Coup of the electric companies: fare increase and extraordinary profit

Next to the day of March 14^th, day that the affected people by dams of 40 countries mobilize for the International Day of Struggle against dams, the federal government ceded to the transnational corporations pressure and authorized the transfer of 21 billions Reais for the electric energy suppliers.

Circa of 13 billions of the national treasury will be used for this and other 8 billions will be re-passed in the domestic electric bill fare, which have been already announced to happen in 2015. Until then, the companies will make loaning of high interests with international financial capital. With this, the government postpones the the electric fare increase, which may reach 30% of increase on the bills for the population after elections.

According to MAB’s specialists and contributors on the energetic issue, despite the government’s cowardice, this “coup” happened thanks to the international speculators which controls the electric sector and the hydro-power plants managed by the state governments of PSDB.

In the beginning of 2013, president Dilma Rousseff announced on national television the Provisional Executive Measure number 579, which afterwards turned into the Law nº 12.783, this reduced circa of 20% of the energy bills. This happened thanks to the renewal of the concession of hydro-power dams controlled by federal government. With this, energy is sold three times lower than before (that was 100 Reais/1000 KW). Since the announcement of the measure the price went to 32 Reais/1000 KW, maintaining the profit rate on 8%.

But, at that same period, the state companies Cesp, Cemig and Copel, controlled by the governments of PSDB, denied to renew the concessions and did not accept to reduce the price. Because no renewal on concession took place, the energy generation have not being contracted, with this the companies sold the energy in the short term market for the price they established.

The energy of these companies, which did not renew its concession, was missing for suppliers, and is available for speculation of energy generators, which may charge 25 times higher the price for the same amount of energy.

The energy of the hydro-power dams built more than 30 years ago, could easily sell energy for 33 Reais, but are being sold for the absurd price of R$ 822.83/1000 kW. According to member of the national coordination of the Movement of People Affected by Dams (MAB), Gilberto Cervinski, these companies are using the media and the shortage of rain in some regions to justify the robbery on the price charged from the population.

“Private power companies speculate and try to justify, the abusive value, blaming the lack of rain and therefore the activation of thermal energy generation, intimidates through the media, when in fact it is not a problem of lack of rain, or the use of thermal energy, but the way they make an extraordinary profit selling energy at a price of of 822.83 Reais/ KW. And again, who pays the bill are the people”; he says.

During the MAB’s activities of struggle pamphlets were handled out, marches and protests were held against the “coup” gestioned by the eletric sector.