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Brazil spot energy prices down sharply due to rain, World Cup
June 6, 2014 / 11:47 PM / in 4 years

Brazil spot energy prices down sharply due to rain, World Cup

SAO PAULO, June 6 (Reuters) - Brazil’s spot market energy rates for next week plunged on expectations for more rainfall and lower consumption during the soccer World Cup this month, the country’s electricity clearing house CCEE said on Friday.

The drop in energy prices is a relief for the government of President Dilma Rousseff, which has spent billions of dollars to help energy distributors struggling with higher costs.

A severe drought that reduced reservoirs for hydroelectric plants in the country’s southeastern region brought spot energy prices to record highs earlier this year.

The government plans to hand out an extra 4 billion reais ($1.8 billion) to help distributors this year. It also negotiated with banks to help set up an 11.2 billion reais loan for distributors.

The administration is considering reopening negotiations to increase the loan, officials said this week.

Electricity clearing house CCEE said the spot prices fell in some cases up to 62 percent from last week in some regions of the country.

The average rate for the country’s southeast, northeast and north regions fell to 318.60 reais a megawatt hour from 577.39 reais, the CCEE said.

Partial holidays at cities that will host World Cup games will drag down energy consumption by local factories and industries, the clearing house said. Twelve Brazilian cities will host the month-long tournament that starts on June 12. (Reporting by Anna Flavia Rochas; Writing by Alonso Soto)

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