Increased Electricity Costs in Brazil for September

SAO PAULO (Reuters) – Brazilians will face higher electricity bills in September as local power regulator Aneel has decided to impose an additional charge due to dwindling reservoir levels at hydroelectric plants amidst the dry season.

Despite the growth of wind and solar energy in Latin America’s largest economy in recent years, over half of Brazil’s power supply still relies on hydroelectric plants.

Aneel has a pricing system categorized into “green”, “yellow”, “red level 1”, and “red level 2”.

• Green: No additional charges on power bills.
• Yellow & above: Gradual implementation of extra tariffs, raising concerns about inflation in the country.

In September, Aneel announced the activation of the “red level 2” tier, resulting in an extra charge of 7.88 reais ($1.40) for each 100 kilowatt-hours consumed. This is the first instance of “red level 2” since August 2021, following a significant drought.

The decision came after forecasts indicated rainfall would be about 50% below average in Brazil’s main hydroelectric regions. This situation would necessitate power generators to rely more on thermoelectric plants, which are costlier.

In August, no additional charges were imposed on consumers.

($1 = 5.6121 reais)