EDP Energias do Brasil : Guidance 1Q16 - Market Release

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São Paulo, April 19, 2016 - EDP Energias do Brasil S.A. (BM&FBOVESPA: ENBR3) releases the electricity market data related to its business unities and controlled companies in the first quarter of 2016 (1Q16).

Volume (MWh)		Chg. 1Q16/ 1Q15	Customers (unit)		Chg. 2016/ 2015
1Q16	1Q15		1Q16	1Q15
EDP BANDEIRANTE
Residential	906,827	935,136	-3.0%	1,619,352	1,587,004	2.0%
Industrial	480,263	578,216	-16.9%	12,387	12,476	-0.7%
Commercial	581,577	606,220	-4.1%	120,489	118,505	1.7%
Rural	20,445	22,394	-8.7%	7,968	7,992	-0.3%
Other	222,192	225,834	-1.6%	13,644	13,387	1.9%
Energy Supplied to Final Customers	2,211,304	2,367,799	-6.6%	1,773,840	1,739,364	2.0%
Supply	10,613	11,462	-7.4%	2	2	0.0%
Energy in transit (UDS)	1,375,988	1,394,117	-1.3%	183	173	5.8%
Free customers	1,317,845	1,335,204	-1.3%	181	171	5.8%
Concessionaries	58,143	58,913	-1.3%	2	2	0.0%
Generation usage	0	0	-	0	0	-
Own consumption	1,596	1,710	-6.7%	167	166	0.6%
Total Energy Distributed	3,599,500	3,775,088	-4.7%	1,774,192	1,739,705	2.0%
EDP ESCELSA
Residential	651,350	649,612	0.3%	1,162,422	1,124,862	3.3%
Industrial	253,422	279,342	-9.3%	11,807	12,013	-1.7%
Commercial	407,237	415,334	-1.9%	121,309	120,555	0.6%
Rural	205,359	231,814	-11.4%	178,435	171,345	4.1%
Other	209,014	191,619	9.1%	13,134	13,044	0.7%
Energy Supplied to Final Customers	1,726,382	1,767,722	-2.3%	1,487,107	1,441,819	3.1%
Supply	150,237	168,676	-10.9%	1	1	0.0%
Energy in transit (UDS)	776,975	1,050,395	-26.0%	89	77	15.6%
Free customers	759,285	1,046,830	-27.5%	69	57	21.1%
Concessionaries	17,690	3,565	396.2%	1	1	0.0%
Generation usage	0	0	-	19	19	0.0%
Own consumption	2,188	2,265	-3.4%	209	202	3.5%
Total Energy Distributed	2,655,781	2,989,058	-11.1%	1,487,406	1,442,099	3.1%
DISTRIBUTION
Residential	1,558,177	1,584,748	-1.7%	2,781,774	2,711,866	2.6%
Industrial	733,685	857,558	-14.4%	24,194	24,489	-1.2%
Commercial	988,814	1,021,554	-3.2%	241,798	239,060	1.1%
Rural	225,804	254,207	-11.2%	186,403	179,337	3.9%
Other	431,206	417,453	3.3%	26,778	26,431	1.3%
Energy Supplied to Final Customers	3,937,685	4,135,521	-4.8%	3,260,947	3,181,183	2.5%
Supply	160,850	180,138	-10.7%	3	3	0.0%
Energy in transit (UDS)	2,152,963	2,444,512	-11.9%	272	250	8.8%
Free customers	2,077,130	2,382,035	-12.8%	250	228	9.6%
Concessionaries	75,833	62,478	21.4%	3	3	0.0%
Generation usage	0	0	-	19	19	0.0%
Own consumption	3,783	3,975	-4.8%	376	368	2.2%
Total Energy Distributed	6,255,281	6,764,146	-7.5%	3,261,598	3,181,804	2.5%
Note: Other = Public entities + Public lighting + Public services UDS: Usage of the Distribution System

1

Commercial 16.2%

Rural

0.6%Other

6.2%

Commercial 15.3%

Rural 7.7%

Other 7.9%

Industrial

13.3%

Residential 25.2%

Energy in Transit

38.2%

Supply + Own Consump.

0.3%

Industrial

9.5%

Residential 24.5%

Energy in Transit 29.3%

Supply + Own Consump.

5.7%

Energy supplied to final customers: the reduction of 4.8% reflects the decrease of consumption on the main segments influenced by the economy slowdown and the increase in electricity tariffs (considering the extraordinary tariff review of March 2015, the tariff flags and the annual tariff adjustments).

• Residential and Commercial: the consumption on the residential and commercial segments decreased by 1.7% and 3.2%, respectively. This reduction is due to the negative impact of increase on unemployment 1 (6.8%), the reduction in the real average income 2 (-2.4%) and by the increase of inflation 3 (IPCA 9.39%), that reduced the consumer's purchasing power.

  EDP Bandeirante: the consumption of residential and commercial segments decreased by 3.0% and 4.1%, respectively, influenced by the effects already mentioned above and by lower average number of billing days in the Low Tension (-0.5 days). In the commercial segment, the migration of four clients to the free market (two in 4Q15 and two in 1Q16) did not affect significantly the consumption variation between the quarters. EDP Escelsa: the consumption of residential remain stable (0.3%) while the commercial segment decreased 1.9%. Despite the higher average number of billing days in 1Q16 (+1.7 days), the temperatures recorded in the state of Espírito Santo were milder compared to the same period last year, a period marked by high temperatures and drought (variation of 0.6°C between the quarters). In the commercial segment, the highlight is the migration of eight clients to the free market (one in the 4Q15 and seven in 1Q16). Excluding the effect of these eight clients, the reduction would be 1.4%.

