The Ministry of Mines and Energy believes that it is necessary to change the energy distribution concessionaire in the State of Amazonas, which is facing serious financial imbalances and debts billions of dollars, and stressed that legislative changes are important to ensure the sustainability of the concession.
According to a report by a working group of the Ministry, it is necessary to act because the situation of Amazonas Energia is expected to worsen this year with the end of the relief measures defined in the past.
After five years in power, the private group that purchased the distributor from the then state-owned Eletrobras failed to improve the concession from an economic, financial and operational point of view.
The diagnosis is contained in a report published Thursday, prepared by a group created to analyze the situation of the country’s energy distributors who suffer from imbalances due to structural problems in their concessions: Amazonas Energia, Light and Enel Rio.
In the case of Amazonas, the report highlighted the need for timely measures to ensure the continuity of services since, this year, some legal and contractual constraints defined in the past which brought cash relief to the distributor expire.
According to the calculations presented, there will be billion-dollar deficits for the company with the end of a series of flexibilities resulting in amounts recognized in tariffs as operating costs and non-technical losses and reimbursements from the Fuel Consumption Account (CCC).
Deficits of 1.98 billion reais in 2024, 2.68 billion reais in 2025 and 2.77 billion reais in 2026 were estimated.
“By way of comparison, Amazonas Energia’s Share B (distribution revenue) amounts to 1.27 billion reais per year… i.e. the projected deficit for the next few years is totally incompatible with the potential cash generation concession of the company”, reads the document.
According to the government, which is evaluating alternatives to change control of the concession, new legislative measures will be necessary to guarantee a “transitional period” so that the future concessionaire can achieve economic and financial sustainability of the concession.
“Among the new features, we highlight the reimbursement of the CCC and the definition of regulatory references for non-technical losses, operating costs and irrecoverable revenues which allow the service to be taken over by a new concessionaire or a new controller.”
Another prediction is that the costs of an excessive contract with the distributor could be borne by the Reserve Energy Account (Coner), with payments made from the Reserve Energy Account (EER).
The ministry has also indicated three possible alternatives to guarantee a new concessionaire, but has not implemented any binding action: expiry and tender of the concession with financial compensation; expiry and relaunch of the concession together with the transfer of corporate control of the distributor; and transfer of control without the need to declare its expiry.
Amazonas Energia was privatized by Eletrobras in 2018, in a single-bid auction presented by the Oliveira Energia group. The vending machine was sold for the symbolic value of 50 thousand reais, but the company had to take on heavy debts, for a total of 8.9 billion reais.
Five years later, the government and the regulatory agency Aneel found that Amazonas Energia was unable to resolve the problems of the concession which, in addition to being deficient, is considered complex from an operational point of view, since it involves a forest region and serves isolated communities. .
According to the ministry’s report, the concession is facing “a combination of negative cash generation, with a high and growing debt level, i.e. in a situation of unsustainability”.
In September 2023, Amazonas Energia’s net debt reached 9.6 billion reais, of which approximately 80% was concentrated on Eletronorte and Eletrobras.
With Eletronorte, which in addition to being a creditor is also an electricity supplier, Amazonas Energia is in default with the energy purchase amounts, but has obtained a court decision to suspend the debt.
Aneel recommended to the government that the concession expire, after the current company was unable to conclude an adequate plan to transfer control.
When contacted, the Oliveira Energia group did not immediately comment on the matter.
The government will also have to present similar reports for Light and Enel Rio.
“With regards to the proposals for measures aimed at the sustainability of concessions in the State of Rio de Janeiro, since they are intrinsically related to the process of guidelines for the treatment of electricity distribution concessions expiring between 2025 and 2031 conducted by MME , these will be forwarded in a second report.”
Source: Terra
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