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ABCEAssociação Brasileira de Concessionárias de Energia Elétrica (Brazilian Association of Electric Power Companies). The association brings together electric energy companies that operate transmission, generation, and distribution concessions granted for public services. ABCE was founded in 1936.

ABEER Associação Brasileira de Energia Renovável e Eficiência Energética (Brazilian Association of Renewable Energy and Energy Efficiency)

ABRACEAssociação Brasileira de Grandes Consumidores de Energia Elétrica (Brazilian Association of Large Energy Consumers). The association brings together the largest energy consuming industrial groups in the country. Its members account for 20% of the energy consumed, or 33% of the industrial consumption in Brazil. The association represents energy-intensive consumers in industries such as: cement, copper, aluminum, chemical and petrochemical, iron-alloys, steel, mining, pulp and paper, air gases, among others.

ABRACEELAssociação Brasileira dos Agentes Comercializadores de Energia Elétrica (Brazilian Association of Electricity Marketing Agents). The association is aimed at promoting the unification of marketing agents authorized by ANEEL and representing them before public authorities and national and international organizations.

ABRADEE Associação Brasileira de Distribuidores de Energia Elétrica (Brazilian Association of Electric Energy Distributors). ABRADEE was founded as a Distribution Committee and transformed into an association in 1995. Its members account for over 95% of the Brazilian electricity market.

ABRAGE Associação Brasileira das Grandes Empresas Geradoras de Energia Elétrica (Brazilian Association of Large Electricity Generation Companies). The association was founded in 1998 with the objective of supporting electricity generating companies to better develop their activities. It represents the country’s major generation companies, predominantly of hydroelectric origin.

ABRATE Associação Brasileira das Grandes Empresas de Transmissão de Energia Elétrica (Brazilian Association of Large Electricity Transmission Companies). The association was founded in 1999 with the objective of bringing together and defending the interests of electric power transmission companies, which emerged as a result of the process that implemented the new energy model for the sector.

ACL – Ambiente de Contratação Livre (Free Contracting Environment). A market segment comprising of the purchase of electricity by non-regulated market agents (such as Free Consumers and electricity traders).

Adhesion Agreement – A contractual instrument signed between consumers and suppliers of electric energy containing clauses strictly linked to the rules and regulations approved by ANEEL. The contract must be accepted in its entirety by all parties.

American Depositary Receipt (ADR) – An American security backed by shares of companies in other countries. In other words, an ADR is a certificate that is traded in stock exchanges in the USA and represents one or more shares of companies outside of the USA.

ANA – Agência Nacional de Águas (National Water Agency). The agency was established in June 2000, under a special regime autarchy linked to the Ministry of the Environment. It is responsible for implementing the National Water Resources Policy and enforcing the Water Law (1997), which regulates the use of water resources in the country.

ANEEL Agência Nacional de Energia Elétrica (National Agency of Electric Energy). The agency was established in December 1996, under a special regime autarchy linked to the Ministry of Mines and Energy. The agency regulates and inspects activities involving the generation, transmission, distribution, and sale of energy. It also acts as mediator in conflicts involving consumers and market agents, as well as between the market agents themselves, in addition to granting permits and authorizations for the installation and services to provide electric energy, ratifying tariff readjustments, ensuring universal access and adequate quality of services, and encouraging investment and competition among the sector’s agents.

Annual Adjustment – The annual adjustment, which is provided for in the concession contracts, is calculated based on a formula that considers the variation of non-manageable costs (Portion A). Manageable costs are adjusted by the IGP–M and, for concessionaires that have already undergone a Periodic Review, the X Factor is applied to reduce the IGP–M. The annual adjustment is approved by ANEEL on the anniversary in which the Concession Agreement was signed.

Annual Shareholders’ Meeting (ASM) – A shareholder meeting that must be held, pursuant to legislation, once a year and in the first four months following the end of the fiscal year. The objective of the ASM is to resolve on matters involving the future of the company, as provided for in article 132 of the Brazilian Corporations Law, through votes cast by shareholders on the matters in the meeting’s agenda. The Annual Shareholders’ Meeting may only resolve on matters relating to five specific topics provided by law, namely:

  • Analysis of management accounts and financial statements.

  • Allocation of net income; and

  • Distribution of dividends;

  • Electing members of senior management and members of the fiscal council;

  • Monetary correction of its share capital;

ANP Agência Nacional de Petróleo (National Petroleum Agency). The agency was established in August 1997, and is linked to the Ministry of Mines and Energy. It is the regulatory body of the oil industry and its purpose is to promote the regulation, the contracting and the inspecting of the economic activities that are part of this industry.

APINE Associação Brasileira dos Produtores Independentes de Energia Elétrica (Brazilian Association of Independent Electricity Producers). The association was founded in 1995 and aims to represent companies interested in the independent production of electricity before public authorities and national and international institutions.

ASMAE Administradora de Serviços do Mercado de Energia Elétrica (Administrator of the Wholesale Energy Market). The entity was extinct through Provisional Measure 29 (02/07/2002). This Provisional Measure was the result of changes proposed by the Electric Sector Revitalization Committee, created within the scope of the Electric Energy Crisis Management Chamber (GCE). Prior to its extinction, it operated as a private legal entity providing administrative, technical and legal services to the Wholesale Energy Market (MAE – Mercado Atacadista de Energia).

Assured Demand – A demand that must be made available by the concessionaire to the consumer at the delivery point and according to the contractual amount and validity.

Assured Energy – The amount of energy generation established by a contract for a specific plant. The assured energy of each plant is a fraction of the total generation capacity of the national interconnected system and, based on this fraction, the plant’s remuneration is defined, regardless of the amount of energy actually generated.


B3 – The São Paulo Stock Exchange, where shares of publicly held companies are traded in the Brazilian market.

