EDP Energias do Brasil : Guidance 1Q18 - Market Release

São Paulo, April 17th, 2018 - EDP Energias do Brasil S.A. ("EDP" or "Company") (B3: ENBR3) releases the electricity market data related to its business unities, for the first quarter of 2018 ("1Q18").

The volume of energy distributed in the quarter increased, being +3.6% in EDP São Paulo and +0.4% in EDP

Espírito Santo, resulting in a total increase of +2.3% in EDP Distribution, having as a highlight 3.1% growth in the Industrial segment and 2.1% in the Commercial segment.

1Q18
Residential	1.583.090	1.571.722
Industrial	2.666.316	2.586.431
Free	2.196.488	2.106.858
Captive	469.828	479.573
Commercial	1.110.587	1.087.331
Free	261.626	239.415
Captive	848.961	847.915
Rural	218.668	228.666
Others	506.368	487.585
Permissionary	12.262	11.598
ConcessionariesGeneration	119.999	104.668
Total Energy Distributed	6.217.291	6.078.001
EDP São Paulo
Residential	933.652	919.963
Industrial	1.743.450	1.678.026
Free	1.424.792	1.360.561
Captive	318.658	317.465
Commercial	642.601	621.330
Free	149.526	135.648
Captive	493.075	485.681
Rural	21.110	20.749
Others	278.277	272.054
Permissionary	12.262	11.598
ConcessionariesGeneration	79.626	58.773
Total Energy Distributed	3.710.978	3.582.492
EDP Espírito Santo
Residential	649.437	651.760
Industrial	922.866	908.405
Free	771.697	746.297
Captive	151.170	162.108
Commercial	467.986	466.001
Free	112.100	103.767
Captive	355.886	362.234
Rural	197.558	207.916
Others	228.092	215.531
ConcessionariesGeneration	40.373
Total Energy Distributed	2.506.312

EDP Distribution
Volume (MWh)
1Q17	Var	2018	Var
0,7%	2.888.730	2.847.037	1,5%
3,1%	24.373	24.106	1,1%
4,3%	404	354	14,1%
-2,0%	23.969	23.752	0,9%
2,1%	253.672	247.677	2,4%
9,3%	322	253	27,3%
0,1%	253.350	247.424	2,4%
-4,4%	195.721	190.567	2,7%
3,9%	27.362	27.635	-1,0%
5,7%	2	2	0,0%
14,6%	26	26	0,0%
2,3%	3.389.886	3.337.050	1,6%
1,5%	1.687.292	1.656.171	1,9%
3,9%	13.080	12.668	3,3%
4,7%	280	250	12,0%
0,4%	12.800	12.418	3,1%
3,4%	129.891	124.555	4,3%
10,2%	169	136	24,3%
1,5%	129.722	124.419	4,3%
1,7%	7.917	7.953	-0,5%
2,3%	13.744	13.998	-1,8%
5,7%	2	2	0,0%
35,5%	8	8	0,0%
3,6%	1.851.934	1.815.355	2,0%
1.201.438	1.190.866	0,9%
11.293	11.438	-1,3%
124	104	19,2%
11.169	11.334	-1,5%
123.781	123.122	0,5%
153	117	30,8%
123.628	123.005	0,5%
187.804	182.614	2,8%
13.618	13.637	-0,1%
18	18	0,0%
1.537.952	1.521.695	1,1%

-0,4% 1,6% 3,4% -6,7% 0,4% 8,0% -1,8% -5,0% 5,8%

Consumers (unit)

2017

45.896 2.495.509

-12,0% 0,4%

The increase is a result of: (i) the recovery of economic activity in both states; (ii) 4.3% growth in industrial production1 in the country; (iii) lower inflation rates2; (iv) the reduction in interest rates3; as well as (v) the improvement in income4 and the positive expectation regarding the recovery of the labor market5.

There was an increase of 18% in the number of free consumers in the last 12 months, being 61 consumers in EDP São Paulo and 54 consumers in EDP Espírito Santo, due to the migration of consumers from the captive market to the free market, despite the trend of reduction in migrations due to the increasing trajectory of the PLD (Price for Settlement of Differences).

EDP São Paulo: increase of 3.6%, driven by the progress of the industrial segment consumption (+3.9%) and commercial segment consumption (+3.4%), as well as the expansion in number of consumers (+ 2.0%).

•  Residential: 1.5% increase due to the expansion in number of consumers (+1.9%) and the highest number of average billing days (+1.4 days for low voltage consumers).

•  Commercial: 3.4% increase, reflecting a recovery in retail trade, with a 7.3% increase in sales6, positively impacted by the expansion in number of consumers (+4.3%) and the highest number of average billing days (+2.0 days for medium and high voltage consumers and +1.4 days for low voltage consumers).

•  Industrial: 3.9% increase due to the resumption of the state's industrial activity, which expanded by 6.2%7 in the two months (in the state), driven by the production of motor vehicles. In the quarter, 21 of the 26 branches of industrial activity located in the concession area showed an increase in the electric energy consumption, with emphasis on metallurgy (+15.3%), motor vehicles (+11.1%), rubber and plastic (+9.0%) and non-metallic minerals (+6.4%). The industrial class was also positively impacted by the expansion in number of consumers (+3.3%).

