UPDATE 1-Brazil utilities get average 23.4 pct special rate hike

viernes 27 de febrero de 2015 17:27 GYT

(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
    Below is a table of the approved rate increases for some of
the largest Brazilian utilities. 
 Utility Name                           Stock Code  Ave.
 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