ANNUAL REPORT SOCIAL and ENVIRONMENTAL RESPONSIBILITY 2017 OVERVIEW 4 | Management Message 6 | Energisa 13 | Strategy and Management

ANNUAL REPORT SOCIAL AND ENVIRONMENTAL RESPONSIBILITY 2017 OVERVIEW 4 | Management message 6 | Energisa 13 | Strategy and management

CORPORATE GOVERNANCE FRONT 22 | Governance 24 | Risk management 25 | Ethical conduct

ECONOMY AND FINANCES 27 | Overview of the economy and sector 29 | Operating performance 34 | Financial performance

THE ENVIRONMENT 68 | Environmental management

74 | ibase social balance sheet 76 | Aneel indicators 166 | Corporate information OVERVIEW 4 OVERVIEW

MANAGEMENT MESSAGE

THE ABILITY to deliver results, even in a challenging introduce new technologies. environment such as the one that persisted in 2017, simply reaffirms our culture and the Energisa Way Despite Brazil's subdued growth, Energisa Group's of Being, which focuses on efficiency, simplicity and financial results saw continued growth in 2017. sustainable performance of our business in the last We posted consolidated net revenue of R$ 13.6 113 years. billion, up 15.5% over the previous year, consolidated Adjusted EBITDA of R$ 2.4 billion, 15.7% higher than Still affected by Brazil’s political instability, the in 2016, and record consolidated net income of R$ macro economy made a modest recovery in 2017. 572.6 million, up 192.4% from the previous year. This Gross domestic product rose by 1.0% after two supported dividend payments of R$ 269.8 million in consecutive contractions of 3.5% each, in 2015 and the year. 2016. Despite the timid recovery, per capita income closed the year relatively unchanged on 2013. The We successfully completed significant investments services and industrial segments, which contribute amounting to R$ 2.0 billion in the year and R$ 7.4 more to the economy, remain stable, but have not billion, in nominal terms, over the past five years. yet recovered the losses incurred in the largest We have continued to invest in the future of our recession in recent history. Furthermore, strong utilities, particularly in quality and in preparing for growth of 13% in the agricultural sector, driven the close of another rate-setting cycle. In 2017 we by a record grain harvest, was responsible for the made important progress on our outage frequency main contribution to the GDP growth in 2017. This and duration indicators. In April 2018 three import- provided some respite to Brazilians. Household ant utilities will undergo rate-setting reviews: consumption began rising again, if only modestly, Energisa Mato Grosso, Energisa Mato Grosso do helped by lower interest and inflation rates. Sul and Energisa Sergipe. With our recognized investment in regulatory assets, we expect to see The modest recovery therefore helped make future continued improvement in operational performance prospects more positive in a still uncertain environ- Group-wide. ment in the country. We closed the year with energy sales growth of 3.7%, outperforming the average In 2017 our shared services center—the Energisa 0.8% recorded in Brazil. The 29,620.4 GWh of energy Services Center (ESC)—began operation, an invoiced in our concessions represents the highest important milestone in the continued integration of volume ever recorded by Energisa Group, despite our acquisitions from Rede Group. Now one of the the fact we are still growing at a slower rate than largest shared service centers in Brazil, ESC handles before the economic crisis. Group-wide administrative effort and is helping to standardize processes and improve time and In legal and regulatory terms, 2017 was a year of cost efficiency to support the continued growth of intense discussion about reforming the sector Energisa Group. model. Public Consultation 33 elicited inputs from industry and society into a bill that the Federal We continued to expand and diversify our Government will present to Congress. The reforms businesses with our entry into the transmission are highly ambitious in seeking to broaden segment. Our bid was successful in an auction for consumer choice, address barriers to the proper the construction of two transmission lines in the operation of the free market, reduce subsidies and states of Goiás and Pará, which will also provide ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 5

MANAGEMENT MESSAGE

synergies to our utilities operations. These transmis- in the 500,000+ consumer category by the Brazilian sion lines should be completed by respectively 2021 Association of Electrical Utilities (Abradee) in its and 2022, and will help to improve power quality annual industry benchmarking report. This recogni- and system reliability, especially in Mato Grosso and tion has brought us a step closer the aspiration we Mato Grosso do Sul. are determined to achieve by 2020.

We also opened two new buildings in Cataguases, Our ambition for excellence has also been rec- Minas Gerais, where Energisa Group was founded in ognized by our investors. Energisa shares rose by 1905. Designed as modern, sustainable and energy- 50.5% in 2017, the highest appreciation in the power and water-efficient facilities, the new buildings sector, significantly outperforming the IEE (10.0%) now host the head offices of Energisa Minas Gerais, and B3 (26.9%) indices. Energisa Soluções and the Energisa Services Center, providing comfort and optimal working conditions We are reaping dividends from developing and for our employees retaining talent, from exercising discipline in cost management, from anticipating trends and We also concluded the merger of five utilities in from building leadership in our industry. With a the states of São Paulo and Paraná into the newly determined spirit, we are positioned for a new cycle created Energisa Sul-Sudeste. This pioneering, of growth, confident we are on the right path and ANEEL-approved reorganization will provide signif- progressing at the right pace. We continue to rely on icant efficiency benefits both to the company and a strong system of governance and compliance, and to customers. We also continued the information our values of ethics and integrity, which reflect our systems migration initiated in 2015, unifying these commitment to the present and the future. utilities on the same platform. Lastly, we cannot neglect to acknowledge the role We remain engaged in and progressing on our that our employees, customers, suppliers, creditors digitization journey. As part of this, we launched and shareholders have played on this journey. Our “+Simples, +Ágil, +Energisa”, a transformation sincere thanks for your trust and confidence. program that will take us faster and with less complexity to the level of leadership and efficiency we aspire to in a world of profound and rapid change. Ivan Müller Botelho Ricardo Perez Botelho We remain relentlessly focused on our dream of Chairman of the Board CEO 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 6 OVERVIEW

ENERGISA

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 authorized by the National Electricity Regulatory Agency (Aneel). TOTAL ENERGISA 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. CAPTIVE CLIENTS 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 6,649,966 administrative departments, in order to better organize working routines and processes and support Energisa’s objective to be a leading energy group.

13 6 Net revenue amounted to R$ . billion. At the end of the year MUNICIPALITIES SERVED the Group was employing 16.7 thousand people, including internal employees and service providers.

