Tarcísio says renewing Enel contract would be a “mockery” and SP state is ready to go to court | Brazil

Tuesday (16), the governor, mayor of the capital of São Paulo, Ricardo Nunes (MDB), and the Minister of Mines and Energy, Alexandre Silveira, met in São Paulo to discuss the company’s problem, after consecutive days of energy supply problems. After the meeting, the three representatives stated that they request for expiry of the company’s contract to the National Electric Energy Agency (Aneel)a process formalized by the Ministry of Mines and Energy Wednesday (17).

Asked about Tarcísio’s statements, Enel said in a statement that it fully complied with regulatory indicators and had shown constant progress in all indices related to service quality. He also defended “a broad assessment” of the problem, citing “extreme weather events” associated with climate change.

Tarcísio said he hoped that the “regulatory remedies” suggested to the Ministry of Mines and Energy will have an effect, but that, if nothing happens, the government has “ready measures” to take against the company. The process could be filed with the Federal Court or directly to the Federal Court (STF), since it is a unifying issue.

“The immediate start of the expiration process interrupts any discussion on the early renewal of the contract, which would be absurd, it would be an attack on São Paulo. A renewal of the contract in 2028 would be a mockery, a slap in the face for all citizens of São Paulo,” he added.

“It is no longer possible. The company is in no condition, it has completely lost its reputation, there is no more trust. We have been experiencing repeated problems since 2023, reporting to the ministry and the agency on this problem,” Tarcísio said. According to him, the company is taking advantage of the proximity of the end of the contract to not make an investment.

According to him, the dealership did not respect the quality of service indicators, analyzed in a disaggregated manner, and did not pay the fines. The governor also said the company was failing in aspects such as maintaining networks and expanding teams. According to him, investments in network automation are also not satisfactory, which could speed up repairs.

Intervention in the company

According to Tarcísio, the next step to be discussed is intervention in the company, with the transfer of control and the use of the company’s liquidity to invest in solving the problems.. He said, however, that even in an extreme situation like this, it would not solve the failures “overnight”, as these are problems that go back “decades”.

The governor asked that the Enel file not be treated as a simple bureaucracy, since its effects have been harmful to the general population and various economic sectors. “People run out of food at home, they lose what they sacrificed to buy. The food that was in the refrigerator spoils. The small business owner loses everything.”

He said there is “alignment between the federal government, state government and municipal governments.” but above all a citizen desire to “see this company disappear”. Tarcísio demanded a firm stance from Aneel and said it was impossible for the company’s situation to “get worse” than it already is. “There is only one way to protect the citizens of São Paulo: and that is to kick Enel out of here.”

Enel, in a statement, said “it confirms full compliance with regulatory indicators in São Paulo, after presenting constant advances in all indices related to the quality of service, as proven by the inspections recently carried out by the regulatory agency.”

Still according to the press release, the company “reaffirms its confidence in the Brazilian legal and regulatory system to guarantee security and stability to investors with long-term commitments in the country.” The company also discussed climate change, defending a “broad assessment” and “in a technical environment” to “structurally address the challenges related to energy supply in a densely populated city like São Paulo”.