Governor proposes purchasing control of Araucaria

Governor Roberto Requião of Brazil's Paraná state proposed that the state's power company Copel (NYSE: ELP) and federal energy company Petrobras (NYSE: PBR) buy control in the 480MW Araucaria thermoelectric plant from US power company El Paso, the federal government's news service Agencia Brasil reported. Requião and mines and energy minister Dilma Rousseff met to discuss power generation in the state, including a solution for the Araucaria thermoelectric plant, which does not produce power because of alleged technical reasons. Paraná's state government and El Paso are in the middle of legal and arbitration proceedings over the plant. El Paso, Araucaria's 60% controller, had taken Copel to arbitration court in April last year. Copel's controller, the Paraná state government, suspended 450mn reais (US$156mn) in yearly payments soon after the current administration took office in January 2003, considering that the contracts signed by its predecessors were too expensive.