* President Rousseff promised 20 percent drop in electric
* Big utilities rejecting terms for renewal of concessions
* Cteep profit fell 30 pct in third quarter
SAO PAULO, Nov 12 Brazilian power company Cteep
said on Monday its board recommended against renewing
an expiring concession to transmit power, rejecting the
government's plan to lower electricity costs to spur economic
Cteep, which has a concession expiring in 2015, said it will
hold a shareholder meeting to discuss the government's new terms
on Dec. 3, one day before the deadline for renewing the
The company says it transmits 28.2 percent of the
electricity generated in Brazil.
Refusal by large utility firms like Cteep to renew their
concessions over fears of cutting into profits has cast doubt on
President Dilma Rousseff's ability to provide cheaper
electricity in the world's sixth largest economy.
Rousseff unveiled plans in September to lower some of the
world's highest energy bills by an average of 20 percent. The
central bank says the lower electric rates would slow inflation
by half a percentage point in 2013.
Minas Gerais state electricity company Cemig
already decided not to renew concessions for three of its
hydroelectric dams that produce 2,500 megawatts (MW).
Analysts also expect the Sao Paulo state utility Cesp
to reject the extension of concessions in exchange
for a commitment to provide cheaper electricity.
Those that refuse to renew the current contracts that expire
between 2015 and 2017 will continue to charge higher prices in
the near term, making it hard for the government to fulfill its
promise of cheaper electricity as of the start of 2013.
Cteep posted third-quarter earnings of 241.3 million
reais($117 million) on Monday, down 30 percent from a year ago.