Brazil power firms ordered to redo dam impact in flood areas

BRASILIA, March 11 Tue Mar 11, 2014 7:55pm EDT

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BRASILIA, March 11 (Reuters) - A court has ordered the operators of two new hydroelectric dams in western Brazil to redo their environmental impact studies on the suspicion they have caused extensive flooding in the area.

The federal court injunction issued on Monday in the state of Rondonia also ordered them to provide food, temporary housing and transport for more than 11,000 people forced to leave their homes by the rising waters of the Madeira River, the Amazon's largest tributary.

The injunction was sought by federal and state prosecutors who last week sought the suspension of the dams' licenses until their impact on the environment can be assessed again.

The two dams are part of an array of hydro projects that Brazil plans to build in the Amazon to cover power shortages and meet growing demand for electricity. Environmentalists say the dams will cause flooding and devastate indigenous communities.

The Madeira reached its highest level on record this week, cutting off highways and flooding dozens of villages upriver from the state capital of Porto Velho.

The court said there was not enough evidence at present to link the flooding to the Santo Antonio and Jirau dams and gave the companies 90 days to show they are doing new environmental impact studies.

French multinational utility GDF Suez SA is a shareholder in Energia Sustentável do Brasil, which operates the 3,750-megawatt Jirau dam now in its final phase of construction.

Down river, the Santo Antonio dam, which began generating electricity in 2012, is owned by Furnas Centrais Elétricas SA, a unit of state-controlled Centrais Elétricas Brasileiras SA - known as Eletrobras - and Cia Energética de Minas Gerais SA, or Cemig.

Last week, ONS, as the country's national grid operator is known, ordered the lowering of the water level of the Santo Antonio reservoir to avoid impacting construction work at Jirau, and the dam's turbines were shut down.

The companies said the floods were caused by heavy rainfall in neighboring Bolivia and not by their run-of-the-river dams, which need smaller reservoirs than other hydroelectric projects.

Bolivia has asked Brazil to explain whether the dams are causing the flooding in its territory. (Reporting by Anna Flávia Rochas and Anthony Boadle; Editing by Lisa Shumaker)

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