Tariff Structure
The tariff structure plays a critical role in the electricity sector by defining how generation, transmission, and distribution costs are allocated among end consumers. A well-designed tariff structure ensures that energy prices fairly and transparently reflect the actual costs of producing and delivering electricity. This not only supports the financial viability of energy companies, but also promotes energy efficiency by encouraging consumers to use electricity more consciously and responsibly.
Sector Overview
Since 1999, tariff structure has been a continuous focus of study and research for Paulo Steele, founding partner of TR Soluções. His efforts culminated in 2011 with the publication of the book Electricity Tariffs – Tariff Structure, which consolidated his knowledge and made significant contributions to the field.
A tariff structure refers to the set of rules and criteria that determine how electricity prices are charged to consumers. It defines the applicable tariffs for different components of energy consumption and/or contracted demand, depending on the supply modality. In Brazil, Group A consumers are subject to tariff modalities such as Conventional, Green, and Blue structures, while Group B consumers follow either the Conventional or White tariff structures. TR Soluções’ system replicates the calculations of Aneel’s spreadsheet known as “TR,” which stands for Reference Tariffs. These tariffs, established under the rules of Submodule 7.2 of the PRORET, serve as a benchmark for the allocation of economic and financial costs between captive and free consumers of distribution utilities.