Brazil evaluating forfeiture of Enel’s power concession

Brazil’s electric power watchdog Aneel has determined Enel São Paulo must respond to accusations of non-compliance with the distributor’s contingency plan and repeated unsatisfactory service provided to consumers in emergency situations.

The decision is part of a report on failures and transgressions, which initiates a process to evaluate a recommendation of forfeiture of the concession to be assessed by Aneel, which is then forwarded to the mines and energy ministry (MME).

The distributor has 15 days, counting from Monday, to respond.

Heavy rains and winds of over 100km/h on October 11 left 2.6mn consumers in São Paulo metropolitan region without service, 2.1mn in the concessionaire's distribution area.

It was the third time in less than a year that the Italian company's customers had their power supply interrupted.

São Paulo’s electricity crisis has worsened the precarious relationship between the federal government and Aneel, with the MME increasing pressure on the regulator to take tougher measures against Enel.

The company's concession is due to expire in 2028. Aneel is currently conducting a public consultation on the renewal of distribution concessions in the country, whose guidelines, with stricter rules, were established by federal decree in June.

Despite the crisis, local experts heard by BNamericas believe it is unlikely that Enel will lose its concession.

According to Enel SP, 6,691 consumers remained without power on October 22, corresponding to 0.08% of its 8.3mn clients. 

Through its press office, Enel SP stated that it had mobilized to restore power in the shortest possible time and that, by the end of the night on October 12, service had been normalized for around 80% of consumers.

The distributor highlighted that it fully complies with all contractual and regulatory obligations and is committed to exceed established indicators. 

It also reiterated that it will continue to invest in order to deliver quality energy and cope with the advance of climatic events.