RIO DE JANEIRO—When proper electricity arrived in Santa Marta, a small favela in the shadow of Rio’s Christ the Redeemer statue, longtime resident Cândida Oliveira Silva was happy to get the bill.

For the 52-year-old homemaker, it meant having legal proof of address and “feeling like a citizen” for the first time. But in recent months it has also meant cutting back on all but the most basic expenses. Reduced government subsidies and a drought have raised her bill to about 280 reais ($72) a month, roughly five times what it...