# How is the discount program for those who reduce consumption

The federal government this week announced a discount program for those who reduce electricity consumption, in the midst of one of the worst water crises in the country, which has affected mainly energy generation.

But how does this program work?

According to Aneel (National Electric Energy Agency) and the Ministry of Mines and Energy, the program aims to reduce consumption by 15% between September and December this year in homes, small businesses and rural establishments.

The idea is to award R\$ 50 for every 100 kWh reduced on the electricity bill, as long as the reduction is at least 10% of the bill, compared to the average of what was consumed in the same months of 2020. The bonus is limited to a 20% reduction in consumption. In other words, for each kWh reduced, the consumer will have a discount of R\$ 0.50.

The first step is to compare consumption in the four months between September and December this year with last year’s consumption. If a family consumed about 125kWh between those months last year and reduced its consumption by 15%, it uses about 106.25kWh per month. As the reduction was 18.75 kWh, the monthly bonus amount will be R\$ 9.375, or R\$ 37.50 during the entire period.

Understand the calculation:

• Average consumption between September and December 2020: 125 kWh
• Average consumption between September and December 2021: 106.25 kWh
• Economy: 18.75 kWh (15%)
• Bonus: BRL 9.375 per month (18.75 times BRL 0.50) or BRL 37.50 in the period (BRL 9.375 times 4)

With this, the government hopes to reduce by 1.41% the use of electricity from the National Interconnected System (SNI), which is the set of facilities and equipment that enable the supply of electricity in the regions of the country that are electrically interconnected. The program will cost the public coffers around R\$ 340 million per month, during the established period.

The launch of the program takes place in the same week that Aneel announced the creation of a new billing banner, the water scarcity banner. Effective until April 2022, the new brand provides for a fee of R\$ 14.20 per 100 kWh. As a result, there will be a 49.6% increase in relation to the level 2 red flag, which was already being applied.

On Monday night, the minister of Mines and Energy, Almirante Bento Albuquerque, made a statement on the national network warning about the energy crisis that the country is facing. According to him, measures are needed to avoid a blackout in the country. “The conscientious and responsible use of water and energy will considerably reduce the pressure on the electrical system, also reducing the cost of generated energy,” he stated. He suggested that the population reduce the use of showers, irons and other equipment.

Since then, the Ministry started to publish, on its social networks, ways to save electricity. In a video posted on Twitter, for example, the Ministry advises taking shorter showers, not leaving the tap running for nothing and reducing the use of air conditioning.

On average, a family consumes 163 kilowatt-hours per month, totaling R\$139.26, including taxes. By saving 20%, for example, this same family would pay a 36% smaller bill: in addition to the 130.4 kWh, they would receive a bonus on the 32.6 kWh saved and would pay R\$ 88.43.

## How to save on electricity bills?

The first step is to understand how to calculate the energy consumption of an object in the month. Consumption is calculated by multiplying the power of an appliance, the number of hours and the number of days the appliance is used, divided by 1000. This multiplication will give the total in KWh, a measure used by electricity companies for billing the home’s electricity bill.

Each appliance has different electrical power and is consumed for different periods. But it is possible to do an average calculation to know where to save.

According to the Aneel website, an electric shower, for example, can vary between 2,100 to 3,500 watts in summer (warm) mode. The hourly consumption is therefore from 2.10 to 3.50 kWh in summer.

Refrigerators also vary according to capacity in liters and monthly consumption, but Aneel warns that new refrigerator models use much less energy, on average 43.6 kWh per month, or almost 250% less than an older refrigerator, which spends an average of 150 kWh per month.

A survey carried out by the Brazilian Center for Energy Efficiency Information (Procel) also shows the average monthly consumption of the most common household appliances in a household. According to the survey, air conditioning is the appliance that consumes the most energy in the home, with a minimum consumption of 128 kWh per month, with use of 8 hours a day (9,000 BTU/h).

Once you know how much electricity each appliance consumes, it is possible to make choices about its uses.

Accumulate clothes to wash at once, do not open the refrigerator door if you are not going to get something and do not put pans and platters with the food still hot in the refrigerator and unplug all appliances that are in standy by mode are some of the tips raised by the finance executive, André Aragão.

“It is important that people are aware that the time is for saving electricity and water. The situation is critical, and if we do not save, it is likely that we will go through a period of rationing,” he says.

## Is the consumer the main culprit?

Although the consumption reduction incentive program is aimed at consumers and their homes, analysts point out that the consumption of individuals is not the main cause of the crisis we are going through.

For the electrical engineer at Sinapsis Inovação em Energia, Daniel Szente Fonseca, the State’s lack of planning to raise awareness about the water crisis can be pointed out as the main reason we are living such a moment.

“There may be waste, but that’s not enough to cause the impact we’re seeing in the country. It’s not about the population’s consumption, but about [governos anteriores e o atual] not having dealt with consumption policies in the past,” he says. “The low supply of reservoirs has been observed in recent years, we could have acted at that time to avoid drastic measures today.”

The engineer points out, however, that incentive programs tend to be more effective than programs that punish consumption, and that is why the measure elaborated by the Ministry is positive.

## Impact beyond homes

The water crisis and its impact on the electricity bill will be seen not only in the electricity bill, but in prices in general, experts say.

In a report, the chief economist of emerging markets at Capital Economics, William Jackson, points out that the production of energy from hydroelectric plants is being affected by the drought and could result in even higher inflation in the country.

“Fiscal risks could also intensify if the government tries to cushion the blow to families. The introduction of economically harmful electricity rationing measures is not in our central scenario, but it is a growing risk,” he says.