Cemig Slumps on Report Rousseff Plans to Limit Rate Increases
Stock Chart for Cia Energetica de Minas Gerais (CMIG4)
Cia. Energetica de Minas Gerais, Brazil’s third-biggest electric utility by market value, slumped after O Estado de S. Paulo reported that the government plans to limit increases in power distributors’ rates.
Shares of Cemig, as the company is known, declined 2.4 percent to 18.19 reais at 11:33 a.m. in Sao Paulo, the lowest level on a closing basis since August 2010. The Ibovespa stock index dropped 0.2 percent. The MSCI Brazil/Utilities index fell 0.4 percent, the second-worst performance of 10 industry groups.
President Dilma Rousseff plans to force power distributors to accept rules establishing lower rate increases for customers under the renewal of licenses expiring from 2015 to 2017, O Estado de S. Paulo reported today, citing an unidentified government adviser.
The president’s and Belo Horizonte, Brazil-based Cemig’s press offices didn’t immediately respond to phone calls from Bloomberg News seeking comment.
Rousseff announced last September a plan to reduce electricity costs for consumers and businesses by demanding that generation and transmission companies agree to cut rates before renewal of hydroelectric and power-line concessions.
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