Changes to the Tariff Policies of the Electricity Distribution Segment And its Effects on the Economic Performance of Investments in Fixed Assets

Abstract

Objective: This article discusses the effects of changes in electricity distribution regulation on the economic performance of fixed asset investments.   Theoretical Framework: The analyses in this study are based on Ferreira's (2021) research conducted on a concessionaire's asset database, considering the period between two tariff cycles.   Method: The methodology used in this study included the analysis of regulatory documents related to the 4th Tariff Review Cycle of a specific distributor, from April 2013 to May 2018. The analysis of these documents was conducted through organization and comparison of versions, based on continuous readings, following Ferreira's (2021) guidelines.   Results and Conclusions: Although they can cause distortions in the evaluation and decision-making processes regarding investments, the regulatory changes analyzed in the research had a positive effect on the economic performance of the selected sample's assets.   Research Implications: It was observed that regulatory changes are important for regulation to adapt to the reality and needs of the sector but can impair the evaluation and decision-making process regarding fixed asset investments in the electricity distribution segment in Brazil.   Originality/Value: The research results emphasize the importance of concessionaires actively participating in public discussions proposed by the regulatory agency to carefully evaluate all possible consequences of regulatory changes for the economic performance of assets and the provision of public service.