Company Quick10K Filing
CPFL Energy
20-F 2019-12-31 Filed 2020-04-24
20-F 2018-12-31 Filed 2019-04-22
20-F 2017-12-31 Filed 2018-04-24
20-F 2016-12-31 Filed 2017-04-17
20-F 2015-12-31 Filed 2016-04-15
20-F 2014-12-31 Filed 2015-04-17
20-F 2013-12-31 Filed 2014-04-04
20-F 2012-12-31 Filed 2013-04-17
20-F 2011-12-31 Filed 2012-03-30
20-F 2010-12-31 Filed 2011-06-06
20-F 2009-12-31 Filed 2010-04-05

CPL 20F Annual Report

Item 17 £ Item 18 £
Item 1. Identity of Directors, Senior Management and Advisers
Item 2. Offer Statistics and Expected Timetable
Item 3. Key Information Selected Financial and Operating Data
Item 4. Information on The Company Overview
Item 4A. Unresolved Staff Comments
Item 5. Operating and Financial Review and Prospects
Item 6. Directors, Senior Management and Employees Directors and Senior Management Board of Directors
Item 7. Major Shareholders and Related Party Transactions Major Shareholders
Item 8. Financial Information Consolidated Statements and Other Financial Information
Item 9. The Offer and Listing Trading Markets
Item 10. Additional Information Memorandum and Articles of Incorporation Corporate Purpose
Item 11. Quantitative and Qualitative Disclosures About Market Risk
Item 12. Description of Securities Other Than Equity Securities American Depositary Shares Fees and Expenses
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications To The Rights of Security Holders and Use of Proceeds
Item 15. Controls and Procedures
Item 16. Item 16A. Audit Committee Financial Expert
Item 16B. Code of Ethics
Item 16C. Principal Accountant Fees and Services Audit and Non‑Audit Fees
Item 16D. Exemptions From The Listing Standards for Audit Committees
Item 16E. Purchases of Equity Securities By The Issuer and Affiliated Purchasers
Item 16F. Change in Registrant's Certifying Accountant
Item 16G. Corporate Governance
Item 16H. Mine Safety Disclosure
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Exhibits
EX-1.1 exhibit_11.htm
EX-3.1 exhibit_31.htm
EX-8.1 exhibit_81.htm
EX-12.1 exhibit_121.htm
EX-12.2 exhibit_122.htm
EX-13.1 exhibit_131.htm
EX-13.2 exhibit_132.htm
EX-15.1 exhibit_151.htm

CPFL Energy Earnings 2012-12-31

Balance SheetIncome StatementCash Flow

20-F 1 cplform20f_2012.htm FORM 20-F 2012 cplform20f_2012.htm - Generated by SEC Publisher for SEC Filing  

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2012
Commission File Number 1-32297

CPFL ENERGIA S.A.

(Exact name of registrant as specified in its charter)

CPFL ENERGY INCORPORATED

The Federative Republic of Brazil

(Translation of registrant’s name into English)

(Jurisdiction of incorporation or organization)

 

Rua Gomes de Carvalho, 1,510, 14th floor - Suite 142
CEP 04547-005 Vila Olímpia - São Paulo, São Paulo
Federative Republic of Brazil
+55 11 3841-8507
(Address of principal executive offices)

Gustavo Estrella
+55 19 3756 8704 –
gustavoestrella@cpfl.com.br
Rodovia Engenheiro Miguel Noel Nascentes Burnier, 1,755, km 2,5 – Parque São Quirino – Campinas, São Paulo - 13088 140
Federative Republic of Brazil
(Name, telephone, e-mail and/or facsimile
number and address of company contact person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class:

Name of each exchange on which registered:

Common Shares, without par value*
American Depositary Shares (as evidenced by American Depositary Receipts), each representing 2 Common Shares

New York Stock Exchange

 

*Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:  None 

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:  None 

As of December 31, 2012, there were 962,274,260 common shares, without par value, outstanding

 


 
 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes    No  £ 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934.

Yes  £   No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes    No  £ 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  £   No  £   N/A 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non‑accelerated filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer    Accelerated Filer  £   Non‑accelerated Filer  £ 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  £   IFRS    Other  £ 

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 £   Item 18  £   

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).

Yes  £   No 



 

 


 
 

 

Table of Contents

    Page 
 
FORWARD-LOOKING STATEMENTS  1 
CERTAIN TERMS AND CONVENTIONS  2 
PRESENTATION OF FINANCIAL INFORMATION  2 
ITEM 1.  Identity of Directors, Senior Management and Advisers  2 
ITEM 2.  Offer Statistics and Expected Timetable  2 
ITEM 3.  Key Information  2 
  Selected Financial and Operating Data  2 
  Exchange Rates  6 
  RISK FACTORS  7 
  Risks Relating to Our Operations and the Brazilian Power Industry  7 
  Risks Relating to Brazil  13 
  Risks Relating to the ADSs and Our Common Shares  14 
ITEM 4.  Information on the Company  15 
  Overview  15 
  Our Strategy  19 
  Our Service Territory  21 
  Distribution  21 
  Purchases of Electricity  24 
  Consumers and Tariffs  25 
  Generation of Electricity  27 
  Electricity Commercialization and Services  35 
  Competition  37 
  Our Concessions and Authorizations  37 
  Properties  41 
  Environmental  41 
  The Brazilian Power Industry  42 
  Principal Regulatory Authorities  42 
  Concessions, Permissions and Authorizations  44 
  The New Industry Model Law  45 
  Tariffs for the Use of the Distribution and Transmission Systems  50 
  Distribution Tariffs  50 
  Government Incentives to the Energy Sector  52 
  Regulatory Charges  52 
  Energy Reallocation Mechanism  53 
ITEM 4A.  UNRESOLVED STAFF COMMENTS  54 
ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS  54 
ITEM 6.  Directors, Senior Management and Employees  85 
ITEM 7.  Major Shareholders and Related Party Transactions  92 
ITEM 8.  Financial Information  95 
ITEM 9.  The Offer and Listing  97 
ITEM 10.  Additional Information  100 
  Material Contracts  106 
ITEM 11.  Quantitative and Qualitative Disclosures about Market Risk  116 
ITEM 12.  Description of Securities Other than Equity Securities  117 
  Reimbursement of Fees and Direct and Indirect Payments by the Depositary  120 
ITEM 13.  Defaults, Dividend Arrearages and Delinquencies  118 
ITEM 14.  Material Modifications to the Rights of Security Holders and Use Of Proceeds  118 
ITEM 15.  Controls and Procedures  118 
  Internal Control over Financial Reporting  118 
ITEM 16.     119 
ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT  119 
ITEM 16B.  CODE OF ETHICS  120 

 


 
 
 
 

 

FORWARD-LOOKING STATEMENTS

This annual report contains information that constitutes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.  Many of the forward-looking statements contained in this annual report can be identified by the use of forward-looking words, such as “believe,” “may,” “aim,” “estimate,” “continue,” “anticipate,” “will,” “intend,” “expect” and “potential,” among others.  Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition.  Those statements appear in a number of places in this annual report, principally under the captions “Item 3.  Key Information—Risk Factors,” “Item 4.  Information on the Company” and “Item 5.  Operating and Financial Review and Prospects.”  We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business.  Many important factors, in addition to those discussed elsewhere in this annual report, could cause our actual results to differ substantially from those anticipated in our forward-looking statements.  These factors include:

·         general economic, political, demographic and business conditions in Brazil and particularly in the markets we serve;

·         changes in applicable laws and regulations, as well as the enactment of new laws and regulations, including those relating to environmental, tax and employment matters;

·         electricity shortages;

·         changes in tariffs;

·         our inability to generate electricity due to water shortages, Transmission outages, operational or technical problems or physical damages to our facilities;

·         potential disruption or interruption of our services;

·         inflation and exchange rate variation;

·         the early termination of our concessions to operate our facilities;

·         increased competition in the power industry markets in which we operate;

·         our inability to implement our capital expenditure plan, including our inability to arrange financing when required and on reasonable terms;

·         changes in consumer demand;

·         existing and future governmental regulations relating to the power industry; and

·         the risk factors discussed under “Item 3.  Key Information—Risk Factors,” beginning on page 7.

Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or to revise them after we distribute this annual report because of new information, future events or other factors.  In light of these limitations, you should not place undue reliance on forward-looking statements contained in this annual report.

 

1

 


 
 

Table of Contents

 

CERTAIN TERMS AND CONVENTIONS

A glossary of electricity industry terms is included in this annual report, beginning on page 123

PRESENTATION OF FINANCIAL INFORMATION

We maintain our books and records in reais.  We prepared our consolidated financial statements included in this annual report in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). 

ITEM 1.                        Identity of Directors, Senior Management and Advisers

Not applicable.

ITEM 2.                        Offer Statistics and Expected Timetable

Not applicable.

ITEM 3.                        Key Information

Selected Financial and Operating Data

The tables below contain a summary of our financial data as of and for years ended December 31, 2012, 2011, 2010 and 2009Our financial data as of December 31, 2012 and 2011 and for the three years in the period ended December 31, 2012 was derived from our consolidated financial statements, which appear elsewhere in this annual report were prepared in accordance with IFRS, as issued by the IASB.  You should read this selected financial data in conjunction with our consolidated financial statements and the related notes included in this annual report. Our financial data as of December 31, 2010 and 2009 and for the year ended December 31, 2009 was derived from our audited financial statements that are not included in this annual report.

 

The following tables present our selected financial data as of and for each of the periods indicated.

2

 


 
 

Table of Contents

 

STATEMENT OF OPERATIONS DATA

 

For the year ended December 31,

 

2012

2012

2011(5)

2010(5)

2009(6)

 

US$

R$

R$

R$

R$

 

(in millions, except per share and per ADS data)

 

 

 

 

 

 

Net operating revenue

7,367

15,055

12,764

12,024

11,358

Cost of electric energy services:

 

 

 

 

 

Cost of electric energy

3,781

7,726

6,221

6,222

6,015

Operating cost

793

1,620

1,158

1,068

1,054

Services rendered to third parties

663

1,356

1,139

1,051

621

Gross operating income

2,130

4,353

4,246

3,683

3,668

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Sales expenses

229

468

364

301

255

General and administrative expenses

358

733

615

443

403

Other operating expense

186

381

216

200

227

Income from electric energy service

1,356

2,771

3,051

2,739

2,783

Financial income (expense):

 

 

 

 

 

Income

352

720

761

566

351

Expense

(728)

(1,488)

(1,387)

(837)

(672)

Net financial income (expenses)

(376)

(768)

(625)

(271)

(321)

Income before taxes

980

2,003

2,425

2,468

2,461

Social contribution

(97)

(199)

(216)

(229)

(207)

Income tax

(268)

(548)

(585)

(625)

(573)

Total taxes

(365)

(747)

(801)

(853)

(780)

Net income

615

1,257

1,624

1,615

1,681

Net income attributable to controlling shareholders

600

1,226

1,572

1,572

1,650

Net income attributable to non-controlling shareholders

15

31

52

22

31

Earnings per share attributable to controlling shareholders(1):

 

 

 

 

 

Basic

0.62

1.27

1.63

1.66

1.72

Diluted

0.62

1.26

1.63

1.66

1.72

Net income per ADS

1.28

2.61

3.26

3.32

3.44

Dividends(2)

536

1,096

1,506

1,260

1,227

Weighted average of number of common shares (in million)

962

962

962

962

960

Dividends per share(1)(2)

0.56

1.14

1.57

1.31

1.28

Dividends per ADS(2)

1.12

2.28

3.13

2.62

2.56

 

3

 


 
 

Table of Contents

 

BALANCE SHEET DATA

 

For the year ended December 31,

 

2012

2012

2011 (5)

2010(5)

2009

 

US$

R$

R$

R$

R$

 

(in millions, except per share and per ADS data)

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

1,213

2,478

2,700

1,563

1,487

Consumers, concessionaires and licensees

1,110

2,269

1,874

1,816

1,753

Other current assets

432

884

789

519

409

Total current assets

2,755

5,630

5,363

3,898

3,649

 

 

 

 

 

 

Noncurrent assets:

 

 

 

 

 

Accounts receivable

79

162

182

196

225

Financial asset of concession

1,146

2,343

1,377

935

674

Property, plant and equipment

4,704

9,612

8,292

5,786

5,213

Intangible Assets

4,666

9,535

8,927

6,585

6,063

Other noncurrent assets

1,856

3,793

3,272

2,657

2,666

Total noncurrent assets

12,452

25,445

22,050

16,159

14,841

Total assets

15,207

31,076

27,413

20,057

18,490

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Short-term debt(3)

