ANEEL and the Regulatory Process of the Electricity Sector

ANEEL and the Regulatory Process of the Electricity Sector

August, 9th, 2005Brasília – DF

August, 9th, 2005Brasília – DF

Alvaro MesquitaSuperintendet of Institutional

Relations

Alvaro MesquitaSuperintendet of Institutional

Relations

VI WORKSHOP ANEEL – USEA/USAID VI WORKSHOP ANEEL – USEA/USAID

SumarySumary

I. Institutional roles of the Power Sector

II. Regulatory Process

III. Performance, attributes and description of ANEEL

IV. Regulator’s challenges

I. Institutional roles of the Power Sector

II. Regulatory Process

III. Performance, attributes and description of ANEEL

IV. Regulator’s challenges

Institutional Roles of thePower SectorInstitutional Roles of thePower Sector

Policies and directives:• National Congress• National Council of Energy Policy – CNPE – approval by

the President of the Republic• Chamber of Infra-structure Policies of the Government

Council

Planning and assurance of the balance between supply and delivery:

• Ministry of Mines and Energy – MME

Research and studies for the planning of the energy sector• Energy Research Company - EPE

Regulatory Body and Delegation of Power• Brazilian Electricity Regulatory Agency – ANEEL

Policies and directives:• National Congress• National Council of Energy Policy – CNPE – approval by

the President of the Republic• Chamber of Infra-structure Policies of the Government

Council

Planning and assurance of the balance between supply and delivery:

• Ministry of Mines and Energy – MME

Research and studies for the planning of the energy sector• Energy Research Company - EPE

Regulatory Body and Delegation of Power• Brazilian Electricity Regulatory Agency – ANEEL

Institutional Roles of thePower SectorInstitutional Roles of thePower Sector

Overview, control and operation of the systems:• National Operator of the Power System – ONS

Monitoring and evaluation to assure the reliability and security of the supply:

• Electric Sector Monitoring Committee – CMSE

Accounting and clearing• Chamber of Commercialization of Electric Power

– CCEE

Execution and service delivery to the costumers:

• Entities G, T, D e C

Overview, control and operation of the systems:• National Operator of the Power System – ONS

Monitoring and evaluation to assure the reliability and security of the supply:

• Electric Sector Monitoring Committee – CMSE

Accounting and clearing• Chamber of Commercialization of Electric Power

– CCEE

Execution and service delivery to the costumers:

• Entities G, T, D e CFOCUS: Public InterestFOCUS: Public Interest

ANEEL’s performance ANEEL’s performance

ANEELANEEL

• Resonable tariffs • Quality of service• Guarantee of rights

• Resonable tariffs • Quality of service• Guarantee of rights

•Adequate remuneration•Contracts honored•Predictable and clear rules

•Adequate remuneration•Contracts honored•Predictable and clear rules

• Strategic interests• Development model

Universal service

• Strategic interests• Development model

Universal service

Consumers/societyConsumers/society

Government Government Employees Employees

Federal Federal GovernmentGovernment

Federal Federal GovernmentGovernment

Draft of LawDraft of LawDraft of LawDraft of Law

Provisory Provisory ActAct

Provisory Provisory ActAct

National National CongressCongressNational National

CongressCongress

Draft of LawDraft of LawDraft of LawDraft of Law

Law Law Law Law Decree Decree Decree Decree

ANEEL ANEEL ANEEL ANEEL

Technical Technical Discussion Discussion Technical Technical

Discussion Discussion Public Audience Public Audience

or Consult or Consult Public Audience Public Audience

or Consult or Consult Official Public Official Public

Position of the ANEELPosition of the ANEELOfficial Public Official Public

Position of the ANEELPosition of the ANEELRegulatoryRegulatoryRegulatoryRegulatory

