More investments inDistribution and Generation

What can we expect of 2011?The Brazilian electricity sector will be on

the country’s agenda this year. Important regulatory decisions are expected, both re-garding the third cycle of the Distribution Company Tariff Revision, whose method-ology currently is under discussion togeth-er with the Granting Authority (ANEEL), as well as the renewal process for the conces-sions that expire in the upcoming years.

In the midst of this scenario, CPFL En-ergia plans to proceed with its permanent e�orts to achieve competitive advantag-es and to �nd new business opportuni-

ties. We will continue to implement our growth strategy, focused on three seg-ments — distribution, generation, and commercialization and business units services. We see opportunities down the road and, therefore, have set up work-groups to continuously study and evalu-ate the market.

For example, there is still potential for consolidation in Brazil’s Distribution sec-tor, and CPFL Energia is one of the groups that can create value in this segment in view of its operational expertise and ef-

�ciency. In Generation, we will participate in the hydroelectric plant auctions and we are strengthening our investments in renewable energy sources, especially wind and biomass.

CPFL Energia intends to work towards solidifying its growth strategy in the elec-tric power sector, through �nancial and socio-environmental responsibility and the creation of value for its shareholders.

Wilson Ferreira Jr.President of CPFL Energia

The President’s wordBioFormosa plant

The forecast for the growth of the Brazilian GDP in 2011 is 4.3%, which translates into posi-tive prospects for power consumption in view of the current investment cycle and an increase in family incomes — with low unemployment.

Within this context, 2011 will be a year of intense investments by CPFL Energia. In Dis-tribution, the group is earmarking an amount that is over R$ 1 billion for expansion projects and modernization of the electricity systems in over 600 Brazilian cities in the states of São Pau-lo, Rio Grande do Sul, Minas Gerais and Paraná. In 2011, 45 substations will be expanded or built, more than 500 km of electricity distribu-tion lines will be added and hundreds of pieces of equipment will be installed so that the CPFL Energia system will meet the needs of nearly 7 million customers.

With regard to Generation, the plans are no less ambitious. Three biomass plants will go

on stream, representing a total investment on the part of CPFL of some R$ 290 million. The Bio Formosa (Rio Grande do Norte) and Bio Ipê (upstate São Paulo) thermoelectric power plants will start up this year, expanding the group’s portfolio in this type of energy source to 160 MW of installed capacity. Furthermore, we will continue construction of eight wind parks the group owns in Rio Grande do Norte and whose operations are scheduled to begin in 2012 (seven of them) and 2013.

This extensive package of construction works reflects the force of the Brazilian market and, especially, of the markets in which CPFL Energia operates, strengthening its position as the leader of the Brazilian electric power dis-tribution sector, with a market share of about 13%. Similarly, it reaffirms the group’s strategic plan for growth in generation, where today it is the third largest private national participant.

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INVESTOR RELATIONS | 36 | YEAR 7 | JANUARY/FEBRUARY 2011

Capital Market Overview — CPFL’s Performance in 2010

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You can see in the chart below the performance of CPFL Energia’s shares for the 12 months ending January 2010, both in the Bovespa (CPFE3) as well as the New York Stock Exchange (CPL), compared to the main benchmark indexes for both of the exchanges.

Source: Economática Variations adjusted for dividend payouts

Our market performance

12.7%

CPFE3 IEE IBOV1/29/10 33.68 24,304 65,401 1/31/11 41.04 27,394 66,574 Var. 21.8% 12.7% 1.8%

21.8% 1.8%

Share Performance -Bovespa – 12 months

CPL DJBr20 DJIA

Share Performance -NYSE – 12 months

14.5%

1/29/10 54,.4 30,885 10,067 1/31/11 75.21 35,367 1,892 Var. 36.9% 14.5% 18.1%

36.9% 18.1%

CPFL Energia’s shares (CPFE3) traded on the BMF&Bovespa in 2010 went up in value by 25.7%, a rate that was higher than the rise posted by the IGC (12.5%), ISE (5.8%), IBX-100 (2.6%) and IBX-50 (0.8%).

The average trading volume increased 22% and 2010 compared to the previous year. On the Bovespa, on average the volume was R$ 17.4 million per day and on the NYSE it was R$ 15.9 million.

CPFE3: 25.7%

IGC: 12.5%

IBX-100: 2.6%IBX-50: 0.8%

ISE: 5.8%

Dec/09 Jan/10 Feb/10 Mar/10 Apr/10 May/10 Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10

11.6 15.9

15.717.4

2009 2010Nyse Bovespa

33.327.3

22% 26.2

19.8

17.9

16.4

10.8

8.8

8.7

6.1

5.4

5.2

3.6

1.2

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dec/31/2010

Market Cap ComparisonBovespa Electric Sector

Largest Electric Sector private company and second in market cap in the Industry

CPFE3: 25.7%

IGC: 12.5%

IBX-100: 2.6%IBX-50: 0.8%

ISE: 5.8%

Dec/09 Jan/10 Feb/10 Mar/10 Apr/10 May/10 Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10

11.6 15.9

15.717.4

2009 2010Nyse Bovespa

33.327.3

22% 26.2

19.8

17.9

16.4

10.8

8.8

8.7

6.1

5.4

5.2

3.6

1.2

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PrivatePlayer

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PrivatePlayerCPFL

dec/31/2010

CPFE3: 25.7%

IGC: 12.5%

IBX-100: 2.6%IBX-50: 0.8%

ISE: 5.8%

Dec/09 Jan/10 Feb/10 Mar/10 Apr/10 May/10 Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10

11.6 15.9

15.717.4

2009 2010Nyse Bovespa

33.327.3

22% 26

.2

19

.8

17

.9

16

.4

10

.8

8.8

8.7

6.1

5.4

5.2

3.6

1.2

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dec/31/2010

Price evolution CPFE3 x Indexes2010 accumulated variation

Average Daily Volume(R$ million)

Capital

Recommendations

Analysts’ recommendationsCPFL Energia’s shares closed the month of February 2011 covered by 27 financial institutions. With regard to the assessments of these institutions, 70% recommended the purchase or holding of CPFL’s securities.

