Market Structures and Institutions

Granting of concessions and authorizations

Market Structures and Institutions

Granting of concessions and authorizations

September 22nd, 2003Brasília

September 22nd, 2003Brasília

CIGRÉ WorkshopCIGRÉ Workshop

Isaac Pinto AverbuchDirector of ANEEL

Isaac Pinto AverbuchDirector of ANEEL

Granting of concessions and authorizationsGranting of concessions and authorizations

I. T e G process

II. Outcomes

III. ANEEL’s actions

I. T e G process

II. Outcomes

III. ANEEL’s actions

TransmissionGrant management TransmissionGrant management

CND approvesCND approves

PlanningPlanning

ExpansionExpansionReinforcementsReinforcementsImprovementsImprovements

Determinative ProgramDeterminative Programfor Transmissionfor Transmission

ModalityModalityRequirements for the ParticipationRequirements for the Participation

ProceedingsProceedingsJudgment Criteria and Maximum PricesJudgment Criteria and Maximum Prices

OperationOperation

Plan for the exPlan for the expanpansionsionand reinforcementsand reinforcements

Program forProgram forGrantsGrants

Program for theProgram for theEnterprisesEnterprises

ANEEL authorizes andANEEL authorizes andEstablishes RevenueEstablishes Revenue

BidBidGranting of the Concession Granting of the Concession

by the President of theby the President of theRepublicRepublic

Concession contractConcession contractwith ANEELwith ANEEL

TransmissionBidding process

Year 1Year 1 Year 2Year 2 Year 3Year 3

ProclamationProclamation

Commercial Commercial operationoperation

Document Document elaboration elaboration for the TCUfor the TCU

Document Document elaboration for elaboration for

the CND the CND

Concession Concession GrantGrantinging Decree Decree

Concession Contract Concession Contract SignatureSignature

FeasibFeasibiillitity y studies CCPEstudies CCPE

Constitution of the Constitution of the SPESPE

BidBid

Transmission - OutcomesAuctions (1998/2002)Transmission - OutcomesAuctions (1998/2002)

AuctionsAuctions SuccessesSuccesses FailuresFailures InvestmentsInvestments TotalTotal BenefitsBenefits

LTs 27 1* R$ 5 billions8.017

km

Saved Costs**

~750 km

* TL Ouro Preto - Vitória (authorized to FURNAS)

** For 230 kV lines (or 430 km for 500 kV lines)

* TL Ouro Preto - Vitória (authorized to FURNAS)

** For 230 kV lines (or 430 km for 500 kV lines)

ANEELANEEL

Transmission Line Basic Network Annual Increase

3.077,10

861,20

2.436,802.047,00

648,20

3.102,90

1.149,70

2.079,85

20,30

706,94622,86

109,40

915,50

623,30

5.816,92

0

1000

2000

3000

4000

5000

6000

7000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003* 2004*

Year (* Forecast for operation entry)

Tra

nsm

issi

on

Lin

e I

ncre

ase

(km

)

Transmission Line Basic Network Annual Increase

3.077,10

861,20

2.436,802.047,00

648,20

3.102,90

1.149,70

2.079,85

20,30

706,94622,86

109,40

915,50

623,30

5.816,92

0

1000

2000

3000

4000

5000

6000

7000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003* 2004*

Year (* Forecast for operation entry)

Tra

nsm

issi

on

Lin

e I

ncre

ase

(km

)Transmission - Outcomes

Basic Network (Annual Increase)

Transmission - Outcomes

Basic Network (Annual Increase)

• Enterprises : 36

– on schedule: 24 (~ 67%)

• 22 normal e 2 advanced

• 16 “concession” e 8 “authorization”

– delayed: 12 (~ 33%)

• 3 “concession” e 9 “authorization”

• Enterprises : 36

– on schedule: 24 (~ 67%)

• 22 normal e 2 advanced

• 16 “concession” e 8 “authorization”

– delayed: 12 (~ 33%)

• 3 “concession” e 9 “authorization”

Transmission – Basic network EnterprisesTransmission – Basic network Enterprises

Transmission – Granting processTransmission – Granting process

• Clear rules (investor’s confidence)• Improvements in the bid’s proclamation • The winner is who offers the “lowest tariff”

(final consumers are the beneficiaries) • Elimination or minimization of risks out of the

business environment• Bid’s Proclamation previously approved by the

Federal Audit Court (TCU)• Auditing follows a chronogram• Ongoing dialog with investors, consumers and

society

• Clear rules (investor’s confidence)• Improvements in the bid’s proclamation • The winner is who offers the “lowest tariff”

(final consumers are the beneficiaries) • Elimination or minimization of risks out of the

business environment• Bid’s Proclamation previously approved by the

Federal Audit Court (TCU)• Auditing follows a chronogram• Ongoing dialog with investors, consumers and

society

Generation – Granting Management ProcessGeneration – Granting Management Process

Environmental Reference Term (X-ray)

