On May 8, 2026,  the Brazilian Association of Unions and Associations Representing the Energy Industries (ABRAENERGIAS) filed a Public Civil Action (ACP) with a request for urgent relief, filed by against the Federal Government, the Ministry of Mines and Energy (MME), the National Electric Energy Agency (ANEEL), the Energy Research Company (EPE), and the National System Operator (ONS). The plaintiff argues that the Capacity Reserve Auctions in the form of Power (LRCAPs 2026) were structured in violation of the principles of legality, motivation, tariff moderation, administrative efficiency, and free competition, due to alleged irregularities in the definition of contracted power demand, the formation of ceiling prices, and the regulatory modeling of the auctions. They alleged that the auctions resulted in the contracting of an excessive volume of power, with the potential to generate billions in tariff impacts on consumers and favor market concentration in certain economic agents. They also argued that the adopted model favored the contracting of thermoelectric power plants fueled by fossil fuels, such as natural gas, coal, diesel oil, and fuel oil, to the detriment of less expensive and more environmentally sound technological alternatives. This in turn would contribute to increased greenhouse gas emissions and the worsening of climate change, contradicting the energy transition and decarbonization commitments undertaken by the country. Therefore, they requested an urgent injunction to suspend the approval of the auction results and the signing of the respective Reserve Capacity Contracts (CRCAPs), as well as a declaration of nullity of the administrative and regulatory acts related to the LRCAPs 2026.

In a preliminary ruling, the Court denied the plaintiff's request for urgent relief, on the grounds that the controversy involves a matter of high technical and regulatory complexity related to the LRCAPs 2026, and that at that procedural stage, there were insufficient elements to rebut the presumption of legitimacy of the challenged administrative acts. It also highlighted that any suspension of the bidding processes could have significant systemic, regulatory, and operational impacts, recommending greater caution and prior input from the public entities before a thorough examination of the issue.

ABRAENERGIAS vs. União Federal e outros (Regulatory flaws in the 2026 energy capacity reserve auctions.)

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ABRAENERGIAS vs. União Federal e outros (Regulatory flaws in the 2026 energy capacity reserve auctions.) - complaint

Filed

Brazil

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