Online interactionThe recommendations made by these financial institutions are available for consultation on the CPFL Energia web-site. To view the complete table, please visit our site at www.cpfl.com.br/ri. In the menu, choose the “Investor Information” section and click on the “Analysts and Consensus” option.

CPFL Atende starts new business segment

Capital Market

Dec 31, 2010

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The thermal imager, a piece of equipment developed by the U.S. Army to locate hidden enemy sol-diers, has become an ally of tech-nicians working for CPFL’s distribu-tion companies in their e�orts to detect and prevent problems in the electricity grid. The device reads in-frared radiation and is being used by the company’s technicians to diagnose equipment problems or in places where temperature levels that are higher than normal could result in future failures.

Currently, the CPFL Group’s electricity distribution utilities

are using a total of 38 units, in di�erent models, distributed in their hub cities. One of their advantages is that the devices greatly speed up the inspection process. Inspections can be car-ried out in movement so the in-spectors do not even have to get out of their vehicles: transmission lines are even inspected from in-side a helicopter. The points that are checked include connectors, switching gear, bus connectors, fuses, clips, circuit breakers, ca-pacitor banks, and current and power transformers.

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Thermal Imager enhances maintenance

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Diversi�cation. That is the word to use when one speaking about CPFL Atende. It is one of the CPFL Group’s newest businesses, re-sponsible for the contact center. CPFL Atende works out of on two structures (head o�ce in Araquara and Ourinhos) and now will render all of the services that have been provided by the Call Center.

The idea is to o�er client rela-tionship services to other com-panies as well as the Group’s own distribution utilities — even to clients outside of the electric power industry.

This move toward consolida-tion is fully in step with the com-pany’s growth strategy, open-ing up a range of services and

new business opportunities.“It represents a restructuring of

our business processes. Through this, we will minimize costs, read-just the client relationship man-agement process and use new technologies in a more appropri-ate environment for future expan-sion,” explained Amleto Landucci Jr., Wholesale Sales Director.

Business Units Services

CPFL Atende starts new business segment

The Araquara Call Center: expansion

In support of social institutions, CPFL Energia is launching a training program aimed at the third sector in the cities in which it operates. The Social Management Program offers free courses designed to help social organizations improve the management of their activities and to run their projects more efficiently. The first cities benefited were: Itapetininga, Av-aré, Ourinhos, Mococa, São José do Rio Pardo and Jaguariúna.

The training content that has been developed is based on criteria developed by the National Qualitative Foundation (FNQ). It raises the awareness of employees of the organizations regarding the importance of e�ec-tive management and disseminates the basic concepts for achieving management excellence. The program ranges from strategic planning through to results assess-ment and is open to leaders, managers and technicians of third sector organizations.

Social Management Program promotes 3rd

sector training

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CPFL INVESTOR is a publication of the Investor Relations Department of CPFL Energia, published by the Corporate Communication and Institutional A�airs Department, Rodovia Campinas Mogi Mirim, Km 2.5 - Jd. Santana - Campinas/SP, CEP 13.088-900. Tel.: (19) 3756-8197 Fax: (19) 3756-8040 – Chief Financial and Investor Relations O�cer: Wilson Ferreira Jr., Investor Relations O�cer: Gustavo Estrella, Corporate Communications O�cer: Augusto Rodrigues, Journalism Manager: Carlos Henrique Matos Ramos. Journalist responsible: Maria Helena Portinari MTB15577. Content and Editing: Marcos Sambo. Design: Leonardo Castagna - site: Investor Relations: www.cp�.com.br/ri - email: ri@cp�.com.br.

The week of São Paulo’s birthday celebration was mo-tive for CPFL Energia to put its sustainability initiatives on view to the public, including an electric car, green build-ing (sustainable construction concepts, power generation from renewable fuel sources and other projects showing its commitment to the new (low carbon) economy. These programs were some of the highlights on display at the 4th Planet in the Park exposition, an event organized by the Sustainable Planet project at Ibirapuera Park in São Paulo.

For example, visitors learn about the Aris utility vehicle (photo) manufactured by Edra Automotores, from Rio Claro City. Currently, the car is undergoing tests conduct-ed by the federal postal authority (Correios) in the city of Campinas for its Sedex fast delivery service.

CPFL Energia’s sustainability actions are highlight at Planet in the Park

CPFL Energia has just ob-tained two new certifications for its processes. The company’s risk management system was awarded ISO9001 certification for excellence and for its internal controls for producing Financial Statements. And then there was ISO 27001, for IT security, the first Brazilian energy industry com-pany to obtain it in recognition of the safety measures implement-ed at the company’s data center to secure information.

The ISO9001 certificate is awarded by the International Organization for Standardization and attests to the fact that the company adopts the corporate

best risk management and finan-cial statement preparation prac-tices. CPFL Energia’s risk manage-ment policies are designed to meet the standards of the best practices that exist in the world.

For its part, the ISO 27001 certificate also is awarded by the Organization for Standardization and confers that the company adopts the best risk manage-ment practices to reject its infor-mation systems. The evaluation process goes beyond the IT uni-verse: it includes infrastructure, contracting processes, physical access and other issues involved directly or indirectly with the se-curity of the environments.

Two new certifications

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Sustainability