The Challenge of Determining the WACC of Electricity Transmission Service Operators: The Brazilian Case

Objective: ANEEL, the Brazilian National Electric Energy Agency, regularly renews its tariff model to remunerate electricity transmission service operators. This study focuses on conceded rate of return operators’ regulatory capital. We aim contribute methodological improvement regulator’s approach in future reviews by focusing issues concerning calculation this key figure.Method: critically review ANEEL’s concept return, stressing figure.Originality/Relevance: are not aware any research that analyzes actual for calculating return. In line with search support, we intend our considerations will help improve and serve as stimuli answers open questions.Results: revealed five aspects give rise deeper reflections. Our findings suggest determining could be adapted better reflect financial market conditions.Theoretical/Methodological contributions: As a main finding, sample US electric energy companies involved so-called ߠfactor should reconsidered. Furthermore, compute weights these calculate sample’s unleveraged ß, missing data excluded. Moreover, instead gathering WACC from quite different periods, periods aligned theoretical basis.