Requiao rejects Copel rates rise

Brazil's Parana state governor Roberto Requiao has refused to accept a 25.27% electricity rates hike that national power regulator Aneel approved June 24 for state utility Copel (NYSE: ELP), Parana state news service reported. "Parana will not carry out this increase because of the heavy impact it would have on our economy," Requiao said, adding the increase could see companies go bankrupt when what the government seeks is for them to increase production and therefore jobs. In addition to rejecting the increase, the state government will give a 25% discount to Copel's commercial and residential clients that pay their bills on time. To maintain Copel profitability, the state government chose to implement a "reasonable" rates adjustment that many people could pay instead of a high adjustment that only a few could pay, governor Requiao said. The 25% discounts will also be offered to people paying late bills. "We're making possible the recovery of the debt represented by late bills," he said. Since Requiao took office in January, he has had no qualms in confronting companies and regulators. In the power sector alone, he has refused to continue paying for power under contract from the Araucaria thermo plant and the Cien interconnection project, and Parana state's environment authority IAP suspended the construction of small-scale hydro plants as a move against "the neo-liberal and privatization policies" of past federal and state governments.