Several Brazilian distribution companies are targeting defaulters among their consumers as the financial crisis in the country and the onset of recession affects their financial predictions.
The Rio de Janeiro distribution company Cerj had a default rate of 7 per cent in 1998 and has made its reduction a prime target for this year. This will include suspending the power supply to customers who fail to pay their bills within a stipulated period.
In Sao Paulo the distribution company Bandeirante, with a 5 per cent default rate, is also taking stern measures. Large users who default will be offered individual solutions, small defaulters will lose their supplies.
Companies are worried that the current recession may increase the default rate. This issue is made more worrying by the fact that costs are rising. The fall in the value of the Real has forced Itaipu, a major supplier to many utilities in southeastern Brazil, to increase its tariffs. The companies need the cash they are owed by their customers to pay for the higher cost of power.
