The recent decision by Aneel (National Electric Energy Agency) regarding Enel São Paulo highlighted a central issue for the infrastructure market: how the regulator should act when a public service concession starts to present persistent flaws in its execution.
On April 7, 2026, the agency published Order No. 1,214, determining the conversion of the inspection process into a process leading to expiry and the suspension of the analysis of the renewal of the electricity distribution concession contract in São Paulo. The measure is relevant not only for its immediate effects, but also because it brings back into debate a structural issue: the regulation of long-term contracts in essential sectors.
In the case of São Paulo, this story begins in 1998, in the context of the restructuring of the electricity sector. That year, Eletropaulo Metropolitana was purchased by the Lightgás consortium, formed by AES Corporation, Houston Industries Energy, Électricité de France and CSN, giving rise to Concession Contract nº 162/1998 Aneel. It is this contract, in essence, that remains at the center of the current controversy.
This point deserves to be highlighted because it corrects an inaccurate perception that still recurs in the public debate. There is no discussion of a new contract, but continued executionover almost three decades, of the same contractual relationship, although subject to amendments and changes in the concessionaire’s corporate control.
Long contracts require permanent regulation
Historical data matters. The contract was signed a few years after the promulgation of the 1995 Concessions Law, and shortly after the creation of Aneel itself, in 1996. In other words, foi established in an institutional environment still in consolidation. Since then, not only has the contract matured, but the regulatory framework responsible for regulating its execution has also matured.
In infrastructure, this perspective is decisive. Concessions are long-term legal relationships, subject to corporate changes, regulatory reviews, technological transformations and increasing pressures for performance. In the case under analysis, after 2001 the concessionaire came under the control of AES, until Enel took control in 2018. Its stability, however, does not result from the absence of changes, but the institutional capacity to preserve, over time, the adequacy of the service provided.
From this perspective, it is important to emphasize that Enel’s entry into control of the concessionaire did not represent the emergence of a new concession. Represented the assumption of the position of controller in a pre-existing legal relationshipwith defined contractual obligations, known regulatory parameters and accumulated inspection history. In regulated sectors, changes in the controller’s profile do not distort the contract or reduce the duties assumed towards the granting authority, users and the regulatory system itself.
Expiry as an extreme measure
It is in this context that Aneel’s actions gain special relevance. Regulating is not just about sanctioning in times of crisis. Regular means monitoring the execution of the contract, monitoring the quality of the service, demanding corrections and, when necessary, elevating the institutional response in a technically based way.
Expiry must be understood as the most serious measure provided for in the concessions regime. This is not an ordinary measure, nor an automatic response to operational deficiencies. Its validity presupposes relevant and persistent non-compliance, determined in a regular administrative process, with a sufficient technical basis and compliance with contradictory rules and broad defense.
According to the elements made public by the agency, the controversy does not arise from an isolated fact. It is treated as a result of a set of failures related to the restoration of service, emergency response, the prolonged duration of interruptions and the insufficiency of corrective measures presented by the concessionaire. From there, the discussion stops being just operational and starts to involve adherence to the provision to the concession’s contractual regime itself.
Legal certainty and market effects
It is important, however, to distinguish the initiation of the procedure from the application of the penalty. Aneel’s order did not decree expiry. What it did was open a more serious and structured procedural phase, aimed at specifically investigating the assumptions of this measure. This distinction is central to the legal security of the sector.
In essential service concessions, Decisions of this nature require regulatory coherence, proportionality and procedural rigor. The more intense the measure, the greater the requirement for technical and institutional consistency must be.
The Enel SP case projects effects that go beyond the distributor and the consumers served in São Paulo. It is also observed by investors, financiers, operators and other market agents as a sign of how the regulator intends to deal with persistent failures in infrastructure contracts. That’s why, interests not only the electricity sector, but the broader environment of concessions and economic regulation in the country.
In the end, the main lesson seems clear: in long-term contracts, good regulation depends less on abrupt responses and more on continuous supervision, stable inspection criteria and gradual correction instruments. Contractual stability remains a core value. But it does not dispense with permanent responsibility, nor does it eliminate the need for firm, predictable and technically based regulatory action.
* Paulo Dantas He is a partner at Castro Barros Advogados
Articles published by CNN Infra seek to stimulate debate, reflection and shed light on views on the main challenges, problems and solutions faced by Brazil and other countries around the world. The texts published in this space do not necessarily reflect the opinion of CNN Brasil.
