By Eduardo Simoes

SAO PAULO, BRAZIL - Brazil's government blamed a severe storm for the power outage that put the country's economic heartland in the dark for more than five hours and raised doubts about the reliability of its energy grid.

Tuesday night's blackout, Brazil's worst in a decade, left tens of millions of people without power across most of the wealthy southeastern region, halting subways and snarling traffic in major cities like Sao Paulo and Rio de Janeiro.

A combination of lightning, rain and heavy winds caused three transmission lines to short-circuit in Sao Paulo state,
setting off a ripple effect that forced the massive Itaipu hydroelectric plant on the border with Paraguay to shut down automatically, Energy Minister Edison Lobao said on Wednesday.

"Our grid is strong and resistant but there are moments that the system simply can't withstand," Lobao told a news
conference in the capital Brasilia, stressing that weather-related blackouts are commonplace around the world.

Responding to criticism the government has neglected to maintain and upgrade Brazil's energy infrastructure, President Luiz Inacio Lula da Silva said investment in transmission lines over the last seven years amounted to 30 percent of what had been spent over the preceding 120 years.

"We didn't have a failure in the generation of energy, we had a problem in the transmission line," Lula told reporters in Brasilia.

Brazil's economy, fueled by a global commodities boom and a vast consumer market at home, has forged ahead in recent years under former union leader Lula and was quick to shrug off the global financial crisis.

But transport and energy infrastructure remain weak points for Latin America's largest country, which will host the soccer World Cup in 2014 and the Olympic Games two years later.

"This shows that Brazil is very vulnerable. You can't leave a country the size of Brazil hostage to accidents," said Adriano Pires, director of the Brazilian Center for Infrastructure Studies in Rio de Janeiro.

Lobao, the energy minister, denied the problem was caused by computer hackers. U.S. television network CBS reported in its "60 Minutes" program this month that blackouts in Brazil in 2005 and 2007 may have been caused by "cyber attacks," quoting mostly unnamed U.S. intelligence sources.

TRAFFIC CHAOS

The blackout hit 18 of Brazil's 26 states and all of Paraguay, which gets about 90 percent of its power from the Itaipu dam, was left in the dark for about 15 minutes. Paraguay's state electricity company said the problem originated in Brazil.

The last time Brazil suffered such a large outage was in 1999, when a lightning bolt struck a transmission line in Sao Paulo state.

While some analysts said Tuesday's blackout highlighted the challenges Brazil faces to ensure its infrastructure keeps pace with its robust economic growth, others saw the outage as an isolated incident that could happen anywhere.

"The system is reliable, even if it faces the risk of this sort of problem," said Cesar de Barros Pinto of Brazil's
electrical transmission industry association.

Power was restored in Sao Paulo, Brazil's financial capital and South America's largest city, before dawn on Wednesday.

Traffic on the city's streets descended into chaos shortly after the outage. Thousands of passengers were forced to exit stalled subway trains and walk along the tracks to get back to stations and make their way to the surface.

Sao Paulo's streets were still clogged on Wednesday after the mayor canceled restrictions on the number of cars allowed to circulate during rush hour.

In Rio, the beachside city that will host the 2016 Olympics, many tourists left their hotel rooms along Copacabana beach because of the lack of air-conditioning and milled around on the darkened streets. --REUTERS