Brazil to Seek End of Enel São Paulo Concession After Outage

Article content(Bloomberg) — Leia em português.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentBrazil’s government will ask power regulator Aneel to initiate the termination process for an Enel concession in São Paulo, Mining and Energy Minister Alexandre Silveira announced, following prolonged power outages in the country’s wealthiest city and nearby municipalities.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentThe request was part of an agreement reached among Silveira, São Paulo Mayor Ricardo Nunes and São Paulo state Governor Tarcísio de Freitas.Article contentLast week, the lights went out for around 2.2 million customers in the major metropolitan region after a storm with winds as strong as 61 miles per hour (98 kilometers per hour) felled trees and damaged power lines. Restoring power took more than five days for some consumers.Article contentArticle content“Enel has lost, including from a reputation standpoint, the conditions to continue operating the São Paulo concession,” Silveira told reporters Tuesday at a news conference.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentHe added that he expects Aneel to begin the termination process “as quickly as possible,” but didn’t provide a specific timeline. Article contentAneel will assess the company’s “repeated failures in restoring service” this month, the agency said in a statement. The recent prolonged outage will be evaluated as part of a monitoring process issued in October 2024, Aneel said.Article contentEnel Brasil said in a statement that a broad assessment is necessary to structurally address the challenges related to energy supply in São Paulo. The company is willing to make large investments to improve the network “as part of a strategy shared with all the institutions involved,” it said.Article contentEnding the concession could weaken Enel’s position in a fast-growing networks market outside Europe. A potential termination of Enel’s contract in São Paulo would imply a downside of 2% to 3.5% to the estimate for 2025 earnings before interest, tax, depreciation and amortization of about €23 billion ($27 billion), according to Bloomberg Intelligence.Article contentArticle contentThe company, part of the Italy-based Enel SpA group, supplies power to more than 20 million people across the sprawling metropolis, according to its website.Article contentEnel shares dropped 1.8% to €8.62 on Wednesday. Article contentNunes, who also spoke at the news conference, argued that Enel lacks the necessary structure and commitment to meet local power demand, especially when bad weather hits.Article contentEarlier power outages in São Paulo state, in 2023 and 2024, prompted criticism from Nunes and Freitas, who both questioned Enel’s performance.Article content(Updates with Enel and Aneel statements in sixth and seventh paragraphs, analyst commentary in eighth paragraph)Article contentTrending 'Why let one person in the States change your life?' For Canadian snowbirds, the stay or go dilemma gets complicated Real Estate Is a $2.75 million portfolio enough for Halifax empty nesters to retire early?

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Personal Finance Canada's population declines for the first time since the pandemic News Expect 'dramatically higher' oil prices in 2026, says Eric Nuttall Oil & Gas World watches as Ottawa's bullish shift on LNG puts wind at the back of two major projects Oil & Gas