Founded in 1905 as Companhia Força e Luz Cataguazes- 788 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). ELECTRICITY SOLD1 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 29,604.9 GWh capital of the holding company Nova Gipar. 1 Captive sales + free consumers (Tusd) ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 7

Energisa Borborema 209,981 6 634.2 GWh Energisa Paraíba 1,404,298 216 Energisa Tocantins 4,181.4 GWh 573,855 139 2,245.2 GWh Energisa Mato Grosso 1,365,659 141 8,464.0 GWh

Energisa Sergipe 761,924 63 Energisa Mato Grosso do Sul 3,015.3 GWh 1,015,526 74 Energisa Minas Gerais 5,165.9 GWh 445,557 66 1,482.6 GWh

Energisa Nova Friburgo 105,555 1 323.7 GWh

Energisa Sul-Sudeste 767,611 82 4,092.6 GWh 8 OVERVIEW

ENERGISA IN 2017

PERSONNEL 12,941 3,769 direct employees outsourced employees

DISTRIBUTION

536.1 thousand 18.1 thousand kilometers of distribution grids and lines kilometers of transmission lines

SALES 3,951.6 GWh of energy sold by Energisa Comercializadora

energy sold and transported 29,620.4 GWh (captive sales + transportation) ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 9

SOCIO-ENVIRONMENTAL R$ 89.2 million 30 years invested in environmental initiatives of the Ormeo Junqueira Botelho Foundation

FINANCIAL 50.5% valuation of Energisa’s most R$ 13.7 billion R$ 2.4 billion liquid shares in of net revenue of adjusted EBITDA 2017 – ENGI11 – Units, (consisting of 1 common share and 4 preferred shares)

CLIENTS

6.7 million 788 clients municipalities, in nine states

SOCIETY 16.4 million people served 10 OVERVIEW

SHARE OWNERSHIP

Gipar GIF IV FIA Other (Botelho Family) (Gávea) Samambaia 1 NCI

CV=66.1% CT=30.0% CV= 5.6% CT=11.7% CV=10.0% CT=20.9% CV=18.3% CT= 37.4%

DISTRIBUTION DIRECT CONTROL DISTRIBUTION DIRECT CONTROL

ENERGISA REDE ENERGIA2

Gipar/Família Botelho EMG ESE EPB ESS3 EMS ETO

100% 100% 100% 99.0% 99.9% 76.7%

ENF EBO EMT 37.9% 100% 100% 57.7%

SERVICES TRANSMISSION

Energisa Energisa Energisa Soluções Energisa Pará 4 Energisa Goiás 4 Comercializadora Soluções Construções 100% 100% 100% 100% 100%

Energisa Serviços Energisa Multi Energisa Aéreos Planejamento Serviços

100% 100% 100%

CV = Voting Capital / CT= Total Capital 1 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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 11

MISSION

Energisa 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.

VISION

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.

VALUES

COMMITMENT: RESULTS: To the present-day and the future Overcoming challenges We act as responsible citizens, striving to to achieve results generate wealth and prioritizing respect for our We seek to achieve extraordinary results collaborators, investors, suppliers and clients. that generate value for our clients, Most importantly, we are part of a community shareholders and employees. We seek to and are committed to future generations. As exceed our targets in order to ensure that such, it is essential that we foster an ethical Energisa stands among the best in its sector attitude and value the truth above all else. in terms of efficiency and customer service.

TRADE ACCOUNTS RECEIVABLE: SECURITY: Simplify the lives of our clients First We always treat our clients with dedication Our greatest asset is life itself. As such, we and respect in an effort to build an attentive place health and safety above all else in and long-lasting relationship with them. We our processes and attitudes. We adopt a place ourselves in our customers' shoes to disciplined mindset, invest in preventative deliver efficient and lasting solutions that measures and promote constant awareness make life easier and add value for users. amongst all our personnel to reduce risks.

PEOPLE: INNOVATION: Our energy comes from people To make a difference We are part of a winning team that enables We encourage creativity that generates us to achieve, learn and win together. The value, be it in the production of opportunities here depend principally on the something completely new or possible merits and dedication of each member of that improvements to an existing product. team. We place a high value on transparency, Responsible observation, experimentation teamwork and open and participative dialog. and curiosity all form part of the If you think the same way, you are one of proactive approach that sets us apart. us and we want you to be happy here. 12 OVERVIEW

AWARDS AND RECOGNITION

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

ddRecipient 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.

ddFour-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.

ddThird 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.

ENERGISA PARAÍBA ddAbradee 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.

ddSeal 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.

ENERGISA BORBOREMA ddWinners in the categories social responsibility and operational management for companies with up to 500 thousand consumers in the Abradee Award.

ENERGISA SERGIPE ddTwo Eloy Chaves Medals for best distribution company in security and accident prevention for 2015 (bronze) and 2016 (gold).

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

ddAbradee Award for Economic, Financial and Operational Management

ENERGISA MATO ddFirst place in the categories performance improvement best company GROSSO DO SUL in the North / Midwest Region in the Abradee Award for distribution companies with more than 500 thousand consumers

ENERGISA SUL-SUDESTE ddIn 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%. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 13

STRATEGY AND MANAGEMENT

The Group's vision guides the way Energisa does In 2017 the Group strategically entered the business. The direction is revised annually during Transmission sector, which in conjunction with the Strategic Planning, which takes into account other sectors where Distribution is the flagship, as economic, political, sector and technological issues a part of the vision of “to be one of the best and that exert a short-, mid- and long-term influence most respected power companies in Brazil by 2020, on the pursuit of profitable business opportunities engaged in the distribution, transmission, gener- within the electricity chain. ation and trading of energy and related services, acknowledged for the quality of its client services, operational efficiency and shareholder returns”.

OPERATING SCOPE

BOLSTER the national branding as a quality company offering a CONSOLIDATE the process of integrating diverse range of services, which the new distribution companies meet consumer demands for into the Group and capturing the new services and products. synergies and economies of scale as promised by the shareholders and agreed with the regulator.

ASSESS opportunities for CAPTURE and develop growth in distribution by renewable generation projects acquiring assets of strategic to comprise a long-term importance to Company. portfolio as an alternative to expanding the portfolio.

CONSOLIDATE the segments of EVALUATE transmission providing construction, operation and businesses focused on areas maintenance services related to the related to distribution, electricity distribution, transmission and with suitable financing generation segments; and for corporate terms and returns. commercial and industrial clients, CONSOLIDATE a seamless and offering products and services with independent trading business added value and technological content. with national reach. 14 OVERVIEW

MANAGEMENT SYSTEM

The Strategic Management System (SGE) is disseminated within Group companies and ensures disciplined planning and monitoring to aid decision-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 TRANSMISSION SYNERGIES of management methodologies such as PDCA (Plan-Do-Check-Act) and PMO (Project Management Energisa entered a new segment of the electric sector upon successfully bidding for 3 lots and 26 Office), the latter for monitoring projects, in addition transmission lines at the auction held by Aneel to specific methodologies for Strategic Reflection. in April 2017. The company acquired two lots, Today the management system spans the entire with a total length of 864 kilometers of lines, Group, with regular follow-ups at all management with 272 being in Goiás state and 592 in Pará levels of the organization. state. The total investment earmarked by Aneel is approximately R$ 625 million - an amount which can also be optimized by Energisa over To assist the process Energisa uses the the construction period, which runs until 2022. Management Network - which entails method The decision to invest in transmission is in multiplies and guardians. This network ensures line with the Company’s growth strategy discipline throughout the organization. and will allow it to diversify the risk of its portfolio, consolidating the business model As part of the ongoing pursuit of continual improve- with investments that provide synergies ment and progress, in 2017 a strategic/corporate between assets - i.e. distribution companies in the Midwest and North regions (Energisa project raised a series of internal complexities in the Mato Grosso do Sul, Energisa Mato Grosso day-to-day management of the Group’s companies. and Energisa Tocantins). The investment This survey resulted in another major project to also improves the security of the system, be implemented in 2018 called + Simple + Agile + supplies critical areas and improves quality. Energisa (detailed in the table Prepared for the future The Group has experience in the management and on the next page). 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 R$ 36.7 million R$ 46.3 million Permitted Revenue (RAP) Proposed Construction 48 months 54 meses term

Start of Up to Aug/2021 Up to Feb/2022 operation ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 15

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.

