Risk to Brazilian power sector under control

According to a recent report from Fitch Ratings, one of three statistical rating organizations recognized by the U.S. Securities and Exchange Commission, applying a more realistic tariff to consumers in Brazil has decreased the risk of liquidity of distribution companies throughout 2015.

Additionally, the report states that there is not an expected power rationing event for 2015. Experts attribute this to a decrease of potential energy consumption as well as the heavy dispatches of thermal plants.

Brazil’s power sector and its consumers have been negatively impacted by challenging macroeconomics in the region as well as a rise in energy prices.

Fitch has also reported that the significantly lower displacement of hydro plants has increased the risk of dependence on generators as a source of power. This could prove to be a problem for Brazilian consumers, homeowners and business owners.

The lowest risk continues to be the transmission segment. Experts attribute this low risk to the generation and distribution to consumers. High margins as well as steady cash flow has further helped reduce risk.

Additional information is available for curious readers on the main website of Fitch Ratings at www.fitchratings.com. Fitch Ratings has been considered a valid source for consumers for years.