Basic Network – Energy plants that are part of the National Interconnected System (Sistema Interligado Nacional – SIN). It is comprised of a set of transmission lines, dams, power transformers and equipment with voltage equal to or greater than 230kV, in addition to other facilities defined by ANEEL

BEN Balanço Energético Nacional (National Energy Balance). A document prepared annually by the Energy Secretary of the Ministry of Mines and Energy, aimed at disclosing the energy flows from primary and secondary energy sources, since the start of generation to final consumption, in the main economic sectors.

Bilateral Contracts – Contracts for the purchase and sale of energy in volumes freely agreed between two parties (market agents), without the participation of ANEEL or MAE. The amount of contracted energy is defined in these contracts. However, energy prices are not previously established.

Billable Demand – A demand used for calculating the invoice to be charged to the consumer or concessionaire.

Biomass – A plant-based or animal-based organic matter that can be used to generate heat or electricity. It can be produced by using residential, commercial or industrial waste, such as sawdust, rice, tree bark, and sugar cane bagasse, which is an abundant resource in the country.

Blackout – A general power outage in a given region.

Blue Tariff – A type of hourly-seasonal tariff structure, in which different consumption tariffs or energy demand can be applied for industrial consumers, according to the days and periods of the year in which the energy is being used.

BRR – Base de Remuneração Regulátoria (Regulatory Remuneration Basis/RRB). A mechanism through which Brazilian energy distribution and transmission companies are compensated by remuneration for the investments made by them to expand or strengthen the system.


CADE – Conselho Administrativo de Defesa Econômica (Administrative Council for Economic Defense) is responsible for maintaining order and avoiding the abuse of economic power in the country. In other words, CADE is responsible for ensuring competitiveness and preventing competition problems in all economic sectors aimed at avoiding distortions that harm the final consumer. It acts, for example, in mergers and acquisitions. When a company makes an offer to purchase another company, it must provide CADE with detailed information on the transaction, which will then analyze the feasibility of the transaction from a competition perspective.

CAGR – Compounded Annual Growth Rate

Captive Consumer – A consumer that is authorized to purchase energy only from the concessionaire that operates in the network to which it is connected.

CCC Conta Consumo de Combustíveis Fósseis (Fossil Fuel Consumption Account). The account was created in 1993 with the purpose of covering the costs of using fossil fuels, such as diesel oil and coal, in thermoelectric generation companies of the interconnected and isolated systems (areas not served by the electrified services). The energy distribution companies collect from the tariff, on a monthly basis, an amount equivalent to their share (proportional to the market served by each company). This fund is managed by Eletrobrás. The annual amount is defined by ANEEL.

CCEAR – Contrato de Comercialização de Energia no Ambiente Regulado (Energy Trading Agreement in a Regulated Environment).

CCEE – Câmara de Comercialização de Energia Elétrica (Electric Energy Commercialization Chamber).

CDE Conta de Desenvolvimento Energético (Energy Development Account). A subsidy that was established to make alternative energy sources, such as wind and biomass, more competitive and to promote the universalization of electric energy services. In addition to alternative sources, the CDE subsidizes the costs of coal-fired thermoelectric plants that had already began operating by 1998, and the installation of transportation systems for natural gas. Funds are raised through annual payments due on the use of public goods, fines imposed by ANEEL and, as of 2003, also from annual percentages paid by market agents who sell energy to the final consumer. The account has a valid term of 25 years and is considered the successor to the CCC.

CFURHCompensação Financeira pela Utilização dos Recursos Hídricos (Financial Compensation for the Use of Water Resources). The amount paid by energy companies and other players authorized to produce electricity, as compensation for the use of water resources for this purpose. The fee is equivalent to 6.75% of the value of the energy generated and ANEEL is responsible for managing the collected amounts. Municipalities affected by dams (with the construction of plants) receive 45% of the total collected amount. The same percentage is allocated to the states where the dams are located. The remaining 10% is forwarded to the Federal Government.

CGSE Câmara de Gestão do Setor Elétrico (Electricity Sector Management Chamber) was created on June 6, 2002 to replace the GCE (Gestão da Crise de Energia Elétrica – Electric Energy Crisis Management Chamber), which was established in May 2001 to manage the energy rationing and other problems of the electric sector. The CGSE is part of the National Energy Policy Council (CNPE) of the Ministry of Mines and Energy and is chaired by its Minister. Its attributions include, among others, to continue the works and studies coordinated by the GCE until then.

CIDEContribuição de Intervenção no Domínio Econômico (Contribution for Intervention in the Economic Domain). A contribution due on the import and sale of oil and byproducts, natural gas and byproducts, and ethyl alcohol fuel. The collected funds are intended to be used for the payment of price subsidies or for the transportation of fuel alcohol, natural gas and byproducts, petroleum byproducts, as well as for the financing of environmental projects related to the oil and gas industry and the financing of programs for transportation infrastructure. CIDE was established by Law 10,336, in December 2001.

Clean Energy – Energy from sources such as solar and wind, which do not produce polluting waste.

CNPE Conselho Nacional de Política Energética (National Council for Energy Policy). An advisory body to the President of the Republic of Brazil and its purpose is to formulate policies and guidelines for the energy sector. CNPE was established in August 1997, is chaired by the Minister of Mines and Energy, and has among its members the ministers of: Science and Technology; Planning, Budget, and Management; Environment; Finance; Chief of Staff; and Development, Industry and Foreign Trade. The council also has among its members a civil representative with expertise in the energy sector, a member of a university, and a representative of the States. In June 2002, the CNPE began to overlook the CGSE, which replaced the GCE.

Co-Generation – A process that allows the simultaneous production of electric, thermal, and steam energy from a single fuel source, such as natural gas, industrial waste and biomass, among others. The process of burning this fuel creates thermal energy (heat) while, at the same time, drives generation companies to produce electricity.

Common Shares (ON) – The class of shares that give shareholders, in addition to profit sharing, the right to vote in a company’s general shareholders’ meetings.

