MP 577: Brazilian Government Regulates the Procedure for Intervention by ANEEL in the Management of Concessionaires of Electricity
1 October 2012
Tauil & Chequer Legal Update
As a response to the current situation of Centrais Elétricas do Pará S.A. – CELPA, an electricity distribution concessionaire within Rede Group that filed for court-assisted reorganization last February 28, the Brazilian government passed Provisional Measure No. 577, published on August 30, 2012 (“MP 577”), which establishes specific rules for intervention by the concession, granting authority, acting through the Brazilian Electric Energy Agency (“ANEEL”), in the management of concessionaires of electricity as a public service. The purpose of the measure is to ensure a proper provision of services and full compliance with the applicable contractual, regulatory and legal provisions. On the day following publication of MP 577, ANEEL published eight resolutions determining intervention in the other eight distributors within Rede Group that are also facing difficult economic and financial conditions.