Brazil introduces rationing as energy crisis looms

By ADALID CABRERA LEMUZ The Associated Press 5/18/01 3:55 PM

BRASILIA, Brazil (AP) -- Moving to avoid California-style blackouts, the government on Friday introduced rationing designed to force Brazilians to cut electric consumption by 20 percent.

A government task force said it would implement a carrot-and-stick array of rationing, incentives for energy savers and punishments for the profligate to deal with an escalating energy crisis.

Low rainfall has left reservoirs in several regions at record low levels. Hydroelectric power stations, which produce more than 90 percent of Brazil's energy, cannot keep pace with demand for power.

Full-scale blackouts, or even months of rationing, could stop Brazil's surging economy dead in its tracks, slow foreign investment and damage the government's chances in elections next year.

The plan calls for rationing starting June 1 in the Brazil's economic heartland along the Sao Paulo-Rio de Janeiro axis, in the northeast tourist region and in central-west states rich in mining and agriculture.

In this way, full-scale blackouts could be avoided for now, officials said.

"The (electricity) system doesn't have the capacity to meet demand for the next months," said Pedro Parente, head of the task force. "We are calling for the cooperation of all society."

Parente laid out plans that would reward consumers saving electricity, while heavily penalizing those who failed.

Households consuming an average of more than 200 kilowatts per hour each month -- about a third of Brazilian homes -- would have to reduce their consumption by 20 percent compared to last year, Parente said.

Those failing to rein in consumption would face surcharges of up to 200 percent. Consumers who managed reductions of 34 percent would get their energy for free, Parente said.

Brazilians who repeatedly fail to meet savings targets would have their supplies cut first for three-day and then for six-day periods.

"I'm unplugging the freezer at night, we're taking shorter showers, I'm not doing any ironing and we've swapped all our light bulbs for fluorescent ones that use less electricity," said Maria Reinaldo Negocia, 49, who shares a Sao Paulo apartment with her husband and two sons.

Parente promised to lower sales and import taxes on energy-saving devices. Low-income Brazilians would also be exempted from penalties, he said.

Industry would be expected to save between 15 and 25 percent, Parente said. Companies saving more than their given targets could sell excess energy on the free market or save it for later use.

Large-scale, California-style power cuts would be implemented only as a last resort, he said.

The government on Wednesday announced a 35 percent power cut for street lighting, illumination of public buildings and nighttime sports events, forcing the Brazilian soccer federation to reschedule nearly 130 evening matches to daylight hours.

The government is scrambling to build about 50 new, mainly gas-driven power stations by 2003.

Copyright 2001 Associated Press

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-- Martin Thompson (mthom1927@aol.com), May 18, 2001

Answers

This is an excellent "case study" of how two separate societies very differently manage very similar problems, at the same time, but that are far enough apart not to greatly influence one another (at least short term.) Which country, Brazil or the United States, is managing the problem better? The question is almost rhetorical.

-- Robert Riggs (rxr.999@worldnet.att.net), May 18, 2001.

O Globo: Power Rationing Plan Will Affect More Than 31.7 Million Consumers(Racionamento Atinge Mais De 31,7 MI De Consumidores) ( May 18, 2001 )

May 18, 2001, (O Globo /FT World Media Abstracts via COMTEX) -- The Brazilian government's power rationing plan is expected to affect the lives of more than 31.7 million people in the country's Southeast, Mid-West and Northeast regions.

According to the electric energy crisis committee, 71.4 per cent of the people living in those states consume up to 200 kW/h.

http://199.97.97.163/IMDS%PMANAT0% read%/home/content/users/imds/feeds/comtex/2001/05/18/we/0000-2341- KEYWORD.Missing

-- Martin Thompson (mthom1927@aol.com), May 19, 2001.

TUESDAY, 22 MAY 2001 W O R L D N E W S S T O R Y Brazilians dim lights to avert blackouts 22 May 2001

SAO PAULO (Reuters): The towering office blocks of Banco Itau and Microsoft Corporation in Brazil's financial heartland greeted nightfall on Sunday with their trademark lights turned off, and store owners celebrated astronomic weekend sales of energy-saving lamps. All this is good news for the government as it asks the nation to chop an average 20 percent off energy consumption to avoid widespread blackouts and haul South America's biggest country and economy out of a chronic power shortage sparked by drought.

