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The lack of sufficient rainfall has meant that hydroelectric dams have been unable to adequately power Brazil’s electricity needs.
The country faced a massive blackout on February 4 that affected three regions, striking 13 states and the capital city Brasilia, affecting some 6 million people. The blackouts are particularly worrying as Brazil readies to host the Football World Cup this summer.
The drought has forced electric power companies to partially depend on thermal power, a more expensive means of electricity generation, with the possibility of the average consumer footing the bill.
Last month, the government admitted for the first time to the possibility of more blackouts, as Brazil’s Committee for Energy Monitoring (CMSE) said there was a possibility of the problems in the energy distribution system.
On March 13, Finance Minister Guido Mantega announced that the government was planning share out the costs between the electricity sector, the government and consumers, in a bid to shield Brazilians from a steep rise in energy prices, possibly until 2015
The government’s treasury will partially fund – in addition to what already is allocated as part of the national budget – R$4bn ($1.69bn) to power companies.
In February, electricity regulator ANEEL had proposed a 4.6 per cent increase in rates paid by consumers to help cover power subsidies.
Several regions in Brazil are currently facing a shortage of rain – in Rio, for example, it has not rained in four weeks – which leads to the lower water level in several dams.
Besides affecting the energy distribution, a long dry spell could endanger the water supply as well.