What is charged on the electricity bill?

Often when receiving their electricity bill, the consumer is not aware of the various parameters addressed in it, usually, the consumer is only aware of the total amount to be paid. The energy bill is a reflection of how energy is being used. Monitoring and mainly understanding what is being charged on the energy bill is an important tool for the consumer since through this monitoring it is possible to reduce expenses and make better use of energy, adapting to the needs of the enterprise.

Electricity consumption is the amount of electrical power consumed in a time interval, expressed in kilowatt-hours (Kwh). Power is the amount of electrical energy requested in the unit of time. This quantity is specified in the devices, i measured in watts (W) or kilowatt (KW) corresponding to 1000 W. Consumer is the individual or legal entity that assumes the responsibility for the payment of energy tariffs, and the other obligations provided for by the concessionaire energy distributor and by ANEEL (National Electric Energy Agency).

Tariff Structure

It is a set of rules and regulations that aims to establish the price of electricity for different types of consumers. Regulated by ANEEL.

The Energy Tariff is the invoice that presents the total amount to be paid to the energy distribution concessionaire for the consumption of energy and provision of services, for a specified period.

The electricity bill includes three distinct costs: energy generation, transportation and distribution of the energy generated to the consumer and charges and taxes.

Energy tariff.

Tariff Flag

The costs to generate differ according to the type of plant being used for generation. Thermoelectric plants, for example, produce energy in a more expensive way than hydroelectric ones, because thermal plants are more complex. The tariff flag exists to pass on to the consumer this price difference in energy generation. In times of low rain, where the operation of hydroelectric dams is not conducive, thermoelectric dams come into action, to make up for the lack of dams, causing more expensive energy. This system came into force on 01/01/2015 as a way to pass on to the final consumer the costs of generating electricity in the country according to the plants that are being used and is applied by all energy distribution concessionaires connected to the SIN (National Interconnected System)

The operation of the tariff flag system is very simple: the colors green, red and yellow are used to signal whether the energy will cost more or not, depending on the favorable generation conditions. This system makes the electricity bill more transparent to the consumer. Often the consumer does not take into account that the conditions of generation fall directly on the cost of his account. This system also serves to raise awareness about the conditions of energy generation, making the conscious use of electricity possible. ANEEL discloses the current tariff flag.

  • Green flag:

Adequate and favorable conditions for energy generation, the consumer does not suffer an increase in his energy bill.

  • Yellow flag:

Less favorable conditions for energy generation. The consumer suffers an increase of 0.25 cents for each Kw / h consumed.

  • Red flag:

Conditions not favorable to energy generation. The consumer suffers an increase of 0.055 cents for each Kw / h consumed.

Taxes applicable to the electricity sector

In addition to the additions made by the tariff flags, state, federal and municipal taxes are also included in the energy tariff. These taxes are nothing more than taxes, which are later passed on to the public coffers by the energy distributors.

Federal taxes

  • PIS – Social Interaction Program.
  • Confins – Contribution to Social Security Financing.

These taxes are collected by the Federal Government, to maintain programs aimed at workers and Federal Government programs.

State Tax:

It is a tax imposed on any goods and services circulating in the state, charged by state governments, regulated by the state tax code.

Municipal Taxes:

The CIP (Interbank Payment Chamber) establishes among the powers of the municipalities to have, according to specific law and approved by the City Council, the form of collection and the CIP calculation base.

Basically, any responsibility for the services of design, implementation, and maintenance of the electrical installation of public lighting is attributed to the Municipal Government.

In addition to the sector charges: CCC (Fuel Consumption account), ECE (Emergency Capacity Charge), RGR (Global Reversion Reserve), TFSEE (Electricity Service Inspection Fee), CDE (Energy Development Account) , ESS (Charges for System Services), R&D (Electric Energy Research and Development), ONS (National System Operator), CFURH (Financial Compensation for the use of Water resources).

We can then draw the following conclusion: The consumer does not only pay for energy consumption, but the consumer also pays for energy consumption, the costs of generation and distribution, in addition to taxes paid to public coffers for the maintenance of public programs and public lighting. These values ​​are set out in the energy tariff, but it usually goes unnoticed by the consumer.