Consumers connected to low-voltage power grids could save an average of 16% on their electricity bills if they switch to the free market starting in 2026. At the same time, those who remain under the management of distribution companies may also benefit, with an average 5% reduction in tariffs once the market opens.
The figures come from a study by the Brazilian Association of Energy Traders (ABRACEEL) on the effects of the measure on this consumer profile, particularly households.
Since 2024, all consumers connected to high-voltage grids—above 2.3 kilovolts (kV)—have been allowed to migrate to the free market, where they can choose their electricity supplier and contract terms. For low-voltage consumers, the opening could begin next year, under Provisional Presidential Decree 1,300/2025, which updates the legal framework of the electricity sector. Roughly 90 million consumer units are served through low-voltage networks.
The savings will only materialize if Congress votes on the conversion bill for the Executive Order (MP) 1,300 before September 17, when the decree expires. The joint congressional committee tasked with analyzing and voting on the decree has yet to be installed.
Among the initiatives in MP 1,300 are new criteria for the social tariff for low-income households, the opening of the free market to low-voltage consumers, and changes in how electricity costs are distributed to make the system more equitable. Measures include adjustments to the allocation of the sectoral charge known as the Energy Development Account (CDE), the implementation of the new social tariff, and redistribution of costs tied to the Angra 1 and Angra 2 nuclear plants and distributed micro- and mini-generation.
Rodrigo Ferreira, president of ABRACEEL, said there is still time for Congress to pass the decree. The rapporteur will be Congressman Fernando Coelho Filho, a former energy minister under Michel Temer.
Mr. Ferreira noted that, despite the volume of amendments, approval is feasible: “There are 600 amendments to the decree, but only about 150 are actually relevant. Many are duplicates. It’s manageable, but with each passing day it becomes harder to secure approval in time.”
MP 1,300 sets a timetable for opening the market: commercial and industrial consumers connected to low-voltage grids may migrate beginning in August 2026, while other groups, including households and rural users, would gain access starting in December 2027.
Mr. Ferreira said that approving the decree now represents a window of opportunity, including for distributors, which would avoid being left with significant surplus energy. Distribution companies are already dealing with the expiration of old bilateral contracts with power plants, the end of quota-based remuneration for Eletrobras hydropower plants, and thermal plants contracted in mid-2000s auctions.
“If we lose this window of opportunity without generating costs, new energy auctions will be necessary and new contracts signed. The moment is now,” Mr. Ferreira said.
The main reason for savings in the free market is that the average price of electricity purchased by distributors is higher than prevailing free-market rates.
The ABRACEEL study concluded that both free-market and captive consumers would benefit from lower costs under the decree. It also projects that the free market could account for up to 75% of Brazil’s total electricity consumption by 2038.
The CDE is expected to cost R$49 billion in 2026, charged directly to electricity bills. The account finances energy policies and subsidies. Mr. Ferreira highlighted that the potential savings for low-voltage consumers—around R$20 billion annually—should be seen as a counterweight to the rising costs of the CDE.
The savings will only materialize if Congress votes on the conversion bill for the Executive Order (MP) 1,300 before September 17 — Foto: Bruno /Germany por Pixabay