Regulatory ProcessRegulatory Process

Monitoring and ControlMonitoring and Control

MediationMediation

ATTRIBUTIONSMonitoring the performance of the

power sector

ATTRIBUTIONSMonitoring the performance of the

power sector

AUDITINGAUDITINGAUDITINGAUDITING

Where necessary - following the legal framework and specific policiesWhere necessary - following the legal framework and specific policiesREGULATORYREGULATORYREGULATORYREGULATORY

Guide and advise – enforce penalties when unavoidableGuide and advise – enforce penalties when unavoidable

Dispute settlementDispute settlementIONIONMEDIATIONMEDIATIONMEDIATIONMEDIATION

Delegation of authority (*)Delegation of authority (*)

Energy auctions

Auctions for new enterprises (G/T)(*)

Authorization(*)

Energy auctions

Auctions for new enterprises (G/T)(*)

Authorization(*)

(*) Delegation of authority by Federal Government, through MME, responsible to assure the supply of electricity(*) Delegation of authority by Federal Government, through MME, responsible to assure the supply of electricity

• Decision-making independence• Administrative, financial and property management autonomy• Staggered terms for Commissioners – nominated

by the President, approved by the Senate• Commissioners – cannot be fired without good

cause• “Quaranthe”• Decision Collegiate Board• No hierarchy subordination• Final administrative option• Technical discretionary power

• Decision-making independence• Administrative, financial and property management autonomy• Staggered terms for Commissioners – nominated

by the President, approved by the Senate• Commissioners – cannot be fired without good

cause• “Quaranthe”• Decision Collegiate Board• No hierarchy subordination• Final administrative option• Technical discretionary power

Characterization of ANEELCharacterization of ANEEL

External controlExternal control

• Consumer Advocate - (organized by the Civil Society)• Consumer Advocate - (organized by the Civil

Society)

• Legislative Body• Legislative Body

• Sub-commission of the CFC of the Senate• Public Hearings (~70)• Request information • National Accounting Tribunal • (accounts approved from 1997 to 2002)

• Sub-commission of the CFC of the Senate• Public Hearings (~70)• Request information • National Accounting Tribunal • (accounts approved from 1997 to 2002)

• Judiciary (Review of the acts)• Judiciary (Review of the acts)

• Public Ministry• Public Ministry

•Executive Body•Executive Body• Secretary of Federal Control

• Contract Management

• Fulfillment of PPA goals

• Secretary of Federal Control

• Contract Management

• Fulfillment of PPA goals

Transparency and improvement of the society’s participation Transparency and improvement of the society’s participation

Transparency improves the efficiency and social control

and promotes better regulation to the benefit of society.

Transparency improves the efficiency and social control

and promotes better regulation to the benefit of society.

To make the regulation, auditing and mediation actions To make the regulation, auditing and mediation actions closer to the consumers and sectorial agentscloser to the consumers and sectorial agents

To make the regulation, auditing and mediation actions To make the regulation, auditing and mediation actions closer to the consumers and sectorial agentscloser to the consumers and sectorial agents

To To adjust the regulation, auditing and mediation adjust the regulation, auditing and mediation actions to localactions to local circumstances circumstances

To To adjust the regulation, auditing and mediation adjust the regulation, auditing and mediation actions to localactions to local circumstances circumstances

To expedite the regulatory process, monitor service To expedite the regulatory process, monitor service quality, mediation and delegation quality, mediation and delegation

To expedite the regulatory process, monitor service To expedite the regulatory process, monitor service quality, mediation and delegation quality, mediation and delegation

To minimize or to solve the problems of the To minimize or to solve the problems of the relationship between consumers and concessionaires relationship between consumers and concessionaires

at local levelat local level

To minimize or to solve the problems of the To minimize or to solve the problems of the relationship between consumers and concessionaires relationship between consumers and concessionaires

at local levelat local level

Transparency and society’s participation - DecentralizationTransparency and society’s participation - Decentralization

DECENTRALIZATIONDECENTRALIZATION

Agreements signed (13)Agreements signed (13)

