Brazil: Overdue electricity bills hit record in 2021

RIO DE JANEIRO, BRAZIL – With the impact of the pandemic on household income and the rising cost of energy due to the water crisis, more Brazilians are unable to pay their electricity bill on time.

According to the National Electric Energy Agency (ANEEL), 39.43% of low-income households have delayed their bills for at least a month in 2021.

The share of these consumers with overdue bills has been growing since 2012, when the index began to be measured, and stood at 17.85%.

With no funds to pay their bills, households are now exposed to shut-offs, allowed again since last October. A month’s delay in payment risks the service supply.

According to ANEEL rules, there is no minimum amount of unpaid bills to allow energy distributors to shut-off power supply.

The only rule is that consumers must be notified at least 15 days in advance. Low-income households are those with a monthly income of up to half the minimum wage per person – currently R$606 (US$115).

The shut-off suspension established by ANEEL in 2020 and 2021 lowered the number of disconnections. There were 391,000 in 2020, the first year of the Covid-19 pandemic. In 2019, 1.3 million shut-offs were enforced.

Brazilian Association of Electricity Distributors (ABRADEE) chairman Marcos Madureira points out that, despite authorization to shut-off service in the first month of delay, companies are looking for alternatives.

“Electricity shut-off is the last resort. It is of no interest to keep consumers disconnected, it doesn’t make sense, but it must remain active in the appropriate form.”

HIKES

Since 2015, Brazilians’ energy bills have risen by more than twice the rate of inflation. In 7 years, residential tariffs have accumulated a 114% hike – compared to 48% inflation in the same period, a difference of 137%.

According to the Brazilian Institute of Geography and Statistics (IBGE), the price of residential electricity rose 21.21% last year.

The Brazilian Consumer Defense Institute (IDEC) Energy and Sustainability Program consultant Clauber Leite said that households have entered a cycle of paying overdue bills.

“There is a whole history of tariff hikes, and this has impacted families’ budgets. Consumers are increasingly in debt.”

ANEEL’s data show that not only the poorest have struggled to keep up with their bills. Considering all residential consumers, 22.44% of families have overdue bills for at least a month.

FGV’s Center for Studies in Regulation and Infrastructure (CERI) researcher Diogo Lisbona said that bills are a bigger burden for low-income consumers. “Even for those getting a discount because they are classified as low-income, the weight of the energy tariff is greater than for those with a higher income.”

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