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Brazil's Eletrobras to seek bigger compensation payout
November 3, 2012 / 5:58 PM / 5 years ago

Brazil's Eletrobras to seek bigger compensation payout

BRASILIA (Reuters) - State-run electricity holding company Eletrobras (ELET6.SA) plans to appeal against the amount it will receive in indemnities linked to the renewal of operating concessions, its CEO told the Estado de Sao Paulo newspaper on Saturday.

The company, which owns and operates electrical facilities with partners all over the country, is set to be paid 14 billion reais ($6.89 billion) as part of concession renewals the government will use to cut power prices to consumers. That is less than half what it expected to receive.

“We are going to prepare a complete report to try to convince the various organs to revise these calculations,” said Eletrobras CEO Jose da Costa Carvalho in the report. He said the government had failed to include all the investments the company made that are relevant in calculating its compensation.

The purpose of the revamped concessions is to remove from utility bills the portion of charges that power companies, in order to recoup their investments in energy infrastructure, have been passing on to end users. Under the new concessions, end users will no longer pay those charges and the government will indemnify the companies for the amount not yet recouped.

($1 = 2.0311 Brazilian reais)

Reporting by Peter Murphy; Editing by Vicki Allen

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