Some companies profit as Brazil struggles to secure power

jueves 11 de septiembre de 2014 11:56 GYT

By Anna Flávia Rochas and Marcelo Teixeira

SAO PAULO, Sept 11 (Reuters) - A small group of energy companies in Brazil are increasing revenues at a time when the country is grappling with its worst power crisis in more than a decade, taking advantage of sky-high prices to sell electricity in the spot market.

Power generators that have managed to produce extra energy in recent months or who aren't restricted by long-term supply contracts are being rewarded with prices up to six times higher than the average cost on conventional electricity contracts.

At the same time, distributors that had to resort to the short-term market to fulfill demand increases are facing financial burdens and are being rescued by the government.

The situation underscores the imbalances of the Brazilian power system, which has come under stress because of a prolonged drought. The energy crunch has also become a hot topic in Brazil's presidential race, with the government facing criticism for not ensuring a stable power supply at reasonable prices.

Among those profiting are listed companies controlled by state governments Copel, Cemig and Cesp , along with sugar and ethanol makers that also generate electricity from biomass such as Raizen, the joint-venture between Cosan and Royal Dutch Shell , and Biosev, controlled by commodities trader Louis Dreyfus.

"Companies that have been able to offer energy in the short-term market are seeing high profitability," said Henrique Leme, director of Dcide, a local energy consultancy.

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