The Brazilian electricity regulator, ANEEL, approved the 8th Periodic Tariff Revision for Espírito Santo Centrais Elétricas S.A. (“EDP ES”), a subsidiary of EDP – Energias do Brasil, S.A., in which EDP holds a 51% stake. The new tariffs (average decline for consumers of 4.8% YoY), effective as from August 7th, 2019 onwards, represent to EDP ES annual allowed revenues of R$ 979 million (vs. R$ 862 million in the last 12 months).
In the periodic tariff review process at EDP ES, occurring every 3 years, ANEEL recalculates the regulatory costs that can be managed by the distributor (Parcel B) which includes: (i) operational costs and (ii) capital costs (remuneration and depreciation). Non-manageable costs (Parcel A), that includes energy purchases from generators, cost of energy transportation, sector charges and financial adjustments are adjusted based on price variation during the preceding twelve months.
In this regard, the net Regulatory Asset Base was set at R$ 2.58 billion (vs. the previous R$ 2.01 billion) for the starting 3-year regulatory period. The rate of return on the Regulatory Asset Base is 8.09% net of taxes.
Finally, the regulatory index for Technical Losses was set by ANEEL at 7.06% (vs. 7.14% in the previous period). For Low Voltage, the Non-Technical Losses regulatory index was set at 10.74%, for the first year, which is expected to follow a declining trajectory to reach 9.58%, in 2022.
This information is disclosed pursuant to the terms and for the purposes of the article 17 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council and of article 248-A of the Portuguese Securities code.
EDP – Energias de Portugal, S.A.