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Enron Mail |
I skipped your name on this one. We are fully engaged on both these issues=
. =20 ---------------------- Forwarded by Orlando Gonzalez/SA/Enron on 09/05/2001= =20 16:26 --------------------------- Orlando Gonzalez 09/05/2001 11:36 To: Rebecca McDonald/ENRON_DEVELOPMENT, John J Lavorato/Enron@EnronXGate,= =20 James A Hughes/ENRON_DEVELOPMENT cc: Joe Kishkill/SA/Enron@Enron, sergio.assad@enron.com, Keith=20 Miceli/Corp/Enron@Enron, Mark Metts/Enron@EnronXGate, Mitchell=20 Taylor/Enron@EnronXGate=20 Subject: recent news Attached is the summary of Dennis Bakke's comments on AES investment plan f= or Brazil. Apparently these were on CNN. These are the same positions we an= d=20 the Investors Group have been discussing with government officials.=20 =20 The second article is on the rationing situation which will result in cuts= =20 of over 20% over the next 6 months. We are preparing a summary of the impacts on our business for discussion=20 with =20 you this week. AES Suspends Brazil Investments US-based power company AES Corp. has put on hold plans to invest between US$2 billion and US$2.5 billion on energy projects in Brazil, alleging that= =20 the government=01,s policy on pricing is jeopardizing its operations. AES President Dennis Bakke, on a brief visit to Brazil, said the company suspended indefinitely its plans to build as many as 10 thermoelectric powe= r plants. Bakke criticized Brazil's electricity sector regulator Aneel for maintainin= g=20 an energy policy that charged what Bakke said were ``unrealistically low price= s=20 for consumers,'' forcing AES to carry the burden of rising costs. He said investments would remain on hold until the government came up with a solution. AES has already invested US$6 billion in Brazil, primarily in electricity projects, making it one of the country's top private foreign investors. Energy Blackouts To Begin June 1 The government announced Tuesday that it will begin a policy of programmed blackouts starting June 1 as part of its energy rationing plan. Mines and Energy Ministry officials had at first hoped to delay any blackou= ts until August, concentrating first on a program to induce consumers to reduc= e energy use. The critical level of reservoirs in the country=01,s main=20 hydroelectric plants, however, forced Tuesday=01,s decision to accelerate the blackouts w= hich=20 will last until the end of November when the rainy season begins. The blackouts will occur in the Southeast, Central-West and Northeast regio= ns of the country. At the same time the government will introduce a program=20 providing incentives to consumers to reduce their energy use. The goal of the plan is= =20 to lower electricity consumption by 20%. Although the general outline of the rationing plan was announced Tuesday, t= he details have yet to be worked out due to differences between the government ministers who compose the National Energy Policy Council (CNPE). A new meeting of CNPE was set for May 23 by which time it is hoped that an agreem= ent will have been reached on how to implement the plan. The initial proposal from Mines and Energy was for a 15% reduction for industry, 20% for residences and between 18% and 20% for commerce. The ministries of finance, planning and development, however, asked for more ti= me=20 to consider the impact of the energy cuts. The principal concern among government officials is with the impact on the economy of the proposed blackouts. According to a study to be released toda= y=20 by the Get?lio Vargas Foundation, a 20% energy cut would slow economic growth = by 1.5% of gross domestic product and would have a direct impact on 850,000 jo= bs. Production costs for industry would rise 1.5%, government tax receipts woul= d decline by R$6.6 billion (US$2.9 billion) and Brazil=01,s trade deficit wou= ld=20 increase by US$1.6 billion, according to the study. The study=01,s authors also said= =20 there was no guarantee that the effects of the program would be limited to this year. Business leaders reacted with apprehension to the prospect of obligatory blackouts. Most defended a policy of separate reduction goals for each=20 industrial sector, sparing industries that depend heavily on electricity. The S?o Paul= o=20 State Federation of Industries (Fiesp) said that sectors who are major consumers = of energy such as steel should be exempted from any rationing. While details were lacking in the government=01,s plan, officials said that= the administration of the energy cuts would be placed in the hands of local=20 utilities which would determine the locations and schedules for daily blackouts.=20 According to national energy secretary Afonso Henriques, a 20% reduction in consumpti= on would amount to a cut of six hours a day.
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