"We are in the hands of the public. If people manage to economize 20 percent, the likelihood of blackouts will be very small," Mauro Arce, Sao Paulo State energy secretary and member of an anti-crisis task force, said in an interview in Folha de S.Paulo daily on Sunday.

Brazil announced on Friday its plan of attack to stave off California- style electricity cuts, asking consumers, companies and industry to cut electricity use by 15 percent to 25 percent with the threat of surcharges of 50 percent to 200 percent.

The country crashed into the crisis after the worst drought in 70 years dried up reservoirs that feed hydro-electric plants, responsible for more than 90 percent of electricity generation.

Rationing officially begins June 1 across most of Brazil although its biggest cities have already dimmed street lighting and consumers have turned to candles.

Arce said the initial drop in consumption could be gauged within a week although the decision on blackouts would come later. If blackouts were necessary, they would have to last about five hours and happen daily, he said.

"We have to give people a month to respond," Arce said.

The chance of blackouts, though, also depends on the weather. If water levels fall further, the country may need to economize up to 40 percent of consumption, Arce said. Rationing is set to last through November, when the rainy season resumes.

COOPERATION, UNDERSTANDING

With cooperation and the weather on its side, the energy task force will just need some understanding from the public, even though experts partly blame the power crisis on the government's failure to plan ahead.

In an early sign of irritation, Sao Paulo Internet company ATN Internet filed a lawsuit seeking a judicial ban on power cuts, newspapers said. And Brazil's Supreme Court President Marco Aurelio Mello said some of the government's measures violated the constitution.

"Unfortunately, the filing of injunctions and lawsuits has become a national sport," said Pedro Parente, head of the task force, in a separate Folha interview. "The situation today is serious. We need this to be understood by the judiciary."

If the public cooperates, Parente said the government could relax some of its rationing measures. The task force had banned energy contracts for new commercial or industrial projects.

"If we feel that things are going well, we have no problem in reversing this norm," he said.

Economists fear such measures, and the energy saving drive as a whole, could knock down Brazil's 2001 economic growth to less than 3 percent from expectations of about 4.5 percent.

http://www.stuff.co.nz/inl/index/0,1008,800881a12,FF.html

-- Martin Thompson (mthom1927@aol.com), May 21, 2001.

Brazilian energy plan runs into obstacles

By Raymond Colitt in São Paulo - May 22 2001 18:46:19

The power rationing plan announced last week by the Brazilian government to counter the country's worst energy crisis in decades has run into a series of logistical, political and legal obstacles just over a week before its scheduled application.

The government's effective management of the energy crisis, analysts say, will determine the impact on economic growth and on its popularity before presidential elections next year.

The plan is designed to reduce consumption by an average of 20 per cent to overcome insufficient hydro energy reserves. It relies on residential and business customers to reduce consumption under punishment of higher rates and selective cuts. Yet, if it proves ineffective, more damaging black outs will be inevitable.

Power distributors have warned that they do not have the capacity to inform consumers on time of their required reduction targets nor to apply selective cuts if they do not comply. In addition, there exists uncertainty about the government proposed notice they must issue before cutting a consumer’s power supply.

Several civil rights groups, arguing the plan is illegal, have already obtained their first victory in court. A tribunal in Rio de Janeiro this week ruled that distributors could not apply the government-mandated surcharges on energy because of "incommensurate social injustice". Further lawsuits were filed on Tuesday.

Opposition parties and labour unions hoping to gain political capital out of the crisis have also stepped up their anti-rationing rhetoric and protests.

To make matters worse, employees of Light, one of the country's largest power distributors, went on strike over planned lay offs.

Pedro Parente, the minister heading the government's energy task force, on Tuesday insisted the government had the necessary powers to confront legal challenges.

However, analysts warned that drawn out legal battles could delay and thereby increase the need for deeper power cuts.

Meanwhile, nearly all industry groups are intensively lobbying the government to obtain priority status and thereby reduce energy by only 15 per cent rather than 25 per cent. Businesses from bakeries to aluminium producers have warned of production cuts and job losses.

Several companies have already scrapped investment and expansion plans. The share prices of power distributors and energy-intensive companies have fallen significantly in recent days as investors fear a sharp fall in revenues.

Many economists say it is still too early to detail the economic impact of the power crisis. According to some estimates, gross domestic product is to slow by between 0.5 and 1 percentage point. More optimistic observers suggested the power plan would eventually work and cause only limited economic damage.

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-- Martin Thompson (mthom1927@aol.com), May 22, 2001.