Concession Agreement – A contract signed between ANEEL and energy generation, transmission and distribution companies, establishing the rights and obligations for providing public electric energy services to the final consumer. For generation companies, the contract term is 35 years, for distribution and transmission companies, the contract term is 30 years. All contracts can be renewed for the same number of years.

Concessionaire of Public Services – A company which has been approved to provide federal public services by a granting authority through a bidding process (competition). These concessionaires may be generation, distribution or transmission energy companies.

Concessions Law – Law 8,987, of February 13, 1995, and its subsequent amendments

Consumer Council – The Electric Energy Consumer Councils are non-legal advisory bodies comprised by representatives of the main consumer units (residential, rural, public, commercial and industrial), responsible for issuing opinions on matters related to the provision of the public electric energy services, as defined by ANEEL Resolution 963/2021.

Consumer Group A – Consumer units supplied with voltage equal to or greater than 2.3 kV, or served by voltages lower than 2.3 kV from an underground distribution system, characterized by the binomial tariff structure.

Consumer Group B – Consumer units supplied with voltage lower than 2.3 kV, or served by higher voltages and characterized by the monomial tariff structure.

Consumer Subgroup A1 – Consumer units supplied with voltage equal to or greater than 230 kV.

Consumer Subgroup A2 – Consumer units supplied with voltage between 88 and 138 kV.

Consumer Subgroup A3 – Consumer units supplied with voltage equal to 69 kV.

Consumer Subgroup A3a – Consumer units supplied with voltage between 30 and 44 kV.

Consumer Subgroup A4 – Consumer units supplied with voltage between 2.3 and 25 kV.

Consumer Subgroup AS – Consumer units supplied with voltage lower than 2.3 kV served by an underground distribution system and classified in this group on an optional basis.

Consumer Subgroup B1 – Residential consumer units characterized as low income.

Consumer Subgroup B2 – Rural consumer units characterized as rural electrified cooperatives and public irrigation services.

Consumer Subgroup B3 – Consumer units of other classes.

Consumer Subgroup B4 – Consumer units characterized as public lighting.

Consumer – An individual or legal entity that requests the supply of electricity from a concessionaire, with the responsibility for paying invoices and other obligations established by ANEEL.

Consumption Tariff – The amount charged, in local currency, for the consumption of one kilowatt/hour (kWh), or another comparable unit.

Contract with Obligation of Acquisition (take or pay) – A type of contract used by thermoelectric plants for the purchase of natural gas. It provides for the obligation to purchase a minimum amount of energy. In this type of contract, even if the purchased energy is not used, a payment for the minimum amount must be made at the previously determined price.

Contracted Demand – A demand established by a contract and that must be made available continuously to the consumer or concessionaire and which must be paid in full, regardless if it was used or not during the billing period.

Cross Subsidy – A distortion among tariffs for different consumer categories, in which residential consumers pay higher tariffs so that industrial consumers can pay lower ones. This mechanism prevents tariffs from reflecting the actual costs of providing electricity for each consumer category. The elimination of cross-subsidies is being analyzed by the Electric Sector Revitalization Committee of the GCSE.

Curve Guide – An indicator used to monitor the water level in reservoirs of hydroelectric plants.

Custodian Bank – A financial institution responsible for holding, physically or electronically, financial assets (shares, bonds, etc.) of its customers and handling all events related to these assets.

CVA Conta de Compensação de Variação de Valores de Itens da Parcela A (Compensation Account for Variation in Values of Portion A Items). A mechanism created in October 2001 to compensate for variations in values of non-manageable cost items (Portion A) that occur between annual tariff adjustments period of the energy distribution companies. If the CVA is negative on the date of the annual adjustment, there is a transfer to the tariff. If the account is positive, the balance is deducted from the annual rate adjustment.

CVM – Comissão de Valores Mobiliários (Brazilian Securities and Exchange Commission). An authority that supervises, regulates, and disciplines the Brazilian securities market. The CVM was established by Law 6,385, of December 7, 1976, and is a body linked to the Ministry of Finance.


Dam – A structure that retains and controls the levels and flows of water into rivers.

Daylight Saving Time – A procedure by which clocks are advanced by one hour in relation to the official time aiming to increase the use of natural light and, consequently, reduce energy consumption, particularly at peak hours. Daylight saving time is adopted in the most part of Brazil’s territory, from October to February, when spring and summer months have longer days than nights. It was adopted, for the first time in Brazil, in 1931 and has been implemented every year since 1985. Daylight saving time in 2001/2002 (from October 14, 2001 to February 17, 2002) was the 28th time this measure was adopted in the country. It is put into practice through a presidential decree.

Debenture – A private credit security issued by corporations (S/A) for the general market. It is basically an instrument used by large companies to finance themselves through third-party capital and remunerating them for it.

DEC – Duração Equivalente de Interrupção por Unidade Consumidora (Interruption Duration Equivalent per Consumer Unit)The amount of time, on average, in an observed period, that the distribution of electric energy was interrupted for any consumer unit of a certain set of units.

Deficit Cost – Energy price in the short-term market (spot market) during a period of energy rationing. It signals the cost of opportunity for producing electricity when there is a shortage. It also reflects the economic losses to society caused by the forced reduction in energy supply.

Demand – The average instantaneous electrical power requested by the consumer or a concessionaire during a specified period.

Depositary Bank – A financial institution responsible for the transfer, acting as an agent, of depositary receipts (DRs), such as American Depositary Receipts (ADRs) and Brazilian Depositary Receipts (BDRs), issuing the securities and making them available in the market.

DIC – Duração de Interrupção Individual por Unidade Consumidora (Duration of Individual Interruption per Consumer Unit)The amount of time, in an observed period, that the distribution of electric energy was interrupted for any consumer unit.

Dispatch – Defined by the ONS as the amount of energy that a plant will generate at a given time.

