NOTE | PRIVATIZATION OF ELETROBRAS WILL CAUSE CHARGES ON THE ELECTRIC BILL, UNEMPLOYMENT, AND NEW BLACKOUTS!

The Bolsonaro government is directing another attack on the Brazilian people and the sovereignty of the country: the privatization of the federal company Eletrobrás. Currently, 62% of the company’s shares are state-controlled and the proposal is to deliver this percentage to international capital. The consequence will be an increase of approximately 20% in the population’s electricity bills for the 30 years.

To sell Eletrobrás will mean the privatization of 125 generation plants (51,125 MW), being 80% of hydraulic base, 71,000 kilometers of transmission lines, and 366 substations of electric power. Its equity is valued at almost R$ 400 billion, but the government plans to raise only about R$ 61,25 billion with its sale.

Most Eletrobrás plants sell their energy at a lower cost than private companies. Data from the National Electric Energy Agency (ANEEL) reveal that the current sale price of the energy produced by its hydroelectric plants is R$ 65.30/1,000 kWh, while private power plants charge the market value, which is on average R$ 250.00/1,000 kWh. By privatizing Eletrobrás, it will be authorized to sell its most expensive energy (market price) and pass on this difference of R$ 185,00/ 1,000 kWh to consumers in the electricity bills in future increases. A new 30-year property concession will also be allowed – until 2051 – and all final energy prices of privatized plants will be reviewed. Any difference in value per kWh (plus the government’s loss on privatization) will be fully transferred in the final tariffs of residential consumers.

ANEEL’s previous internal study predicted that, if privatized, the tariffs would have an average of 16.5% of national increases. The “tariff”, however, will be much bigger. The privatization of Eletrobrás means an attack and a financial crime of the cruelest, which penalizes, even more, the Brazilian people at this time of health and economic crisis, implying the complete loss of national sovereignty over the Brazilian electric sector. This will result in abusive increases in electricity bills, unemployment, post-pandemic economic recovery difficulties, loss of service quality, possible environmental disasters, and new blackouts.

To approve privatization in Congress, the agreement of the government plans to allocate R $ 8,75 billion for “investments” in three projects ten years in duration (north, northeast, and southeast), which will be administered by “Management Committees” indicated by the “National Executive Power”. This is the strategy to buy the parliamentary benches to vote in favor of bolsonarista surrenderism. More R $ 3,5 billion will subsidize the owners of thermoelectric fuel, R $ 25,5 billion will be transferred to the coffers of the Union, and other R $ 25,5 billion will be transferred in annual quotas for 30 years to the Energy Development Account (CDE) for a supposed “tariff modality” – in practice, a resource which will be used to subsidize the controlling business agents of the national electricity sector. That is, this is a kind of return of money to the private sector that controls the country’s electricity.

This process is real theft and loot of public assets, which aims to privilege the privileged who sustain this government. The Brazilian people will be the great victim and cannot accept such aggression against the country.

It’s wrong to hand over power to private control. It takes a broad process of resistance and struggle of all to defeat to the very end this ongoing energy policy, led by a surrendering government with neo-fascist characteristics. It is necessary to build something better, with sovereignty, distribution of wealth, and popular control.

Worker and Peasant Water and Energy Platform