To ease the upcoming electric power crisis, the Brazilian government announced Friday details for rationing measures to begin June 1. The rationing, in effect for 6 months, will impact more than 130 million of Brazil’s 170 million people in all major population centers.

The government blames the electricity shortage on droughts affecting hydroelectric generation. But electricity industry executives disagree.

“The Brazilian electric power sector is burdened much more by the lack of investments than by lack of rain,” said Roberto Procopio Lima Netto, president of the Brazilian Chamber of Electric Power Investors.

The government created regulatory obstacles for investment, making it unattractive for the private sector to invest in energy, said Netto.

Laws enacted by the Brazilian Congress blocked Eletrobras, the state’s electricity holding company, from investing, he said.

In 2000, public and private investment in the electric power sector fell to $3 billion compared with $15.4 billion in 1987, according to government data.

Some government allies also criticized the rationing plan. “I spent 1 year requesting federal investments for Mato Grosso state’s power sector without success and now we have the rationing. This medicine is too bitter,” said Gov. Dante de Oliveira.

The national bar association (OAB) said it will appeal the energy cutbacks to the Supreme Court and argue that the surcharge penalties on consumers are unconstitutional. The electric power supply is an essential public service guaranteed by the constitution. In a press conference, Marco Aurelio de Mello, the new Supreme Court president, as of June 1, called the surcharges “confiscation”.

The rationing may cut Brazil’s expected 4.5% economic growth this year by as much as one-third, according to the Getulio Vargas Foundation, an economic research institute.

The rationing measures include:

– Consumption by residential and business consumers who use above 200 Kw-hr/month must be reduced by 20% beginning June 1.

– Non-compliance means electricity will be cut off 3 days for the first violation and 6 days for the second time.

– Surcharges will also be applied if the required reductions are not met.

– Consumers who reduce demand by 34% will not be charged for electricity at all and large businesses can sell the energy they save.