Country needs to define legal basis to face water crisis, says Parente – 06/17/2021 – Market

Responsible for running the committee that implemented energy rationing in 2001, engineer Pedro Parente considers it essential that the government approve a legal basis to empower the management of the current energy crisis.

At the end of May, Parente was invited by the Minister of Mines and Energy, Bento Albuquerque, to share his experience and make an assessment of the current scenario and considers that the ministry has acted in the right direction to face the crisis.

But he thinks that there is still a lack of legal instruments to support decision-making, “without the need to resort to government bureaucracy”, he said in a webinar for the launch of the book “Short Circuit – When Brazil was almost in the dark”.

“It seems to me that there is something missing that we had in 2001 since the beginning, which is a legal basis to support decisions of an extraordinary nature for a situation of an extraordinary nature,” he said.

The government plans to issue a provisional measure on the subject, but there is still no confirmation of how it will be or when this will happen. The text of the MP would give greater autonomy to a committee responsible for managing the hydroelectric reservoirs.

In 2001, the Fernando Henrique Cardoso government issued a provisional measure creating the CGE (Committee for the Management of the Energy Crisis), an inter-ministerial group that planned and managed the rationing program.

The MP gave “superpowers” to Parente, according to the authors of the book, journalists Roberto Rockmann and Lúcio Mattos. The CGE could propose the recognition of a situation of public calamity, reallocate state funds and interfere in the energy market.

“The decisions of this Chamber would have to be final – that is, there could not even exist the possibility that a decision was taken in the morning and in the afternoon it would be necessary to go to the Ministry of Finance or Planning to see if there was a budget to resolve the issue”, journalists write.

Thus, the group was formed with high-level representatives from bodies that could be needed in handling the crisis, such as the ministries of Finance and Planning, the BNDES (National Bank for Economic and Social Development) and the AGU (General Advocacy of the Union ), for example.

“It’s an extraordinary situation and the sooner this is understood, the sooner this measure comes out, the better we’ll get out of the process,” Parente said in this Thursday’s webinar.

Currently in charge of the investment company EB Capital and chairman of the board of directors of the slaughterhouse BRF, Parente says he has not been following the situation in the electricity sector in detail.

But he says he got the impression that the MME (Ministry of Mines and Energy) has been monitoring the situation adequately. “Without last minute surprise as we had in 2001, it gives more conditions for prevention or at least to try to mitigate the effects”.

Minister Bento Albuquerque says that, with the measures the government has been taking since 2020, such as the contracting of thermal plants, it is possible to guarantee that there will be no need for energy rationing in 2021.

“The minister has all the information at hand, they used models with a very large margin of safety… Maybe he feels comfortable saying that,” he commented. In 2001, he recalled, he preferred not to give absolute certainty.

Parente says that the experience of rationing showed the population’s capacity for engagement. “A great lesson was knowing that families, society, companies can be counted on to help with national problems.”

He assesses that the government has been transparent in handling the crisis, which can ease impacts on President Jair Bolsonaro’s popularity in case of need for rationing.

But he thinks that the sooner you start acting, the lower the cost. “There is this idea of ​​pushing a little more to see if the situation resolves itself. If it is not resolved, it could represent a greater cost, including in terms of popularity,” he said.

The 2001 energy crisis is identified as one of the factors that led to the defeat of the PSDB in the 2002 presidential election, won by Luiz Inácio Lula da Silva. Parente agrees, and believes that the perception that the FHC government was taken by surprise weighed heavily.

“We need to see what will happen, what will represent the evolution of rainfall in the coming months, which is crucial to define the need or not for voluntary or compulsory reduction in consumption.”

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