Distribution Network – A network intended for energy distribution in a delimited consumption zone.

Dividend – A portion of the companies’ net income that is distributed to shareholders as a form of remuneration. This amount may be distributed in the form of cash, special payments, or as Interest on Equity (IOE). Therefore, as companies increase their results, dividends also grow and higher remuneration can be offered to its shareholders.

DMIC – Duração Máxima de Interrupção Contínua por Unidade Consumidora (Maximum Duration of Continuous Interruption per Consumer Unit)The maximum amount of time an interruption in the distribution of electric energy can last for any consumer unit.

Dry Season – A period characterized by reduced rainfall. In the Southeast, Mid-west and Northeast regions, the dry season extends during seven consecutive months and runs from May to November. In the South region, rainfall is distributed throughout the year, but the months of June and July are generally drier. In the North region, with the exception of the North of Amazonas and Roraima, the autumn and winter months (April to September) are drier. In the North of Amazonas and in Roraima, the dry season runs from December to May.


Earnings per Share – A company’s net profit divided by the total number of outstanding shares in the stock market.

EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization. A financial indicator widely used to evaluate publicly traded companies.

ECE – Encargo de Capacidade Emergencial (Emergency Capacity Fee). A fee paid by consumers and passed on by energy distributing companies to CBEE to fund the lease of thermal plants to be used in the event of a possible reduction in water reservoirs.

Electric Energy Consumer Council – A council created by each of the energy distribution companies to represent consumers. This council, which has an advisory nature, is responsible for guiding, analyzing, and evaluating issues concerning supply, tariffs and the adequacy of the services provided by the company. It was established in 1993 and its characteristics were modified in 2000, through ANEEL Resolution 138. Under the new determinations, the council must have one representative of each consumer class and one representative of a consumer defense entity among its members.

Eletrobras – Established in 1961, Centrais Elétricas Brasileiras S/A is a public company linked to the Ministry of Mines and Energy. Eletrobrás is the holding company of federal electric energy generation and transmission concessionaires and its subsidiaries are Companhia Hidrelétrica do São Francisco (Chesf), Eletronorte, Eletrosul, Furnas, and Companhia de Geração Termica de Energia Elétrica (CGTEE). It owns half of the share capital of Itaipu Binacional. It also brings together the Electric Energy Research Center (Cepel) and operates government programs in the energy sector, such as Procel, Luz no Campo and Reluz.

ENA Energia Natural Afluente (Affluent Natural Energy). Energy that can be produced with water flow from a river to a reservoir of a hydroelectric plant.

Energy Auctions – A mechanism adopted by the federal government to allow state-owned generation companies to sell old, cheaper energy, without compromising the formation of competitive market prices thus avoiding that new investors are driven away from the sector. Since 2003, as initial contracts expired, contracted energy has been sold through auctions.

Energy Intensive Consumers – Industrial consumers in which electricity expenses account for a significant portion of their production costs. Examples include the paper, iron alloy, soda – chlorine and industrial gas sectors.

Energy Meter – An equipment that enables the measuring of energy consumption.

Energy Network – A set of substations, lines and other equipment connected to each other to conduct electric energy from generation plants to final consumers.

Energy Sector Law – Law 9,648, of May 27, 1998, and its subsequent amendments

Energy Theft (“Gato”) – Illegal connections of energy cables without contracting electricity supply services from the distribution company.

Exceeding Demand – The portion of the measured demand that exceeds the amount established for a contracted demand.

Excess Tariff – A tariff applied on the demand that exceeds the contracted demand or the demand guaranteed by energy supply contracts.

Exchange Risk – A term used to define the risk that investors in thermoelectric plants are exposed when purchasing natural gas in US dollars and selling the energy generated by this fuel in Brazilian reais. This risk prevented the financing of projects, since tariffs may only be readjusted once a year. In 2001, during the energy crisis, the Government resolved this issue and, since then, Petrobras, the supplier of natural gas, is responsible for absorbing the costs relating to the exchange differences between these two currencies during a 12-month period, when it is then passed-through to the thermoelectric plants, during their expected annual readjustments.

Extraordinary Review – This review is provided for in the Concession Agreement and may be requested during the Annual Adjustment period, whenever the concessionaire believes that a certain event resulted in an economic and financial imbalance. ANEEL is responsible for deciding the granting, or not, of the requested adjustment in the extraordinary review process.

Extraordinary Tariff (Recomposition) – A tariff readjustment granted in December 2001 to energy distribution and generation companies in regions that were affected by the rationing. Provided for in the General Agreement for the Electricity Sector, this adjustment increased tariffs for residential consumers (with the exception of Low Income Consumers) by 2.9% and tariffs for rural and other consumers increased by 7.9%. The purpose of the readjustment was to replace the losses that energy distribution and generation companies incurred with the reduction in consumption imposed by the government. The duration of the readjustment varies according to the time required for each concessionaire to recover these losses.


FEC – Freqüência Equivalente de Interrupção de Energia (Energy Interruption Frequency Equivalent). The number of times, on average, in an observed period, that the distribution of electric energy was interrupted for any consumer unit of a certain set of units.

FIC – Freqüência de Interrupção Individual por Unidade Consumidora (Frequency of Individual Interruption per Consumer Unit). The number of times, in an observed period, that the distribution of electric energy was interrupted for any consumer unit.

Fiscal Council – An advisory arm of the General Shareholders’ Meeting, responsible for verifying the company’s management accounts and financial statements. It is comprised of three to five members, all elected by the General Shareholders’ Meeting, who may or may not be shareholders of the company.

Fiscal Tariff – An amount, in local currency, that is periodically declared by the granting authority. This tariff is used to calculate the investment limit of the concessionaire, as well as the financial participation of the consumer.

Free Consumer – A consumer that has been legally authorized to choose their energy supplier.

Free Energy – Energy that is not contracted and sold on the spot market.