•  Others (public entities, public lighting, public services and own consumption): increase of 2.3% due to the change in the measurement schedule of a set of public service class consumers.

EDP Espírito Santo: 0.4% increase, driven by the industrial segment growth of (+1.6%) and the expansion in number of consumers (+1.1%).

•  Residential: 0.4% reduction, reflecting milder temperatures recorded in the state (-0.6°C in Vitória) and higher volume of precipitation (+261mm in Vitória).

1 Source: Brazilian Institute of Geography and Statistics - IBGE. Monthly Survey of Industry. February/2018.

2 The Extended National Consumer Price Index (IPCA), in the last twelve months fell to 2.68%, after registering 2.84% in the immediately previous

12 months. Source: Brazilian Institute of Geography and Statistics - IBGE. National System of Consumer Price Indexes - IPCA and National Consumer Price Index (INPC) - March/2018.

3 Selic rate of 6.5% p.y. after the 12th consecutive reduction. Source: Central Bank of Brazil. SELIC Target - March/2018.

4 Increase of 2.1% in the average real income from people ≥ than 14 years old in the mobile quarter of December, 2017 to February, 2018, when compared to the same period of the previous year. Brazilian Institute of Geography and Statistics - IBGE. Continuous National Home Sample Research - Mobile Quarter from December, 2017 to February, 2018.

5 The Fear of Unenployment Index was 63.8 points by the end of March, 2018, a decrease of 2 points when compared to the number registered in the previous research (December). Source: National Industry Confederation - CNI. CNI Index: Fear of Unenployment & Life Satisfaction. March/2018. 6 Growth of 7.3% in the sales movement in the accumulated quarter when compared to the same period of 2017. Source: Serasa Experian. Serasa Experian Trade Activity Index - Brazil. March/2018.

7 Source: IBGE. Monthly Survey of Regional Industry. February/2018.

•  Commercial: 0.4% increase, reflecting milder temperatures recorded and higher volume of precipitation that overcame the resumption of the economic activity.

•  Industrial: 1.6% increase, reflecting the increase in energy consumption of consumers in the pulp and paper sectors (+203.0%) and mineral extraction (+4.1%).

•  Rural: 5.0% reduction due to the impact of higher precipitation volume (+277.4 mm in the north region of the state), reducing the consumption of electric energy for irrigation. The result was mitigated by the expansion in number of consumers (+2.8%).

•  Others (public entities, public lighting, public services and own consumption): 5.8% increase, reflecting the growth in public lighting class consumption (+9.9%).

The Company has been implementing portfolio protection measures to minimize the impacts of the GSF and the fluctuation of the

Spot Price value since 2017 through the management of uncontracted energy and short-term contracts. The Company ended the quarter with 16% of its energy hedged to 2018.

27%

1Q

1Q17

1Q18

2Q

Jari, Cachoeira Caldeirão and São Manoel HPP'sTotal TPP

2017

3Q 2018

4Q

Total HPP's

- Hydroelectric Generation

The volume of energy sold from hydroelectric plants, according to the consolidation criteria, was 1,601 GWh, a decrease of 8.0%, reflecting the lower contracted energy volume in Enerpeixe (-80 MWh), Santa Fé (-32 MWh) and Energest (-28 MWh), given the Seasonality strategy adopted by the Company for 2018.

In the quarter, there was average secondary energy of 112.6%, equivalent to 187 GWh8 to the average Spot Price of R$ 196.0/MWh (SE/Central-Western submarket).

The non-consolidated assets9 had a volume of energy sold of 568 GWh, an increase of 50.1%, due to the start-up of the first 3

Generation Units of São Manoel (+192 MWh).

- Thermal Generation

In the quarter, the average availability of the Plant was 97.53%, exceeding the percentage established in contract of 90.14% and confirming the operational improvement trajectory. The volume reached 1,329 GWh, stable when compared to 1Q17.

8 Excluding the impact of Jari, Cachoeira Caldeirão and São Manoel HPPs.

9 According to 50% participation of the Company in Jari and Cachoeira Caldeirão HPP's and 33.33% in São Manoel HPP.

The volume of energy commercialized amounted 4,086 GWh, an increase of 30.5%, due to: (i) market price volatility ranging from R$ 80.0/MWh to R$ 303.0/MWh, associated with high liquidity of the market that benefited long and short position-making operations; (ii) higher energy allocation of agents for the 1H18, generating an increase in short-term liquidity; (iii) superior energy volume available in the market as a result of energy uncontracted by the distributors through the Surplus and Deficit Compensation Mechanisms - MCSD or bilateral agreements; (iv) increase in the volume of energy sold to the new free consumers, reflecting the migrations of consumers from the captive market to the free market; as well as (v) the energy seasonality auction, used to adjust the energy volume curve of the Commercialization.