FIEC and SINDENERGIA vs. União Federal and others (Irregularities in Energy Capacity Reserve Auctions)

On May 18, 2026, the Federation of Industries of the State of Ceará (FIEC) and the Union of Energy and Services Industries of the Electric Sector of the State of Ceará (SINDENERGIA) filed a Public Civil Action (ACP) with a request for urgent relief, against the Federal Government, the National Electric Energy Agency (ANEEL), the Energy Research Company (EPE), and the National System Operator (ONS). Plaintiffs allege that the Capacity Reserve Auction (LRCAP) 2026 compromises competitiveness and economic rationality, shows signs of methodological inconsistencies, may impact the tariff formation of the electricity sector, and is inconsistent with environmental protection and sustainable development, thus violating the international climate commitments assumed by Brazil. With the estimated cost of contracting through LRCAP being over R$ 500 billion, in addition to an increase in consumer tariffs in general, significant effects on the industrial sector are anticipated. Plaintiffs argue that the energy sector should evaluate more efficient, competitive, and sustainable technologies, considering solutions already discussed in the international market.

Plaintiffs claim that the demand does not intend to replace technical and administrative merit, but to verify the legal, procedural, regulatory, and competitive compliance of the administrative acts carried out within the scope of LRCAP 2026. This attention should be paid given the long duration of the contracts signed, the potential billion-dollar tariff impacts, and the systemic relevance of the electricity sector to the national economy. FIEC and SINDENERGIA argue that the adopted model is questionable regarding the technological neutrality and environmental compatibility of the promoted expansion, since the auctions are prioritizing the contracting of fossil fuel thermoelectric sources, such as coal, to the detriment of more efficient and sustainable alternatives. They argue that the auction threatens the environmental protection foreseen in Article 225 of the Federal Constitution and in the National Policy on Climate Change, which establishes the inclusion of the climate agenda in national energy policies. An urgent injunction is requested to suspend the acts of approval, awarding, and formalization of the Capacity Reserve Power Contracts arising from LRCAP 2026 or, alternatively, to suspend the effects of acts related to thermoelectric products. On the merits, a declaration of nullity is requested for the administrative and regulatory acts related to LRCAPs 2026.

In its preliminary ruling, the 1st Federal Court of Ceará found Plaintiff's arguments as involving significant amounts that could compromise the financial stability of companies and families and the clean energy matrix for national energy production, and granted the request for urgent relief to immediately suspend the approval of the results of the LRCAPs 2026 and the signing of the respective contracts. Additionally, it recognized the connection with Public Civil Action No. 1048511-21.2026.4.01.3400 and transferred jurisdiction to the 6th Court of the Federal District, which heard the related lawsuit.

The 6th Court of the Federal District dismissed the preliminary injunction request and declared the previous provisional decision null and void.