The possibility of disengagement of reserve power¹ emerged with the publication of Decree No. 9,019/2017, which established that reserve power could be disengaged through a competition mechanism to be carried out by the National Electric Power Agency (ANEEL) directly or through the Electric Power Commerce Chamber (CCEE).
After analyzing the contributions presented at the Public Hearing No. 30/2017 at the ANEEL board of directors meeting held on July 25th, 2017, the following criteria were defined for participation in the mechanism:
The disengagement mechanism shall occur until August 28th, 2017 and the disengagement shall be made up to the amount of power to be established by the Energy Mines Ministry (MME).
Wind, hydro or solar generation projects whose power supply has been contracted in a reserve power auction will be able to participate, as long as (i) they have a valid RPC²; and (ii) the power plant has not started its trial operation.
It is also important to note that the successful tenderers must be compliant with their sectoral obligations and must have terminated their system connection and use contracts, on the date of execution of the RPC term of termination.
ANEEL will disclose the list of eligible ventures to participate in the mechanism up to 30 (thirty) days prior to the disengagement (07.28.2017).
The disengagement mechanism will have two stages:
- Initial Stage: Tenderers may submit a single bid for each project, equal to or greater than the Initial Product Prize³ which shall be ranked in descending order of the Prize Classification Index – ICP⁴.
Proponents who offer a prize equal to or greater than the Initial Product Prize will pass to the final phase; and
- Continuous Stage: Classified tenderers may submit bids greater than or equal to the bids they offer in the initial stage for each product (wind, solar or hydraulic) of each project, which will be sorted in descending order.
The continuous stage will be concluded at the closing of the deadline for inserting the bid into the system.
The proposal that completes the maximum disengagement limit defined by the MME will be fully complied with, without any inquiry, even if it exceeds the limit established by the Ministry.
The prize value of the winning bidder of the mechanism shall be paid in a single installment, which will be reverted to CONER⁵.
The endorsement of the result of the mechanism implies:
- Automatic termination of the RPC or its amendment (if the RPC includes more than one power plant);
- Release of the performance bond; and
- Termination of the grant, in case the winning bidder does not have other projects.
The winners of the mechanism will not be able to participate in the next two (2) reserve power auctions subsequent to the completion of the mechanism⁶.
Finally, the withdrawal of the winning bidder will imply the execution of the bond offered for participation in the mechanism and the application of the penalty of suspension of the right to contract or participate in bids promoted by ANEEL for a period of two years.
For further information about the contents of this memorandum, please contact the following Lawyers:
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Rosi Costa Barros
rosi.barros@nbfa.com.br
(11) 3007-8370
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Willian de Figueiredo Lins Junior
willian.lins@nbfa.com.br
(11) 3007-8370
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Luisa Tortolano Barreto
luisa.barreto@nbfa.com.br
(11) 3007-8370
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This memorandum has been prepared solely for the clients of this firm and aims at informing major changes and news of interest in the legal field. In the event of doubts, the lawyers will be at your complete disposal for further clarification.
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