SAO PAULO, Nov 14 (Reuters) - Brazil’s state-run electricity utility holding company Centrais Eletricas Brasileiras SA reported a larger loss in the third quarter of 2014 from a year earlier after being forced to purchase more expensive energy to resell.
The company reported a net loss of 2.7 billion reais ($1 billion), compared with a loss of 915 million reais in the third quarter of 2013, the company said in a statement filed with Brazil’s securities regulator.
Eletrobras has been struggling to make a profit ever since Brazilian President Dilma Rousseff unilaterally slashed power rates by about 20 percent in 2012, allowing Eletrobras and other generators to renew hydroelectric dam concessions early but starving them of revenue to finance expansion.
Since then, the worst drought in 80 years has wrecked havoc with the country’s hydroelectric dam-dominated power system.
Water in many dam reservoirs is at its lowest levels in more than 15 years. This has forced hydropower generators to stop producing power and to buy more expensive power generated by diesel, natural gas and other more expensive fossil fuels to meet their power supply contracts.
Eletrobras has the worst return on equity of any major Brazilian utility.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, was a negative 2.5 billion reais.
$1 = 2.6 reais Reporting by Caroline Stauffer; Editing by Jonathan Oatis