Brazil faces the possibility of widespread energy rationing for the first time since 2001, as a hot, dry summer has deprived hydroelectric dams of needed water while boosting power use to run air conditioners in sweltering cities.

Even if the country escapes rationing, electricity experts say it may have to boost use of thermo-electric power - a more expensive option which could undermine President Dilma Rousseff's plans to lower energy rates.

Energy Minister Edison Lobao said the extra cost of diesel-fired plants would add less than 1 percent to consumers' electric bills during the months they are in use, ruling out the possibility of new government controls.

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