The energy price, this unknown

OPINION

We show in this issue that the operation marginal cost (CMO) has a key role in the sector model, which is to ensure consistency and transparency between the activities of planning, operation, contracting in the free market, and demand response. However, this role has been harmed by the growing detachment between operational decisions and prices, affecting the credibility and efficiency of the sector model. We suggest short and medium term measures to resolve the problem.

REGULATIONS

This section covers the following topics: (i) seasonalization of physical guarantee - in our view an unnecessary detail that can now cause great harm to consumers and further aggravate the current problems of distribution utilities; and (ii) MME Ordinance with guidelines for the fiA-0fl auction.

JURIDICAL

This section evaluates the main changes introduced in the second half of 2012 to the free energy contracting environment (ACL). A contrast is made between these recent rules - mainly the result of the conversion of MP 579 into Law - with the sector model introduced in 2004.

ENVIRONMENTAL

This month, the Environmental section brings to focus once again the Indian question, evaluating the history of conflicts and main needs and claims of these people, and seeking a peaceful solution.

SUPPLY

We present here the inclusion in the latest PMO of the plants which won the A-5 auction of 2012. The electric energy supply situation in Brazil is assessed through PSR's usual balances and surveys.