  
  

  
  

  Consumption per residential customer presented decrease of 5.2% and 3.0% at EDP Bandeirante and EDP Escelsa, respectively, reflecting the economic effects and consumer reaction to the effects of tariff increases.

  
  

  
  

• Source: IBGE. National Household Sample Survey (Pnad) - January, 2016. Moving Average November 2015 to January 2016 compared to the same period last year;

• Source: IBGE. National Household Sample Survey (Pnad) - January, 2016. Moving Average November 2015 to January 2016 compared to the same period last year;

• Source: IBGE. National Index of Price for Consumers - IPCA - March, 2016;

  
  

  Residential Segment	Consumption per Customer (KWh)		Var. 1Q16/ 1Q15
  	1Q16	1Q15
  EDP Bandeirante	186.8	197.1	-5.2%
  EDP Escelsa	187.4	193.3	-3.0%

  
  

  • Industrial: decrease of 14.4% due to the contraction of industrial production in Brazil (reduction of 11.8%4).

    
    

    EDP Bandeirante: the decrease of 16.9% of consumption in the industrial segment is due to the contraction of industrial production in the state of São Paulo (-14.2%5 in the first two months of 2016 when compared to the same period of last year, highlighting the automotive segment with 30.8% reduction). Additionally, there was a migration of 10 clients (one in the 4Q15 and nine in 1Q16) to the free market, the shutdown of a significant client of cellulose segment and the return of two other clients to the captive market. Disregarding these three effects, the segment would have retreated 14.4% in 1Q16.

    EDP Escelsa: decrease of 9.3% in industrial consumption is mainly due to reduction of non-metallic mineral industries (-12.3 %) and food products (-2.4 %). Additionally, the result was impacted by: (i) decrease in the industrial production in Brazil (-11.8

    %6); and (ii) the migration of three clients (one in 2Q15, one in 4Q15 and one in 1Q16) to the free market. Excluding the effect of such migration, the reduction would be 6.5%.

• Rural: the reduction of 11.2 % (8.7% at EDP Bandeirante and 11.4% at EDP Escelsa) is due to: (i) downturn in the economy and the increase in energy tariffs in EDP Bandeirante; and (ii) milder temperatures and high volume of rain in the state of Espírito Santo in 1Q16 when compared to the same period of last year, reducing the energy consumption for irrigation in EDP Escelsa.

The consolidated energy in transit in the distribution system (UDS), destined to free customers consumption, decreased 11.9% due to the contraction of industrial production in Brazil, as mentioned above. EDP Bandeirante: reduction of 1.3% reflects the contraction of industrial production already mentioned, the shutdown of two clients (2Q15) and the return of two clients to the free market (in 4Q15). Two effects mitigated this decrease: (i) the consumption of customers who discontinued use of self-production and started using the distribution power, and (ii) the migration of 14 clients (three in 4Q15 and 11 in 1Q16) to the free market. Excluding these effects, the reduction would be 6.4%. EDP Escelsa: reduction of 26.0 % reflects the stoppage of an important client of the mineral extraction industry, influenced by the accident in the city of Mariana, which represented about 28% of the segment in 2015. Noteworthy is also the migration 11 clients (one in 2Q15, two in the 4Q15 and eight in 1Q16) to the free market, the connection of a new client (3Q15) and the increase of the "Energy Provider" (+ 396.2%), due to the partial consumption of Santa Maria on this type of contract (after their disqualification in the category of "Supply" by ANEEL from 2016 after exceed 500 GWh). Excluding these effects, the reduction would be 2.9%.

The volume of energy sold reached 3,274 GWh, increase of 42.1% when compared to 2,305 GWh 1Q15. This increase is due to the accounting of Pecém I TPP's volume that is been considered since May 2015, date that the Company started to consolidate the asset.

1. Source: IBGE. Monthly Research of Industry - February, 2016; 5 Source: IBGE. Monthly Research of Industry - February, 2016; 6 Source: IBGE. Monthly Research of Industry - February, 2016;

Excluding the volume of Pecém I TPP, and considering only the energy sold by hydro's of the group by the consolidation method, the volume of energy decreased 16.3%. The difference is due to three reasons: (i) sale of Pantanal Energética, whose closing took place on January 29, 2016; (ii) closure of Enerpeixe's contracts on January 31, 2016, being 31 MW remaining intended to hedge strategy of the Company and; (iii) seasonal adjustment effect and short-term operations in 2015.

Considering the availability of Pecém I TPP, in both periods, and 50% of the Jari HPP (237 GWh), the volume of the group reached 3,506 GWh in the quarter, increase of 9.5%.

Bellow we present the chart with seasonality strategy of energy sold by hydro power plants in 2015 and 2016, following the criteria of consolidation.

2015 2016

2015 2016 (e)

2,305

1,930

2,014 1,9351,919

1,8101,856

28%

1,699

26%

25%

23%

25% 25%

24%

23%

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

*Estimate values for 2Q, 3Q and 4Q of 2016.

The average GSF presented in the quarter was 87.5%, representing an exposure of 264 GWh, excluding the impact of Jari HPP, the average spot prices of R$ 34.6/MWh (SE/Central-Western submarket).

The volume of energy traded reached 2,556 GWh, stable when compared to 2,514 GWh traded in 1Q15. Although the higher volatility scenario caused by the PLD decrease and, consequently, higher liquidity during the period, there was not increase in the volume traded.