Brazil to triple price it pays Paraguay for energy

[Judi Lynn]

Brazil to triple price it pays Paraguay for energy
Sat Jul 25, 2009 8:20pm BST

By Todd Benson

ASUNCION, July 25 (Reuters) - Brazil agreed on Saturday to triple the amount it pays Paraguay for energy from the massive Itaipu hydroelectric dam on their border, ending a long-running dispute that had soured relations between the two neighbors.

Paraguay also won the right to gradually sell excess energy from the dam directly to the Brazilian market instead of doing so exclusively through state-owned power utility Eletrobras (ELET6.SA: Quote, Profile, Research).

That move will allow Paraguay to fetch more for the power at market prices.

The deal is a much-needed political victory for Paraguayan President Fernando Lugo, whose first year in office has been marked by a severe economic downturn and scandals over revelations he fathered children when he was a Roman Catholic bishop.

But the agreement is likely to face criticism in Brazil, where opposition leaders and even some government allies have urged President Luiz Inacio Lula da Silva to play tough with Paraguay.

Lugo swept into office in August last year after promising to extract better terms from Brazil over the energy it sells from Itaipu. His victory ended a 60-year stronghold on power by Paraguay's conservative Colorado Party.

Lugo and Lula said the deal would usher in a new era of relations between the two countries based on cooperation instead of recriminations over who benefits most from Itaipu.

WIN-WIN DEAL

Lula said the agreement is part of a campaign by Brazil to spur economic development in the region.

"Brazil is not interested in growing and developing if our neighbors aren't growing and developing at the same time," Lula said at a ceremony with Lugo at the presidential palace in Asuncion, Paraguay's capital.

"This is not an agreement in which one side wins and the other side loses," Lugo said. "This is for the good of both countries."

Lugo had initially pushed to renegotiate the 1973 treaty that laid the foundations for Itaipu, which straddles their border along the Parana River. But Brazil pushed for a compromise that would allow Paraguay to boost its take from the dam.

Brazil gets close to 20 percent of its energy from Itaipu, paying Paraguay about $120 million a year, an amount that will now triple. Each country owns half of the 14,000 megawatts the dam produces annually, but Paraguay consumes just 5 percent of that amount and sells the rest of its share to Eletrobras for $45 per megawatt hour.

Paraguay will eventually be allowed to sell a growing share of that excess energy directly to the Brazilian power market, where it could fetch as much as $65 per megawatt hour under current market prices.

The deal gave negotiators 60 days to work out a timeline and the terms at which that excess energy will be sold on the Brazilian market. It also stipulated that Brazil and Paraguay could begin selling excess power from Itaipu to other countries in 2023, when the Itaipu treaty expires.

http://uk.reuters.com/article/idUKN2540431820090725?rpc=401&

Congratuations to both good leaders.

[Peace Patriot]

1. This is the heart of the revolution in South America--sovereign people controlling

their own resources and cooperating and sharing resources for mutual benefit. And you can be sure that the profits from this enterprise are going to schools, health care, help for poor neighborhoods, local infrastructure and developing regional institutions and development funds, which both Lugo and da Silva are committed to. There is always a danger that, once wealth is created, guess who shows up to rip it off? The local fascists could surge back into power, by stolen elections or coups, and then give the profits away to global corporate predators, for a cut to line their own pockets and forget everybody else--the vast poor majority. This is what fascist elites do. They don't create wealth. They rip off other peoples' creativity and enterprise. We are seeing this very thing in California right now. The progressive middle class created one of the greatest education systems in the world, one of the greatest public park systems, one of the best emergency and public services programs, and many other great things, including one of the cleanest governments, and thus engineers, physicists, artists, enterpreneurs and professionals of many kinds, were created in California's school system or gravitated to California, and produced, among other things, the high tech revolution, great wealth and many, many jobs. With a progressive governor, Gray Davis, in the 1990s, California accumulated a $10 billion surplus for a "rainy day." The Bushwhacks and the Reich wing then went to work to "drown" this great government "in the bathtub." They unleashed Texas energy corporations--Enron being the most notorious, which outright stole that $10 billion surplus. The Reich media blamed it on Davis. The Reich electronic voting machines corporations had moved into place, with operatives like Puke Sec of State Bill Jones smoothing their way: electronic voting using 'TRADE SECRET' code with no audit/recount controls. Schwarzenegger was tapped to take advantage of that in the weirdest election ever held in California, with 125 candidates on the ballot--easy pickins for Diebold & brethren, especially with Time magazine and Larry King giving the uber-famous Schwarzenegger millions of dollars in free publicity.

And now, California has one of the worst education systems in the country, college education costs have become onerous, they are setting up our fabulous public park system for privatization--the Reich wants to sell it to big corps, of course--California's environmental regulation, long on a downward path, will now be severely underfunded, health care and other helps to the poor are being severely slashed, the public employees union and all unions are reeling from this onslought on slashed jobs and downward spiraling economy, and on and on and on--a corpo/fascist's wet dream of crippled public services and trashed and looted 'common good' programs, based on grand theft by the rich combined with the highly manipulated Financial 9/11 of September 2008.

This did not happen overnight, and it is not all the Pukes' doing. California DINOs have had a hand in it. But the end-game, what is happening now--and has been happening since the mind-boggling Enron theft and throughout the Bush Junta--is planned destruction. They are destroying California.

Prior to this catastrophe--and the catastrophe of the Bush Junta nationwide--these techniques of looting and destroying public services and the "commons" had been worked on Latin America. Latin Americans have recovered from it by means of long hard work on transparent elections and other democratic institutions, by the election of good leaders, and their cooperation with each other--of which the hydroelectric deal between Brazil and Paraguay is an excellent example. But all that work--and all the wealth creation, and wide distribution of the wealth, and creative thinking, and enterprising spirit with a social justice conscience can be undone. That's what the Schwarzeneggerization of California teaches us. Look out, Paraguay! Look out, Brazil! Look out, Venezuela! They're coming to loot you again! Shore up your democratic defenses. Reform and democratize the media. Attend to your voting system. Kick the US "war on drugs" out of your country, if you haven't already. Stick together. And stand firm on Honduras, because, if the Reich can't fiddle elections, they will just frigging eviscerate your Constitutions and evict good leaders at gunpoint and declare martial law. They want that water. They want that oil. They want whatever wealth you create from it. And they have no scruples about how they get it, or who or what they destroy in doing so. They are looting and destroying the United States of America itself.

[Judi Lynn]

3. Thanks so much for your comments. This could have turned out so badly for Paraguay,

again, since it has been on the losing end of this arrangement for so many years.

The wisdom shown by these two leaders, their willingness to see this through fresh eyes, and to look for the larger picture, the greater good is almost unheard of considering the total lack of social conscience and identification with the human race so prevalent in the leaders of both countries prior to very recent times, and the onset of the movement toward solidarity and REAL democracy.

I'm in awe regarding Lula's "It's a win-win situation" view. He is an extraordinary man to make the admission he doesn't see growth and developement for only one country alone to be the best goal. That remark alone could make him public enemy number one among the U.S. right-wing. They are eternally unable to understand that kind of reasoning. It takes all the fun out of life, from their perspective if you actually SHARE!

Your remarks on the similarity between what happened in Latin America at the hands of fascists to rip social services away, public services to shreds, looting the economy, and what has happened here are completely clear and sadly real. Years ago we never would have believed this could be possible in our country.

[dipsydoodle]

2. BBC link

http://news.bbc.co.uk/1/hi/world/americas/8169084.stm