By Brazil Stock Guide – Brazil’s Federal Court ordered the national power regulator Aneel to suspend the early renewal process of Enel’s electricity distribution contract in São Paulo, following a lawsuit filed by Mayor Ricardo Nunes’s administration over repeated blackouts and service delays.
Judge Maurilio Freitas Maia de Queiroz partially granted the city’s injunction request, ruling that Aneel may not propose an early extension of the concession—currently valid until 2028—until the regulator concludes its separate administrative process investigating the possible caducity (forfeiture) of the same contract.
The judge also ordered Aneel to submit within five days a copy of its October 2024 administrative proceeding that evaluates whether to recommend termination of Enel’s concession to the Ministry of Mines and Energy (MME).
In addition, Aneel must later present a technical review of Enel’s performance based on legal criteria such as service quality, tariff affordability, infrastructure modernization, and operational efficiency. The court further required inclusion of metrics previously omitted by Aneel, including average emergency response time (TMAE), service level index (INS), consumer satisfaction (IASC), and critical-day outage duration (DICRI).
A September 25 technical note from Aneel had preliminarily found that Enel met renewal requirements, pending a final board vote. Aneel’s director-general Sandoval Feitosa recently acknowledged the “interdependence” between the renewal and the investigation into the company’s alleged operational shortcomings—a position now mirrored by the court.
Meanwhile, Energy Minister Alexandre Silveira, who publicly supports renewing Enel’s contract, has said that “political interference must end” to enable the R$120 billion (US$21 billion) in investments needed to modernize Brazil’s power distribution system. Over the next five years, about 20 concession contracts held by regional distributors are set to expire, making Enel’s case a bellwether for the broader sector.
In a statement, Enel said it remains committed to Brazil through “massive investments in technology, grid renewal, and workforce training,” expressing confidence in the regulatory renewal process that provides certainty to its current and future investments.
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