By Brasil Stock Guide – Brazil’s Federal Audit Court, known as TCU, on Wednesday (6) shelved a case that challenged about 20 billion reais included in electricity tariffs paid by consumers, according to Broadcast.
The decision means the court will not review the calculation method used to determine that portion of compensation owed to power transmission companies. The dispute centered on payments to concessionaires that operated transmission assets before May 31, 2000.
The broader case involved 62.2 billion reais, based on June 2017 values, in compensation for investments that had not yet been amortized. More than 70% of the total has already been paid, with the remainder expected to be settled through future tariff cycles through 2028.
At issue was a 2016 ordinance from Brazil’s Mines and Energy Ministry that established the basis for the payments. About 20 billion reais of the total referred to compensation for the cost of equity capital, known in the sector as “ke.”
TCU’s technical unit had questioned the use of that metric and recommended that its application be deemed irregular. The unit argued that the appropriate benchmark should have been the weighted average cost of capital, or WACC, rather than a measure tied to risk remuneration.
Former TCU Minister Aroldo Cedraz, who had served as rapporteur in the case, signaled earlier in 2026 that he agreed with that view and indicated support for annulling acts stemming from the ministry ordinance. Minister Benjamin Zymler voted in the opposite direction, finding the rule legal.
Minister Bruno Dantas backed a different route, favoring the case’s closure without a ruling on the merits of the ordinance’s legality. That position prevailed on Wednesday.
Dantas said he felt “discomfort” that the matter was being resolved only about a decade after the rule was issued.
“The lengthy course of the proceedings allowed consumers to have already borne more than 80% of the compensation, calculated at 62 billion reais as of June 2017, without a timely assessment by this court. Only about 11 billion reais remain, to be diluted in the next tariff cycles,” Dantas said.
The “ke” metric represents the return required by investors who deploy their own capital and assume business risk. For TCU’s technical unit, that risk-based return should not have been used as the index to update the amounts owed.
With the case shelved, the calculation method adopted under the 2016 ministry ordinance remains in place. The remaining payments will continue to be passed through electricity tariffs in upcoming cycles.
No publicly traded companies were named in the original report, so no stock tickers apply.
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