1,044

2,133

1,653

2,251

1,364

Other current liabilities

1,498

3,060

2,846

2,177

2,059

Total current liabilities

2,541

5,193

4,499

4,428

3,423

 

 

 

 

 

 

Noncurrent liabilities:

 

 

 

 

 

Long-term debt(3)

7,337

14,993

11,955

7,167

6,548

Other long-term liabilities

1,215

2,482

2,406

1,712

1,983

Noncurrent liabilities

8,552

17,475

14,361

8,879

8,531

Noncontrolling interest

739

1,510

1,485

256

267

Net equity attributable to controlling shareholders

3,375

6,897

7,067

6,494

6,269

Total liabilities and shareholders’ equity

15,207

31,076

27,413

20,057

18,490

 

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Table of Contents

 

OPERATING DATA

 

For the year ended December 31,

 

2012

2011

2010

2009

2008

Energy sold (in GWh):

 

 

 

 

 

Residential

14,567

13,626

12,983

12,346

11,649

Industrial

14,536

14,718

15,413

14,970

16,066

Commercial

8,714

8,140

7,695

7,297

6,938

Rural

2,093

1,991

2,100

2,256

2,449

Public administration

1,220

1,154

1,112

1,074

1,027

Public lighting

1,525

1,495

1,444

1,408

1,355

Public services

1,864

1,823

1,742

1,664

1,634

Own consumption

33

33

33

33

32

Total energy sold to Final Consumers

44,552

42,979

42,522

41,048

41,150

Electricity sales to wholesalers (in GWh)

15,214

14,089

12,737

12,925

9,551

Total consumers (in thousands)(4)

7,176

6,952

6,748

6,567

6,425

Installed capacity (in MW)

2,961

2,644

2,309

1,737

1,704

Assured Energy (in GWh)(7)

12,742

11,678

7,786

7,485

7,134

Energy generated (in GWh)

10,570

9,638

9,142

5,984

6,659

 

                                                               


(1)          Net income per share and Dividends per share are based on the number of shares resulting from the reverse and forward stock split of our common shares as if they had occurred on January 1,  2009.

(2)          “Dividends” represent the total amount of dividends from net income for each period indicated, subject to approval of the shareholders at the general shareholders’ meeting to be held in the following year.

(3)          Short-term debt and Long‑term debt include loans and financing, debentures,  accrued interest on loans, financing and debentures and derivatives.

(4)          Represents active consumers (meaning consumers who are connected to the Distribution Network), rather than consumers invoiced at period-end.

(5)          Includes the effects described in note 2.8 to our consolidated financial statements.

(6)          Our net financial expenses, income taxes and net income reduced in R$12 million, R$4 million and R$8 million respectively, due to the reasons described in note 2.8 to our consolidated financial statements.

(7)          Refers to Assured Energy in GW available at the end-period, multiplied by the number of hours per each year. Further information about commencement of operation of each power plant, see Item 4 – Information on the company.

 

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Table of Contents

 

Exchange Rates

The Central Bank allows the real/U.S. dollar exchange rate to float freely, and it has intervened occasionally to control unstable movements in foreign exchange rates.  We cannot predict whether the Central Bank or the Brazilian government will continue to let the real  float freely or will intervene in the exchange rate market through a currency band system or otherwise.  The real  may substantially depreciate or appreciate against the U.S. dollar.  For more information on these risks, see “Item 3.  Additional Information—Risk Factors—Risks Relating to Brazil.”

The following table provides information on the selling exchange rate, expressed in reais  per U.S. dollar (R$/US$), for the periods indicated.

 

Year-end

Average for period(1)

Low

High

 

(reais  per U.S. dollar)

Year ended:

 

 

 

 

December 31, 2008

2.337

1.833

1.559

2.500

December 31, 2009

1.741

1.990

1.702

2.422

December 31, 2010

1.666

1.759

1.655

1.881

December 31, 2011

1.876

1.671

1.535

1.902

December 31, 2012

2.044

1.958

1.702

2.112

 

                                                               

(1)           Year-end figures represent the average of the month-end selling exchange rates during the relevant period.

 

Month-end

Average for period(1)

Low

High

 

(reais  per U.S. dollar)

Month ended:

 

 

 

 

September 2012

2.031

2.028

2.014

2.039

October 2012

2.031

2.030

2.022

2.038

November 2012

2.107

2.068

2.031

2.107

December 2012

1.876

2.078

2.044

2.112

January 2013

1.988

2.031

1.988

2.047

February 2013

1.975

1.973

1.957

1.989

March 2013

2.014

1.983

1.953

2.019

April (through April 12, 2013)

1.976

1.999

1.974

2.024

                                        


(1)           The figures provided for months in 2012 and 2013, as well as for the month of April up to and including April 12, 2013, represent the average of the selling exchange rates at the close of trading on each business day during such period.

 

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Table of Contents

 

RISK FACTORS

Risks Relating to Our Operations and the Brazilian Power Industry

We are subject to comprehensive regulation of our business, which fundamentally affects our financial performance.

Our business is subject to extensive regulation by various Brazilian regulatory authorities, particularly the National Electric Energy Agency, Agência Nacional de Energia Elétrica (“ANEEL”).  ANEEL regulates and oversees various aspects of our business and establishes our tariffs.  If we are obliged by ANEEL to make additional and unexpected capital investments and are not allowed to adjust our tariffs accordingly, or if ANEEL modifies the regulations related to such adjustment, we may be adversely affected.

In addition, both the implementation of our strategy for growth and our ordinary business may be adversely affected by governmental actions such as changes to current legislation, the termination of federal and state concession programs, creation of more rigid criteria for qualification in public energy auctions, or a delay in the revision and implementation of new annual tariffs.

If regulatory changes require us to conduct our business in a manner substantially different from our current operations, our operations and financial results may be adversely affected.

The regulatory framework under which we operate is subject to legal challenge.

The Brazilian government implemented fundamental changes in the regulation of the power industry under 2004 legislation known as the Lei do Novo Modelo do Setor Elétrico, or New Industry Model Law.  Challenges to the constitutionality of the New Industry Model Law are still pending before the Brazilian Supreme Court.  If all or part of the New Industry Model Law were held to be unconstitutional, there would be uncertain consequences for the validity of existing regulation and the further development of the regulatory framework.  The outcome of the legal proceedings is difficult to predict, but it could have an adverse impact on the entire energy sector, including our business and results of operations.

We are uncertain as to the renewal of our concessions.

We carry out our generation and distribution activities pursuant to concession agreements entered into with the Brazilian Federal Government.  Our concessions range in duration from 16 to 35 years, with the first expiration date in 2015.  Five of our distribution subsidiaries, as well as three Small Hydroelectric Power Plants and six Micro Hydroelectric Power Plants that generate energy exclusively for these distribution subsidiaries, have concessions that expire in July 2015 (originally) and may be renewed for an additional 20 years upon our request but at the discretion of the Federal Government.  In 2012, these five distribution subsidiaries represented 5.6% of net operating revenues of our distribution companies and 5.6% of the energy distributed by these companies.

The Brazilian constitution requires that all concessions relating to public services be awarded through a bidding process.  Under laws and regulations specific to the electric sector, the Federal Government may renew existing concessions for additional periods of up to 30 years without a bidding process, provided that the concessionaire has met minimum performance standards and that the proposal is otherwise acceptable to the Federal Government.  The Federal Government has considerable discretion under the Concessions Law and the concession contracts with respect to renewal of concessions.

Law No. 12,783, of January 11, 2013, defined the conditions for the renewal of generation, transmission and distribution concessions that have been obtained under the conditions specified in articles 17, 19 or 22 of Law No. 9,074 of July, 7, 1995.  These concessions may be extended once at the discretion of the Federal Government, for a period of up to 30 years in order to ensure the continuity and efficiency of the services rendered and low tariffs.  Law No. 12,783/13 provided that renewals that would take place in 2015, 2016 or 2017 could be anticipated to 2012. On October 10, 2012, we applied for the renewal of the concession of our distribution subsidiaries CPFL Santa Cruz, CPFL Jaguari, CPFL Mococa, CPFL Leste Paulista and CPFL Sul Paulista.  These concessions were granted in 1999 for a 16-year period.  The response from the Federal Governement is still pending. We cannot assure that the renewal will be granted, if it will be antecipated or the conditions under which it will be granted.  If these concessions are not renewed or renewed subject to conditions that are unfavorable to us, our revenues could be adversely affected.

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Table of Contents

 

The tariffs that we charge for sales of electricity to captive consumers are determined by ANEEL pursuant to concession agreements with the Brazilian government, so our operating revenues could be adversely affected if ANEEL makes decisions relating to our tariffs that are not favorable to us.

ANEEL has substantial discretion to establish the tariff rates our distribution companies charge our consumers.  Our tariffs are determined pursuant to concession agreements with the Brazilian Federal Government, and in accordance with ANEEL’s regulations and decisions.

Our concession agreements and the Brazilian law establish a mechanism that permits three types of tariff adjustments:  (i) the annual adjustment (“reajuste tarifário anual”), (ii) the periodic revision (“revisão tarifária periódica”) and (iii) the extraordinary revision (“revisão tarifária extraordinária”).  We are entitled to apply each year for the annual adjustment, which is designed to offset some effects of inflation on tariffs and pass through to consumers certain changes in our cost structure that are beyond our control, such as the cost of electricity we purchase from certain sources and certain regulatory charges, including charges for the use of transmission and distribution facilities.  In addition, ANEEL carries out a periodic revision every four or five years that is aimed at identifying variations in our costs as well as setting a factor based on our operational efficiency that will be applied against the index of our ongoing annual tariff adjustments, the objective of which is to share any related gains with our consumers.  We are also subject to extraordinary revision of our tariffs that may affect (negatively or positively) our results of operations or financial position.

We cannot be sure if ANEEL will establish tariffs at rates that are favorable to us, due to changes in the methods in calculating the periodic revision adjustments.  In addition, to the extent that any of these adjustments are not granted by ANEEL in a timely manner, our financial condition and results of operations may be adversely affected.

On November 22, 2011, ANEEL defined the methodology applicable to the third periodic revision cycle (2011 to 2014) through Resolution No. 457/2011.  For the third cycle, ANEEL has designated a new method of recognizing which costs we may pass through to our consumers.  In addition, ANEEL approved the new methodology for calculating the TUSD and other electricity tariffs, under which Distributors assume all market risk resulting from tariff indicators.  As compared to the previous tariff cycle, this new methodology negatively impacts our financial condition and results of operations.

We could be penalized by ANEEL for failing to comply with the terms of our concession agreements, which could result in fines, other penalties and, depending on the gravity of the non‑compliance, in our concessions being terminated.

ANEEL may impose penalties on us in the event that we fail to comply with any provision of our concession agreements.  Depending on the gravity of the non‑compliance, these penalties could include the following:

·         warning notices;

·         fines per breach of up to 2.0% of the revenues from the relevant concession in the year ended immediately prior to the date of the relevant breach;

·         injunctions related to the construction of new facilities and equipment;

·         restrictions on the operation of existing facilities and equipment;

·         intervention by ANEEL in the management of the concessionaire; and

·         termination of the concession.

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In addition, the Brazilian government has the power to terminate any of our concessions by means of expropriation for reasons related to the public interest.

We are currently in compliance with all of the material terms of our concession agreements.  However, we cannot assure that we will not be penalized by ANEEL for breaching our concession agreements or that our concessions will not be terminated in the future.  The compensation to which we are entitled upon expiration or early termination of our concessions may not be sufficient for us to realize the full value of certain assets.  In addition, if any of our concession agreements is terminated for reasons attributable to us, the effective amount of compensation by the granting authorities could be materially reduced through the imposition of fines or other penalties.  Accordingly, the imposition of fines or penalties on us or the termination of any of our concessions could have a material adverse effect on our financial condition and results of operations.

We may not be able to fully pass through the costs of our electricity purchases and, to meet demand, we could be forced to enter into short‑term agreements to purchase electricity at prices substantially higher than under our long‑term purchase agreements.

