BRAZIL Trends and Developments Contributed by: Márcio Pina, André Serrão, Thiago Furtado and Gustavo Oliveira, Advocacia Bettiol
The Brazilian regulatory framework urgently needs to be reformed to resolve this issue. Oth- erwise, it will keep imposing excessive costs on investors and discouraging new investments in the expansion of generation sites. The debates between ANEEL and society have been restart- ed. Some points deserve special attention. Lack of information on implemented generation cuts Many generators are unable to obtain accurate information about the real reasons for their own plant’s operating restrictions. The companies claim that in some cases reasons for restrictions have been incorrectly classified. Generation cuts supposedly carried out for reasons of “electrical reliability” are, in many cases, due to “external unavailability ”, which would allow the generator to be reimbursed. When analysing a specific case (ANEEL Admin- istrative Proceeding No 48500.001945/2025- 09), the reporting director proposed a revision of the current standard in order to “obtain greater transparency/publicity of the motivation, that is, the reasons that led ONS to implement the restriction measure, for all classifications of restriction events (not limited to external una- vailability)”. It is expected that operational criteria for genera- tion cuts will in fact be established, which should not only result in an event’s correct classifica- tion, providing inherent and sufficient informa- tion to generators, but also lead to compensa- tion of generators that do not represent a risk to the system. Impossibility of attributing burden in cases where there is no risk allocation Risks must be allocated to those who have the capacity to manage them. To achieve this, the
Brazilian electricity sector needs a clearer risk allocation matrix. Rules that restrict rights can- not be interpreted in a way that increases the attribution of risks to generators who are not required to co-ordinate, manage, plan and oper- ate Brazil’s interconnected electricity transmis- sion system. Restrictive rules must be interpreted restrictively. It is not acceptable to use analogical reasoning to attribute burden to generators in cases that are not expressly provided for. In this sense, it is worth looking at an excerpt from the vote of Justice Moreira Alves’s opinion in ADI No 45/ DF, (ruling by the Federal Supreme Court): “Now, since the rules that establish an exception to the general rule are part of the so-called exceptional right, they only admit strict interpretation and are not applicable by analogy; therefore, they should not go beyond the cases expressed therein, nor extend to encompass the logical consequences of these same cases” (STF, ADI No 41/DF, Ple- nary, majority opinion, Justice Moreira Alves, 11/21/1990). Furthermore, the correct allocation of risk previously established in the contract must be observed to guarantee predictability and legal certainty. Professor Flávio Amaral Garcia explains that “correctly allocating risks provides predictability and legal certainty to modern con- cession contracts, protecting the parties from controversies and subsequent disputes regard- ing doubts about responsibility for past events and renegotiations that may disrupt the execu- tion of the contract”. In this regard, the Federal Court of Auditors, in Proceeding TC 013.040/2011-1 (07/27/2011), stated that “in a concession contract, the con- tractual terms must guarantee the legal certainty necessary for the stability of the relationships
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