BRIEFS: Business

Hydro companies see profits fall

LA PRENSA

under water: Low levels in hydro dams during the dry season cut into profits recorded by the country’s hydro companies.1075996

The combination of rising oil prices and an extended dry season have cut into the profits of Panama's hydroelectric companies.

The profits of Enel Fortuna fell 16.5 percent in the 2007-08 fiscal year, as compared to the 2006-07 period. The company reported a profit of $30.8 million for its most recent fiscal year, compared to profits of $36.9 million the previous year.

Manager Jacques Lepage said that low water levels in the company's hydroelectric dams forced it to make a higher-than-expected number of purchases of energy from carbon-powered plants to meet its contractual obligations. This energy was much more expensive to purchase because of rising oil prices.

The company spent $43 million on these purchases in the 2006-07 fiscal year, while that amount rose to $72 million last year.

Under its agreement with the government, hydro companies are required buy power from other producers if they can't generate enough energy to fulfill their contracts.