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UPDATE 1-Brazilian industries escape extra power tariff after court ruling
April 11, 2017 / 3:47 PM / 7 months ago

UPDATE 1-Brazilian industries escape extra power tariff after court ruling

(Adds court decisions obtained by other groups, Eletrobras comment, context)

SAO PAULO, April 11 (Reuters) - A large group of Brazilian companies will be partly spared an additional power tariff that will be levied later this year, after a federal court issued an injunction in their favor late on Monday, according to court documents.

Several industry groups obtained the injunction that partially exempt the companies they represent from the extra tariff the government plans to add to power bills from the second half of this year.

The groups are Abrace, an association of large power consumers in Brazil, including aluminum maker Alcoa Corp and petrochemical company Braskem; Abividro, an organization representing glass producers; and Abrafe, which acts in favor of steel and mining companies such as Vale SA .

The government adopted the extra charge of up to 7 percent to compensate power transmission companies such as Eletrobras , CTEEP, Cemig and Copel for the early renewal of operating licenses in 2013.

The early renewal left power transmission companies with a credit because investments they had made in their operations were not fully amortized since licenses were terminated before the expected time.

The court decision, if not overturned, would impact expected revenues for power companies. State-controlled firm Eletrobras, for example, had already added to its accounting books 36.5 billion reais ($11.62 billion) from its share of the broad compensation. Other power companies have also done the same.

Eletrobras said it would evaluate possible appeals.

On Monday, another court granted steel producer Companhia Siderúrgica Nacional a similar injunction that exempted it from the additional charge.

$1 = 3.1467 reais Reporting by Marcelo Teixeira and Luciano Costa; Editing by Lisa Von Ahn and Frances Kerry

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