SOCIAL AND ENVIRONMENTAL RESPONSIBILITY 2017 - Grupo …grupoenergisa.com.br/Documents/sustentabilidade/eficiencia-energe… · Minas Gerais, where Energisa Group was founded in 1905

ANNUAL REPORTSOCIAL AND ENVIRONMENTAL RESPONSIBILITY

2 0 1 7

OVERVIEW4 | Management message

6 | Energisa13 | Strategy and management

CORPORATE GOVERNANCE FRONT22 | Governance

24 | Risk management25 | Ethical conduct

ECONOMY AND FINANCES27 | Overview of the economy and sector

29 | Operating performance34 | Financial performance

SOCIAL AND SECTOR FRONT42 | Employees and service providers

50 | Clients and consumers54 | Suppliers

56 | Communities62 | Innovation

64 | energy efficiency

THE ENVIRONMENT68 | Environmental management

74 | ibase social balance sheet76 | Aneel indicators

166 | Corporate information

OVERVIEW

MANAGEMENT MESSAGE

THE ABILITY to deliver results, even in a challenging environment such as the one that persisted in 2017, simply reaffirms our culture and the Energisa Way of Being, which focuses on efficiency, simplicity and sustainable performance of our business in the last 113 years.

Still affected by Brazil’s political instability, the macro economy made a modest recovery in 2017. Gross domestic product rose by 1.0% after two consecutive contractions of 3.5% each, in 2015 and 2016. Despite the timid recovery, per capita income closed the year relatively unchanged on 2013. The services and industrial segments, which contribute more to the economy, remain stable, but have not yet recovered the losses incurred in the largest recession in recent history. Furthermore, strong growth of 13% in the agricultural sector, driven by a record grain harvest, was responsible for the main contribution to the GDP growth in 2017. This provided some respite to Brazilians. Household consumption began rising again, if only modestly, helped by lower interest and inflation rates.

The modest recovery therefore helped make future prospects more positive in a still uncertain environ-ment in the country. We closed the year with energy sales growth of 3.7%, outperforming the average 0.8% recorded in Brazil. The 29,620.4 GWh of energy invoiced in our concessions represents the highest volume ever recorded by Energisa Group, despite the fact we are still growing at a slower rate than before the economic crisis.

In legal and regulatory terms, 2017 was a year of intense discussion about reforming the sector model. Public Consultation 33 elicited inputs from industry and society into a bill that the Federal Government will present to Congress. The reforms are highly ambitious in seeking to broaden consumer choice, address barriers to the proper operation of the free market, reduce subsidies and

introduce new technologies.

Despite Brazil's subdued growth, Energisa Group's financial results saw continued growth in 2017. We posted consolidated net revenue of R$ 13.6 billion, up 15.5% over the previous year, consolidated Adjusted EBITDA of R$ 2.4 billion, 15.7% higher than in 2016, and record consolidated net income of R$ 572.6 million, up 192.4% from the previous year. This supported dividend payments of R$ 269.8 million in the year.

We successfully completed significant investments amounting to R$ 2.0 billion in the year and R$ 7.4 billion, in nominal terms, over the past five years. We have continued to invest in the future of our utilities, particularly in quality and in preparing for the close of another rate-setting cycle. In 2017 we made important progress on our outage frequency and duration indicators. In April 2018 three import-ant utilities will undergo rate-setting reviews: Energisa Mato Grosso, Energisa Mato Grosso do Sul and Energisa Sergipe. With our recognized investment in regulatory assets, we expect to see continued improvement in operational performance Group-wide.

In 2017 our shared services center—the Energisa Services Center (ESC)—began operation, an important milestone in the continued integration of our acquisitions from Rede Group. Now one of the largest shared service centers in Brazil, ESC handles Group-wide administrative effort and is helping to standardize processes and improve time and cost efficiency to support the continued growth of Energisa Group.

We continued to expand and diversify our businesses with our entry into the transmission segment. Our bid was successful in an auction for the construction of two transmission lines in the states of Goiás and Pará, which will also provide

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MANAGEMENT MESSAGEsynergies to our utilities operations. These transmis-sion lines should be completed by respectively 2021 and 2022, and will help to improve power quality and system reliability, especially in Mato Grosso and Mato Grosso do Sul.

We also opened two new buildings in Cataguases, Minas Gerais, where Energisa Group was founded in 1905. Designed as modern, sustainable and energy- and water-efficient facilities, the new buildings now host the head offices of Energisa Minas Gerais, Energisa Soluções and the Energisa Services Center, providing comfort and optimal working conditions for our employees

We also concluded the merger of five utilities in the states of São Paulo and Paraná into the newly created Energisa Sul-Sudeste. This pioneering, ANEEL-approved reorganization will provide signif-icant efficiency benefits both to the company and to customers. We also continued the information systems migration initiated in 2015, unifying these utilities on the same platform.

We remain engaged in and progressing on our digitization journey. As part of this, we launched “+Simples, +Ágil, +Energisa”, a transformation program that will take us faster and with less com-plexity to the level of leadership and efficiency we aspire to in a world of profound and rapid change.

We remain relentlessly focused on our dream of being a leading player in the power sector. We aspire to grow and achieve leadership in our industry across four aspects: customer satisfaction, safety, workplace climate and profitability.

We are pleased to report significant achievements in 2017 on each of these four major goals: our safety performance was recognized by Eloy Chaves medals presented to seven of our utilities, with special recognition for Energisa Nova Friburgo, which to date has gone 590 days without work-related accidents leading to leave, Energisa Paraíba earned a Great Place to Work seal of approval; we achieved leadership in customer satisfaction, with the best performance among utility groups on the Perceived Quality Satisfaction Index (ISQP); and Energisa Paraíba was recognized as the best utility in Brazil

in the 500,000+ consumer category by the Brazilian Association of Electrical Utilities (Abradee) in its annual industry benchmarking report. This recogni-tion has brought us a step closer the aspiration we are determined to achieve by 2020.

Our ambition for excellence has also been rec-ognized by our investors. Energisa shares rose by 50.5% in 2017, the highest appreciation in the power sector, significantly outperforming the IEE (10.0%) and B3 (26.9%) indices.

We are reaping dividends from developing and retaining talent, from exercising discipline in cost management, from anticipating trends and from building leadership in our industry. With a determined spirit, we are positioned for a new cycle of growth, confident we are on the right path and progressing at the right pace. We continue to rely on a strong system of governance and compliance, and our values of ethics and integrity, which reflect our commitment to the present and the future.

Lastly, we cannot neglect to acknowledge the role that our employees, customers, suppliers, creditors and shareholders have played on this journey. Our sincere thanks for your trust and confidence.

Ivan Müller Botelho Ricardo Perez BotelhoChairman of the Board CEO

E N E R G I S A 2 0 1 7 S O C I A L A N D E N V I R O N M E N TA L R E S P O N S I B I L I T Y R E P O R T 5

ENERGISA

CAPTIVE CLIENTS

6,649,966

TOTAL ENERGISA

MUNICIPALITIES SERVED 788

ELECTRICITY SOLD1

29,604.9 GWh1 Captive sales + free consumers (Tusd)

A ENERGISA is engaged in energy distribution, transmission, sales, services and energy generation studies. We are the sixth largest group in Brazil in terms of energy consumption, selling 29,620.4 GWh in 2017, equal to 6.4% of overall Brazil consumption, serving 6.7 million consumers (8.1% of the total number of consumers in Brazil in 2017). It controls nine distribution companies located in the states of Minas Gerais, Paraíba, Sergipe, Rio de Janeiro, Mato Grosso, Mato Grosso do Sul, Tocantins, Paraná and São Paulo, which have concession agreements expiring between 2020 and 2045.

In 2017, five distribution companies in São Paulo and Paraná, that were acquired from Rede Group in 2014, were merged into a single company, Energisa Sul-Sudeste (the new name of Caiuá Distribuidora), into which were merged the companies Bragantina, Força e Luz do Oeste, Vale Paranapanema and Nacional, as a result of the corporate reorganization autho-rized by the National Electricity Regulatory Agency (Aneel).

In the transmission sector the Group acquired two pieces of land in the states of Goiás and Pará in April 2017, in lines totaling a length of 864 km which are forecast to come into operation in 2021 and 2022. The two ventures will have synergies in the areas in which the company operates in the midwest and North regions of Brazil.

The Energisa Services Center (CSE) also came into operation in the year, in Cataguases (Minas Gerais state), This center centralizes the provision of transactional services and operating activities of administrative departments, in order to better organize working routines and processes and support Energisa’s objective to be a leading energy group.

Net revenue amounted to R$ 13.6 billion. At the end of the year the Group was employing 16.7 thousand people, including internal employees and service providers.

Founded in 1905 as Companhia Força e Luz Cataguazes-Leopoldina, Energisa’s shares are traded in at B3, the São Paulo Stock Exchange, under the symbols ENGI3 (common shares), ENGI4 (preferred shares) and ENGI11 (Units, certificates consisting of one common share and four preferred shares).

Its share control is exercised by Gipar S.A., whose only shareholder is Nova Gipar Holding S.A., whose major shareholders are Itacatu S.A. And Multisetor Comércio, Indústria e Participações S.A., belonging to the Botelho family, which holds 93.7%% of the voting capital of the holding company Nova Gipar.

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Energisa Mato Grosso do Sul 1,015,526 74 5,165.9 GWh

Energisa Mato Grosso 1,365,659 141 8,464.0 GWh

Energisa Tocantins 573,855 139 2,245.2 GWh

Energisa Paraíba 1,404,298 216 4,181.4 GWh

Energisa Borborema 209,981 6 634.2 GWh

Energisa Sul-Sudeste 767,611 82 4,092.6 GWh

Energisa Nova Friburgo 105,555 1 323.7 GWh

Energisa Minas Gerais 445,557 66 1,482.6 GWh

Energisa Sergipe 761,924 63 3,015.3 GWh


ENERGISA IN 2017

12,941 direct employees

3,769 outsourced employees

PERSONNEL

energy sold and transported

(captive sales + transportation) 29,620.4 GWh

18.1 thousandkilometers of transmission lines

536.1 thousand kilometers of distribution grids and lines

DISTRIBUTION

3,951.6 GWhof energy sold by Energisa Comercializadora

SALES

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FINANCIAL

SOCIO-ENVIRONMENTAL

SOCIETY

CLIENTS

people served16.4 million

788municipalities, in nine states

6.7 million clients

R$ 2.4 billionof adjusted EBITDA

R$ 13.7 billionof net revenue

R$ 89.2 millioninvested in environmental initiatives

30 yearsof the Ormeo Junqueira Botelho Foundation

50.5%valuation of Energisa’s most liquid shares in 2017 – ENGI11 – Units, (consisting of 1 common share and 4 preferred shares)


CV = Voting Capital / CT= Total Capital1 Share holding held directly and indirectly through investment vehicles.2 Energisa has an interest of 96.3% in Rede Energia.3 On June 30, 2017 the distribution companies CNEE, EDEVP, EEB and CFLO were merged into Energisa Sul-Sudeste (the new name of Caiuá Distribuição de Energia S/A).4 Transmission SPEs (Transmission Auction 5/2016)

EMG: Energisa Minas Gerais; ESE: Energisa Sergipe; PB: Energisa Paraíba; ENF: Energisa Nova Friburgo; EBO: Energisa Borborema; EDEVP: Vale Paranapanema; CNEE: Nacional; EEB: Bragantina; EMT: Energisa Mato Grosso; EMS: Energisa Mato Grosso do Sul; CFLO: Força e Luz do Oeste; ETO: Energisa Tocantins.

Gipar/Família Botelho

SHARE OWNERSHIP

Gipar (Botelho Family)

CV=66.1% CT=30.0%

GIF IV (Gávea)

CV= 5.6% CT=11.7%

FIA Samambaia 1

CV=10.0% CT=20.9%

Other NCI

CV=18.3% CT= 37.4%

EMT

57.7%37.9%

DISTRIBUTION DIRECT CONTROL

REDE ENERGIA2

ESS3

99.0%

ETO

76.7%

EMS

99.9%

ENF

100%

EBO

100%

EMG

100%

ESE

100%

EPB

100%

DISTRIBUTION DIRECT CONTROL

ENERGISA

SERVICES

Energisa Comercializadora

100%

Energisa Soluções

100%

Energisa Soluções Construções

100%

Energisa Serviços Aéreos

100%

Energisa Planejamento

100%

Multi Energisa Serviços

100%

TRANSMISSION

Energisa Pará 4

100%

Energisa Goiás 4

100%

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M I S S I O NEnergisa Group exists to transform energy into comfort, development and new sustainable possibilities, offering innovative energy solutions to its clients, aggregating value for its stockholders and offering opportunities to its collaborators.

V I S I O N

By 2020 Energisa will be one of the best and most respected power companies in Brazil, engaged in the distribution, transmission, generation and trading of energy and related services, acknowledged for the quality of its client services, operational efficiency and shareholder returns.

COMMITMENT: To the present-day and the futureWe act as responsible citizens, striving to generate wealth and prioritizing respect for our collaborators, investors, suppliers and clients. Most importantly, we are part of a community and are committed to future generations. As such, it is essential that we foster an ethical attitude and value the truth above all else.

TRADE ACCOUNTS RECEIVABLE: Simplify the lives of our clientsWe always treat our clients with dedication and respect in an effort to build an attentive and long-lasting relationship with them. We place ourselves in our customers' shoes to deliver efficient and lasting solutions that make life easier and add value for users.

PEOPLE: Our energy comes from peopleWe are part of a winning team that enables us to achieve, learn and win together. The opportunities here depend principally on the merits and dedication of each member of that team. We place a high value on transparency, teamwork and open and participative dialog. If you think the same way, you are one of us and we want you to be happy here.

RESULTS: Overcoming challenges to achieve resultsWe seek to achieve extraordinary results that generate value for our clients, shareholders and employees. We seek to exceed our targets in order to ensure that Energisa stands among the best in its sector in terms of efficiency and customer service.

SECURITY: FirstOur greatest asset is life itself. As such, we place health and safety above all else in our processes and attitudes. We adopt a disciplined mindset, invest in preventative measures and promote constant awareness amongst all our personnel to reduce risks.

INNOVATION: To make a differenceWe encourage creativity that generates value, be it in the production of something completely new or possible improvements to an existing product. Responsible observation, experimentation and curiosity all form part of the proactive approach that sets us apart.

VA LU E S


ENERGISA GROUP

ENERGISA PARAÍBA

ENERGISA BORBOREMA

ENERGISA SERGIPE

ENERGISA MATO GROSSO DO SUL

ENERGISA SUL-SUDESTE

AWARDS AND RECOGNITION

d A leader in Customer satisfaction in the Perceived Quality Satisfaction Index (ISQP), compiled by Abradee, with a score 81.5.

d Recipient of the Transparency Trophy between the companies with net revenue in excess of R$ 5 billion in the 21st Anefac-Fipecafi-Serasa Experian Awards, in recognition of the transparency of the accounting information.

d Four-time winner of the Award Excellent Press Relations Award, in the category electric power, awarded by the magazine Negócios da Comunicação and by the Communication Studies Center, for good press relations.

d Third place in Best Investor Relations Team in the 2017 Latin America Executive Team ranking, compiled by the journal Institutional Investor. Investor Relations Officer and CFO ranked amongst the three best CFOs and corporate investor relations manager ranked as the third best IR professional.

d Abradee Award for Best National Distribution Company with more than 500 thousand consumers and a winner in the categories best company for economic and financial management, operational management and best company in the Northeast.

d Seal for appearing in the ranking of best companies to work for in Brazil, compiled by Great Place to Work and the magazine Época, with an 84% employee trust rating.

d Winners in the categories social responsibility and operational management for companies with up to 500 thousand consumers in the Abradee Award.

d Two Eloy Chaves Medals for best distribution company in security and accident prevention for 2015 (bronze) and 2016 (gold).

d Winner of the regional north and north-east Aberje award of in the category Consumers communications and relations.

d Abradee Award for Economic, Financial and Operational Management

d First place in the categories performance improvement best company in the North / Midwest Region in the Abradee Award for distribution companies with more than 500 thousand consumers

d In the Aneel Customer Satisfaction Rating (Iasc) run by National Electricity Regulatory Agency (Aneel), this company prevailed in the South/Southeast region with a 68.98% score, as opposed to the regional average of 63.14%.

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STRATEGY AND MANAGEMENTThe Group's vision guides the way Energisa does business. The direction is revised annually during the Strategic Planning, which takes into account economic, political, sector and technological issues that exert a short-, mid- and long-term influence on the pursuit of profitable business opportunities within the electricity chain.

In 2017 the Group strategically entered the Transmission sector, which in conjunction with other sectors where Distribution is the flagship, as a part of the vision of “to be one of the best and most respected power companies in Brazil by 2020, engaged in the distribution, transmission, gener-ation and trading of energy and related services, acknowledged for the quality of its client services, operational efficiency and shareholder returns”.

CONSOLIDATE the process of integrating the new distribution companies into the Group and capturing the synergies and economies of scale as promised by the shareholders and agreed with the regulator.

ASSESS opportunities for growth in distribution by acquiring assets of strategic importance to Company.

BOLSTER the national branding as a quality company offering a diverse range of services, which meet consumer demands for new services and products.

CONSOLIDATE the segments of providing construction, operation and maintenance services related to the electricity distribution, transmission and generation segments; and for corporate commercial and industrial clients, offering products and services with added value and technological content.

EVALUATE transmission businesses focused on areas related to distribution, with suitable financing terms and returns.

CONSOLIDATE a seamless and independent trading business with national reach.

CAPTURE and develop renewable generation projects to comprise a long-term portfolio as an alternative to expanding the portfolio.

OPERATING SCOPE


MANAGEMENT SYSTEM

The Strategic Management System (SGE) is dis-seminated within Group companies and ensures disciplined planning and monitoring to aid deci-sion-making. The process has been enhanced over the years, with improvements and introduction of new planning and management technologies.

This enhancement included improvements in the process of preparing and submitting Business Plans, introducing target detailing methodologies based on the Balance Score Card (BSC), dissemination of management methodologies such as PDCA (Plan-Do-Check-Act) and PMO (Project Management Office), the latter for monitoring projects, in addition to specific methodologies for Strategic Reflection. Today the management system spans the entire Group, with regular follow-ups at all management levels of the organization.

To assist the process Energisa uses the Management Network - which entails method multiplies and guardians. This network ensures discipline throughout the organization.

As part of the ongoing pursuit of continual improve-ment and progress, in 2017 a strategic/corporate project raised a series of internal complexities in the day-to-day management of the Group’s companies. This survey resulted in another major project to be implemented in 2018 called + Simple + Agile + Energisa (detailed in the table Prepared for the future on the next page).

TRANSMISSION SYNERGIES

Energisa entered a new segment of the electric sector upon successfully bidding for 3 lots and 26 transmission lines at the auction held by Aneel in April 2017. The company acquired two lots, with a total length of 864 kilometers of lines, with 272 being in Goiás state and 592 in Pará state. The total investment earmarked by Aneel is approximately R$ 625 million - an amount which can also be optimized by Energisa over the construction period, which runs until 2022.

The decision to invest in transmission is in line with the Company’s growth strategy and will allow it to diversify the risk of its portfolio, consolidating the business model with investments that provide synergies between assets - i.e. distribution companies in the Midwest and North regions (Energisa Mato Grosso do Sul, Energisa Mato Grosso and Energisa Tocantins). The investment also improves the security of the system, supplies critical areas and improves quality.

The Group has experience in the management and construction of important projects in the electric sector, such as transmission and distribution lines for its distribution companies, which will be crucial for delivering and operating these new ventures.

Goiás Pará

Length of line 272 km (CD) 592 km (CD)

Aneel Capex R$ 295 million R$ 330 million

Annual Permitted Revenue (RAP) Proposed

R$ 36.7 million R$ 46.3 million

Construction term

48 months 54 meses

Start of operation

Up to Aug/2021 Up to Feb/2022

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STRATEGIC MANAGEMENT SYSTEM

Stakeholders: clients, shareholders, suppliers and society

Planning (P) Follow up (DCA)

Strategic reflection Quantification Delivery and

follow-up Results

1 2 3 4Strategic

alternatives Projected Delivering actions

Performance evaluation

Mission, Vision and Values Targets and actions Handling

deviations Profit sharing

Strategic maps Detailed projects Results meetings

G G G G

Common goal Discipline Mobilization

Acknowledgments Understanding

prioritiesDefining resources Realization

People + Personalized Processes + Technology

PREPARED FOR THE FUTURE

The + Simple + Agile + Energisa project was launched at the end of 2017 to enhance efficiency, cut through complexity and introduce positive changes, and aims to streamline routine processes, identifying bottlenecks and opportunities in activities to make the company more agile.

Analyses were carried out to understand the organization and its operating model, by mapping out all processes and identifying sources of complexity. Interviews with executives, 13 workshops at the distribution companies and visits by the project team resulted in a selection of issues with the greatest impact on the company’s daily routines. Survey on more than 2.3 thousand employees measured the time allocated to each process, so it is possible to analyze departments and processes most in need of streamlining.

Based on the information, the project carried out studies to assess improvements to the operating model, including issues related to organization, processes, systems and reporting. See below improvement initiatives to be implemented over the course of 2018 involving the streamlining of activities, making Energisa Group better prepared for the future.


2017 REFLECTION

Strategic reflection process conducted in four stages:

SCOPE

Brainstorm workshop (attended by Energisa and external experts)

ENVIRONMENT ANALYSIS

Surveying economic and sector factors based on workshop outputs

DETERMINING WORKING SCENARIOS

Workshop preparing cross scenarios of opportunities, threats and recommendations (participated in by all of the Group’s executives)

FINANCIAL MODELS

based on the analyzed scenarios

DEVISING STRATEGIES

for the next 10 years

1 2 3 4 5

STRATEGIC REFLECTION

More than just predicting potential future scenar-ios, our annual Strategic Forecasting exercise also assesses the implications of each of those pro-spective scenarios. The goal is to inform strategic guidance for the Group and our Business Units by analyzing each scenario and its impacts. The rationale of the exercise is to try to capture signals beyond the uncertainties in the short term.

As a structured process carried out Group-wide for more than 10 years, in retrospect this exercise has proven itself effective in informing bold yet sound strategies in a constantly changing business environment.

Energisa Group's Strategic Forecasting process uses a method that is based on predicting and assessing likely scenarios. The deliverable from this scenar-io-based planning exercise is a core strategy and robust options that reduce risk and accelerate our businesses’ response to changing circumstances.

STRATEGY QUANTIFICATION

In the quantification and resource allocation step, business and supporting unit Business Plans are firmed up and approved by the Board, setting bud-get and financial results projections Group-wide.

Following Board approval—in the second half of December—the strategy is translated into action-able targets. This exercise ensures key levers are prioritized and spans all levels of management.

The process is facilitated by our proprietary Strategic Management System (SMS) software, which streamlines and increases reliability in measuring and tracking results.

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FOLLOW-UP AND RESULTS

In the delivery step, employees are engaged in implementing actions and ensuring strategic goals are met. Results are measured using performance indicators that are evaluated at periodic status (Monthly Operations Reporting) meetings. At the end of the cycle, at the close of the financial year, the extent to which strategic goals have been achieved is factored into Energisa Group's Results-Based Compensation Program.

In addition to Monthly Operations Reporting meet-ings, our Sustainability Committee meets quarterly to discuss matters related to social, cultural and environmental development, including the Energisa Energy Efficiency Program.

COMMUNICATING OUR STRATEGY

Group strategy is disseminated through our Compass Program—a series of events in which the strategy approved for the current cycle is communicated to all employees. These events are divided into audience-appropriate Compass events for managers and employees.

Managers Compass events are held concurrently for all subsidiaries and are attended by employees in leadership positions. The event is broadcast live and speakers include our Chairman of the Board, CEO, vice-presidents and chief executive officers.

2017 was our ninth year of successfully dissemi-nating and achieving alignment on the Group's strategic guidance.

Following the Managers Compass events, each leader then disseminates the strategy to employees in similar events at a smaller scale. The Employees Compass program is designed to ensure that strategy information is optimally communicated to all employees across Group bases and geographies.

CERTIFICATION

All of Energisa’s distribution companies have ISO 9001 certification, as a means of ensuring the quality of their service provision processes. In 2017, Energisa Minas Gerais, Energisa Nova Friburgo, Energisa Sergipe, Energisa Paraíba and Energisa Borborema were recertified for the new version of ISO 9001:2015.

Energisa Minas Gerais, Energisa Nova Friburgo, Energisa Sergipe, Energisa Tocantins, Energisa Mato Grosso do Sul, Energisa Mato Grosso and Energisa Sul-Sudeste have declarations stating they have implemented the standard ISO 10002 - Customer Satisfaction and Complaints Handling.

,

Stakeholder Communications channel Main initiatives in 2017

Shareholders and investors

• Investor relations site, periodically updated with institutional and governance information, presentations, earnings releases, event calendars and registration to receive notifications

• Conference calls

• Capital market events

• Quarterly conference calls with analysts about earnings

• Participation in meetings organized by banks in roadshows in Brazil and overseas

• Energisa Day to showcase the company to investors

Clients • Telephone service center

• Site dedicated to serving consumers (Virtual Agency)

• On-site service (branches/trucks)

• Printed material (information in energy bills, flyers)

• Social media (facebook, twitter, YouTube)

• Energisa ON mobile applications (clearing up queries, information, news, solutions etc.) and Virtual Inspection

• Operation of all call center channels by way of Multi Energisa, based in Eusébio (CE) with a branch in Campo Grande (MS)

• Implementation of the Virtual Call Center (CVV) for the South and South-east regions. Except for Mato Grosso do Sul, all units are now operating with the support of the CVV

• Introduction of new functionalities in the Energisa ON application, such as Virtual Inspection, to send photos to check the connection standards before scheduling an energy connection visit

• Training attendants to instruct clients on how to use Energisa ON and the Virtual Branch

Employees and service providers

• Energisa Informa (e-mail marketing)

• Vem com a gente (e-mail campaigns)

• Clique.gente (general online newsletter)

• Energisa Notícias (regional bulletin)

• Mural Energisa (bulletin board newspaper)

• intranet

• Clique.líder (leadership newsletter)

• Clique.conexão (executive board newsletter)

• Sintonia Gente (radio and audio bulletin)

• Clique.saber (technical bulletin)

• Antenado (POA)

• Bússola Meeting (in loco event to present the Group’s strategies)

• Café&Prosa (meeting of the president with staff at the plants)

• Weather survey

• Creation of six new internal communications channels

• Creation of a Seamless Communications Platform

STAKEHOLDER RELATIONS

It is a part of Energisa Group's premise and implicit in its Sustainability Policy that business be conducted whilst taking into account economic, social and environmental responsibilities in an integrated, constant and balanced fashion, in order to guarantee the sustainable development of its operations and create value for all stakeholders.

In addition to guaranteeing results, the Group is also nurturing the economic development of the regions it operates in, to improve living and working standards of the community in line with its strategy. It is also seeking to ensure equal treatment between all stakeholders and commitment to future generations.

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Stakeholder Communications channel Main initiatives in 2017

Suppliers • Commercial channel (Electronic Market platform)

• Formal channels: letters, relevant documents (site), Ethics Code

• Quality Manual (printed)

• Informal channels: e-mail, telephone

• Updating of the Energisa Group supplier quality management manual

• Quality assurance manual introduced for strategic suppliers

• Maintenance of the Escalation program to monitor critical and strategic suppliers

• Issuance of the Ethics Code to active suppliers, with acknowledgment that they agree with the document’s contents

• Potential Supply Risk Audit (ARPS)

• Annual assessment of suppliers with feedback from both parties

• First 2017 Energisa Partner Award to recognize the quality of services provided

Local communities and tertiary sector organizations

• Campaigns, meetings and huddles

• OJB – Ormeo Junqueira Botelho Foundation

• Energy efficiency programs (Nossa Energia, Espaço Energia)

• Venues for community social and cultural events, such as cultural workshops, the Energisa Library and Book Counter

• Education and income projects, such as Ilumina – Gestão de Aprendizagem, Ensina Brasil, Bem da Gente and Junior Achievement

• Sporting projects such as sponsorship of Young Sailing run by the Brazilian sailing confederation

• Sponsorship of numerous audiovisual projects in production in the concession areas

Government and sector associations

• Communication through company representatives and the holding company’s institutional relations department

• Visits to government authorities to identify requirements and opportunities

• Participation in public hearings

• Partnerships in events meeting the population’s requirements

• Participation in sector meetings and discussions of regulatory themes and government policies in the energy sector

Media • Press advisory

• Part of the site with press releases and sector glossary

• Workshops and meetings with journalists

• Interviews


ENERGISA SERVICES DESK

A new working model for administrative operations was introduced in 2017 following the creation of the Energisa Services Desk (CSE), which runs in a single platform all routine and operating activities that are repetitive in certain departments and the Company’s transactional services. Based on the shared services center concept, the Desk aims to offer greater security and solidity to permit Energisa to plan growth and sustainability on the path to becoming a Leading Group.

Operations are centralized in a modern and sustain-able building located in Cataguases (MG), with open spaces that encourage high productivity. The team can therefore channel energy which is essential when distribution companies are serving the end consumer. The building has a structure ready for possible increases in services provided, in anticipa-tion of possible expansions of the Group’s business.

The CSE came into operation in April 2017, after a feasibility study conducted two years before by a specialist firm, previously approved by Aneel, which resulted in a consistent implementation plan.

The following services began to be processed at CSE in 2017: accounting (tax, equity and general), HR (benefits, payroll and personnel), facilities (fleet, building maintenance and travel), supplies (pur-chases under R$ 500 thousand), financial (treasury, accounts payable and accounts receivable), telephony and networks, performance services and ongoing improvements, service center.

The desk’s quality is monitored based on some 180 service and operational level (SLAs) indicators, which measure the efficiency, time and quality of all processes delivered. A number of benefits of the centralized services were reaped in the course of 2017. There was a significant reduction in manual activities after the rewiring and standardization of 200 of the Company’s flows, in addition to an improvement in the control of the flow of informa-tion for decision taking, based on the implemen-tation of control charts. Another example was the shortening in the period for purchasing materials worth above R$ 20 thousand, from 90 days to 60 days. The target is to reduce this to 50 days in 2018. SUSTAINABLE BUILDINGS

Sustainability was the fundamental concept for two new buildings erected in Cataguases; one to house the Energisa Services Desk and another for the head office of Energisa Minas Gerais. The architectural plans were built around a tree that has existed on the site for over a hundred years and became a symbol of the company (ficus glabra vellozo, a type of fig tree).

