Brazil power rationing unavoidable

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Brazil power rationing unavoidable, minister says Updated 11:10 AM ET April 24, 2001

SAO PAULO, Brazil (Reuters) - Latin America's largest country will have to ration electricity soon to get through a power crisis stemming from low water levels in power stations' reservoirs, Brazil's mining and energy minister said Tuesday. Hydroelectric plants generate more than 90 percent of electricity in Brazil, which makes the country hostage to nature. Poor rains at the start of the year have failed to refill the reservoirs and the dry period has already begun.

"Based on this fact (low water levels), there should be power rationing, although we still have to examine the program of rationalization of power usage," Jose Jorge Vasconcelos told reporters at an energy conference in Sao Paulo.

The government has been pinning hopes on its power-saving "rationalization" plan but experts, who blame a lack of investment in the electricity sector for the energy crisis, have long predicted power cuts in the country of 170 million.

"Nothing has been defined yet, but rationing will certainly be carried out in stages," the minister said.

Ministry officials have said rationing is likely to start in June with quotas for households and industries and, if those don't yield the desired effect, power cuts would be imposed.

Vasconcelos said the government would try to minimize losses for industry as the country struggles to boost its economic growth by 4.5 percent this year. He said rationing would first affect households.

"Households have more fat to burn than industries. In the industrial area there is always the issue of jobs. If there is a big cut (in power supply), production falls, as does tax collection and employment," he said.

Officials said on Monday the quotas plan, which could be imposed through power distributors, would aim to cut consumption by 20 percent.

They said consumers would be split up in groups and each group would have a different quota. For households, the quota is 50 kilowatts per hour as a monthly average, with businesses able to use up to 300 KW per hour and industrial enterprises up to 500 KW per hour.

In case the quota is surpassed, consumers would have to pay double the normal tariff for electricity, officials said.

Investment in gas-fired plants and new hydroelectric plants has been slow and the first big projects would start operating in late 2002, which means that Brazil may face the same crisis next year as well.

http://news.excite.com/news/r/010424/11/energy-brazil-rationing?printstory=1

-- Martin Thompson (mthom1927@aol.com), April 25, 2001


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