Regulatory agencies and federalism: the decentralized management of the energy sector regulation

This article explores the subject of the relationship between regulation and federalism, from the perspective of the decentralization of the regulatory activities in the electricity sector in Brazil. The article presents a descriptive assessment of the creation of the state and municipal agencies, underlining the large number of agencies created since 1997, and analyzes the main studies on this processes' origin and characteristics. The dispute between the federal and state governments over the creation of the concept of decentralization of the regulatory and overseeing activities was central to the process of elaborating the act that created Aneel (the Brazilian electricity sector regulatory agency). The article shows the role that this dispute had when Aneel's institutional design was being formatted and defends that it is one of the explaining factors for the genesis and governance of the Brazilian regulatory agencies, particularly in the electric power sector. It assesses the decentralized regulatory and overseeing activities in the power sector, and raises some issues on decentralization management, in relation both to the state agencies, responsible for the complementary regulatory activities, and the federal agencies, which coordinate these activities.