Thiago Carvalho Fonseca, energy law expert at Tortoro, Madureira & Ragazzi Advogados

In a national political scenario in which less state intervention in public-private relations is being discussed, we are faced, with due proportions, with Bill No. 1917/2015, which will enable the expansion of the Free Contracting Environment – ACL for electricity, enabling small consumers to choose the best way toward their energy independence. Explanation as follows.
Law No. 10.848, of March 15, 2004, establishes in its article 1 that the commercialization of electricity in the country will take place by means of regulated or free contracting. In other words, there were two different scenarios for the purchase and sale of electricity, the Regulated Contracting Environment – ACR and the Free Contracting Environment – ACL.
In ACR, the consumer, classified as captive or regulated, has no margin for individualized contract negotiation. The consumer simply pays the cost of the energy consumed to the local distributor that serves them. As a rule, they are residential consumers, individuals and companies with lower consumption.
On the other hand, in the ACL, commercial relations are freely agreed upon by means of bilateral energy purchase and sale contracts, which establish, among others, terms, prices and contracting volumes. In this negotiable contracting environment, there are two kinds of consumers, special and free.
In short, for special consumers, contracted energy should come from incentivized sources such as wind, small hydroelectric, biomass or solar plants. In this scenario, the energy demand is limited between 500 KW to 3 MW per month. In turn, free consumers, in addition to not having any bargaining restrictions, must have a minimum energy demand of 3 MW per month.
From these assumptions, it is noteworthy that Bill No. 1917/2015 intends to provide captive consumers with the migration to ACL electricity, and, consequently, access to this negotiation environment for contracting.
In summary, it is intended for Article 16 of Law No. 9.074 of 1995 to be amended, in order to gradually allow, by 2028, all consumers to access the free energy market.
According to the Opinion of the Special Committee of the House of Representatives, with an Amendment to the original Project, it is intended that: (i) from January 1, 2020, the minimum consumption requirement be reduced to 2000 kW; (ii) from January 1, 2021, the minimum consumption requirement be reduced to 1000 kW; (iii) from January 1, 2022, the minimum consumption requirement be reduced to 500 kW; (iv) from January 1, 2024, the minimum consumption requirement be reduced to 300 kW; (v) from January 1, 2026, the minimum consumption requirement for consumers serviced at a voltage equal to or greater than 2.3 kV does not apply; (vi) by December 31, 2022, the Executive Branch must submit a plan for the termination of the minimum consumption requirement for consumers served at a voltage lower than 2.3 kV. Also, as of January 1, 2028, the minimum consumption requirement for consumers serviced at voltages below 2.3 kV will not apply.
Currently, Bill 1.917/2015 is on the Steering Committee of the House of Representatives, which is responsible for managing the House’s legislative work.
In any case, it is understood that this expansion of the free market will represent a true act of “empowerment” of consumers in the face of their energy independence. After all, consumers will have the option to remain in the regulated market or, if appropriate, migrate to the free market, in order to have access to the negotiating environment of electric energy contracting, however, safeguarding the undertaking of obligations and risks of adhering to this contracting environment.