The Brazilian electricity regulator Aneel has suggested increasing the rates paid by consumers by 4.6 per cent.

The country’s energy regulator has proposed this increase to help cover power subsidies. However, there are concerns that the measure will push up inflation, which is already high in Latin America’s biggest economy, according to Reuters.

Aneel expects a deficit of $2.33bn this year in the ‘Energy Development Account’ or CDE, which that does not include the cost of using more expensive thermal generation to make up for a drop in hydroelectric power output.

The subsidies in the CDE cover energy distribution to the remote northern regions and lower rates for poor consumers.

Aneel’s proposal is currently under discussion at public hearings, with a decision expected after mid-March.

Last year, President Dilma Rousseff made a deal with power utilities to significantly reduce electricity prices in a bid to bolster Brazil’s slow-moving economy.

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