STRATEGIC MANAGEMENT SYSTEM

Stakeholders: clients, shareholders, suppliers and society

Planning (P) Follow up (DCA)

Strategic Delivery and Quantification Results reflection follow-up

1 2 3 4

Strategic Delivering Performance Projected alternatives actions evaluation

Mission, Vision Handling Targets and actions and Values deviations Profit sharing Results Strategic maps Detailed projects meetings G G G G

Common goal Discipline Mobilization Acknowledgments Understanding Defining Realization priorities resources

People + Personalized Processes + Technology 16 OVERVIEW

2017 REFLECTION

Strategic reflection process conducted in four stages:

1 2 3 4 5

SCOPE ENVIRONMENT DETERMINING FINANCIAL MODELS DEVISING STRATEGIES Brainstorm ANALYSIS WORKING SCENARIOS based on the for the next 10 years workshop Surveying economic Workshop preparing analyzed scenarios (attended by and sector factors cross scenarios of Energisa and based on workshop opportunities, threats external experts) outputs and recommendations (participated in by all of the Group’s executives)

STRATEGIC REFLECTION STRATEGY QUANTIFICATION

More than just predicting potential future scenar- In the quantification and resource allocation step, ios, our annual Strategic Forecasting exercise also business and supporting unit Business Plans are assesses the implications of each of those pro- firmed up and approved by the Board, setting bud- spective scenarios. The goal is to inform strategic get and financial results projections Group-wide. guidance for the Group and our Business Units by analyzing each scenario and its impacts. The Following Board approval—in the second half of rationale of the exercise is to try to capture signals December—the strategy is translated into action- beyond the uncertainties in the short term. able targets. This exercise ensures key levers are prioritized and spans all levels of management. As a structured process carried out Group-wide for more than 10 years, in retrospect this exercise The process is facilitated by our proprietary has proven itself effective in informing bold yet Strategic Management System (SMS) software, sound strategies in a constantly changing business which streamlines and increases reliability in environment. measuring and tracking results.

Energisa Group's Strategic Forecasting process uses a method that is based on predicting and assessing likely scenarios. The deliverable from this scenario-based planning exercise is a core strategy and robust options that reduce risk and accelerate our businesses’ response to changing circumstances. 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 meetings, 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 CERTIFICATION in leadership positions. The event is broadcast live and speakers include our Chairman of the Board, All of Energisa’s distribution companies have ISO CEO, vice-presidents and chief executive officers. 9001 certification, as a means of ensuring the quality of their service provision processes. In 2017, 2017 was our ninth year of successfully dissemi- Energisa Minas Gerais, Energisa Nova Friburgo, nating and achieving alignment on the Group's Energisa Sergipe, Energisa Paraíba and Energisa strategic guidance. Borborema were recertified for the new version of ISO 9001:2015. Following the Managers Compass events, each leader then disseminates the strategy to Energisa Minas Gerais, Energisa Nova Friburgo, employees in similar events at a smaller scale. Energisa Sergipe, Energisa Tocantins, Energisa The Employees Compass program is designed Mato Grosso do Sul, Energisa Mato Grosso and to ensure that strategy information is optimally Energisa Sul-Sudeste have declarations stating communicated to all employees across Group they have implemented the standard ISO 10002 - bases and geographies. Customer Satisfaction and Complaints Handling. ,

18 OVERVIEW

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.

Stakeholder Communications channel Main initiatives in 2017

Shareholders •• Investor relations site, periodically •• Quarterly conference calls with and investors updated with institutional and analysts about earnings governance information, presentations, •• Participation in meetings organized by earnings releases, event calendars and banks in roadshows in Brazil and overseas registration to receive notifications •• Energisa Day to showcase the •• Conference calls company to investors •• Capital market events

Clients •• Telephone service center •• Operation of all call center channels by way •• Site dedicated to serving of Multi Energisa, based in Eusébio (CE) consumers (Virtual Agency) with a branch in Campo Grande (MS) •• On-site service (branches/trucks) •• Implementation of the Virtual Call Center (CVV) for the South and South-east regions. •• Printed material (information Except for Mato Grosso do Sul, all units are in energy bills, flyers) now operating with the support of the CVV •• Social media (facebook, twitter, YouTube) •• Introduction of new functionalities in •• Energisa ON mobile applications the Energisa ON application, such as (clearing up queries, information, news, Virtual Inspection, to send photos to solutions etc.) and Virtual Inspection 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 •• Energisa Informa (e-mail marketing) •• Creation of six new internal service providers •• Vem com a gente (e-mail campaigns) communications channels •• Clique.gente (general online newsletter) •• Creation of a Seamless Communications Platform •• 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 19

Stakeholder Communications channel Main initiatives in 2017

Suppliers •• Commercial channel (Electronic •• Updating of the Energisa Group supplier Market platform) quality management manual •• Formal channels: letters, relevant •• Quality assurance manual introduced documents (site), Ethics Code for strategic suppliers •• Quality Manual (printed) •• Maintenance of the Escalation program to •• Informal channels: e-mail, telephone 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 •• Campaigns, meetings and huddles •• Energy efficiency programs (Nossa and tertiary sector •• OJB – Ormeo Junqueira Botelho Foundation Energia, Espaço Energia) organizations •• 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 •• Communication through company •• Visits to government authorities to sector associations representatives and the holding company’s identify requirements and opportunities institutional relations department •• 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 •• Workshops and meetings with journalists •• Part of the site with press releases •• Interviews and sector glossary 20 OVERVIEW

ENERGISA SERVICES DESK The CSE came into operation in April 2017, after a feasibility study conducted two years before by a A new working model for administrative operations specialist firm, previously approved by Aneel, which was introduced in 2017 following the creation of resulted in a consistent implementation plan. the Energisa Services Desk (CSE), which runs in a single platform all routine and operating activities The following services began to be processed at that are repetitive in certain departments and the CSE in 2017: accounting (tax, equity and general), Company’s transactional services. Based on the HR (benefits, payroll and personnel), facilities (fleet, shared services center concept, the Desk aims to building maintenance and travel), supplies (pur- offer greater security and solidity to permit Energisa chases under R$ 500 thousand), financial (treasury, to plan growth and sustainability on the path to accounts payable and accounts receivable), becoming a Leading Group. telephony and networks, performance services and ongoing improvements, service center. Operations are centralized in a modern and sustainable building located in Cataguases (MG), with open The desk’s quality is monitored based on some spaces that encourage high productivity. The team 180 service and operational level (SLAs) indicators, can therefore channel energy which is essential which measure the efficiency, time and quality of when distribution companies are serving the end all processes delivered. A number of benefits of the consumer. The building has a structure ready for centralized services were reaped in the course of possible increases in services provided, in anticipa- 2017. There was a significant reduction in manual tion of possible expansions of the Group’s business. 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 information for decision taking, based on the implementation 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. CORPORATE GOVERNANCE FRONT 22 CORPORATE GOVERNANCE FRONT

