The structure of electric energy distribution tariffs in Brazil

This paper presents an overview of the costs allocation in tariffs of electric energy distribution. It analyzes, briefly, the marginal and average costs pricing, two-part tariffs and Ramsey rule that form the theoretical basis for natural monopolies pricing. From theory to practice, it presents the concept of allowed revenue for the distributor and its components as well as their allocation in the electric energy tariffs structure. In conclusion, this paper compares the tariffs with the regulation theory and also presents some considerations in discussions aimed at improving the electric energy distribution service pricing.