Electricity Prices in Brazil
The president Dilma Rouseff has recently taken measures in order to reduce the Brazilian power bill – which was one of the most expensive in the world. In this article you will learn more about this charge.
Brazil has one of the most expensive prices of electricity in the world, even though it has one of the cheapest costs of production. The electricity price is higher than the prices of some developed countries, like Japan, the Netherlands and the United States.
The Federation of Industries of Rio de Janeiro, known as Firjan, made a research in 2011 to find more about this high price paid by the Brazilian population. In the report, it was shown that Brazil has 14 taxes over the electric energy bill, which represents not only 17% of the cost, but also a worldwide record.
How's the energy bill calculated?
Between the decades of 70 and 90, there was one standardized bill for all the states in Brazil. Lately, it was verified that this unique price wasn't fair to all the locations, because the costs of transmission and distribution were different according to the place where the energy had to be taken to.
Nowadays, the price of electric energy in Brazil is calculated taking into account three different costs:
- energy generation
- transportation of the energy to the houses: transmission and distribution
- taxes.
Which taxes?
There are federal, state and local taxes included in the electric bill, such as:
Federal taxes
- PIS (Programa de Integração Social or Social Integration Program) / Cofins (Contribuição para o Financiamento da Seguridade Social or Contribution for Social Security Financing).
Cofins has two different aliquots: 7% – for the goods that goes from São Paulo, Rio de Janeiro, Minas Gerais, Paraná, Santa Catarina and Rio Grande do Sul to the other parts of the country – and 12% – in general.
State taxes
- ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços or Tax on Circulation of Goods and Services)
Local taxes
- CIP or COSIP (Contribuição para Custeio do Serviço de Iluminação Pública or Contribution for the Cost of Public Lighting)
Other taxes
- CCC (Conta de Consumo de Combustíveis or Fuel Consumption Account)
- ECE (Encargo de Capacidade de Emergência or Emergency Capacity Charge);
- RGR (Reserva Global de Reversão or Global Reservation of Reversion)
- TFSEE (Taxa de Fiscalização de Serviços de Energia Elétrica or Electric Energy Services Supervisory Tax)
- CDE (Conta de Desenvolvimento Energético or Energetic Development Account)
- ESS (Encargos de Serviços do Sistema)
- P&D (Pesquisa e Desenvolvimento e Eficiência Energética or Research and Development and Energetic Efficiency)
- ONS (Operador Nacional do Sistema or National System Operator)
- CFURH (Compensação financeira pelo uso de recursos hídrico or Financial compensation for the use of water resources).
Main companies and their prices
There are several companies of power distribution in Brazil. Here is the list of the ones that cover all the capitals plus the Federal District, and their respective costs of energy for residential bills:
| Capital (State) | Company | BRL/kWh (until when it is valid) |
| Rio Branco (Acre) | Eletroacre | 0,370 (until 11/29/2013) |
| São Luís (Maranhão) | Cemar | 0,366 (until 08/27/2013) |
| Teresina (Piauí) | Cepisa | 0,362 (until 08/27/2013) |
| Campo Grande (Mato Grosso do Sul) | Enersul | 0,360 (until 04/07/2013 – the new cost will increase in 2,47%) |
| Palmas (Tocantins) | Celtins | 0,344 (until 07/03/2013) |
| Cuiabá (Mato Grosso) | Cemat | 0,341 (until 04/07/2013 – the new cost will be reduced in 9,49%) |
| Porto Velho (Rondônia) | Ceron | 0,338 (until 11/29/2013) |
| Belo Horizonte (Minas Gerais) | Cemig | 0,330 (until 04/07/2013 – the new cost will be increased in 4,99%) |
| Salvador (Bahia) | Coelba | 0,327 (until 04/21/2013) |
| Belém (Pará) | Celpa | 0,320 (until 08/06/2013) |
| João Pessoa (Paraíba) | Energisa | 0,317 (until 08/27/2013) |
| Vitória (Espírito Santo) | EDP Escelsa | 0,315 (until 08/06/2013) |
| Rio de Janeiro (Rio de Janeiro) | Light | 0,314 (until 11/06/2013) |
| Maceió (Algoas) | Ceal | 0,302 (until 08/27/2013) |
| Fortaleza (Ceará) | Coelce | 0,298 (until 04/21/2013) |
| Natal (Rio Grande do Norte) | Cosern | 0,298 (until 04/21/2013) |
| Goiânia (Goiás) | Celg | 0,296 (until 09/11/2013) |
| Recife (Pernambuco) | Celpe | 0,296 (until 04/28/2013) |
| Aracaju (Sergipe) | Energisa | 0,290 (from 02/28/2013 on) |
| Porto Alegre (Rio Grande do Sul) | CEEE | 0,275 (until 10/24/2013) |
| Manaus (Amazonas) | AmE | 0,271 (until 10/31/2013) |
| Boa Vista (Roraima) | Boa Vista Energia S/A | 0,260 (until 10/31/2013) |
| Florianópolis (Santa Catarina) | Celesc | 0,255 (until 08/06/2013) |
| Curitiba (Paraná) | Copel | 0,242 (until 06/23/2013) |
| Brasília (Distrito Federal) | CEB | 0,242 (until 08/28/2013) |
| São Paulo (São Paulo) | AES Eletropaulo | 0,238 (until 07/03/2013) |
| Macapá (Amapá) | CEA | 0,197 (from 01/24/2013 on) |
Tax cut
The President Dilma Rouseff approved, in January, 2013, a law that reduces the taxes on electric energy in Brazil, consequently reducing the costs in the electric energy bills. This drop in the energy cost can reach, in average, 20%. This measure was taken in order to prevent Brazil from continuing to have one of the highest costs of electricity in the world.
In the 2011's research made by Firjan, Brazil was the fourth country with the highest cost of energy for the industry. Only behind Italy, Turkey and Czech Republic, Brazil was top 5 in a list of 27 countries that included Argentina, China, France, Germany, India, Japan, Russia and the United States.
With the rate of BRL 329,00 per MWh (Megawatt-hour), the cost of energy in Brazil was 53% higher than BRL 215,50 per MWh, which was the average cost of energy in the 27 countries. It was also 134% higher than the average of the BRICS group (BRL 140,70 the MWh) and 131% higher tha, the average of the country's main business partners (the United States, Argentina, China and Germany) which is BRL 142,20 per MWh. This puts the country at a disadvantage in the competitiveness.
The new prices of the electric energy are currently in practice. Remember the 14 taxes that were part of the energy bill? Two of them (CCC and RGR) were extinct, and another one, CDE, was reduced to 25%. With theses discount, domestic bills can be 18% cheaper, and industry bills, 32%. Both numbers are higher than the forecast for the reduction, which was of 16,2% and 28%, respectively.