PRINCIPLES OF TRANSPARENCY and ethics under- independent members and at least ten regular meetings pin Energisa’s relationships with all stakeholders. are held each year, which enables shareholders to ensure Established since the Group’s foundation in 1905, the the Company is in line with their strategic objectives and governance model has been enhanced over the years in to assess results, risks and opportunities. order to ensure equal treatment between partners and to protect stakeholder rights. As a signatory to the Abrasca code for the Self- Regulation and Good Practices of Listed Companies, the In 2017 the company began preparing a much more following policies have been in place since 2012: Policy detailed and explanatory management report and for controlling and disclosing material information, expanded its investor relations practice by holding more securities trading policy, related-party transactions frequent events in the various regions it operates in. policy and Financial Risk Management Policy, in addition This process also reflects the entry into Level 2 Corporate to the Internal Regulations/Disclosure Committee and Governance of B3 S/A – Brasil, Bolsa, Balcão, which took the Code of Ethics and Conduct. place in 2016, after a period of preparing and adjusting its Bylaws. The compensation of the members of the Board of Directors and Executive Board is set by the General Initiatives to strengthen relations with investors include Meeting. The overall limit on the annual compensation Energisa Day, which took place in August 2017 in João of directors and officers for FY 2017 was approved and Pessoa (Paraíba state), the expansion of monthly results distributed by the Board of Directors. Neither loans, alignment meetings between officers, managers and credits or prepayments are awarded to directors or coordinators and ramping up the work of the reporting executives. committees.

The dedication to investor relations was acknowledged BOARD OF DIRECTORS in six different categories in the 2017 Latin America Executive Team ranking compiled by Institutional This Board is charged with supervising and controlling Investor magazine, one of the international financial the Company’s activities, exercising concrete respon- market’s most recognized specialized vehicles. sibilities in respect of the business direction and strategy, and monitoring the ordinary management of These good governance practices include the fact that its business affairs. It comprises up to seven members, at least 20% of the members of the Boards of Directors elected at the General Meeting for a term of up to two of Energisa S.A. and the distribution companies are 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 members currently represent noncontrolling interests. YEARS OF DEDICATION

In December 2017 the Chairman of Energisa’s Board EXECUTIVE 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 Charged with delivering corporate strategy, the Executive of work and dreams, which can be seen on YouTube Board consists of up to five members, who may or may (www.youtube.com/watch?v=NxLOKc70VMM). not be shareholders, with a term of one year who can be This trajectory was built on work, competence and re-elected by the Board of Directors. The current members humility. It began in 1957, when he joined Cia. Força were elected in April 2016 at the Board of Directors' e Luz Cataguazes-Leopoldina as a transmission line meeting (RCA), and will remain in office until the next engineer. He held various positions at the company, meeting to be held in April 2018. 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 Further information about the members of the Board May 1990, following his father’s death, and has of Directors and Executive Board can be viewed at continually contributed to ranking Energisa amongst https://ri.energisa.com.br/ the largest companies in Brazil’s electric sector. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 23

OVERSIGHT BOARD and recommending the disclosure or nondisclosure of potentially material acts and facts.. Of an advisory A nonpermanent board, the Oversight Board is charged nature, it is made up of four members with renowned with auditing management activities, when necessary, expertise in the field, and must be presided over by the reviewing the company’s financial statements and Investor Relations Officer. reporting their conclusions to the shareholders, in due accordance with the Bylaws. Elected at the General Compensation and Succession – This committee manages Meeting at the request of the Company’s shareholders, issues related to the compensation and succession this should consist of at least three and at most five guidelines and policies for the executives of Energisa S.A. members, with an equal number of alternates. The and its subsidiaries. Oversight Board was not convened in the course of 2017.

FINANCIAL REPORTING ADVISORY BOARD In order to ensure the quality and transparency of the Also nonpermanent, the Advisory Board is elected by the information disclosed to the market, and to protect the Board of Directors to help steer company business, offer shareholders’ interests, Energisa has a policy for disclosing opinions on issues or transactions it is consulted about, material events or facts. Controlling shareholders, directors, present technical, economic, industrial or commercial data executives and other employees who have access to such and information along with suggestions and recom- information sign a Nondisclosure and Confidentiality mendations. When created, the board should consist of a Agreement. minimum of three and maximum of six members, who may be shareholders, with a term of one year, and can be Every month the Company publishes newsletters on re-elected. The Advisory Board is not currently convened. its website containing information about the company. Proactive relationship channels are also part of the investor relations and financial vice presidency, which has an SUPPORTING COMMITTEES open mailing list used to send economic and financial information to investors, shareholders, financial institutions, Four committees assist management and report to the suppliers and other stakeholders. Board of Directors: With three of its companies traded on the stock exchange, Audit and Risk – Monitors and advises the Board of the Group has the support of an investor relations depart- Directors in respect of quarterly and annual financial ment consisting of a team which was expanded in 2017 and accounting reports of all of its subsidiaries, internal to meet the growing demand for economic and financial controls, risk management and the work carried out by information by shareholders, investors and analysts, in internal auditors. Consists of three members (all inde- addition to quarterly earnings reports and conference calls pendent and non-executive, including an expert) and an with analysts. It also has an investor relations site which executive secretary. is continually reviewed and updated, and participates in events organized by banks. Financial Risk Management – Introduced by the Financial Risk Management Policy, this has to evaluate processes and procedures and put forward the best alternatives. It INDEPENDENT AUDITORS addresses debt limits, hedge requirements for foreign-cur- rency liabilities, counterpart risk limits and dividend Energisa's economic and financial statements are policy, amongst other measures aiming to measure and audited by Ernst & Young Auditores Independentes, mitigate risks associated with the holding company and whose engagement complies with the principles of its subsidiaries. independence, according to which the auditor should not audit its own work, perform managerial duties for its Reporting – This Committee is charged with managing client or pursue its interests. the Company's reporting policy, recording access to inside information, classifying it according to criteria that could facilitate monitoring thereof, and discussing 24 CORPORATE GOVERNANCE FRONT

RISK MANAGEMENT

Energisa Group follows a Risk Management Policy Directors, and is delivered by the corporate risk that aims to avoid, mitigate, remediate, monitor, management advisory board, subordinated to the certify or enhance internal controls in order to financial vice presidency. reduce or eliminate the negative impacts and maximize positive factors. The risk map is per- The advisory board is responsible for detecting, clas- manent and steers the enhancement of policies, sifying, analyzing and handling the main business procedures, responsibilities and manuals related risks and conducting audits and monitoring internal to the issue. controls, based on the Coso model introduced by the National Commission on Fraudulent Financial This process is coordinated by the Risk and Audit Reporting, an organization created in the USA to Committee, which answers to the Board of ensure enhanced and transparent financial reporting.

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

INVOLVEMENT of SYNTHETIC and objective reports senior management in PARTICIPATION of quantifying the risks assessed defining the processes business units in MOBILIZATION in each project and assertive to be analyzed. determining the meetings with recommendations focusing on portfolio of projects managers of the enhancing internal controls. to be established for departments each financial year. involved to present and consolidate the project planning.

