EDEC - From 20% to 5% in 60 Days

The power outages in Santiago were publicly acknowledged by EDEC/EPEC, which justified the failures with complex generator set malfunctions and maintenance delays. The situation led to intermittent and prolonged outages, severely affecting the population and businesses. There was also public and political pressure for compensation measures and service improvements.

Today's column is a result of the arrival of the EDEC bill, with the announced 10% discount:

“EDEC will apply a 10% discount to the electricity bills of customers on the island of Santiago for the months of October and November 2025.” In practice, this discount represents immediate cost relief, benefiting businesses and residential consumers, due to the outages we experienced on the island of Santiago. It reflects social care and a measurable financial impact for consumers in the short term.

But a more detailed analysis reveals some surprises. Let's analyze.

The discount applied is 10% on the Consumption value, to which the Fixed Rate and the Power Rate are then added. So far, so good.

What kind of discount is this? Is it a commercial discount or a financial discount?

A commercial discount, by definition, is a direct reduction in the selling price of a product or service, usually granted at the time of sale, through negotiation, volume, promotional campaigns, or loyalty programs.

A financial discount is a reduction granted as an incentive for early or cash payment, usually applied to the total invoice amount after the sale, as a way to encourage payment before the deadline.

Looking at the invoice, we have a commercial discount applied to the consumption value of 10%. So far, so good.

But then comes the first surprise: the ICMS calculation. What we see is that the ICMS is applied to the consumption value, the fixed rate, and the power rate, forgetting the discount.

Analyzing this situation from a technical point of view, we understand that the taxable value is determined after deducting the discount. In other words, we should pay less VAT.

Second surprise: Maintaining the assumptions of this first invoice from October 2025, applied to the November 2025 invoice, projecting the total discount over these two months is approximately 5%, calculated for the 30 days in which there were cuts.

Hence the title of this column: EDEC from 20% to 5% in 60 days.

Is the discount sufficient?

Example: A small 20-room hotel, with a restaurant and support services, paying approximately 280 contos per month. According to EDEC, it will have a discount of approximately 25 contos in two months.

Recommended power: 80–120 kVA, consumption 18 liters/hour, diesel price 107.70 CVE. Considering that the outages lasted at least 40 hours (5 days/8 hours), we would have an expense of 78 contos, just for fuel. This assumes that there was already a generator, therefore it was not necessary to buy or rent one.

Consumer rights and compensation in a monopoly context

According to Cape Verdean legislation and international best practices for essential public services:

• Consumers have the right to a stable, continuous and secure energy service.

• In the event of prolonged or recurring service outages, especially when there is no alternative supplier (monopoly), the concessionaire company is obligated to compensate consumers for the damages caused, whether material (damage to equipment, production losses) or moral (inconvenience, loss of quality of life).

How can compensation be made?

Direct discount on the bill: The simplest and most transparent method is to apply a discount proportional to the time and severity of the outages, reflected directly on the bill for the affected month. This discount can be a percentage or a fixed amount for each hour/day without service.

Additional compensation: In cases of proven damages (for example, failures in electrical equipment), additional compensation may be claimed, upon presentation of evidence.

Formal procedure: The consumer must register the complaint with EDEC, document the damages and, if necessary, resort to ARME (Multissectoral Regulatory Agency of the Economy) for mediation and decision. The Complaints Book and the consumidor.arme.cv portal are official means for this purpose.

What is ARME's role?

How are power cuts and compensations handled in other countries with energy monopolies?

ARME is responsible for regulating access to and operation of the electrical system, protecting consumers, setting tariffs, issuing opinions, and supervising and monitoring the activities of regulated companies, according to defined legislation and regulations. Examples include ELECTRA/EDEC and AEB, Águas e Energia da Boavista.

The penalty aims to encourage the monopoly to invest in maintenance and service quality. Generally, there are compensation systems regulated by public bodies to protect consumers against failures or unscheduled interruptions.

The compensation amount is usually proportional to the interruption time and the presumed loss. Let's make a general comparison.

Sweden: The country adopts strict regulations. If the power supply is interrupted for more than 12 hours, the consumer receives 12.5% ​​of the annual value of their bill; the compensation increases to 37.5% between 24 and 48 hours, and so on. The system is automatic and proportional to the duration of the interruption, with guaranteed minimum payments.

This and other examples show the importance of strong regulation and transparent criteria to protect consumers when they cannot choose their supplier.

Constructive suggestion: measures to avoid new crises, such as strengthening ARME's oversight, investments in infrastructure, diversification of the energy matrix, or incentives for companies to produce their own energy. Two weeks ago, we discussed critical infrastructure.

Provocative question for reflection:

"Why should Cape Verdean consumers demand more transparency and respect?"

By the way, the EDEC invoice still does not meet the mandatory legal requirements.

The EDEC invoice continues to fail to meet the legal requirements in force, namely those of E-Fatura. We hope that the DNRE will not later impute the "responsibilities" to consumers/taxpayers.

Listen to the full episode on this topic and discover more about how critical infrastructure influences the business environment in Cape Verde (link).