Blackouts Brazil N E*

August 16, 2001

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Brazil's Impoverished Northeast Area Is Next to Face Compulsory Blackouts

Dow Jones Newswires

RIO DE JANEIRO -- Brazil's arid and impoverished northeastern region will likely be hit with blackouts in September as part of a power-rationing program that's been in effect since June.

Brazilian Power Regulation Change Sparks Fears of 'Runaway Inflation' (Aug. 9)

Brazil Must Resolve a Dispute Over Plan for Power Rationing (Aug. 3)

From Power Provider to Power Policeman: AES Enforces Brazil's Rationing Program (July 30)

The government's "plan B" for dealing with the nation's energy crisis calls for scheduled blackouts and a four-day work week, among other measures. Brazil is hoping to save energy and preserve depleted water reservoirs that power key hydroelectric stations in the northeastern region.

Over 90% of Brazil's electricity comes from hydroelectric power plants. A lack of investment and inefficient expansion left Brazil's electricity grid at the mercy of the weather this year, when rainfall reached historic lows.

The northeast so far has been free of blackouts and will remain so during the next four weeks. But after that, there's a strong possibility of power cuts, a spokesman for a government task force dealing with the energy crisis said Thursday. In early August, government officials alerted the population to the possibility if rainfall conditions didn't improve.

Since June 1, Brazilians have endured an energy-rationing plan that aims at cutting electricity usage by 20% on average. Industrial consumers that are heavy energy users have power-savings targets of up to 25%. In the first two months under the rationing program, Brazil saved an average 20.4%.

The program originally was expected to last until December but now no ending date has been set, and the rationing is already inhibiting economic growth. The government-run statistics institute IBGE said Wednesday that Brazil's gross domestic product grew a worse-than-expected 0.79% between April and June, while contracting 0.99% from the previous quarter. The drop marks the first contraction since the fourth quarter of 1998, when Brazil was hit by aftershocks from the Russian debt default

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