Commercial Operation

PL

IL OLRenewalRenewal

Environmental licenses

PL: Previous License IL: Installation License OL: Operation License

BIDBIDPotential Grant Potential Grant

Concession ContractConcession Contract

INVENTORY FEASIBILITY BASICPROJECT

EXECUTIVE

PROJECT/

CONSTRUCTION

OPERATION

Study hand out(Data Room ANEEL)

Technical NoteTCU

Proclamation

Pre-qualificationDocument

Pre-qualificationJudgment Publication

AUCTION

Grant

ConcessionContract

ContractWarranty

ProposalWarranty

DaysDays

60 30 50 15 20 1 90 30

Stated period: 296 days

~10 months

GenerationBidding ProcessGenerationBidding Process

Annual Generation Increase(1990 – 2002)Annual Generation Increase(1990 – 2002)

1.1061.106

4.6384.638

2.3272.327

2.8282.828

4.2624.262

2.5062.506

2.9292.929

1.4071.4071.2181.2181.1731.1739089081.0911.091925925

00

500500

1.0001.000

1.5001.500

2.0002.000

2.5002.500

3.0003.000

3.5003.500

4.0004.000

4.5004.500

5.0005.000

19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 20002000 20012001 20022002

ANEEL(dec/1997)

ANEEL(dec/1997)

Po

we

r (M

W)

Po

we

r (M

W)

Average 90/94: 1.063 MWAverage 90/94: 1.063 MW Average 95/99: 2.119 MWAverage 95/99: 2.119 MW Average 00/02: 3.795 MWAverage 00/02: 3.795 MW

Ca

pac

ity

(M

W)

Ca

pac

ity

(M

W)

3.664,3 2.267,6 1.715,0

2.131,2 4.401,44.075,9

3.697,4

2.741,3

5.426,0

1.920,8

350,2

2.741,32.741,3

5.762,65.762,6

8.172,08.172,0

9.986,59.986,5

12.203,112.203,1

1.0001.000

3.0003.000

5.0005.000

7.0007.000

9.0009.000

11.00011.000

13.00013.000

15.00015.000

20032003 20042004 20062006 20072007

Heavy constraints (24,5%)Heavy constraints (24,5%) Constraints (43,9%) Constraints (43,9%)

No constraints (31,6%)No constraints (31,6%)

4.645,9

Data updated on 15/8/03 (not including the 2.049 MW from the emergency thermals)Data updated on 15/8/03 (not including the 2.049 MW from the emergency thermals)

1.828,5

Generation EnterprisesGeneration Enterprises

2005

Expected outcomes by Consumers, Investors and SocietyExpected outcomes by Consumers, Investors and Society

Consumers e SocietyConsumers e Society InvestorsInvestors BothBoth

• Guarantee Consumer’s Rights

• Fair tariffs

• Improvement in the quality and supply of service

• Efficiency

• Protection of the environment

• Technological development

• Decentralized performance

• Clear and steady rules

• Adequate remuneration

• Regulation and concession contract compliance

• Balance

• Isonomic treatment

• Accountability – Institutional Control

• Transparency

• Impartiality

• Agile and efficient management

• Confidence

• Participation in the regulatory process

• Ongoing dialog

• Identification of the regulator as an institution that satisfies the public interest

• Fulfill expectations of consumers, investors and the society

• Improve participation mechanisms for consumers and transparency

• Reduce asymmetry of information

• Disseminate the regulation culture

• Achieve autonomy

• Contribute to the clear delimitation of boundaries amid the Agency, the Government and the Market

• Skilled and adequately paid in-house staff

• Broaden decentralization

• Harmonically and complementary external controls

• Identification of the regulator as an institution that satisfies the public interest

• Fulfill expectations of consumers, investors and the society

• Improve participation mechanisms for consumers and transparency

• Reduce asymmetry of information

• Disseminate the regulation culture

• Achieve autonomy

• Contribute to the clear delimitation of boundaries amid the Agency, the Government and the Market

• Skilled and adequately paid in-house staff

• Broaden decentralization

• Harmonically and complementary external controls

ConclusionsRegulator's challengesConclusionsRegulator's challenges

IBAMA

STATES

MUNICIPALITIES

ANA

STATES

COMMITTEES

ENVIRONMENT WATER

ANEEL

MME

AGENCIES

POWERPOWER

SOIL

USE

DI

R.

PLAN

FFEEDDEERRAALL

SSTTAATTEE

MMUUNNIICCIIPPIIAALL

NGO

GROUPS

PUBLIC PUBLIC ATTORNEYATTORNEY

MUNICIPALITIES OTHERS

ANEEL’s recent actionsANEEL’s recent actions

ENTERPRISE

www.aneel.gov.br

Telephone: 0800-61-2010

Fax: (61) 426-5705

institucional@aneel.gov.br

www.aneel.gov.br

Telephone: 0800-61-2010

Fax: (61) 426-5705

institucional@aneel.gov.br