Find out more about how the "covid-account" will support the electricity sector and help energy consumers

On May 18, the government issued the decree the electricity sector had been anxiously anticipating for weeks: Decree nº 10.350 established the rules for implementing the so-called “Conta-covid”.

The objective is to bring relief to the distributors' cashflow, impacted by the measures adopted in the face of the covid-19 pandemic.

Who is responsible for “Conta-covid”?

The Electric Energy Trading Chamber (CCEE) is responsible for managing the account and passing on values to distributors. The National Electric Energy Agency (Aneel), in turn, will calculate the limits for the loan and the installments of the Energy Development Account (CDE) to be used for this purpose.

Who will pay the covid-account?

Approximately R$ 15.4 billion will be raised among energy consumers, both in the regulated and unregulated market.

This charge will be made through the Distribution System Use Tariff (TUSD) and the Energy Tariff (TE). They will be charged from 2021 and will remain in place until the total debt is paid off.

This amount will be paid proportionally and individually by each distributor's consumers, based on the loan received by their distributor.

What will the covid-account pay?

Check below some of the cases where funds will be passed on:

  • Distributor over-contracting

Distributors contracts with energy consumers include a forecast of the energy that will be consumed monthly.

With activities in industries and businesses coming to a halt, the distributor was left with the excess energy that was already contracted, but not used by such large consumers. This surplus was settled at PLD (Settlement Price for Differences).

This difference will be borne by the covid-account, provided that the distributor can prove that this over-contracting was caused by the pandemic.

  • Postponement of tariff adjustments

Since April 7, the National Electric Energy Agency (Aneel) has approved postponements to distributor tariff adjustments. Consumers will only be charged the new tariffs from July 1st.

The difference in amounts up to that date will be offset by the covid-account as well.

Check out details of the MegaWhat analysis here.