Chamber of Electric Energy Commercialization (CCEE)

In 2004 the Federal Government set a new model for the Brazilian Electricity Sector and defined the creation of two energy trading markets: a Regulated Contracting Environment (RCE) where a pool of distributors buys power from generators in public auctions and a Free Contracting Environment (FCE) where free consumers, traders and generators can freely negotiate their contracts.

The Chamber of Electric Energy Commercialization (CCEE) replaced the Wholesale Electricity Market and was created under the Law 10,848, of March 2004 as a private and not-for profit institution, with the responsibilities of administrating both regulated and free contracting environments under regulation and inspection of National Electric Power Agency (ANEEL) and make the energy commercialization feasible in order to attract investments to the sector.

Currently, there are more than 900 agents associated to CCEE. The electric energy commercialization in Brazil is stable and presents positive results that have never been seen in the country´s history. The huge energy volume traded in auctions in the RCE and the free consumer expansion in the FCE are examples that CCEE has a relevant role in the new model, providing an attractive environment and benefiting new projects which are fundamental to guarantee electricity supply in Brazil.

Company Profile

CCEE has the following main attributions: to keep records of the energy contracting and acquire on line measuring data of all Agents in the Brazilian interconnected electricity system, to conduct energy purchase auctions for distribution utilities under authorization of ANEEL and to determine the weekly prices and the monthly accounting and settlement of the short term market in FCE and RCE environments, based on a set of commercialization rules established by ANEEL. In 2006, the settlement activities involved financial amount of US$ 1.1 billion.

Besides the operation of Electricity Market, CCEE has become also an important center of data and strategic information for other sector relevant institution, such as Ministry of Mines and Energy (MME), Energy Research Company (EPE), National Power System Operator (ONS), National Council of Finance Policy (CONFAZ) and ANEEL.

Energy Auctions

The auction system implemented by CCEE in the RCE is related to the service of captive consumers by distribution utilities, and it ensures the provision of energy to these consumers in a reliable, equitable and economically efficient way (fair tariffs) through regulated pooled contracts. The auctions for existing plants cover the existing load while auctions for the new energy plants stimulate new capacity to cover load increasing. Existing energy auctions comprise energy delivery one year ahead and contract durations from 5 to 15 years. New energy auctions comprise energy delivery five or three years ahead, with durations of 15 and 30 years for thermal and hydropower plants respectively.

The criterion of the least tariff is used to define the winners of a given auction and it stimulates economic efficiency while long term contracting allows the project finance for investors usually in enough time to build hydro and thermal plants. CCEE also mediates the supply guarantee contracts that each distribution utility has to sign, in order to reduce defaulting risks.

From 2005 to now, five auctions of existing power plants and six auctions from new power plants have been implemented by CCEE, including a specific auction for alternative energy. Taken together these auctions involved a sales volume of 29,399 average MW, a financial amount in the range of US$ 147 billion and a signature of 5,238 long term contracts. Up to now, considering only the new power plant auctions, 125 new power plants contracted 9,594 average MW by distributors, which guarantee the capacity expansion for the electricity sector.

CCEE has been provided a proper environment for the energy commercialization activities, by improving the operation and solutions to the Brazilian Electricity Market, with integrity, transparency and reliability.

Antônio Carlos Fraga Machado Chairman, CCEE