Physical and geographical factors were taken into account, such as temperature of the work environment, wind and light levels, relative humidity of the air and rainfall. To guarantee the best use of natural resources, such as natural lighting, film-covered plate glass, perforated metallic plates and sunshades were used, in addition to LED bulbs, which are more efficient and consume less energy;

The walls and ceilings are painted in light colors to reflect the light. Restrooms and kitchens have been designed to guarantee rational water use, with timers installed in showers and taps. Floors are washed, windows are cleaned and gardens are watered with water collected from rainfall and produced by the air-conditioning system.

O V E R V I E W20

CORPORATE GOVERNANCE FRONT

PRINCIPLES OF TRANSPARENCY and ethics under-pin Energisa’s relationships with all stakeholders. Established since the Group’s foundation in 1905, the governance model has been enhanced over the years in order to ensure equal treatment between partners and to protect stakeholder rights.

In 2017 the company began preparing a much more detailed and explanatory management report and expanded its investor relations practice by holding more frequent events in the various regions it operates in. This process also reflects the entry into Level 2 Corporate Governance of B3 S/A – Brasil, Bolsa, Balcão, which took place in 2016, after a period of preparing and adjusting its Bylaws.

Initiatives to strengthen relations with investors include Energisa Day, which took place in August 2017 in João Pessoa (Paraíba state), the expansion of monthly results alignment meetings between officers, managers and coordinators and ramping up the work of the reporting committees.

The dedication to investor relations was acknowledged in six different categories in the 2017 Latin America Executive Team ranking compiled by Institutional Investor magazine, one of the international financial market’s most recognized specialized vehicles.

These good governance practices include the fact that at least 20% of the members of the Boards of Directors of Energisa S.A. and the distribution companies are

independent members and at least ten regular meetings are held each year, which enables shareholders to ensure the Company is in line with their strategic objectives and to assess results, risks and opportunities.

As a signatory to the Abrasca code for the Self-Regulation and Good Practices of Listed Companies, the following policies have been in place since 2012: Policy for controlling and disclosing material information, securities trading policy, related-party transactions policy and Financial Risk Management Policy, in addition to the Internal Regulations/Disclosure Committee and the Code of Ethics and Conduct.

The compensation of the members of the Board of Directors and Executive Board is set by the General Meeting. The overall limit on the annual compensation of directors and officers for FY 2017 was approved and distributed by the Board of Directors. Neither loans, credits or prepayments are awarded to directors or executives.

BOARD OF DIRECTORS

This Board is charged with supervising and controlling the Company’s activities, exercising concrete respon-sibilities in respect of the business direction and strategy, and monitoring the ordinary management of its business affairs. It comprises up to seven members, elected at the General Meeting for a term of up to two years, who can be reelected. The current members were elected in April 2016 and will remain in office until the 2018 Annual General Meeting. Two of the seven mem-bers currently represent noncontrolling interests.

EXECUTIVE BOARD

Charged with delivering corporate strategy, the Executive Board consists of up to five members, who may or may not be shareholders, with a term of one year who can be re-elected by the Board of Directors. The current members were elected in April 2016 at the Board of Directors' meeting (RCA), and will remain in office until the next meeting to be held in April 2018.

Further information about the members of the Board of Directors and Executive Board can be viewed at https://ri.energisa.com.br/

YEARS OF DEDICATION

In December 2017 the Chairman of Energisa’s Board of Directors, Ivan Botelho, completed 60 years at the company. The documentary Ivan Müller Botelho was launched to commemorate and tell this story: 60 years of work and dreams, which can be seen on YouTube (www.youtube.com/watch?v=NxLOKc70VMM).

This trajectory was built on work, competence and humility. It began in 1957, when he joined Cia. Força e Luz Cataguazes-Leopoldina as a transmission line engineer. He held various positions at the company, until he took over the presidency of the company in May 1997, replacing his father Ormeo Junqueira Botelho. He has been chairman of the board since May 1990, following his father’s death, and has continually contributed to ranking Energisa amongst the largest companies in Brazil’s electric sector.

C O R P O R A T E G O V E R N A N C E F R O N T22

OVERSIGHT BOARD

A nonpermanent board, the Oversight Board is charged with auditing management activities, when necessary, reviewing the company’s financial statements and reporting their conclusions to the shareholders, in due accordance with the Bylaws. Elected at the General Meeting at the request of the Company’s shareholders, this should consist of at least three and at most five members, with an equal number of alternates. The Oversight Board was not convened in the course of 2017.

ADVISORY BOARD

Also nonpermanent, the Advisory Board is elected by the Board of Directors to help steer company business, offer opinions on issues or transactions it is consulted about, present technical, economic, industrial or commercial data and information along with suggestions and recom-mendations. When created, the board should consist of a minimum of three and maximum of six members, who may be shareholders, with a term of one year, and can be re-elected. The Advisory Board is not currently convened.

SUPPORTING COMMITTEES

Four committees assist management and report to the Board of Directors:

Audit and Risk – Monitors and advises the Board of Directors in respect of quarterly and annual financial and accounting reports of all of its subsidiaries, internal controls, risk management and the work carried out by internal auditors. Consists of three members (all inde-pendent and non-executive, including an expert) and an executive secretary.

Financial Risk Management – Introduced by the Financial Risk Management Policy, this has to evaluate processes and procedures and put forward the best alternatives. It addresses debt limits, hedge requirements for foreign-cur-rency liabilities, counterpart risk limits and dividend policy, amongst other measures aiming to measure and mitigate risks associated with the holding company and its subsidiaries.

Reporting – This Committee is charged with managing the Company's reporting policy, recording access to inside information, classifying it according to criteria that could facilitate monitoring thereof, and discussing

and recommending the disclosure or nondisclosure of potentially material acts and facts.. Of an advisory nature, it is made up of four members with renowned expertise in the field, and must be presided over by the Investor Relations Officer.

Compensation and Succession – This committee manages issues related to the compensation and succession guidelines and policies for the executives of Energisa S.A. and its subsidiaries.

FINANCIAL REPORTING

In order to ensure the quality and transparency of the information disclosed to the market, and to protect the shareholders’ interests, Energisa has a policy for disclosing material events or facts. Controlling shareholders, directors, executives and other employees who have access to such information sign a Nondisclosure and Confidentiality Agreement.

Every month the Company publishes newsletters on its website containing information about the company. Proactive relationship channels are also part of the investor relations and financial vice presidency, which has an open mailing list used to send economic and financial information to investors, shareholders, financial institutions, suppliers and other stakeholders.

With three of its companies traded on the stock exchange, the Group has the support of an investor relations depart-ment consisting of a team which was expanded in 2017 to meet the growing demand for economic and financial information by shareholders, investors and analysts, in addition to quarterly earnings reports and conference calls with analysts. It also has an investor relations site which is continually reviewed and updated, and participates in events organized by banks.

INDEPENDENT AUDITORS

Energisa's economic and financial statements are audited by Ernst & Young Auditores Independentes, whose engagement complies with the principles of independence, according to which the auditor should not audit its own work, perform managerial duties for its client or pursue its interests.


RISK MANAGEMENT

Energisa Group follows a Risk Management Policy that aims to avoid, mitigate, remediate, monitor, certify or enhance internal controls in order to reduce or eliminate the negative impacts and maximize positive factors. The risk map is per-manent and steers the enhancement of policies, procedures, responsibilities and manuals related to the issue.

This process is coordinated by the Risk and Audit Committee, which answers to the Board of

Directors, and is delivered by the corporate risk management advisory board, subordinated to the financial vice presidency.

The advisory board is responsible for detecting, clas-sifying, analyzing and handling the main business risks and conducting audits and monitoring internal controls, based on the Coso model introduced by the National Commission on Fraudulent Financial Reporting, an organization created in the USA to ensure enhanced and transparent financial reporting.

RISK MANAGEMENT CULTUREA number of initiatives are maintained that seek the involvement and commitment of all to ensure the risk management culture permeates our business

INVOLVEMENT of senior management in defining the processes to be analyzed.

PARTICIPATION of business units in determining the portfolio of projects to be established for each financial year.

MOBILIZATION meetings with managers of the departments involved to present and consolidate the project planning.

SYNTHETIC and objective reports quantifying the risks assessed in each project and assertive recommendations focusing on enhancing internal controls.

SUPPORT from the corporate risk management advisory board for departments involved in preparing action plans, with a view to implementing the recommendations.

SYSTEMATIC monitoring of the action plans and measurement of the residual vulnerability after the recommendations have been introduced.

PERMANENT disclosure of risk policies and hotlines via e-mail, intranet, notices and when recruiting new employees.

MEETINGS with officers of the companies to reinforce the importance of monitoring risks and implementing suggested improvements.

WORK conducted with the active participation of the departments involved.

C O R P O R A T E G O V E R N A N C E F R O N T24

The audits embrace the organizational processes deemed critical and comply with standard ISO 31000 – Risk-Based Auditing (ABR). The risk matrix follows the corporate dynamics and undergoes constant revisions. The main risks managed embrace issues related to operations, regulations, safety, the environment, repute and the supply of materials and services. These factors are assessed by two variables: vulnerability of processes related to these risks which could result in their materialization; and

the risk amount, i.e. the potential financial loss the Company faces if the risk materializes.

Recommendations have been made over the years involving internal processes, compliance, contracts, controls, personnel and systems, among other issues, which lead to deliverable actions. The continual improvement of critical processes has led to a drastic reduction in process vulnerability over the years and conse-quently business risks.

ETHICAL CONDUCT

Energisa Group has a Code of Ethics and Conduct, revised in 2016, which embraces a set of fun-damental ethical guidelines and rules aligned with its Values to guide conduct and guarantee a fair and harmonious coexistence between the Company and its stakeholders.

The printed document is delivered to all staff along with a letter of presentation signed by the Chairman of the Board of Directors. Remote training is also provided to our staff. The Code is also given to suppliers and third parties when signing the supply contract with the Group, thereby ensuring optimal relations with these partners, who provide services to companies throughout the concession area. The document’s contents can be seen on the Company's website (http://holding.grupoenergisa.com.br/)

Energisa set up a Hotline in 2010, which follows a protocol supported by legal and ethical practices and can be seen by the public on the site (www.energisa.com.br/empresa/Paginas/sobre-energisa/etica-transparencia.aspx) or requested by e-mail ([email protected]) or post (Rodovia BR 230, km 25, Cristo Redentor, CEP: 58071-680, João Pessoa/PB), in person or by telephone (83 2106-7689).

Ethics Committee

Any complaints regarding ethics all corruption are analyzed by the Ethics Committee, which is charged with enforcing and enhancing Energisa Group’s Code of Ethics and Conduct. The committee analyses suggestions, consultations, complaints, charges, violations and breaches of the code and determines the implementation of disciplinary measures, where necessary, accord-ing to seriousness, based on the Group’s internal regulations.

It has five serving members and two alterna-tives representing all of the Group’s divisions, with three-year extendable terms, reporting to the holding company’s CEO.

The volume of complaints has been minimal over the years testifying to the assertiveness and dedication of management in its manage-ment tools and policies and internal controls being used to mitigate ethic and corruption risks.


ECONOMY AND FINANCES

OVERVIEW OF THE ECONOMY AND SECTOR

In 2017 Brazil experienced a modest economic recovery. Gross domestic product (GDP) rose by 1%, reverting the contraction of 3.5% witnessed con-secutively in the last two years. Consumption levels made a recovery at the end of the first half, but have yet to return to the levels of 2014 before the onset of the economic and political crisis. Financial system loans contracted by 0.6% in the year to a balance of R$ 3,086 billion, driving the ratio between credit/GDP to 47.1% compared with 49.6% at the end of 2016.

Amid this climate unemployment worse with the average rate rising from 11.5% in 2016 to 12.7% in 2017, according to the Brazilian Institute of Geography and Statistics (IBGE), which signifies the loss of 3.3 million registered jobs over the course of the last three years.

Due to lower consumption, inflation (as measured by the IPCA price index) continue to decline, to 2.95% in the 12 months of the year%, compared with 6.29% in 2016, falling within the lower target of 4.5% established by the Monetary Policy Committee (Copom). A series of interest rate cuts led to an accumulated decrease of 6.75 percentage points in the Selic base interest rate, which dropped from 13.65% to 6.9% in December 2017.

Energy consumption

Despite the slowness of the recovery, the mac-roeconomic situation boosted electricity sales. Consumption rose by 0.8% in 2017 to 463,948 GWh, after contracting in the two prior years (0.9% in 2016 and 2.1% in 2015) returning to the levels recorded in 2015, according to the research Institute Empresa de Pesquisa Energética (EPE).

All segments experienced growth, especially the industrial segment, which rose by 1.3% (consump-tion of 165,883 GWh in 2017). Residential consump-tion rose by 0.8%, commercial by 0.3% and other segments by 0.7%.

All regions of Brazil experienced growth, except for the north-east (-1.9%), which after its third annual consecutive contraction closed 2017 with

the lowest industrial consumption for the year in the series monitored by EPE since 2004. The South observed the greatest consumption increase (rise of 3%). The south-east and midwest, the main consumption centers in Brazil, experienced growth of 0.3%. The north experienced growth of 0.5%.

REGULATORY ENVIRONMENT

2017 was marked by high volatility in energy prices, due to worsening hydrological conditions which led to greater output by thermal sources, impacting energy costs and the rates passed through to consumers.

In conjunction with sector entities, Energisa actively participated in discussions about the issue, by way of Public Consultation 33/2017 conducted by the Ministry of Mines and Energy, addressing the improvement of the Electric Sector’s Regulatory Framework.

A number of measures are being debated, including pricing adjustments, reduction in the limits for consumers to access the free market, reduction in transmission and generation costs, separation of the energy ballast and new guidelines to set rates and measures to counter the judicialization of the sector, amongst other things.

The main expectation of the electric sector was that the consultation would result in the publi-cation of measures addressing the hydrological risk, considered urgent due to the risk of energy shortages and consequent increase in prices instability in the companies’ financial health. The government, however, merely published a Provisional Law (814/2017), which introduces actions to facilitate the sale of the distribution companies owned by Eletrobrás in addition to the state company’s share control.

Another topic that marked the regulatory environ-ment was the discussion about the rate of return on investments made by the distribution com-panies (WACC - Weighted Average Capital Cost). After a broad debate with sector agents, Aneel maintained the index at 8.09% through 2020.


On the internal front, rate reviews were awarded to Energisa Borborema and Energisa Paraíba, reversing the losses that Aneel had provisionally awarded in the rate review of Energisa Tocantins and completed the preparation of Energisa Mato Grosso, Energisa Mato Grosso do Sul and Energisa Sul-Sudeste for revisions that will take place in 2018, guaranteeing greater profitability for these companies (for further information see the section Financial Performance).

Rate flags

On October 24, 2017, at public meeting the Aneel Executive Board approved the revision of the rate flag methodology and application intervals. This mechanism aims to diminish the financial burden between the rate adjustments and to alleviate the cash outflows incurred by the distribution compa-nies in the short term.

The surcharges apply from November 2017 as follows: Green flag: no surcharges (good conditions for energy generation) Yellow flags: R$ 2.00 for each 100 (kWh); Red flag - Level 1: R$ 3.00 for each 100 (kWh); and Red flag - Level 2: R$ 5.00 for each 100 (kWh).

Overcontracting

Energy overcontracting, which undermined the performance of Brazilian distribution companies in 2016, was resolved over the course of the year. At an Executive Board meeting held April 25, Aneel determined that each distribution company's involuntary contracting be assessed individually, considering the maximum effort to achieve the con-tractual coverage level, as established in Normative Resolution 453/2011. The regulations determine that the companies contractually guarantee coverage of between 95% and 105% of the market demand. If the limit is exceeded and the reasons for overcontracting are deemed voluntary, Aneel does not include this difference in the readjustment processes and rate reviews. As Energisa did not contract energy above the regulatory level of 105% in the course of 2017, the results were not affected.

In the previous year Energisa had provisioned for the amounts resulting from the services created by the obligation to participate in the A-1 auctions whilst the final decision of the regulatory agency was pending. The administrative proceedings filed by the electricity companies had not been resolved by ANEEL by the end of 2017.

E C O N O M Y A N D F I N A N C E S28

OPERATING PERFORMANCE

CUSTOMER BASE

Energisa Group closed 2017 with 6,649,966 consumer units on its captive client base, growth of 2.0% on 2016. 647 were served in the free market, growth of 35.9% on the figure of 476 in the previous year.

GROWTH IN THE NUMBER OF CLIENTS

2015 2016 2017

Company Captive sales Free market Captive sales Free market Captive sales Free market

Energisa Minas Gerais

433,470 32 438,869 46 445,557 51

Energisa Nova Friburgo

102,533 0 104,116 4 105,555 8

Energisa Borborema 204,656 2 208,592 7 209,981 12

Energisa Paraíba 1,355,210 21 1,378,693 34 1,404,298 44

Energisa Sergipe 731,480 18 748,538 36 761,924 42

Energisa Mato Grosso

1,296,639 95 1,327,938 168 1,365,659 200

Energisa Mato Grosso do Sul

970,635 73 990,556 90 1,015,526 139

Energisa Tocantins 567,469 7 566,124 15 573,855 21

Energisa Sul-Sudeste 741,943 26 756,139 76 767,611 130

Total Energisa 6,404,035 274 6,519,565 476 6,649,966 647

Energisa Paraíba



Energisa Sul-Sudeste

Energisa Sergipe

Energisa Tocantins


Energisa Borborema


1,404,298

1,365,659

1,015,526

767,611

761,924

573,855

445,557

209,981

105,555

NUMBER OF CUSTOMERS BY DISTRIBUTION COMPANY - CAPTIVE SECTOR


ELECTRICITY SALES

After remaining stable in 2015 and contracting in 2016, electricity consumption in Energisa Group's free and captive sectors rose by 3.7% in 2017. This performance exceeds the national average consumption increase by 2.9 percentage points, which was 0.8% in 2017, according to Empresa de Pesquisa Energética (EPE). If uninvoiced consump-tion is taken into account, the growth in 2017 was 4.0%.

The consumed volume (29,604.9 GWh) was a historic record, signaling a gradual recovery in the energy sector. The fourth quarter was extremely important for this result, primarily due to the small comparison base due to the better weather in certain concession areas at the end of 2016.

All the consumption sectors presented positive variance in the year, especially the rural sector (7.9%). After consecutive contractions in 2015 and 2016, the industrial sector returned to growth (+2.3%), primarily due to the macroeconomic growth in Brazil. The food sector, accounting for 40% of the sector, experience the greatest increase (+5.3%), which is served by midwest distribution companies.

ENERGY CONSUMPTION BY CLASS1

1 Energy sold and transported at the distribution companies

35.7 %

Residential

21.6 %

Industrial

19.7 %

Commercial

13.4 %

Other sectors

We also draw your attention to the consumption by the concessions of EMT (+6.6%) and EMS (+5.4%), which jointly account for 45.8% of Energisa's consolidated total sales. The only distri-bution company that experienced a consumption decrease in 2017 was ESE (-1.3%), driven by heavy rainfall and lower activity by companies in the cement and oil and gas sectors.

Energisa Comercializadora recorded an overall total sales volume of 3,951.6 GWh, compared with 2,458.3 GWh in 2016, or 60.4% more. The number of clients rose from 171 to 299, or by 74.9%

SALES BY CONSUMER SECTOR (GWH)

Sector 2015 2016 2017 Change

Residential 9,866.1 10,085.1 10,475.4 + 3.9%Industrial 7,011.2 6,339.1 6,486.4 + 2.3%

Captive 3,638.0 2,967.5 2,321.5 - 21.8%Free 3,373.2 3,371.6 4,164.9 + 23.5%

Commercial 5,838.6 5,725.6 5,880.0 + 2.7%Captive 5,577.6 5,365.1 5,313.0 - 1.0%Free 261.0 360.5 567.0 + 57.3%

Rural 2,526.8 2,613.4 2,820.3 + 7.9%Captive 2,526.8 2,592.1 2,765.9 + 6.7%Free - 21.3 54.4 + 155.4%

Other sectors 3,776.4 3,786.1 3,942.7 + 4.1%Captive 3,776.4 3,777.9 3,892.7 + 3.0% Free - 8.2 50.1 + 511.0%

Energy sales to consumers (Invoiced Captive Sales) 25,384.9 24,787.7 24,768.5 - 0.1%Energy associated with free consumers (TUSD) 3,634.2 3,761.4 4,836.4 + 28.6%Invoiced Captive Sales + TUSD 29,019.1 28,549.1 29,604.9 + 3.7% Uninvoiced consumption (52.0) (56.0) 15.5 -Invoiced Captive Sales + Uninvoiced TUSD 28,967.1 28,493.1 29,620.4 + 4.0%

9.6 %

Rural


ENERGY SOLD BY DISTRIBUTION COMPANY (GWH) - CAPTIVE SALES

Company 2015 2016 2017 Change

Energisa Minas Gerais 1,215.5 1,197.5 1,204.4 0.6%

Energisa Nova Friburgo 328.3 320.7 307.6 -4.1%

Energisa Borborema 660.2 601.7 549.3 -8.7%

Energisa Paraíba 3,775.6 3,689.1 3645.0 -1.2%

Energisa Sergipe 2,443 2,409 2,357.7 -2.1%

Energisa Mato Grosso 6,923 6,745 7,027.6 4.2%

Energisa Mato Grosso do Sul 4,477 4,310 4,320.3 0.2%

Energisa Tocantins 2,036 2,119 2,093.0 -1.2%

Energisa Sul-Sudeste 3,490 3,358 3,263.6 -2.8%

Total Energisa 25,348.6 24,749.9 24,768.5 0.1%

ENERGY SOLD BY DISTRIBUTION COMPANY (GWH) - CAPTIVE SALES + TUSD (INVOICED)

Company 2015 2016 2017 Change

Energisa Minas Gerais 1,556.9 1,459.6 1,482.6 1.6%

Energisa Nova Friburgo 328.1 323.3 323.7 0.1%

Energisa Borborema 660.1 620.8 634.2 2.2%

Energisa Paraíba 4,185.1 4,107.9 4,181.4 1.8%

Energisa Sergipe 3,125.8 3,054.4 3,015.3 -1.3%

Energisa Mato Grosso 8,055.1 7,940.4 8,464.0 6.6%

Energisa Mato Grosso do Sul 4,967.3 4,903.2 5,165.9 5.4%

Energisa Tocantins 2,102.3 2,187.1 2,245.2 2.7%

Energisa Sul-Sudeste 3,986.4 3,952.6 4,092.6 3.5%

Total Energisa 29,019.1 28,549.1 29,604.9 3.7%

ENERGY SOLD AND TRANSPORTED AT THE DISTRIBUTION COMPANIES

2015 2016 2017 Change

Invoiced captive energy sales 25,384.9 24,787.7 24,768.5 - 0.1%

Energy transmitted to free clients (Tusd) 3,634.2 3,761.4 4,836.4 + 28.6%

Subtotal (captive sales + Invoiced Tusd) 29,019.1 28,549.1 29,604.9 + 3.7%

Uninvoiced consumption (52.0) (56.0) 15.5 -

Subtotal (captive sales + Tusd + uninvoiced) 28,967.1 28,493.1 29,620.4 + 4.0%


Energy losses

Consolidated total energy losses amounted to 4,080 GWh in the 12 months of 2017, or 11.8% of the injected energy, a decrease of 0.57 percentage points compared with the 12.40% recorded in December 2016. Nontechnical losses diminished (from 3.29% in 2016 to 2.70%). The nontechnical loss of 933 GWh in volume is the lowest on record since 2015. Technical losses remained stable (9.10% in 2016 and 9.11% in 2017), in the amount of 3,147 GWh.

The results are primarily due to the intensification of energy theft combating actions. Meanwhile, the higher technical loss was due to the increase in total invoiced energy (Captive + Free + Supplies), which also contributed to the decrease in non-technical losses in percentage terms.

The distribution companies Energisa Mato Grosso, Energisa Tocantins and Energisa Mato Grosso do Sul – which jointly accounted for 63.4% of the Group's total losses in the year – saw losses diminish by 0.85 percentage points (p.p.), 1.87 p.p. and 0.28 p.p., respectively. Consumption rose significantly at the three companies in the year, demonstrating the market recovery in 2017.

The main measures combating losses entailed expanding the regularization inspection teams, especially in the states of Mato Grosso and Paraíba; and the implementation of the Centralized Measurement System (SMC) in critical

areas, such as regions with a high incidence of makeshift connections, areas classified as heritage sites, in which irregularities are hidden by building fronts, and indigenous villages. The actions include tamperproof grids and meters, in addition to consuming units (such as seals and special boxes, which prevent the meters from being violated), and replacement of the open low-voltage grid by a multiplex grid, amongst other things.

All of these measures have been making it pos-sible for the losses to fall within the regulatory level in the Group’s consolidated figures in the last two years.

ENERGY LOSSES - PAST 12 MONTHS (%)

Technical losses (%) Non-technical losses (%) Total losses (%)

Company 2016 2017 2016 2017 2016 2017 Aneel

Energisa Minas Gerais 9.41 10.19 0.69 0.24 10.10 10.43 9.63 ●

Energisa Nova Friburgo 5.15 5.02 -0.55 -0.75 4.60 4.28 5.84 ●

Energisa Borborema 7.5 7.64 -0.6 -1.77 6.90 5.87 7.54 ●

Energisa Paraíba 10.26 10.23 3.26 2.57 13.52 12.80 13.53 ●

Energisa Sergipe 6.9 6.85 2.12 1.93 9.02 8.78 10.51 ●

Energisa Mato Grosso 9.82 9.51 5.62 5.08 15.44 14.59 13.68 ●

Energisa Mato Grosso do Sul 9.83 10.00 3.89 3.44 13.72 13.44 14.91 ●

Energisa Tocantins 11.52 11.41 3.34 1.58 14.86 12.99 13.99 ●

Energisa Sul-Sudeste 6.25 6.53 0.49 -0.20 6.74 6.32 6.73 ●

Energisa consolidated 9.10 9.11 3.28 2.65 12.38 11.85 12.23 ●

11.97% 12.38% 11.85%

201720162015

12.32 % 12.40 % 12.23 %

PERFORMANCE OF ELECTRICITY LOSSES

Total losses Regulatory losses


Quality supply

The quality of the energy supply was notable in operations in 2017. All nine distribution companies experienced a decrease in the equivalent outage frequency (FEC), stated in times, which also fell within the regulatory limits. Seven companies managed to decrease their equivalent outage duration (DEC).

In 2017, five companies reported the lowest ever DEC rates and another five the lowest ever FEC rates.

The exceptions were Energisa Mato Grosso and Energisa Mato Grosso do Sul, two states affected by heavy rainfall at the start of the year. Tocantins also experienced heavy rainfall in the third quarter, but a comprehensive mobilization of additional resources helped maintain the annualized standard within the regulatory limits. According to Instituto Nacional de Pesquisas Espaciais (Inpe), there was 65% more lightning strikes in Mato Grosso do Sul and 42% more in Mato Grosso in 2017 compared with 2016.

The results reflect the ongoing investment in quality improvements, especially: intensifying tree pruning and easement cleaning actions, installing three-phase and single-phase reclosers combined with power outage alarms, and allocating teams and vehicles and transformers and posts in strategic locations in order to reduce service time.

OUTAGES

Equivalent outage duration (DEC - hours) Equivalent outage frequency (FEC - times)

Company 2015 2016 2017 Aneel Limit

2015 2016 2017 Aneel Limit

Energisa Minas Gerais 10.18 10.35 8.44 11.52 ● 7.30 7.16 5.05 9.36 ●

Energisa Nova Friburgo 8.76 7.25 5.78 11.12 ● 6.96 7.42 3.82 9.84 ●

Energisa Borborema 5.53 4.94 4.03 13.13 ● 3.84 3.22 2.46 9.91 ●

Energisa Paraíba 18.20 16.44 14.60 17.62 ● 7.98 6.81 6.30 11.16 ●

Energisa Sergipe 13.38 12.27 12.09 12.80 ● 7.75 7.21 6.99 9.30 ●

Energisa Mato Grosso 30.24 23.57 25.35 23.94 ● 24.13 14.27 12.49 19.85 ●

Energisa Mato Grosso do Sul 13.93 11.81 11.92 12.26 ● 7.16 5.93 5.72 9.22 ●

Energisa Tocantins 1 33.22 32.24 27.98 27.19 ● 16.09 14.47 12.72 19.33 ●

Energisa Sul-Sudeste 10.27 7.91 6.60 8.55 ● 7.93 6.54 4.97 8.77 ●1 Revised data for 2015 published in the previous report

FINANCIAL PERFORMANCE

OPERATING REVENUE

Consolidated gross operating revenue amounted to R$ 20,347.6 million, an increase of 11.6% on 2016 (R$ 18,234.4 million), due to the higher volume of energy sold and rate adjustments and reviews defined by Aneel in the course of the year.

Consolidated net revenue amounted to R$ 13,637.2 million, a change of 15.5% on the previous year (R$ 11,810.7 million), including construction revenue, which has been attributed a margin of zero

12,178.5 11,810.713,637.2

201720162015

NET OPERATING REVENUE1

1 Excludes construction revenue. 2015 Data re-presented

NET REVENUE BY SEGMENT (R$ MILLION)

Segment/company 2016 2017 Change %

Electricity distribution 11,314.8 12,848.5 13.6

Energisa Minas Gerais 567.4 669.5 18.0

Energisa Nova Friburgo 148.2 137.7 -7.1

Energisa Borborema 224.7 253.0 12.6

Energisa Paraíba 1,580.6 1,650.8 4.4

Energisa Sergipe 1,049.4 1,161.9 10.7

Energisa Mato Grosso 3,331.1 3,897.6 17.0

Energisa Mato Grosso do Sul 1,963.6 2,260.4 15.1

Energisa Tocantins 1,188.4 1,298.2 9.2

Energisa Sul Sudeste 1,261.4 1,519.4 20.5

Electricity service sales 727.5 1,050.2 44.4

Energisa Comercializadora 440.4 747.5 69.7

Energisa Soluções (consolidated) 173.7 119.0 -31.5

Energisa S.A. (ESA) 67.1 126.8 89.0

Multi Energisa 41.2 35.9 -12.9Others 1 5.1 21.0 311.8

Total 12,042.3 13,898.7 15.4

Energisa - consolidated 11,810.7 13,637.2 15.5

Construction revenue 1,427.0 1,392.1 -2.4

Energisa consolidated, without construction revenue 10,383.7 12,245.1 17.9 1 Energisa Planejamento e Corretagem de Seguros Ltda., Energisa Serviços Aéreos de Aeroinspeção S/A, Energisa Goiás Transmissora de Energia I S/A and Energisa Pará Transmissora de Energia I S/A

(R$ MILLION)


Rate reviews and adjustments

Three distribution companies underwent the fourth rate review cycle in 2017: Energisa Borborema, in January; Energisa Sul-Sudeste, in July; and Energisa Paraíba, in August. Energisa Mato Grosso, Energisa Mato Grosso do Sul and Energisa Sergipe will have their processes approved in April 2018, while Energisa Minas Gerais, Energisa Nova Friburgo and Energisa Tocantins underwent their reviews in 2016.