Under the New Industry Model Law, an electricity Distributor must contract in advance, through public bids, for 100% of its forecasted electricity needs for its distribution concession areas.  Over- or under-forecasting demand can have adverse consequences.  If our forecasted demand is incorrect and we purchase less or more electricity than we need, we may be prevented from fully passing through the costs of our electricity purchases and we may also be forced to enter into short‑term agreements to purchase electricity at prices substantially higher than under our long‑term purchase agreements.  For instance, the New Industry Model Law provides, among other restrictions, that if our forecasts fall significantly short of actual electricity demand, we may be forced to make up the shortfall with shorter term electricity purchase agreements.  If our acquisitions of electricity in the public auctions are above the Annual Reference Value (Valor Anual de Referência), as defined in “Item 4.  Information on the Company—The New Industry Model Law—The Annual Reference Value,” established by the Brazilian government, we may not be able to fully pass through the costs of our electricity purchases.  Our forecasted electricity demand may prove inaccurate, including as a result of consumers moving between the different markets (regulated and free).  If there are significant variations between our electricity needs and the volume of our electricity purchases, our results of operations may be adversely affected.  See “Item 4.  Information on the Company—The Brazilian Power Industry—The New Industry Model Law.”

We generate a significant portion of our operating revenues from consumers that qualify as Free Consumers, which are allowed to seek alternative electricity suppliers.  We may face other types of competition that could adversely affect our market share and revenues.

Within our concession areas, other electricity suppliers are permitted to compete with us in offering electricity to certain consumers that qualify as Free Consumers, to whom our distribution subsidiaries may supply electricity only at regulated tariffs.  These consumers qualified as Free Consumers may elect to opt out of our regulated distribution system upon the expiration of their contracts with us, by providing six months’ prior notice, or by providing a year’s prior notice if their contract has no fixed termination date.  At December 31, 2012, we supplied energy to 47 consumers qualified as Free Consumers, which accounted for approximately 1.7% of our net operating revenues and approximately 2.4% of the total volume of electricity sold by our Distributors during 2012.  In addition, other consumers meeting certain criteria may become Free Consumers if they move to energy from renewable energy sources, such as Small Hydroelectric Power Plants or biomass. At December 31, 2012 we had a total of 1,723 potentially Free Consumers which accounted for approximately 12.2% of our net operating revenues and approximately 14.6% of the total volume of electricity sold by our distribution companies during 2012.

Additionally, it is possible that our large industrial clients could be authorized by ANEEL to generate electric energy for own consumption or sale to other parties, in which case they may obtain an authorization or concession for the generation of electric power in a given area, which could adversely affect our results of operations.

 

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Our operating results depend on prevailing hydrological conditions.  Poor hydrological conditions may require a higher dispatch of thermoelectric generation in Brazilian electric system, which may affect our results of operations.

We are dependent on the prevailing hydrological conditions in the geographic region in which we operate.  In 2012, according to data from the ONS, approximately 86% of Brazil’s electricity supply came from Hydroelectric Facilities.  Our region is subject to unpredictable hydrological conditions, with non‑cyclical deviations from average rainfall.  In order to compensate for poor hydrological conditions and to maintain the reservoirs security levels and electricity supply level, the ONS may dispatch Thermoeletric Power Plants, including ours. The replacement of hydroelectricity generation with thermoelectric generation may lead to adverse results in our generation segment as hydro power plants, including ours, may receive in the Energy Reallocation Mechanism, Mecanismo de Realocação de Energia (“MRE”) an amount of energy lower than their assured energy. This deficit of energy will represent an expense valued at the electricity spot price, exposing the hydrogenerator to spot price risk.

For the distribution segment, the additional costs of thermoelectric generation will be passed through tariffs in the following annual adjustments or periodical review, as permitted by the regulation. However, there may be a mismatch of costs and revenues for the distribution company, affecting its cash flow at the short term, since distribution companies have to pay the additional thermoelectric cost instantly and this cost will only integrate rates after the following annual adjustments or periodical review.

The impact of an electricity shortage and related electricity rationing, as in 2001 and 2002, may have a material adverse effect on our business and results of operations.

During the low rainfall period of 2000 and 2001, the Brazilian government instituted the Rationing Program, a program to reduce electricity consumption that was in effect from June 1, 2001 to February 28, 2002.  The Rationing Program established limits for energy consumption for industrial, commercial and residential consumers, which ranged from a 15.0% to a 25.0% reduction in energy consumption.  If Brazil experiences another electricity shortage (a condition which might happen and we are not able to control or anticipate), the Brazilian government may implement similar or other policies in the future to address the shortage that could have a material adverse effect on our financial condition and results of operations.  A recurrence of poor hydrological conditions that result in a low supply of electricity to the Brazilian market could cause, among other things, the implementation of broad electricity conservation programs, including mandated reductions in electricity consumption.  We cannot assure you that periods of severe or sustained below-average rainfall will not adversely affect our financial results.

Construction, expansion and operation of our electricity generation and distribution facilities and equipment involve significant risks that could lead to lost revenues or increased expenses.

The construction, expansion and operation of facilities and equipment for the generation and distribution of electricity involves many risks, including:

·         the inability to obtain required governmental permits and approvals;

·         the unavailability of equipment;

·         supply interruptions;

·         work stoppages;

·         labor unrest;

·         social unrest;

·         weather and hydrological interferences;

·         unforeseen engineering and environmental problems;

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·         increases in electricity losses, including technical and commercial losses;

·         construction and operational delays, or unanticipated cost overruns;

·         the inability to win electricity auctions promoted by ANEEL; and

·         unavailability of adequate funding.

If we experience these or other problems, we may not be able to generate or distribute electricity in amounts consistent with our projections, which may have an adverse effect on our financial condition and results of operations.

We are subject to environmental and health regulations that may become more stringent in the future and may result in increased liabilities and increased capital expenditures.

Our distribution and generation activities are subject to comprehensive federal and state legislation as well as supervision by Brazilian governmental agencies that are responsible for the implementation of environmental and health laws and policies.  These agencies could take enforcement action against us for our failure to comply with their regulations.  These actions could include, among other things, the imposition of fines and revocation of licenses.  It is possible that enhanced environmental and health regulations will force us to allocate capital expenditures to compliance, and consequently, divert funds from planned investments.  Such a diversion could have a material adverse effect on our financial condition and results of operations.

If we are unable to complete our proposed capital expenditure program in a timely manner, the operation and development of our business may be adversely affected.

We plan to invest approximately R$2,062 million in our generation activities from conventional and renewable sources, and R$5,981 million in our distribution activities during the period from 2013 through 2017.  Our ability to carry out this capital expenditure program depends on a variety of factors, including our ability to charge adequate tariffs for our services, our access to domestic and international capital markets and a variety of operating, regulatory and other contingencies.  We cannot be certain that we will have the financial resources to complete our proposed capital expenditure program, and failure to do so could have a material adverse effect on the operation and development of our business.

We are strictly liable for any damages resulting from inadequate provision of electricity services, and our contracted insurance policies may not fully cover such damages.

Under Brazilian law, we are strictly liable for direct and indirect damages resulting from the inadequate provision of electricity distribution services.  In addition, our distribution facilities may, together with our generation utilities, be held liable for damages caused to others as a result of interruptions or disturbances arising from the generation, transmission or distribution systems, whenever these interruptions or disturbances are not attributed to an identifiable member of the ONS.  We cannot assure you that our contracted insurance policies will fully cover damages resulting from inadequate rendering of electricity services, which may have an adverse effect on us.

We may not be able to create the expected benefits and return on investments from the energy generation businesses we recently entered into.

We have entered into a number of energy generation businesses (wind, thermoelectric and biomass energy) with substantial capital investments.  We have few operating history and track record in these industries and may not be able to foster the synergies with our traditional businesses.  In addition:

·         In the biomass business, we may suffer from a lack of sugar cane (a necessary input for the generation of this type of energy) in the market.  In addition, we depend to a certain extent on the performance of our partners in these projects in the construction and operation of the plants;

·         Among the significant uncertainties and risks with respect to our wind farms under construction, we have financial risk associated with the difference between the energy we generate and the energy contracted through the reserve energy contract (Contrato de Energia de Reserva – CER), in which we bear the risk of divergences arising from:  (a) wind intensity and duration different from that contemplated in the study phase of the project; (b) delay in commencement of operations of the wind farms under construction; and (c) unavailability of wind turbines at levels above the performance benchmarks;

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If these generation plants are not able to (i) generate the energy contracted by our clients, or (ii) generate the energy necessary to supply any clients in the Free Market, and (iii), the energy provided to us is insufficient to supply the contracted demand, we may be obliged to buy the shortfall in the spot market, in which the price per MWh is usually more volatile and may be higher than our price, resulting in an adverse effect on us.  See “Item 4.  Information on the Company—The Brazilian Power Industry—The New Industry Model Law.”

Our growth, operating results and financial condition may be negatively affected by one or more of the above factors.

We are controlled by a few shareholders acting together, and their interests could conflict with yours.

As of December 31, 2012, VBC Energia S.A./ESC Energia S.A./Camargo Corrêa S.A., PREVI/BB Carteira Livre I FIA and Energia São Paulo FIA/Bonaire Participações S.A. owned 25.64%, 31.02% and 12.62%, respectively, of our outstanding common shares.  These entities are parties to a shareholders’ agreement, pursuant to which they share the power to control us.  Our controlling shareholders may take actions that could be contrary to your interests, and our controlling shareholders will be able to prevent other shareholders, including you, from blocking these actions.  In particular, our controlling shareholders control the outcome of decisions at shareholders’ meetings, and they can elect a majority of the members of our Board of Directors.  Our controlling shareholders can direct our actions in areas such as business strategy, financing, distributions, acquisitions and dispositions of assets or businesses.  Their decisions on these matters may be contrary to the expectations or preferences of our noncontrolling shareholders, including holders of our ADSs.  See “Item 7.  Major Shareholders and Related Party Transactions—Shareholders’ Agreement.”

We are exposed to increases in prevailing market interest rates, as well as foreign exchange rate risk.

As of December 31, 2012, approximately 85.8% of our total indebtedness was denominated in reais  and indexed to Brazilian money-market rates or inflation rates, or bore interest at floating rates.  The remaining 14.2% of our total indebtedness was denominated in U.S. dollars and substantially subject to currency swaps that converted these obligations into reais.  In addition, the costs of electricity purchased from the Itaipu power plant (“Itaipu”) are indexed to the U.S. dollar exchange variation.  Our tariffs are adjusted annually in order to contemplate the losses or gains’ effects from such electricity acquisition.  Accordingly, if these indexation rates rise or the U.S. dollar/real  exchange rates appreciate, our financing expenses will increase.

Our indebtedness and debt service obligations could adversely affect our ability to operate our business and make payments on our debt.

As of December 31, 2012, we had a debt of R$17,126 million.  Our indebtedness increases the possibility that we may be unable to generate cash sufficient to pay when due the principal, interest or other amounts due in respect of our indebtedness.  In addition, we may incur additional debt from time to time to finance strategic acquisitions, investments, joint ventures or for other purposes, subject to the restrictions applicable under our existing indebtedness.  If we incur additional debt, the risks associated with our leverage would increase.

We may acquire other companies in the electricity business, as we have in the past, and these acquisitions could increase our leverage or adversely affect our consolidated performance.

We regularly analyze opportunities to acquire other companies engaged in activities along the entire electricity generation, transmission and distribution chain.  If we do acquire other electricity companies, it could increase our leverage or reduce our profitability.  Furthermore, we may not be able to integrate the acquired company’s activities and achieve the economies of scale and expected efficiency gains that often drive such acquisitions, and failure to do so could harm our financial condition and results of operations.

 

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Risks Relating to Brazil

The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy.  This involvement, as well as Brazilian political and economic conditions, could adversely affect our business and the trading price of our ADSs and our common shares.

The Brazilian government frequently intervenes in the Brazilian economy and occasionally makes significant changes in policy and regulations.  The Brazilian government’s actions to control inflation and other policies and regulations have often involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency devaluations, capital controls and limits on imports.  Our business, financial condition and results of operations may be adversely affected by changes in policy or regulations at the federal, state or municipal levels involving or affecting factors such as:

·         interest rates;

·         monetary policy;

·         currency fluctuations;

·         inflation; 

·         liquidity of domestic capital and lending markets;

·         tax policies;

·         changes in labor laws;

·         regulatory environment of our sector;

·         exchange rates and exchange controls and restrictions on remittances abroad, such as those that were briefly imposed in 1989 and early 1990; and

·         other political, social and economic developments in or affecting Brazil.