MEETINGS with officers SUPPORT from SYSTEMATIC of the companies to the corporate risk monitoring of the reinforce the importance management action plans and of monitoring risks and advisory board for implementing suggested measurement PERMANENT disclosure of departments involved improvements. of the residual risk policies and hotlines in preparing action vulnerability after the via e-mail, intranet, notices plans, with a view to recommendations and when recruiting WORK conducted implementing the have been introduced. new employees. with the active recommendations. participation of the departments involved. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 25

The audits embrace the organizational the risk amount, i.e. the potential financial loss processes deemed critical and comply with the Company faces if the risk materializes. standard ISO 31000 – Risk-Based Auditing (ABR). The risk matrix follows the corporate Recommendations have been made over the dynamics and undergoes constant revisions. The years involving internal processes, compliance, main risks managed embrace issues related to contracts, controls, personnel and systems, operations, regulations, safety, the environment, among other issues, which lead to deliverable repute and the supply of materials and services. actions. The continual improvement of critical These factors are assessed by two variables: processes has led to a drastic reduction in vulnerability of processes related to these risks process vulnerability over the years and conse- which could result in their materialization; and quently business risks.

ETHICAL CONDUCT

Energisa Group has a Code of Ethics and Conduct, Ethics Committee revised in 2016, which embraces a set of fundamental ethical guidelines and rules aligned Any complaints regarding ethics all corruption with its Values to guide conduct and guarantee are analyzed by the Ethics Committee, which is a fair and harmonious coexistence between the charged with enforcing and enhancing Energisa Company and its stakeholders. Group’s Code of Ethics and Conduct. The committee analyses suggestions, consultations, The printed document is delivered to all staff complaints, charges, violations and breaches of along with a letter of presentation signed by the code and determines the implementation of the Chairman of the Board of Directors. Remote disciplinary measures, where necessary, accord- training is also provided to our staff. The Code is ing to seriousness, based on the Group’s internal also given to suppliers and third parties when regulations. signing the supply contract with the Group, thereby ensuring optimal relations with these It has five serving members and two alterna- partners, who provide services to companies tives representing all of the Group’s divisions, throughout the concession area. The document’s with three-year extendable terms, reporting to contents can be seen on the Company's website the holding company’s CEO. (http://holding.grupoenergisa.com.br/) The volume of complaints has been minimal Energisa set up a Hotline in 2010, which follows over the years testifying to the assertiveness a protocol supported by legal and ethical and dedication of management in its manage- practices and can be seen by the public on the ment tools and policies and internal controls site (www.energisa.com.br/empresa/Paginas/ being used to mitigate ethic and corruption sobre-energisa/etica-transparencia.aspx) or risks. 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). ECONOMY AND FINANCES ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 27

OVERVIEW OF THE ECONOMY AND SECTOR the lowest industrial consumption for the year in the series monitored by EPE since 2004. The South In 2017 Brazil experienced a modest economic observed the greatest consumption increase (rise recovery. Gross domestic product (GDP) rose by 1%, of 3%). The south-east and midwest, the main reverting the contraction of 3.5% witnessed con- consumption centers in Brazil, experienced growth secutively in the last two years. Consumption levels of 0.3%. The north experienced growth of 0.5%. 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 REGULATORY ENVIRONMENT of R$ 3,086 billion, driving the ratio between credit/ GDP to 47.1% compared with 49.6% at the end of 2017 was marked by high volatility in energy 2016. prices, due to worsening hydrological conditions which led to greater output by thermal sources, Amid this climate unemployment worse with the impacting energy costs and the rates passed average rate rising from 11.5% in 2016 to 12.7% through to consumers. in 2017, according to the Brazilian Institute of Geography and Statistics (IBGE), which signifies the In conjunction with sector entities, Energisa loss of 3.3 million registered jobs over the course of actively participated in discussions about the the last three years. issue, by way of Public Consultation 33/2017 conducted by the Ministry of Mines and Energy, Due to lower consumption, inflation (as measured addressing the improvement of the Electric by the IPCA price index) continue to decline, to Sector’s Regulatory Framework. 2.95% in the 12 months of the year%, compared with 6.29% in 2016, falling within the lower target of A number of measures are being debated, 4.5% established by the Monetary Policy Committee including pricing adjustments, reduction in the (Copom). A series of interest rate cuts led to an limits for consumers to access the free market, accumulated decrease of 6.75 percentage points reduction in transmission and generation in the Selic base interest rate, which dropped from costs, separation of the energy ballast and new 13.65% to 6.9% in December 2017. guidelines to set rates and measures to counter the judicialization of the sector, amongst other things. Energy consumption The main expectation of the electric sector was Despite the slowness of the recovery, the mac- that the consultation would result in the publi- roeconomic situation boosted electricity sales. cation of measures addressing the hydrological Consumption rose by 0.8% in 2017 to 463,948 risk, considered urgent due to the risk of energy GWh, after contracting in the two prior years shortages and consequent increase in prices (0.9% in 2016 and 2.1% in 2015) returning to the instability in the companies’ financial health. levels recorded in 2015, according to the research The government, however, merely published a Institute Empresa de Pesquisa Energética (EPE). Provisional Law (814/2017), which introduces actions to facilitate the sale of the distribution All segments experienced growth, especially the companies owned by Eletrobrás in addition to the industrial segment, which rose by 1.3% (consump- state company’s share control. tion of 165,883 GWh in 2017). Residential consumption rose by 0.8%, commercial by 0.3% and other Another topic that marked the regulatory environ- segments by 0.7%. ment was the discussion about the rate of return on investments made by the distribution com- All regions of Brazil experienced growth, except panies (WACC - Weighted Average Capital Cost). for the north-east (-1.9%), which after its third After a broad debate with sector agents, Aneel annual consecutive contraction closed 2017 with maintained the index at 8.09% through 2020. 28 ECONOMY AND FINANCES

On the internal front, rate reviews were awarded Overcontracting to Energisa Borborema and Energisa Paraíba, reversing the losses that Aneel had provisionally Energy overcontracting, which undermined the awarded in the rate review of Energisa Tocantins performance of Brazilian distribution companies and completed the preparation of Energisa Mato in 2016, was resolved over the course of the year. Grosso, Energisa Mato Grosso do Sul and Energisa At an Executive Board meeting held April 25, Aneel Sul-Sudeste for revisions that will take place determined that each distribution company's in 2018, guaranteeing greater profitability for involuntary contracting be assessed individually, these companies (for further information see the considering the maximum effort to achieve the con- section Financial Performance). tractual coverage level, as established in Normative Resolution 453/2011. The regulations determine that the companies contractually guarantee Rate flags coverage of between 95% and 105% of the market demand. If the limit is exceeded and the reasons On October 24, 2017, at public meeting the Aneel for overcontracting are deemed voluntary, Aneel Executive Board approved the revision of the rate does not include this difference in the readjustment flag methodology and application intervals. This processes and rate reviews. As Energisa did not mechanism aims to diminish the financial burden contract energy above the regulatory level of 105% between the rate adjustments and to alleviate the in the course of 2017, the results were not affected. cash outflows incurred by the distribution companies in the short term. In the previous year Energisa had provisioned for the amounts resulting from the services created The surcharges apply from November 2017 as by the obligation to participate in the A-1 auctions follows: Green flag: no surcharges (good conditions whilst the final decision of the regulatory agency for energy generation) Yellow flags: R$ 2.00 for was pending. The administrative proceedings filed each 100 (kWh); Red flag - Level 1: R$ 3.00 for each by the electricity companies had not been resolved 100 (kWh); and Red flag - Level 2: R$ 5.00 for each by ANEEL by the end of 2017. 100 (kWh). ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 29

