IEEE Power & Energy Magazine - May/June 2020 - 47

table 6. Alternative tariff structures under discussion in Brazil.
Alternative

Name

Description

Current

Present condition, used as a comparison parameter

One

New minimal payment

Increase minimum consumption levels

Two

Commercial cost

Definition of fixed tariff without differentiation among consumers, charged in U.S. dollars
per consumer to recover commercial distribution costs (for example, billing and help desks)

Three

Fixed cost

Definition of fixed tariff without differentiation among consumers, charged in U.S.
dollars per consumer to recover commercial and distribution network costs

Four

Differentiated fixed cost

Definition of fixed tariff for different consumer sizes, charged in U.S. dollars per consumer

Five

Load

Definition of a tariff in U.S. dollars per kWh for distribution-system-availability costs

changes to the net-metering mechanism. For the low-voltage new meters would represent a 13% increase for a typical elecconsumers, ANEEL defined five alternatives to the purely vol- tricity bill. In alternatives 3 and 4, a fixed payment to recover
umetric tariff, carrying out a regulatory analysis for representa- the distribution network costs would be applied. The difference is that, in alternative 4, the amount to be paid is based on
tive distribution companies based on the following principles:
1) Revenue adequacy: guaranteeing sufficient service a consumer's average consumption during the past 12 months,
while in alternative 3 the fixed payment does not vary with
remuneration
2) Allocative efficiency: encouraging productive con- consumption. According to the regulator, alternative 4 presents the better tradeoff between costs and benefits (especially
sumer behavior during the short and long term
3) Transparency and intelligibility: simplicity of adop- when considering the transaction cost), since there would be
no need to change the existing meters.
tion and understanding
At the second hearing, the regulator proposed five alter4) Justice and nondiscrimination: no competitive advannatives for net metering. The mechanism would continue
tages to any consumer.
The alternatives under discussion are listed in Table 6. applying volumetric tariffs, but, contrary to today's pracAlternative 1 proposes to increase the minimum amount of tice, rates would vary for withdrawals and injections, difpower prosumers must consume to use the distribution net- ferentiating prosumers' production and consumption. While
work (even if they consume zero or negative kWh), from 100 consumption would continue paying for the entire electricity
to 219 kWh, which is necessary to recover distribution net- supply chain, production would pay for only part of it. Table 7
work costs. This would reduce the distribution companies' presents the alternatives. The first, for example, corresponds
cost-recovery risk. Still, consumers without DG would sub- to the current practice, where the energy produced by DG is
sidize prosumers, since both would be exposed to volumetric remunerated at a price that contains all components. Instead,
tariffs. In alternative 2, the minimal consumption limit would alternative 5 remunerates DG production at the wholesale
be replaced by a fixed tariff per consumer. The analysis car- price (without including network and other sector charges),
ried out by the regulator showed that cross subsidies remained which is significantly lower than that of the first option.
in this approach, since all consumers would be charged by the The chosen alternative will function temporarily, until a
same tariff regardless of their
peak load levels.
table 7. Components included in the volumetric tariff to remunerate DG
Alternative 5, with a payproduction.
ment in $/kW, proved to be the
most efficient in terms of cost
Sector
Sector
Distribution Transmission Charges
Distribution Charges
allocation, since all consumNetwork
Network
Applied to Network
Applied to
Energy
ers would be charged based
Alternative Tariff
Tariff
Peak Load Losses
Consumption Tariff
on their (approximate) use of
Status quo X
X
X
X
X
X
the network (although the time
element is still missing, that is,
One
X
X
X
X
X
when the peak load occurs).
Two
X
X
X
X
This approach's main problem
Three
X
X
X
concerns the cost of replacing all the low-voltage-level
Four
X
X
consumers' meters. Initial esFive
X
timates show that the cost of
may/june 2020

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IEEE Power & Energy Magazine - May/June 2020

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