We cannot assure you that the Brazilian government will continue with the current economic policies, or that any changes implemented by the Brazilian government will not, directly or indirectly, affect our business and results of operations.

Exchange rate instability may adversely affect our financial condition and results of operations and the market price of the ADSs and our common shares.

The Brazilian currency has during the last decades experienced frequent and substantial variations in relation to the U.S. dollar and other foreign currencies.  In the context of the crisis in the global financial markets after mid-2008, the real  depreciated against the U.S. dollar, reaching R$2.337 per US$1.00 at year-end 2008.  During 2009, the real  appreciated 25.5% against the U.S. dollar in the context of the economic recovery, reaching R$1.741 per US$1.00 at year-end 2009.  On December 31, 2011 and 2012, the exchange rate of the real  against the U.S. dollar was R$1.876 and R$2.044 per US$1.00, respectively.  On April 12, 2013, the exchange rate was R$1.976 per US$1.00.  We cannot assure that the real  will not depreciate against the U.S. dollar in the future.

Depreciation of the real  increases the cost of servicing our foreign currency denominated debt and the cost of purchasing electricity from the Itaipu power plant, a Hydroelectric Facility that is one of our major suppliers and that adjusts electricity prices based in part on its U.S. dollar costs.  Depreciation of the real  against the U.S. dollar could create inflationary pressures in Brazil and cause increases in interest rates, which could negatively affect the growth of the Brazilian economy as a whole and harm our financial condition and results of operations, curtail access to foreign financial markets and may prompt government intervention, including recessionary governmental policies.  Depreciation of the real  against the U.S. dollar can also lead to decreased consumer spending, deflationary pressures and reduced growth in the economy as a whole.  On the other hand, appreciation of the real  relative to the U.S. dollar and other foreign currencies could lead to a deterioration of the Brazilian foreign exchange current account, as well as dampen export-driven growth.  Depending on the circumstances, either depreciation or appreciation of the real  could materially and adversely affect the growth of the Brazilian economy and our business, financial condition and results of operations.

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Depreciation of the real  also reduces the U.S. dollar value of distributions and dividends on the ADSs and the U.S. dollar equivalent of the market price of our common shares and, as a result, the ADSs.

Government efforts to combat inflation may hinder the growth of the Brazilian economy and could harm our business.

Brazil has in the past experienced extremely high rates of inflation and has therefore followed monetary policies that have resulted in one of the highest real  interest rates in the world.  Between 2006 and 2012, the base interest rate in Brazil (“SELIC”) varied between 17.25% p.a. and 7.25% p.a.  Inflation and the Brazilian government’s measures to fight it, principally through the Central Bank, have had and may in future have significant effects on the Brazilian economy and our business.  Tight monetary policies with high interest rates may restrict Brazil’s growth and the availability of credit.  Conversely, more lenient government and Central Bank policies and interest rate decreases may trigger increases in inflation, and, consequently, volatility in growth and the need for sudden and significant interest rate increases, which could negatively affect our business.  In addition, if Brazil again experiences high inflation, we may not be able to adjust the rates we charge our consumers to offset the effects of inflation on our cost structure.

Developments and the perception of risk in other countries, including the United States and emerging market countries, may adversely affect the market price of Brazilian securities, including our ADSs and our common shares.

The market value of securities of Brazilian issuers is affected by economic and market conditions in other countries, including the United States, the European Union and emerging market countries.  The 2008 global financial crisis has generated significant consequences, such as stock and credit market volatility, unavailability of credit, higher interest rates, a general economic slowdown, volatile exchange rates and inflationary pressure.  Even though the world economy and the financial and capital markets had been recovering, the conditions of the global markets again deteriorated in by the end of 2011.  European countries encountered serious fiscal problems, including high debt levels that impair growth and increase the risk of sovereign default.  In 2012, there were threats of some countries leaving the block, but this risk was contained by the EU and European Central Bank. At the same time, the United States faced significant political conflicts due to the lack of a decision regarding the continuation of incentives of social programs; the suspension of these incentives would result in a strong economic slowdown. In this context of uncertainty, the Chinese economy also faced a slowdown in 2012, demanding the Chinese government to intervene on public investment levels, aiming to avoid an abrupt hard landing..  Although economic conditions in those countries may differ significantly from economic conditions in Brazil, investor reactions to developments in other countries may have an adverse effect on the market value of securities of Brazilian issuers.  Crises in the United States, the European Union or emerging market countries may diminish investor interest in securities of Brazilian issuers, including ours.  This could adversely affect the trading price of the ADSs or our common shares, and could also make it more difficult for us to access the capital markets and finance our operations in the future on acceptable terms or at all.

Risks Relating to the ADSs and Our Common Shares

Holders of our ADSs may encounter difficulties in the exercise of voting rights.

Holders of our common shares are entitled to vote on shareholder matters.  You may encounter difficulties in the exercise of some of your rights as a shareholder if you hold our ADSs rather than the underlying common shares.  For example, you are not entitled to attend a shareholders’ meeting, and you can only vote by giving timely instructions to the depositary in advance of the meeting.

 

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If you surrender your ADSs and withdraw common shares, you risk losing the ability to remit foreign currency abroad and certain Brazilian tax advantages.

As an ADS holder, you benefit from the electronic certificate of foreign capital registration obtained by the custodian for our common shares underlying the ADSs in Brazil, which permits the custodian to convert dividends and other distributions with respect to the common shares into non‑Brazilian currency and remit the proceeds abroad.  If you surrender your ADSs and withdraw common shares, you will be entitled to continue to rely on the custodian’s electronic certificate of foreign capital registration for only five business days from the date of withdrawal.  Thereafter, upon the disposition of or distributions relating to the common shares, you will not be able to remit abroad non‑Brazilian currency unless you obtain your own electronic certificate of foreign capital registration or you qualify under Brazilian foreign investment regulations that entitle some foreign investors to buy and sell shares on Brazilian stock exchanges without obtaining separate electronic certificates of foreign capital registration.  If you do not qualify under the foreign investment regulations you will generally be subject to less favorable tax treatment of dividends and distributions on, and the proceeds from any sale of, our common shares.

If you attempt to obtain your own electronic certificate of foreign capital registration, you may incur expenses or suffer delays in the application process, which could delay your ability to receive dividends or distributions relating to our common shares or the return of your capital in a timely manner.  The depositary’s electronic certificate of foreign capital registration may also be adversely affected by future legislative changes.

Holders of ADSs may be unable to exercise preemptive rights with respect to our common shares.

We may not be able to offer our common shares to U.S. holders of ADSs pursuant to preemptive rights granted to holders of our common shares in connection with any future issuance of our common shares unless a registration statement under the Securities Act is effective with respect to such common shares and preemptive rights, or an exemption from the registration requirements of the Securities Act is available.  We are not obligated to file a registration statement relating to preemptive rights with respect to our common shares, and we cannot assure you that we will file any such registration statement.  If such a registration statement is not filed and an exemption from registration does not exist, Deutsche Bank, as depositary, will attempt to sell the preemptive rights, and you will be entitled to receive the proceeds of such sale.  However, these preemptive rights will expire if the depositary does not sell them, and U.S. holders of ADSs will not realize any value from the granting of such preemptive rights.

The relative volatility and illiquidity of the Brazilian securities markets may substantially limit your ability to sell the common shares underlying the ADSs at the price and time you desire.

Investing in securities that trade in emerging markets, such as Brazil, often involves greater risk than investing in securities of issuers in the United States, and such investments are generally considered to be more speculative in nature.  The Brazilian securities market is substantially smaller, less liquid, more concentrated and can be more volatile than major securities markets in the United States.  Accordingly, although you are entitled to withdraw the common shares underlying the ADSs from the depositary at any time, your ability to sell the common shares underlying the ADSs at a price and time at which you wish to do so may be substantially limited.  There is also significantly greater concentration in the Brazilian securities market than in major securities markets in the United States.  The ten largest companies in terms of market capitalization represented 51.8% of the aggregate market capitalization of the BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias & Futuros (“BM&FBOVESPA”), as of December 31, 2012.  The top ten stocks in terms of trading volume accounted for 43.0%, 47.2% and  50.0% of all shares traded on the BM&FBOVESPA in 2012,   2011 and 2010, respectively.

ITEM 4.                        Information on the Company

Overview

We are a corporation (sociedade por ações) incorporated and existing under the laws of Brazil with the legal name CPFL Energia S.A.  Our principal executive offices are located at Rua Gomes de Carvalho, 1,510, 14th floor – Suite 142, Vila Olímpia, CEP 04547-005, in the City of São Paulo, state of São Paulo, Brazil and our telephone number is +55 11 3841-8507.

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We are a holding company that, through our subsidiaries, distributes, generates and commercializes electricity in Brazil.  We were incorporated in 1998 as a joint venture among VBC, 521 Participações S.A. and Bonaire to combine their interests in companies operating in the Brazilian power sector.

We are one of the largest electricity Distributors in Brazil, based on the 40,645 GWh of electricity we distributed to approximately 7.2 million consumers in 2012.  In 2012, our Installed Capacity was 2,961MW.1 We are also involved in building two biomass generation projects and 18 wind farms, through which we expect to increase our Installed Capacity to 3,327 MW¹  once they are completed over the next three years.

We also engage in electricity commercialization, and provide agency services to Free Consumers before the CCEE and other agents, as well as electricity-related services to our affiliates and unaffiliated parties.  In 2012, the total amount of electricity sold by our commercialization subsidiaries was 4,850 GWh and 10,179 GWh to affiliated and unaffiliated parties, respectively.

In 2011 and 2012, the important events in the development of our business were as follows:

·         On April 19, 2011, we entered into an agreement with Energias Renováveis S.A. (“ERSA”) to combine assets and projects relating to renewable energy sources (wind, biomass and Small Hydroelectric Power Plants).  The transaction encompassed:  (i) the transfer of wind, biomass and Small Hydroelectric Power Plants previously owned and operated by CPFL Geração and CPFL Comercialização Brasil S.A. (“CPFL Brasil”) to certain companies, which subsequently transferred the wind, biomass and Small Hydroelectric Power Plants to a holding company, SMITA Empreendimentos e Participações S.A. (“SMITA”); (ii) the establishment of SMITA by CPFL Geração and CPFL Brasil; (iii) the incorporation of SMITA by ERSA, of which we turned out holding 54.5% interest; and (iv) the change of ERSA’s corporate name to CPFL Energia Renováveis S.A. (“CPFL Energias Renováveis”).  CPFL Energias Renováveis’ financial statements have been consolidated in our consolidated financial statements since August 1, 2011.  The transaction was ratified by our shareholders on December 19, 2011.

·         On April 7, 2011, CPFL Energia S.A. entered into a Sale and Purchase Agreement for the acquisition of 100% of the shares of Jantus for R$823 million.  On September 21, 2011, CPFL Energia S.A. assigned the Sale and Purchase Agreement to CPFL Energias Renováveis.  In order to complete the acquisition, our subsidiary CPFL Brasil contributed funds to CPFL Energias Renováveis, of which we now hold 63% interest.  The transaction contemplated the acquisition of:  (i) four wind farms in operation in the state of Ceará with Installed Capacity of 210 MW, and (ii) a portfolio of wind farm projects with total Installed Capacity of 732 MW in the states of Ceará and Piauí, of which 412 MW has already been certified and eligible for participation in the next electricity auctions.  The acquisition was completed on December 19, 2011.

·         On December 29, 2011, through our subsidiary CPFL Energias Renováveis, we acquired all of the shares of Santa Luzia Energética S.A. (“Santa Luzia”), representing 100% of its capital stock for R$132 million through assumption of debts with BNDES.  As a result, we now have Santa Luzia Small Hydroelectric Power Plant, located in the cities of São Domingos and Iguaçu, in the state of Santa Catarina, with Installed Capacity of 28.5 MW.

·         In January, 2012, through our subsidiary CPFL Energias Renováveis, we entered into a Sale and Purchase Agreement for the acquisition of 100% of the shares of Atlântica I Parque Eólico S.A. (“Atlântica I”), Atlântica II Parque Eólico S.A. (“Atlântica II”), Atlântica IV Parque Eólico S.A. (“Atlântica IV”) and Atlântica V Parque Eólico S.A. (“Atlântica V”).  Atlântica I, Atlântica II, Atlântica IV and Atlântica V hold authorizations to produce energy from wind sources as Independent Power Producers for a term of 35 years.  These wind farms are located in the state of Rio Grande do Sul and have aggregate Installed Capacity of 120 MW, all of which have been certified and sold at the auction of alternative sources of energy held on August 2010.  The acquisition was completed on March 23, 2012.


