Brazil’s watchdog upholds fines against power distributors

Brazil’s electric power watchdog Aneel upheld 70mn reais (US$12mn) in fines for two local distributors and applied a new penalty to another power utility. 

The announcements were made amid heavy government pressure on the regulator due to power distribution failures in large metropolitan areas of the country, among other issues, such as the transfer of control of Amazonas Energia to the J&F Group. 

In Rio de Janeiro, Aneel denied an appeal and upheld a fine of 54mn reais against distributor Enel Rio for the delay in restoring electricity in its concession area after a storm on November 18, 2023.

That same month, the Italian firm’s concessionaire in São Paulo (Enel SP) had its distribution service severely affected by a storm that caused trees and branches to fall onto lines. The company's failings resulted in a 165mn-real fine, but it managed to have it suspended in a Brazilian court. 

Last Tuesday, Aneel decided that Enel SP must respond to accusations of failure to comply with the distributor’s contingency plan and repeated unsatisfactory service provided to consumers in emergencies.

The decision is part of a report on failures and transgressions, which initiates a process to evaluate a recommendation of forfeiture of the concession to be assessed by Aneel, which will then be forwarded to the mines and energy ministry (MME).

On Thursday, a new storm hit the state of São Paulo. In Pirapora do Bom Jesus, Enel reported that 23% of customers were without electricity. At 9pm, a total of 53,000 properties were still cut off.

On Friday, Enel published on its website that, due to an extratropical cyclone in the South Atlantic, winds in excess of 90km/h should continue to hit the state over the weekend. 

“We're reinforcing field operations and service channels to respond to calls from our customers,” said the company.  

Aneel also upheld a 16mn reais fine against EDP São Paulo. According to the agency, the concessionaire's response to emergencies has worsened, as average servicing times grew. Meanwhile, there was an increase in the number of interruptions with excessive durations (longer than 24 hours) in 2021-23.

Meanwhile, the regulatory agency imposed a fine of 8.3mn reais against Companhia de Eletricidade do Amapá (CEA Equatorial) for power supply failures in Macapá on April 26.

The penalty notice was issued after an inspection was carried out to verify the distributor's responsibilities regarding a disruption to the electricity system in the state capital on that date, which originated at the Equatorial substation.

The two lapses cited by the inspectors were failures in the substation's operation and protection system, and inadequacy of the contingency plan in view of the emergency failures that occurred, which prevented the prompt restoration of the electricity supply.