Energisa Tocantins’ Compensation Base was permanently approved in July 2017, recognizing the addition of R$ 44.3 million to the gross compensation base and R$ 19.1 million to the net compensation base, for prices valid for June 2016. This acknowledgment reflects the asset manage-ment and equity control process implemented by Energisa Group after acquiring the distribution company's share control in 2014.

RATE FLAGS

Consolidated revenue from rate flags was R$ 449.2 million, compared with R$ 246.4 million in 2016, due to the improvement in the water situation in 2017. In force since January 2015, the rate flag system automatically passes through to consumers costs incurred by the distribution company when energy purchases are affected by thermoelectric production.

LOW INCOME

The rate subsidies awarded to low income consum-ers, rural irrigation consumers and public services grossed operational revenue of R$ 949.3 million (R$ 832.5 million in 2016). Authorized by Aneel, these funds derive from the Energy Development Account (CDE), in compliance with Decree 7891, issued 2013. (Further information about Low Income can be seen in the section Society)

LOW INCOME SUBSIDY (R$ MILLION)

Company 2016 2017 Change %

Energisa Minas Gerais 68.2 74.0 + 8.5

Energisa Nova Friburgo 3.4 4.4 + 28.1

Energisa Borborema 1 13.2 16.1 + 21.8

Energisa Paraíba 1 129.4 140.3 + 8.4

Energisa Sergipe 74.4 80.1 + 7.7

Energisa Mato Grosso 254.2 281.1 + 10.6

Energisa Mato Grosso do Sul 129.8 168.5 + 29.8

Energisa Tocantins 74.2 87.4 + 17.8

Energisa Sul-Sudeste 85.7 97.4 + 13.6

Total Energisa 832.5 949.3 + 14.01 Revised figures published in 2016

The rate subsidies awarded to low income consumers, rural irrigation consumers and public services grossed operational revenue of

R$ 949.3 million


Collection fee

Energisa Group's consolidated collection rate (consisting of collections in the last 12 months over accumulated sales in the same period) closed 2017 at 97.45%, down slightly by 0.23 percentage points on the previous year (97.68%).

A plan of measures was introduced in the year to enhance this performance, including: (i) renegoti-ations with municipal and state governments, (ii) weekly collection and more aggressive blacklisting of debtors (greater and collective), (iii) collection of debts by reading teams on days not assigned for reading meters, (iv) protest at the registry office, (i) debit conciliation events, and (vi) expansion of telephone collections and pruning teams working with operating, maintenance and losses teams at the distribution companies Energisa Mato Grosso do Sul, Energisa Paraíba and Energisa Borborema.

In addition to traditional collection initiatives, new receivables management initiatives began at Energisa Mato Grosso, where a multidisciplinary center began conjugating the coordination of field collection and back office activities, thereby expediting the resumption of negotiations to settle debits.

In order to contribute technology and intelligence to the measures to improve the receivables portfolio, a pilot project is also being implemented at Energisa Paraíba, which involves the use of

Advanced Analytics to prioritize collection mea-sures based on the likelihood of the customer to get behind on payments. By using algorithms, choosing the most suitable types according to the customer’s profile will make it possible to increase collection efficiency at lower costs. After measur-ing results, this pilot project should be expanded to the other companies.

Operating costs and expenses

Consolidated operating expenses and costs exclud-ing construction costs amounted to R$ 12,392.2 million in 2017, an increase of 15.9% (R$ 1,698.0 million) over 2016, especially due to electricity costs 23.6% higher over YTD.

Uncontrollable costs and expenses rose by 19.5% to R$ 7,995.4 million, a direct effect of higher costs incurred in purchasing electricity for resale, which amounted to R$ 7,385.7 million.

Controllable costs and expenses rose by 18.2% to R$ 2,188.6 million, primarily due to labor claims, entry into the Special tax regularization program (PERT) and the pension fund/post-employment benefit. Without these nonrecurrent effects, the costs would have been 4.1% greater than in the previous year.

Finance income

Consolidated net financial income (consolidated

COLLECTION RATE (%) – 12 MONTHS

Company 2016 2017 Change (p.p.)

Energisa Minas Gerais 98.74 98.53 -0.21

Energisa Nova Friburgo 98.81 98.61 -0.20

Energisa Borborema 98.88 98.74 -0.14

Energisa Paraíba 98.16 97.67 -0.49

Energisa Sergipe 98.56 98.48 -0.08

Energisa Mato Grosso 97.08 96.54 -0.54

Energisa Mato Grosso do Sul 96.98 97.06 0.08

Energisa Tocantins 96.35 96.74 0.39

Energisa Sul-Sudeste 99.03 99.04 0.01

Total Energisa 97.68 97.45 -0.23


financial revenue less consolidated financial expenses) closed the year down by 17.4%, with net financial expenses of R$ 638.0 million, compared with R$ 772.5 million in the 12 months of the previous year, primarily due to higher revenue from arrears charges and lower CDI, thereby reducing the debt cost.

EBITDA

Cash generation, as expressed by the Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization plus arrears charges revenue), not including asset sales, amounted to R$ 2,372.8 million, up by 15.7% on the R$ 2,051.6 million recorded in 2016.

Net income

Consolidated net income amounted to R$ 572.6 million compared with R$ 195.8 million in 2016, an increase of 192.4% primarily explained by the better cash generation (EBITDA), lower financing, and extraordinary effects.

Financial operations

The financing taken out by Energisa Group in 2017 amounted to R$ 3,076.9 million, and was used to finance investments and the working capital of the Group’s companies and also to refinance outstand-ing debts.

The main operation was the 9th debentures issuance in the amount of R$ 850.0 million, con-ducted on October 31, 2017. This entailed four series of simple, nonconvertible ordinary debentures with additional guarantee, maturing between 2022 and 2027. The issuance incurred an average issuance cost of 106.6% of the CDI rate.

The funds raised will be used to pay and/or reimburse the annual investments for expansion, renewal or improvement works set out in the Distribution Development Plans (PDD) submitted to Aneel in 2017 by the subsidiaries EMT, EMS, ETO, EPB, EMG, ESE and ESS and which are scheduled for 2017 and 2018.

1,976.5 2,051.62,372.8

201720162015

16.2 % 17.4 %

ADJUSTED EBITDA AND MARGIN1

Adjusted EBITDA (R$ million)

Adjusted EBITDA Margin (%)1 Without asset sales

351.4

195.8

572.6

201720162015

NET INCOME

17.4 %

(R$ MILLION)

192.4% the growth in consolidated net income primarily explained by improved cash generation (EBITDA), lower financing costs and extraordinary effects.


Debt

The consolidated net debt at the end of 2017, less sector credits, amounted to R$ 7,202.0 million compared with R$ 6,021.5 million as of December 31, 2016. The ratio between consolidated net debt and consolidated adjusted EBITDA fell from 2.9 in December 2016 to 3.0 in December 2017.

The consolidated position of cash, cash equivalents and short-term investments was R$ 3,174.7 million, against R$ 2,768.2 million at the end of the previous year. The balances include credits relating to the Energy Development Account (CDE), Consumption Account of R$ 353.3 million in December 2017 and R$ 67.2 million in December 2016.

The average debt tenor diminished from 7.2 years in December 2016 to 6.7 years at the end of 2017, at an average cost of 9.32% (135.20% of the CDI rate), compared with 13.85% (101.6% of the CDI rate) at the end of the previous year. Approximately 68% of Energisa Group's debt is restated by the CDI or Selic rate.

Detailed financial information can be seen in the Consolidated Statements, at https://ri.energisa.com.br/ptb/8322/601175.pdf

RATINGS

Branch Domestic Rating/Outlook Global Rating/Outlook Latest report

Standard & Poor’s brAA- (negative) BB (negative) January 2018

Moody’s Aa2.br (negative) Ba2 (negative) June 2017

Fitch Ratings AA (bra) (stable) BB (stable) February 2018

Ratings

In 2017 the rating agencies Standard & Poor’s, Moody’s and Fitch Ratings maintained the credit ratings attributed to Energisa, as follows:

SCHEDULE FOR AMORTIZATION OF BANK DEBT AND ISSUANCE

2018

2019

2020

2021

2022

2023

2023 onwards

3,171.6

1,999.6

1,173.6

1,594.9

1,180.9

1,229.4

75.2

1.700.9

Dec/2017

(R$ MILLION)

Cash/Short-term investments/Sector credits Debt


INVESTMENTS

Record investments were made in 2017 amounting to R$ 2,002.9 million, compared with R$ 1,642.9 million the previous year, amounting to an accumulated R$ 5,270.2 million over five years. 59.8% of the total con-solidated volume year was invested in electric assets to enhance service quality, extend grids and expand and automate substations of the distribution companies.

Note the fact investment has started in the transmission companies Energisa Pará and Energisa Goiás, amounting to R$ 14.7 million in the second half, resulting from activities related to land adjustments and environmen-tal licensing.

The distribution companies receiving the greatest investments were Energisa Mato Grosso (R$ 710 million), followed by Energisa Mato Grosso do Sul (R$ 467.1 million) and Energisa Tocantins (R$ 246.1 million), in proj-ects comprising the distribution development plans (PDD).

Energisa Sul Sudeste invested heavily in systems, completing the migration as part of the integration project in 2017, with the view to agility and incorporating best practices and Energisa Group’s management culture. The process will be carried out in Mato Grosso do Sul state in 2018, including technical–commer-cial, administrative–financial, maintenance, webmobile and business intelligence systems.

Energisa Paraíba



Energisa Sul-Sudeste

Energisa Sergipe

Energisa Tocantins


Energisa Borborema


85

6.7

14.3

140.4

107.4

710.6

467.1

246.1

151.5

57.3

6.6

16.1

159.2

90.9

628.5

244.4

309.5

103.2

2016 2017

INVESTMENT BY DISTRIBUTION COMPANY

1,624.4 1,642.92,002.9

201720162015

INVESTMENTS

(R$ MILLION)

(R$ MILLION)


CAPITAL MARKET

The Energisa shares with the greatest liquidity - ENGI11 – Units (consisting of 1 common share and 4 preferred shares) appreciated by 50.5% in 2017, and closed the year quoted at R$ 27.30 per Unit at B3 – Brasil, Bolsa Balcão. Energisa’s market value rose to R$ 9.3 billion.

Over the same period, the main stock exchange index, Ibovespa, gained 26.86% and the sector energy index IEE) gained 10.04%. In five years the Units gained 157.3%, versus 21.1% of Ibovespa and 36.04% of IEE. ENG11 was the share that made the greatest gains in 2017 compared with all other electric sector companies.

Liquidity of the units rose, as a result of the success-ful re-IPO, in July 2016. From that time the Company expanded its investor relations activities and in 2017 attended 13 events, 11 in the country and 2 overseas, as well as a number of individual meetings and Energisa Day, held in August in João Pessoa (PB).

3,839.0

6,180.3

9,301.8

201720162015

MARKET VALUE

(R$ MILLION)

ENERGISA UNITS VERSUS IBOVESPA AND IEE – 5 YEARS

+150%

+100%

+50%

-50%JAN/13 JUL/13 JAN/14 JUL/14 JAN/15 JUL/15 JAN16 JUL/16 JAN/17 JUL/17 JAN/18

0

ENG|11 R$10.61IEE 28,893.5 points

Ibovespa 62,795.2 points

Ibovespa 76,402.08 points

ENG|11 R$27.30

IEE 39,723.33 points


SOCIAL AND SECTOR FRONT

EMPLOYEES AND SERVICE PROVIDERS

As part of the Líder Group’s 2020 target, Energisa encourages the creation of career opportunities, staff-member training and their active participa-tion in business development, as well as creating leaderships for the succession process, retaining talents and winning over and preparing young professionals to take over future strategic func-tions, always in a safe and health environment.

Energisa Group closed 2017 with 12,491 own staff and 3,769 outsourced staff (not including the employees of construction firms building grids and plants) and 1,292 trainees. There were 68 out-sourced staff working at other Group companies. The turnover rate in the year stood at 10.74%.

The nine distribution companies had 9,779 proprietary employees, including 8,414 men and 1,365 women, in addition to 3,736 outsourced staff and 1,248 trainees.

With an 84% employee satisfaction rate, in 2017 Energisa Paraíba was awarded the Great Place to Work certification awarded to companies exceed-ing 70% trust index of employees in relation to the best places to work.

15,561

15,502

16,64212,491

11,932

10,154

3,837

3,202

4,729

314

427

6192015

2016

2017

Trainees Partners Employees

TOTAL EMPLOYEES – ENERGISA GROUP

EMPLOYEES BY AGE

31 to 40 years

13.9 %

41 to 50 years

5.6 %

Over 50 years

EMPLOYEES BY GENDER

81.2 %

Men

18.8 %

Women

42.4%

38.1 %

Under 30

S O C I A L A N D S E C T O R F R O N T42

The company reviewed its human resources policy over the year and defined staff member features that contribute to business development in a com-petitive environment and under constant change. Eight competences were defined, broadly informed in an internal communications campaign.

The 2017 Performance Evaluation was also changed and the process is now viewed as assertive and objective. The rule and competencies were rewritten to approximate current competences with the real-ity of Energisa and the desired culture. This made the process more objective and easy to be realized.

New communications channels

The review of the internal communication chan-nels was concluded in 2017 and an integrated Communication Platform created, with the aim of clearly and efficiently expanding Energisa’s dialog with its employees and supporting the changes arising from the effective integration of the Group’s companies.

All the vehicles were reviewed and their graph-ics-editorial projects reformulated, with the specification of definite attributes for each channel: concept, content, language, tone of voice and visual identity. With the structuring of the platform, six new communication vehicles were created (Vem com a Gente, Clique.gente, Clique.líder, Clique.conexão, Clique.saber and Antenado).

RECRUITMENT AND SELECTION

The hiring and selection process is based upon the Management by Skills model, that prioritizes professionals who display the abilities required for a position, and also upon the evaluation of the can-didates’ adherence to Energisa’s values and culture. The Company looks to hire professionals with a good attitude, and who are focused on results, the quality of delivery, and simplicity in the performance of their activities.

Insourcing is a priority. External selection is only performed when professionals who demonstrate the profile for a specific position are not found within the Group.

ENERGISA PRIORITIES

Our employees’ new priorities are:

Over the course of 2017, the 12 trainees selected during the year had the opportunity to work in the corporate areas and in their destined areas, concluding a challenge launched at the beginning of the program. The selection process for the ‘2018 Energisa Trainee’ program was carried out during the second half of 2017 and attracted 10,288 par-ticipants for 10 positions. There are 69 ex-trainees currently working within the Group, all having come through programs conducted between the years 2010 and 2016, meaning there was a 63% retention rate. Of these, 32 are now in leadership positions and 19 are planned as being successors.

THE HOUSE DISHES

At Energisa Paraíba, 35% of the positions open in 2017 were filled by internal hiring, whilst the voluntary turnover stands at just 0.94%. Bruno Henrique dos Santos, an administrative control assistant, is one example of an employee who took part in two types of selection process in the company: the first, in 2013, when he joined the Company, through the external hiring process, and the other, more recently, to assume a new internal position.

“It was great to have had the first opportunity to join the Company, and now to have the chance to embrace new challenges. I’m very happy to be able to take up this new position through the internal selection process. Energisa always surprises me when it recognizes my dedication.”

Love

of custo mers

Strategy

focused

Committed

to Health & Safety

EnergisaFrom the heart

Innovative

Integrating

Results

oriented

Energy

leader


Diversity

Energisa ensures that there is no discrimination of gender, race or creed and always strives to promote equal opportunities for all its employees. It also looks to encourage the inclusion of minorities through the partnerships established with insti-tutions such as the ‘National Disabled Foundation’ (Funad) and the ‘Integrated Center of Support for the Disabled’, which advertise positions for those with special needs and send in their curricula. The hiring of women at all levels of the Company's hierarchy is also encouraged, one example being the job of electrician in the field, a position which had previously been dominated by men. New actions of inclusion are being studied based upon discussions held during 2017.

TRAINING AND COACHING

The Company is constantly investing in its employ-ees’ training and their improvement of knowledge and skills, in order to help the Group to achieve its strategic objectives. In 2017, special attention was paid to the training of supervisors to enable them to become internal multipliers and be ready to take over coordination and management positions.

In 2017, a total of 959,120 trained man-hours were recorded, with an average of 76.8 hours per employee. The migration of systems, intended to standardize the Group’s processes, has been the subject that involved the most training over the last three years, with a total of 137,148 hours.

Improvement needs for all staff members are men-tioned during annual performance assessments, with managers participating in the Leadership Academy, for accelerated learning, attended by guest speakers. Last year the Academy provided 5446 training hours.

Furthermore, the Company offers courses and training to ensure compliance with current legisla-tion, such as the ‘NR 10’ - ‘Regulatory Norm 10/Safety Course on Electricity Installation and Services’, that is divided into ‘basic’, ‘complementary’ and ‘retrain-ing’ modules - and vehicle handling and defensive driving for those employees who have driving licenses, as well as training in operating procedures and execution for each specific job.

External training is provided by means of on-site training, reading and technical visits, as well as by video conferences and Remote Learning (EAD), with a view to optimizing travel time and costs.

Succession Program

As a means of retaining internal talents, Energisa's Succession Program defines criteria and proce-dures to detect and develop staff members with a potential or who are able to occupy strategic positions.

The mapping of the employees is conducted after the performance assessment cycle has closed, at the assessment meeting attended by leaders, using the ‘9 Box’ methodology. The methodology manages to guarantee a pool of professionals who are able to assume key-positions in the organi-zational change processes and develops planned successors with a focus on future positions and their necessary state of readiness.

The Leadership Academy Development Programs, the main tool for training leaderships skills, are prepared base on this plotting.

TRAINING OF ELECTRICIANS

In 2017, in partnership with the ‘National Industrial Training Service’ (Senai), Energisa trained 547 network electricians in the states of Sergipe, Mato Grosso, Mato Grosso do Sul and Tocantins.

In addition to focusing on the training of talents, this partnership plays an important social role, since it allows individuals from the community to develop their knowledge and improve their employability, be it with Energisa or the electricity distribution market in general.


Energisa Recognition System

Based upon the results of the research into the inter-company environment, the Group noted the need to create a culture of recognition to demonstrate its appreciation of attitudes and behavior that are in line with the achievement of better results, this being one of its organizational values.

With this in mind, the Energisa Recognition System (SER) was created in 2016 to draw attention to good practices amongst its teams, highlighting the performance of actions based upon the institutional values: People, Clients, Safety, Commitment, Results and Innovation. With this system, the Group has started to offer tools that enable everyone to exercise the practice of recognition.

The SER currently consists of four programs: Value Seal, Team of Value, Best Practices and Value Generation.

ENERGISA RECOGNITION SYSTEM PROGRAMS (SER)

Program Description 2017 Results

Valeu Certificate This encourages the recognition of the practicing of Energisa Values between colleagues regardless of rank. Every two months the Energisa newspaper publishes the program’s certificates, which can also be sent electronically.

It brings people together and empowers employees. Employees began collecting Valeus, proudly displaying them on their workstations.

Time de Valor This equips managers with tools (pin and printed and digital cards) so they can recognize the members of their team for several initiatives related to Energisa Values, with agility in processes, delivering solutions or performance excellence.

22.7 thousand pins and cards were produced and at the end of the year the Group’s CEO delivered 43 pins recognizing the most outstanding employees. The On-line SER was launched in December, an advancement of the recognition for the digital platform, which can be used as another analysis metric when assessing performance for promotion and succession processes and also legitimizing the investment in development.

Best Practices This recognizes employees and teams for successfully delivered groundbreaking ideas that generate results for the Group. The best proposals are selected for participation in the Best Practices Event held every two years.

The 2017 event recognized ten projects in the categories Best Dashboard, Simples Assim, Great Idea, Best R&D and Best Project, in prizes worth R$ 220 thousand.

Creating Value Program recognizing high-performance teams

1,233 enrollments were received

The recognition comes from where you least expect it and that’s pleasing. With this opportunity to recognize your colleagues, I could see that my work is important, not just here, but also in other states and areas, because I have even received the electronic Value!”

Ericka Vilela Carvalho, administrative assistant - Corporate Management of Contracting of Materials and Equipment


BENEFITS AND COMPENSATION

The Group offers benefits including medical, hospital and dental assistance plans, supple-mentary retirement plans, meal vouchers, crèche allowances, life insurance, study grants and others. Serving employees also receive variable compen-sation in the form of profit shares related to the Company’s performance.

The Results Based Compensation program (PRR) is one form of recognition, retention and motivation, which is calculated based on the performance of targets and skills. The targets are comprised of Company and departmental metrics, while skills are assessed annually by peers, subordinates and superiors. This makes it possible to implement mechanisms to incentivize teams, focusing on the continual improvement of processes and fostering a culture of excellence.

HEALTH AND SAFETY

In order to achieve its goal to be a standard setter in Occupational Health and Safety amongst sector companies by 2020, Energisa is reviewing the mapping of its processes, with a focus on more critical ones with a greater impact health and safety issues. The goal is for the Group to be a leader in safety according to the criteria of the Eloy Chaves Medal, which recognizes electricity companies for occupational accident prevention practices and for achieving the best accident metrics.

Analyzing behavioral and structural weaknesses that impact the Company’s performance will be the aim of a mitigation and control plan, with a structured vision of processes and the disciplined deployment of plans for tracking and monitoring health and safety metrics. Energisa believes that it is possible to reduce gradually by 20% and 30% its frequency and seriousness rates to obtain a scenario with no fatal cases or serious accidents in the short run, with a significant decline of less serious accidents in the medium run.

Energisa’s Occupational Safety Plan seeks to ensure the safety of employees, clients and the commu-nity is always a top priority. It intends to prevent accidents in routine activities based on educational principles and strengthening accountability, com-mitment and planning and encouraging accident prevention amongst employees.

A Central Health and Safety Committee, a perma-nent committee comprised of representatives from all of the Group’s companies, addresses critical issues and gives visibility to the processes and bottlenecks that need to be addressed by senior leadership. The aim is to make it ever more focused to support the Group’s transformations in the years ahead.

SAFETY MEDAL

The distribution companies Sul-Sudeste, Tocantins, Sergipe, Minas Gerais, Paraíba and Mato Grosso have been awarded ten Eloy Chaves medals in the last two years in recognition of the performance in safety. Awarded by the Brazilian Association of Electricity Companies (ABCE), this is one of the most prestigious awards for Occupational Health and Safety Brazil


IMPLEMENT procedures that comprise the Health and Safety Management System

IDENTIFY issues and impacts, hazards and risks related to work activities

REVIEW and update all operations and execution procedures, with a focus on health and safety

ISSUANCE of a quarterly health and safety report by the Central Health and Safety Committee

STANDARDIZE occupational medicine actions

OCCUPATIONAL safety campaigns for company staff and service providers throughout the concession area

INTENSIVE training program aimed at standardized operating procedures and safety

PERMANENT inspections of vehicles, operating services and indoor and outdoor working areas

OCCUPATIONAL Health & Safety audtis at service providers

CONTINUAL incentivization of actions carried out by Internal Commissions for Accident Prevention (Cipas)

ADOPT new and more efficient individual and collective protection equipment

SAFETY PLAN

Metrics

Energisa adopts specific metrics to assess and mon-itor safety initiatives at each of its companies. The company employee safety metric takes into account the frequency, gravity and loss time resulting from work-related accidents. Frequency and gravity rates are compiled for service providers.

The community safety metric considers accidents affecting people in Energisa’s geographies, both due to negligent use of electricity and unauthorized intervention in grids. The rate also considers the gravity and frequency rates calculated by the same criteria adopted by Funcoge and Abradee.


Number of own staff

Seriousness rate (SR)

SERIOUSNESS RATE – PROPRIETARY

2015 2016 20170

200

400

600

800

1.000

1.200

1.400

10,154

11,93212,941

Number of own staff

Frequency rate (FR)

2015 2016 2017

10,154

11,93212,941

FREQUENCY RATE – PROPRIETARY

0

2

4

6

8

10

12


2017 initiatives

538,170 hours of mandatory training were provided over the year to 28,642 participants, 19% of which was in mandatory training regulatory standards essential for carrying out technical activities safely.

An Operational Procedure Commission (Cope), comprised of experts from technical, environmen-tal and safety areas from all distribution compa-nies, held forums in order to identify procedures and implement improvements based on the experiences of each unit and external benchmark-ings. Lectures and meetings were also provided to raise awareness amongst employees and the community in relation to good safety practices.

The main actions in 2017 included:

• Focusing on the Portuguese acronym Ditais (switch off, impede, test, earth, insulate), an easy acronym to remember in daily safety practices;

• Moving technicians to locations in order to pro-vide greater support and an ongoing presence at both the base and the field;

• Technicians participating in family health and safety dialogs (DDS), held once a month involv-ing the families of employees and at events like the internal accident prevention week (Sipat);

• Monthly leadership meetings to align initiatives, handle incidents and nonconformities and disseminate good practices;

• Communications via the Integrated Operations Center (COI), where the operator talks about safety during field services (Anjos do Rádio);

• Reading out of health and safety messages on COI to all radio users, twice daily (on the radio waves program)

• Nocturnal inspections (Altas Horas)

• Safety workshop for meter readers

• Safety workshop in the Live Line Logbook

• Interactive DDS;

• Observe Program, aimed at leaders to nurture behavioral change in their teams

• Monthly meeting with meter readers during stoppages

• Integrated Sipat

• Safety clock

• In loco conversations (APR) with contractors;

• Creating a noticeboard to make notes about services to be carried out and ascertain the risks and control measures that are exposed during said activity

• Acquiring equipment to enhance field inspections.

46983.7 72.1 78.9

16.327.9

21.1

2017*20162015

581 834+44%

Mandatory safety

Additional safety

* estimate

TRAINING TYPE


CLIENTS AND CONSUMERS

As part of the premises to be a Leading Group in the next decade, Energisa undertakes to provide services safely, and with quality, efficiency, empathy, respect and integrity. Every year it has been enhancing customer services to achieve these goals, becoming increasingly agile.

In 2017, the Company consolidated the transfer of the call center to a single company, Multi Energisa Serviços S.A., making it possible to optimize time and consequently improve the efficiency of customer services. Based in Eusébio (CE), the service center has a branch in Campo Grande (MS).

The customer service center is assisted by a virtual call center (CCV), which serves smaller customers just as effectively, which account for some 35% of calls. The CCV was implemented for Sul and Sudeste in the course of 2017, and in 2018 it is Mato Grosso do Sul's turn, which is expected to be completed in January 2019.

SERVICE

Technological breakthroughs have led to a series of transformations in consumer behavior, including the demand for new forms of interacting with the companies. To monitor this change, Energisa has been modernizing its digital services, investing R$ 3.4 million since 2012. Introducing technologies focusing on providing the best experience for clients in a straightforward and simple fashion is a top priority for Energisa.

Today it is possible to use digital channels to view statements, debits, simulate consumption, report energy theft and request a second copy of bills, recon-nect to the grid and change owner details, amongst other services. An important tool is Ligo Já, which customers can use to access the site of the switch-board or Energisa ON to inform their telephone number. The distribution company then returns the call, meaning the customer doesn’t have to wait for the call to be answered.

4,26

0

0

14,26

6,62

0

34,7

42,91

23,67

15,9

17,88

25,14

30,88

32,59

51,192013

2016

2017

Telephone In loco Virtual branch Application Totem(call center) (loja) (internet) (Energisa ON)

53.22

46.78

Digital channels

Conventional channels


DIGITAL ADVANCE

4,26

0

0

14,26

6,62

0

34,7

42,91

23,67

15,9

17,88

25,14

30,88

32,59

51,192013

2016

2017

Telephone In loco Virtual branch Application Totem(call center) (loja) (internet) (Energisa ON)

53.22

46.78

Digital channels

Conventional channels

ACKNOWLEDGMENTS

Ongoing improvement in customer assistance was acknowledged by the 2017 Abradee Survey, held by the Brazilian Association of Electricity Distributors and by Instituto Innovare. Energisa obtained the best score in the Perceived Quality Satisfaction Index (ISQP) among all the country’s energy groups: 82.2%, as opposed to 80.6% for second place and the 76.8% country average. It was a benchmark in the five attributes found in the ISQP: supply, information and communica-tions, light bill, assistance and image.

The group received ten trophies in eight cate-gories. Energisa Paraíba was ranked first as the country’s award winner, besides being considered the best company in the Northeast of Brazil. Energisa Mato Grosso do Sul earned the best-in-the-region award (Midwest). Energisa Sergipe was awarded prizes for Economic and Financial Management and Operating Management, and Energisa Borborema excelled in Social Responsibility and Operating Management.

In the Aneel Customer Satisfaction Rating (Iasc) run by National Electricity Regulatory Agency (Aneel), Energisa Sul-Sudeste was awarded first place in the South-Southeast region with a 68.98% score, as opposed to the regional national average of 63.14%.

New application-based services were rolled out in 2018, some of which were unprecedented, such as the Virtual Inspection, where it is possible to check whether everything is okay inside power meters before requesting an energy connection visit.

To encourage the use of self-service channels training was given to all the Group’s attendants providing guidance on the functionalities and applications of the Energisa On application and the Virtual Branch (online services). Similarly, when the service is taking place they now explain how the digital channels work in order to encourage customers to use them.

This and other similar actions led Energisa to exceed the landmark of 1 million digital service interactions in a month via the site, application, social networks and electronic totems - outstripping the number of interactions by conventional means - by telephone and in-person. Services through digital channels accounted for 53.22% of the total.

The good practices of using digital channels at Energisa have become benchmarking for other companies. In July 2017, for example, the Company's employees gave a lecture about the matter at an Aneel seminar addressing digital advancement trends for customer services, the changing profile of consumers and the use of technology as a facilitator towards a better experience for customers.


