Title: Brazil's Rationing Plan: A Step Away from Market Mechanisms?
URL: http://www20.cera.com/eprofile?u=35&m=2381

RATIONING PLAN CONTINUES TO EVOLVE AS THREAT LOOMS
Brazil?s hydro reservoirs? current stored energy is well below the levels
necessary to assure supply throughout the dry season. Despite a general
acceptance that rationing is becoming inevitable, the Brazilian government has
not announced how it will be implemented. Key issues include the following:

* It is too late to sufficiently increase supply to avoid a crisis.

* The power shortage could reduce GDP growth by 0.5 to 1.5 percent.

*Immediate implementation of rationing will minimize the depth of the required
cuts.

**end**

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E-mail Category: Alert
CERA Knowledge Area(s): Latin American Energy,

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