Gasbol – Gasduto Brasil – Bolivia gas pipeline, with a total extension of 3,150 kilometers, allows natural gas to be imported from Bolivia into Brazil. This is the largest project of Gaspetro, a subsidiary of Petrobras, established in partnership with Yacimientos Petrolíferos Fiscales Bolivianos (YPFB). Bolivian gas supplies the plants included in the Programa Prioritário de Termoeletricidade (PPT) program.

GCE – Gestão da Crise de Energia Elétrica (Electric Energy Crisis Management Chamber), established by Provisional Measure 2,198-5/2001

General Agreement for the Electricity Sector – An agreement signed between energy generation and distribution companies aimed at defining rules for compensating financial losses generated by the 2001/2002 energy rationing.

Gigawatt or GW – Unit equivalent to one billion Watts

Gigawatt-hour or GWh – A unit equivalent to one gigawatt of electric energy supplied or requested per one hour, or one billion, Watt-hours

Global Reversion Reserve (RGR) – An annual percentage paid by concessionaires that is used to fund the expansion and improvement of public electric energy services. The RGR was established in 1971 (Law 5,655) and the amounts are collected on a monthly basis in favor of Eletrobrás, who is responsible for managing the resources, which must also be used to fund projects with the scope of PROCEL.

Granting Authority – Refers to Federal, State and Municipal authorities that grant the right to operate public services through concessions, permissions or authorizations.

Green Tariff – A type of hourly-seasonal tariff structure, in which different consumption tariffs can be applied for industrial consumers, according to the days and periods of the year in which the energy is being used, and under a single energy demand tariff.

GSF (Generation Scaling Factor) – A hydrological risk adjustment factor which indicates the hydroelectric generation in relation to the physical guarantee. The GSF of the electrical system corresponds to the ratio between the energy generated by the plants included in the MRE (Mecanismo de Realocação da Energia – Energy Reallocation Mechanism) and the sum of the physical guarantee of each plant.


Holding Company – A parent company that controls or acts as an “umbrella” for other companies. A holding company owns the majority of shares in other companies and controls their management and corporate policies. Therefore, a holding company is a legal entity that has control over other legal entities.

Hydroelectric Energy – Energy produced by harnessing the hydraulic potential of a river. The water spins in the turbine, transforming hydraulic energy into mechanical energy, which in turn is transformed into electric energy.


IASC – Índice ANEEL de Satisfação do Consumidor (ANEEL Consumer Satisfaction Index).

IBX – Brazil Index – Also referred to as IBrX, the objective of this index is to measure the average performance of share prices for the most tradable assets and with the highest representation in the Brazilian stock market.

ICMS – Imposto sobre Circulação de Mercadorias e Serviços de Transporte Interestadual e Intermunicipal e de Comunicação (Tax on Circulation of Goods and Interstate and Intermunicipal Transport and Communication Services) is a state tax that represents the largest portion of the tax collected by Brazilian states.

IEX – Index of Electrical Energy (Índice de Energia Elétrica – IEE). One of the indexes managed by B3. As the name suggests, it consists of companies in the electricity sector, therefore making it a sector index.

IFRS – International Financial Reporting Standards. Consists of a set of rules that establish how the accounting procedures must be carried out at the company.

Initial Contracts – Long-term energy purchase and sale agreements, signed between generation and distribution companies, between only distribution companies, or between only generation companies. The prices of the energy sold through these contracts are established by ANEEL.

Installed Capacity – The total generating capacity of all the turbines in a plant.

Interest on Equity (IoE) – A type of remuneration paid by companies, and therefore characterized as one of the alternatives for distributing profit to shareholders. IoE is paid as remuneration on funds from shareholders and is distributed during the fiscal year, the same way as dividends are distributed by companies.


KiloVolt (kV) – A unit used to measure voltage. One kV corresponds to 1,000 Volts (V).

KiloWatt (kW) – A unit used to measure power. One kW corresponds to 1,000 watts. Electricity consumption is measured as the number of kW spent in a 1-hour period (kWh). A MegaWatt (MW) has one million Watts. A GigaWatt (GW) has one billion Watts. A TeraWatt (TW) has one trillion Watts.


Law 14,300/2022 – The law that establishes the Legal Framework for micro and mini energy generation companies (distributed generation). This legislation allows consumers to produce their own energy from renewable sources, such as photovoltaic solar, wind, hydroelectric plants and biomass, as long as they meet the legal limits, also allowing them to be entitled to offset credits. The law also establishes responsibilities and schedules for addressing the financial effects sustained by the energy distribution companies.

Low Income Consumer – A residential consumer served by a single-phase circuit and that, in the last 12 months, had an average monthly consumption of less than 80 kWh/month. Consumers who spend between 80 and 220 kWh/month will also be considered low income, but the criteria for this classification must still be defined by ANEEL. The definition is provided for in Law 10,438 (2002).

Low-Income Social Tariff – A tariff applied on the energy supplied to low-income consumers. The standardization criteria for this tariff will still be defined by the Electric Sector Revitalization Committee of the GCSE. Currently, each distribution company adopts different rules for classifying this consumer segment. The objective is to elaborate general rules that can be applied for this category.

Luz no Campo – The National Rural Electrification Program, created by the federal government in December 1999. The objective is to bring electricity to one million rural properties and rural households across the country. The Program is coordinated by the Ministry of Mines and Energy and developed by Eletrobrás with funds obtained from the Global Reversion Reserve (Reserva Global de Reversão – RGR).


MAE Price (PMAE) – Energy prices traded on the Short-Term Market (Spot Market). The MAE price varies according to the ratio between energy supply and demand.

