Enel Negotiates with Brazilian Regulator on Sao Paulo Power Concession Issues
Background and Developments in the Enel Sao Paulo Concession Dispute
By Leticia Fucuchima
Regulatory Meeting and Context
SAO PAULO, June 2 (Reuters) - Italy's Enel met with Brazil's power regulator last week, according to official minutes of the meeting, which occurred amid a spat over the firm's concession in Sao Paulo, with authorities considering revoking the approval due to a series of outages in recent years during heavy rains.
Enel's Request and Objectives
Enel requested the meeting, which took place last Tuesday, to seek alternatives to the revocation process, two sources familiar with the matter told Reuters.
Proposed Commitments and Investment Plans
Although no formal proposal was presented, Enel in the meeting discussed committing to a "conduct adjustment," or increasing its investments in Brazil, the sources said.
Shift in Enel's Strategy
The meeting with Brazil's power watchdog, known as Aneel, marks a shift in Enel's approach, as the company went to court earlier this year in an attempt to stall the regulator's possible forfeiture of the contract.
Focus on Consensus-Based Solutions
The subject of the meeting was the discussion of "possible consensus-based solutions" for the concession, the minutes showed.
Enel's Public Statements and Defense
In a statement, Enel said that it has made itself available to authorities to evaluate complementary measures, and make additional investments, focusing on the improvement of the service provided in its concession area.
The company, which has said it complies with the contract obligations and it does not intend to give up the concession, submitted its final defense in the case last month, requesting a technical expert's examination into disagreements that emerged with the regulator.
Next Steps and Decision Timeline
Aneel is analyzing Enel's arguments before deciding whether to propose revoking the concession. A final decision rests with the government.
(Reporting by Leticia Fucuchima; Writing by Andre Romani; Editing by Aurora Ellis)
