Brazil will hold an electricity auction in the first quarter to assure distribution companies have enough energy to meet their contracts without having to make spot market purchases, the head of electric regulator said.
Distribution companies will have the possibility of buying more than 2,000 megawatts that are available after over 2,000 megawatts that aren’t available anymore due to power utilities such as Cia Energetica de Minas Gerais (CMIG4) and Cia Energetica de Sao Paulo refused the government’s proposal to extend their concessions in 2012, Nelson Hubner, head of the regulator known as Aneel told reporters in Brasilia.
Brazil’s government is also discussing the possibility of creating credit lines for distributors at the country’s development bank, known as BNDES. The credit lines would provide cash flow for utilities while the country uses more expensive thermal plants because of lower water reservoirs, Hubner said.
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