An approach to identify strategies to be taken into account when revising ITAIPU Annex C

Paraguay and Brazil - partner countries of the second largest hydroelectric power plant in the world (ITAIPU) - are currently in the preparation phase to review, in the year 2023, the conditions of the tariff structure and commercialization of the energy supplied by the plant, as in Annex C of the ITAIPU Treaty. This phase presupposes the gathering and analysis of information for the negotiation that will take place. Thus, governments define objectives and strategies to reach an agreement during talks in the bilateral table. This article helps formulate a country’s intentions and tactics, particularly Paraguay, for a bilateral negotiation obeying goals set out in national plans. Therefore, it appraises components of ITAIPU’s Cost of Electricity Service (CSE) (i.e., the fundamentals for the definition of the tariff established in Annex C and the objectives of the National Development Plan 2030 - PND 2030). So, it would be possible to identify which components of the CSE are the most important for the fulfillment of the national plan, organized in order of relevance according to the agreements in force. This work aims to provide elements to support the definition of the cost of electricity service using multi-criteria analysis. So, the Analytic Hierarchical Process (AHP) approach and results can help formulate and evaluate negotiation strategies to define the CSE. AHP analyzes, identifies, and ranks the current CSE components' degree of relevance to fulfill the PND 2030. Moreover, although based on the current situation of the CSE, this type of analysis can be applied to other cost configurations. This work proposes analytical and methodological tools extensible to other national plans (including at the subnational level) or programs.