2º

6º

2º 2º

1º

2º

1º

3º

9º

CUSTOMER SATISFACTION (ISQP) – RANKING IN ABRADEE AWARD – CORPORATE GROUP

2012 2013 2014 2015 2016 2017

Energisa Rede

CUSTOMER SATISFACTION SURVEYS

ISQP (Abradee) Iasc (Aneel)

Company 2015 2016 2017 2015 2016 2017

Energisa Minas Gerais 83.40 84.0 81.20 70.12 58.86 71.18

Energisa Nova Friburgo 72.30 73.4 83.51 56.31 73.12 57.97

Energisa Borborema 86.60 85.5 83.31 63.87 78.70 65.85

Energisa Paraíba 77.20 76.7 83.84 63.08 76.75 67.62

Energisa Sergipe 84.80 82.9 85.56 58.81 68.48 63.64

Energisa Mato Grosso 81.40 78.9 77.66 44.80 52.87 55.67

Energisa Mato Grosso do Sul 77.90 72.10 82.64 50.29 66.85 64.44

Energisa Tocantins 86.60 84.2 76.58 47.96 59.18 45.15

Energisa Sul-Sudeste 1 - - - - - 68.98

Bragantina 77.90 76.30 76.51 61.29 68.60 -

Caiuá 83.70 75.30 75.88 56.25 71.34 -

Força e Luz do Oeste 84.70 85.00 90.12 63.21 78.15 -

Nacional 92.20 79.10 81.39 65.91 72.08 -

Vale Paranapanema 91.00 85.20 90.56 56.97 72.4 -1 Energisa Sul-Sudeste was founded in April 2017 – prior to this the data referred individually to the unified companies


SUPPLIERS

As a result of all the vendor management prac-tices put in place and enhanced in recent years, improvements were obtained in average vendor performance and a greater concentration of purchases from vendors with good performance, as seen in the graph below.

Purchases in 2008 with vendors assessed as “excellent”, “good” and “satisfactory” performance were equal to roughly 60% of the total, a percent-age that rose to 97.5% in 2017. In the course of the

years, those rated as “unsatisfactory” reduced their share in supply, and as of 2014 they were no longer part of the Energisa’s portfolio, having surrendered their position to vendors rated as excellent.

As of 2017 the quality indicator for the supply of materials and equipment was included in Senior Management’s goals for formal monitoring of non-conformity events, cause analysis, mitigating actions studies, implementing and problem solving.

Unsatisfactory Poor Regular Good Excellent

40.84

19.31

23.94

12.44

36.15

41.09

39.35

39.96

20.54

31.39

30.81

35.44

2.46

8.21

5.9

12.17

0

0

0

02014

2015

2016

2017

IMPROVEMENT IN SUPPLIER PERFORMANCE

Presidente Prudente - SP


SELECTING AND HIRING

Energisa stands out for the quality of acquired products and services. To this end it enforces strict criteria in the selection of its vendors, contained in the Energisa Group’s Vendor Quality Management Manual, updated in 2017. Among the chief improvements by the Manual, adapting to the ISO 9001:2015 new version stands out, stressing the manufacturing process, inclusion of social and environmental guidelines, a require-ment to extend the management system to sub-vendors and use of a standard for labeling.

In the case of strategic vendors (those dealing with more relevant kinds of materials for the business, such as meters, transformers, posts and cables), as of June an Quality Assurance Manual was adopted that defines the requisites needed for implementing the Quality Assurance Manual (QA). These stakeholders are certified during 6 or 12 months and are exempted from new inspec-tions. QA provides greater agility in processes, better prices, delivery terms and security, in addition to encouraging ongoing improvement by vendors.

Checking that program requisites are met is undertaken by a Potential Supply Risk Audit (ARPF) that assesses operating aspects (quality of facilities, control, laboratory structure, among others) and social and environmental quality (project assessment, impact management and practices) by vendors.

In order to meet a growing demand by society, vendors also have begun to agree on an anti-cor-ruption clause when entering into agreements.

ACKNOWLEDGMENTS

For the first time Energisa Group got together its best vendors to acknowledge excellence of the services provided, the quality of materials deliv-ered, compliance with deadlines, among other requisites that are carefully assessed, in the 2017 Energisa Stakeholder Award. Acknowledgment reflects the outcome of performance for 2016.

The awarding event is an extension of the 100 largest stakeholders supply ranking, which is prepared by the Company every year. Vendors are assessed for financial soundness, quality management system, compliance with contrac-tual conditions, product quality, health, security and the environment, by means of six-monthly performance monitoring.

Those that do not reflect minimum supply requisites are placed in a formal recovery process known as Escalada, managed in the Quality Management System through Non-Conformity Records (RNCs), with a joint creation of action plans and monitoring of effectiveness of the actions adopted.

The process is focused on not over ten vendors selected strategically at each cycle. Should a vendor not respond positively to the process, its sales to Energisa may be temporarily or perma-nently suspended.

Since being implemented in 2015, 27 vendors were submitted to Escalada and only six had their sales reduced or blocked. The others improved their performance after submitting to the program.

40.84% of suppliers were rated as having excellent performance


COMMUNITIES

Energisa Group’s social investment policy is intended to encourage education, culture, sports, income generation, entrepreneurship, environmen-tal preservation and social and economic develop-ment in the communities of its regions of activity.

The initiatives received investments of R$ 8 million in 2017, including company funding and tax incentives.

ORMEO JUNQUEIRA BOTELHO FOUNDATION

The year was also notable for the commemora-tion of the 30th anniversary of the founding of the Ormeo Junqueira Botelho Foundation, the branch of Energisa Group located in Cataguases (MG) engaged in the technical and cultural analysis of sponsored projects and is responsible for the management of cultural facilities funded by Energisa (the map opposite shows where they are located). The support for the Foundation

demonstrates the Company's commitment to human and social development through the socio-cultural projects that it sponsors.

As part of the celebrations, the ‘Alegoria Elétrica’ panel of tiles was unveiled at Energisa S.A.'s head offices in Cataguases, and the Humberto Mauro Cultural Center, also in Cataguases, hosted a visual exhibition that made use of the institution’s photog-raphy collection, that was visited by around 10,000 people between October 2017 and February 2018.

The Foundation’s activities also encompass the development and upkeep of museums, archives and libraries; the restoration of historical sites, works of art and architecture; the preservation of folklore; and the sponsorship and scheduling of cultural events and forms of expression. Further information about the Foundation, and the projects and cultural facilities it develops and supports, can be found at http://www.fundacaoormeo.org.br/

INVESTMENTS IN SOCIAL PROJECTS (R$ 000)

2015 2016 2017

CULTURE 2,115.9 6,825.7 5,801.5

Federal Law (Rouanet, Audiovisual) 1,622.0 1,560.1 2,000.0

State Law Incentivizing Culture – MG 118.9 3,529.0 1,811.0

State Law Incentivizing Culture – RJ 225.0 0.0 775.0

State Law Incentivizing Culture – SP 150.0 1,736.6 1,215.5

SPORT 3,832.0 3,473.2 521.7

Federal Law Incentivizing Sport 430.0 471.0 521.7

PB State law (Gol de Placa) 3,154.9 3,002.2 0

State Law - SP 247.1 0.0 0

TAXES 1,474.0 572.0 1,065.0

National Dental Care Program (Pronon) 380.0 191.0 499.0

National Health Care Program for Persons with Disabilities (Pronas/PCD)

380.0 89.4 0

Infancy and Adolescence Fund (FIA) 357.0 158.8 314.0

Elderly Fund 357.0 132.8 252.0

Total 7,461.9 10,870.9 8,082.0


Nova Friburgo (RJ)Energisa Nova Friburgo Cultural Workshop

João Pessoa (PB)Energisa Cultural Workshop

Leopoldina (MG)Lya Maria Müller Botelho Reading Place

Cataguases (MG)Ivan Müller Botelho AmphitheaterHumberto Mauro Cultural CenterHumberto Mauro Memorial Energisa Museum

Campo Grande (MS)Espaço Energisa

Cultural Workshops – these workshops promote culture and science in centers in Nova Friburgo (RJ) and João Pessoa (PB), through activities that involve literature, music, cinema, theater and plastic arts. The two workshops promoted 477 events and welcomed 82,500 visitors in 2017.

Energisa Museum – Located in Cataguases, this is a museum designed to present the extensive and wide-reaching history of the development of Energisa and the regional economy that it has stimulated in an educational and interactive way, alongside the history of electricity (from the ‘Big Bang’ that brought the universe into being to modern hydro-electric power plants). In 2017, the Energisa Museum developed a range of different socio-educational actions together with the school communities in Cataguases and the surrounding region, benefiting a total of 11,360 students in Cataguases, Leopoldina, Ubá and Muriaé.

Ivan Muller Botelho Amphitheater – Having remained closed in 2017 due to work on the new Energisa head offices, the ‘Anfiteatro Ivan Muller Botelho’ once again opened its doors for cultural activities in 2018.

Humberto Mauro Memorial and Cultural Center – the Humberto Mauro Cultural Center is a multiple-use space, located in the center of Cataguases (MG), that hosts art exhibitions, stages Brazilian and international plays, dance presentations and musicals, cinema festivals and seminars, and forums and talks involving different cultural sectors, meeting a demand that exists not only within Cataguases, but through-out the region. In 2017, more than 120 events were held at the Center, which also includes the Humberto Mauro Memorial, and 16,120 people, including adults, children and young people, enjoyed the activities.

Lya Botelho Reading Place – Located in Leopoldina (MG), this is a multi-use space designed to host cultural events that looks for different and varied ways of providing for the interests of its public. Its exhibitions, focusing on issues relating to the history of Brazil, attract a great many visitors from all over the region, other states and abroad. In 2017, 19,780 people, including students and teachers from 16 local educational establishments, visited the center.

ORMEO JUNQUEIRA BOTELHO FOUNDATION


CULTURAL PROJECTS

Zona da Mata Audiovisual Zone – This audiovisual center creates opportunities for professional qualifi-cations, work and income, by promoting audiovisual productions, offering technical training and staging festivals and events, thereby having a positive impact on the economy of the region in Minas Gerais. In 2017, the following films were produced: ‘Maria do Caritó’, a drama based upon a play by the playwright Newton Moreno; ‘Árvore dos Araújos’, a 26-part TV drama series, and ‘Coração das Trevas’, an drama in cartoon form.

Serrinha Art Festival – Held every year for three weeks in July in the town of Bragança Paulista (SP), this festival provides a moment for the celebration and artistic immersion in nature with workshops, experi-ences, residences, music shows, performances, talks, theater, cinema and art exhibitions. The theme of the 16th annual festival was “De quem é essa terra?” (“Who Does the Earth Belong To?”) and it welcomed around 5,000 visitors.

São Gonçalo Viva Festival – This event focusing on the traditional ‘viola caipira’ (country guitar) has one competitive part, another for newcomers, and a third which stages shows by famous masters of the instru-ment. In 2017, it was held in Presidente Prudente (SP), as part of the town’s centenary celebrations.

Sergipe Youth Orchestra – This orchestra focuses on social inclusion through classical music, providing young people with the opportunity to discover this type of music and to train in the area. The initiative benefits around 100 young people from a high-risk area on the outskirts of the town of Aracaju.

Watch and Make Movies Festival – held in Cataguases, the intention of this festival is to raise awareness of the audio-visual languages amongst children and young people. Part of the festival involves the sponsorship of short films by young directors from the Zona da Mata region of Minas Gerais state.

Ballet do Amor Brasileiro – This dance spectacle, full of songs from the 1960s and 1970s, presents ballet couples dancing beautiful ‘pas de deux’. With songs by Tom and Vinicius, Villa Lobos, Edu, Caetano, Flavio Venturini and Murilo Antunes, Roberto and Erasmo, João Bosco and Aldir, and Milton and Brant, the songs are performed by both the Ouro Preto Orchestra, arranged and conducted by the conductor Rodrigo Toffolo, and by the musician Rodrigo Torino. The show forms part of the 30th anniversary celebrations of the Ormeo Junqueira Botelho Foundation.

Entrando em Cena – This project, staged in Bragança Paulista (SP), includes art-education activities using the languages of theater, circus, Brazilian dance and aerial dance, culminating annually in a spectacular show with the participa-tion of 150 young people. It is also expected that five artistic groups developing out of the project will receive support, and a Performing Arts festival will be held with a series of free shows open to the community.

50 years of the Acaba Group - A documentary on the history of this traditional, regional musical group, that researches, develops and disseminates the folklore of the states of Mato Grosso and Mato Grosso do Sul. The film includes contributions from eight musicians who are members of the group as well as interviews with more than 20 well-known figures from the Pantanal region’s musical and cultural scenes.

Art in the Company Program – Since 2002, Energisa Sergipe has used the reception area of its head offices to present the art and culture of its employees and visitors, staging exhibitions by local artists or those who have settled in the region. Over its 15 years in existence, the program has allowed Energisa to add to its collection, and provided an opportunity for new talents to stage their first individual or collective exhibitions.

EDUCATIONAL PROJECTS

What do we want for the world? – Held in Mato Grosso and Mato Grosso do Sul, this project develops audiovisual technologies with the intention of providing an arena for an interaction between teachers and students in public and private schools. It looks to understand what children want for the world, how new technologies can be turned into functional tools for future generations, and whether our lack of contact with nature is placing our ability to understand ourselves and relate with each other at risk. Over the course of 2017, the project benefited 103 educators and 2,587 children.

Ensina Brasil – This is an innovative program developed by the ‘Ensina Brasil’ NGO, and inspired by the experiences of the global ‘Teach for All’ network. Selects recently graduated professionals from the best universities in the country for a spell in a classroom, with the purpose of training leaderships committed with improving the country’s educa-tional level. In 2017 ten schools in Mato Grosso and seven in Mato Grosso do Sul joined the initiative sponsored by Energisa.


Projeto Girarte – A traveling art and education project that disseminates dance and theater by means of workshops, cultural presentations and scenic perfor-mances for students of learning institutions in the different municipalities where Energisa Group is active. Aimed at cultural democratization and the creation of a dialog between art and education, this project has already staged presentations in theaters in the states of Minas Gerais, Rio de Janeiro, Mato Grosso do Sul and Paraíba. In 2017, the project visited more than 20 different locations taking art and education activities and presentations to upstate Minas Gerais, Rio de Janeiro (Nova Friburgo) and Paraíba (João Pessoa).

Projeto Ilumina – Provides coaching in Mathematics to public school pupils by means of on-line games, a more entertaining and creative form of learning, in the aid of teaching quality. Implemented in Cataguases (MG) and Nova Friburgo (RJ), the project is the result of a Cooperation Agreement entered into between Energisa Minas Gerais and the Municipal Education Department of Cataguases, and Energisa Nova Friburgo and the Municipal Government of Nova Friburgo.

Nossa Energia na Escola Project – Through educational talks on conscientious consumption, this project trains primary and secondary school students and educators to spread the word about the effects of the efficient and safe use of residential electricity, with the aim of creating habits that lead to sustainable development and the combating of wasteful uses of electrical energy.

Zé da Luz na Escola Program – This program aims to raise awareness amongst the community about the risks and dangers of electricity, especially when it comes to flying kites, a popular children’s activity with a high rate of accidents in the electricity network. Fifty presentations were made in 2017.

Biblioteca Energisa and Balcão de Livros – Facilities located in a number of the Group’s units, they provide access and encourage reading as a tool for intellectual development. A highlight was the 1st Balcão de Livros by Energisa in Mato Grosso do Sul, in the customer assistance facilities in Dourados. Libraries account for a total of 6100 books in their shelves.

ENVIRONMENTAL PROJECT

Sponsorship of Falcon Park – Under an agreement that runs through until 2018, Energisa Sergipe has made improvements and supported the sustainable operation of this park that shelters sick birds of prey, such as falcons, hawks, owls and other animals, before returning them to the wild. Open to visitors, its main aim is to raise society’s awareness about the preservation of the environment, wildlife and, principally, birds of prey.

SPECIAL PROJECTS

Christmas – In various locations, Energisa is a partner alongside the local government in putting on the Christmas lighting display. In 2017, it was responsible for the lighting that adorned the building of the Legislative Assembly in João Pessoa (PB), sponsored the Christmas Lights in Palmas (TO) and Christmas in Usina (PB), with 30 days of shows, choral presentations and the staging of nativity scenes. In Mato Grosso do Sul, it put together the Christmas Bus, lit up with LED bulbs, that held activities focused on the conscientious use of energy.

over 20 different locations with art and education activities and presentations in upstate Minas Gerais, Rio de Janeiro (Nova Friburgo) and João Pessoa, in Paraíba, were visited by the Girarte Project

Projeto Girarte

LOCAL DEVELOPMENT PROJECTS

Bem da Gente – The project undertakes initiatives that ease productive inclusion by means of training and entrepreneurship. In Mato Grosso do Sul, between 2016 and 2017, R$ 1.2 million was provided for an income creation project in the Furnas do Dionísio Quilombola Community. In partnership with the Dom Bosco Catholic University, Energisa sup-ported the revision and renewal of the entire process performed by the community in its manufacture of brown sugar, cane syrup and muscovado sugar, to adapt the local hygiene and production technology conditions to best market practices.

The project takes different approaches to the provision of support for the community, ranging from investments in improving the professionalism of the sale of handicrafts to the structural reform of the headquarters of the Association of Small Rural Producers and replacement of old electrical instal-lations, bulbs and equipment such as refrigerators, freezers and air conditioning units. The initiative also contributes to the education of children and adults, aiming to raise awareness about waste and the safe use of electricity.

The community’s schools have also benefited from the energy efficiency actions. The classrooms have had air conditioning installed and the IT room has been refurbished with new computers.

In Paraíba, where the project has been in place since 2012, the highlight of 2017 was the conclusion of the project in the Timbó community, in João Pessoa, where 45 business plans were developed, support was provided for the raising of micro-credit to the tune of more than R$ 71,000, 14 businesses were formalized, and 7 new enterprises launched. In partnership with Sebrae, more than 70 people were trained in subjects relating to entrepreneurship.

The Energisa units developed a series of local and one-off actions in 2017 with the aim of supporting government policies and developing the surround-ing communities.

• Energisa Paraíba started distributing its bills in braille, thus making it easier for the visually impaired to read them, lent its support to the fight against cancer as well as to families with children suffering from microcephaly, staged a workshop about the ‘Rouanet’ law that provides financial support for the arts, whilst it also performed the diagnosis and raised resources, together with the local government, to replace the entire wiring system of the Napoleão Laureano Hospital, in João Pessoa, with the aim of resolving the problem of electrical energy failures for some wings of the hospital.

• With a traveling library installed in a VW camper van, the historian Clóvis Mattos took the oppor-tunity to read to the neediest of areas and to those living in the rural regions throughout the state of Mato Grosso. More than 2,000 people have benefited from this project since it started in July 2017.

• Also in Mato Grosso, Energisa has supported the Vicente Lenílson Institute in its sports activities (athletics) to get children out of situations of risk, thereby having a positive impact on the lives of 80 young students last year.

Projeto Bem da Gente


NO. OF LOW INCOME CUSTOMERS (000)

Company 2014 2015 2016 2017

Energisa Minas Gerais 97.4 55.9 56.0 56.3Energisa Nova Friburgo 8.2 5.1 5.1 5.1Energisa Borborema 61.7 40.4 42.5 39.6Energisa Paraíba 523.2 335.8 345.1 353.6Energisa Sergipe 259.1 167.9 173.9 204.0Energisa Mato Grosso 163.1 127.7 128.9 141.4Energisa Mato Grosso do Sul 176.8 133.5 104.2 116.0Energisa Tocantins 104.0 106.0 110.0 116.6Energisa Sul-Sudeste 58.4 53.3 56.9 61.0Total 1,451.9 1,025.6 1,022.6 1,093.6

LOW INCOME

At the close of 2017 Energisa’s distribution companies had over one million customers classed as low income, or 15% of total consumer units in its captive market, with a 7% growth in billings to customers in this class.

A number of actions by these companies sought to detect customers entitled to this right, with discounts ranging from 10% to 65% in their electric-ity bills, and ensure access to electricity and a drop in the risk of default. There was an interchange of information with local governments based on the Single Registry, the Ministry of Social Development, as well as visits by social assistants, offers for inclusion in the electricity Social Fee during these visits and sending of reminders for re-registration. This set of actions resulted in extending the benefit to roughly 170 thousand customers during the year.

UNIVERSAL ACCESS - LIGHT FOR ALL

No A sixth stage of the Light for All (Luz para Tudos) program was authorized in Tocantins with the aim of speeding up its standardized implementation in 30 municipalities in the state in which the process has still not been concluded. The Program, implemented using federal, state and distribution company funds, allows for the extension of energy services to remote rural areas. Energisa Tocantins has registered around 6,400 new clients, with 1,500 of them having their electricity connections completed in 2017. The rest are expected to be completed in 2018.

SAFETY IN THE COMMUNITY

Energisa regularly performs different actions designed to raise awareness in relation to safety in the communities where it operates, with special focus on:

• Energy efficiency trucks/vans: Energisa trucks fitted with cinema screens that perform activities in the communities to explain safety procedures, including the risks of going too near fallen cables or involvement in other situations of risk;

• Energisa Teaches: talks designed to orient the public about the safe use of electricity;

• Talks in schools: Talks focusing on the conscien-tious and safe use of electricity;

• Safety Minute: Radio programs containing guidance for the public;

• Procedures for the Removal of Grids in Hazardous Conditions.

In order to assess and monitor the results of these actions, the Company adopts specific indicators that the senior management discusses every month, aiming to guarantee ongoing improvement in the prevention and control of the events. As a result, there was a 20% reduction in accidents in the communities in 2017 in relation to the previous year.


INNOVATION

With the aim of developing projects that are more aligned and integrated with Energisa’s strategic objectives, the areas of Innovation, New Technologies, Energy Efficiency and Research and Development (R&D) were grouped together under the coordination of the Company's Innovation Management department.

This restructuring started with an extensive diagnosis of the current situation of innovation within the Group, followed by the development of a methodology capable of maintaining, strength-ening and fully implementing the internal culture of innovation.

Based upon the identification of the main social, economic and technological trends in society and an assessment of the results in light of the Company's strategic objectives, three themes were identified that will be able to guide the efforts made to bring up new ideas: management of services in the field, automation of the network, and photovoltaic generation/energy storage.

OPEN INNOVATION

Proposals and solutions for these issues were stud-ied, developed and presented at two Open Ideation Workshops held in 2017, at which executives from the Energisa Group, together with internal specialists, and specialists from the Brazilian and international markets, met to share knowledge and discuss new initiatives for solving the prob-lems facing the Group and which could potentially be applied throughout the electrical sector.

The themes of the events were ‘Management of Services in the Field’ and ‘Automation of the Network’. At the end of each workshop the best ideas developed in relation to the five dimensions that the company considers to be strategic were chosen: ‘product and service logic’, ‘positioning’, ‘the value chain’, ‘marketing and sales’ and ‘the logic of value creation’. There was also an analysis of the viability of adopting the idea in a practical way.

As part of the strategic actions for the dissemina-tion of the innovation processes, two Innovation Days were also held, which consolidated the application of these ideas, and an Innovation Roadshow, an event that brought together around 30 employees in Rio de Janeiro, with the aim of presenting the methodology developed at the Open Ideation so that the concept could be applied at each of the Group’s units, mapping out the problems and potential solutions.

The department’s principal target for the coming years is to transform these ideas and solutions into positive results for the operation. As such, it is preparing the leadership to identify the challenges in technology, energy efficiency and R&D in their areas and orienting the managers in relation to the best way of encouraging their teams to contribute with innovative suggestions.


19.1

29.426.2

201720162015

R&D INVESTMENT

(R$ MILLION)

RESEARCH AND DEVELOPMENT

The initiatives of 2017 aimed to reinforce the positioning of the Company in the development of strategic Research and Development (R&D) projects with the potential to contribute in an innovative way to the supply of energy, providing results not just for Energisa, but for its entire chain.

Over the course of 2017, the Energisa distribution companies invested R$ 26.2 million in around 30 R&D projects, especially the following initiatives:

Climate disasters

This project consists of a short-term, high-resolution meteorological alert system that can very precisely and reliably, and in real time, identify severe storms that are capable of causing significant damage to the Brazilian electrical sector, be it due to rain or lightning at levels that are above the average for the country. Alongside this, the project also includes the development of a standard-contingency plan of responses to catastrophic events that will be suitable for the realities of the electricity distribu-tion companies and can be integrated into the plans of other public and private entities. The alert system will be available for use by the centers of operation of Energisa’s different departments and can also be used by other sectors, thus complementing the process of technological innovation.

Technical, economic and regulatory impact of the generation distributed in the distribution grids

This project aims to create a set of tools and methodologies that will make it possible to under-stand the economic and regulatory impacts of the widescale dissemination of generation distributed in Brazil’s electric system, especially photovoltaic solar energy, facilitating possible regulatory advancements. The qualitative and quantitative analyses make it possible to identify the more efficient regulatory adjustments and mechanisms to facilitate the dissemination of this energy source, without causing negative financial impacts on electricity distribution companies and their con-sumers. The regulatory propositions prepared can also be used to establish an agenda of discussions with the various stakeholders, regulatory agencies, entrepreneurs and consumers.

Supplies in the Pantanal region of south Mato Grosso state

In 2017, the results achieved in stage I of the project were validated and its continuity insured. The research initiative seeks to balance the supply of complex islanded systems similar to the Pantanal region of south Mato Grosso state, which have access problems due to widespread flooding and islanded areas. It therefore contributed to the universal access of energy in this region. In stage two 25 generation sites will be deployed in selected locations, exploring the various genera-tion and supply possibilities.

30 projects, approximately, involving research and development were carried out in 2017 by the distribution companies, in initiatives to be applied across Brazil’s electric sector


ENERGY EFFICIENCY

The projects are carried out under the Energy Efficiency Program (PEE) in accordance with the legislation established by the National Electricity Regulatory Agency (Aneel). R$ 68.1 million was invested in these projects in 2017, which were aimed at low-income residences, trade and services, government authorities and industries. The initia-tives benefited 212,613 consumer units and made possible energy savings of 79,666 MWh/year.

The result of the projects are determined according to the procedures of Aneel’s energy efficiency program (PROPEE) and the international measure-ment & verification protocol (PIMVP). In 2017, the main projects carried out were Nossa Energia and Espaços Energisa.

Nossa Energia

The project is developed for communities with low purchasing power in all cities comprising the Group’s concession areas, and aims to encourage the rational and efficient use of electricity. Consists of a set of educational initiatives aimed at raising awareness for combating waste and changing habits, promoting conscientious consumption and strengthening the bonds between Energisa and its customers.

All consumers, regardless of whether they are regis-tered for social electricity rates (TSEE), can exchange incandescent light bulbs for compact fluorescent or LED bulbs, can replace inefficient refrigerators with other more efficient refrigerators, and can participate in lectures, theater shows and dynamic events conducted in the 11 efficient mobile units. These units are equipped with all the infrastructure necessary to provide public and private schoolgoers with a fun and digital extracurricular learning experience. A significant development in the year was acquisition of a van to share knowledge in remote communities of Mato Grosso do Sul state.

NOSSA ENERGIA PROJECT IN 2017

CompanyInvestment

(R$ thousands)

Efficient equipmentNo. of students

in lecturesBulbs Fridges

Energisa Minas Gerais 1,121 13,816 25 2,706

Energisa Nova Friburgo 217 1,257 - 263

Energisa Borborema 714 1,028 - 1,250

Energisa Paraíba 5,908 11,317 - 18,229

Energisa Sergipe 4,839 50,000 - 14,193

Energisa Mato Grosso 5,608 34,881 270 31,630

Energisa Mato Grosso do Sul 5,480 66,848 792 16,596

Energisa Tocantins 3,672 46,060 3,400 -

Energisa Sul-Sudeste 2,403 900 100 1,644

Total Energisa 29,962 226,107 4,893 86,511

1 In 2016, includes customer contribution to the Energia Solidária project (R$ 13,298 thousand) and management costs (R$ 3,510 thousand)


81,055 84,065

68,054

201720162015

185,196

258,834

212,613

201720162015

48,663

63,73579,666

201720162015

ENERGY EFFICIENCY UNITS SERVED ENERGY SAVED

(INVESTMENT1 – R$ THOUSAND) (MWH/YEAR)(NUMBER)

R$ 68.1 million was invested in projects under the Aneel Energy Efficiency Program

Projeto Nossa Energia

1 In 2016, includes customer contribution to the Energia Solidária project (R$ 13,298 thousand) and management costs (R$ 3,510 thousand)

ENERGISA HOSTS THE INDUSTRY’S LARGEST INNOVATION EVENT

In 2017 Energisa organized the Electricity Technological Innovation Congress (Citenel) and the 5th Electrical Industry’s Energy Efficiency Seminar (Seenel), held in João Pessoa (PB). This event is held every two years by Aneel to disclose technological innovations developed in the scope of regulated programs, exchange experiences and discuss regulations in force.

About the subject of Innovation and Integration: Local Replies to Global Barriers, Citenel was attended by key leaderships and the activity’s institutions. Electricity generating, transmitting, distributing and resale companies were present, as well as technology based companies, manufacturers, industry agencies, research centers, certifiers and universities. During the event’s three days, attended by over 1.1 thousand visitors, 2.7 thousand participants and 1.3 thousand students (basic, middle and higher education students) the first exhibition of goods and solutions took place, resulting from R&D and energy efficiency programs. There 144 projects being exhibited, with 27 booths and 89 products.

Energisa had an interactive booth, with a totem robot, 360º projection and virtual reality goggles, in addition to an R&D project exhibition and augmented reality PEE. Among the novelties could be found the Energisa Innovation application, with information such as the event’s agenda programming of the projects on show.

Espaço Energia

The didactic and interactive compounds are installed at Energisa Paraíba (since 2005) and Energisa Mato Grosso do Sul (since 2015), providing guidance to the population on the safe and efficient use of electricity.

Espaço Energia provides visitors with the oppor-tunity of becoming familiar with the principles of Physics and with the history of electricity, supported by models, prototypes, a video room, recreation room, audiovisual experiences, works by local artists and an area that represents a home of years ago and another current home, for comparing use and technology.

In the course of 2017 both Espaço Energia were visited by 31,476 persons, of which 14,367 were basic and middle school students from public and private schools.

Espaço Energia

MORE TECHNOLOGY IN ESPAÇO ENERGIA

The Espaço Energia in João Pessoa, state of Paraíba, was completely revamped in 2017 to include unprecedented technologies in support of lessons on energy in a dynamic and innovative manner. This includes holograms, 7D motion pictures, virtual reality and ecobikes among others, in support of work developed with educators and basic and middle education students, as well as guidance on the efficient and safe use of electricity. The project was funded by roughly R$ 1 million and completing it lasted about 12 months.

