The Brazilian Electric Sector - BES operates under concession, authorization or permission of the State providing public services on electricity to the population. Currently it is the public service in the area of infrastructure with the largest attendance extension, superior to 98% of the population, therefore, close to universalization.
The BES' regulatory framework, which went through a review process from mid-90s was consolidated by Law 10.848/2004, which establishes the rules that define its functioning in the typical activities of generation, transmission, distribution and trade of electricity.
While public service performed under concession, authorization or permission of the State, the operation of the BES is highly regulated, the regulatory framework extensively defining the powers, rights and duties of the Granting Authority, the Regulatory Agency, Sector Entities and Agents, all with the fundamental goal of ensuring management's commitment to safety of supply and low tariffs in the short, medium and long terms.
The regulatory framework attaches to the Granting Authority, in addition to its typical responsibilities of Stat, as the definition of national energy matrix, ensuring the balance between supply and demand in the short, medium and long terms: for that it reserves the planning and management of the grant of enterprising of supply expansion, as well as taking actions that are regulated, in managing the continuity of supply in the short and medium terms.
Some key features of the regulatory framework, which aim at making it stable, are as follows:
- Universalization of access to and use of services;
- Fair pay, defined in concession contract, authorization or permission for investments;
- Auctions for the grant of generation and transmission expansion;
- Purchase of energy through bilateral contracts for regulated and free markets (ACR and ACL);
- Accounting and centralized liquidation of contracts;
- Permanent monitoring of the conditions of attendance by the Granting Authority;
- Systemic operation of the Basic Transmission Grid and centralized generation dispatch;
- Regulated mechanisms for monitoring and evaluation by the Sector Agency.