Agencies created without delegation (06)Agencies created without delegation (06)

In negotiation (08)In negotiation (08)

ARCE (CE)Agência Reguladora de Serviços

Públicos Delegados do Estado do Ceará

ARCE (CE)Agência Reguladora de Serviços

Públicos Delegados do Estado do Ceará

ARSEP (RN)Agência Reguladora de

Serviços Públicos do Rio Grande do Norte

ARSEP (RN)Agência Reguladora de

Serviços Públicos do Rio Grande do Norte

AGERBA (BA)Agência Estadual de Regulação de

Serviços Públicos de Energia, Transporte e Comunicações da Bahia

AGERBA (BA)Agência Estadual de Regulação de

Serviços Públicos de Energia, Transporte e Comunicações da Bahia

CSPE (SP)Comissão de Serviços Públicos de

Energia

CSPE (SP)Comissão de Serviços Públicos de

Energia

AGER (MT)Agência Estadual de Regulação

dos Serviços Públicos Delegados do Mato Grosso

AGER (MT)Agência Estadual de Regulação

dos Serviços Públicos Delegados do Mato Grosso

AGESP (ES)Agência Estadual de Serviços Públicos

AGESP (ES)Agência Estadual de Serviços Públicos

ARCO (SC)Agência Catarinense de Regulação e

Controle

ARCO (SC)Agência Catarinense de Regulação e

Controle

AGR (GO)Agência Goiana de Regulação, Controle e

Fiscalização de Serviços Públicos

AGR (GO)Agência Goiana de Regulação, Controle e

Fiscalização de Serviços Públicos

ARPE (PE)Agência Estadual de Regulação dos

Serviços Públicos Delegados de Pernambuco

ARPE (PE)Agência Estadual de Regulação dos

Serviços Públicos Delegados de Pernambuco

AGEAC (AC)Agência Reguladora dos

Serviços Públicos do Estado do Acre

AGEAC (AC)Agência Reguladora dos

Serviços Públicos do Estado do Acre

ASTINS (TO)Agência de Serviços Públicos

Delegados do Tocantins

ASTINS (TO)Agência de Serviços Públicos

Delegados do Tocantins

ARSAM (AM)Agência Reguladora dos Serviços

Públicos Concedidos do Estado do Amazonas

ARSAM (AM)Agência Reguladora dos Serviços

Públicos Concedidos do Estado do Amazonas

ASEP (RJ)Agência Reguladora de Serviços

Públicos Concedidos

ASEP (RJ)Agência Reguladora de Serviços

Públicos ConcedidosAGERGS (RS)Agência Estadual de Regulação dos Serviços Públicos Delegados do Rio

Grande do Sul

AGERGS (RS)Agência Estadual de Regulação dos Serviços Públicos Delegados do Rio

Grande do Sul

AGEPAN (MS)Agência Estadual de Regulação de Serviços

Públicos de Mato Grosso do Sul

AGEPAN (MS)Agência Estadual de Regulação de Serviços

Públicos de Mato Grosso do Sul

AGEEL (PB)Agência Estadual de Energia

da Paraíba

AGEEL (PB)Agência Estadual de Energia

da Paraíba

ARSAL (AL)Agência Reguladora de

Serviços Públicos do Estado de Alagoas

ARSAL (AL)Agência Reguladora de

Serviços Públicos do Estado de Alagoas

ARSEP (MA)Agência Reguladora de

Serviços Públicos Maranhão

ARCON (PA)Agência Estadual de Regulação e

Controle de Serviços Públicos

ARCON (PA)Agência Estadual de Regulação e

Controle de Serviços Públicos

November//2004November//2004

• Relationship with the Legislative – more then

70 public hearings and thematic meetings

• Public Director’s meetings: since October, 2004

• Ethics Code – consolidation, approval and

Implementation (Ethics Commission)