1 Considering CPFL Energia’s stake in each project

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·         In March, 2012, through our subsidiary CPFL Energias Renováveis, we acquired 100% of the biomass electric energy and steam generation assets of SPE Lacenas Participações Ltda., a subsidiary of Usina Açucareira Ester (“Usina Ester”). Around 7 MW average of co-generation energy from Usina Ester were commercialized in the 2007 alternative sources auction (LFA), for a period of 15 years and at an average selling price of R$177 per MWh (as at January 2012). The remaining 2.8 MW of energy was sold on the free market for 18 years. The transfer of control of SPE Lacenas to the subsidiary was conditional upon approval from ANEEL, which was obtained and the acquisition was concluded on October 18, 2012. The total acquisition price of the assets after the adjustments provided for in the contract R$111.5 million, comprising: (i) R$55.2 million paid by the buyer to the sellers; and (ii) assumption of a net debt of R$56.3 million shown in the balance sheet of the acquired company.

·         On June 19, 2012, through our subsidiary CPFL Renováveis, we acquired the total capital stock of BVP S.A., a subsidiary of Bons Ventos Geradora de Energia S.A. (“Bons Ventos”). The total price of the acquisition was R$1,095 million, involving: (i) the payment to the sellers of the amount of R$529 million; (ii) the assumption of net debt in the amount of R$439 million; and (iii) R$128 million for settlement of debentures issued by Bons Ventos Geradora de Energia S.A. Bons Ventos has an authorization granted by ANEEL to exploit the Taíba Albatroz, Bons Ventos, Enacel and Canoa Quebrada wind power plants, with installed capacity of 157,5 MW. These wind power plants are located in the State of Ceará and are in full commercial operation. All the energy has been contracted to Eletrobrás for twenty years, under the PROINFA Program (Programa de Incentivo às Fontes Alternativas de Energia Elétrica). As per the Material Fact published on June 19, 2012, ANEEL has approved transfer of the control of BVP to the CPFL Renováveis.

·         On November 27, 2012, the Tanquinho solar power plant (“Tanquinho”) started operations.  Tanquinho is the first solar power plant in the state of São Paulo and the largest in Brazil.  Tanquinho is located in the city of Campinas, with an Installed Capacity of 1.1 MWp.  It is located in an area of 13,700 square meters at Tanquinho Substation, which belongs to one of our distribution subsidiaries.  The Tanquinho plant is expected to generate approximately 1.6 GWh per year.  Our subsidiary CPFL Energias Renováveis was responsible building this project and will be responsible for managing and operating the plant.

·         On December 19, 2012, we, Equatorial Energia S.A. (“Equatorial”) and Jorge Queiroz de Moraes Junior (“Controlling Shareholder”) signed a binding “Investment, Purchase and Sale Agreement and Other Covenants” commitment, with the following objective: (i) disposal to Equatorial by the  Controlling Shareholder of his direct and indirect interest in the control of Rede Energia S.A. (“Rede”) and other companies controlled by Rede (“Acquisition”); and (ii) investment by Equatorial and CPFL Energia of the outlay required for the operational and financial recovery of the companies in the Rede Group, including the electric energy distribution concessionaires controlled by Rede, which are under intervention by ANEEL (“Investment”). The Acquisition and the Investment are interlinked transactions, and the main preceding conditions are as follows: (i) prior consent by ANEEL, resulting in lifting of the interventions in relation to the concessionaires controlled by Rede; (ii) approval by the Conselho Administrativo de Defesa Econômica – CADE; (iii) approval by creditors of Rede and other companies in the Rede group in the process of court reorganization under the court reorganization plan (iv) obtaining the necessary approval on the part of certain creditors and minority shareholders of the companies involved, in accordance with the pertinent law, contracts and shareholders agreements; and (v) obtaining the pertinent corporate approvals.

The following chart provides an overview of our corporate structure, as of March 31, 2013:

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(1) Controlling shareholders.

(2) Includes the 0.1% stake of Camargo Corrêa S.A.;

(3) Termoparaíba and Termonordeste Thermoelectric Facilities;

(4) CPFL Energia owns a 63.0% indirect interest in CPFL Renováveis through CPFL Geração.

 

Our core businesses are:

·         Distribution.  In 2012, our eight fully-consolidated distribution subsidiaries delivered 40,645 GWh of electricity to approximately 7.2 million consumers primarily in the states of São Paulo and Rio Grande do Sul.

·         Conventional generation sources.  As of December 31, 2012, we had Installed Capacity of 2,234 MW.  During 2012, we generated a total of 7,697 GWh of electricity, and we had 9,949 GWh of Assured Energy, the amount of energy representing our long‑term average electricity production, as established by ANEEL, which is the primary driver of our revenues relating to generation activities.  We hold equity interests in eight Hydroelectric Power Plants (Serra da Mesa, Monte Claro, Barra Grande, Campos Novos, Luiz Eduardo Magalhães-Lajeado, Castro Alves, 14 de Julho and Foz do Chapecó).  Although the concession for Serra da Mesa Hydroelectric Facility is held by Furnas, we are entitled to 51.54% of its Assured Energy.  In October 2010, Foz do Chapecó Hydroelectric Power Plant started operations, currently representing an Installed Capacity of 855 MW, of which we hold a share of 51%, or 436.1 MW.  We also own three Thermoelectric Power Plants, two of which were acquired in 2009 (Termonordeste and Termoparaíba) through the acquisition of EPASA.  In December 2010 and January 2011, respectively, Termonordeste and Termoparaíba power plants started operations with Installed Capacity of 170.8 MW each one.  We hold an aggregate 52.75%2 interest in Termonordeste and Termoparaíba, or 180.2 MW.

·         Renewable generation sources.  In 2011, we established CPFL Energias Renováveis, in which we own a 63% interest, to concentrate our activities in energy generation through renewable sources.  Currently, all of our wind farms and thermoelectric biomass plants, as well as 35 of our 47 Small Hydroelectric Power Plants, are managed by CPFL Energias Renováveis.  These 35 Small Hydroelectric Power Plants are responsible for 92.5% of the aggregate capacity generated by our Small Hydroelectric Power Plants as a whole, of which: (i) 35 are operational, with aggregate Installed Capacity of 326 MW, located in the states of São Paulo, Santa Catarina, Rio Grande do Sul, Minas Gerais and Mato Grosso.  Additionally, we have 33 wind farms, of which (i) 15 3 are operational, with aggregate Installed Capacity of 555.5 MW, located in the states of Ceará and Rio Grande do Norte, and (ii) 18 are under construction, with an estimated Installed Capacity of 482 MW, scheduled to commence operations between 2013 and 2016.  We also have eight thermoelectric biomass plants, of which:  (i) six are operational, with aggregate Installed Capacity of 270 MW, located in the states of São Paulo and Rio Grande do Norte, and (ii) two are under construction and with an estimated capacity of 100 MW, scheduled to start operations in 2013.  We closed 2012 with total Installed Capacity (i.e., including through our conventional generation sources segment) of 2,961 MW.  We will use part of our increased Installed Capacity for our own distribution and commercialization activities.


2 We acquired 51% of the shares of EPASA in September 2009.  However, as a result of a dilution of EPASA’s capital stock in December 2011, we now hold a 52.75% interest in it.

3 This number includes seven wind farms in Santa Clara complex with an istalled capacity of 188 MW.  We have been receiving revenues deriving from the Santa Clara wind farms, as contracted through the “2009 Auction Reserve Energy” (Leilão de Energia de Reserva), since July 2012. Although the construction of the Transmission line is not yet completed, these wind farms are ready to start generating energy.

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·         Commercialization.  Our commercialization subsidiaries handle our commercialization operations and provide agency services to Free Consumers before the CCEE and other agents, including guidance on their operational requirements.  CPFL Brasil, our largest commercialization subsidiary, procures and sells electricity to Free Consumers, other commercialization and generation companies and distribution facilities.  In 2012, we sold 15,029 GWh of electricity, of which 10,179 GWh was sold to unaffiliated third parties.

·         Services  Since January 1, 2012, we started to analyze the services segment separately and we now disclose information with respect to our services activities as an operating segment.  Our subsidiary CPFL Serviços provides electricity-related services, such as project design and construction, to our affiliates and unaffiliated parties.

Our Strategy

Our overall objective is to consolidate our leadership position in the Brazilian electricity sector while creating value for our shareholders.  We seek to achieve these goals in all of our sectors (distribution, conventional generation sources, renewable generation sources, and commercialization and services) by pursuing operational efficiency (through innovation and technology) and growth (through business synergies and new projects).  Our strategies are grounded on financial discipline, social responsibility and enhanced corporate governance.  More specifically, our approach involves the following key business strategies.

Complete the development of our existing renewable generation projects, expand our generation portfolio by developing new conventional and renewable energy generation projects and maintain our position as market leader in renewable energy sources.  In 2011, we became the largest renewable energy company in Brazil by establishing CPFL Energias Renováveis and acquiring 100% of the shares of Jantus, a company engaged in the generation of energy through renewable sources, especially wind power.  In 2012, our Installed Capacity increased to 2,961 MW, 2,234 MW of which was conventionally generated, and 727 MW of which was generated through renewable sources.  This represented a 12.0% increase as compared to 2011, when our Installed Capacity was 2,644 MW.  This increase was due to (i) the acquisition of Bons Ventos wind farm complex, which we completed on June 19, 2012; (ii) the commencement of operations of Bio Ipê and Bio Pedra Thermoelectric Power Plants on May 17, 2012 and May 31, 2012, respectively; (iii) the acquisition of Ester Thermoelectric Power Plant, which we completed in October 18, 2012; (iv) the commencement of operations of Tanquinho solar power plant on November 27, 2012; and (v) the commencement of operations of Salto Góes Small Hydroelectric Power Plant on December 28, 2012.  In January 2012, we entered into a Sale and Purchase Agreement for the acquisition of 100% of the shares of Atlântica I, Atlântica II, Atlântica IV and Atlântica V wind farms, to be operational in 2013.  We completed the acquisition of the Atlântica wind farms on March 23, 2012. Additionally, the Santa Clara wind farms are ready to start generating energy (although the construction of the transmission line is not yet completed). We have been receiving revenues deriving from the Santa Clara wind farms, as contracted through the “2009 Auction Reserve Energy” (Leilão de Energia de Reserva), since July 2012.

 

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By the end of 2013, when Coopcana and Alvorada biomass Thermoelectric Power Plants, Campo dos Ventos II, Macacos I and Atlântica wind farms are expected to become fully operational, our Installed Capacity may reach 3,169 MW.  By the end of 2016, when we expect the Campo dos Ventos I, III and V wind farms (the “Campo dos Ventos Complex”) and the São Benedito complex to become operational, it may reach 3,327 MW.  Part of these generation facilities have associated long‑term power purchase agreements (“PPAs”), approved by ANEEL, which we believe will ensure us an attractive rate of return on our investment.  We also have a 3,800  MW (of which our share is 2,394  MW) portfolio of projects to be developed in the next years through our subsidiary CPFL Energias Renováveis. As consumption of electricity in Brazil increases, we believe that there will continue to be new opportunities for us to explore investments in additional conventional and renewable generation projects.

Focus on further improving our Net Income operating efficiency.  The distribution of electricity in our distribution concession areas is our largest business segment, representing approximately 69.9% of our consolidated net income.  We continue to focus on improving the quality of our service and maintaining efficient operating costs by exploiting synergies and technologies.  We also make an effort to standardize and update our operations regularly, introducing automated systems where possible.  In 2011, we started the Tauron program, aiming at an efficiency breakthrough based on smart grid technologies that increase our operational efficiency by allowing us to control our operations remotely and avoiding staff’s displacement.  Under the Tauron program, our main projects relate to mobility, telemetry, self-healing, asset management and performance management. We expect to fully implement Tauron project by 2014.

