Economic Evaluation of Regulatory Tariff Risk Planning for an Electric Power Company

  • L. G. Arango
  • H. Arango
  • E. Deccache
  • B. D. Bonatto
  • E. O. Pamplona


Regulatory energy tariff revision planning conducted by the Brazilian regulatory agency ANEEL is based on the electric power company’s accrued costs during the previous tariff revision cycle and the gain in productivity seen during this same period. However, this planning considers purely deterministic variables, which in practice are known for presenting a certain degree of uncertainty. This article uses the TAROT (optimized tariff economic model) socioeconomic model to simulate the tariff revision process of a regulated electric power company and considers a selection of important stochastic variables for the revision process, such as consumer energy consumption, the purchased energy cost from the generator and commercial energy losses. Therefore, a risk study will be conducted to present a methodology for calculating and determining the regulatory tariff of companies under risk conditions, which is designed to assist ANEEL in regulating the electric power sector.


Commercial energy losses Regulated electric power company Consumers Tariff revision Regulation Risk Regulatory tariffs TAROT 



The authors gratefully acknowledge the financial support in part of CAPES, CNPq, Fapemig, FAPEPE, ANEEL and Eletrobrás, in terms of R&D projects motivating this research.


  1. ANEEL - Agência Nacional de Energia Elétrica (2013). Calendário e Resultado dos Processos Tarifários de Distribuição (Schedule and results of tariff distribution processes). Accessed 20 Sept 2017.
  2. ANEEL - Agência Nacional de Energia Elétrica (2015a). Metodologia e critérios gerais para definição do custo de capital a ser utilizado no cálculo da remuneração dos investimentos efetuados pelas concessionárias de distribuição por ocasião da Revisão Tarifária Periódica (Methodology and general criteria of the cost of capital definition to be used in calculating the investments remuneration made by the electricity companies based on the Periodic Tariff Review). Nota Técnica nº 22/2015-SGT/ANEEL.Google Scholar
  3. ANEEL - Agência Nacional de Energia Elétrica (2015b). Submódulo 2.6 - Perdas de Energia (Submodule 2.6 – power losses). PRORET 2.6 - Módulo 2 Revisão Tarifária Periódica das Concessionárias de Distribuição.Google Scholar
  4. Abreu, R. G., Carvalho, T. S., Arango, H., Abreu, J. P. G., Bonatto, B. D., & Tahan, C. M. V. (2009). Expansion and tariff revision modeling of a regulated power distribution company in Brazil. In VIII Brazilian conference about the quality of power (CBQEE 2009), Blumenau-SC, August 2–5, 2009.Google Scholar
  5. Arango, H., Abreu, J. P. G., Bonatto, B. D., Tahan, C. M. V., Kagan, N., & Gouvea, M. R. (2008). A model for electricity markets: the impact of regulation on value. In Proc.: the international conference on the european electricity market (EEM 2008), Lisbon, May 28–30, 2008.Google Scholar
  6. Arango, L. G., Deccache, E., Bonatto, B. D., Arango, H., & Pamplona, E. O. (2017). Study of electricity theft impact on the economy of a regulated electricity company. Journal of Control, Automation and Electrical Systems, 28, 567–575.CrossRefGoogle Scholar
  7. Campos, R., Arango, H., Bonatto, B. D., & Araujo, S. C. N. (2013). Application of risk analysis in prioritizing investments in terms of value-based management and power quality. Journal of Control, Automation and Electrical Systems, 24, 513–521.CrossRefGoogle Scholar
  8. Danthine, J.-P., & Donaldson, J. B. (2005). Intermediate financial theory. New York: Elsevier Academic Press.Google Scholar
  9. Fabozzi, F. J., Kolm, P. N., Pachamanova, D. A., & Focardi, S. M. (2007). Robust portfolio optimization and management. New York: Wiley.Google Scholar
  10. Jehle, G. A., & Reny, J. P. (2000). Advanced microeconomic theory (2nd ed.). Boston: Addison Wesley – Longman.Google Scholar
  11. Kupfer, D., & Hasenclever, L. (2002). Industrial Economy. Ed. Amsterdam: Campus-Elsevier.Google Scholar
  12. Markowitz, H. (1952). Portfolio selection. The Journal of Finance, 7, 77–91.Google Scholar
  13. Martin, J. D., & Petty, J. W. (2000). Value based management. Boston: Harvard Business School Press.Google Scholar
  14. Von Neumann, J., & Morgenstern, O. (1944). Theory of games and economic behavior. Princeton: Princeton University Press.zbMATHGoogle Scholar

Copyright information

© Brazilian Society for Automatics--SBA 2019

Authors and Affiliations

  1. 1.Unifei – Federal University of ItajubaItajubaBrazil

Personalised recommendations