Manaus Energia delays 175MW delivery to Sep. 2005

Bnamericas Published: Monday, November 29, 2004
Brazil's federally owned power distributor Manaus Energia has delayed until September 2005 the initial delivery date for up to 175MW it plans to buy as part of a 525MW tender due to a legal dispute with its current supplier, US energy company El Paso, Manaus announced Monday. The Brazilian company had planned to receive the power starting January 15, 2005 when its existing contract with El Paso expires. Due to delays in the tender there is not enough time to conclude the auction before the contract expires, the engineering director at state power company Eletrobrás, Valter Cardeal, said in a letter to newspaper Valor Econômico Monday. Eletrobrás, which controls Manaus Energia through its northern unit Eletronorte, is now seeking a way to continue power supplies after the contract expires, Cardeal said. Manaus Energia aims to hold a tender to replace its three power supply contracts with El Paso that expire in January 2005, December 2005 and January 2006 respectively. The tender is for three batches of 150-175MW each, which are now scheduled for first delivery on September 1, 2005, January 1 and January 15 2006, Manaus Energia said. The deadline for submitting bids is December 13, 2004 and the tender could generate a total of US$10bn in revenues over 20 years for the winning bidders. However, the tender has been delayed due to a court dispute between Eletronorte and El Paso, whose two gas-fired generators are the main suppliers of power to the Amazon region city of Manaus. Although 17 companies had lined up for the tender, El Paso and local environmental authorities protested the auction in court. The tender requires the winning bidders build new gas-fired power plants to supply Manaus, but El Paso claimed the requirement that generators own the land where the plants would be built is unfair. Local press reported last week that El Paso's existing power supply contracts had been extended for five years after the US intervened in El Paso's favor, but official sources at El Paso, Eletronorte and Eletrobrás denied that such an agreement had been reached. Nevertheless, an El Paso spokesperson told BNamericas that negotiations are on going. Manaus is an industrial city with 1 million inhabitants located in Brazil's northern Amazon region, which is not linked to the national grid.

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