Electricity in Minas Gerais: sale of Cemig results in

Maria Paula, a 20-year-old resident of the Barreiro region, in Belo Horizonte, describes her concern with the possibility that the energy tariff will be increased again.

“If the electricity bill goes up again, I don’t know how I’ll be able to support myself”, he says.

Maria’s reality is the same as that of a part of the population that lives in the country and cannot afford to keep up with electricity rates.

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Since 2019, electricians have denounced that the state government of Minas Gerais has been preparing the way to privatize the Companhia Energética de Minas Gerais (Cemig).

According to Emerson Andrada Leite, general coordinator of the Intermunicipal Union of Workers in the Energy Industry of Minas Gerais (Sindieletro-MG), if Cemig is privatized, the electricity bill will probably increase even more.

“The buyer ends up investing a lot of money in buying the company. And so, he intends to recover this money as quickly as possible. And this recovery is done precisely by increasing the electricity bill and making the service more precarious so that the company’s profitability increases”, says Emerson.

Although there is no formal guarantee that, if Cemig is privatized, the electricity bill will increase. However, Emerson rescues a recent example that reinforces the more expensive price theory and privatization.

“An example of this refers to the privatization of the São Simão plant, which belonged to Cemig and was privatized by the Michel Temer government. The plant sold energy at around R$40 per megawatt/hour. After privatization, the cost immediately rose to around R$ 150, which demonstrates the privatized company’s desire to quickly recover the investment made”, reports the union leader.

Poorer Families May Be More Affected

Law No. 10,438, created in 2002, implemented the Social Electricity Tariff that grants discounts on electricity bills to low-income consumers in Brazil. In Minas Gerais, there are more than 800 thousand beneficiaries.

If Cemig is privatized, part of these families may no longer receive the benefit.

:: On the verge of blackout, companies profit from increased electricity bills ::

“One way that privatized companies use is to reduce as much as possible the number of beneficiaries of the Social Tariff, appropriating the money that would be destined for this type of consumption and enriching shareholders even more. As a result, consumers can run out of electricity because they are unable to pay the bill”, says Emerson.

Privatization would also have negative impacts on families in rural communities. as the company’s substations are usually far away and require the construction of a longer network, with more poles and cables, which depends on greater investment.

For the coordinator of the Movement of People Affected by Dams (MAB) Soniamara Maranho, the privatization of Cemig would make rural electrification more difficult.

“When privatized, the company’s profit is not invested from the interests of those who benefit from the service. So, for sure, if Cemig is privatized, there will be an impact on rural electrification, because the investment in maintenance will not be the same”, he declared.

For Soniamara, the The attempt to privatize Cemig is related to the government’s idea that energy is a commodity and not a right of the population.

“Energy is an essential asset for human development. We need the energy to organize our work and our lives. Therefore, we need to defend Cemig as a public company, which benefits the people of Minas Gerais and treats energy is an essential right”, he points out.

Pay more to run out of energy?

By prioritizing profits and investing less in maintenance, the electricity grid becomes more fragile and the population is more at risk of running out of energy, as Emerson explains, this is common among private companies. “The immediate perception of consumers is that the electrical network is more defective. The repair time is much longer and, consequently, the consumer’s time without energy ends up being a longer time”, he says.

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Another factor that threatens the quality of the service, according to the union member, is the practice of privatized companies hiring less skilled workers to pay lower wages.

privatization process

Romeu Zema (Novo) announced the privatization of Cemig during his 2018 election campaign. Workers at the state-owned company have since denounced that privatization is already underway, and that the process is carried out with little debate with society.

“Governor Zema, in addition to promoting the dismantling of the company through a policy he has called anticipating privatization, has sought to discredit and discredit the company in front of Minas Gerais society”, says Emerson, who qualifies the action of the state government as disrespectful and devaluation of the mining heritage.

For Soniamara, the argument that supports the need for privatization presented by the state government makes no sense. “What is stated is that the company is not self-sustaining. See the contradiction. I wouldn’t buy a bankrupt company. Banks do not invest in failed companies”, he points out.

what the government says

In a statement, the state government informed that “studies are being carried out to analyze the best way to sell certain assets of Cemig” and that the company intends to invest around 22.5 billion reais by 2025 in improving its transmission structure, generation and distribution, with a focus on Minas Gerais”.

In addition, the government states that “this process carried out with efficient technical studies is defended by Governor Romeu Zema as a way to improve the quality of energy supply for all miners, including efforts to maintain a fair tariff. It is important to emphasize that the tariff policy is Cemig’s responsibility”.

Cemig was contacted by the report, but has not yet responded.

Source: BoF Minas Gerais

Edition: Larissa Costa

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