Espaço Energia

THE ENVIRONMENT

Environmental preservation is one of the major concerns by Energisa, which has a permanent com-mitment for harmonious co-existence with natural resources, always bearing in mind the country’s development and comfort for customers through sustainable actions, from the social, economic and environmental viewpoints. In 2017 R$ 89.2 million were invested in actions related to operating the Company and external programs.

The Company has an Environmental, Health and Safety Policy intended to provide an ongoing improvement of its goods and services, as well as ensuring its economic feasibility, preservation of natural resources and care for the health and safety of its staff members.

An example of this concern is the new building that will house the company’s head office and the new Energisa Services Desk in Cataguases, projected based on sustainability concepts which reduce the consumption of water and electricity and promote the proper disposal of waste (further information on page 20).

To minimize the impact of the operations on the environment, Energisa carries out environmental inspections on substations, prepares and delivers an action plan to eradicate nonconformities and to pro-vide operational training, renewed every six months, to coach technicians onto how to correctly carry out their activities. The identification card and pruning certification was introduced in 2017, displayed on employee helmets.

COMPLIANCE with environmental,

occupational health and safety legislation, and with other legal

requirements applicable.

FOSTERING of environmental education, prevention

of occupational illnesses and optimization of living standards of employees,

suppliers and the community.

USING natural resources rationally and sustainably.

ENCOURAGE research aimed at adopting practices that encourage protecting the environment, the safety and health of employees

and third parties.

WORK together with suppliers and service providers in order

to guide and monitor their activities to ensure they

comply with environmental, health and safety standards.

COMMITMENT to continual improvements in the

quality of their processes, products and services, in

a sustainable manner.

BEHAVIORAL change in response to

environmental issues.

ENVIRONMENTAL PRINCIPLES


ENVIRONMENTAL MANAGEMENT

The Environment, Social and Occupational Health and Safety Management System - SGMASS imple-mented at the Company is based on ISO 14001, OSHAS 18001 and the applicable legislation. The system is renowned for its capacity to provide the means necessary to properly monitor social environ-mental, health and safety issues and is based upon the PDCA cycle philosophy (Plan, Do, Check, Act).

The Company keeps its ISO 9001 – Quality Management System certification, 2015 version, at its units. Energisa Mato Grosso do Sul also has ISO 10002:2005 certification – Quality Management – Customer Satisfaction.

In order to foresee as fast as possible any and all impacts (breaching of cables, scheduled outages and accidental outages) that the operations could have on the well-being of society, Energisa evaluates and describes procedures to eliminate or reduce the risks involved in this operation, thereby guaranteeing efficient and preventive operations. To this end it uses suitable technology to ensure the quality and efficiency of services provided. The aim is to predict as fast as possible any and all impacts, thereby ensuring an efficient and preventive operation.

Major progress in 2017 was the updating of all the environmental control instructions (ICAs) established by Energisa Group's 1st Environmental Workshop. The event brought together representatives from all units to align and analyze the environmental management practices and to put forward a plan of action to resolve the main projects and/or proceedings that impact the entire Group. The next stage of this endeavor will take place at a second edition of the Workshop in 2018.

Protected areas

To ensure an effective control over environmental management, Energisa Sergipe mapped out all of the protected areas in the state in the Incra database and the State Environmental and Water Resources Department. All of the requests for the new connection and/or extension of the grid to these environmental protection and conservation areas will only be performed after an environmental license has been presented.

In partnership with landowners and municipal governments in the concession area, Energisa Nova Friburgo move forward with the plan to restore the springs and streams in Permanent Conservation Areas (APPs) and to restore degraded areas by planting and periodically maintaining native species from the Atlantic Forest.

The Indígena Nambiquara and Vale do Guaporé Basic Environmental Plans were completed in Mato Grosso state, and initiatives implemented to reduce water and energy consumption such as the installation of drinking fountains and smart flushing systems in toilets and installation of energy-saving bulbs in buildings and substations.

T H E E N V I R O N M E N T70

WATER WITHDRAWAL BY SOURCE

(m3)

Conservation

The distribution companies adopted important environmental conservation measures to varying degrees, such as:

• Controlled disposal of sodium vapor lamps, mercury vapor lamps and fluorescent lamps at its own facilities and in the public lighting infrastructure.

• Insulated cables are used in low-voltage grids where trees could be more affected by contact with the power lines. Protected cables are used in medium voltage grades close to trees, in order to avoid undesirable pruning

• Water and energy consumption reduction campaigns, education based on the 3Rs (Reduce, Reuse and Recycle) and education for conscious consumption by distributing leaflets and presenting lectures at schools (Water Day, Environmental Week) and internal disclosure (intranet, stickers and notices put up by the company and screensavers).

• Initiatives commemorating Environmental Week, Water Day and Tree Day;

• Environmental Education Programs;

• Regenerating insulating oil used in its equip-ment and recovering industrial lubricating oil, ensuring the recycling of this material and avoiding environmental pollution

• Retaining suppliers that have good environmen-tal conduct

• Preventive servicing of all fleet vehicles and use of ethanol fuel in vehicles whenever possible, in order to diminish the impact of pollutant emissions.

101,23893 93 93

20,065 26,677 29,95

81,08071,793 72,451

201720162015

98,563 101,793

Supply (public system)

Groundwater (wells)

Surface extraction (waterways)

RESOURCE CONSUMPTION

WATER

All distribution companies also have water consumption reduction campaigns both internally and in the communities, in addition to awareness raising activities and lectures when commemorat-ing Water Day. For internal consumption Energisa Mato Grosso do Sul takes in water from a deep well in the Serra Geral aquifer and the distribution companies of Energisa Sul-Sudeste taking water from wells in the Bauru aquifer.

New buildings were erected in Minas Gerais in 2017, where water is taken in and used and at Energisa Mato Grosso drinking fountains were changed and a smart flushing system installed in the units’ restrooms. Notwithstanding the perma-nent actions and those in progress in the course of the year, consolidated consumption rose at the nine distribution companies rose by 3.2% in 2017.


891,984 900,9751,013,148

201720162015

ELECTRICITY CONSUMPTION

(GJ)

ENERGY

Internal and external campaigns are promoting lower energy consumption by way of an energy efficiency program. The actions adopted to reduce internal consumption include the replacement of conventional bulbs with more efficient LED bulbs. The new Energisa Minas Gerais buildings make use of natural lighting, through the use of film-covered plate glass, perforated metallic plates and sunshades.

(Further information about energy efficiency can be seen on the related page on our site http://www.energisa.com.br/Paginas/sustentabilidade/eficiencia-energetica.aspx)

EMISSIONS

The Group’s vehicle fleet is reviewed and inspected regularly, in accordance with the existing envi-ronmental legislation, in order to ensure reduced emissions of pollutants in the atmosphere. The distribution companies follow a fleet renewal pol-icy in which vehicles are monitored and replaced whenever necessary.

To reduce CO2 emissions, Energisa Sul-Sudeste uses ethanol fuel in live vehicles whenever possible and Diesel-S10 in diesel vehicles, with a maximum sulfur content of 10mg/kg (10 parts per million) making it possible to reduce particulate matter emissions by up to 80% and nitrogen oxides by up to 98%.

WASTE MATERIAL

Energisa Group makes every effort to minimize waste and ensures all waste is properly disposed of. Part of nonhazardous waste is sold as scrap, an action that minimizes the environmental impact and strengthens the re-use chain, avoiding an overload in landfills.

The Company runs campaigns to reduce waste in its processes and administrative offices. The use of digital documents is encouraged internally and the external public is encouraged to use digital invoices and direct debits - both of which aim to reduce the requirement to print documents, thereby contributing to global sustainability.

One of the main issues and potential impacts of Energisa's operations is the risk of oil leaks and ground contamination. To mitigate this risk the equipment has a containment base and maintenance teams carry environmental kits for absorbing oil in the case of leaks at substations. Employees are trained to respond to emergency leaks and preventive maintenance is carried out periodically cleaning out water and oil segregation boxes and containing any leaks from transformers.

Hazardous waste classified as Class I (according to ABNT NBR 10.004:2004) is collected and stored differently, in accordance with the respective legislation, and disposed of by licensed companies to ensure the correct handling, transportation and final disposal.

Energisa’s distribution companies install insu-lated cables in low-voltage grids and shielded cables in the medium-voltage grids, significantly reducing the need for pruning. The tree pruning and easement cleaning teams in the processes of maintaining distribution and transmission lines and grids are trained to work in such a way as to have a minimum impact on the scenery and animal and plant wildlife. Pruning in general is conducted in partnership with municipal governments, with the generated waste always being correctly disposed of.

T H E E N V I R O N M E N T72

BIODIVERSITY

To honor the commitment undertaken to preserve plant and animal wildlife in the geographies, Energisa Group companies employ sustainable management and projects avoid clearing land as much as possible. In cases where land clearance is necessary, the impact is always mitigated by planting and community initiatives.

Energisa Sul-Sudeste planted and is maintaining 12.62 hectares of native tree species of the Atlantic Forest In degraded areas, in accordance with the commitments made with environmental authorities, and the change of practice agree-ment with the prosecutions department. Urban pruning and tree planting manuals were also handed out to municipal governments, environ-mental departments, government agencies and communities produced through a partnership between ESS and the Consumer Council.

The company prepares simplified environmental reports on grids and lines that cross areas of forest or other types of permanent preservation areas and Phytossociologic Studies when nec-essary. It also presents any mitigating and/or compensatory measures to be implemented, as stipulated in the internal policies and operating standards of the distribution companies.

In addition to the simplified environmental reports - RAS, for the construction of high-volt-age distribution lines preventive archeology studies are carried out, supervised by the National Archaeological Heritage Institute (Iphan), which indicate the possibility of archaeological remains, in addition to the preparation of an Environmental Feasibility Study (EVA), Environmental Control Plan (PCA) and Environmental Inspections.

The biodiversity preservation initiatives at Energisa Sergipe helped improve the restate-ment metric by transmission function (IDAT Environmentally friendly companies) from 81.8 in 2016 to 88.5 in 2017, in addition to the Performance Indicator of Perceived Quality Areas (IDAR - Social Responsibility) from 78.6 to 83.6.

In partnership with landowners and municipal governments in the concession area, Energisa Minas Gerais and Energisa Nova Friburgo restored the springs and streams in Permanent Conservation Areas (APPs) and to restore degraded areas by planting and maintaining native species from the Atlantic Forest.


IBASE SOCIAL BALANCE SHEET1 - Calculation base 2017 Amount (thousand reais) 2016 Amount (thousand reais)

Net revenue (RL) 13,637,154 11,810,695Operating income (RO) 606,890 344,080Gross payroll (FPB) 905,435 1,024,017

2 - Internal social metrics Amount (thousand)

% of FPB

% over RL

Amount (thousand)

% of FPB

% over RL

Food and Restaurants 126,485 13.97% 0.93% 119,632 11.68% 1.00%Compulsory social charges 204,194 22.55% 1.50% 216,294 21.12% 1.83%Pension plan 107,508 11.87% 0.79% 55,881 5.46% 0.47%Health 66,176 7.31% 0.49% 60,272 5.89% 0.51%Occupational health and safety 22,091 2.44% 0.16% 64,407 6.29% 0.55%Education 1,149 0.13% 0.01% 1,015 0.10% 0.01%Culture 0 0.00% 0.00% 15 0.00% 0.00%Training and professional development 6,187 0.68% 0.05% 2,810 0.27% 0.02%Day care and day care allowance 5,052 0.56% 0.04% 2,626 0.26% 0.02%Profit sharing 59,701 6.59% 0.44% 44,624 4.36% 0.38%Other 16,245 1.79% 0.12% 15,106 1.48% 0.13%Total - Internal social metrics 614,788 67.90% 4.51% 582,682 56.90% 4.93%

3 - External social metrics Amount (thousand)

% over RO

% over RL

Amount (thousand)

% of RO

% over RL

Education 4,621 0.76% 0.03% 1,425 0.41% 0.01%Culture 9,400 1.55% 0.07% 3,612 1.05% 0.03%Health care and sanitation 31 0.01% 0.00% 266 0.08% 0.00%Sports 522 0.09% 0.00% 368 0.11% 0.00%Combating hunger and food safety 0 0.00% 0.00% 0 0.00% 0.00%Other 2,420 0.40% 0.02% 3,305 0.96% 0.03%Total contributions to society 16,994 2.80% 0.12% 8,976 2.61% 0.08%Taxes (not including social charges) 4,919,561 810.62% 36.07% 4,887,132 1420.35% 41.38%Total - External social metrics 4,936,555 813.42% 36.20% 4,896,108 1422.96% 41.45%

4 - Environmental metrics Amount (thousand)

% over RO

% over RL

Amount (thousand)

% of RO

% over RL

Investments related to company production / operation

89,110 14.68% 0.65% 43,757 12.72% 0.37%

Investments in external programs and/or projects 55 0.01% 0.00% 0 0.00% 0.00%Total environmental investment 89,165 14.69% 0.65% 43,757 12.72% 0.37%

Regarding the establishment of annual targets to minimize waste and overall consumption in production/operations and improve resource usage efficiency, the company

( ) has no targets( ) performs 0 to 50%( ) performs 51% to 75% ( x ) performs 76% to 100%

( ) has no targets( ) performs 0 to 50%( ) performs 51% to 75% ( x ) performs 76% to 100%

5 - Functional staff metrics 2017 2016

Number of employees at period-end 12,573 11,932Number of new hires in the period 2,275 1,974Number of outsourced employees 4,351 3,202Number of trainees 387 427Number of employees over 45 1,524 1,745Number of women working at the company 2,383 2,274% management positions held by women 44.32% 21.25%Number of black people working at the company 5,911 6,088% management positions held by black employees1

71.46% 21.58%

No. of employees with special needs 387 3981 In 2016, this includes the proportion of the total managers and advisers and in 2017 it also includes coordinators.

I B A S E S O C I A L B A L A N C E S H E E T74

6 - Material information regarding corporate citizenship 2017 Meta 2018

Ratio of lowest to highest earners at the company 23.9 21.8

Total number of occupational injuries 140 112

The social and environmental projects implemented by the company were defined by:

( x ) directors ( ) senior and middle management( ) all employees

( x ) directors ( )senior and middle management( ) all employees

Occupational health and safety standards have been defined by:

( x ) senior and middle management ( ) all employees ( ) all + Cipa

( x ) senior and middle management ( ) all employees ( ) all + Cipa

Regarding freedom of association, the right to collective bargaining and internal representation of workers, the company:

( ) does not get involved ( x ) follows the OIT rules ( ) promotes and follows ILO standards

( ) will not get involved ( x ) will follow the OIT rules ( ) will promote and follow ILO standards

The private pension embraces: ( ) directors ( ) senior and middle management ( x ) all employees

( ) directors ( ) senior and middle management( x ) all employees

Profit-sharing embraces: ( ) directors ( ) senior and middle management( x ) all employees

( ) directors ( ) senior and middle management( x ) all employees

When selecting suppliers the same ethical, social responsibility and environmental standards adopted by the company:

( ) are not considered ( ) are suggested( x ) are demanded

( ) will not be considered ( ) are suggested ( x ) are demanded

In respect of employee participation in voluntary work programs, the company:

( ) does not get involved ( ) gives support( x ) offers organization and incentives

( ) will not get involved ( ) will support it( x ) will offer organization and incentives

Total number of consumer complaints and criticism:

to the Firm: 2,489,393at Procon: 11,341to the Courts: 23,51

to the Firm: 2,064,664at Procon: 6,588to the Courts: 18,290

% complaints and criticism handled or resolved: to the Firm: 86%at Procon: 96%to the Courts: 66%

to the Firm: 99%at Procon: 82%to the Courts: 71%

Added value to be distributed (in R$ thousand): In 2017: 9,290,675 In 2016: 9,189,321

Distribution of Added Value (DVA): 68% government11% employees3% shareholders15% third parties3% retained earnings

71% government9% employees2% shareholders17% third parties1% retained earnings

7 – Other information 2017 (mil reais) 2016 (mil reais)

7. Social investments

7.1 - The Light for All Program - -

7.1.1 - Government Investment - 38,987

7.1.2 - State Investment - -

7.1.3 - Municipal Investment - -

7.1.4 - Concessionaire Investment 6,468 273,902

Total - Light for All program (7.1.1 to 7.1.4) 6,468 312,889

7.2 - Energy efficiency program 69,981 86,685

7.3 - Research and development program 34,937 39,943

Total social investments 111,386 439,517


ENERGISA MINAS GERAISOperating and productivity metrics

Technical information (consumables, production capacity, sales, losses) 2017 2016 2015

Number of consumers served - Captive 445,557 438,869 433,470

Number of consumers served - Free 51 47 32

Number of locations served (municipalities) 66 66 66

Number of own employees 1 806 613 593

Number of outsourced employees 134 171 155

Number of commercial offices 66 66 66

Electricity generated (GWh) NA NA NA

Electricity purchased (GWh) 1,498.32 1,538.65 1,454.75

1) Itaipu 281.51 286.07 267.48

2) Auction (including federal generator auction (2002) 1,216.81 1,252.58 1,187.27

3) Energy sales of concession operator 0 0 0

Global electric losses (GWh) 175.3 170.6 169.3

Electrical losses – (%) total on energy requirement 10.43% 10.10% 9.70%

Technical losses – (%) on energy requirement 10.19% 9.41% 9.87%

Non-technical losses – (%) on energy requirement 0.24% 0.69% -0.17%

Energy sold (GWh) 1,201.00 1,197.47 1,215.51

Residential 503.53 492.98 486.79

Industrial 130.91 142.26 166.03

Commercial 226.88 236.88 240.94

Rural 183.63 174.56 173.71

Government 33.07 32.96 32.94

Public lighting 83.47 79.28 77.52

Public utility 39.50 38.54 37.58

Substations (in Units) 2 47 46 46

Installed capacity (MVA) 2 1,012 987 987

Transmission lines (in km) 1,090 1,080 1,080

Distribution lines (in km) 26,882 26,459 26,245

Distribution transformers (in units) 62,771 61,184 60,222

Sale of energy through installed capacity (GWh/MVA*No. Hours/Year) 0.00014 0.00014 0.00014

Electricity sold by employee (MWh) 1,490 1,953 2,050

Number of consumers by employee 553 716 731

Added value/GWh sold 414.20 388.41 411.90

Overall equivalent outage duration per consumer “DEC” of the company - Amount determined 8.44 10.35 10.18

Overall equivalent outage duration per consumer “DEC” of the company - Limit 11.52 11.57 11.76

Overall equivalent outage frequency per consumer “FEC” of the company - Amount determined 5.05 7.16 7.28

Overall equivalent outage frequency per consumer “FEC” of the company - Limit 9.36 9.44 10.08

1 Increase in the number of employees resulting from intercompany transfers. 2 The energization of the Manhuaçu 2 Substation was improperly included in 2016. The figure for 2015 was incorrectly registered and has been corrected.

E N E R G I S A M I N A S G E R A I S76

Corporate governance

Managers 2017 2016 2015

CA DE CF 1 Total CA DE CF 1 Total CA DE CF 1 Total

No. of members 6 6 - 12 6 6 - 12 6 6 - 12

Annual Fixed Compensation (R$ 000) 715 2,574 - 3,289 727 1,533 - 2,261 649 1,532 - 2,181

Salary or management fees 449 900 - 1,349 520 886 - 1,405 459 885 - 1,343

Direct or indirect benefits 90 435 - 525 79 429 - 508 80 438 - 518

Participations in committees - - - - - - - - - - -

Other (charges) 176 1,239 - 1,415 129 219 - 347 111 209 - 320

Description of other fixed compensation

- - - - - - - - - - -

Variable Compensation (R$ 000) 252 907 - 1,159 658 992 - 1,650 384 488 - 872

Bonuses - - - - - - - - - -

Profit sharing 252 907 - 1,159 658 992 - 1,650 384 488 - 872

Attending meetings - - - - - - - - - - - -

Commission - - - - - - - - - - - -

Other - - - - - - - - - - - -

Description of other variable compensation

- - - - - - - - - - - -

CA - Board of Directors; DE - Executive Board; CF - Oversight Board 1 There is no Oversight Board at the moment

Cataguases - MG


Economic and financial metrics

Statements of added value (In thousands of reais) 2017 2016

Revenue 1,054,649 946,233

Revenue from energy sales and services 975,131 894,651

Other revenue 2,418 2,287

Revenue relating to construction of company assets 78,111 52,116

Formation and reversal of allowance for doubtful accounts (1,011) (2,821)

(-) Consumables acquired from third parties 559,632 488,906

Cost of electricity sold 410,152 353,400

Materials and outsourced services 57,257 73,531

Other operating costs 92,223 61,975

Gross added value 495,017 457,327

Amortization and depreciation 33,240 31,129

Net added value 461,777 426,198

Transferred added value

Finance income 35,681 38,630

Total added value to be distributed 497,458 464,828

Distribution of value added 2017 2016

Personnel

Direct compensation 33,274 29,278

Benefits 10,501 8,813

FGTS 2,693 1,917

Taxes, charges and contributions

Federal 73,078 60,112

State 213,181 206,657

Municipal 274 217

Intrasector Obligations 82,547 89,993

Interest expenses

Interest 51,816 62,565

Rent 867 887

Interest earnings

Legal Reserve 1,461 219

Additional dividends proposed 8,652 3,127

Dividends 19,114 1,043

497,458 464,828

Investments 2017 2016

R$ 000 ∆% R$ 000

Internal social metrics 7,284 82.5% 6,010

Renewal of distribution/transmission 77,701 59.5% 46,236

Sub- transmission 0 0.0% 0

Total 84,986 62.7% 52,246


Internal social metrics

Employees/ Employability/ D&O

General information 2017 2016 2015

Total number of employees 806 613 593

Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, employment contract and region

134 171 155

Employees aged 30 or under (%) 34.24% 34.9% 39.3%

Employees aged between 31 and 40 (%) 41.81% 39.5% 36.1%


Employees aged over 50 (%) 7.69% 8.2% 6.2%

Percentage of female employees out of total (%) 20.84% 18.4% 17.7%

Women in managerial positions - out of total managerial positions (%) 30.43% 32.2% 35.8%

Black female employees (black and mixed race) - out of total employees (%) 1.24% 1.5% 1.3%

Black male employees (black and mixed race) - out of total employees (%) 14.64% 14.0% 13.8%

Black employees (black and mixed race) in managerial positions out of total managerial positions (%)

13.04% 11.9% 11.3%

Percentage of interns out of total employees (%) 2.85% 3.3% 2.5%

Apprentice program employees (%) 5.0% 5.0% 5.0%

Employees with special needs 15 9 9

Compensation, benefits and career (R$ 000) 2017 2016 2015

Gross payroll 47,981 37,628 36,045

Compulsory social charges 11,186 8,511 9,011

Education 47,981 46 41

Food and Restaurants 11,186 6,039 5,401

Transportation 69 292 238

Health 7,368 1,789 1,463

Date Founded 245 611 594

Occupational health and safety 1,850 397 327

Culture 808 0 0

Training and professional development 983 272 313

Day care and day care allowance 0 220 146

Other (funeral allowance, exceptional payments, retirement premium) 403 1,391 652

Profit sharing 2017 2016 2015

Total investment in company profit-sharing program (R$ 000) 4,315 3,463 3,199

Amounts distributed in relation to gross payroll (%) 8.99 9.2% 7.5%

Highest compensation divided by the lowest compensation in cash paid by the company 25.05 25.05 24.26

Lowest compensation at the company divided by the minimum salary in force 1.1 1.1 1.1

Compensation profile by category - average salary in the current year 2017 2016 2015

Executive positions 39,825 42,050 36,825

Management positions 14,469 16,149 15,126

Administrative positions 4,478 3,723 3,239

Operating positions 1,775 1,580 1,498


Occupational health and safety 2017 2016 2015

Average overtime per employee/year 49.2 57.6 72.4

Total frequency rate of the company for the period - employees 3.33 8.99 8.28

Employee seriousness rate in the period 6 104 106

Total frequency rate of the company for the period - contractors 10.68 14.91 2.81

Seriousness Rate of outsourced/contracted employees in the period 320.51 9,173.0 126.4

Frequency rate of the company for the period - workforce (employees + contractors) 5.03 11.22 6.16

Severity rate for the period - workforce (employees + contractors) 51.35 3,516 77

Fatalities – employees 0 0 0

Fatalities – contractors 0 1 0

Professional development 2017 2016 2015

Education levels - specify percentage of total employees

Primary Education 2.98% 4.6% 5.1%

High School 51.24% 57.2% 58.5%

Technical School 15.51% 13.1% 14.5%

Undergraduate School 22.46% 18.0% 16.4%

Graduate (specialist, Master's degree, PhD) 7.82% 7.1% 5.5%

Amount invested in professional development and education (R$ 000) 481 272 313

Average number of hours of training per year per employee, broken down into job type

Executive positions 15 31 0

Management positions 27 78 47

Administrative positions 40 45 52

Operating positions 90 109 133

Conduct in light of dismissals 2017 2016 2015

Churn rate 5.39% 6.18% 7.73%

Labor claims (company and outsourced employees)

Amounted provisioned in the period (R$ 000) 2,147 2,329 4,480

Number of labor claims brought against the company in the period 35 96 123

Number of labor claims upheld in the period 59 47 44

Number of labor claims deemed misplaced in the period 10 8 14

Total compensation and fines paid by order of the courts in the period (R$ 000) 1,696 3,737 1,894

metrics 2017 2016 2015

Investments in supplementary pensions (R$ 000) 808 611 594

Number of beneficiaries of supplementary pension plans 62 56 61


External social metrics

Consumers

Service excellence 2017 2016 2015

Profile of consumers and clients


Energy sales by rate class (GWh): % Total 35.22% 34.64% 34.04%

Residential 6.98% 7.00% 6.85%

Low-income residential 19.63% 20.22% 21.52%

Sales 10.45% 11.32% 11.54%

Industrial 14.44% 13.72% 13.41%

Rural 7.21% 6.94% 6.53%

Public lighting 3.25% 3.32% 3.23%

Public utility 2.82% 2.84% 2.88%

Customer satisfaction 2017 2016 2015

Satisfaction rates obtained by Iasc Survey - Aneel 71.18 58.86 70.12

Satisfaction rates obtained by other entities and/or proprietary surveys - Abradee Survey 81.2 84.0 83.4

Consumer service 2017 2016 2015

Call Center

Calls received (unit) 679,282 691,315 540,965

Average number of agents (unit) 57 65 54

INS - Level of Service Rate (%) 90.41% 92.84% 91.16%

IAB - Abandonment rate (%) 1.25% 0.81% 0.88%

ICO - Busy Call Rate (%) 0.00% 0.20% 1.84%

TMA - Average interaction time (s) 182 174 177

Compensation for electrical damages

Volume of Applications (unit) 1,229 1,743 1,654

Upheld (unit) 1 220 440 442

Complaints metrics 2017 2016 2015

Confirmed Complaints (unit) 98,264 109,916 1,590

DER (hours) 109.23 156.00 150.36

FER (unit) 2.55 2.96 3.07

Violation of commercial service terms

Service interactions (unit) 161,573 155,545 139,667

Service interactions completed late (unit) 4,326 3,879 3,222

Service efficiency (%) 97.32% 97.51% 97.69%

Number of customer complaints escalated to 2017 2016 2015

The company 2 122,145 131,486 4,964

Aneel – state/regional agencies 437 421 429

Procon 134 181 270

to the courts 1,018 2,583 358

1 There are 162 requests in 2017 in progress, i.e. the number of founded complaints can only be changed after these proceedings have been completed. For this reason the figures for 2016 have been changed.2 From 2016 we included all the complaints in Appendix I, including electrical damage, voltage level and outages.


Community

Impacts on health and safety 2017 2016 2015

Total number of nonfatal injuries involving the population 4 6 7

Total number of fatal injuries involving the population 2 2 1

Legal claims resulting from accidents involving the population - General Litigation Base

3 4 7

Low-income rate 2017 2016 2015

Number of low-income households served 56,357 55,979 55,894

Total low-income households out of total households served (residential customers/consumers) (%)

17.03% 17.2% 17.4%

Revenue from sales to low-income residential subsector (R$ 000) 38,816 41,270 42,445

Total revenue from sales to low-income residential subsector out of total residential revenue (%)

10.23% 11.00% 12.30%

Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 17,125 13,357 13,753

Company involvement in social action 2017 2016 2015

Funds allocated to education (R$ 000) 494 478 574

Funds allocated to health care and sanitation (R$ 000) 0 0 0

Funds allocated to culture (R$ 000) 1,158 1,111 1,237

Funds allocated to sports (R$ 000) 29 31 0

Other funds allocated to social initiatives (R$ 000) 156 359 307

Employees conducting voluntary work in the community outside the Company/total employees (%)

0.6% 0.3% 0.5%

Number of monthly hours donated (released from normal working hours) by the Company for voluntary work by employees

37.5 0 0

Company involvement in cultural, sporting and social projects (Rouanet Law, Sporting Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

2017

2016

2015

Funds allocated to projects (R$ 000) 2,014 3,791 119

Funds allocated to the largest project (R$ 000) 500 700 90

Project name Film Maria do Caritó

Studio-school Project

Princesa Leopoldina

Musical Band

Proposed by Versão Final Produção e

Comunicação Ltda.

Instituto Fábrica do

Futuro

Princesa Leopoldina

Musical Band

Electric sector metrics

Universal electricity access

2017 2016 2015

Service targets - - -

Calls handled (no.) - - -

Performance of targets (%) - - -

Total municipalities with universal access - - -

Municipalities with universal access (%) 100% 100% 100%

Universal access completed in 2010, as per Aneel Order 2344, issued 7/17/2012.


Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments (R$ 000) 1

Financing sources (R$ 000)





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Tota

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Tota

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(%)

Com

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Third

pa

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Clie

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Industrial - - - - - - - - - - - - - - -

Trade and Services 509 23.8% 509 - - - - - - - - - - - -

Public Authorities - - - - - - - - - - 160 6.8% 160 - -

Public Utility - - - - - - - - - - - - - - -

Rural - - - - - - - - - - - - - - -

Residential 2 514 24.0% 514 - 929 48.0% 929 - - 856 36.5% 121 735 -

Low-Income Residential

1,119 52.2% 1,119 - - 1,006 52.0% 1,006 - - 1,327 56.7% 1,327 - -

Public Lighting - - - - - - - - - - - - - - -

Municipal Energy Management

- - - - - - - - - - - - - - -

Educational - - - - - - - - - - - - - - -

TOTAL 2,521 100.0% 2,142 - - 1,935 100.0% 1,935 - - 2,342 100.0% 1,607 735 -

1 Excludes funds used in project management 2 The amount of R$ 13 thousand was erroneously allocated in 2016 as client funds. This was corrected and the amount transferred to proprietary investment.