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 433,470 32 438,869 46 445,557 51 Gerais Energisa Nova 102,533 0 104,116 4 105,555 8 Friburgo 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 1,296,639 95 1,327,938 168 1,365,659 200 Grosso Energisa Mato 970,635 73 990,556 90 1,015,526 139 Grosso do Sul 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

NUMBER OF CUSTOMERS BY DISTRIBUTION COMPANY - CAPTIVE SECTOR

Energisa Paraíba 1,404,298 Energisa Mato Grosso 1,365,659 Energisa Mato Grosso do Sul 1,015,526 Energisa Sul-Sudeste 767,611 Energisa Sergipe 761,924 Energisa Tocantins 573,855 Energisa Minas Gerais 445,557 Energisa Borborema 209,981 Energisa Nova Friburgo 105,555 30 ECONOMY AND FINANCES

ELECTRICITY SALES We also draw your attention to the consumption by the concessions of EMT (+6.6%) and EMS After remaining stable in 2015 and contracting in (+5.4%), which jointly account for 45.8% of 2016, electricity consumption in Energisa Group's Energisa's consolidated total sales. The only distri- free and captive sectors rose by 3.7% in 2017. bution company that experienced a consumption This performance exceeds the national average decrease in 2017 was ESE (-1.3%), driven by heavy consumption increase by 2.9 percentage points, rainfall and lower activity by companies in the which was 0.8% in 2017, according to Empresa de cement and oil and gas sectors. Pesquisa Energética (EPE). If uninvoiced consumption is taken into account, the growth in 2017 was Energisa Comercializadora recorded an overall 4.0%. total sales volume of 3,951.6 GWh, compared with 2,458.3 GWh in 2016, or 60.4% more. The number The consumed volume (29,604.9 GWh) was a of clients rose from 171 to 299, or by 74.9% historic record, signaling a gradual recovery in the energy sector. The fourth quarter was extremely important for this result, primarily due to the small ENERGY CONSUMPTION BY CLASS 1 comparison base due to the better weather in certain concession areas at the end of 2016.

All the consumption sectors presented positive 21.6 % variance in the year, especially the rural sector 19.7 % (7.9%). After consecutive contractions in 2015 and 2016, the industrial sector returned to growth 35.7 % 9.6 % (+2.3%), primarily due to the macroeconomic growth in Brazil. The food sector, accounting for 13.4 % 40% of the sector, experience the greatest increase (+5.3%), which is served by midwest distribution Residential Rural Commercial companies. Industrial Other sectors

1 Energy sold and transported at the distribution companies

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% ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 31

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% 32 ECONOMY AND FINANCES

Energy losses

Consolidated total energy losses amounted to areas, such as regions with a high incidence 4,080 GWh in the 12 months of 2017, or 11.8% of the of makeshift connections, areas classified as injected energy, a decrease of 0.57 percentage points heritage sites, in which irregularities are hidden compared with the 12.40% recorded in December by building fronts, and indigenous villages. The 2016. Nontechnical losses diminished (from 3.29% in actions include tamperproof grids and meters, in 2016 to 2.70%). The nontechnical loss of 933 GWh in addition to consuming units (such as seals and volume is the lowest on record since 2015. Technical special boxes, which prevent the meters from losses remained stable (9.10% in 2016 and 9.11% in being violated), and replacement of the open 2017), in the amount of 3,147 GWh. low-voltage grid by a multiplex grid, amongst other things. The results are primarily due to the intensification of energy theft combating actions. Meanwhile, All of these measures have been making it pos- the higher technical loss was due to the increase sible for the losses to fall within the regulatory in total invoiced energy (Captive + Free + level in the Group’s consolidated figures in the Supplies), which also contributed to the decrease last two years. in non-technical losses in percentage terms. PERFORMANCE OF ELECTRICITY LOSSES The distribution companies Energisa Mato Grosso, Energisa Tocantins and Energisa Mato 63 4 Grosso do Sul – which jointly accounted for . % 12.32 % 12.40 % 12.23 % of the Group's total losses in the year – saw losses diminish by 0.85 percentage points (p.p.), 1.87 11.97% 12.38% 11.85% 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 2015 2016 2017 and Paraíba; and the implementation of the Centralized Measurement System (SMC) in critical Total losses Regulatory losses

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 ● 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 2015 2016 2017 Aneel Limit 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 34 ECONOMY AND FINANCES

FINANCIAL PERFORMANCE

OPERATING REVENUE NET OPERATING REVENUE 1 (R$ MILLION) Consolidated gross operating revenue amounted to R$ 20,347.6 million, an increase of 11.6% on 2016 13,637.2 (R$ 18,234.4 million), due to the higher volume of 12,178.5 11,810.7 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 2015 2016 2017

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 -12.9 Others 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 35

Rate reviews and adjustments LOW INCOME

Three distribution companies underwent The rate subsidies awarded to low income consum- the fourth rate review cycle in 2017: Energisa ers, rural irrigation consumers and public services Borborema, in January; Energisa Sul-Sudeste, in grossed operational revenue of R$ 949.3 million July; and Energisa Paraíba, in August. Energisa (R$ 832.5 million in 2016). Authorized by Aneel, Mato Grosso, Energisa Mato Grosso do Sul these funds derive from the Energy Development and Energisa Sergipe will have their processes Account (CDE), in compliance with Decree 7891, approved in April 2018, while Energisa Minas issued 2013. (Further information about Low Gerais, Energisa Nova Friburgo and Energisa Income can be seen in the section Society) 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 management 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 The rate subsidies awarded to low million, compared with R$ 246.4 million in 2016, due to the improvement in the water situation income consumers, rural irrigation in 2017. In force since January 2015, the rate flag consumers and public services grossed system automatically passes through to consumers operational revenue of costs incurred by the distribution company when energy purchases are affected by thermoelectric production. R$ 949.3 million

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 + 14.0 1 Revised figures published in 2016 36 ECONOMY AND FINANCES

Collection fee Advanced Analytics to prioritize collection measures based on the likelihood of the customer to Energisa Group's consolidated collection rate get behind on payments. By using algorithms, (consisting of collections in the last 12 months over choosing the most suitable types according to the accumulated sales in the same period) closed 2017 customer’s profile will make it possible to increase at 97.45%, down slightly by 0.23 percentage points collection efficiency at lower costs. After measur- on the previous year (97.68%). ing results, this pilot project should be expanded to the other companies. A plan of measures was introduced in the year to enhance this performance, including: (i) renegoti- Operating costs and expenses ations with municipal and state governments, (ii) weekly collection and more aggressive blacklisting Consolidated operating expenses and costs exclud- of debtors (greater and collective), (iii) collection of ing construction costs amounted to R$ 12,392.2 debts by reading teams on days not assigned for million in 2017, an increase of 15.9% (R$ 1,698.0 reading meters, (iv) protest at the registry office, million) over 2016, especially due to electricity (i) debit conciliation events, and (vi) expansion of costs 23.6% higher over YTD. telephone collections and pruning teams working with operating, maintenance and losses teams at Uncontrollable costs and expenses rose by 19.5% the distribution companies Energisa Mato Grosso to R$ 7,995.4 million, a direct effect of higher costs do Sul, Energisa Paraíba and Energisa Borborema. incurred in purchasing electricity for resale, which amounted to R$ 7,385.7 million. In addition to traditional collection initiatives, new receivables management initiatives began at Controllable costs and expenses rose by 18.2% to Energisa Mato Grosso, where a multidisciplinary R$ 2,188.6 million, primarily due to labor claims, center began conjugating the coordination of entry into the Special tax regularization program field collection and back office activities, thereby (PERT) and the pension fund/post-employment expediting the resumption of negotiations to benefit. Without these nonrecurrent effects, the settle debits. costs would have been 4.1% greater than in the previous year. In order to contribute technology and intelligence to the measures to improve the receivables Finance income portfolio, a pilot project is also being implemented at Energisa Paraíba, which involves the use of 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 37

financial revenue less consolidated financial ADJUSTED EBITDA AND MARGIN 1 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 17.4 % 17.4 % 16.2 % previous year, primarily due to higher revenue from 2,372.8 arrears charges and lower CDI, thereby reducing the 2,051.6 debt cost. 1,976.5