MAE Mercado Atacadista de Energia (Wholesale Energy Market). A private, non-profit entity, subject to ANEEL regulation, which was re-established in February 2002 (through Provisional Measure 29), replacing the extinct ASMAE. MAE processes the activities for the purchase and sale of electric energy through bilateral contracts or the short-term market (spot market), restricted to the interconnected systems for the South/Southeast/Mid-west and North/Northeast regions. MAE only enables the purchase and sale of energy among market agents.

Majority Shareholder – The owner of the largest number of shares of a company.

Manageable Costs – Costs that essentially rely on the effectiveness of business management, such as personnel expenses, purchase of materials, payment for third-party services, and other expenses and remuneration. These costs are also known as controllable costs and are indexed to the variation of the General Market Price Index (IGPM) calculated by Fundação Getúlio Vargas and included in the annual tariff adjustment for the concession contracts.

Marginal Operational Cost – The cost, per unit, of energy produced to meet an increased power load to the system.

Mixed Capital Company – A corporate structure in which the shares are distributed between the State and private market entities, with the State being the largest holder of the shares with voting rights.

MLT – Média de Longo Termo (Long-Term Average). The average influent natural energy calculated from a historical series. The MLT is linked to the volume of rainfall that flows into the rivers to feed the hydroelectric reservoirs. There is an MLT for each subsystem (North, South, Northeast and Southeast/Mid-west).

MME Ministério de Minas e Energia (Ministry of Mines and Energy). This ministry was created in 1960, and is currently undergoing structural changes due to the energy crisis experienced by the country in 2001. With its new structure, the MME will be able to formulate short, medium and long-term policies and plans, in addition to proposing preventive or corrective measures to ensure the reliability of the country’s energy supply. MME is responsible for ensuring the cyclical and structural balance between energy supply and demand. On the mineral front, MME works to promote the development of this industry in Brazil.

MP 14 Medida Provisória do Setor Elétrico MP 14 – Provisional Measure for the Electricity Sector PM 14. This measure was published in December 2001 to address the following: the contracting of emergency energy, the creation of Proinfra, extraordinary tariffs, and the transfer of non-manageable costs (Portion A) to tariffs. This PM also formalized the General Agreement for the Electricity Sector. After being passed by the National Congress, it became Law 10,438, enacted in April 2002.

MRE Mecanismo de Realocação de Energia (Energy Reallocation Mechanism). A commercial process in which energy generation companies, sponsored by the Wholesale Energy Market, share the financial risks associated with the centralized system dispatch by the ONS (National Operator of Electrical Systems). Under the MRE, each plant is responsible for generating a certain pre-established amount of energy (assured energy). Therefore, the ONS can define a larger or smaller generation volume for a plant without causing it any economic effect.


Natural Gas – A mixture of odorless and colorless hydrocarbons, especially methane. It is the cleanest option within fossil fuels and is widely used for heating, cooling, electric power production and other industrial uses. The construction of the Gasoduto Brasil – Bolivia gas pipeline is allowing the increase in electric generation through thermoelectricity in the country, which is the main objective of the Programa Prioritário de Termoeletricidade (PPT) program.

Net Asset Value or Book Value – The book value, as defined by the Federal Accounting Council (CFC), is the amount in which an asset or liability is recorded in the company’s accounting books. It considers the accumulated depreciation for the recorded item, in addition to provisions for impairment. The book value of an asset is the amount in which it was recognized on the company’s balance sheet.

New Energy – Energy produced by newly built plants, whose investments have not yet been amortized and, for this reason, is more expensive than old energy.

New Model for the Energy Sector Law – Law 10,848, of March 15, 2004, regulated by Decree 5,163, of July 30, 2004, Decree 5,175, of August 9, 2004, and Decree 5.184, of August 16, 2004.

Newave – A software developed by the Electric Energy Research Center (Cepel) to be used to determine the energy price in the Wholesale Energy Market, also known as the MAE Price.

Non-Manageable Costs – Also known as Portion A or non-manageable costs, these costs are not managed by decisions taken by the concessionaires and include items such as: Fossil Fuel Consumption Account (CCC); share of the Global Reversion Reserve (RGR); Inspection Fee on Electricity Services (TFSEE); Financial Compensation for the Use of Water Resources (CFURH); energy purchased from Itaipu for conventional resale; charges for use of the basic network; transport of energy generated by Itaipu; and system connection charges.

Nuclear Plant – A thermoelectric plant that uses nuclear reaction as a source to generate electricity.

NYSE – New York Stock Exchange. It is the largest global financial center and also considered the largest stock exchange in the world in terms of capitalization (market value of listed companies).


Old Energy – Energy produced by state-owned hydroelectric plants whose investments have already been partially or fully amortized. For this reason, the price of energy produced by these plants is lower than recently built plants which have not yet recovered the investment made.

ONS Operador Nacional do Sistema Elétrico (National Operator of Electrical Systems). A private company established to coordinate and control energy generation and transmission operations in Brazil’s interconnected electrical power systems. The ONS is responsible for monitoring energy consumption and water levels for the reservoirs of the country’s main plants. It was established by Law 9,468/98 and Decree 2,655/98, and its operation was authorized by ANEEL Resolution 351/98. The monitoring of the National Interconnected System began on March 1, 1999.


PCH Pequenas Centrais Hidrelétricas (Small Hydroelectric Power Plants). These hydroelectric plants have an installed capacity ranging from 1 MW to 30 MW, and reservoir areas covering up to three square kilometers. The energy generated by the PCHs that began operating by 2003 are included in the electric system and exempt from paying fees for the use of transmission and distribution networks. These plants are also exempt from paying municipal and state remuneration for the use of water resources. If PCHs are installed in the isolated system in the North region with the objective of replacing diesel thermal generators, they will also receive incentives from the CCC – Fossil Fuel Consumption Account.

Peak Hours – A period consisting of three consecutive hours, between 5pm and 10pm, to be defined by each energy distributing company, according to the longest consumption record. Peak hours are only considered on business days.