• Relationship with the Legislative – more then

70 public hearings and thematic meetings

• Public Director’s meetings: since October, 2004

• Ethics Code – consolidation, approval and

Implementation (Ethics Commission)

Transparency and society’s participation Transparency and society’s participation

• 1 Council of Consumers in each 64 distributors of energy

• 2003 – ANEEL’s Home Page: easy access to the

process for consumers and regulatory agencies

(Ex.: authorization of contracts, monitoring reports,

tariffs and quality indices )

• Petitions and public hearings – regulation and auditing (more then 150)

• 1 Council of Consumers in each 64 distributors of energy

• 2003 – ANEEL’s Home Page: easy access to the

process for consumers and regulatory agencies

(Ex.: authorization of contracts, monitoring reports,

tariffs and quality indices )

• Petitions and public hearings – regulation and auditing (more then 150)

Transparency and society’s participation Transparency and society’s participation

• Democratization of the regulatory process

• Transparency

• Publicity

• Advance preparation of the Consumer’s Council and Organizations of Consumers and Stakeholders – looking for improvement

• Local meetings and by teleconference

• Publicize results - Improvement

• Democratization of the regulatory process

• Transparency

• Publicity

• Advance preparation of the Consumer’s Council and Organizations of Consumers and Stakeholders – looking for improvement

• Local meetings and by teleconference

• Publicize results - Improvement

Public Hearings Society’s participation in the regulatoryprocess

Public Hearings Society’s participation in the regulatoryprocess

• Decision-making Process

•Decision – Board of Directors

•Public Directors meeting

•Report Director (draw) – Technical and

Judicial Support (Fact and Law)

•Broad Defense – Appeal with or without a stay

• Regulation supported by the Law 9.784/99• Clarity, Transparency and Publicity of the Acts• Rights and Duties of Consumers

• Decision-making Process

•Decision – Board of Directors

•Public Directors meeting

•Report Director (draw) – Technical and

Judicial Support (Fact and Law)

•Broad Defense – Appeal with or without a stay

• Regulation supported by the Law 9.784/99• Clarity, Transparency and Publicity of the Acts• Rights and Duties of Consumers

Administrative and Decision-making proceedingsAdministrative and Decision-making proceedings

Regulator’s challengesRegulator’s challenges

•Achieve autonomy

•Skilled and adequately paid in-house staff

•Reduce asymmetry of information

•Completion of the new regulation model

•To support and enhance energy policies, to

identify improvements and to fill gaps

•Achieve autonomy

•Skilled and adequately paid in-house staff

•Reduce asymmetry of information

•Completion of the new regulation model

•To support and enhance energy policies, to

identify improvements and to fill gaps

•To be recognized as a “State Institution” that takes care of public interest

•To look for continual improvement of ANEEL

•To strive for the reduction of charges and tariffs

•To be recognized as a “State Institution” that takes care of public interest

•To look for continual improvement of ANEEL

•To strive for the reduction of charges and tariffs

Regulator’s challengesRegulator’s challenges

•To consolidate the process of Periodic Tariff Review: (develop guidelines for the basis of cost recovery)

•To expand the mechanisms of interface with the public and agencies: workshop`s about specific themes; disseminate a regulatory agenda

•To guarantee the consumers rights and take care of the compliance of the obligations and the rights of agencies

•To consolidate the process of Periodic Tariff Review: (develop guidelines for the basis of cost recovery)

•To expand the mechanisms of interface with the public and agencies: workshop`s about specific themes; disseminate a regulatory agenda

•To guarantee the consumers rights and take care of the compliance of the obligations and the rights of agencies

Main Regulator’s challengesMain Regulator’s challenges

www.aneel.gov.br

Phone: (+55) 61 2192-8906

Fax: (+55) 61 2192-8705

institutional@aneel.gov.br

www.aneel.gov.br

Phone: (+55) 61 2192-8906

Fax: (+55) 61 2192-8705

institutional@aneel.gov.br