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Electricity Sector: Provisional Measure grants discounts to beneficiaries of the Social Tariff and changes public-private contracts.

April 15, 2020

Put Christian Fernandes Rosa and Beatriz Wehby – 15/04/2020 On April 8, 2020, Provisional Measure No. 950 was published, which provides for emergency measures aimed at the electricity sector to face the state of public calamity resulting from the pandemic caused by COVID-19. The measure brought changes to Law No. 12,212, which provides for the benefit of the Social Tariff for Electric Energy, so that, in the period from April 1 to June 30, 2020, discounts will be granted to consumers who fall under the Low Income Residential Subclass. Regarding the portion of electricity consumption, those less than or equal to 220 kWh/month, the discount will be 100%. For those with a higher value, the discount will apply up to the amount of 220, but not on the remaining portion. It is worth noting that, according to the aforementioned law, the discounts were from 10 to 65% in a staggered manner. In addition, to cover the tariff discounts, the Union is authorized to allocate resources to the Energy Development Account (CDE), limited to R$$ 900 million, in order to cover the discounts related to the electricity supply tariff for these consumers included in the Social Tariff. The measure also determines that consumers in the regulated contracting environment – concessionaires and licensees – who carry out activities such as energy use based on solar, wind and biomass sources, purchase and sale of electricity or import and export thereof, must pay, through a tariff charge levied in proportion to the consumption of electricity, the remaining costs of financial transactions linked to measures to address the impacts on the sector resulting from the state of public calamity. In this sense, the MP mentions that these charges will be regulated by an act of the Federal Executive Branch and may be handled by the Electric Energy Trading Chamber (CCEE).

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