Amec criticizes tariff deferral granted to electric and sanitation utilities

On September 3, Amec (the Association of Capital Market Investors) published public letters about its position on the tariff deferral requested by Copel (Companhia Paranaense de Energia), CEB (Companhia Energética de Brasília), and Sabesp (Companhia de Saneamento Básico do Estado de São Paulo) and granted by their respective regulatory bodies.

Amec members consider that the three companies, which announced a tariff flexibilization during the pre-election period, have been facing a worrisome situation. The concern is related to the fact that, because they are quasi-public and publicly-held corporations, that is, regulated public utilities, “there is the spectrum of decisions that can be politically motivated – instead of based on the best option for the company and, therefore, their shareholders.”

According to Amec, such measure weakens the companies’ balance sheets and their working capital needs, “precisely in a moment when the (electricity) sector has been facing a very stressful situation, what would require conservative actions by their management.” In the specific case of Sabesp, considering the current drought and rationing in the State of São Paulo, combined with the reduction in revenues resulting from the bonus granted and the consequent drop in consumption levels, “the increase in Sabesp’s ordinary tariffs becomes even more necessary, in addition to further discouraging the waste of water.”

Find below the links to access the letters:

President Letter 13A – Copel

 President Letter i 13B – CEB

 President Letter i 13C – Sabesp