Advancements in NEEA'S methodology for calculating regulatory operating costs of electricity distribution companies based on PC 062/2020

In Brazil, the National Electric Energy Agency (NEEA) regulates electricity tariffs through Tariff Regulation Procedures, with periodic adjustments involving public hearings. The latest methodology revision for calculating regulatory operating costs occurred during Public Consultation No. 062/2020, which received 63 contributions from 28 entities, leading to Technical Notes 121/2020, 176/2022, and 068/2024. This study analyzes these notes, emphasizing proposed improvements in calculating distributors' operating costs, addressing issues such as data quality, efficiency methodology, confidence intervals, and update schedules. The analysis highlighted the need for standardized data collection and validation to enhance accuracy, identified temporal mismatches, and underscored the importance of considering environmental and socioeconomic heterogeneity in distributor studies. Despite low representativeness from the 2nd stage DEA, the necessity for public consultations to better grasp operational complexities and adjust regulatory targets was reinforced. Finally, ANEEL's efforts to develop productivity-encouraging mechanisms that benefit consumers and ensure the economic sustainability of concessions were noted.