Paraguay Seeks to Stop Itaipu Power Sales to Brazil -Report

Paraguay Seeks to Stop Itaipu Power Sales to Brazil -Report
June 26, 2012, 2:55 p.m. ET

SAO PAULO--The new Paraguayan director of Itaipu, the hydroelectric dam straddling the Brazil-Paraguay border, said the country wants to stop selling to Brazil the energy Paraguay doesn't use from the dam, Jornal da Energia reported Tuesday.

Franklin Rafael Boccia Romanach, who was chosen as the Paraguayan director of the dam operated by the two countries, said "no more to the sale of electric energy, even if it brings us money. We want total use of our energy in Paraguay, driving industry and jobs," according to the Jornal da Energia news service. Romanach was named by Federico Franco, who took over as Paraguayan president after the impeachment of Fernando Lugo.

Itaipu, the world's biggest hydroelectric dam with a generating capacity of 14,000 megawatts, produces about 17% of Brazil's power and 73% of Paraguay's electricity. The two countries each have rights to half of the energy produced at the dam, but Paraguay has historically consumed just 10% of power produced by Itaipu and sold the rest to Brazil, generating about $360 million of annual revenue from the sale.

An agreement between the two countries prohibits Paraguay from selling that power to a country other than Brazil.
Government-controlled utility Centrais Eletricas Brasileiras, or Eletrobras (EBR, ELET6.BR), controls the Brazilian part of the dam, and government officials choose the Brazilian directors of the dam. Brazil's Mines and Energy Ministry didn't respond to a call from Dow Jones Newswires seeking comment.

http://online.wsj.com/article/BT-CO-20120626-711624.html