EBITDA

Cash generation, as expressed by the Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization plus arrears charges revenue), 2015 2016 2017 not including asset sales, amounted to R$ 2,372.8 million, up by 15.7% on the R$ 2,051.6 million Adjusted EBITDA (R$ million) recorded in 2016. Adjusted EBITDA Margin (%) 1 Without asset sales 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 NET INCOME extraordinary effects. (R$ MILLION) Financial operations 572.6 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 351.4 Group’s companies and also to refinance outstanding debts. 195.8

The main operation was the 9th debentures issuance in the amount of R$ 850.0 million, con- 2015 2016 2017 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 192.4% the growth in consolidated net income and 2018. primarily explained by improved cash generation (EBITDA), lower financing costs and extraordinary effects. 38 ECONOMY AND FINANCES

Debt

The consolidated net debt at the end of 2017, less The average debt tenor diminished from 7.2 years sector credits, amounted to R$ 7,202.0 million in December 2016 to 6.7 years at the end of 2017, at compared with R$ 6,021.5 million as of December an average cost of 9.32% (135.20% of the CDI rate), 31, 2016. The ratio between consolidated net debt compared with 13.85% (101.6% of the CDI rate) at and consolidated adjusted EBITDA fell from 2.9 in the end of the previous year. Approximately 68% December 2016 to 3.0 in December 2017. of Energisa Group's debt is restated by the CDI or Selic rate. The consolidated position of cash, cash equivalents and short-term investments was R$ 3,174.7 million, Detailed financial information can be seen in the against R$ 2,768.2 million at the end of the previous Consolidated Statements, at https://ri.energisa. year. The balances include credits relating to the com.br/ptb/8322/601175.pdf Energy Development Account (CDE), Consumption Account of R$ 353.3 million in December 2017 and R$ 67.2 million in December 2016.

SCHEDULE FOR AMORTIZATION OF BANK DEBT AND ISSUANCE

(R$ MILLION)

Dec/2017 3,171.6

2018 1,999.6

2019 1,173.6

2020 1,594.9

2021 1,180.9

2022 1,229.4

2023 75.2

2023 onwards 1.700.9

Cash/Short-term investments/Sector credits Debt

Ratings

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

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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 39

INVESTMENTS INVESTMENT BY DISTRIBUTION COMPANY

(R$ MILLION) Record investments were made in 2017 amounting to R$ 2,002.9 million, compared with R$ 1,642.9 million the previous year, Energisa Minas Gerais amounting to an accumulated R$ 5,270.2 57.3 million over five years. 59.8% of the total consolidated volume year was invested in electric 85 assets to enhance service quality, extend grids and expand and automate substations of the Energisa Nova Friburgo distribution companies. 6.6 Note the fact investment has started in the 6.7 transmission companies Energisa Pará and 14 7 Energisa Goiás, amounting to R$ . million Energisa Borborema in the second half, resulting from activities related to land adjustments and environmen- 16.1 tal licensing. 14.3

The distribution companies receiving the Energisa Paraíba greatest investments were Energisa Mato Grosso (R$ 710 million), followed by Energisa 159.2 Mato Grosso do Sul (R$ 467.1 million) and 140.4 Energisa Tocantins (R$ 246.1 million), in projects comprising the distribution development Energisa Sergipe plans (PDD). 90.9 Energisa Sul Sudeste invested heavily in 107.4 systems, completing the migration as part of the integration project in 2017, with the view Energisa Mato Grosso to agility and incorporating best practices and Energisa Group’s management culture. The 628.5 process will be carried out in Mato Grosso do 710.6 Sul state in 2018, including technical–commercial, administrative–financial, maintenance, webmobile and business intelligence systems. Energisa Mato Grosso do Sul 244.4 467.1

INVESTMENTS Energisa Tocantins (R$ MILLION) 309.5 246.1 2,002.9 1,624.4 1,642.9 Energisa Sul-Sudeste 103.2 151.5

2015 2016 2017 2016 2017 40 ECONOMY AND FINANCES

CAPITAL MARKET MARKET VALUE

(R$ MILLION) 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 9,301.8 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. 6,180.3

Over the same period, the main stock exchange 3,839.0 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 2015 2016 2017 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 successful 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).

ENERGISA UNITS VERSUS IBOVESPA AND IEE – 5 YEARS

ENG|11 R$27.30 +150%

+100%

IEE 39,723.33 points +50% ENG|11 R$10.61 IEE 28,893.5 points 0 Ibovespa 76,402.08 points Ibovespa 62,795.2 points -50% JAN/13 JUL/13 JAN/14 JUL/14 JAN/15 JUL/15 JAN16 JUL/16 JAN/17 JUL/17 JAN/18 SOCIAL AND SECTOR FRONT 42 SOCIAL AND SECTOR FRONT

EMPLOYEES AND SERVICE PROVIDERS

As part of the Líder Group’s 2020 target, Energisa The nine distribution companies had 9,779 encourages the creation of career opportunities, proprietary employees, including 8,414 men and staff-member training and their active participa- 1,365 women, in addition to 3,736 outsourced staff tion in business development, as well as creating and 1,248 trainees. leaderships for the succession process, retaining talents and winning over and preparing young With an 84% employee satisfaction rate, in 2017 professionals to take over future strategic func- Energisa Paraíba was awarded the Great Place to tions, always in a safe and health environment. Work certification awarded to companies exceed- ing 70% trust index of employees in relation to the Energisa Group closed 2017 with 12,491 own staff best places to work. and 3,769 outsourced staff (not including the employees of construction firms building grids and plants) and 1,292 trainees. There were 68 outsourced staff working at other Group companies. The turnover rate in the year stood at 10.74%.

