UPDATE 1-Brazil utilities get average 23.4 pct special rate hike
(New throughout; adds details, background, table) RIO DE JANEIRO, Feb 27 (Reuters) - Brazil's utilities were granted an average special rate hike of 23.4 percent to cover the costs of a energy subsidy program that the government has decided to stop funding directly, the country's electrical energy system regulator said on Friday. The hikes take effect on Monday for 58 electricity distributors, the regulator, ANEEL, said. The special rate hike, which will cover the estimated 22.1 billion real ($7.77 billion) cost of a subsidy program known as the CDE that the government has decided not to fund directly this year. The subsidies cover a range of programs including system expansion, fuel purchases for remote communities and coal power. These costs will now fall directly on consumers. The rate increase comes as the government looks for ways to cut its budget in the face of a slowing economy and to reduce electricity consumption without resorting to outright rationing. Brazil's power generation capacity threatens to outstrip demand in much of the country thanks to delays in building new power plants and transmission lines and a drought. A lack of water has undermined the country's hydroelectric system, responsible for most power generation. The rate hikes related to the CDE will be on top of regular annual adjustments for utilities which are expected to rise sharply as the drought and power shortage force distributors to buy higher cost power from thermal generators or on the spot market. Below is a table of the approved rate increases for some of the largest Brazilian utilities. Utility Name Stock Code Ave. Rate Hike Cia Paranaense de Energia - Copel 36.4% Eletropaulo Metropolitana SA 31.9% Cia Energetica de Minas Gerais -Cemig 28.8% Light SA 22.5% Bandeirante Energia 24.9% CPFL Paulista 31.8 ($1 = 2.8450 Brazilian reais) (Reporting by Jeb Blount; Editing by Chris Reese and Marguerita Choy)
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