New São Paulo power crisis intensifies clash between ministry and watchdog

A new electric power crisis in São Paulo has worsened the already poor relationship between Brazil’s federal government and sector watchdog Aneel. 

Heavy rains and winds of more than 100km/h on Friday left 2.6mn consumers in the state’s metropolitan region without service, 2.1mn of them in Enel-SP’s distribution concession area. 

The incident follows a series of failures in the area since November 2023, when over 2mn people were left without power for weeks. 

On Saturday, the mines and energy ministry (MME) said Aneel is failing to supervise Enel. 

“Once again showing a lack of commitment to the population, the regulatory agency has not made any progress with the process that could lead to the distributor's [concession] forfeiture, requested months ago by the MME, which should lead to Aneel’s actions being investigated by the control bodies,” the ministry said in a release. 

“The MME also clarifies that there is no indication that the São Paulo distributor's concession will be renewed and that Aneel's failure to properly investigate the case cannot be justified.”

Enel-SP’s concession is due to expire in 2028. 

The statement follows irritation within the government with the way Aneel handled the transfer of control of the Amazonas Energia power utility to the J&F Group, which ended up in the courts. 

That was one of the issues that led the MME to threaten to intervene in Aneel in August to speed up the regulation of government proposals. 

In a statement released on Monday, Aneel said it is taking all measures to ensure the prompt normalization of service in São Paulo and it is conducting a rigorous and technical investigation into Enel-SP's actions during the critical period. 

“If serious faults or negligence are found in the provision of the service, the agency will not hesitate to adopt the sanctioning measures provided for by law, which may include severe fines, administrative intervention in the company and the opening of forfeiture proceedings for the company's concession,” said the agency. 

Enel said on Monday that its teams have been working around the clock to restore the power grid since the first moments of the storm.

“By 2pm, power had been restored to more than 1.7mn customers in Greater São Paulo. At the moment, technicians are concentrating on restarting the supply to the remaining 400,000 customers. Of this total, around 280,000 are in the [state] capital,” the company said.

On Sunday, Aneel held a meeting with Enel-SP and distribution and transmission concessionaires operating in the state: Neoenergia, EDP São Paulo, Energisa Sul-Sudeste, CPFL Piratininga, CPFL Paulista, CPFL Santa Cruz, ISA CTEEP and Eletrobras Sudeste. 

The meeting also discussed possibilities for sharing teams and infrastructure between the companies. In addition to ISA CTEEP and EDP, Light, which operates in Rio de Janeiro, made professionals available to help restore power in São Paulo.