Uni

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Peak

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Uni

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Peak

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(k

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Uni

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Ener

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s (M

Wh/

year

)

Peak

Sha

ving

(k

W)

Industrial - - - - - - - - -

Trade and Services 3 356.9 47.1 - - - - - -

Public Authorities - - - - - - 1 76.40 19.4

Public Utility - - - - - - - - -

Rural - - - - - - - - -

Residential 2 3,626 996.6 7.8 3,574 3,125.0 - 4,734 4,058.0 -

Low-Income Residential2

7,476 2,774.6 707.4 12,510 - - 2,087 - -

Public lighting 2 - - - - - - - - -


- - - - - - - - -

Educational - - - - - - - - -

TOTAL 11,105 4,128.1 762.3 16,084 3,125.0 - 6,822 4,134.4 19.4

2 Residential and low-income residential amounts incorrectly included in 2016 in low-income residential and public lighting respectively. The correction was made and the information transferred to the correct classifications.


Funds Invested in technological and scientific research and development (R$ 000) 1

By field of research (Research & Development Handbook – Aneel)

2017 2016 2015

Valor (%) Valor (%) Valor (%)

FA – Alternative Electricity Generation Sources 0 - 0 - 0 -

GT – Thermal Generation 0 - 0 - 0 -

GB – River Basin and Reservoir Management 0 - 0 - 0 -

MA – Environment 0 - 0 - 0 -

SE – Safety 0 - 0 - 0 -

EF – Energy Efficiency 0 - 0 - 0 -

PL – Power Systems Planning 0 - 40.30 15.6% 137.70 9.5%

OP – Power System Operation 47.81 61.3% 68.50 26.6% 146.20 10.2%

SC – Power System Supervision, Control and Protection 6.32 8.1% 0.80 0.3% 119.70 8.3%

QC – Power Supply Quality and Reliability 18.62 23.9% 134.30 52.0% 590.20 41.0%

MF – Metering, Billing and Commercial Loss Reduction 0 -% 0 - 0 -

OU – Other 5.30 6.8% 14.10 5.5% 446.30 31.0%

TOTAL 78.06 100.0% 258.00 100.0% 1,440.10 100.0%1 Excludes funds used in project management


Environmental metrics

Recover degraded areas 2017 2016 2015

Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 1,252 1,720 1,648Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 42.7 40.6% 38.9%

Waste generation and treatment 2017 2016 2015

EmissionsAnnual volume of greenhouse (CO2, CH4, N2O, HFC, PFC, SF6), issued into the atmosphere (in tonnes of CO2 equivalent) - - -

Annual volume of ozone-depleting emissions - - -EffluentsTotal water discharge by quality and destination 1 - - -Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 306 354 340Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 100% 100% 100%

Use of resources in the production process and managerial processes 2017 2016 2015

Total electricity consumption by sourceElectricity consumption per kWh distributed (sold) 0.000390 0.000391 0.000396Direct energy consumption by primary source in GJ 468,417 468,698 481,733

Diesel 365,938 364,259 382,368Gasoline 102,479 104,439 99,365Ethanol - - -Natural gas - - -

Other (Specify) - - -Total water consumption by source (m3) Supply (public system) 6,523 7,320 7,315Groundwater (wells) - - -Surface extraction (waterways) - - -Total water withdrawal (m3) 6,523 7,320 7,315Water withdrawal per employee (m3) 2 15 12 11

Environmental education and awareness raising 2017 2016 2015

At the Organization

Number of employees trained in environmental education programs 59 59 58Percentage of employees trained in environmental education programs/total employees 14.39 9.7% 9.0%Number of hours of environmental training out of total hours of training Not

availableNot

availableNot

availableIn the Community Number of primary schools and high schools served 3 23 32 25Number of primary school and high school students served 3 2,706 7,870 4,846Number of teachers trained - - -Number of technical schools and high schools served 2 - -Number of technical school and graduate students served 110 - -

1 Water waste is sanitary waste and relatively insignificant.2 In 2017 this only includes employees based in the city of Cataguases.3 2016 and 2015 data included which had not been previously reported.

Performance metrics 2017 2016 2015

Deforestation (hectares of land cleared by quarter) Not available Not available Not availableTree pruning (volume of waste created by month in kg) Not available Not available Not availableOil leaks (leakage sites by month) Not available Not available Not available


ENERGISA NOVA FRIBURGOOperating and productivity metrics





Number of own employees 128 127 120

Number of outsourced employees 24 25 50



Electricity purchased (GWh) 324.38 336.87 344.91

1) Itaipu 0 0 0

2) Auction (including federal generator auction (2002) 324.38 8.40 8.32

3) Energy sales of concession operator 0.00 328.46 336.59




Non-technical losses – (%) on energy requirement -0.75% -0.55% -0.49%

Energy sold (GWh) 307.36 320.66 328.32

Residential 161.14 159.40 159.87

Industrial 39.65 47.07 50.20

Commercial 65.30 69.70 73.45

Rural 5.56 5.35 5.44

Government 7.32 7.79 7.68



Substations (in Units) 5 5 5

Installed capacity (MVA) 119 119 119

Transmission lines (in km) 24 24 24




Electricity sold by employee (MWh) 2 3 3



Overall equivalent outage duration per consumer “DEC” of the company - Amount determined

5.78 7.25 8.76


Overall equivalent outage frequency per consumer “FEC” of the company - Amount determined

3.82 7.42 6.95


E N E R G I S A N O V A F R I B U R G O86


Managers 2017 2016 2015

CA 1 DE CF 1 Total CA 1 DE CF 1 Total CA 1 DE CF 1 Total

No. of members - 6 - 6 - 6 - 6 - 6 - 6

Annual Fixed Compensation (R$ 000) - 1,439 - 1,439 - 876 - 876 - 879 - 879

Salary or management fees - 708 - 708 - 666 - 666 - 638 - 638

Direct or indirect benefits - 38 - 38 - 26 - 26 - 75 - 75

Participations in committees - - - - - - - - - - - -

Other (charges) - 693 - 693 - 184 - 184 - 166 - 166


- - - - - - - - - - - -

Variable Compensation (R$ 000) - - - - - 564 - 564 - 307 - 307

Bonuses - - - - - - - - - - - -

Profit sharing - 659 - 659 - 564 - 564 - 307 - 307


Commission - - - - - - - - - - - -

Other - - - - - - - - - - - -


- - - - - - - - - - - -

CA - Board of Directors; DE - Executive Board; CF - Oversight Board 1 There is no Board of Directors or Oversight Board at the moment

Nova Friburgo - RJ




Revenue 241,369 246,637


Other revenue 704 424


Formation and reversal of allowance for doubtful accounts (462) (410)












Personnel


Benefits 2,501 2,394

FGTS 833 433


Federal 13,618 13,226

State 58,896 55,113

Municipal 214 195


Interest expenses

Interest 11,485 16,473

Rent 254 222

Interest on equity

Dividends 1,289 -

Additional dividends proposed 3,867 -

Legal reserve 271 -

Profit Retention - (3,304)

121,815 111,296

Investment 2017 2016

R$ 000 ∆% R$ 000

Expansion of distribution/transmission (reinforcement expansion)

1,065 63.7% 679



Total 6,807 10.3% 6,169






Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, employment contract and region 24 25 50









Black employees (black and mixed race) in managerial positions out of total managerial positions (%) 0.0% 0.0% 0.0%





Gross payroll 9,063 8,166 8,642


Education 22 27 26


Transportation 244 202 224

Health 596 672 335

Date Founded Not available

128 183


Culture 0 0 0



Other (funeral allowance, exceptional payments, retirement premium) 257 293 62














Total frequency rate of the company for the period - employees 0 11.96 3.87



Seriousness Rate of outsourced/contracted employees in the period 576.92 5,714 51,229


Severity rate for the period - workforce (employees + contractors) 43.08 1,700 16,397






High School 58.6% 57.5% 59.2%











Churn rate 5.97% 6.90% 9.10%


Amounted provisioned in the period (R$ 000) - - 106


Number of labor claims upheld in the period - 4 3

Number of labor claims deemed misplaced in the period - 1 1

Value of damages and fines paid under court awards in the period (R$ 000) - 80 75

Preparation for retirement 2017 2016 2015





Consumers





Residential 3.10% 3.0% 2.9%


Sales 9.08% 12.3% 12.0%

Industrial 1.65% 1.5% 1.4%

Rural 7.16% 6.9% 6.6%



Public Authorities 2017 2016 2015

Customer satisfaction 57.97 73.12 56.31


Satisfaction rates obtained by other entities and/or proprietary surveys - Abradee Survey 2017 2016 2015

Consumer service

Call Center 162,004 179,410 132,072

Calls received (unit) 47 65 54

Average number of agents (unit) 92.57 94.01 92.18

INS - Level of Service Rate (%) 0.71 0.57 0.66

IAB - Abandonment rate (%) - 0.02 0.05

ICO - Busy Call Rate (%) 190 180 183

TMA - Average interaction time (s)

Compensation for electrical damages 985 1,310 952Volume of Applications (unit) 250 435 388

Upheld (unit) 1 2017 2016 2015

Complaints metrics 17,170 23,371 402

Confirmed Complaints (unit) 103.73 128.85 142.23

DER (hours) 2.73 3.61 3.41

FER (unit)

Violation of commercial service terms 33,745 32,093 30,931

Service interactions (unit) 866 708 489

Service interactions completed late (unit) 97.43% 97.80% 98.40%

Service efficiency (%) 2017 2016 2015

Number of customer complaints escalated to 23,511 29,411 1,540

The company 2 111 98 101


Procon 105 107 106

to the courts

1 There are 60 requests in 2017 in progress, i.e. the number of founded complaints can only be changed after these proceedings have been completed. For this reason the figures for 2016 have been changed. 2 From 2016 we included all the complaints in Appendix I, including electrical damage, voltage level and outages.


Community




Legal claims resulting from accidents involving the population - General Litigation Base 0 1 0




5.5% 5.5% 5.7%



3.84% 4.3% 4.6%





Funds allocated to culture (R$ 000) 185 158 218




0% 0% 0%

Number of monthly hours donated (released from normal working hours) by the Company for voluntary work by employees 0 0 0


2017 2016 2015

Funds allocated to projects (R$ 000) 0 0 225


Project name- -

Nova Friburgo Audiovisual

Pole

Proposed by- -

Instituto Serrano de Economia

Criativa



2017 2016 2015
















Tota

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Tota

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Com

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Tota

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Com

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Industrial - - - - - - - - - - - - - - -

Trade and Services - - - - - - - - - - - - - - -

Public Authorities 143 28.0% 143 - - - - - - - - - - - -

Public Utility - - - - - - - - - - - - - - -

Rural - - - - - - - - - - - - - - -

Residential 2 148 29.0% 148 - - 271 50.7% 271 - - 252 44.0% 252 - -

Low-Income Residential 216 43.0% 216 - - 292 54.7% 292 - - 321 56.0% 321 - -

Public Lighting - - - - - - - - - - - - - - -

Municipal Energy Management - - - - - - - - - - - - - - -

Educational - - - - - - - - - - - - - - -

TOTAL 565 100.0% 507 - - 563 100.0% 563 - - 573 100.0% 573 - -

1 Excludes funds used in project management. 2 Residential and Low-Income Residential amounts were inverted in 2016. R$ 29 thousand was also failed to be recorded as residential amounts under the Solidarity Energy project too.


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Industrial - - - - - - - - -

Trade and Services - - - - - - - - -

Public Authorities 1 132.04 19.7 - - - - - -


Rural - - - - - - - - -

Residential 1,693 623.5 - 1,288 1,736.0 - 1,412 1,900.0 -


617 289.0 74.0 2,488 - - 340 - -

Public Lighting - - - - - - - - -


- - - - - - - - -

Educational - - - - - - - - -

TOTAL 2,311 1,044.6 93.7 3,776 1,736.0 - 1,752 1,900.0 -




2017 2016 2015






SE – Safety 0 - 0 - 0 -




SC – Power System Supervision, Control and Protection 0 - 0 - 30.8 31.4%


MF – Metering, Billing and Commercial Loss Reduction 0 - 0 - 0 -

OU – Other 0 - 0 - 18.1 18.5%

TOTAL 6.9 100.0% 26.8 100.0% 98.1 100.0%

1 Excludes funds used in project management




Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 636 614 609Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 55.0% 53.7% 52.4%


EmissionsAnnual volume of greenhouse (CO2, CH4, N2O, HFC, PFC, SF6), issued into the atmosphere (in tonnes of CO2 equivalent)

Not available

Not available

Not available

Annual volume of ozone-depleting emissions Not available

Not available

Not available

EffluentsTotal water discharge by quality and destination 1 Not

availableNot

availableNot

availableSolids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 176 401 208Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 100% 100% 100%



Diesel 65,113 67,643 66,287Gasoline 19,100 22,448 21,193Ethanol 0 0 0Natural gas 0 0 0

Other (Specify) 0 0 0Total water consumption by source (m3) Supply (public system) 1,949 1,511 1,759Groundwater (wells) 0 0 0Surface extraction (waterways) 0 0 0Total water withdrawal (m3) 1,949 1,511 1,759Water withdrawal per employee (m3) 14 13 15


At the Organization

Number of employees trained in environmental education programs 11 11 21Percentage of employees trained in environmental education programs/total employees 12.7% 8.7% 14.0%Number of hours of environmental training out of total hours of training Not

availableNot

availableNot

availableIn the Community Number of primary schools and high schools served 2 4 13 3Number of primary school and high school students served 2 263 1,324 706Number of teachers trained 0 0 0Number of technical schools and high schools served 0 0 0Number of technical school and graduate students served 0 0 01 Water waste is sanitary waste and relatively insignificant.2 2016 and 2015 data included which had not been previously reported.


Deforestation (hectares of land cleared by quarter) Not available Not available 0.11Tree pruning (volume of waste created by month in kg) Not available Not available Not availableOil leaks (leakage sites by month) Not available Not available Not available


ENERGISA BORBOREMAOperating and productivity metrics





Number of own staff 233 236 242

Number of outsourced employees 1 26 30 31



Electricity purchased (GWh) 734.45 812.65 771.66

1) Itaipu 0.00 0.00 0.00






Non-technical losses – (%) on energy requirement -1.77% -0.60% 0.13%

Energy Sold (GWh) 2 549.0 601.7 660.2

Residential 240.4 235.7 230.7

Industrial 3 64.8 122.4 179.7

Commercial 140.3 146.8 155.3

Rural 23.8 23.8 24.3

Government 32.4 32.7 32.7




Installed capacity (MVA) 182.5 185 173

Transmission lines (in km) 45 45 38

Distribution lines (in km) 3 5,527 5,271 5,243

Distribution transformers (in units) 2 4,433 4,328 3,671


Electricity sold by employee (MWh) 2,356.2 2,549.6 2,728.1




Overall equivalent outage duration per consumer of the company - Limit 13.13 13.91 14.1



1 From 2016, this does not include outsourced employees working at other Group companies.2 Excludes uninvoiced consumption and concession operator sales.3 Revised figures published in 2016..

E N E R G I S A B O R B O R E M A96


Managers 2017 2016 2015


Managers 7 6 - 13 7 6 - 13 8 6 - 14

631 1,761 - 2,393 536 922 - 1,457 452 894 - 1,345

No. of members 437 719 - 1,156 413 683 - 1,096 349 661 - 1,010

Annual Fixed Compensation (R$ 000) 12 80 - 92 18 66 - 84 14 66 - 81

Salary or management fees - - - - - - - - - - - -

Direct or indirect benefits 182 962 - 1,144 105 173 - 277 88 167 - 255


Other (charges) 515 639 - 1,154 391 703 - 1,093 263 509 - 772


- - - - - - - - - - - -

Variable Compensation (R$ 000) 515 639 - 1,154 391 703 - 1,093 263 509 - 772

Bonuses - - - - - - - - - - -

Profit sharing - - - - - - - - - - -

Participation in meetings - - - - - - - - - - -

Commission - - - - - - - - - - -

Other



Campina Grande - PB




Revenue 99,582 67,365


Other revenue 461 758


Formation and reversal of allowance for doubtful accounts (904) (1,667)





Gross value added 197,500 174,945



Transferred value added




Personnel


Benefits 4,348 4,136

Government Severance Indemnity Fund for Employees (FGTS) 1,155 1,104


Federal 29,834 22,104

State 78,373 80,870

Municipal 143 125


Interest expenses

Interest 13,882 15,193

Rent 272 180

Interest on equity



Legal reserve - 847

Income tax reduction reserve 4,373 4,619

206,533 181,326


R$ 000 ∆% R$ 000

Expansion of distribution/transmission (reinforcement expansion) 5,251 276.4% 14,513

Renewal of distribution/transmission 9,074 0.0% 0


Total 14,325 -1.3% 14,513






Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, employment contract and region 1 26 30 31


Employees aged 31 to 40 (%) 54.6% 51.3% 45.5%

Employees aged 41 to 50 (%) 17.5% 20.3% 23.1%

Employees over 50 (%) 11.6% 11.4% 9.9%










Gross payroll 15,205 14,918 13,745


Education 10 65 40


Transportation 87 - 403

Health 1,089 1,086 907

Date Founded 187 153 222


Culture 0 0 0






Amounts distributed in relation to gross payroll (%) 10.07% 12.7% 12.5%




Executive positions 23,700.40 23,190.97 26,956.93

Management positions 9,691.57 12,784 14,192

Administrative positions 3,070.04 3,042 2,559

Operating positions 1,390.63 1,414 1,741





Employee seriousness rate in the period 23.25 20.7 28.23

Total frequency rate of the company for the period - contractors 5.26 0 4.67

Seriousness Rate of outsourced/contracted employees in the period 157.89 0 210.28


Severity rate for the period - workforce (employees + contractors) 64.51 15.5 62.39






High School 64.3% 69.9% 69.8%






Executive positions 32 67.3 8

Management positions 46.47 58.2 47.1

Administrative positions 20.97 46 29

Operating positions 59.85 86.5 80


Churn rate 5.28% 2.85% 9.96%




Number of labor claims accepted in the period 19 24 10

Number of labor claims rejected in the period 11 8 7

Value of damages and fines paid under court awards in the period (R$ 000) 406 255 667

Retirement provision 2017 2016 2015


Number of beneficiaries of supplementary pension plans 38 49 511 From 2016, this does not include outsourced employees working at other Group companies.



Consumers

Excellence in service 2017 2016 2015




Residential 8.2% 7.9% 7.7%


Sales 11.8% 20.3% 27.2%

Industrial 1 4.3% 4.0% 3.7%

Rural 7.1% 5.6% 4.4%

Public lighting 1 1.5% 1.1% 1.3%


Public Authorities 2017 2016 2015

Customer satisfaction 65.85 78.70 63.87


Satisfaction rates obtained by other entities and/or proprietary surveys - Abradee Survey 2017 2016 2015

Consumer service

Call Center 283,651 263,453 211,441

Calls received (unit) 39 26 103

Average number of agents (unit) 92.69% 94.67% 91.81%


IAB - Abandonment rate (%) 0 0.10% 0.11%

ICO - Busy Call Rate (%) 181 176 178

TMA - Average interaction time (s)

Compensation for electrical damages 507 876 494

Volume of Applications (unit) 61 122 80

Confirmed (unit) 2017 2016 2015

Complaints metrics 19,368 40,414 1,782

Confirmed Complaints (unit) 279.57 402.67 287.64

DER (hours) 5.75 5.35 8.3

FER (unit)

Violation of commercial service terms 65,053 58,288 54,748


Service interactions completed late (unit) 95.85% 96.28% 95.56%

Service efficiency (%) 2017 2016 2015

Number of customer complaints escalated to 31,637 58,783 3,033

The company 2 149 432 189


Procon 772 386 187

The courts

1 Revised figures published in 2016 2 From 2016 we included all the complaints in Appendix I, including electrical damage, voltage level and outages, which until 2015 didn't enter the calculation.


Community


Total number of nonfatal injuries involving consumers 1 0 1

Total number of fatal injuries involving consumers 3 0 2

Legal proceedings resulting from accidents involving consumers – Overall Legal Proceedings

1 0 1




22.3% 24.1% 23.4%

Revenue from sales to low-income residential subsector (R$ 000) 1 19,505 20,881 21,823


13.0% 14.9% 15.8%

Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 1 8,325 8,848 8,310







Employees carrying out voluntary work in the community outside the Company/total employees

0.0% 0.0% 0.0%

Number of hours donated a month (released from normal working hours by the Company for employee volunteer work

0% 0% 0%


2017 2016 2015



Project name Youth Orchestra

Energisa Cultural

Workshop - Visual Arts

Occupation

Youth Orchestra

Bidder Instituto Banese

Dyogenes Chaves

Atelier Ltda.

Instituto Banese

1 Revised figures published in 2016



2017 2016 2015





Municipalities with universal access (%) 100% 100% 100% Universal access completed in 2010, as per Aneel Order 2344, issued 7/17/2012.










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Industrial - - - - - - - - - - - - - - -


Public Authorities - - - - - - - - - - 271 21.5% 271 - -

Public Utility - - - - - - - - - - - - - - -

Rural - - - - - - - - - - - - - - -

Residential 2 154 24.0% 154 - - 315 45.1% 315 - - 425 33.7% 425 - -

Low-Income Residential 489 76.0% 489 - - 383 54.9% 383 - - 567 44.9% 567 - -

Public Lighting - - - - - - - - - - - - - - -


- - - - - - - - - - - - - - -

Education - - - - - - - - - - - - - - -

TOTAL 714 100.0% 643 - - 698 100.0% 698 - - 1,263 100.0% 1,263 - -1 Excludes funds used in project management. 2 Residential and Low-Income Residential amounts were inverted in 2016. R$ 29 thousand was also failed to be recorded as residential amounts under the Solidarity Energy project too.


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Industrial - - - - - - - - -

Trade and Services - - - - - - - - -

Public Authorities - - - - - - 1 82.00 41.0


Rural - - - - - - - - -

Residential 1,418 737.85 103.12 3,700 2,040.0 538.3 2,122 1,831.0 208.0

Low-Income Residential 257 159.34 82.47 525 605.0 351.1 1,520 256.0 144.0



- - - - - - - - -

Education - - - - - - - - -

TOTAL 1,675 897.2 185.6 4,225 2,645.0 889.4 3,643 2,169.0 393.0


Funds Invested in technological and scientific research and development (R$ 000) 1 By field of research (Research & Development Handbook – Aneel)

2017 2016 2015






SE – Safety 0 - 0 - 0 -



OP – Power System Operation 0 - 0 - 49.2 16.6%

SC – Power System Supervision, Control and Protection 4.0 5.7% 0 - 86.9 29.4%


MF – Metering, Billing and Commercial Loss Reduction 0 - 0 - 0 -

OU – Other 0 - 0 - 67.9 22.9%

TOTAL 70.5 100% 72.7 100% 296.0 100%




Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 749 735 544Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 43.4% 42.5% 38.0%


Emissions Annual volume of greenhouse gases (CO2, CH4, N2O, HFC, PFC and SF6) emitted (in tons of CO2 equivalent) 285 343 409

Annual volume of ozone-depleting emissions 0 Not available Not availableEffluents Total water discharge by quality and destination 1 0 0 0Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 2,300 2,500 3,800Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 100% 100% 100%


Total electricity consumption by source Electricity consumption per kWh distributed (sold) 2 0.00047 0.00044 0.00006Direct energy consumption by primary source in GJ 184,573 40,669 38,352

Diesel 3,497 3,747 3,519Gasoline 2,929 3,201 3,167Ethanol 0 0 0Natural gas 0 0 0Other 0 0 0

Total water consumption by source (m3) Supply (public system) 1,200.0 1,350.0 1,419.0Groundwater (wells) Not available Not available Not availableSurface extraction (waterways) 86.1 86.1 86.1Total water withdrawal (m3) 1,200.0 1,436.1 1,505.1Water withdrawal per employee (m3) 5.3 6.1 6.2


At the Organization

Number of employees trained in environmental education programs 6 15 15Percentage of employees trained in environmental education programs/total employees 2.7% 5.6% 6.2%Number of hours of environmental training out of total hours of training 0.6% 1.6% 1.6%In the Community Number of primary schools and high schools served 3 20 6 7Number of primary school and high school students served 600 126 519Number of teachers trained 0 62 83Number of universities and technical schools served 2 0 0Number of technical school and graduate students served 30 0 0

1 Water waste is sanitary waste and relatively insignificant.2 Revised figures published in 20163 2016 and 2015 data included which had not been previously reported


Deforestation (hectares of land cleared by quarter) 0 0 0Tree pruning (volume of waste created by month in kg) Not available 430 380Oil leaks (leakage sites by month) 0 0 0


ENERGISA PARAÍBAOperating and productivity metrics


Number of consumers served - Captive 1 1,404,298 1,378,693 1,355,210



Number of own staff 1,807 1,941 1,979





1) Itaipu 0 0 0


3) Energy sales of concession operator 0 0 0

Global electric losses (GWh) 640,685 663,289 611,045

Electrical losses – (%) total on energy requirement 1 12.80% 13.51% 12.47%


Non-technical losses – (%) on energy requirement 2.57% 3.26% 2.09%

Energy sold (GWh) 3,640.9 3,689.1 3,775.6

Residential 1,662.5 1,633.6 1,592.7

Industrial 335.6 437.7 511.2

Commercial 695.7 704.1 714.4

Rural 267.0 266.2 275.0

Government 234.9 228.9 234.6




Installed capacity (MVA) 1,181.0 1,230.0 1,170.8



Distribution transformers (in units) 1 60,332 59,166 55,572


Electricity sold by employee (MWh) 1,879.7 1,900.6 1,908

Number of consumers by employee 1 725 710 685






1 Revised figures published in 2016 2 Revised figures published in 2016 - this does not include outsourced employees working at other Group companies.

E N E R G I S A P A R A Í B A106


Managers 2017 2016 2015


No. of members 7 6 - 7 6 - 13 8 6 - 14

Annual Fixed Compensation (R$ 000) 1,388 6,149 - 7,537 2,143 1,818 - 3,960 1,954 1,874 - 3,828

Salary or management fees 959 1,097 - 2,056 1,679 1,131 - 2,810 1,525 1,097 - 2,622


Participations in committees - - - - - - - - - - -

Other (charges) 390 2,567 - 2,957 383 257 - 640 356 256 - 612


- - - - - -- - - - -

Variable Compensation (R$ 000) 310 789 - 1,099 2,039 1,357 - 3,396 1,236 870 - 2,106

Bonuses - - - - - - - - - - -

Profit sharing 310 789 - 1,099 2,039 1,357 - 3,396 1,236 870 - 2,106

Attending meetings - - - - - - - - - - -

Commission - - - - - - - - - - -

Other - - - - - - - - - - -


- - - - -- - - - - -


João Pessoa - PB




Revenue 2,512,036 2,417,362

Revenue from energy sales and services 2,386,728 2,271,188




(-) Consumables acquired from third parties 1,275,027 1,207,374

Cost of electricity sold 1,005,966 923,527



Gross added value 1,237,009 1,209,988


Net added value 1,161,686 1,147,128



Total added value to be distributed 1,236,655 1,231,675


Personnel


Benefits 26,373 25,113

FGTS 6,369 7,985


Federal 156,404 225,682

State 515,551 473,562

Municipal 700 577


Interest expenses

Interest 79,788 90,184

Rent 2,031 2,123

Interest on equity

Dividends 80,313 97,352


Legal reserve - 8,193

Income tax reduction reserve 44,874 -

1,236,655 1,231,675


R$ 000 ∆% R$ 000

Expansion of distribution/transmission (reinforcement expansion) 39,938 317.5% 126,812

Renewal of distribution/transmission 100,427 0.0% 0


Total 140,364 10.7% 126,812





Total number of employees 1,807 1,941 1,979















Gross payroll 91,476 103,785 93,876


Education 126 395 361


Transportation - - 1,692

Health 5,616 4,718 4,545

Date Founded 22,767 23,115 10,655

Occupational health and safety 2,670 111 123

Culture 0 6 5

Training and professional development 1,552 739 553


Other (funeral allowance, exceptional payments, retirement premium) 2,456 2,443 455




Highest compensation divided by the lowest compensation in cash paid by the company 24.6 21.5 24











Employee seriousness rate in the period 1,747.92 100 8.57


Seriousness Rate of outsourced/contracted employees in the period 3,664.26 37.55 114.07


Severity rate for the period - workforce (employees + contractors) 2,356.54 81.41 27.43

Fatalities – employees 1.00 0 0

Fatalities – contractors 1.00 0 0




High School 70.7% 73.9% 73.6%






Executive positions 48.16 67.25 172.5

Management positions 58.83 58.15 68

Administrative positions 30.34 45.96 51



Churn rate 8.88% 8.59% 9.01%






Value of damages and fines paid under court awards in the period (R$ 000) 1,667 1,702 3,685


Investments in supplementary pensions (R$ 000) 22,767 23,115 10,655


1 Revised figures published in 2016 - this does not include outsourced employees working at other Group companies.



Consumers



Energy sales by rate class (GWh): % Total

Residential 34.5% 33.3% 30.9%


Sales 19.1% 19.1% 18.9%

Industrial 9.2% 11.9% 13.5%

Rural 7.3% 7.2% 7.3%



Public Authorities 6.4% 6.2% 6.2%





Call Center

Calls received (unit) 1,872,124 1,841,831 1,591,226








Upheld (unit) 325 348 395


Confirmed Complaints (unit) 1 286,591 305,749 10,456

DER (hours) 742.59 898.87 697.78

FER (unit) 5.66 5.68 6.07






The company 379,436 400,536 16,739

Aneel – state/regional agencies 1,831 5,144 1,794

Procon 378 377 546

to the courts 3,536 2,601 2,251

1 From 2016 we included all the complaints in Appendix I, including electrical damage, voltage level and outages, which until 2015 didn't enter the calculation.


