CESP - Companhia Energética de São Paulo and Empresa Metropolitana de Águas e Energia S.A. (Emae) may merge their operations for mitigating the negative effects of the government MP 579 decree. Jose Anibal, Sao Paulo State's Energy Secretary, told Valor Economico on December 14, 2012 that a possible merger will allow CESP and Emae to strengthen their power generation capacity. The merger will help mainly CESP, which recently decided not to renew the concessions of its 807.5-MW Tres Irmaos, 3,440-MW Ilha Solteira and 1,552-MW Jupi hydroelectric power plants (HPPs) which jointly correspond to 70% of its energy generation park.

Thus, the installed capacity of CESP will soon rise to 1,600 MW from the current 7,400 MW. Emae has opted to remove its power generation concessions under the government-set conditions and its capacity will continue at 940 MW. The government of Sao Paulo will study the possible tie-up of CESP and Emae, Anibal reportedly said.