Electricity Bills Set for Yellow Alert in December, First Surcharge Since 2021
Consumers may see an increase in their electricity bills starting in December, as analysts predict the activation of the yellow tariff band. This marks the first additional charge on power bills since 2021, a period characterized by significant water scarcity.
The National Electric Energy Agency (Aneel) is expected to officially announce the tariff for December on Friday. The yellow band signifies that energy generation costs have risen, necessitating a supplementary charge to consumers.
According to projections, the additional cost for the yellow tariff will be approximately R$1.885 per 100 kilowatt-hours (kWh) consumed. This is a notable decrease from the current R$4.46 per 100 kWh being charged under the red tariff, level 1.
Weak Rains Impact Reservoir Levels
The early part of the wet season has not delivered the expected recovery in the main hydroelectric power plant reservoirs, particularly in the Southeast/Center-West submarket. This has prevented a more significant improvement in energy costs for consumers, according to consultancy Thymos.
Pedro Moro, coordinator of Prices and Market Studies at Thymos Energia, indicated that December might see a trend reversal with improved water flow. However, he stressed that the rainfall patterns in the coming weeks will be crucial in confirming this expectation.
“The system still demands care,” Moro stated, emphasizing that reservoir levels need to remain consistent for a more favorable outlook to be established. The continued reliance on hydroelectric power means that water availability directly influences electricity prices.
Shift in Energy Pricing Models
The expectation of a yellow tariff in December is shared by the Electric Energy Commercialization Chamber (CCEE) and the brokerage firm Warren Rena. This development comes amid a backdrop of higher and more volatile energy prices throughout the year.
These price fluctuations are partly attributed to recent changes in the computational models used to calculate prices in the short-term energy market. These adjustments aim to better reflect the cost of water resources, especially considering Brazil’s heavy dependence on hydroelectric power.
The updated models incorporate a greater aversion to risk, particularly concerning scenarios of severe hydrological drought. The goal is to improve the valuation of water resources for the Brazilian energy matrix, which relies heavily on hydroelectric dams as significant energy storage systems.
Outlook for 2026 and Inflation
Looking ahead, both the CCEE and Warren Rena anticipate a green tariff for January, meaning no additional charges on electricity bills. This projection is based on expected improvements in rainfall during the wet season.
Warren Rena’s inflation forecast, which includes the yellow tariff for December, projects the IPCA (Brazil’s benchmark inflation index) to close 2025 at 4.2%. For 2026, with a projected yellow tariff at the end of the year, the estimated inflation is 4.5%.
The return of the yellow tariff band, even with a reduced surcharge, underscores the ongoing sensitivity of electricity prices to weather patterns and the complex interplay of energy generation costs in Brazil. Consumers will be closely watching rainfall and reservoir levels in the coming months.
Empowering you to master your money with confidence and clarity. On this channel, we break down personal finance—from budgeting basics and saving smarter to debt-free strategies and practical investing—all in easy-to-understand language.
Expect weekly deep dives into real-life financial questions, step-by-step tutorials, and expert insights that make money topics approachable and actionable. Whether you’re building emergency savings, paying off loans, or planning for the future, you’re in the right place to get informed, empowered, and financially confident.