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Electricity Bills Spike 1,400% in Rio de Janeiro Slums

By: Contributor - May 21, 2015, 9:30 am
The favelas of Rio de Janeiro are hardly home to people who can afford steep electricity prices. (David Schenfeld)
The favelas of Rio de Janeiro are hardly home to people who can afford steep electricity prices. (David Schenfeld)

EspañolIn Rio de Janeiro, favela residents have had a harder time paying their bills as of late.

According to news outlet G1, south-side residents have seen a 1400 percent increase in their electricity bills since new digital consumption monitors were installed. But while some residents with the new monitors have seen their bills go from R$60 to R$900 (US$20 to US$299), those still using the older systems have seen the same disproportionate increase.

Neighborhoods impacted include the Vidigal, Chapéu-Mangueira, and Babilônia, which consist of thousands of shacks and lowly homes where low-income workers reside.

According to the president of the local Residents Association André Luiz de Souza, “this is theft!”

“Residents have been complaining to me about their BR$500 or BR$600 electricity bills. This change is associated with the installation of the new electricity monitors. Before [that], residents had some kind of control [over their electricity use]; now they don’t know what to do. One resident who lives with his wife and has only one electric fan in his home cannot afford that much.”

Léa Silva, a cook, has lived in the Vidigal for the past 13 years. According to the low-income resident, public-utility Light hasn’t installed the new monitor in her house, but the favela veteran says her bill went from BR$60 to BR$900. To her, the power outages many residents are forced to regularly deal with may have something to do with the startling increase.

“Our biggest problem is the lack of electricity and the constant oscillation. When the power comes back, it’s like a boom,” Silva says. “I believe that when this happens, the monitor changes. I asked for a new measurement, but they say it’s right. It is impossible for me to live alone. They [Light] want me to pay.”

Light Serviços de Eletricidade S.A., the company that offers electricity to the Morro da Babilônia region, is owned by the Companhia Energética de Minas Gerais S.A. (CEMIG), a company founded and owned by the state of Minas Gerais.

The Light organization actually originates from Toronto, Canada, and was privileged by President Campos Sales on July 17, 1899, with a decree that secured the company’s presence in São Paulo. Light began covering certain areas of Rio de Janeiro in 1907, and in 1996 it was privatized and CEMIG took over most of its stocks. CEMIG now controls Light.

New Tariffs Hurt the Poor

According to Light, complaints are being evaluated. Once more details concerning the disproportionate hikes are available, residents are being told, Light should be able to contact them for further clarification.

However, the company has released a statement concerning the recent regulatory changes that affect how tariffs and taxes are charged. Light claims that “due to the readjustment of tariffs and collection of fees approved by the regulators” the price hikes are easily justified.

Light insists that the monitors installed are approved by Inmetro, the National Institute of Meteorology, Quality, and Technology. But while the company claims these changes are justifiable, few residents are looking into the government-imposed barriers to understand what caused the shift.

To long-time critics, this story is not news.

The cost of electricity in Brazil appears to have always been higher than in developed countries, according to economics professor Alcides Leite. Leite explains that the kilowatt-hour (kWh) costs $0.254, while in the United States it costs $0.133. A family that consumes about 300 kWh per month will spend $914.40 yearly in Brazil but only $478.80 in the United States.

This year, the central government imposed what it called the “tarifaço,” a series of measures that sought to address the Energy Development Account deficit. In spite of the government’s optimist sell, tarifaço has hurt the poor and the middle class.

Since the measures have raised electricity bills by about 50 percent, critics suggest the Dilma Rousseff administration is hoping to increase electricity rates even further. That could cause household electricity bills to reach a 70 percent raise nationwide.