Taxes charged on the electricity bill!

Reading the electricity bill

The method for charging electricity consumption to users is the same for all utilities, but there are some things that will vary from state to state which are taxes. To start reading the electricity bill, we need to know the bill calculation period and how much electricity was spent.

In the image below observe the parts marked in red in the reading dates box shows the calculation period between 11/13 and 12/12, and just below in the technical information box there is the electricity consumption which was 121 kWh.

Technical information box has electricity consumption.

Calculation period of the electricity bill.

Continuing the reading of the electricity bill, in the box of billed values, ​​it is possible to have some more information such as, for example, the amount of billed energy, which in our case is 121 kWh, right in front of it there is an energy price with taxes, which is 0, 9796521 reais per kWh, which gives a total of 118.50 reais.

In the same box of billed amounts, it is possible to see the amount charged for the public lighting fee, which is a very controversial amount because it is a collection based on municipal law, that is, each city in Brazil may have a different law for this tariff. The concessionaire is responsible for charging the fee on the electricity bill, and then pass the amount on to the municipality. In some cities the rate of public lighting is fixed for all customers, while in other cities the rate varies according to the amount of energy used, so customers who spend more pay even more for the public lighting fee.

The last information in the billed values ​​box is the values ​​of the tariff flags. In November the red flag P1 was applied and December the yellow flag. As the account was calculated between November and December, we have the two flags applied proportionally, according to the number of days in each of the flags.

Amounts billed to the electricity bill.

At the bottom of the electricity bill, there are 3 taxes that are charged to the electricity bill. One state tax is ICMS, and two federal taxes are PIS / PASEP and COFINS. The tax that really makes the electricity bill more expensive is the ICMS, this is a state tax that has a different value in each state. For example, Minas Gerais has one of the most expensive ICMS’s in Brazil, reaching a rate of 30%. PIS / PASEP and COFINS electricity bill taxes.

Different energy values

We know that the vast majority of electricity distribution in Brazil is interconnected, but there are different amounts charged for the electricity consumed for each state today. Between the 70s and 90s, there was a single electricity tariff throughout Brazil, so consumers in all states paid the same amount for the electricity consumed. This amount guaranteed the remuneration of concessionaires, regardless of their efficiency, companies nonprofits were maintained by those that made a profit and by the Federal Government.

But in 1995 a tariff was established for the concession of geographical territory, where each company is contractually obliged to supply electricity. If that area coincides with that of a state, the tariff is unique in that state. Otherwise, there will be different rates within the same state. In this way, the values ​​of electricity tariffs are impacted by peculiarities of each region, such as the number of consumers, network kilometers, amount of energy served by a given infrastructure, cost of purchased energy, state taxes

What is included in the electricity price?

The electricity bill includes the value of three different costs, energy generation, transmission and distribution, which is basically the “rent of wires and cables”. Among these costs there are sector charges, which are the amounts used for the administration of the electrical system, they are:

  • CCC is the Fuel Consumption Account, used to subsidize thermal generation, mainly in the northern region where the systems are still isolated.
  • RGR is the Global Reversion Reserve, which is used to indemnify assets linked to the concession and encourage the expansion of the electricity sector.
  • TFSEE is the Electricity Service Inspection Fee, which has the purpose of providing resources for the operation of Aneel.
  • CDE is the Energy Development Account, it is used to promote energy development from alternative sources, promote the universalization of the energy service and subsidize the tariffs of the residential subclass, which are low-income tariffs.
  • ESS is the System Service Charges, they are used to subsidize the maintenance of the reliability and stability of the National Interconnected Electric System.
  • PRO INFO is the Incentive Program for Alternative Sources of Electric Energy, it is also included as a sectoral charge, it is responsible for subsidizing alternative sources of energy.
  • R&D is Research and Development in Energy Efficiency, promoting scientific and technological research related to electricity and the sustainable use of natural resources.
  • CFURH is the Financial Compensation for the Use of Water Resources, it is used to financially compensate for the use of water and productive land for the purpose of generating electricity. A portion of the fare money is used to pay royalties from Itaipu under the Brazil / Paraguay Treaty.
  • ONS which is the National System Operator, which has the function of keeping the electrical system in operation.

Among the sector charges that are charged, the apportionment of fraud and theft is also included. So those who regularly pay for electricity also pay a portion of the energy that is being stolen and diverted. This is true not only for residential consumers but also for large companies. On the Mundo da Elétrica channel on YouTube we have already made some videos talking about the theft and diversion of electricity, the famous cat.