Brazilians Experience Increased Power Bills Due to September’s Dry Season

Brazilians will see an increase in electricity costs starting in September, as the national power regulator has opted to impose an additional charge on bills due to declining reservoir levels at hydroelectric plants during the dry season.

Although wind and solar energy have expanded significantly in Brazil, the country still relies heavily on hydroelectricity, which accounts for more than half of its power supply.

The power pricing system used by the regulator classifies levels into “green,” “yellow,” “red level 1,” and “red level 2.” A “green” designation indicates no added charges on bills, while “yellow” and subsequent levels introduce increasing tariffs, raising concerns about inflation.

In its recent announcement, the regulator activated the “red level 2” rate for September, which will impose an additional charge of 7.88 reais for every 100 kilowatt-hours of energy consumed. This is the first time “red level 2” has been activated since August 2021, a period marked by severe drought.

The decision follows forecasts indicating that rainfall in Brazil’s primary hydroelectric regions is expected to be about 50% below average this September. As a result, power generation companies will need to rely more on thermoelectric plants, which are costlier to operate.

Previously, in August, no extra charges were applied to consumers.