Economy & Energy
Ano II - No 11 November/December 1998

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ollaoro.gif (978 bytes)The regulating state in ES
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ollaoro.gif (978 bytes)Eletricity in Brazilian Energy Balance
ollaoro.gif (978 bytes)Insolvency in the Enterprises and Public Debt
ollaoro.gif (978 bytes)Brazilian Energy Balance 1998
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Following the Brazilian Public Debt

Graphical Edition:
Editoração Eletrônic
Friday, 11 July 2003.


Genserico Encarnação Jr.
English Version
Frida Eidelman

Without considering in this article the reasons that led to this situation as well as the merit of the change, the present State is setting aside its entrepreneurial role and is performing the functions of regulator of the economical activities.

In this new era, investments in the productive and infrastructure sectors will be made by the private initiative while the State has the role of inducer, articulator, catalyst, aligner and controller of these activities, besides, of course, its direct responsibilities concerning the social areas such as education, public health, safety, etc. So are the rules that are governing this end of century, a transitional period with unpredictable results. According to the more radical neoliberal oracles, regulation will turn to be the main and perhaps the only activity of the State.

Setting aside consideration of a conceptual nature, here in Espirito Santo, before ADERES, that started to perform the above mentioned roles, has completed two years of its creation, AGESP – Public Services State Agency was recently created, having controlling and surveillance functions, that is, normalizing and regulating public activities performed by the private sector.

The federal government has given examples with the establishment of ANEEL – National Electric Energy Agency, of ANP – National Petroleum Agency and of ANATEL – National Telecommunication Agency. At the federal states level there are regulating agencies in Ceará, Rio de Janeiro, Rio Grande do Sul, Minas Gerais and the Energy Public Services Commission of São Paulo. Except the last one, which is exclusively concerned with electrical energy and natural gas, the other agencies have a multi - sectorial character, as it is also the case of Espirito Santo’s recently created agency.

AGESP, created by the State Law 5,721/98, was conceived to comprise initially the Energy, Sanitation and Transportation (urban and inter-municipal) sectors and other works and public services conceded, permitted or authorized by the state.

The Agency, now in its regulating phase, aiming at its implantation in the near future, is an autarchy with administrative, technical and financial autonomy. The elaboration of sectorial policies is a responsibility of the executive power, interacting with the legislative power if it’s the case. AGESP limits itself to regulating functions. It is legally linked to the Finance Department simply because of constitutional rule and it has no hierarchical link with this organ, which will not imply any type of "improper relationship" with the State Treasury.

AGESP will be composed of a Consulting Council gathering the most representative segments connected with the sectors to be regulated and a Board with fixed mandates that are not coincident with those of the state authorities. It will also have a juridical department.

In the sanitation sector, where the management law for hydraulic resources is now under discussion at the Legislative Assembly - it will follow the federal model, the regulating function will be exerted on public works involving dams and dikes, not depending on the privatization process now underway. On the other hand, the regulating activities for water supply and sewage may be exerted by delegating them through agreement with municipalities, which have the constitutional power for concession in these areas.

As to the transportation sector, with concessions and permissions already given, it would be AGESP’s responsibility to organize the present activities and the management of future concessions and permissions, such as the control of state highways to be privatized.

The Energy area should be highlighted in this new organizational arrangement. AGESP will exert the controlling role of the only concession legally granted to the Federal States in this area, urban gas distribution, notably natural gas. In Espirito Santo, this concession was given exclusively to Petrobrás Distribuidora which, with the participation of the state and of private entrepreneurs, is articulating the establishment of a State Gas Company to deal with a market that presumably will be one of the largest in Brazil.

Furthermore, it should be emphasized the concrete possibility for this new organ to have delegation from its corresponding national agencies – ANEEL and ANP – and through that, increase its intervention power on very important activities for our development in which the conceding power is the Union and where there are promising expectations, specially in the exploration and production of petroleum and natural gas.

The main task of the regulating agency will be to defend and protect the consumer in the mentioned areas where such provided services get close to natural monopoly situations. In these cases, competitive incentives should be considered in such a way as to reduce the monopolistic power of the concessionaires, keeping in mind the need of guarding them from negative impacts that may come from the very regulation activity if it gets hypertrophied.

The author in an economist from ADERES.