Rio de Janeiro State Government updates gas market regulatory framework
The State Government of Rio de Janeiro, through its Regulatory Agency for Energy and Basic Sanitation (Agência Reguladora de Energia e Saneamento Básico – AGENERSA), published on February 12, Deliberation Nº 4068/2020, which revoked the provisions contained in Art 1 to Art. 11 of Deliberation Nº 3862/2019.
The new Deliberation Nº 4068/2020, reinforces the principles contained in the Federal Government's New Gas Market program, among them: the harmonization of state and federal regulations and the effective liberalization of the market, in order to have a clearer regulatory framework for the self-producer to act , as well as for the self-importer and free consumer - Free Agents, within the State of Rio de Janeiro, with regard, among other aspects, to dedicated gas pipelines and their construction.
Among the changes and provisions brought by the new Resolution, we highlight the following:
• Definition of the concepts of Self-producer, Self-Importer, Free Consumer, Trader and Free Agents;
• Definition of a new minimum consumption volume for the Free Consumer, which will be 10,000 m³/day of gas instead of 300,000 m³/month;
• Rules, procedures and deadlines, to be observed by Free Agents and the State Distributor, related to the construction of dedicated gas pipelines and execution of the respective construction, operation and maintenance contracts, as applicable;
• The new Free Agents, with a minimum consumption of 100,000 m³/day, which have publicly known enterprises in the State of Rio de Janeiro, which comply with the requirements set forth in Article 9 of the aforementioned Resolution, may start the construction of the dedicated gas pipeline without prior consultation to the state Distributor. However, the State Distributor will have preferential rights to submit a proposal for the construction of the gas pipeline, provided that it meets the same conditions and deadlines provided for in the Free Agent project;
• During the first 3 (three) years of the Deliberation, it is authorized the building of dedicated gas pipelines only by new Free Agents, not yet connected to the distribution grid on the date of the Deliberation's publication, with some exceptions, as long as the contracts in force with the state distributors are respected;
• The definitions of the TUSD and TUSD-E tariff bases will still be subject to specific regulatory instrument, and the provisional TUSD tariff was maintained, which corresponds to the purging of the 1.9% distribution margin related to commercialization charges;
• The TUSD-E tariff benefit will be guaranteed only to new Free Agents, supplied by dedicated gas pipelines built as from the date of publication of the Resolution and up to its first three (3) years;
• Thermoelectric Free Agents may not use the TUSD-E and TUSD-Thermoelectric cumulatively, and must choose the one that suits them best;
• The general conditions of operation of the Trader will be defined by specific regulation, upon the opening of a specific Regulatory Process by AGENERSA.
For more information, contact our Oil, Gas & Offshore area.