ANEEL APPROVES THE 8th PERIODIC TARIFF REVIEW OF EDP ESPÍRITO SANTO

São Paulo, August 06th, 2019 - EDP - Energias do Brasil S.A. ("EDP" or "Company") ("B3: ENBR3") announces to the market that the National Electricity Agency ("ANEEL"), at an ordinary public meeting held on this date, approved the 8th Periodic Tariff Review of EDP Espírito Santo S.A. ("EDP ES" or "Distributor"), to be applied from August 07th, 2019.

When compared to the current tariff, the average effect to be notice by consumers will be -4.84 %, being -3.22 % to high and medium voltage consumers and -5.56 % to low voltage consumers.

In the Periodic Tariff Review process, which occurs every three years for EDP ES, ANEEL recalculates the distributor's manageable regulatory costs (Component B), which includes: (i) Administration, Operation and Maintenance Costs, and (ii) the Annual Asset Costs. Non-Manageable Costs (Component A), which include energy purchased from generators, energy transportation, sector charges and financial adjustments, are based on projections for the following twelve months, as well as price changes in the previous twelve months.

The X-Factor is calculated based on the "Pd" (Gains of Productivity) and "T" (Trajectory for Operational Costs Adequacy) components, which will last until the next Tariff Review, in addition to the "Q" (Quality Incentive) component, recalculated for each tariff process, with the values being approved in:

  • "Pd": 1.12%; "T": -1.05%; "Q": -0.28%.

In the Manageable Costs composition, the following components stand out: Capital Remuneration and Regulatory Reintegration Quota, derived from the homologated Regulatory Remuneration Asset Base. Gross Remuneration Asset Base was set at R$ 4.198 billion and Net Remuneration Asset Base was set at R$ 2.581 billion.

The regulatory index defined by ANEEL for Technical Losses for the next cycle is 7.06% over the injected energy. For Low Voltage Non-Technical Losses, the regulatory trajectory will reach 9.58% in 2022, considering the value set for the first year of 10.74%.

The adjustment of financial items recognized by ANEEL in this process was +R$ 187.0 million, referring to the difference between the approved non-manageable costs (energy, transportation and charges) and those actually incurred by EDP ES in the 2018-2019 tariff period, and the future costs forecast.

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Composition of 2019 Tariff Repositioning

Description

Sector Charges

Transport

Electricity Purchase

Total Component A

Administration, Operation and Maintenance Costs Annual Asset Costs

Total Component B

Pd X-Factor (Productivity Index of Component B) Q X-Factor (Quality Incentive Mechanism)

  1. X-Factor(Operating Cost Adjustment Index) Demand Override Revenue and Other Revenues Adjusted Component B
    Required Revenue (Component A + Component B) Financial Components
    Average Effect to be Notice by Consumers

Result

R$ 521,555,076.03 R$ 364,284,994.37 R$ 1,575,080,280.89

R$ 2,460,920,351.29

R$ 465,276,164.19 R$ 569,909,534.12

R$ 1,035,185,698.30

1.12% -0.28%-1.05%

-R$ 47,586,277.46

R$ 978,928,506.05

R$ 3,439,848,857.34

R$ 187,026,783.66

-4.84%

Miguel Nuno Simões Nunes Ferreira Setas

Diretor Presidente e de Relações com Investidores

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Disclaimer

EDP - Energias do Brasil SA published this content on 06 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 August 2019 21:44:00 UTC