In order to sell part of its stake in the company, the government said that the privatization of Eletrobras could reduce the cost of energy.
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The sale of Eletrobras should raise around R$ 100 billion to the public coffers, being the second largest operation of its kind in the history of Brazil. In order to sell part of its stake in the company to the private sector, the government said privatization could reduce the cost of energy to consumers. However, will this really happen? Find out below.
With the sale of Eletrobras, will the electricity bill go down?
According to experts, the decrease in the value of electricity bills should not occur in the short term. One of the reasons for this is that the electricity sector is already dominated by private companies. Therefore, they are the ones who set the tariffs for consumers.
“That doesn’t make any sense. What would lead to the reduction of bills? Eletrobras does not even set energy tariffs. The local distribution companies are responsible for charging the population for electricity, and most of them are already private”, said Professor Ewaldo Mehl, from the Department of Electrical Engineering at UFPR.
Currently, Eletrobras focuses its activities on generating electricity, in addition to being a shareholder in distribution companies. It has little power, therefore, over setting tariffs.
According to Celio Bermann, associate professor at IEE-USP, privatization should raise the cost to consumers.
“The easiest argument to be able, let’s say, to reach the unwary is precisely to say that the electricity tariff will be lowered. It is a rhetoric that always appears. But excuse me for anyone who believes in the fantasy that fares will be reduced. This is devoid of any basis. The tariffs will be more expensive, and the service provided will be more precarious”, explain.
The objective is not to reduce the consumer’s bill.
The main objective of the privatization of Eletrobras is not to reduce the value of electricity bills, but to give the company greater investment capacity. The sale of 15% of the capital to the private sector will bring more resources to the box.
Thus, this should increase the capacity to modernize energy generation and transmission infrastructures. And that can benefit consumers in the long run.
In addition, another factor that should benefit consumers is the increase in competition in the electricity sector. This is what Professor Edmar Almeida, from the Energy Institute at PUC Rio points out.
“When you privatize the energy sector, you are trying to introduce competition. The idea behind it is that you will have more competition and, through competition, you will promote the reduction of tariffs. But it is a long-term process.” explains Almeida.
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