The associations challenged Resolution 1030/2022, as amended by Resolution 1073/2023, arguing that Law 10848/2004 and Decree 5163/2004 guaranteed compensation for curtailment without distinguishing between causes. Generation cuts occur for three reasons under the regulatory framework: insufficient transmission infrastructure, where generators can claim reimbursement because they bear no responsibility; transmission line capacity limits preventing energy evacuation; and surplus supply exceeding demand. Only the first category qualifies for compensation under current rules.
The court found that legislative provisions establishing a system services charge to cover certain grid costs do not automatically extend payment obligations to every operational restriction. Judge Ramos wrote that the legal provision for such charges does not lead to the conclusion that every generation reduction event, regardless of cause, nature or relation to inherent business risks, must necessarily be borne by system users.
The ruling cited Law 15269/2025, which explicitly addressed different curtailment categories, prohibiting coverage of oversupply costs through system charges while establishing specific treatment for external unavailability and electric reliability events. That law authorized compensation through agreements with the granting authority for events in those two categories occurring between September 1, 2023, and the law’s effective date. The judge determined this differentiation contradicts claims that prior legislation already guaranteed unrestricted reimbursement.
The case followed earlier decisions favoring the associations. The Fifth Panel of the First Region Federal Regional Court had unanimously ordered full compensation for events from the date of its ruling, without distinguishing cause or applying hourly thresholds. The trial court decision also referenced Superior Court of Justice jurisprudence on the technical complexity of regulatory matters and limits on judicial review of agency decisions.
Abeeólica and Absolar were ordered to pay court costs and legal fees calculated on the case value of 215.7 million reais.
This article was curated and published as part of our South American energy market coverage.
