By Brazil Stock Guide – Brazil’s electricity regulator upheld a R$235 million ($43 million) fine against Termelétrica Rio Grande SA and Bolognesi Energia SA after the companies failed to deliver the UTE Rio Grande power plant. According to Aneel, the project’s missed construction schedule culminated in its complete non-execution.
Aneel’s board rejected the companies’ administrative appeal on Tuesday, July 21, leaving the original penalty unchanged. The regulator imposed the fine after concluding that the developers had breached the obligations assumed for the construction and operation of the facility.
Power from UTE Rio Grande was sold in Brazil’s 2014 A-5 new-energy auction, under an agreement requiring deliveries to begin on Jan. 1, 2019. The plant was never completed, prompting Aneel to revoke the project’s authorization.
The regulator subsequently opened an administrative enforcement proceeding that led to the R$235 million auction-related fine. Termelétrica Rio Grande and Bolognesi Energia challenged the sanction, but Aneel’s board declined to reverse it.
Neither company has a publicly traded stock ticker.
The gas-fired plant was designed with two generation blocks. Each block would include two 202.5-megawatt gas turbines and a 214-megawatt steam turbine operating in a combined-cycle configuration.
The planned facility would have had about 1.23 gigawatts of installed capacity. Combined-cycle technology uses heat from gas turbines to produce steam and generate additional electricity, increasing the plant’s overall efficiency.
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