Electricity losses costing Brazil R$10 billion in lost taxes


Brasilia, Brazil — (METERING.COM) — October 21, 2008 – Electricity losses are costing Brazil around R$10 billion (US$4.7 billion) annually in lost taxes, according to the country’s audit court, Tribunal de Contas da União (TCU), in an assessment of the sector.

Moreover, while customers are paying 5 percent more in tariffs in recent years the losses have increased, caused by theft, operational failures and absence of metering.

And to get a sense of the scale of these losses, the amount of electricity lost in 2007 could power the states of Minas Gerais, Ceará, Bahia and Pernambuco together for a year.

The TCU says the technology used by electricity distributors is one of the causes of the losses. TCU technicians found that among the 64 distributors in Brazil, there are still companies that use mechanical meters – technology that is more than 100 years old, which facilitates theft and hampers efficient measurement. They also found on visits to Light and Ampla in Rio de Janeiro and to Manaus Energy in Amazonas that the vulnerability of the network is too great.
However, the technology is available in Brazil to combat fraud and losses, the TCU says, highlighting the developments of a centralized metering system by the Research Centre for Electrical Energy (Centro de Pesquisas de Energia Elétrica, Cepel), and of a shielded electronic metering system by Ampla, now installed for 350,000 customers. Nevertheless only 7 percent of the resources allocated to new studies are channeled to projects to combat losses.

Given that the level of the losses is one of the factors that influence the level of the tariffs, and that since 2003 these have been passed on to consumers, the TCU recommends that the regulatory agency Aneel, takes steps to reduce the losses. The agency should establish allowable levels of technical losses by means of comparison between the distributors and set a downward trajectory for their reduction, among other measures.