The Energy Regulation and Markets Review - Stikeman Elliott

Brazil
Alternatively, there is the free power market. Free power consumers, power
generators and trading companies are the main agents in this market. These agents are
free to negotiate their own power volumes and prices.
The Brazilian government also actively participates in the regulation of the BPS
in order to ensure the energy supply, protect the level of the power rate and plan the
expansion of the energy network to distant areas of the country.
II
REGULATION
The Brazilian government has paid close attention to the regulation of the BPS in order
to secure investment for a strong and diversified energy matrix to cover the growing
power demand throughout the years.
Due to its strategic importance, there are extensive regulations for all segments,
in order to achieve legal security and the technical parameters needed for its expansion.
i The regulators
The BPS is basically structured by a group of federal laws and several administrative
rules. It falls under the responsibility of the MME, which in turn answers to the Brazilian
president. The MME formulates and implements the policies in the electric sector in
accordance with the guidelines provided for by the National Energy Policy Council (‘the
CNPE’).
The MME is responsible for certain activities related to exploitation and
exploration of natural resources such as geology, mineral and energy recourses, mining,
metallurgy, oil, fuel and electric power, including nuclear energy.
Currently, the MME is the authority responsible for granting concessions and
permissions to agents in the electric sector for exploiting electric power services and
facilities. Such responsibility was previously carried out by ANEEL.
The oil and natural gas sector and the electric power sector are regulated by
different regulatory agencies. ANEEL regulates the electric sector and the National Oil
Agency (‘ANP’) is responsible for the regulation of the oil and natural gas activities. Both
ANEEL and ANP are linked to the MME.
ANEEL is a special independent regime, created by Law No. 9,427/1996 for
the purpose of regulating the electric sector. Although ANEEL is linked to the MME,
it has technical and political autonomy to regulate, supervise and monitor the activities
of generation, transmission, distribution and commercialisation of electric power, in
compliance with the guidelines established by the federal government.
ANEEL has two hierarchical levels. The board of directors is composed of five
directors, one of whom is the director general; the directors make collective decisions.
The board approves resolutions and is the final instance in administrative proceedings
conducted before ANEEL. At the level below the board, there are 20 specialised
superintendents, each with particular expertise. The superintendents are assistant to the
board.
With respect to its regulatory function, the acts performed by ANEEL are
externalised by way of normative resolutions (creating technical rules), authoritative
resolutions (prior authorisation to allow certain acts conducted by an agent), approving
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