Expand and strengthen our commercialization and services business.  Free Consumers represent a significant segment of the electricity market in Brazil (approximately 27% of the market share).  We strive to enter into bilateral contracts (through our subsidiary CPFL Brasil, our commercialization subsidiary) with former consumers of our distribution companies that become Free Consumers, in addition to attracting additional Free Consumers from outside of our distribution companies’ concession areas.  In order to achieve this objective, we foster positive relationships with customers by providing electricity-related services, strategic advice and decision-making support.

Position ourselves to take advantage of consolidation in our industry by using our experience in successfully integrating and restructuring other operations.  We believe that with the stabilization of the regulatory environment in the Brazilian power industry, there may be substantial consolidation in the generation, the transmission and, particularly, the distribution sectors.  Given our financial strength and managerial expertise, we believe that we are well-positioned to take advantage of this consolidation.  If promising assets are available on attractive terms, we may make acquisitions that complement our existing operations and afford us and our consumers further opportunities to take advantage of economies of scale.

Maintain a high level of social responsibility in the communities in which we operate.  We aim to hold our business operations to the highest standards of social responsibility and sustainable development.  We also support initiatives to advance the economic, cultural and social interests of the communities in which we operate and contribute effectively to their further development.

Follow enhanced corporate governance standards.  We are dedicated to maintaining the highest levels of management transparency and corporate governance, providing equitable shareholder rights and, through various measures, including the increase of our free float and the liquidity of our shares, seeking value for our shareholders.

 

 

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Our Service Territory

Distribution

We are one of the largest electricity Distributors in Brazil, based on the amount of electricity we delivered in 2012.  Our eight distribution subsidiaries together supply electricity to a region covering 175,237 square kilometers, primarily in the States of São Paulo and Rio Grande do Sul.  Their concession areas include 559 municipalities and a population of approximately 18 million people.  Together, they provided electricity to approximately 7.2 million consumers as of December 31, 2012.  Our eight subsidiaries distributed approximately 13% of the total electricity distributed in Brazil, based on data from the Energetic Studies Company (Empresa de Pesquisas Energéticas - EPE).

Distribution Companies

We have eight distribution subsidiaries:

·         CPFL Paulista.  Companhia Paulista de Força e Luz (“CPFL Paulista”) supplies electricity to a concession area covering 90,440 square kilometers in the state of São Paulo with a population of approximately 9.5 million people.  Its concession area covers 234 4 municipalities, including the cities of Campinas, Bauru, Ribeirão Preto, São José do Rio Preto, Araraquara and Piracicaba.  CPFL Paulista had approximately 3.9 million consumers as of December 31, 2012.  In 2012, CPFL Paulista distributed 21,521 GWh of electricity, which accounts for approximately 22.0% of the total electricity distributed in the state of São Paulo, and 6.6% of the total electricity distributed in Brazil, during that period.

·         CPFL Piratininga.  Companhia Piratininga de Força e Luz (“CPFL Piratininga”) supplies electricity to a concession area covering 5,618 square kilometers in the southern part of the state of São Paulo with a population of approximately 3.8 million people.  Its concession area covers 27 municipalities, including the cities of Santos, Sorocaba and Jundiaí.  CPFL Piratininga had approximately 1.5 million consumers as of December 31, 2012.  In 2012, CPFL Piratininga distributed 9,156 GWh of electricity, accounting for approximately 11.4% of the total electricity distributed in the state of São Paulo, and 3.4% of the total electricity distributed in Brazil, during that period.


4 These numbers consider municipalities within the concession area of each subsidiary only.  Please note that we also serve consumers in municipalities within the concession area of other concessionaire where, for any reason, those consumers are not assisted by such concessionaire.

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·         RGE.  Rio Grande Energia S.A. (“RGE”) supplies electricity to a concession area covering 58,823 square kilometers in the state of Rio Grande do Sul with a population of approximately 3.7 million people.  Its concession area covers 253 municipalities, including the cities of Caxias do Sul and Gravataí.  RGE had approximately 1.4 million consumers as of December 31, 2012.  In 2012, RGE supplied 7,690 GWh of electricity (6,533 GWh distributed to Final Consumers, and 1,157 GWh delivered principally to small electric concessionaires and small rural cooperatives), which accounts for approximately 33.8% of the total electricity distributed in the state of Rio Grande do Sul, and 2.1% of the total electricity distributed in Brazil, during that period.

·         CPFL Santa Cruz.  Companhia Luz e Força Santa Cruz (“CPFL Santa Cruz”) supplies electricity to a concession area covering 11,870 square kilometers, which includes 24 municipalities in the northwest part of the state of São Paulo and three5 municipalities in the state of Paraná.  In 2012, CPFL Santa Cruz distributed 1,004 GWh of electricity to approximately 191,071 consumers, accounting for approximately 0.8% of the total electricity distributed in the state of São Paulo, and 0.2% of the total electricity distributed in Brazil, during that period.

·         CPFL Jaguari.  Companhia Jaguari de Energia (“CPFL Jaguari”) supplies electricity to a concession area covering 252 square kilometers, which includes two municipalities of the state of São Paulo.  In 2012, CPFL Jaguari distributed 442 GWh of electricity to approximately 34,972 consumers.

·         CPFL Mococa.  Companhia Luz e Força de Mococa (“CPFL Mococa”) supplies electricity to a concession area covering 1,844 square kilometers, which includes one municipality in the state of São Paulo and three5 municipalities in the state of Minas Gerais.  In 2012, CPFL Mococa distributed 202 GWh of electricity to approximately 42,872 consumers.

·         CPFL Leste Paulista.  Companhia Leste Paulista de Energia (“CPFL Leste Paulista”) supplies electricity to a concession area covering 2,589 square kilometers, which includes seven municipalities of the state of São Paulo.  In 2012, CPFL Leste Paulista distributed 266 GWh of electricity to approximately 53,202 consumers.

·         CPFL Sul Paulista.  Companhia Sul Paulista de Energia (“CPFL Sul Paulista”) supplies electricity to a concession area covering 3,802 square kilometers, which includes five municipalities of the state of São Paulo.  In 2012, CPFL Sul Paulista distributed 365 GWh of electricity to approximately 77,505 consumers.

Distribution Network

Our eight distribution subsidiaries own distribution lines with voltage levels ranging from 34.5 kV to 138 kV.  These lines distribute electricity from the connection point with the Basic Network to our power sub-stations, in each of our concession areas.  All consumers that connect to these distribution lines, such as Free Consumers or other concessionaires, are required to pay a tariff for using the system - Tarifa de Uso do Sistema de Distribuição (“TUSD”).

Each of our subsidiaries has a Distribution Network consisting of a widespread network of predominantly overhead lines and sub-stations having successively lower voltage ranges.  Consumers are classified in different voltage levels based on their consumption of, and demand for, electricity.  Large industrial and commercial consumers receive electricity at High Voltage ranges (up to 138 kV) while smaller industrial, commercial and residential consumers receive electricity at lower voltage ranges (2.3 kV and below).

As of December 31, 2012, our Distribution Networks consisted of 235,498 kilometers of distribution lines, including 327,455 distribution transformers.  Our eight distribution subsidiaries had 9,644 km of High Voltage distribution lines between 34.5 kV and 138 kV.  At that date, we had 446 transformer sub-stations for transforming High Voltage into Medium Voltages for subsequent distribution, with total transforming capacity of 13,650 mega-volt amperes.  Of the industrial and commercial consumers in our concession area, 308 had 69 kV, 88 kV or 138 kV high-voltage electricity supplied through direct connections to our High Voltage distribution lines.

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System Performance
Electricity Losses

We experience two types of electricity losses:  technical losses and commercial losses.  Technical losses are those that occur in the ordinary course of our distribution of electricity.  Commercial losses are those that result from illegal connections, fraud or billing errors and similar matters.  Electricity loss rates of our three largest distribution subsidiaries (CPFL Paulista, CPFL Piratininga and RGE) compare favorably to the average for other major Brazilian electricity Distributors in 2011 according to the most recent information available from the Brazilian Association of Electric Energy Distributors, Associação Brasileira de Distribuidores de Energia Elétrica (“ABRADEE”), an industry association.

We are also actively engaged in efforts to reduce commercial losses from illegal connections, fraud or billing errors.  To achieve this, in each of our eight subsidiaries, we have deployed trained technical teams to conduct inspections, enhanced monitoring for irregular consumption, increased replacements for obsolete measuring equipment and developed a computer program to discover and analyze irregular invoicing.  332,777 inspections were conducted during 2012, which we believe led to a recovery of receivables estimated at more than R$42.1 million.

Power Outages

The following table sets forth the frequency and duration of electricity outages per consumer for the years 2012 and 2011 for each of our distribution subsidiaries:

 

Year ended December 31, 2012

 

 

 

 

 

 

 

 

 

 

CPFL Paulista

CPFL Piratininga

RGE

CPFL Santa Cruz

CPFL
Jaguari

CPFL Mococa

CPFL Leste Paulista

CPFL Sul Paulista

 

 

 

 

 

 

 

 

 

FEC1

5.37

4.24

8.94

5.83

4.66

5.69

6.57

9.10

DEC2

7.48

5.66

14.61

5.28

4.49

5.83

8.26

10.80

 

__________________

(1)           Frequency of outages per consumer per year (number of outages)

(2)           Duration of outages per consumer per year (in hours)

 

Year ended December 31, 2011

 

 

 

CPFL Paulista

CPFL Piratininga

RGE

CPFL Santa Cruz

CPFL Jaguari

CPFL Mococa

CPFL Leste Paulista

CPFL Sul Paulista

 

 

 

 

 

 

 

 

 

FEC1

5.36

4.87

9.44

8.15

5.10

5.24

6.17

5.73

DEC2

6.77

6.44

15.19

8.43

7.00

5.95

9.66

9.06

 

__________________

(1)           Frequency of outages per consumer per year (number of outages).

(2)           Duration of outages per consumer per year (in hours).

We seek to improve the quality and reliability of our power supply, as measured by the frequency and duration of our power outages.  According to data from ABRADEE for 2011, our frequency and duration of interruptions per consumer in the past few years compare favorably to the averages for other Brazilian distribution companies.

Based on data published by ANEEL, the duration and frequency of outages at CPFL Paulista and CPFL Piratininga are among the lowest in Brazil compared to companies of similar size. The duration of outages at RGE are comparatively higher than those at CPFL Paulista and CPFL Piratininga, but they remain in line with the average rate for power companies in Southern Brazil mainly as a result of the lack of redundancies in its distribution system, the use of medium voltage lines and a lower level of automation in the network. However, their duration and frequency of outages are below the national average.

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ANEEL establishes performance indicators per consumer to be complied with by power companies.  If these indicators are not reached, we are obliged to reimburse our consumers, and our revenues are negatively affected.  In 2011, according to data from ANEEL, the amount we reimbursed our consumers was lower than the average amount reimbursed by power companies of similar size.

Our distribution subsidiaries have construction and maintenance technology that allows for repairs of the electricity network without interruption in electricity service, which allows us to have low levels of scheduled interruption, amounting to approximately up to 14% of total interruptions.  Unscheduled interruptions due to accidents or natural causes, including lightning storms, fire and wind represented the remainder of our total interruptions.  In 2012, we invested a total of R$1,403 million in improvements of (i) the logistics of our operations, (ii) our systems, and (iii) our infrastructure to support operations, across our different business segments.  We expect to invest an additional R$1,033 million for such purposes in 2013.

We strive to improve response times for our repair services.  The quality indicators for the provision of energy by CPFL Paulista and CPFL Piratininga have maintained levels of excellence while complying with regulatory standards.  This was also mainly the result of our efficient operational logistics, including the strategic positioning of our teams and the technology and automation of our network and operation centers, together with a preventive maintenance and conservation plan.

Purchases of Electricity

Most of the electricity we sell is purchased from unrelated parties, rather than generated by our facilities.  In 2012, 11.2% of the total electricity our distribution subsidiaries acquired was purchased from our generation subsidiaries.

