ANEEL APPROVES THE 2016 ANNUAL EDP BANDEIRANTE´s TARIFF READJUSTMENT São Paulo, October 18th, 2016 - EDP - Energias do Brasil S.A. ("EDP" or "Company") ("BM&FBOVESPA: ENBR3") announces to the market that National Electricity Agency ("ANEEL"), in public meeting held on this date, approved the 2016 annual tariff readjustment for Bandeirante Energia S.A ("EDP Bandeirante"), to be applied as of October 23rd, 2016.

When compared to the current tariff, the average effect to be notice by customers will be -23.53%, being -28.64% to high and medium voltage customers and -19.51% to low voltage customers.

The component B was adjusted by 9.54%, resulting in R$ 828,863,354.57. The IGP-M (inflation index) calculated for the tariff period was 10.66% and the X-Factor was 1.12%. The X-Factor consists of portions "Pd" (gains of productivity) of 1.14%, "T" (trajectory to adequacy of operational costs) of - 0.24% and "Q" (incentives of quality) of +0.22%.

The financial items adjustments recognized by ANEEL in this process was - R$ 308 million referring to the difference between the non-manageable costs (energy, transport and charges) approved and costs actually incurred by the company in the tariff period from 2015 to 2016.

During the tariff adjustment process, ANEEL updates the regulatory costs that can be managed by the distributor (Component B), while the non-manageable costs (Parcela A)1 and the financial items are adjusted based on the last 12 months' price and the forecast of the next 12 months.

EDP Bandeirante: Composition of 2016 Tariff Repositioning

Description

Sector Charges Transport

Electricity Purchase

Total of Component A

Pd X-Factor (Productivity index of Component B) Q X-Factor (Incentives to quality)

T X-Factor (Trajectory to adequation of operational costs)

Total of Component B

Required Revenue (Component A + Component B)

Financial Components

Average Effect to be notice by customers

Result

R$ 1,147,429,976.55

R$ 214,364,219.05

R$ 1,734,563,493.89

R$ 3,096,357,689.49

1.14%

0.22%

-0.24%

R$ 828,863,354.57

R$ 3,925,221,044.06

-R$ 307,915,775.15

-23.53%

1 Component A includes energy purchases from generators, cost of energy transportation and sector charges.

Additionally, on the same date, ANEEL partially approved the pleading from EDP Bandeirante regarding the Administrative Appeal of 2015 Tariff Review (Case No. 48,500,006,203/2014-17), resulting in a new regulatory index for Non-Technical Low Voltage Losses for the 2015-2019 tariff cycle, as follows:

Description

Starting Point

2015

2016

2017

2018

Regulatory Referential PNT/BT (2015 tariff review)

10.43%

9.83%

9.31%

8.85%

8.45%

Regulatory Referential PNT/BT (New - Annual Tariff Readjustment 2016)

10.43%

9.96%

9.55%

9.19%

8.87%

The difference between the new rate and the rate approved in 2015 tariff process for the last 12 months, has been recognized as a financial component in the amount of R$ 2,253, 086.27.

Miguel Nuno Simões Nunes Ferreira Setas

CEO and IR Director

Maytê S. D. Albuquerque Marilia Barbosa Nogueira Anna Luisa Bacellar Maria Rodrigues

Amanda Pecorari

+55 (11) 2185-5907

ri@edpbr.com.br www.edp.com.br/ri

(55 11) 2185-5907

EDP - Energias do Brasil SA published this content on 18 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 18 October 2016 21:28:03 UTC.