Time-of-use tariffs in Brazil: Design and implementation issues

In late 2011, the Brazilian Electricity Regulatory Agency approved a new tariff structure for distribution services. This included the creation of the White Tariff, a time-of-use (Toll) tariff modality for retail consumers connected to low-voltage distribution grids. Brazil is currently conducting an ambitions smart meter roll-out plan, and consumers will be able to opt for Toll tariffs in the coming years. In preparation for that, the regulator has started the definition of the economic signals embedded in Toll tariffs for several distribution utilities, at the occasion of their multi-annual Tariff Review processes. This has been done despite of the fact that virtually no country-specific data on demand response to electricity prices is currently available, which brings additional difficulties to the process. In this paper, we discuss the design and implementation of Toll tariffs in Brazil, highlighting lessons learned so far and coming challenges, from an economic and regulatory perspective.