September 15, 2017 / 9:41 PM / a year ago

UPDATE 1-Brazil's São Paulo state will not change price for utility CESP -source

(Adds details, Governor Alckmin’s remarks from paragraph 3)

SAO PAULO, Sept 15 (Reuters) - Brazil’s São Paulo state will publish new bidding terms for the privatization of utility Companhia Energética de São Paulo SA, or CESP, after cancelling an auction that was scheduled for Sept. 26, a source with knowledge of the matter said on Friday.

The new rules will be disclosed within weeks, the source said, adding that they will not change the minimum asking price of 16.80 reais per CESP share, but will make the auction more attractive to prospective investors.

Asking for anonymity because discussions are not public, the source said the São Paulo government will propose to the federal government a 30-year extension of CESP’s hydropower plant licenses after the privatization.

The plan is to include the license renewals in a reform of sector rules which the federal government intends to submit to Congress in October, the source said.

The CESP auction was suspended pending a potential review by the federal government of the regulatory framework for Brazil’s electricity sector, São Paulo Governor Geraldo Alckmin told journalists on Friday.

Without elaborating, Alckmin reiterated there are investors interested in bidding for CESP.

CESP’s three hydropower plants have 1.65 gigawatts of installed capacity and their respective operating licenses expire between 2020 and 2028. (Reporting by Luciano Costa; Writing by Tatiana Bautzer and Ana Mano; Editing by Chizu Nomiyama and Jonathan Oatis)

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