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Brazil May Turn Off More Costly Thermo Plants This Month

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May 7 (Bloomberg) -- Brazil’s government may shut off the country’s four most expensive thermo plants after water reservoir levels increased, a government official said.

The increased reserves during Brazil’s rainy season make it more likely officials will agree at a meeting tomorrow to turn off the most expensive diesel plants, said Marcio Zimmermann, executive secretary at Brazil’s Energy Ministry.

Brazil’s southeastern reservoirs, responsible for 70 percent of the country’s hydropower, are at 62.7 percent of capacity, according to the power grid operator’s website. The government expected those levels would be slightly above 50 percent, Zimmermann said.

“We are confident that this decision will not affect the power supply in the country,” Zimmermann said today in an interview from his office in Brasilia.

Brazil has turned on the full capacity of thermo plants this year to avoid power cuts as water reservoirs for hydro facilities dropped to the lowest level in 12 years. Thermo plants are more costly to operate than hydro ones because of fuel prices. This raised costs for power distribution companies such as state-run utility Centrais Eletricas Brasileiras SA, known as Eletrobras, which were compensated by government.

To contact the reporter on this story: Mario Sergio Lima in Brasilia Newsroom at mlima11@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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