Custo de capital de distribuição de energia elétrica: revisão tarifária 2007/2009[Cost of capital of electric energy distribution: tariff review procedure 2007/2009]

The current methodology adopted by the Aneel to estimate the rate of return (cost of capital) applied in the periodic tariff revision is improved via some modifications in the following parameters: country risk, exchange rate risk and regulatory risk. We recommend the global CAPM methodology with some adjustments for the specifics of the Brazilian electricity sector such as the addition of the total magnitude of the country risk premium, which the current regulation considers only partially. Such approach makes the correction for the exchange risk premium unnecessary. Since country risk is a volatile parameter presenting a continuing falling over the last 3 years, several scenarios are analyzed. The appropriate rate of return is estimated in real terms at 10.6% - 12.3%. The relevance of the rate of return adopted by the regulatory agency and the recognition that, in the long run, private investors have to recover the opportunity cost of capital(including the country, regulatory and project-specific risks) are crucial issues indiscussions over the best regulatory practices.