Despite the countless debates among the entities that represent the energy sector and government agents, there are still some doubts of legal nature about the new proposal to the energy sector that may be adopted in the conversion project, which is under examination at the National Congress.

The first and, maybe, the most disturbing one is the establishment of limitations to the granting authorities – the Federal Government. Incumbency/duties may be delegated from a public entity to another with due regard for legality principle, i.e., the law as approved by the Legislative Branch. Very little can be delegated by means of an administrative act – decree.

As established in section 21, XII, b, . the Federal Government is incumbent on exploiting electricity services, directly or by means of authorization, concession or license. One can assume that the Federal Government, represented by the President, is the granting power for matters related to electricity.

In the case of Provisional Measure 144/2003, when the legislator wanted to delegate powers to the Ministry of Mines and Energy, this was done expressly, as in section 3A, par. 4. Nevertheless, most times, the published text refers to the incumbency of the granting power only, i.e., the Federal Government, but not the Ministry. However, Item 4 of the manual for the new model clearly sets forth that the granting power is the Ministry of Mines and Energy, what we deem not consistent because the provision has no legal basis.

Best jurisprudence and case law have established that the delegation of granting power may only be ascribed by the law and, in this case, Provisional Measure 144 does not set forth that the Ministry may be incumbent on granting power. The statute that deals with the organization of the Presidency, Federal Law 10,683, of May 28th, 2003 makes no reference to how the assignments of granting powers should be performed

Thus, it seems to us that the Ministerial incumbencies have not yet been totally clarified and defined and the conversion project of said Provisional Measure shall carefully set forth such definition with due regard for the legality principle, in order to avoid conflicting discussions that would only escalate regulatory risk.

To this sense, Federal Decree 4,931, of December 23rd, 2003, which assigned to ANEEL certain incumbencies should as well be reviewed as regards expropriation power, i.e., the power to determine that an asset is of public interest for purposes of expropriation. We understand that such incumbencies should not be ascribed to a Regulatory Agency by means of a decree, and rather by duly voted law. Similar incumbencies were, in the best practice of law, attributed to ANEEL by means of the law that created ANEEL..

Yet another question that should be carefully reviewed by congressmen in the conversion project is the applicability of new legal rules to the contracts in progress, taking into account the elementary contracting rules set forth by the new Civil Code, the vested rights of the contracting parties and the legal certainty for application of the law in time, which are not dealt with by the Provisional Measure. Literal interpretation of the section 15, which forbids indistinctly the renewal or extension or rider of the contracts in progress, may cause countless losses to the parties.

In addition, we deem that the federal legislator took the right path by maintaining arbitration as a means of solution of the issues related to the transactions to be carried out in the Electricity Trade Chamber (Câmara de Comercialização de Energia Elétrica - CCEE). Without expressing any poilitical judgment, these are the reflections we understand as the most relevant in the discussions to which the Provisional Measure shall be submitted.

It is known that currently society takes part and interferes much more in the government resolutions than before, and that is why the alliance between the public authorities, the private initiative and the customers should aim at the adjustment in a hybrid environment and the Congressional debate of the Provisional Measure should be part of the democratic process we are facing.

Sources:; January 23rd, 2004.
Date of insertion:   29/01/2004 - 22:14:11