When Neoenergia took over electricity distribution in Brazil’s Federal District in 2021, privatization was presented as the answer to an indebted utility with limited investment capacity and a history of struggling to meet operating targets. Five years later, a court decision suggests that changing the controlling shareholder may have strengthened the company without necessarily fixing the problem for every customer.
Neoenergia Brasília says it has invested R$ 1.4 billion, or about $275 million, in the grid since acquiring the former state-controlled CEB Distribuição. It plans to invest another R$ 1.9 billion, or roughly $373 million, between 2026 and 2030. According to the company, the service areas examined by prosecutors recorded reductions of between 18.7% and 63.1% in the duration of outages from 2021 to 2025, while their frequency fell by between 38.1% and 61.3%. That performance is difficult to reconcile with the image of a utility standing still.
The problem lies in what the averages fail to show. In an injunction granted at the request of Federal District prosecutors, a local court said that an improvement in company-wide indicators did not rule out the existence of critically underserved areas. In PAD-Jardim, customers experienced 41.54 hours of outages in 2024, 231% above the regulatory limit cited in the case. In Vale do Amanhecer, the figure reached 15.02 hours, exceeding the limit by 188%.
The ruling requires the distributor to submit infrastructure projects for PAD-Jardim and Vale do Amanhecer and begin implementing plans to reduce outages. In Contagem, Paranoá and Sobradinho, it ordered intensified preventive maintenance and projects to replace conventional overhead lines with compact or protected networks. Each breach could result in a R$ 5 million, or approximately $980,000, fine.
For now, the injunction does not order the immediate execution of the R$ 160 million or R$ 286 million investment alternatives mentioned in the court filings. Nor does it amount to a final judgment. Neoenergia can appeal, challenge the deadlines and argue that investments of this scale require environmental permits, tariff planning and coordination with Brazil’s electricity regulator, Aneel. Even so, the ruling shifts part of the debate over where and how quickly the company should invest from the regulator to the courts.
That is the more significant risk. Brasília’s distribution concession was not renewed recently. It was extended in 2015, when the utility was still controlled by CEB, and remains valid until July 2045. Neoenergia therefore acquired a distributor whose concession had already been secured for more than two decades. In return, it inherited not only the assets but also the expectation that private capital and stronger management would fix the problems left behind.
Privatization has not necessarily failed. The investments and improved operating indicators suggest otherwise. But Brasília shows that restoring a distributor’s financial health is not the same as delivering uniformly reliable service across its concession area. Changing the owner restored the company’s capacity to invest. Ensuring that the investment reaches the customers receiving the worst service remains a job for regulation — or, increasingly, for the courts.
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