Power sales held up at El Paso Brazilian plant

Regulatory delays are holding up spot market electricity sales from a new 350 Mw power plant in Macae, Brazil, developed by a unit of El Paso Corp. The $600 million gas-fired plant began operating Wednesday, but state government officials said the plant is finding it impossible to sell energy into that market because rules haven't been established for its operation.

Nov. 9, 2001

2 min read

By an OGJ Online Correspondent

Rio de Janiero, Nov. -- Regulatory delays are holding up spot market electricity sales from a new 350 Mw power plant in Macae developed by a unit of El Paso Corp., Houston.

The first phase of the $600 million gas-fired plant began operating Wednesday, but state government officials said the plant is finding it impossible to sell energy into that market because rules haven't been established for its operation.

"Currently this market is not operating," Wagner Victer, Rio de Janeiro state energy secretary, told OGJ Online.

Gregory Lois Bafalis, president of the El Paso unit, said the uncertainty is creating a problem. "All we want is for the federal government to set up clear rules as to how the free energy market will function since the wholesale market is not functioning," he said.

Noting Brazil began rationing electricity in June because of shortages, Rio de Janeiro state Gov. Anthony Garotinho said he asked Brazilian President Fernando Henrique Cardoso to intervene.

The problems grew out of a wholesale market plan that went awry. Brazilian officials set up a new plan to contract and market electricity produced by oil-fired plants but haven't established a comparable scheme for gas-fired plants.

Thursday Mario Santos, president of the National Operator of the Electricity System, said he believed the government would find a solution for El Paso's plant woes by month's end. The Macae plant was first announced in July 1997 and was expected to begin full commercial operation last year.