Brazil Sets Yellow Power Tariff for May, Adding R$1.885 per 100 kWh

Overview

• Aneel said Friday the May flag will be yellow, adding R$1.885 for each 100 kWh as weaker rains cut hydro output and costlier thermal plants step in.
• Following Wednesday’s board vote, eight distributors received annual tariff revisions with average hikes between about 5% and 15% across parts of São Paulo, Ceará, Bahia, Rio Grande do Norte, Sergipe, Mato Grosso and Mato Grosso do Sul.
• Regulators and utilities cite sector charges led by the CDE fund, higher energy purchase and transmission costs, and the end of past discounts as the main drivers of the increases.
• Some bills were softened by deferring part of the pass‑through to future cycles or by advancing hydropower royalty resources known as UBP, while a federal loan idea to delay impacts was shelved after pushback inside the government.
• Economists warn the combined effects could lift inflation and strain energy‑intensive businesses and small shops, and recent reserve‑capacity contracts are projected to add further tariff pressure into the next decade.