Brazil Drought Relief Seen Trailing Distributors’ Cost Increases
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The Brazilian government’s pledge to help power distributors cope with the worst drought in four decades is set to fall short of their additional spending, according to data compiled by an industry association.
Authorities allocated 1.2 billion reais ($512 million) for companies such as Eletropaulo Metropolitana Eletricidade de Sao Paulo SA to cover January costs as low dam levels increase the use of more expensive thermo-electric plants, sending spot prices to record highs. The Association of Electricity Distributors calculates costs rose by 1.8 billion reais, said an association official, who isn’t an authorized spokesperson.