Community




Legal claims resulting from accidents involving the population - General Litigation Base

12 1 4




30.6% 30.4% 30.2%



18.7% 19.1% 20.0%

Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 1 77,631 70,920 67,959




Funds allocated to culture (R$ 000) 1,344 528 1311


Other funds allocated to social initiatives (R$ 000) 531 1,954 1,265


1.4% 0.0% 0.0%


124 0 0


2017

2016

2015



Project name Iluminarte Teatral

Projeto Vela Jovem

Usina Criativa de Cinema

Proposed by Carolina Paiva Neves

Frade da Cruz

Confederação Brasileira de

Vela

Instituto Fábrica do

Futuro




2017 2016 2015
















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Industrial - - - - - - - - - - - - - - -

Trade and Services 402 7.3% 402 - - - - - - - - - - - -

Public Authorities 329 6.0% 329 - - - - - - - - - - - -

Public Utility - - - - - - - - - - - - - - -

Rural - - - - - - - - - - - - - - -

Residential 893 16.3% 893 - - 1,877 28.4% 1,379 - 498 3,516 43.2% 2,961 - 555


2,621 47.9% 2,621 - - 2,910 43.9% 2,910 - - 3,333 40.9% 3,333 - -

Public Lighting - - - - - - - - - - 1,299 15.9% 1,299 - -


- - - - - - - - - - - - - - -

Educational 1,226 22.4% 1,226 - - 1,832 27.7% 1,832 - - - - - - -

TOTAL 5,908 100.0% 5,472 - - 6,619 100.0% 6,121 - 498 8,148 100.0% 7,593 - 5551 Excludes funds used in project management


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Industrial - - - - - - - - -

Trade and Services 17,001 14,459.8 54.01 - - - - - -

Public Authorities 1 167.4 174.70 - - - - - -


Rural - - - - - - - - -

Residential 2,559 2,859.9 353.10 22,615 6,208.9 1,716.8 10,363 6,187.0 758.0

Low-Income Residential 2,092 811.7 421.20 6,456 1,815.6 1,053.4 4,287 1,827.0 1,047.0

Public Lighting - - - - - - 2 1,597.0 364.5


- - - - - - - - -

Educational 22,816 0.0 0.0 22,939 - - - - -

TOTAL 44,469 18,298.7 1,003.0 52,010 8,024.5 2,770.2 14,652 9,611.0 2,169.5




2017 2016 2015


FA – Alternative Electricity Generation Sources 0 - 0 - 105.9 2.4%




SE – Safety 0 - 0 - 0 -


PL – Power Systems Planning 4.0 0.2% 662.4 23.8% 617.6 14.6%

OP – Power System Operation 339.5 18.0% 557.3 20% 460.8 10.9%

SC – Power System Supervision, Control and Protection 265.6 14.1% 259.6 9.3% 2,132.6 50.3%


MF – Metering, Billing and Commercial Loss Reduction 0 - 0.7 0.0% 241.0 5.7%

OU – Other 1,119.4 59.5% 807.0 28.9% 495.3 11.7%

TOTAL 1,881.2 100% 2,787.7 100% 4,239.9 100%





Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 4,668 4,544 4,235Percentage of shielded and insulted lines out of total distribution lines in urban areas (%)

37.3% 36.5% 32.7%


Emissions Annual volume of greenhouse (CO2, CH4, N2O, HFC, PFC, SF6), issued into the atmosphere (in tonnes of CO2 equivalent)

2,280 2,447 3,418

Annual volume of ozone-depleting emissions 1 108.8 Not available Not availableEffluents Total water discharge by quality and destination 2 224 302 310Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 47,000 30,095 128,580Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 100% 100% Not available


Total electricity consumption by source Electricity consumption per kWh distributed (sold) 0.001132 0.001207 0.000015Direct energy consumption by primary source in GJ 57,823 59,249 58,001

Diesel 37,105 37,561 35,503Gasoline 20,718 21,688 22,498Ethanol 0 0 0Natural gas 0 0 0

Other 0 0 0Total water consumption by source (m3) Supply (public system) 4,646 5,500 5,856Groundwater (wells) Not available Not available Not availableSurface extraction (waterways) Not available Not available Not availableTotal water withdrawal (m3) 4,646 5,535 6,207Water withdrawal per employee (m3) 2.46 3.8 3.13


At the Organization

Number of employees trained in environmental education programs 140 125 116Percentage of employees trained in environmental education programs/total employees

7.4% 6.4% 1.8%

Number of hours of environmental training out of total hours of training 1.8% 1.4% 1.2%In the Community Number of primary schools and high schools served 384 271 327Number of primary school and high school students served 32,357 24,324 17,812Number of teachers trained 61 1,342 1,029Number of technical schools and high schools served 4 18 23Number of technical school and graduate students served 225 1,233 1,331

1 Revised figures informed in 20162 Revised figures informed in 2015 and 2016


Deforestation (hectares of land cleared by quarter) 0 0 0Tree pruning (volume of waste created by month in kg) Not available 4,200 4,054Oil leaks (leakage sites by month) 1 22 21 5

1 Revised figures informed in 2016


ENERGISA SERGIPEOperating and productivity metrics






Number of outsourced employees 1, 3 97 75 75




1) Itaipu 0.00 0.00 0.00



Global electric losses (GWh) 2 334.26 349.6 345.8

Electrical losses – (%) total on energy requirement 3 8.79% 9.02% 8.83%



Energy Sold (GWh) 4 2,354.53 2,409 2,443

Residential 1,010.94 1,019 999

Industrial 213.80 240 289

Commercial 489.72 513 535

Rural 108.81 117 117

Government 134.19 138 137

Public lighting 184.59 178 160

Public utility 212.48 204 206

Substations (in Units) 5 33 32 31

Installed capacity (MVA) 5 741 741 688

Transmission lines (in km) 5 1,320 1,288 1,287








Overall equivalent outage duration per consumer “DEC” of the company - Limit 12.80 13.6 14


Overall equivalent outage frequency per consumer “FEC” of the company - Limit 3 9.30 10.23 10.81

1 From 2016, this does not include outsourced employees working at other Group companies.2 Revised figures for 2015 and 2016.3 Revised figures for 2015.4 Excludes proprietary consumption. 5 Revised figures for 2016.

E N E R G I S A S E R G I P E116


Managers 2017 2016 2015


No. of members 7 6 - 13 7 6 - 13 8 6 - 14


Salary or management fees 643 1,676 - 2,319 754 1,465 - 2,219 677 1,436 - 2,113



Other (charges) 251 2,108 - 2,359 194 376 - 570 172 365 - 538


- - - -- - - - - - - -

Variable Compensation (R$ 000) 363 940 - 1,303 918 1,515 - 2,433 526 1,141 - 1,667

Bonuses - - - - - - - - - - - -

Profit sharing 363 940 - 1,303 918 1,515 - 2,433 526 1,141 - 1,667


Commission - - - - - - - - - - - -

Other - - - - - - - - - - - -


- - - -- - - - -

-- -


Aracaju - SE




Revenue 1,708,651 1,559,118




Formation and reversal of allowance for doubtful accounts 4,476 (6,136)












Personnel


Benefits 14,609 16,359

FGTS 6,146 5,034


Federal 126,264 141,179

State 279,827 265,479

Municipal 876 874


Interest expenses

Interest 105,522 71,367

Rent 1,440 1,436

Interest on equity

Dividends 39,975 75,508


Legal reserve 6,950 4,921

Tax incentive reserve 16,752 17,575

Accumulated losses - (9,842)

867,549 767,558


R$ 000 ∆% R$ 000

Expansion of distribution/transmission (reinforcement expansion) 25,292 217.2 8,192

Renewal of distribution/transmission 81,277 - 25.3 108,833

Sub- transmission - - -

Total 107,269 - 8.3 117,025






Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, employment contract and region 1, 2

97 75 75














Gross payroll 2 60,778 64,874 61,254


Education 123 92 98


Transportation - - 268

Health 4,334 5,061 4,979

Date Founded 48,209 17,533 15,870

Occupational health and safety 1,256 1,080 991

Culture 197 9 40



Other (funeral allowance, exceptional payments, retirement premium) 1,546 585 309



Amounts distributed in relation to gross payroll (%) 2 6.1% 7.9% 8.0%










Average overtime per employee/year 58 59 59


Employee seriousness rate in the period 63.70 48.18 25.33


Seriousness Rate of outsourced/contracted employees in the period 16.93 93.17 34.4


Severity rate for the period - workforce (employees + contractors) 45.34 60 32.83





Primary Education 2% 1% 2%

High School 78% 67% 72%

Technical School 6% 14% 7%

Undergraduate School 10% 5% 14%

Graduate (specialist, Master's degree, PhD) 4% 13% 5%








Churn rate 9.58% 8.19% 6.44%






Value of damages and fines paid under court awards in the period (R$ 000) 5,722.79 4,086.74 5,306.33



Number of beneficiaries of supplementary pension plans 575 450 4781 In 2016, this does not include outsourced employees working at other Group companies.2 Revised figures published in 2015.



Consumers



Energy sales by rate class (GWh): % Total 2,357 2,413 2,443

Residential 34.1% 34.1% 32.6%


Sales 20.8% 21.3% 21.9%

Industrial 9.1% 10.0% 11.8%

Rural 4.6% 4.9% 4.8%








Call Center

Calls received (unit) 872,092 812,647 746,543











DER (hours) 151.34 370.53 263.04

FER (unit) 2.98 2.67 2.79


Service interactions (unit) 1 216,960 210,123 161,569

Service interactions completed late (unit) 1 16,189 9,136 6,233



The company 161,237 132,824 143,389


Procon 122 60 83

to the courts 1,362 1,110 1,038



Community








42.2% 33.5% 26.1%



16.5% 15.1% 15.3%






Funds allocated to sports (R$ 000) 1 85 114 127



0.7% 1.1% 0.9%


Not available 116 Not available


2017 2016 2015



Project name Film Arigó Sergipe Youth

Orchestra

Sergipe Youth Orchestra

Proposed by Write Produções Artísticas

Ltda.

Instituto Banese

Instituto Banese




2017 2016 2015
















Tota

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Tota

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Industrial - - - - - - - - - - - - - - -


Public Authorities - - - - - - - - - - - - - - -

Public Utility - - - - - - - - - - - - - - -

Rural - - - - - - - - - - - - - - -

Residential 1,951 40.7% 1,951 - - 2,003 40.7% 2,003 - - 2,143 43.0% 2,142 - -

Low-Income Residential 2,843 59.3% 2,843 - -

2,923 59.3% 2,923 - - 2,846 57.0% 2,846 - -

Public Lighting - - - - - - - - - - - - - - -

Municipal Energy Management - - - - -

- - - - - - - - - -

Educational - - - - - - - - - - - - - - -

TOTAL 4,839 100.0% 4,794 - - 4,925 100.0% 4,925 - - 4,989 100.0% 4,989 - -1 Excludes funds used in project management


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Industrial 0 0.0 0.0 0 0.0 0.0 0 0.00 0.0

Trade and Services 0 0.0 0.0 0 0.0 0.0 0 0.00 0.0

Public Authorities 0 0.0 0.0 0 0.0 0.0 0 0.00 0.0

Public Utility 0 0.0 0.0 0 0.0 0.0 0 0.00 0.0

Rural 0 0.0 0.0 0 0.0 0.0 0 0.00 0.0

Residential 12,205 8,563.3 1,416.2 6,328 4,698.0 651.0 33,693 8,843.0 3,214.0


96,302 6,750.0 1,575.0 69,162 3,984.0 2,079.0 62,619 6,556.0 3,509.0

Public Lighting 0 0.0 0.0 0 0.0 0.0 0 0.0 0.0


0 0.0 0.0 0 0.0 0.0 0 0.0 0.0

Educational 0 0.0 0.0 0 0.0 0.0 0 0.0 0.0

TOTAL 108,507 15,313.3 2,991.2 75,490 8,682.0 2,730.0 96,312 15,399.0 6,723.0




2017 2016 2015






SE – Safety 0 - 0 - 0 -




SC – Power System Supervision, Control and Protection 8.8 2.3% 10.9 1.7% 0 -


MF – Metering, Billing and Commercial Loss Reduction 0 - 0 - 22.5 1.5%

OU – Other 0 - 126.0 19.6% 818.5 53.8%

TOTAL 391.7 100.0% 644.7 100.0,0% 1,521.6 100%





Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 143.6 145.6 145.0Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 6.8% 1.1% 1.7%


Emissions Annual volume of greenhouse (CO2, CH4, N2O, HFC, PFC, SF6), issued into the atmosphere (in tonnes of CO2 equivalent)

Not available

Not available

Not available

Annual volume of ozone-depleting emissions Not available

Not available

Not available

EffluentsTotal water discharge by quality and destination 4,909 3,806 5,920Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 640.04 318.06 83.89Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 0% 0% 0%


Total electricity consumption by source Electricity consumption per kWh distributed (sold) 0.001353 0.001860 0.00118Direct energy consumption by primary source in GJ 26,875.45 27,075.17 26,716.94

Diesel 18,044.65 17,355.75 17,482.55Gasoline 8,830.80 9,719.42 9,234.39Ethanol - - -Natural gas - - -

Other - - -Total water consumption by source (m3) Supply (public system) 14,877 11,532 17,501Groundwater (wells) 528 528 528Surface extraction (waterways) 7 7 7Total water withdrawal (m3) 14,884 12,067 18,036Water withdrawal per employee (m3) 16.2 13.2 19.7


At the Organization

Number of employees trained in environmental education programs 128 72 153Percentage of employees trained in environmental education programs/total employees 15.5% 8.0% 16.7%Number of hours of environmental training out of total hours of training 2.4% 1.3% 2.9%In the Community Number of primary schools and high schools served 50 50 56Number of primary school and high school students served 10,584 9,600 9,114Number of teachers trained - - -Number of technical schools and high schools served 2 2 4Number of technical school and graduate students served 12 24 67


Deforestation (hectares of land cleared by quarter) 0 10 0Tree pruning (volume of waste created by month in kg) 179,537 158,080 140,000Oil leaks (leakage sites by month) 0 0 Not available


ENERGISA MATO GROSSOOperating and productivity metrics


Number of consumers served - Captive 1,365,659 1,327,938 1,296,639



Number of own employees 1 2,423 2,302 2,366

Number of outsourced employees 1, 2 1,389 827 442




1) Itaipu 1,310.7 1,329.3 1,379.5


3) Energy sales of concession operator Not available Not available Not available

Global electric losses (GWh) 1,448.37 1,446.2 1,380.7




Energy Sold (GWh) 3 7,017 6,745 6,923

Residential 2,772 2,594 2,568

Industrial 656 735 892

Commercial 1,524 1,508 1,602

Rural 1,131 1,032 984

Government 380 363 365

Public lighting 363 323 327

Public utility 192 190 183


Installed capacity (MVA) 3,841 3,679 3,431












1 2015 figures revised2 In 2016, this does not include outsourced employees working at other Group companies.3 Excludes proprietary consumption.

E N E R G I S A M A T O G R O S S O126


Managers 2017 2016 2015

CA DE CF 1 Total CA DE CF Total CA DE CF Total

No. of members 6 7 - 13 6 9 10 15 7 8 10 25

Annual Fixed Compensation (R$ 000) 685 2,548 - 3,233 269 2,801 158 3,228 208 2,437 567 3,212

Salary or management fees 370 1,297 - 1,667 198 1,817 112 2,127 154 1,975 472 2,602

Direct or indirect benefits - 229 - 229 0 418 - 419 - 111 - 111


Other (charges) 315 1,022 - 1,337 71 565 46 682 54 351 94 499


- - - - - - - - - - -

Variable Compensation (R$ 000) 293 1,107 - 1,400 116 2,652 0 2,768 49 1,544 0 1,593

Bonuses - - - - - - - - - - -

Profit sharing 293 1,107 - 1,400 116 2,652 - 2,768 49 1,544 - 1,593


Commission - - - - - - - - - - - -

Other - - - - - - - - - - - -


- - - - - - - - - - - -


Cuiabá - MT




Revenue 5,982,010 5,404,829




Formation and reversal of allowance for doubtful accounts (70,613) 35,524


Cost of electricity sold 2,453,535 1,946,547





Net added value 2,423,221 2,398,295





Personnel


Benefits 42,660 40,704

FGTS 11,536 14,350


Federal 352,069 289,484

State 1,191,364 1,089,499

Municipal 1,133 911


Interest expenses

Interest 409,014 452,569

Rent 2,664 5,438

Interest on equity

Dividends 13,809 20,694

Legal reserve 1,294 6,009

Valuation reserve (19,153) (13,380)

Profit reserves 29,938 106,866

2,569,605 2,583,207


R$ 000 ∆% R$ 000

Expansion of distribution/transmission (reinforcement expansion) 64,284 - 87.4% 508,739



Total 700,985 15.5% 606,912





Total number of employees 1 2,423 2,302 2,366

Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, employment contract and region 1, 2 1,389 827 442














Gross payroll 171,032 284,290 232,541


Education 90 109 0


Transportation 104 - -

Health 13,202 12,702 10,586

Date Founded 20,750 4,363 3,821

Occupational health and safety 6,553 4,007 4,934

CultureNot

availableNot

availableNot

available



Other (funeral allowance, exceptional payments, retirement premium) 1,419 1,956 779















Employee seriousness rate in the period 1,381.64 1,383.69 100


Seriousness Rate of outsourced/contracted employees in the period 369.20 1,814 3,138


Severity rate for the period - workforce (employees + contractors) 1,750.84 3,197 1,480






High School 82.0% 73.7% 72.7%

Technical SchoolNot

availableNot

availableNot

available





Executive positions 0 3.7 16

Management positions 31 55.2 48.4

Administrative positions 30 43.2 82.9



Churn rate 13.1% 13.2% Not available









Number of beneficiaries of supplementary pension plansNot

availableNot

availableNot

available

1 Revised figures published in 2015.2 In 2016, this does not include outsourced employees working at other Group companies.



Consumers




Residential 36.0% 34.8% 33.8%


Sales 21.7% 22.3% 23.2%

Industrial 9.3% 10.9% 12.9%

Rural 16.1% 15.3% 14.2%








Call Center









Upheld (unit) 1,742 1,396 1,427



DER (hours) 199.32 157.52 249.37

FER (unit) 8.67 7.79 9.58






The company 648,038 679,371 763,281

Aneel – state/regional agencies 2,887 2,356 2,788

Procon 7,378 5,708 8,754

to the courts 11,354 13,795 3,759


Community





Low-income rate 1 2017 2016 2015


Total low-income households out of total households served (residential customers/consumers) (%) 13.3% 12.4% 12.9%


Total revenue from sales to low-income residential subsector out of total residential revenue (%) 6.7% 7.5% 6.8%



Funds allocated to education (R$ 000) 220 0 128,419






Not available Not available Not available




2017 2016 2015



Project name - - -

Bidder - - -



2017 2016 2015

Service targets 11,626 8,457 4,445

Calls handled (no.) 4,453 3,006 2,592

Performance of targets (%) 38% 36% 58%

Total municipalities with universal access 80 53 23

Municipalities with universal access (%) 1 56.7% 37.6% 16.3% 1 Revised figures published in 2016










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Industrial 900 3.7% 900 - - - - - - - - - - - -

Trade and Services 4,017 16.5% 4,017 - - - - - - - - - - - -

Public Authorities 6,018 24.7% 6,018 - - - - - - - 1,331 4.8% 1,331 - -

Public Utility 3,685 15.1% 3,685 - - 2,850 6.70% 2,850 - - - - - - -

Rural 2,432 10.0% 2,432 - - - 0.00% - - - 2,541 9.10% 2,541 - -

Residential 820 3.4% 820 - - 27,594 65.3% 16,350 - 11,245 13,186 47.1% 9,492 - 3,695


5,608 23.0% 5,608 - - 8,389 19.8% 8,389 - - 7,282 26.0% 7,282 - -

Public Lighting - 0.0% - - - - 0.0% - - - - - - - -


- 0.0% - - - - 0.0% - - - - - - - -

Educational 862 3.5% 862 - - 3,454 8.2% 3,454 - - 3,636 13.0% 3,636 - -

TOTAL 24,341 100.0% 24,341 - - 42,288 100.0% 31,043 - 11,245 27,976 100.0% 24,281 - 3,6951 Excludes funds used in project management


Uni

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Industrial 1 1,269.2 241.5 - - - - - -

Trade and Services 8 1,988.1 352.0 - - - - - -

Public Authorities 13 4,679.7 1,045.0 - - - 1 711.0 496.7

Public Utility 4 3,568.8 330.3 2 1,390.6 343.3 - - -

Rural 4 2,068.3 727.4 - - - 2 860.6 278.0

Residential - - - 17,172 9,356.0 1,856.7 7,695 5,348.8 2,223.3

Low-Income Residential 3,138 8,095.2 5,175.0 21,000 2,386.9 697.0 5,500 1,188.0 -



- - - - - - - - -

Educational - - - - - - - - -

TOTAL 3,168 21,669.2 7,871.1 38,174 13,133.5 2,897.0 13,198 8,108.3 3,273.0




2017 2016 2015


FA – Alternative Electricity Generation Sources 572.6 6.5% 33.5 0.4% 148.2 2.0%




SE – Safety 0 - 0 - 0 -

EF – Energy Efficiency 19.7 0.2% 0 - 0 -

PL – Power Systems Planning 911.1 10.4% 383.0 4.5% 65.6 0.9%

OP – Power System Operation 1,702.8 19.4% 3,069.2 36.3% 0 -

SC – Power System Supervision, Control and Protection 2,824.5 32.2% 3,823.1 45.1% 0 -

QC – Power Supply Quality and Reliability 560.1 6.4% 576.5 6.8% 6,823.8 94.9%

MF – Metering, Billing and Commercial Loss Reduction 0.1 0.0% 0 - 155.8 2.2%

OU – Other 2,194.0 25.0% 586.0 6.9% - -

TOTAL 8,785.0 100.0% 8,471.3 100.0% 7,193.4 100.0%





Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 8,848 8,222 7,752Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 40.8% 40.6% 37.0%


EmissionsAnnual volume of greenhouse (CO2, CH4, N2O, HFC, PFC, SF6), issued into the atmosphere (in tonnes of CO2 equivalent) 3,966 7,647 6,232

Annual volume of ozone-depleting emissions 0 0 0EffluentsTotal water discharge by quality and destination 1 NA NA NASolids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 101 52 111Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 99.7% 99.7% 0.0%



Diesel 41,592 56,761 51,588Gasoline 7,967 10,379 4,322Ethanol 1,201 8,772 12,081Natural gas NA NA NAOther NA NA NA

Total water consumption by source (m3) Supply (public system) 9,333 8,574 10,092Groundwater (wells) 175 175 0Surface extraction (waterways) 0 0 0Total water withdrawal (m3) 9,508 8,749 10,092Water withdrawal per employee (m3) 3.9 3.6 4.1


At the Organization

Number of employees trained in environmental education programs 719 321 288Percentage of employees trained in environmental education programs/total employees 30.0% 14.0% 12.0%Number of hours of environmental training out of total hours of training 3.00% 3.0% 1.5%In the Community

Number of primary schools and high schools served Not available 204 Not availableNumber of primary school and high school students served Not available 76,417 Not availableNumber of teachers trained Not available 2,990 Not availableNumber of technical schools and high schools served Not available Not available Not availableNumber of technical school and graduate students served Not available Not available Not available

1 Water waste is sanitary waste and relatively insignificant.


Deforestation (hectares of land cleared by quarter) 1 59 130 150Tree pruning (volume of waste created by month in kg) Not available Not available Not availableOil leaks (leakage sites by month) Not available Not available Not available

1 Revised data for 2016 and 2015 published in the 2016 report


ENERGISA MATO GROSSO DO SULOperating and productivity metrics


Number of consumers served - Captive 1,015,526 990,556 970,635








1) Itaipu 906.8 862.1 733.8


3) Energy sales of concession operator 0 0





Energy Sold (GWh) 2 4,314 4,310 4,477

Residential 1,793 1,693 1,686


Commercial 1,041 1,038 1,094

Rural 530 487 473

















1 In 2016, this does not include outsourced employees working at other Group companies. 2 Excludes proprietary consumption.

E N E R G I S A M A T O G R O S S O D O S U L136


Managers 2017 2016 2015


No. of members 5 7 - 12 5 7 - 12 5 8 - 13

Annual Fixed Compensation (R$ 000) 439 2,853

-3,292 279 3,217 - 3,496 164 2,833 - 2,997


Direct or indirect benefits 13 314 - 327 0 682 - 682 - 0 - 0


Other (charges) 104 619 - 723 26 455 - 481 25 476 - 501

Description of other fixed compensation -

- - - - --

- - - - -

Variable Compensation (R$ 000) 221 879 - 1,100 191 3,659 - 3,850 49 1,834 - 1,884

Bonuses - - - - - - - - - - - -

Profit sharing 221 879 - 1,100 191 3,659 - 3,850 49 1,834 - 1,884


Commission - - - - - - - - - - - -

Other - - - - - - - - - - - -


- - - - - - - - - - - -


Campo Grande - MS




Revenue 3,324,688 2,985,318




Formation and reversal of allowance for doubtful accounts (380) (34,220)


Cost of electricity sold 1,265,734 1,072,465





Net added value 1,483,156 1,445,857





Personnel 93,755 92,749

Direct remuneration 70,030 44,901

Benefits 11,913 14,020

FGTS

Taxes, charges and contributions 385,625 321,831

Federal 515,679 491,949

State 700 772

Municipal 262,104 305,914

Intrasector Obligations

Interest expenses 112,230 98,351

Interest 1,881 1,948

Rent 26,703 92,990

Interest on equity

Dividends 51,930 26,354


Legal Reserve 5,207 5,369

Profit retention - -

Retained earnings (accumulated losses) - -

1,584,750 1,572,803


R$ 000 ∆% R$ 000


221,431 0.4% 220,610


Sub- transmission - - -

Total 467,582 91.2% 244,516






Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, employment contract and region

823 776 912














Gross payroll 192,134 196,145 161,776


Education 169 121 162


TransportationNot

available2,243 2,164

Health 17,448 14,914 15,024

Date FoundedNot


Occupational health and safetyNot

available0 194

Culture 337 285 0



Other (funeral allowance, exceptional payments, retirement premium)Not

available593 0







Executive positions 39,000 52,865 47,564.00








Employee seriousness rate in the period 2,244.41 114.94 2,400.75


Seriousness Rate of outsourced/contracted employees in the period 2,058.12 161.42 20,174


Severity rate for the period - workforce (employees + contractors) 4,302.53 276.36 22,575






High School 81.7% 55.9% 51.0%





Average number of hours of training per year per employee, broken down into job type 82.1 83.8 83.4



Administrative positions 51.1 57.1 70.3

Operating positions 92.7 94.2 91.3


Churn rate 11.41% 14.81% 1.01%








Investments in supplementary pensions (R$ 000) Not


Number of beneficiaries of supplementary pension plansNot




Consumers




Residential 37.5% 35.1% 31.1%


Sales 24.1% 24.1% 24.4%

Industrial 7.5% 10.5% 13.0%

Rural 12.3% 11.3% 10.6%








Call Center





ICO - Busy Call Rate (%) 0.00 0.25% 0.85%




Upheld (unit) 593 874 2,100



DER (hours) 105.72 124.84 285.36

FER (unit) 8.69 15.17 26.66





Number of customer complaints escalated to

The company 386,446 507,527 488,473

Aneel – state/regional agencies 700 609 1,065

Procon 1,898 1,648 2,948

to the courts 2,483 2,294 2,568


Community








11.42% 13.00% 17.00%



3.18% 7.20% 8.10%









Not available

Not available

Not available


Not available

Not available

Not available


2017 2016 2015



Project name Mitos Indígenas

em Travessia

Lampz Curva do Rio Sujo

Proposed by Zureta Serviços e

Produções Artísticas

Ltda. – ME

Tem Dende Produções Ltda. – ME

DM Filmes e Prod. Article



2017 2016 2015

Service targets 1 0 3,051 846

Calls handled (no.) 0 1,253 329

Performance of targets (%) NA 41% 39%


Municipalities with universal access (%) 1 100% 100% 70%

1 There are no connection targets for 2017 because all municipalities in the concession area already have universal access, except for the Pantanal region, whose proposed universal access plan set out in resolution 1992/2015 is undergoing a public hearing for subsequent appreciation by Aneel.










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Industrial - - - - - - - - - - - - - -

Trade and Services 1,177 11.36% 1,177 - - 1,277 9.7% 1,277 - - 431 3.8% 431 - -

Public Authorities 1,011 10% 1,011 - - 816 6% 816 - - 1,719 15.0% 1,719 - -

Public Utility - - - - - - - - - - - - - - -

Rural 164 1.5% 164 - - - - - - - - - - - -

Residential 1,317 12.7% 1,317 - - 2,503 18.9% 2,503 - - 862 7.5% 862 - -


5,480 52.9% 5,480 - - 7,193 54.4% 7,193 - - 7,219 63.2% 7,219 - -

Public Lighting - - - - - - - - - - - - - - -


- - - - - - - - - - - - - - -

Educational 1,215 11.7% 1,215 - - 1,061 8.0% 1,061 - - 1,075 9.4% 1,075 - -

TOTAL 10,951 100.0% 10,364 - - 12,851 100.0% 12,851 - - 11,306 100.0% 11,306 - -1 Excludes funds used in project management


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Uni

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Industrial - - - - - - - -

Trade and Services 7 640.13 216.7 2 451.90 140.9 1 32.60 35.5

Public Authorities 7 647.30 264.2 5 865.50 289.2 7 692.40 325.9


Rural 1 107.29 25.5 - - - - - -

Residential 2,739 10,757.0 2,874.9 5,776 11,415.3 3,209.7 370 658.0 334.8


21,840 2,463.8 1,575.0 38,872 6,823.5 1,810.2 26,875 2,414.3 778.1



- - - - - - 7,713 - -

Educational 8,660 - - 11,788 - - - - -

TOTAL 33,254 14,615.5 4,956.3 56,443 19,556.2 5,450.0 34,966 3,797.3 1,474.4




2017 2016 2015


FA – Alternative Electricity Generation Sources 464.2 11.7% 5,724.5 78.7% 0 -




SE – Safety 0 - 0 - 0 -


PL – Power Systems Planning 450.6 11.3% 0 - 0 -

OP – Power System Operation 0 - 19.1 0.3% 48.7 4.3%

SC – Power System Supervision, Control and Protection 6.4 0.2% 0 - 0 -

QC – Power Supply Quality and Reliability 0 - 0 - 0 -

MF – Metering, Billing and Commercial Loss Reduction 977.0 24.5% 411.5 5.7% 966.7 85.0%

OU – Other 2,083.1 52.3% 1,119.3 15.4% 122.2 10.7%

TOTAL 3,981.4 100.0% 7,274.4 100.0% 1,137.6 100.0%



Environmental metricsRecover degraded areas 2017 2016 2015Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 705.9 704.8 559.3Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 13.7% 13.7% 11.0%Waste generation and treatment 2017 2016 2015Emissions Annual volume of greenhouse (CO2, CH4, N2O, HFC, PFC, SF6), issued into the atmosphere (in tonnes of CO2 equivalent) 798 717 557,763

Annual volume of ozone-depleting emissions 0 0 -Effluents Total water discharge by quality and destination 1 21,085 22,222 22,889Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 362.88 169 21,010Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 100% 100% 100%Use of resources in the production process and managerial processes 2017 2016 2015Total electricity consumption by source Electricity consumption per kWh distributed (sold) 0.000015 0.000015 0.000015Direct energy consumption by primary source in GJ 62,226 64,959 67,489

Diesel 52,624 55,652 57,083Gasoline 9,602 9,303 10,398Ethanol Not available 4 8Natural gas Not available Not available Not available

Other Not available Not available Not availableTotal water consumption by source (m3) Supply (public system) 8,705 15,035 19,168Groundwater (wells) 21,005 16,711 13,530Surface extraction (waterways) Not available Not available Not availableTotal water withdrawal (m3) 17,409 31,746 32,698Water withdrawal per employee (m3) 12.2 21.9 24.8Environmental education and awareness raising 2017 2016 2015At the Organization

Number of employees trained in environmental education programs 286 372 187Percentage of employees trained in environmental education programs/total employees 20.0% 26.0% 14.0%Number of hours of environmental training out of total hours of training 2.0% 6.0% 2.2%In the Community Number of primary schools and high schools served 82 0 -Number of primary school and high school students served 15,385 0 -Number of teachers trained 215 0 -Number of technical schools and high schools served - 0 -Number of technical school and graduate students served - 0 -

1 Water waste is sanitary waste and relatively insignificant.


Deforestation (hectares of land cleared by quarter) 4.3775 51.5 2,785

Tree pruning (volume of waste created by month in kg) 86,456 45,845 Not available

Oil leaks (leakage sites by month) 0 Not available 1 em nov. e 1 em dez.