In 2012, we purchased 10,781 GWh of electricity from the Itaipu power plant, amounting to 17.9% of the total electricity we purchased.  Itaipu is located on the border of Brazil and Paraguay and is subject to a bilateral treaty between the two countries pursuant to which Brazil has committed to purchasing specified amounts of electricity.  This treaty will expire in 2023.  Electric utilities operating under concessions in the Midwest, South and Southeast regions of Brazil are required by law to purchase a portion of the electricity that Brazil is obligated to purchase from Itaipu.  The amounts that these companies must purchase are governed by take-or-pay contracts with tariffs established in US$/kW.  ANEEL annually determines the amount of electricity to be sold by Itaipu.  We pay for energy purchased from Itaipu in accordance with the ratio between the volume established by ANEEL and our statutorily established share, regardless of whether Itaipu generates such amount of electricity, at a price of US$24.88/kW.  Our purchases represent approximately 17.0% of Itaipu’s total supply to Brazil.  This share was fixed by law according to the amount of electricity sold in 1991.  The rates at which companies are required to purchase Itaipu’s electricity are established pursuant to the bilateral treaty, and fixed to cover Itaipu’s operating expenses and payments of principal and interest on Itaipu’s U.S. dollar‑denominated debts, as well as the cost of transmitting the power to their concession areas.

The Itaipu plant has an exclusive transmission network.  Distribution companies pay a fee for the use of this network.

In 2012, we paid an average of R$104.98 per MWh for purchases of electricity from Itaipu, as compared to R$89.68 during 2011 and R$93.23 during 2010.  These figures do not include the transmission fee.

We purchased 49,471 GWh of electricity in 2012 from generating companies other than Itaipu, representing 82.1% of the total electricity we purchased.  We paid an average of R$113.95 per MWh for purchases of electricity from generating companies other than Itaipu, as compared to R$110.73 per MWh in 2011 and R$109.47 per MWh in 2010.  For more information on the Regulated Market and the Free Market, see “—The Brazilian Power Industry—The New Industry Model Law.”

The following table shows amounts purchased from our suppliers in the Regulated Market and in the Free Market, for the periods indicated.

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Year Ended December 31,

 

2012

2011

2010

 

(in GWh)

Energy purchased for resale

 

 

 

Itaipu Binacional

10,781

10,855

10,835

Electric Energy Trading Chamber - CCEE

8,656

5,002

3,373

PROINFA

1,070

1,032

1,133

Energy purchased in the Regulated Market and through bilateral contracts

39,745

33,964

37,043

TOTAL

60,252

50,853

52,384

 

The provisions of our electricity supply contracts are governed by ANEEL regulations.  The main provisions of each contract relate to the amount of electricity purchased, the price, including adjustments for various factors such as inflation indexes, and the duration of the contract.

As from 2013, all distribution companies in Brazil purchase electricity from power producers which concessions were renewed in accordance with Law 12,783/13. The tariffs and electricity amounts to be purchased by each distribution company, as well as the provisions of the applicable agreements between distribution companies and power producers, will be defined by ANEEL.  We expect that tariffs for the purchase of electricity by distributors will be lower than the current average energy prices.

Transmission Tariffs.  In 2012, we paid a total of R$1,574 million in tariffs for the use of the transmission network, including Basic Network tariffs, connection tariffs and Transmission of high-voltage electricity from Itaipu at rates set by ANEEL.

Consumers and Tariffs

Consumers

We classify our consumers into five principal categories.  See note 25  to our audited consolidated financial statements for a breakdown of our sales by category.

·         Industrial consumers.  Sales to final industrial consumers accounted for 25.7% of our revenue of electricity sales in 2012.

·         Residential consumers.  Sales to final residential consumers accounted for 41.7% of our revenue of electricity sales in 2012.

·         Commercial consumers.  Sales to final commercial consumers, which include service businesses, universities and hospitals, accounted for 21.3% of our revenue of electricity sales in 2012.

·         Rural consumers.  Sales to final rural consumers accounted for 3.1% of our revenue of electricity sales in 2012.

·         Other consumers.  Sales to other consumers, which include public and municipal services such as street lighting, accounted for 8.2% of our revenue of electricity sales in 2012.

Retail Distribution Tariffs.  We classify our consumers into two different groups, Group A consumers and Group B consumers, based on the voltage level at which the electricity is supplied to them.  Each consumer is placed in a certain tariff level defined by law and based on its respective classification.  Some discounts are available depending on the consumer classification, tariff level or environment for trading (Free Consumers and generators).  Group B consumers pay higher tariffs.  Tariffs in Group B vary by type of consumer (residential, rural, other categories and public lighting).  Consumers in Group A pay lower tariffs, decreasing from A4 to Al, because they are supplied electricity at higher voltages, which requires lower use of the energy distribution system.  The tariffs we charge for sales of electricity to Final Consumers are determined pursuant to our concession agreements and regulations ratified by ANEEL.  These concession agreements and related regulations establish a cap on tariffs that provides for annual, periodic and extraordinary adjustments.  For a discussion of the regulatory regime applicable to our tariffs and their adjustment, see “—The Brazilian Power Industry.”

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Group A consumers receive electricity at 2.3 kV or higher.  Tariffs for Group A consumers are based on the voltage level at which electricity is supplied, and the time of day electricity is supplied.  The consumers may opt for a different tariff applicable in peak periods in order to optimize the use of the electric network.  Tariffs for Group A consumers consist of two components:  TUSD and an “energy charge.”  The TUSD, expressed in reais  per kW, is based on the (i) contracted firm capacity or (ii) power capacity actually used.  The energy charge, expressed in reais  per MWh, is based on the amount of electricity actually consumed.  Group A consumers are those that may opt to purchase electricity in the Free Market under the New Industry Model Law.  See “—The Brazilian Power Industry—The New Industry Model Law.”

Group B consumers receive electricity at less than 2.3 kV (220V and 127V).  Tariffs for Group B consumers consist of a demand and an energy consumption charge, both charged in R$/MWh.

The following tables set forth our average retail prices for each consumer category for 2012 and 2011.  These prices include taxes (ICMS, PIS and COFINS) and were calculated based on our revenues and the volume of electricity sold in 2012 and 2011.

 

Year ended December 31, 2012

 

 

 

 

 

 

 

 

 

 

CPFL Paulista

CPFL Piratininga

RGE

CPFL Santa Cruz

CPFL Leste Paulista

CPFL Sul Paulista

CPFL Jaguari

CPFL Mococa

 

 

 

 

 

 

 

 

 

 

(R$/MWh)

Residential

435.92

421.82

574.07

499.93

517.27

484.53

408.83

561.97

Industrial

337.54

323.62

387.23

369.94

405.36

342.09

287.36

366.44

Commercial

362.04

369.08

542.93

445.90

481.60

441.20

366.92

467.04

Rural

201.74

230.32

286.14

238.51

265.33

252.28

215.05

270.56

Other

268.94

263.54

212.53

199.61

343.06

313.66

263.45

322.24

Total

364.69

364.89

416.12

367.08

407.33

393.87

313.75

423.06

 

 

Year ended December 31, 2011

 

 

 

 

 

 

 

 

 

 

CPFL Paulista

CPFL Piratininga

RGE

CPFL Santa Cruz

CPFL Leste Paulista

CPFL Sul Paulista

CPFL Jaguari

CPFL Mococa

 

 

 

 

 

 

 

 

 

 

(R$/MWh)

Residential

416.68

418.90

541.53

483.21

511.15

481.14

404.51

551.81

Industrial

322.85

313.27

365.08

373.34

416.55

325.14

292.58

355.70

Commercial

349.56

366.33

516.05

437.55

476.79

457.17

363.79

461.81

Rural

192.31

226.27

278.91

235.28

257.46

252.16

211.65

264.64

Other

263.01

278.88

375.98

312.84

340.36

308.73

262.51

317.38

Total

348.63

359.99

440.20

399.14

400.59

384.20

314.96

409.66

 

Under current regulations, residential consumers may be eligible to pay reduced tariffs if:  (i) their monthly earnings are equal or lower than half of the minimum wage, (ii) their monthly earnings are lower than three minimum wages, and one (or more) of the family members has a disease that requires continuous use of an electric-powered equipment, or (iii) they receive certain benefits under Brazilian government’s social programs.  In order to benefit from the regulations, these consumers must register with the respective federal government registry.  The discounts applied to the tariffs depend on the amount of energy consumed.  Discounts range from 10% to 65% for energy consumption varying from 30 KW to 220 KW per month.  Another benefit afforded to these residential consumers is that they are not required to pay the Proinfa Program charge or any extraordinary tariff approved by ANEEL.

TUSD.  Under applicable laws and regulations, we are required to allow other concessionaire’s consumers  to use our high‑voltage distribution system, including Free Consumers within our distribution concession areas that are supplied by other distributors.  All of our consumers must also pay a fee for the use of our network (TUSD).  In 2012, tariff revenues for the use of our network by Free Consumers amounted to R$1,412 million.  The average tariff for the use of our network was R$89.07/MWh and R$90.03/MWh in 2012 and 2011, respectively, including the TUSD we charge to other distributors connected to our Distribution Networks.

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Billing Procedures

The procedure we use for billing and payment for electricity supplied to our consumers is determined by consumer and tariff categories.  Meter readings and invoicing take place on a monthly basis for Low Voltage consumers, with the exception of rural consumers, whose meters are read in intervals varying from one to three months, as authorized by relevant regulation.  Bills are issued from meter readings or on the basis of estimated usage.  Low voltage consumers are billed within three business days after the meter reading, with payment required until five business days after the invoice presentation date.  In case of nonpayment, we send the consumer a notice of nonpayment with the following month’s invoice and we allow the consumer up to 15 days to settle the amount owed to us.  If payment is not received within three business days after that 15-day period, the consumer’s electricity supply may be suspended.  We may also take other measures, such as inclusion of the consumer in the list of debtors of credit reporting agencies, or extrajudicial or judicial collection through collection agencies.

High voltage consumers are billed on a monthly basis with payment required within five business days after the receipt of invoice.  In the event of nonpayment, we send the consumer a notice up to four business days, giving a deadline of 15 days to make payment.  If payment is not made within three business days after that 15‑day period, the consumer’s service is discontinued.

According to data from ABRADEE for 2011, the percentage of customers in default of our three largest distribution subsidiaries compare favorably to the average for other major Brazilian electricity distributors.  For this purpose, consumers in default are consumers whose bills are one to 90 days due.  Bills due for over 90 days are deemed not recoverable.

Customer Service

We strive to provide high-quality customer service to our distribution consumers.  We operate call centers at each of our distribution subsidiaries providing customer service 24 hours a day, 7 days a week.  In 2012, our call centers responded to approximately 12.0 million calls.  We also provide customer service through our Internet website, which handled approximately 12.3 million customer requests in 2012, and through our branch offices, which handled approximately 3.2 million customer requests in 2012.  The growth in electronic requests has allowed us to reduce our customer service costs and provide customer service through our call center to a larger number of customers without access to the Internet.  Following receipt of a customer service request, we dispatch our technicians to make any necessary repairs.

Generation of Electricity

We are actively expanding our generating capacity.  In accordance with Brazilian regulation, revenues from generation are based mainly on Assured Energy of each facility, rather than its Installed Capacity or actual output.  Assured Energy is a fixed output of electricity established by the Brazilian government in the relevant concession agreement.  For certain companies, actual output is determined periodically by the ONS in view of demand and hydrological conditions.  Provided generators have sold their electricity and participate in the MRE, they will receive at least the revenue amount corresponding to the Assured Energy, even if they do not actually generate all of it.  Conversely, if a generating facility’s output exceeds its Assured Energy, its incremental revenue is equal only to the costs associated therewith.  Most of our Hydroelectric Power Plants are members of the MRE, which mitigates hydrologic risks.

At December 31, 2012, CPFL Geração owned a 51.54% interest in the Assured Energy from the Serra da Mesa power plant.  Through our generation subsidiaries CERAN, BAESA, ENERCAN and Chapecoense, CPFL Geração also owned interests in the Monte Claro, Barra Grande, Campos Novos, Castro Alves, 14 de Julho and Foz do Chapecó plants, which have been operational since December 2004, November 2005, February 2007, March 2008, December 2008 and October 2010, respectively.  Through CPFL Jaguari Geração, we owned a 6.93% interest in the Luis Eduardo Magalhães power plant.  We also hold authorization to operate three Thermoelectric Power Plants, two of which were acquired in 2009 (Termonordeste and Termoparaíba) through the acquisition of EPASA (a subsidiary of CPFL Geração).  Termonordeste started operations on December 24, 2010 and Termoparaíba, on January 13, 2011. 

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In February 2012, we completed the installation of a lowering system in the Foz do Chapecó generating units. Through this system, we helped the ONS control the reactive power in the region.  ANEEL will reimburse our investment in Foz do Chapecó in five years, through which we expect to increase our revenues.

