May 29 (Bloomberg) -- Brazil’s President Dilma Rousseff will sign today a presidential decree to allow the government to compensate utilities a total of 2.8 billion reais ($1.3 billion) to finance cuts in electricity tariffs, two ministers said.
“We anticipate the payment of 2.8 billion reais for power distributors,” Brazil Energy Minister Edison Lobao told reporters in Brasilia. “This money is due to be paid until December and compensates distributors so that they do not pass the price to consumers.”
The government is issuing the decree to continue using its CDE fund for the power rate cuts, Rousseff’s Chief of Staff Gleisi Hoffmann told reporters earlier today in Brasilia.
Brazil cut power rates last year in a bid to reduce production costs and help curb inflation. It extended power concession contracts while proposing lower tariffs be charged to consumers and industry. Some companies, such as Cia Energetica de Minas Gerais and Cia Energetica de Sao Paulo, rejected the government’s proposal.
“We reinforce our commitment with the average 20 percent power rate cut,” Lobao said.
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