1 Individuals removed: 86 for easement (Eletrosul-CGII), 62 for Eletrosul-Cuiabá easement, 17 for construction of SD Tamandaré.


ENERGISA TOCANTINSOperating and productivity metrics










1) Itaipu 0.00 Not available Not available


3) Energy sales of concession operator 0 Not available Not available




Non-technical losses – (%) on energy requirement 2 1.54% 3.19% 2.81%

Energy Sold (GWh) 3 2,089 2,119 2,036

Residential 949 918 834


Commercial 403 411 397

Rural 221 205 199












Added value/GWh sold 4 393.03 332.99 348.22


Overall equivalent outage duration per consumer “DEC” of the company - Limit 4 27.19 28.48 30.28

Overall equivalent outage frequency per consumer “FEC” of the company - Amount determined 4 12.72 14.47 16.09

Overall equivalent outage frequency per consumer “FEC” of the company - Limit 4 19.33 20.49 22.53

1 In 2016, this does not include outsourced employees working at other Group companies.2 Less not including uninvoiced.3 Excludes proprietary consumption.4 Revised data for 2015 published in the previous report.

E N E R G I S A T O C A N T I N S146


Managers 2017 2016 2015


No. of members 5 8 - 13 5 8 - 13 5 8 -



Direct or indirect benefits - 244 - 244 0 130 - 130 - 1 - 1


Other (charges) 101 623 - 724 29 352 - 381 12 303 - 315

Description of other fixed compensation - - - - - - - - - - - -

Variable Compensation (R$ 000) 94 406 - 500 117 1,774 - 1,891 49 733 - 783

Bonuses - - - - - - - - - - - -

Profit sharing 94 406 - 500 117 1,774 - 1,891 49 733 - 783


Commission - - - - - - - - - - - -

Other - - - - - - - - - - - -


- - - - - - - - - -- -


Palmas - TO




Revenue 1,824,971 1,676,405





(-) Consumables acquired from third parties 1,028,483 999,491











Personnel


Benefits 22,958 19,218

FGTS 6,090 5,507


Federal 153,495 96,102

State 307,968 265,566

Municipal 1,226 286


Interest expenses

Interest 95,685 128,371

Rent 2,406 2,982

Interest on equity


Legal Reserve 5,394 1,922

Income tax reduction reserve 15,923 10,538

Realization of net tax revaluation (6,900) (6,151)

Additional dividends proposed 42,967 -

Profit retention - 24,104

821,050 705,599


R$ 000 ∆% R$ 000


50,240 -54.1% 109,536


Sub- transmission 0 - 0

Total 246,128 45.0% 169,718

















Apprentice program employees (%) 37 2.4% 1.7%



Gross payroll 2 63,982 97,108 69,399


Education 92 61 107


Transportation 143 - 203

Health 7,891 7,800 6,188

Date Founded 2,402 1,904 2,040

Occupational health and safety 2,246 1,956 2,299

Culture 0 0 0

Training and professional development 2 726 235 489









Executive positions 3 17,696.76 11,742.12 2,171.00








Employee seriousness rate in the period 135.88 62 45


Seriousness Rate of outsourced/contracted employees in the period 2,618 2,114 406


Severity rate for the period - workforce (employees + contractors) 1,349 1,127 277






High School 82.8% 83.4% 82.9%

Technical School 0.0% 0.0% -










Churn rate 2 10.64% 9.09% 7.67%




Number of labor claims upheld in the period 19 8 -


Value of damages and fines paid under court awards in the period (R$ 000) 4 11,471 10,624 6,381



Number of beneficiaries of supplementary pension plans 1,199 1,253 1,287

1 In 2016, this does not include outsourced employees working at other Group companies. 2 Revised figures published in 2015. 3 2016 figure only includes CLT officers. 4 2015 restated to reflect compensation resulting from the court claim, regardless of whether a settlement was reached or the company was convicted.



Consumers




Residential 37.7% 35.9% 34.4%


Sales 19.3% 11.9% 14.1%

Industrial 8.3% 19.4% 19.5%

Rural 10.6% 9.7% 9.8%








Call Center






TMA - Average interaction time (s) 173.00 179.00 208.00






DER (hours) 198.2 156.47 365.3

FER (unit) 9.22 8.28 9.57

Violation of commercial service terms 1





The company 350,344 311,801 312,679

Aneel – state/regional agencies 1,154 955 845

Procon 466 320 270

to the courts 1,016 915 6471 Revised figures published in 2015.


Community






Number of low-income households served 1 141,445 116,612 103,196


13.3% 24.8% 22.9%



6.7% 11.6% 10.6%



Funds allocated to education (R$ 000) 71,390 8 0




Other funds allocated to social initiatives (R$ 000) 45,769 14 139


0.0% 0.0% 0.0%


0 0 0


2017

2016

2015



Project name What do we want for the

world?

What do we want for the

world?

Rota Tocantins

Proposed by Cocriativa Conteúdos

Audiovisuais Ltda.

Cocriativa Conteúdos

Audiovisuais Ltda.

Lamira Artes

1 Revised figures for 2015 and 2016



2017 2016 2015

Service targets 3,795 5,277 6,304

Calls handled (no.) 1,378 5,954 6,689

Performance of targets (%) 36.3% 112.8% 106.1%


Municipalities with universal access (%) 1 28.1% 21.6% 24.5%










Tota

l

(%)

Com

pany

Third

pa

rtie

s

Clie

nt

Tota

l

(%)

Com

pany

Third

pa

rtie

s

Clie

nt

Tota

l

(%)

Com

pany

Third

pa

rtie

s

Clie

nt

Industrial - - - - - - - - - - - - - - -

Trade and Services 1,307 26.2% 1,307 - - - - - - - - - - - -

Public Authorities - - - - - - - - - - - - - - -

Public Utility - - - - - - - - - - - - - - -

Rural - - - - - - - - - - - - - - -

Residential - - - - - 3,529 45.8% 1,931 - 1,598 1,718 19.0% 1,718 - -


3,672 73.8% 3,672 - - 4,196 54.2% 4,197 - - 7,103 81.0% 7,103 - -

Public Lighting - - - - - - - - - - - - - - -


- - - - - - - - - - - - - - -

Educational - - - - - - - - - - - - - - -

TOTAL 5,302 100.0% 4,979 - - 7,726 100.0% 6,128 - 1,598 8,820 100.0% 8,820 - -1 Excludes funds used in project management


Uni

ts se

rved

Ener

gy sa

ving

s (M

Wh/

year

)

Peak

Sha

ving

(k

W)

Uni

ts se

rved

Ener

gy sa

ving

s (M

Wh/

year

)

Peak

Sha

ving

(k

W)

Uni

ts se

rved

Ener

gy sa

ving

s (M

Wh/

year

)

Peak

Sha

ving

(k

W)

Industrial - - - - - - - - -

Trade and Services 2 251.5 60.7 - - - - - -

Public Authorities - - - - - - - - -


Rural - - - - - - - - -

Residential - - - 1,553 2,084.0 1,883.0 64 24.0 5.0


5,923 1,195.7 655.6 2,688 644.0 353.0 9,268 1,805.0 1,009.0



- - - - - - - - -

Educational - - - - - - - - -

TOTAL 5,925 1,447.2 716.3 4,241 2,728.0 2,236.0 9,332 1,828.0 1,014.0




2017 2016 2015






SE – Safety 0 - 0 - 0 -


PL – Power Systems Planning 52 2.0% 1,114 31.8% 270 12.7%

OP – Power System Operation 2,522 97.9% 2,172 61.9% 1,415 66.4%

SC – Power System Supervision, Control and Protection 0 - 0 - 0 -

QC – Power Supply Quality and Reliability 1 0.0% 0 - 0 -

MF – Metering, Billing and Commercial Loss Reduction 0 - 0 - 96 4.5%

OU – Other 0 - 221 6.3% 349 16.4%

TOTAL 2,575 100.0% 3,507 100.0% 2,130 100.0% 1 Excludes funds used in project management




Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 3,858.1 3,660.8 3,185.9Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 37.6% 36.9% 34.4%



Annual volume of ozone-depleting emissions Not available Not available Not availableEffluentsTotal water discharge by quality and destination Not available Not available Not availableSolids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 8.49 46.17 95.16Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 0% 0% 0%



Diesel 28,225 24,841 21,207Gasoline 19,049 16,938 13,699Ethanol 20 24 8Natural gas NA NA NAOther NA NA NA

Total water consumption by source (m3) Supply (public system) 15,145 11,788 10,212Groundwater (wells) Not available Not available Not availableSurface extraction (waterways) - - -Total water withdrawal (m3) 15,145 11,788 10,212Water withdrawal per employee (m3) 12.58 9.05 7.91


At the Organization

Number of employees trained in environmental education programs 148 19 2Percentage of employees trained in environmental education programs/total employees 12.3% 1.5% 0.2%

Number of hours of environmental training out of total hours of training 0.9% 0.3% 0.0%In the Community Number of primary schools and high schools served 2 3 13Number of primary school and high school students served 349 323 848Number of teachers trained - - -Number of technical schools and high schools served - - 1Number of technical school and graduate students served - - 93


Deforestation (hectares of land cleared by quarter) Not available Not available Not availableTree pruning (volume of waste created by month in kg) Not available Not available Not availableOil leaks (leakage sites by month) Not available Not available Not available


ENERGISA SUL-SUDESTEOperating and productivity metrics

Number of consumers served - Captive 2017 2016 2015

Number of consumers served - Free 767,611 756,139 741,943



Number of outsourced employees 1 1,064 1,142 1,184


Electricity generated (GWh) 83 83 82

Electricity purchased (GWh) NA NA NA

1) Itaipu 4,280.85 4,350.32 3,986.50


3) Energy sales of concession operator 3,502.44 3,320.56 2,905.43


Electrical losses – (%) total on energy requirement 283.4 292.7 289.6



Energy Sold (GWh) 2 -0.20% 0.49% 0.38%

Residential 3,260 3,358 3,490

Industrial 1,383 1,339 1,309

Commercial 383 537 679

Rural 727 738 765





Installed capacity (MVA) 93 90 90


Distribution lines (in km) 421 415 415


Sale of energy through installed capacity (GWh/MVA*No. Hours/Year) 47,462 49,904 49,135

Electricity sold by employee (MWh) 12,882.37 12,844.28 13,103.13

Number of consumers by employee 2.92 2.78 2.81


Overall equivalent outage duration per consumer “DEC” of the company - Amount determined

243.22 81.70 -





1 In 2016, this does not include outsourced employees working at other Group companies.2 Excludes proprietary consumption.

E N E R G I S A S U L - S U D E S T E156


Managers 2017 2016 2015


No. of members - 7 - 7 - 7 7 - - 8 - 8

Annual Fixed Compensation (R$ 000) - 2,956 - 2,956 - 2,167 2,167 - - 1,247 - 1,247

Salary or management fees - 1,702 - 1,702 - 1,673 1,673 - - 1,004 - 1,004

Direct or indirect benefits - 65 - 65 - 109 109 - - 0 - 0


Other (charges) - 1,189 - 1,189 - 385 385 - - 243 - 243


- - - - - - - - - - - -

Variable Compensation (R$ 000) - -94 - -94 - 2,496 2,496 - - 1,221 - 1,221

Bonuses - - - - - - - - - - - -

Profit sharing - -94 - - - 2,496 2,496 - - 1,221 - 1,221


Commission - - - - - - - - - - - -

Other - - - - - - - - - - - -


- - - - - - - - - - - -


Presidente Prudente - SP




Revenue 1,742,182 615,409

Revenue from energy sales and services 1,630,015 589,347

Other revenue 6,071 12


Formation and reversal of allowance for doubtful accounts (761) (802)

(-) Consumables acquired from third parties (994,739) (342,641)

Cost of electricity sold (798,999) (278,750)

Materials and outsourced services (79,344) (32,556)

Other operating costs (116,396) (31,335)


Amortization and depreciation (31,744) (17,515)






Personnel 65,204 27,025

Direct remuneration 48,168 17,383

Benefits 13,778 7,451

FGTS 3,258 2,191

Taxes, charges and contributions 578,821 212,327

Federal 116,554 23,363

State 277,583 109,798

Municipal 135 109


Interest expenses 81,000 34,285

Interest 79,246 33,403

Rent 1,754 882

Interest on equity 67,883 716

Dividends 3,171 -

Legal Reserve 15,063 -

Income tax reduction reserve 45,190 -

Realization of net tax revaluation 4,459 716


Investment 2017 2016

R$ 000 ∆% R$ 000

Expansion of distribution/transmission (reinforcement expansion) 9,872 -68.3% 31,096


Sub- transmission 0 - 4,942

Total 151,519 144.5% 61,980

Nb: The figures for 2016 only reflect the individual performance of Energisa Sul Sudeste (the new name of Caiuá Distribuição de Energia S/A). And the figures for 2017 embrace the results of Energisa Sul Sudeste and those of the companies merged into it from June 30, 2017 onwards.






Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, employment contract and region 1

194 260 342









Black employees (black and mixed race) in managerial positions out of total managerial positions (%)

7.1% 6.8% 5.0%





Gross payroll 92,857 101,050 87,346


Education 0 0 0


Transportation 276,970 0 0

Health 6,535 8,336 7,710

Date Founded 1,998 2,716 2,152

Occupational health and safety 506 804 1,263

Culture 0 0 0










Executive positions Not available Not available Not available










Seriousness Rate of outsourced/contracted employees in the period 147 356 309


Severity rate for the period - workforce (employees + contractors) 92 200 184






High School 56.03% 50.7% 59.7%




Amount invested in professional development and education (R$ 000) 452 Not available

Not available


Executive positions 0 0 0.24





Churn rate 1.29% 1.71% 1.21%









Number of beneficiaries of supplementary pension plans 1,117 1,201 1,2271 In 2016, this does not include outsourced employees working at other Group companies.



ConsumersService excellence 2017 2016 2015Profile of consumers and clientsEnergy sales by rate class (GWh): % TotalResidential 39.25% 36.83% 35.05%Low-income residential 3.19% 3.06% 2.47%Sales 22.31% 21.97% 21.93%Industrial 11.76% 16.00% 19.45%Rural 9.05% 8.35% 7.89%Public lighting 5.84% 5.56% 5.34%Public utility 5.02% 4.78% 4.38%Public Authorities 3.59% 3.44% 3.48%Customer satisfaction 1 2017 2016 2015Satisfaction rates obtained by Iasc Survey - Aneel 68.98 - -

Bragantina - 68.60 61.29Caiuá - 71.34 56.25Força e Luz do Oeste - 78.15 63.21Nacional - 72.08 65.91Vale Paranapanema - 72.4 56.97

Satisfaction rates obtained by other entities and/or proprietary surveys - Abradee Survey

81.47 - -

Bragantina 76.51 76.30 77.90Caiuá 75.88 75.30 83.70Força e Luz do Oeste 90.12 85.00 84.70Nacional 81.39 79.10 92.20Vale Paranapanema 90.56 85.20 91.00

Consumer service 2017 2016 2015Call CenterCalls received (unit) 1,018,922 1,075,798 1,165,107

Average number of agents (unit) 27 17 17INS - Level of Service Rate (%) 90.85 94.81 85.58IAB - Abandonment rate (%) 0.81 0.65 3.24ICO - Busy Call Rate (%) 0.00 0.07 0.55TMA - Average interaction time (s) 193 192 212Compensation for electrical damagesVolume of Applications (unit) 5,461 4,057 4,865Upheld (unit) 1,446 1,568 960Complaints metrics 2017 2016 2015Confirmed Complaints (unit) 2 139,007 Not available Not availableDER (hours) 3 159.19 Not available Not availableFER (unit) 3 3.84 Not available Not availableViolation of commercial service terms Service interactions (unit) 272,883 311,508 292,929Service interactions completed late (unit) 6493 8,067 9,987Service efficiency (%) 98% 97,41% 97%Number of customer complaints escalated to 2017 2016 2015The company 4 190,003 Not available Not availableAneel – state/regional agencies 258 216 223Procon 312 271 286to the courts 527 700 358

1 Energisa Sul-Sudeste was founded in April 2017 – prior to this the data referred individually to the unified companies 2 All the types in Appendix I were taken into account, including electrical damage. outages and voltage level. 3 DER and FER figures were taken from the monthly report monitoring this metric, as the Aneel site has not yet published figures for 2017. The technical data for December is preliminary. 4 All the complaints in Appendix I were taken into account for 2017 (including electrical damage; outages and voltage level) along with Ombudsman complaints.


Community








10.39% 9.82% 9.31%



5.20% 5.11% 4.64%













2017

2016

2015

Funds allocated to projects (R$ 000) 415 2,657 471


Project name Iluminarte Música

Serrinha Art Festival-Annual Plan

-2016

2015 Serrinha Art Festival

‘Ressonhando Mundos’

Bidder Carolina Paiva Neves

Frade da Cruz

Espaço Edith Cultura

Espaço Edith Cultura



2017 2016 2015

Service targets NA NA NA

Calls handled (no.) 17,023 18,627 26,465

Performance of targets (%) 100% 100% 100%


Municipalities with universal access (%) 1 100% 100% 100%










Tota

l

(%)

Com

pany

Third

pa

rtie

s

Clie

nt

Tota

l

(%)

Com

pany

Third

pa

rtie

s

Clie

nt

Tota

l

(%)

Com

pany

Third

pa

rtie

s

Clie

nt

Industrial - 0.0% - - - 718 0.0% 718 0 - - 0.0% - - -

Trade and Services 3,662 31.6% 3,662 - - - 0.0% - - - - 0.0% - - -

Public Authorities 686 5.9% 686 - - - 0.0% - - - - 0.0% - - -

Public Utility 515 4.4% 515 - - - 0.0% - - - - 0.0% - - -

Rural - 0.0% - - - - 0.0% - - - - 0.0% - - -

Residential 676 5.8% 676 - - 1,959 30.3% 1,959 - - 1,487 9.5% 1,487 - -

Low-Income Residential 2,403 20.7% 2,403 - - 3,721 57.5% 3,721 - - 11,675 74.6% 11,670 - 5.00

Public Lighting 3,663 31.6% 3,663 - - 71 1.1% 71 - - 2,478 15.8% 2,478 - -


- 0.0% - - - - 0.0% - - - - 0.0% - - -

Educational - 0.0% - - - - 0.0% - - - - 0.0% - - -

TOTAL 12,171 100% 11,605 - - 6,468 100% 6,468 0 - 15,640 100% 15,635 - 5



Uni

ts se

rved

Ener

gy

savi

ngs

(MW

h/ye

ar)

Peak

Sha

ving

(k

W)

Uni

ts se

rved

Ener

gy

savi

ngs

(MW

h/ye

ar)

Peak

Sha

ving

(k

W)

Uni

ts se

rved

Ener

gy

savi

ngs

(MW

h/ye

ar)

Peak

Sha

ving

(k

W)

Industrial 0 0 0.0 2 1,096 29 - - -

Trade and Services 16 665 175 - - - - - -

Public Authorities 2 318 86 - - - - - -

Public Utility 1 228 85 - - - - - -

Rural 0 0.00 0.0 - - - - - -

Residential 406 83 19 4,394 5,995 279.8 297 2 -

Low-Income Residential 1,761 160 48 3,989 1,076 295.0 12,842 1,714 2,889

Public Lighting 13 769 176 6 1,334 307.8 5 - -


0 0 0.0 - - - - - -

Educational 0 0 0.0 - - - - - -

TOTAL 2,199 2,222 589 8,391 9,501 912 12,843 1,716.0 2,889




2017 2016 2015


FA – Alternative Electricity Generation Sources 1,043.0 15.9% 0 - 0 -



MA – Environment 0 - 0 - 1,547.5 66.5%

SE – Safety 0 - 0 - 0 -

EF – Energy Efficiency 1,111.3 16.9% 0 - 0 -

PL – Power Systems Planning 1,099.7 16.8% 781.2 12.2% 0.0 0.0%

OP – Power System Operation 2,892.3 44.1% 3,430.5 53.6% 279.7 12.0%

SC – Power System Supervision, Control and Protection 418.3 6.4% 591.6 9.2% 0 -

QC – Power Supply Quality and Reliability 0 - 0 - 0 -

MF – Metering, Billing and Commercial Loss Reduction 0 - 1,600.0 25.0% 0 -

OU – Other 0.4 0.0% 0 - 499.1 21.5%

TOTAL 6,565.1 100% 6,403.3 100% 2,326.3 100% 1 Excludes funds used in project management




Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 2,420 2,068 1,825Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 22% 20% 18%



Annual volume of ozone-depleting emissions - - -EffluentsTotal water discharge by quality and destination 8,058 7,346 6,206Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 7.3 316.83 Not availablePercentage of equipment replaced by insulating mineral oil without PCB (ascarel) Not

availableNot

available Not available



Diesel 22,833 23,736 19,735Gasoline 3,416 2,985 2,081Ethanol 4,719 5,799 7,492Natural gas 0 0 0Other 0 0 0

Total water consumption by source (m3) Supply (public system) 10,073 9,183 7,758Groundwater (wells) 7,487 9,263 6007Surface extraction (waterways) 0 0 0Total water withdrawal (m3) 17,560 18,446 13,765Water withdrawal per employee (m3) 15.75 15.27 11.07


At the Organization

Number of employees trained in environmental education programs 349 709 526Percentage of employees trained in environmental education programs/total employees 31.3% 58.7% 42.3%Number of hours of environmental training out of total hours of training 0.6% Not

available Not available

In the Community Number of primary schools and high schools served 5 7 49Number of primary school and high school students served 1,910 1,370 4,901Number of teachers trained 11 50 Not availableNumber of technical schools and high schools served 0 4 1Number of technical school and graduate students served 0 900 120


Deforestation (hectares of land cleared by quarter) Not available

Not available

Not available

Tree pruning (volume of waste created by month in kg) Not available

Not available

Not available

Oil leaks (leakage sites by month) Not available

Not available

Not available


CORPORATE INFORMATION

ENERGISA S.A.Board of DirectorsIvan Müller Botelho – CHAIRMAN

Ricardo Perez Botelho – DEPUTY CHAIRMAN

DirectorsOmar Carneiro da Cunha SobrinhoMarcílio Marques MoreiraAntônio José de Almeida CarneiroLuiz Henrique FragaJosé Luiz Alquéres

AlternatesMaurício Perez BotelhoPedro Boardman CarneiroAndre La Saigne de BottonMarcelo Silveira da RochaGuilherme Fernandes Cesar CoelhoLeonardo Prado Damião

Executive BoardRicardo Perez Botelho – CEO

Maurício Perez Botelho – CFO AND INVESTOR RELATIONS OFFICER

Gustavo Nasser Moreira – SUPPLIES AND LOGISTICS OFFICER

Daniele Araújo Salomão Castelo – PERSONNEL MANAGEMENT OFFICER

Alexandre Nogueira Ferreira – REGULATORY AFFAIRS AND STRATEGY OFFICER

AddressAv. Pasteur, 110 – 6º andar Botafogo, Rio de Janeiro/RJCEP 22290-240

ENERGISA MINAS GERAISBoard of DirectorsIvan Müller Botelho – CHAIRMAN


DirectorsMarcílio Marques MoreiraOmar Carneiro da Cunha SobrinhoMarcelo Silveira da Rocha

SubstituteMaurício Perez Botelho

Executive BoardEduardo Alves Mantovani – CEO

Maurício Perez Botelho – CFO



Fernando Lima Costalonga – TECHNICAL AND COMMERCIAL OFFICER


AddressAv. Manoel Ignácio Peixoto, s/nº – Industrial – Cataguases/MGCEP 30140 131

ENERGISA NOVA FRIBURGO

Executive BoardEduardo Alves Mantovani – CEO




Fernando Lima Costalonga – TECHNICAL AND COMMERCIAL OFFICER

Fernando Cezar Maia – REGULATORY AFFAIRS AND STRATEGY OFFICER

AddressAv. Euterpe Friburguense, 111/113 – Centro – Nova Friburgo/RJCEP 28605-130

ENERGISA PARAÍBABoard of DirectorsIvan Müller Botelho – CHAIRMAN


DirectorsAndré la Saigne de BottonMarcílio Marques MoreiraOmar Carneiro da Cunha SobrinhoMarcelo Silveira da Richa


Executive BoardAndré Luís Cabral Theobald – CEO




Jairo Kennedy Soares Perez – TECHNICAL AND COMMERCIAL OFFICER


AddressBR-230, Km 25 – Cristo Redentor – João Pessoa/PBCEP 58071-680

C O R P O R A T E I N F O R M A T I O N

ENERGISA BORBOREMABoard of DirectorsIvan Müller Botelho – CHAIRMAN


DirectorsAndré La Saigne de BottonMarcílio Marques MoreiraOmar Carneiro da Cunha SobrinhoAntônio José de Almeida Carneiro

SubstitutesMaurício Perez BotelhoPedro Boardman Carneiro

Executive BoardAndré Luís Cabral Theobald – CEO

Jairo Kennedy Soares Perez – TECHNICAL AND COMMERCIAL OFFICER




Alexandre Nogueira Ferreira – REGULATORY

AFFAIRS AND STRATEGY OFFICER

AddressBR 230, Km 158, Alça Sudoeste 3 Irmãs – Campina Grande/PBCEP 58423-700

ENERGISA SERGIPEBoard of DirectorsIvan Müller Botelho – CHAIRMAN


DirectorsSérgio Alves de SouzaMarcílio Marques MoreiraOmar Carneiro da Cunha SobrinhoMarcelo Silveira da Rocha


Executive BoardRicardo José Charbel – CEO




Amaury Antônio Damiance – TECHNICAL AND COMMERCIAL OFFICER


AddressRua Min. Apolônio Sales, 81 – Inácio Barbosa – Aracaju/SECEP 49040-150

ENERGISA MATO GROSSOBoard of DirectorsIvan Müller Botelho – CHAIRMAN


DirectorsMarcelo Silveira da RochaHélio Tito Simões de ArrudaAndré La Saigne de ButtonAristóteles Luiz Menezes Vasconcellos Drummond

Executive BoardRiberto José Barbanera – CEO



Alessandro Brum – TECHNICAL AND COMMERCIAL OFFICER

José Souza Silva – ADMINISTRATIVE AND CONTROL OFFICER

Carlos Marcio Ferreira –OFFICER WITH NO SPECIFIC TITLE

Daniele Araújo Salomão Castelo –OFFICER WITH NO SPECIFIC TITLE

Roberto Carlos Pereira Currais –OFFICER WITH NO SPECIFIC TITLE

AddressRua Manoel dos Santos Coimbra, 184-B – Bandeirantes – Cuiabá/MTCEP 78010-900

ENERGISA MATO GROSSO DO SULBoard of DirectorsIvan Müller Botelho – CHAIRMAN


DirectorsMarcelo Silveira da RochaMaurício Perez BotelhoClaudio Rogério Balbuena Leão

Executive BoardMarcelo Vinhaes – CEO AND ADMINISTRATIVE AND CONTROL OFFICER


Marcelo Vinhaes Monteiro – TECHNICAL AND COMMERCIAL OFFICER





AddressAv. Gury Marques, 8000 – Campo Grande/MSCEP 79072-900

E N E R G I S A 2 0 1 7 S O C I A L A N D E N V I R O N M E N TA L R E S P O N S I B I L I T Y R E P O R T

ENERGISA TOCANTINSBoard of DirectorsIvan Müller Botelho – CHAIRMAN


DirectorsAntônio José de Almeida CarneiroAndré La Saigne de BottonAlankardek Ferreira Moreira

Executive BoardMárcio Mário Zidan – CEO


Juliano Ferraz de Palma – TECHNICAL AND COMMERCIAL OFFICER

Daniele Araújo Salomão Castelo – ADMINISTRATIVE AND CONTROL OFFICER


Alankardek Ferreira Moreira – INSTITUTIONAL RELATIONS OFFICER


AddressAv. LO – Conjunto 104 Norte 44, Lote 12 A – Palmas/TOCEP 77006-032

ENERGISA SUL-SUDESTEExecutive BoardGabriel Alves Pereira Junior – CEO



José Adriano Mendes Silva – TECHNICAL AND COMMERCIAL OFFICER




AddressRodovia SP 425 (Assis Chateaubriand) Km 455 + 600m – CHAIRMAN Prudente/SPCEP 19001-970

ACKNOWLEDGMENTSGeneral coordinationCorporate Strategic Management DivisionTatiana de Oliveira Feliciano

Content coordinationPaula Christina Ribeiro Laranjeira da SilvaVictor Marcius Campos de Oliveira

Wording and editingEditora Contadino

LayoutMulti Design

PhotosEnergisa Archive

I N F O R M A Ç Õ E S C O R P O R A T I V A S