The Federal Government, through Law n. 14.120/2021, enacted regulatory improvement measures applicable to electrical energy generation and commercialization, as well as measures for mitigating pandemic-related consumer tariff rises.

The Federal Government, through Law n. 14.120/2021, enacted a wide range of measures intended to improve the regulatory framework of the electric energy sector, specifically to the generation and commercialization segments, and to mitigate pandemic-related consumer tariff rises.

The law revised the conditions of some Research and Development and Innovation (RDI) investment requirements provided by Law n. 9.991/2000 and other complementary legislation, applicable to electrical energy concessionaries. It transferred specific funds, previously destined to obligatory RDI projects, to the Energy Development Account (CDE, in the Portuguese acronym), given that those RDI projects were not initiated or contracted. Those funds can be applied in mitigating consumer tariff rises in the context of the pandemic, as provided by Law n. 10.438/2002. The new conditions are valid until the end of 2025.

The law also amended the electrical energy commercialization rules provided by Law n. 10.848/2004, introducing specific provisions to the Chamber of Electrical Energy Commercialization (CCEE), related to defaulting consumers in the free market.

Furthermore, the law revised specific service provision criteria applicable to distributors, related to service provision in Isolated Systems, provided by Law n. 12.111/2009, and for “capacity reserve” emergency service provision, ruled by Law n. 12.783/2013. The law also enacted hydrological risk compensation provisions for generation power plants auctioned between 2015 and 2017 (see Law n. 13.203/2015 on hydrological risk).

The law results from Provisional Measure n. 998/2020.