Bio Ipê and Bio Pedra Thermoelectric Power Plants started operations in May 17, 2012 and May 31, 2012, respectively.   We have been receiving revenues deriving from the Santa Clara wind farms, as contracted through the “2009 Auction Reserve Energy” (Leilão de Energia de Reserva), since July 2012. Although the construction of the Transmission line is not yet completed, these wind farms are ready to start generating energy. On November 27, 2012 and December 28, 2012, the Tanquinho solar power plant and Santo Góes Small Hydroelectric Power Plant started operations.

In 2012, we also completed the acquisition of the Atlântica and Bons Ventos wind farms and the Ester Thermoelectric Power Plant in March, June, and October, respectively.

CPFL Geração was a winner in the auction of electric energy transmission held in December 2012.  CPFL Geração obtained the right to build, maintain and operate the Piracicaba Substation, located in the state of São Paulo, with installed capacity of 800 MVA, more than than 80,000 square meters of area and within approximately 5 km of the CPFL Paulista Substation.  The concession is for a 30-year term.  Although the Piracicaba Substation is a Transmission asset, it will attend CPFL Paulista’s Distribution Network in Piracicaba.  Our Allowed Annual Revenue equals R$8,87 million.  On December 19, 2012, we established CPFL Transmissão Piracicaba to operate the Piracicaba Substation.

At December 31, 2012, through our subsidiaries CPFL Geração and CPFL Brasil, we owned 63.0% interest in CPFL Energias Renováveis, a company resulting from an association with ERSA, and which holds our subsidiaries engaged in the generation of electricity from renewable sources.  We have fully consolidated CPFL Energias Renováveis in our financial statements since August 1, 2011, upon the incorporation of SMITA by ERSA.  On a meeting held on March 8, 2012, our Board of Directors approved the engagement of investment banks to commence studies regarding a potential public offering of CPFL Energias Renováveis.  However, due to market conditions, on October 4, 2012, CPFL Energias Renováveis filed with the Brazilian Securities Commission, Comissão de Valores Mobiliários (“CVM”), a request for cancellation of the registration process of its intend public offering.  As of the date of this annual report, CPFL Energias Renováveis is comprised of:

·         18 subsidiaries involved in the generation of electric energy through 35 Small Hydroelectric Power Plants in operation, with total Installed Capacity of 326.6 MW, located in the states of São Paulo, Santa Catarina, Rio Grande do Sul, Minas Gerais and Mato Grosso;

·         33 subsidiaries involved in the generation of electric energy from wind sources, of which (i) fifteen 5 are operational, with total Installed Capacity of 555.5 MW, located in the state of Ceará and Rio Grande do Norte, and (ii) 18 are under construction, with an estimated Installed Capacity of 482 MW, scheduled to start operations between 2013 and 2016;

·         eight subsidiaries involved in the generation of electric energy from biomass, of which (i) six are operational, with total Installed Capacity of 270 MW, located in the states of São Paulo and Rio Grande do Norte and (ii) two are under construction, with an estimated Installed Capacity of 100 MW, scheduled to start operations in 2013.  On August 27, 2010, our first sugarcane bagasse-powered plant started operations, through CPFL Bioenergia (Baldin energy generation plant) with 45 MW of Installed Capacity.  CPFL Bio Formosa began operations on September 2, 2011, with Installed Capacity of 40 MW.  CPFL Bio Buriti became operational on October 7, 2011 with Installed Capacity of 50 MW.  Bio Ipê became operational on May 17, 2012 with Installed Capacity of 25 MW.  Bio Pedra became operational on May 31, 2012 with Installed Capacity of 70 MW.  We completed the acquisition of Ester Thermoelectric Power Plant on October 18, 2012.  Ester has an Installed Capacity of 40 MW;


5 This number includes seven wind farms in Santa Clara complex with an istalled capacity of 188 MW.  We have been receiving revenues deriving from the Santa Clara wind farms, as contracted through the “2009 Auction Reserve Energy” (Leilão de Energia de Reserva), since July 2012. Although the construction of the Transmission line is not yet completed, these wind farms are ready to start generating energy.

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·         one subsidiary involved in the generation of electric energy from solar power plant, with total Installed Capacity of 1.1 MW, located in the state of São Paulo. On November 27, 2012, the Tanquinho Plant started operations and is expected to generate approximately 1.6 GWh/year.

We also owned 12 Small Hydroelectric Power Plants through CPFL Geração and certain of our distribution companies at December 31, 2012.

Our total Installed Capacity from all of these facilities was 2,961 MW as of December 31, 2012.  Most of the electricity we produce come from our Hydroelectric Power Plants. We generated 10,570 GWh in 2012, 9,638 GWh in 2011 and 9,142 GWh in 2010.

At the request of ANEEL, in January 2013, we completed the transfer of the Substation and the exclusive Transmission lines of Foz do Chapecó to the Basic Network, therefore reducing regulatory losses deriving from the plants’ Assured Energy from 1.61% to 0.29% and eliminating maintenance costs.  We expect to reduce our costs in approximately R$7 million annually.

We are currently involved in the construction of Alvorada and Coopcana co‑generation plants, the Campo dos Ventos II wind farm and the wind farms of the Macacos I, São Benedito, Atlântica and the Campo dos Ventos complexes. We are also currently engaged in refurbishment of the CERAN complex.  We are installing equipment to assure the free flow of water in the three hydroelectrical plants and therefore increase their availability. We expect to complete the refurbishment at CERAN by 2014. 

The following table sets forth certain information relating to our principal facilities in operation as of December 31, 2012

 

Holding company

Partic.

Capacity (MW)

 

Assured Energy (GWh)

 

Placed in service

Facility upgraded

Concession expires

Hydroelectric plants:

 

 

Our share

TOTAL

 

Our share

TOTAL

 

 

 

 

Serra da Mesa

CPFL Geração

51.54%

657.1

1,275.0

 

3,029.5

5,878.0

 

1998

 

2028(1)

Monte Claro

CPFL Geração

65%

84.5

130.0

 

335.9

516.8

 

2004

 

2036

Barra Grande

CPFL Geração

25.01%

172.6

690.0

 

833.9

3,334.1

 

2005

 

2036

Campos Novos

CPFL Geração

48.72%

428.7

880.0

 

1,612.8

3,310.4

 

2007

 

2035

Castro Alves

CPFL Geração

65%

84.5

130.0

 

364.4

560.6

 

2008

 

2036

14 de Julho

CPFL Geração

65%

65.0

100.0

 

284.7

438.0

 

2008

 

2036

Luis Eduardo Magalhães

CPFL Jaguari Geração

6.93%

62.5

902.5

 

319.7

4,613.0

 

2001

 

2032

Foz do Chapecó

CPFL Geração

51%

436.1

855.0

 

1,930.0

3,784.3

 

2010

 

2036

SUBTOTAL - Hydroelectric plants

 

 

1.991,0

 

 

8,710.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thermoelectric plants:

 

 

 

 

 

 

 

 

 

 

 

Carioba

CPFL Geração

100%

36.0

36.0

 

93.7

93.7

 

1954

 

2027

EPASA

 

 

 

 

 

 

 

 

 

 

 

Termonordeste

CPFL Geração

52.75%

90.1

170.8

 

572.1

1,084.5

 

2010

 

2042

Termoparaíba

CPFL Geração

52.75%

90.1

170.8

 

572.1

1,084.5

 

2011

 

2042

SUBTOTAL - Thermoelectric plants

 

 

216,2

 

 

1,237.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renewable sources

 

 

 

 

 

 

 

 

 

 

 

Small Hydroelectric Plants

 

 

 

 

 

 

 

 

 

 

 

Cariobinha

CPFL Geração

100%

1.3

1.3

 

-

-

 

1936

(2)

2027

Salto do Pinhal

CPFL Geração

100%

0.6

0.6

 

-

-

 

1911

(2)

2027

Ponte do Silva

CPFL Geração

100%

0.1

0.1

 

-

-

 

1956

(3)

2027

Lavrinha

CPFL Sul Paulista

100%

0.3

0.3

 

(4)

 

 

1947

(3)

 

Macaco Branco

CPFL Jaguari

100%

2.4

2.4

 

(4)

 

 

1911

 

2042

Pinheirinho

CPFL Mococa

100%

0.6

0.6

 

(4)

 

 

1911

(3)

 

Rio do Peixe I

CPFL Leste Paulista

100%

3.1

3.1

 

(4)

 

 

1925

 

2042

Rio do Peixe II

CPFL Leste Paulista

100%

15.0

15.0

 

(4)

 

 

1998

 

2042

Santa Alice

CPFL Leste Paulista

100%

0.6

0.6

 

(4)

 

 

1907

(3)

 

São José

CPFL Sul Paulista

100%

0.8

0.8

 

(4)

 

 

1934

(3)

 

São Sebastião

CPFL Mococa

100%

0.7

0.7

 

(4)

 

 

1925

(3)

 

Turvinho

CPFL Sul Paulista

100%

0.8

0.8

 

(4)

 

 

1912

(3)

 

 

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Table of Contents

 

 

Americana

CPFL Renováveis

63.00%

18.9

30.0

 

44.7

71.0

 

1949

2002

2027

Andorinhas

CPFL Renováveis

63.00%

0.3

0.5

 

2.3

3.7

 

1940

 

(3)

Buritis

CPFL Renováveis

63.00%

0.5

0.8

 

1.9

3.1

 

1922

 

2027

Capão Preto

CPFL Renováveis

63.00%

2.7

4.3

 

12.6

20.0

 

1911

2008

2027

Chibarro

CPFL Renováveis

63.00%

1.6

2.6

 

9.3

14.8

 

1912

2008

2027

Dourados

CPFL Renováveis

63.00%

6.8

10.8

 

38.6

61.2

 

1926

2002

2027

Eloy Chaves

CPFL Renováveis

63.00%

11.8

18.8

 

64.0

101.5

 

1954

1993

2027

Esmeril

CPFL Renováveis

63.00%

3.2

5.0

 

15.9

25.2

 

1912

2003

2027

Gavião Peixoto

CPFL Renováveis

63.00%

3.0

4.8

 

21.1

33.5

 

1913

2007

2027

Guaporé

CPFL Renováveis

63.00%

0.4

0.7

 

3.1

4.9

 

1950

 

(3)

Jaguari

CPFL Renováveis

63.00%

7.4

11.8

 

44.7

71.0

 

1917

2002

2027

Lençóis

CPFL Renováveis

63.00%

1.1

1.7

 

8.4

13.3

 

1917

1988

2027

Monjolinho

CPFL Renováveis

63.00%

0.4

0.6

 

1.5

2.5

 

1893

2003

2027

Pinhal

CPFL Renováveis

63.00%

4.3

6.8

 

20.4

32.4

 

1928

1993

2027

Pirapó

CPFL Renováveis

63.00%

0.5

0.8

 

3.2

5.1

 

1952

(3)

 

Saltinho

CPFL Renováveis

63.00%

0.5

0.8

 

4.0

6.4

 

1950

(3)

 

Salto Grande

CPFL Renováveis

63.00%

2.9

4.6

 

14.2

22.6

 

1912

2003

2027

Socorro

CPFL Renováveis

63.00%

0.6

1.0

 

3.0

4.7

 

1909

1994

2027

Santana

CPFL Renováveis

63.00%

2.7

4.3

 

14.5

23.0

 

1951

2002

2027

Três Saltos

CPFL Renováveis

63.00%

0.4

0.6

 

3.0

4.7

 

1928

 

2027

São Joaquim

CPFL Renováveis

63.00%

5.1

8.1

 

28.0

44.5

 

1911

2002

2027

Diamante

CPFL Renováveis

63.00%

2.6

4.2

 

8.8

14.0

 

2005

 

2019

Santa Luzia

CPFL Renováveis

63.00%

18.0

28.5

 

101.7

161.4

 

2007

 

2037

Arvoredo

CPFL Renováveis

63.00%

8.2

13.0

 

42.9

68.1

 

2010

 

 

Alto Irani

CPFL Renováveis

63.00%

13.2

21.0

 

75.6

120.0

 

2008

 

2032

Plano Alto

CPFL Renováveis

63.00%

10.1

16.0

 

56.7

90.0

 

2008

 

2032

Barra da Paciência

CPFL Renováveis

63.00%

14.5

23.0

 

75.1

119.1

 

2011

 

2029

Cocais Grande

CPFL Renováveis

63.00%

6.3

10.0

 

28.3

44.9

 

2009

 

2029