Congress approves provisional measure guaranteeing free electricity bills; text goes to presidential signature

BRASILIA - Congress approved this Wednesday, the 17th, a provisional measure focused on expanding the social tariff, a program dubbed "Luz do Povo." The text, which establishes free electricity for 17.1 million families, according to the government, was approved in the Chamber of Deputies by a vote of 423 to 36, and in the Senate by a vote of 49 to 3.

Now, the bill to convert the MP will be sent for presidential approval, which could occur within 15 days.

Implementing the social tariff costs R$3.6 billion per year to the Energy Development Account (CDE). This cost would be offset by enabling other proposals outlined in the initial version of the provisional measure, including opening the market to residential consumers. However, after a lack of consensus, the Chamber voted on a slimmed-down version of the text, adding additional sections or changing the wording of some items (see details below).

In the Senate, one of the amendments rejected was the provision that expenses currently covered by the CDE, as they are public policy in nature, should be paid for by the Federal Budget and not by electricity consumers.

The already-in-effect, completely free electricity bill applies to monthly consumption of up to 80 kilowatt-hours. The target audience includes CadÚnico families with a monthly income of up to half the minimum wage per capita, people with disabilities, or the elderly who receive the continuous benefit.

The National Electric Energy Agency (Aneel) has already worked with distributors to adapt their operating systems, configuring billing systems to enable the new social tariff model. In other words, if the provisional measure expires, there will be both a logistical and a legal challenge.

Provisional Measure 1.300/2025 was initially dubbed "electricity sector reform." The showcase was free electricity for low-income families, but the proposed bill went further and faced pressure to be split precisely because it addressed different measures in a single package.

In his report, rapporteur and federal deputy Fernando Coelho Filho (União-PE) removed all other topics with the prospect of structural changes, including the proposal to open the free market to low-voltage consumers, as well as the proportional apportionment of consumption in the payment of the CDE, regardless of the voltage level.

One of the most talked-about changes in the sector, also withdrawn, was the idea of ​​eliminating discounts on electricity transmission and distribution system usage rates, specifically for consumers of incentivized sources such as wind and solar. This is known as the "discount on the wire." Now, the sections removed by the rapporteur must be addressed in the provisional measure that sets a ceiling for the Energy Development Account, under the auspices of Senator Eduardo Braga (MDB-AM).

What was left in the text?

The version approved by the Chamber of Deputies, in addition to providing free electricity bills for 17.1 million families, also provides for exemption from the CDE (Electric Energy Consumption) payment on monthly consumption of up to 120 kWh, specifically for families with a per capita income between half and one minimum wage. The government estimates a reduction of approximately 12% in the energy bills of these families, as the CDE is part of the electricity bill. These two social proposals remain unchanged from the government's initial text.

The voted version also continued to provide for the sharing of costs for the Angra 1 and 2 plants among consumers in the National Interconnected System (SIN), except for low-income consumers. A section with specific rules for rural consumers involved in irrigation and aquaculture activities, with previously agreed-upon time slots, was also maintained. According to the rapporteur, the idea is to promote "efficiency" in energy use for this activity. The irrigation subsidy is criticized within the government's economic team.

Added excerpt

The version of the provisional measure approved by the Chamber included an article allowing the renegotiation of installments due for Use of Public Property (UBP). Hydroelectric plants auctioned under the 1998 law are eligible for renegotiation. Representative Fernando Coelho Filho (União-PE), the rapporteur, stated this month that the federal government could face a fiscal impact of up to R$20 billion if the costs of payment for the use of public property by hydroelectric plants are not renegotiated.

According to him, there is no extension of the power plant concessions, only the renegotiation of contracts that had been concluded via the IGP-M index and were no longer in effect. If some of these concessions were returned, the federal government would face fiscal impacts from payments to generators. Furthermore, the measure could raise over R$6 billion from the CDE, which would be allocated to reducing consumer tariffs, according to the congressman's argument.

The MP was approved in the Chamber in the form of an agglutinative amendment, that is, with reduced text.