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Mines and Energy Minister to address the nation on tariff hikes

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Mines and Energy Minister Bento Albuquerque. Photo: Marcello Casal Jr./ABr

Brazil’s Mines and Energy Minister Bento Albuquerque will address the nation this evening, one day after energy regulators decided to introduce electricity tariff hikes for September. It will be Mr. Albuquerque’s second such national address in the last month.

Since 2014, Brazil has adopted a tariff system to provide more transparency around electricity costs. On a scale of green to red, consumers are faced with added charges on their power bills in relation to the country’s energy situation. Following the driest summer in 91 years, the country sees its main water reservoirs at historically low levels, which forced the government to activate more polluting and expensive thermal plants.

Last week, the operator of Brazil’s national grid warned the government of enhanced outage risks and the need to boost production by 7.5 percent. It advised the activation of new thermal power plants, bigger energy imports from Argentina and Uruguay, and permits for reservoirs to fall to lower minimum volumes.

Speaking to allies, President Jair Bolsonaro complained of the political risks involved in continuously increasing electricity bills, as rising costs are particularly harsh on lower-income voters. These concerns are echoed by his congressional allies, who believe that higher tariffs are a deterrent to job creation and consumption.