Eletropaulo is fined R$26.7 million

The São Paulo state regulatory agency for Sanitation and Energy (“Arsesp”) has fined the electricity distributor, AES Eletropaulo, R$26.7 million for flaws in its services between the beginning of 2009 and May 2010.

According to Arsesp, since 2007, Eletropaulo has been fined over R$37 million, but has paid only some R$653,000, as the rest of the fines have been appealed and are in litigation.

Meanwhile, the national regulatory agency for Electricity (“Aneel”) says it is examining AES Eletropaulo conduct last week following a storm. According to Nelson Hubner, the director generat at Aneel, if it is found that the company took too long to reestablish electricity it could be fined.

“We are aware that the weather occurrence last week was exceptional, but the company has an obligation to reestablish electricity as soon as possible. We have reports that in some areas it took three days,” declared Hubner, adding that AES Eletropaulo had been warned by Aneel that it had to improve emergency services to its clients.

The recent three-day delay also brought forth calls for changes at AES Eletropaulo from Consumer Protection (“Procon”) in São Paulo. Procon, citing problems that go back years, has made a formal request for Aneel intervention in the company.

AES Electropaulo says that since 2006 it has invested over R$3 billion in its network and plans to invest another R$3 billion between now and 2015 to improve services. The company says its quality index, as measured by Aneel, is superior to the average of other electricity distribution companies in Brazil and the Southeast region.