The federal government issued a decree today imposing electricity consumption cuts of between 10 and 20 percent for all public buildings. The move comes after the Electric Sector Monitoring Committee (CMSE) detected a “significant worsening” of the Brazilian energy sector’s outlook.
The committee proposes regulators lower the minimum levels on hydroelectric plants at which power generation is still allowed — but did not single out which reservoirs would be affected.
Markets have complained about the lack of transparency in dealing with the looming energy crisis, as well as a lack of action from the government. So far, the only concrete moves have consisted of increasing production in more expensive and polluting thermal power plants and granting rewards for industries that move production away from peak hours.
Since 2014, Brazil has adopted a tariff system to provide more transparency around electricity costs. On a scale of green to red, consumers are faced with added charges on their power bills in relation to the country’s energy situation.
On Friday, regulators will decide on level-2 red tariffs for September. The question is not whether they will hike prices, but by how much. Estimates say electricity bills could get between 8 and 23 percent more expensive — which would have a 1-point impact on the overall inflation index.