New regulatory ordinance allows distributed mini-generation to be included in REIDI
On June 4, 2024, the Brazilian Ministry of Mines and Energy (Ministério de Minas e Energia – MME) issued Regulatory Ordinance Nº. 78/GM/MME (MME Ordinance Nº. 78/2024), published in the Brazilian Federal Official Gazette (Diário Oficial da União –DOU) on June 5, 2024, which establishes the procedures for applications for inclusion of distributed mini-generation projects in the Special Incentive Regime for Infrastructure Development (Regime Especial de Incentivos para Desenvolvimento de Infraestrutura –REIDI), under the terms of article 28, sole paragraph, of Law No. 14.300, of January 6, 2022 (Distributed Generation Law).
The regulation of the classification of distributed mini-generation projects was specially expected by the segment’s agents, given the inclusion of such power generation segment under REIDI’s scope, as provided by the Distributed Generation Law, which determined the characterization of distributed mini-generation projects as electricity generation infrastructure projects for the purposes of REIDI classification.
In recent months, the issue has been brought to court due to the MME’s inertia in regulating the classification of distributed mini-generation projects in REIDI, and injunctions have even been granted in favor of mini-generators to have their own projects included in this special regime for promoting infrastructure projects.
In this sense, the inclusion of distributed mini-generation projects in REIDI represents a valuable incentive for the continued expansion of distributed mini-generation as a form of electrical self-consumption, considering all the tax benefits inherent in qualifying for the special regime, such as the suspension of PIS/Pasep and Cofins on goods and services purchased for the purposes of implementing the projects.
MME Ordinance Nº. 78/2024 states that legal entities that own mini-generation projects that meet the requirements set out in Decree Nº. 6.144, of July 3, 2007, must apply for REIDI membership from the electricity distributor that serves the respective consumer unit by submitting a standard Information Form to be made available by the Brazilian National Electric Energy Agency (ANEEL).
Among the data relating to mini-generation projects to be included in the Information Form are:
(i) identification of the consumer unit;
(ii) identification of the Distribution Use Agreement (CUSD) signed with the distributor;
(iii) location of the project;
(iv) description of the equipment and the project to be implemented; and
(v) environmental license for installation.
Estimates of investments and the amount of taxes and contributions exempted under REIDI must also be provided in order to present scenarios for the acquisition of goods – such as machinery, equipment and construction materials – with and without the special regime, based on the month prior to the date of submission of the application for classification.
Once the complete Information Form has been received and accompanied by the documents required by MME Ordinance Nº. 78/2024, the distributors must certify the information submitted by the distributed mini-generation agents regarding the CUSD and the licenses and authorizations related to each of the projects.
After this verification, the distribution concessionaires or permit holders, must send to ANEEL a consolidated report of the information provided by the mini-generators and the distributor’s conclusions based on the examination of the Forms submitted to them, using electronic means made possible by a system to be made available by the Agency.
The suitability of REIDI applications will be analyzed by ANEEL, according to the terms of the applicable legislation and regulations, considering the compatibility of investment estimates and the amounts of suspension and contributions resulting from the use of the special regime.
The result of the assessment must be submitted by the last business day of the month in which the report provided by the distributors is received, so that mini generators are allowed to resubmit their request to be included in REIDI in the event of a recommendation not to be included.
Finally, regarding mini generators who applied to be included in REIDI prior to the publication of MME Ordinance Nº. 78/2024, their applications will be returned for adjustment to the parameters set out in the regulations, so that interested parties can resubmit their applications.
Once ANEEL has deemed the applications suitable, they will be forwarded to the MME, which will issue a decree granting REIDI status. Once the ministerial order has been issued, the owner or future owner of the mini-generation consumer unit must apply for the project to be eligible for REIDI at the Brazilian Federal Revenue Office.
Souto Correa’s Energy and Tax teams are available to provide further information on this subject matter.