Brazil's government on Tuesday weighs a plan to impose power cuts of about 20 percent starting June 1 in areas encompassing most of the nation's 170 million people, a Mining and Energy Ministry spokesman said. The interministerial National Energy Policy Council will late Tuesday afternoon review the proposal to cut overall power consumption by a fifth, he said. Areas exempt from the cuts will include the Amazon, adjacent sparsely populated regions and Brazil's three southernmost states. On average industries would have to cut electricity consumption by between 12 and 18 percent, according to draft ministry guidelines drawn up to implement the rationing. Brazil, which relies for 90 percent of its power on hydroelectric plants, is facing an acute energy crisis due to low water levels in power station reservoirs.
Experts also point at insufficient investments to expand capacity over the last few years.
Late on Monday, President Fernando Henrique Cardoso turned down a previous proposal by the electricity market regulator Aneel to impose fines for excessive consumption and announced instead that there would be incentives for those who consume less. Copyright 2000, Reuters News Service. U.S. indexes are real-time. Forbes 40 Index powered by Telemet . News may include latest headlines from Reuters.