A Rigged Game: Why Our Energy Rules Don't Protect Us?

 Imagine you're watching a football match. The rules are clear: of the eleven players, only the goalkeeper may use his hands, fouls are called, and a goal only counts if the ball crosses the line. Now imagine the referee is the striker's cousin. Imagine the club owners have the power to change the rules mid-match if they don't suit them. And imagine that, when a team is fined for foul play, the fine is so small it's more worthwhile to break the rules than to play fair. The game still has rules, but it has stopped being fair. The result becomes predictable, and the one who always loses is the fan who paid for the ticket.

This analogy, unfortunately, describes precisely how we, as energy consumers in Brazil, feel every month when we pay our electricity bill. We recognise the need for rules in the electricity sector, even a complex rulebook, to ensure that power reaches our homes safely, reliably and at a fair price. We have ANEEL, our regulatory "referee". We have laws and decrees. On paper, the system is a work of regulatory engineering. In practice, we feel as though we're losing a game of marked cards.

So why doesn't the system, even with a rulebook under its arm, work as it should? The answer lies not in the absence of rules, but in the way they are distorted, ignored or sidestepped by forces far more powerful than the interests of the ordinary consumer.

1. The Political Conductor and the Out-of-Tune Orchestra

The first, and perhaps most corrosive, problem is political interference. The electricity sector should be guided by technical logic and a long-term outlook. Building a power plant, reinforcing a transmission line, or deciding which energy source to encourage are projects that take decades to mature and whose effects last for generations.

Our political system, however, operates in four-year cycles. A politician's horizon rarely extends beyond the next election. And that is where the technical score is torn up to make way for populist improvisation. We see this clearly in tariff manipulation. Years ago, the government decided, by decree, to force a reduction in electricity bills. It seemed like great news, a gift to the people. But it wasn't. It was like putting a lid on a boiling pressure cooker. The bill, artificially held back, exploded a few years later in what became known as the "tarifaço", a brutal price hike that caught everyone off guard and threw the budgets of millions of families and businesses into disarray.

The rules said costs should be passed on transparently. Politics said "not now". The result was financial chaos that required billion-real loans to bail out the distributors, loans that, of course, we're still paying off today through interest built into the tariff.

What's more, leadership positions at regulatory agencies and state-owned companies in the sector often become political bargaining chips. Instead of appointing the most qualified technical expert, a political ally is appointed. The "referee" of our game ends up having to answer directly to the interests of one of the teams, and its independence, a fundamental pillar of any serious regulation, is irreparably compromised. The compass that should point towards society's wellbeing ends up pointing towards the interests of the government palace instead.

2. Who Owns the Ball: Lobbies and Regulatory Capture

If politics interferes "from the top down", major economic interest groups exert pressure "from the sides". Generators, transmission companies and distributors are giant businesses with billions in profits. They have armies of lawyers, consultants and lobbyists whose sole purpose is to ensure the rules of the game always favour them.

This leads to a phenomenon known as "regulatory capture". In simple terms, the regulator (ANEEL), which was created to oversee and control the sector on society's behalf, ends up becoming so close to the companies it regulates that it starts defending their interests rather than ours.

How does this happen in practice? Through influence over the creation of new rules. One example: when discussions arise over how to remunerate a new type of power plant, say, a gas-fired thermal plant. The gas companies' lobby will argue that they need long, expensive contracts to guarantee the "security" of the system. They will present complex studies, attend every public hearing and lobby members of parliament. We, the consumers, are busy working and trying to pay our bills. And we lack the technical knowledge needed to take an active part in this process. Who has more of a voice in this scenario?

The result is that we often see the approval of rules that guarantee exorbitant profits for certain segments, under the pretext of technical necessity. We end up contracting energy from extremely expensive, polluting thermal plants that stay switched on even when our reservoirs are full and the sun is shining, simply because their contracts guarantee they get paid whether they're used or not. The rule exists, the contract is legal, but the result is a more expensive electricity bill and a less efficient system. We lose, and so does the environment.

3. Two Steps Forward, One Step Back: The Long-Term Planning Crisis

Another chronic flaw is our inability to plan for the future. Brazil suffers from a pathological short-termism. We only act once the crisis is knocking at the door. Our energy mix, heavily dependent on hydroelectric power, is a classic example. We have known for decades that climate change would bring more severe and frequent droughts. Logic would dictate diversifying the mix in a planned way, investing heavily in wind, solar and biomass to reduce our dependence on the rain gods.

What did we do instead? We waited for the 2021 water crisis, with reservoirs at alarming levels, before scrambling to switch on every thermal plant available, at an astronomical cost. It was the equivalent of booking a ride-hailing car at the most expensive surge price in history. The "tariff flag" rule worked, it passed the cost on to us. But the fundamental rule, planning to avoid the crisis in the first place, failed miserably.

This reactive, short-sighted, inefficient planning is the hallmark of our sector. Transmission projects that would carry cheap energy from the Northeast to the Southeast are delayed for years by red tape and a lack of political will. Grid expansion fails to keep pace with the growth of renewable generation, and we see waste taken to its extreme: wind and solar farms ready to go, with no way to feed their energy into the system. It's like building a model farm with no road to bring the harvest to market.

4. Oversight on Paper and a Sense of Impunity

What good is a traffic law if there's no enforcement on the streets? In the electricity sector, the feeling is similar. Distributors, for example, have quality targets to meet, such as limits on the duration and frequency of power outages. When they fail to meet them, they should be fined.

The fines exist, but they often don't seem enough to force a change in behaviour. For a company turning over billions, a fine of a few million can just be an "operating cost", cheaper than investing heavily in modernising the grid in remote areas. What's more, companies take these cases to court, and the process drags on for years.

For the consumer at the end of the line, the frustration is very real. When we go hours without power, lose food from the fridge or have an appliance burn out, the path to compensation is a bureaucratic maze. The rule that grants us this right exists, but the effort required to exercise it is so great that many people give up. We feel that the rule protects the company, which can follow a slow, complex protocol, but does not protect our immediate need.

Conclusion: The Gap Between What's Legal and What's Fair

The real problem with Brazil's electricity system isn't a lack of a rulebook, but a lack of genuine commitment to the principles that gave rise to it. The rulebook was written, but the most powerful players have learned to ignore the pages that don't suit them, while the referee often blows the whistle in favour of the home side.

Our electricity bill isn't expensive purely because of the cost of generating and transporting electrons. It's expensive because it has Brazil's "cost of doing business" for energy baked into it: the cost of inefficiency, of reactive planning, of misguided political decisions, of profits guaranteed through lobbying, and of oversight that fails to deter. We pay for the energy we consume and, on top of that, for the dysfunction of the entire system.

The path to change isn't to tear up the rulebook, but to fight for it to be honoured in spirit. To demand transparency, to call for technical appointments, to push back against privilege, and to make noise when the service falls short. We need to understand that as long as the game keeps being played with marked cards, the final score will always be the same: our pockets empty and the bitter feeling that, once again, we've been played for fools. The rule applies to everyone, but in Brazil, it seems some are more "everyone" than others.