Periodic Review – This review is provided for in the Concession Agreement between ANEEL and the concessionaires and carried out every five years during the term of the contract, aimed at restoring the economic and financial balance of the companies. The X Factor to be used in the Annual Adjustments, until the following review, is established in the Periodic Review.

Permits for Public Services – Individuals or legal entities that have been granted a federal authorization to carry out works of energy transmission or distribution intended for their private consumption or to be consumed by their associates.

PIE Produtor Independente de Energia Elétrica (Independent Energy Producing Agent). An independent agent that receives a concession or authorization from the granting authority to produce electric energy intended for sale, partially or in full, at the agent’s own risk.

Plan B – The Program for Reducing Consumption by Cutting Off Power was created in July 2001 by the GCE during the energy rationing period. This program, which is also known as Plan B, was elaborated as a preventive action should the adopted energy rationing measures not reduce consumption in the expected amounts. The plan establishes emergency measures, such as declaring official holidays and even daily power cuts.

Preferred Shares (PN) – The class of shares that is characterized by the guaranteed priority in receiving dividends – the portion of a company’s profits distributed among shareholders – in the event of its liquidation.

PROCEL – Programa Nacional de Conservação de Energia Elétrica (National Electric Energy Conservation Program). This Program is aimed at promoting the rationalization of energy production and consumption in the country by eliminating wastage and, consequently, reducing costs and investment needs for the industry. It was established in 1985 by the Ministry of Mines and Energy and the Ministry of Industry and Commerce, and in 1991, it was transformed into a government program. Procel uses resources from Eletrobrás, from the Global Reversion Reserve (RGR) and from international entities.

ProINFRA – Programa de Incentivo às Fontes Alternativas de Energia Elétrica (Incentive Program for Alternative Sources of Electric Energy). Established on April 26, 2002 (Law 10,438), this Program is aimed at increasing, initially by 3,420 MW, the share of alternative energy sources in the country, including wind, Small Hydroelectric Power Stations, and Biomass sources. By law, the Independent Autonomous Producers that develop these projects will be guaranteed access to purchase energy generated by Eletrobrás for a period of 15 years.

Public Lighting Fee – A fee charged to taxpayers by municipal governments to fund public lighting costs.

Public Lighting – A service aimed at providing lighting in public locations at night or in locations that need permanent lighting during the day.


Quotation – Price of securities, shares, foreign currency, or commodities.


RAP – Refers to the payment received by transmission concessionaires for making their plants available, which are part of the Basic Network or DITs, in order to provide public electricity transmission services.

Rationalization – The use of electric energy without wastage while, at the same time, maintaining comfort and the advantages it provides, generating a reduction in consumption without harming the efficiency and quality of the energy services.

Rationing Risk Aversion Mechanism – A mechanism created to signal a potential power outage within a two-year horizon. The mechanism modifies the formation of energy prices as a result of the risk of energy rationing. The higher the risk, the higher the price. The risk of energy rationing is calculated based on reservoir water levels according to was projected in the safety curve.

Rationing – A compulsory reduction in energy consumption by final consumers, and put into force by a presidential decree. The most recent rationing took place from June 1, 2001 to February 28, 2002, in the Southeast, Mid-west and Northeast regions of Brazil, in which the average reduction in consumption was established at 20%. In the North region, the rationing was carried out from July 15 to December 2001, with an average reduction in consumption established at 15%. The South region was not required to reduce consumption.

RBSE – Rede Básica do Sistema Existente (Basic Network of the Existing System). A portion of the RAP corresponding to the energy plants that are part of the Basic Network, as defined in the Annex to Resolution 166, of May 31, 2000.

Reconnection – A procedure in which the concessionaire restores the energy supply at a consumer unit, upon request by the same consumer responsible for causing the suspension in supply.

Renewable Sources of Energy (Alternative Sources) – Natural and renewable resources, such as winds, tides, biomass, and sun, that can be used to generate electric energy. Due to their natural nature, the energy generation process is less polluting than traditional sources, such as fuels.

Repurchase Agreement – An agreement between energy generation and distribution companies committed to initial contracts, which establish that energy distribution companies may accumulate energy credits for future use when the system’s production was lower than the contracted energy. These credits, when repurchased, contribute to reducing the exposure of the energy generation companies at the time they were contracted and, when accumulated for the following months, also contribute to reducing the exposure of energy distribution companies in future periods.

Reserve Generation – A long-term contract for thermoelectric generation capacity, also contracted by the Government, in which costs are shared among consumers. The objective is to reduce rainfall dependency to supply the reservoirs of the hydroelectric plants used for energy generation. It is different from blackout insurance (emergency capacity fee) since reserve generation would be indefinitely available in the system, while emergency energy is temporary.

Reservoirs – An area used to store water required to operate the turbines of a hydroelectric plant, therefore generating electricity.

RGR – Global Reversion Reserve is a monthly fee paid by energy generation, transmission and distribution companies. It was created in 1957 and, in May 2017, this account started to be managed by the Electric Energy Commercialization Chamber (CCEE). The objective is to finance improvement and expansion projects in the energy sector.


Safety Curve – An indicator that demonstrates the minimum level of water required in reservoirs of hydroelectric plants to ensure the generation of sufficient electricity to meet consumption.

Scheduled Shutdowns – Previously planned interruptions in electricity supply.

Seal Tariff – A portion of the tariff that is equally distributed among all users of the transmission system, aimed at completing the service revenue.

SEC – Security and Exchange Commission. The agency responsible for regulating the capital market in the USA. SEC is equivalent to the CVM in the Brazilian market.

Self-Producer – A concessionaire or agent, authorized by ANEEL, that generates energy for the purpose of its own consumption. This energy can replace or complement the volume purchased from the energy distribution company.

Short-Term Market (spot market) – A segment of the Wholesale Energy Market where energy that has not been subject to a bilateral contract, or leftover energy is traded.

