Water, Light, and the Limits of Power

In a recent decision, Brazil’s Supreme Court (Supremo Tribunal Federal or STF) struck down a state law that prohibited utility companies from cutting off water and electricity until invoices were at least 60 days past due. According to the Court’s majority, Law 3.533 from the State of Tocantins was unconstitutional because it interfered with federal and municipal authority.

The lawsuit was brought by a national association of sanitation companies, which argued that states have no right to regulate when essential services can be shut off. The STF agreed. Under the Brazilian Constitution, the federal government has the exclusive authority to legislate on electricity and basic sanitation.

Electricity is governed by federal law and regulated by ANEEL, Brazil’s national energy agency. Water, on the other hand, is considered a matter of local interest, and it’s typically been managed by municipal governments. In neither case is it left up to the states to impose their own rules. Yet that’s what happened here.

The motivation behind the state law is understandable. It aimed to protect vulnerable consumers from having essential services turned off too quickly. Many families struggle to pay their bills on time, particularly in less developed regions of Brazil. But in trying to offer that protection, the state overstepped its bounds.

The Supreme Court’s decision serves as a reminder of how Brazil’s Constitution divides power among the federal, state, and local governments. No matter how well-intentioned the law may have been, regulating utility cutoffs doesn’t fall within a state’s authority.