Brazil’s CCEE electrical power market clearing house on Monday said it suspended the payment of credits for short-term power deals for September scheduled for liquidation on Tuesday.
The suspension was made in response to court injunctions. A statement from the CCEE did not say when or why the injunctions were put in place.
However, earlier on Monday the CCEE and Brazil’s electrical power regulator ANEEL told Reuters that the clearing would happen as planned even though power users had received injunctions allowing them to withhold payment.
Power shortages caused by drought and delays in expansion of the country’s generation and distribution systems have caused spot-market power rates to soar. Meanwhile many utilities were contractually obliged to sell the power bought on the spot market at a loss.
Without special loans and payment extensions arranged by Brazil’s government, the CCEE and regulators, much of the electricity system would be bankrupt.