SIN – Sistema Interligado Nacional (National Interconnected System). Refers to a large hydrothermal system for energy generation and transmission, whose operation involves complex simulation models coordinated and monitored by the National Operator of Electrical Systems (ONS), which, in turn, is supervised and regulated by the National Agency of Electric Energy (ANEEL). The plants are responsible for supplying energy to all electrically interconnected regions. The system is comprised by generation companies from the South, Southeast, Mid-west and Northeast regions, in addition to part of the North region, with a total installed capacity of 67,987 MW. Until the end of 2000, the transmission network consisted of 70,000 kilometers of transmission lines, according to ONS data. This allows the electro-energetic integration between the generation and transmission systems to supply the consumer market.

Solar Energy – Energy produced through the use of sunlight. Sunlight can be captured for two types of uses: thermal energy and photovoltaic energy. For thermal energy, sunlight serves as a source for heating systems. For photovoltaic energy, sunlight is transformed into electric energy.

Stock Exchange – The location where trading takes place for securities such as stocks, government bonds and commodities.

Stored Energy – Energy that is potentially available in hydroelectric reservoirs and its calculation considers the volume of water stored and the generation capacity of the plant.

Subscription – A process in which shares are subscribed for a capital increase of a company. In other words, it is a process in which investors register to acquire the new shares to be issued.

Substations – Electric installations in which, through the use of transformers, electric energy is transferred between networks of different voltages.


Tariff – The price charged for energy in a consumer unit or for an active energy demand.

Tariff Adjustment – Refers to the updating of the energy prices provided in the Concession Agreement, aimed at preserving the economic and financial balance of the companies. According to the contracts, there are three types of tariff adjustments: annual adjustment, periodic review, and extraordinary review.

Tariff by Consumer Class – A pricing system in which amounts are established according to the characteristics of the supply. The classes are classified as: residential, rural, commercial, industrial, public power, public lighting, public service, and own consumption. 

Tariff flag – system, adopted since 2015, in which all electricity distributed to captive market consumers are billed by the Tariff Flags System, except for those located in isolated systems. The energy bills have the Tariff Flags System, which has the following modalities: green, yellow and red – the same colors as traffic lights – and indicate whether or not there will be an increase in the value of energy to be passed on to the end consumer, depending on the conditions of electricity generation. With the Flags, the electricity bill becomes more transparent and the consumer has the best information to use electricity more consciously. Each modality presents the following characteristics:

Ten-Year Plan – A document that outlines the indicative planning for the expansion of the electricity sector aimed at providing a reference time frame to the market so that market agents can also elaborate their strategic plans with less uncertainties, seeking competitive advantages. The Plan is prepared by the CCPE.

TFSEE Taxa de Fiscalização de Serviços de Energia Elétrica (Inspection Fee for Electricity Services). This fee was established in 1996 (Law 9,247), and is applied to concessionaires, self-producers and independent energy producers. The annual fee is equivalent to 0.5% of the annual economic benefit earned by these market agents, according to the result achieved after the use of a specific formula. It is collected directly by ANEEL, on a monthly basis, and the collected amount serves as a source of funding for the agency’s operating activities.

Thermal Energy – Thermal energy, or energy by heat, is a result of the combustion of several materials, such as coal, oil, and natural gas. It can be converted into mechanical energy by using equipment such as steam engines, combustion engines, or gas turbines.

Trader – A legal entity that is constituted for the specific purpose of buying and selling electricity to authorized energy companies or free consumers.

Transmission Network – A network or system used for energy transmission between regions or countries to feed subsidiary networks.

Transmission Tariff – An amount charged for the use of energy transportation service by means of lines and substations at a voltage of 230 kV, which is known as the basic network.

TUSD and TUST – Tarifa de Utilização de Serviços de Distribuição (Tariff for the Use of Distribution Services) and Tarifa de Utilização de Serviços de Transmissão (Tariff for the Use of Transmission Services). These tariffs are paid on the purchase of electricity and are aimed at remunerating the use of the distribution and transmission systems.


UHE Usina Hidrelétrica (Hydroelectric Power Plant). A power plant that uses the mechanical energy from water to spin turbines and generate electricity.

Use and Connection Agreement – A legal instrument in which free consumers and the concessionaire establish conditions for using the local electric system, pursuant to specific regulations.

UTE – Usina Térmica (Thermal Power Plant). A power plant that uses chemical energy, contained in fossil fuels, to generate electricity.


Volt – The basic measurement unit for electric power voltage.

Voltage – The difference in electric power between two points of a circuit, also known as voltage.


Watt – The basic unit to measure electric energy.

Wet Season – A period characterized by increased rainfall. In the Southeast, Mid-west and Northeast regions, the wet season lasts five consecutive months and runs from December to April. In the South region, rainfall is distributed throughout the year, with exception to the months of June and July, which are generally drier. In the North region, with the exception of the North of Amazonas and Roraima, the wet season is concentrated during the summer months (September to March). In the North of Amazonas and in Roraima, the wet season runs from April to August.

Wind Energy – Energy generated from the force of the winds. The wind’s kinetic energy is transformed by the turbines into mechanical energy, which in turn is transformed into electric energy.

Wire Tariff. A tariff that can be established to remunerate the use of the distribution network for the transportation of energy. This tariff is still being analyzed by the Electric Sector Revitalization Committee of the GCSE. The objective is that free consumers who purchase energy directly from generating companies pay for using the distribution system.


X Factor – A factor that serves as an instrument for sharing the concessionaire’s efficiency gains with its consumers. The X Factor is provided for in the concession agreements signed between the companies that provide the public electric services and ANEEL and is used for in tariff adjustments, mainly aimed at inducing the search for improvement in the economic efficiency of each company.


Yellow Tariff – A type of hourly-seasonal tariff structure, in which different consumption tariffs can be applied for residential consumers, according to the time in which the energy is being used.

Last Updated on July 28, 2023
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