CEEE submits proposal to spin off distribution operations

Brazilian integrated power company CEEE has presented federal power holding company Eletrobrás with a proposal to spin off its distribution operations to meet legal requirements for separating distribution from transmission and generation, Rio Grande do Sul state government, the company's controller, said in a statement. The proposal would also create a transmission and generation unit, the statement said. The country's power sector regulations implemented in 2004 determined the separation of distribution operations in integrated companies to avoid insider power trading and to force greater price competition between generators. The restructuring proposal now needs approval from Eletrobrás, which owns a 32% voting-right stake in the company, and state legislators, the statement said. Rio Grande do Sul's energy and communications secretary Valdir Andres plans to seek support from local politicians during the week of March 21 because changes in CEEE's structure can only be made after an amendment to the state's constitution. Rio Grande do Sul must wrap up the restructuring by September 15. Separately, CEEE signed on Friday (March 18) a contract with local engineering firms Conenge SC and Milano to start building the 3km Pelotas 4/Canguçu transmission line to strengthen power supply in the southernmost region of Rio Grande do Sul that is close to the Uruguayan border, the company said in a statement. The line will link the new Canguçu substation to the Pelotas 4 substation, which is being expanded, the statement said. German engineering firm Siemens and European engineering company Va Tech Hydro were hired to upgrade the substations for 3mn reais.