TOTAL EMPLOYEES – ENERGISA GROUP

2017 314 3,837 12,491 16,642

2016 427 3,202 11,932 15,561

2015 619 4,729 10,154 15,502

Trainees Partners Employees

EMPLOYEES BY GENDER EMPLOYEES BY AGE

% 42.4 81.2 %

38.1 % % 18.8 % 13.9

5.6 % Men Women Under 30 41 to 50 years

31 to 40 years Over 50 years ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 43

The company reviewed its human resources policy ENERGISA PRIORITIES over the year and defined staff member features Our employees’ new priorities are: that contribute to business development in a competitive environment and under constant change. Eight competences were defined, broadly informed ove ateg rgi grat L Str y Ene sa te ing in an internal communications campaign. In

F o r t s o r 2017 f r The Performance Evaluation was also changed c e f m ea ustom ocused the h and the process is now viewed as assertive and objective. The rule and competencies were rewritten a rg esults mmitte nov tive Ene y to approximate current competences with the real- R Co d In ity of Energisa and the desired culture. This made

t o y the process more objective and easy to be realized. H t fe o ea a l riented lth & S eader

New communications channels

The review of the internal communication chan- Over the course of 2017, the 12 trainees selected nels was concluded in 2017 and an integrated during the year had the opportunity to work in Communication Platform created, with the aim of the corporate areas and in their destined areas, clearly and efficiently expanding Energisa’s dialog concluding a challenge launched at the beginning with its employees and supporting the changes of the program. The selection process for the ‘2018 arising from the effective integration of the Group’s Energisa Trainee’ program was carried out during companies. the second half of 2017 and attracted 10,288 participants for 10 positions. There are 69 ex-trainees All the vehicles were reviewed and their graph- currently working within the Group, all having come ics-editorial projects reformulated, with the through programs conducted between the years specification of definite attributes for each channel: 2010 and 2016, meaning there was a 63% retention concept, content, language, tone of voice and visual rate. Of these, 32 are now in leadership positions identity. With the structuring of the platform, six and 19 are planned as being successors. new communication vehicles were created (Vem com a Gente, Clique.gente, Clique.líder, Clique. conexão, Clique.saber and Antenado).

RECRUITMENT AND SELECTION

THE HOUSE DISHES The hiring and selection process is based upon the Management by Skills model, that prioritizes At Energisa Paraíba, 35% of the positions open professionals who display the abilities required for a in 2017 were filled by internal hiring, whilst position, and also upon the evaluation of the can- the voluntary turnover stands at just 0.94%. didates’ adherence to Energisa’s values and culture. Bruno Henrique dos Santos, an administrative The Company looks to hire professionals with a good control assistant, is one example of an employee who took part in two types of selection attitude, and who are focused on results, the quality process in the company: the first, in 2013, of delivery, and simplicity in the performance of their when he joined the Company, through the activities. external hiring process, and the other, more recently, to assume a new internal position. Insourcing is a priority. External selection is only “It was great to have had the first opportunity to performed when professionals who demonstrate the join the Company, and now to have the chance profile for a specific position are not found within the to embrace new challenges. I’m very happy to be able to take up this new position through Group. the internal selection process. Energisa always surprises me when it recognizes my dedication.” 44 SOCIAL AND SECTOR FRONT

Diversity In 2017, a total of 959,120 trained man-hours were recorded, with an average of 76.8 hours per Energisa ensures that there is no discrimination of employee. The migration of systems, intended to gender, race or creed and always strives to promote standardize the Group’s processes, has been the equal opportunities for all its employees. It also subject that involved the most training over the last looks to encourage the inclusion of minorities three years, with a total of 137,148 hours. through the partnerships established with institutions such as the ‘National Disabled Foundation’ Improvement needs for all staff members are men- (Funad) and the ‘Integrated Center of Support for tioned during annual performance assessments, the Disabled’, which advertise positions for those with managers participating in the Leadership with special needs and send in their curricula. The Academy, for accelerated learning, attended by hiring of women at all levels of the Company's guest speakers. Last year the Academy provided hierarchy is also encouraged, one example being 5446 training hours. the job of electrician in the field, a position which had previously been dominated by men. New Furthermore, the Company offers courses and actions of inclusion are being studied based upon training to ensure compliance with current legisla- discussions held during 2017. tion, such as the ‘NR 10’ - ‘Regulatory Norm 10/Safety Course on Electricity Installation and Services’, that is divided into ‘basic’, ‘complementary’ and ‘retrain- TRAINING AND COACHING ing’ modules - and vehicle handling and defensive driving for those employees who have driving The Company is constantly investing in its employ- licenses, as well as training in operating procedures ees’ training and their improvement of knowledge and execution for each specific job. and skills, in order to help the Group to achieve its strategic objectives. In 2017, special attention was External training is provided by means of on-site paid to the training of supervisors to enable them training, reading and technical visits, as well as by to become internal multipliers and be ready to take video conferences and Remote Learning (EAD), with over coordination and management positions. a view to optimizing travel time and costs.

Succession Program

As a means of retaining internal talents, Energisa's Succession Program defines criteria and procedures 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, TRAINING OF ELECTRICIANS at the assessment meeting attended by leaders, using the ‘9 Box’ methodology. The methodology In 2017, in partnership with the ‘National Industrial manages to guarantee a pool of professionals who Training Service’ (Senai), Energisa trained 547 network electricians in the states of Sergipe, are able to assume key-positions in the organi- Mato Grosso, Mato Grosso do Sul and Tocantins. zational change processes and develops planned In addition to focusing on the training of successors with a focus on future positions and talents, this partnership plays an important their necessary state of readiness. social role, since it allows individuals from the community to develop their knowledge and The Leadership Academy Development Programs, improve their employability, be it with Energisa the main tool for training leaderships skills, are or the electricity distribution market in general. prepared base on this plotting. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 45

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 The recognition comes from where its organizational values. you least expect it and that’s pleasing. With this in mind, the Energisa Recognition System (SER) With this opportunity to recognize your was created in 2016 to draw attention to good practices colleagues, I could see that my work amongst its teams, highlighting the performance of is important, not just here, but also in actions based upon the institutional values: People, other states and areas, because I have Clients, Safety, Commitment, Results and Innovation. even received the electronic Value!” With this system, the Group has started to offer tools that enable everyone to exercise the practice of Ericka Vilela Carvalho, administrative recognition. assistant - Corporate Management of Contracting of Materials and Equipment 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 It brings people together and empowers practicing of Energisa Values between employees. Employees began collecting Valeus, colleagues regardless of rank. Every proudly displaying them on their workstations. two months the Energisa newspaper publishes the program’s certificates, which can also be sent electronically. Time de Valor This equips managers with tools (pin and 22.7 thousand pins and cards were produced and printed and digital cards) so they can at the end of the year the Group’s CEO delivered recognize the members of their team 43 pins recognizing the most outstanding for several initiatives related to Energisa employees. The On-line SER was launched in Values, with agility in processes, delivering December, an advancement of the recognition for solutions or performance excellence. 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 The 2017 event recognized ten projects in successfully delivered groundbreaking the categories Best Dashboard, Simples ideas that generate results for the Assim, Great Idea, Best R&D and Best Group. The best proposals are selected Project, in prizes worth R$ 220 thousand. for participation in the Best Practices Event held every two years. Creating Value Program recognizing high- 1,233 enrollments were received performance teams 46 SOCIAL AND SECTOR FRONT

BENEFITS AND COMPENSATION HEALTH AND SAFETY

The Group offers benefits including medical, In order to achieve its goal to be a standard setter hospital and dental assistance plans, supple- in Occupational Health and Safety amongst sector mentary retirement plans, meal vouchers, crèche companies by 2020, Energisa is reviewing the allowances, life insurance, study grants and others. mapping of its processes, with a focus on more Serving employees also receive variable compen- critical ones with a greater impact health and safety sation in the form of profit shares related to the issues. The goal is for the Group to be a leader in Company’s performance. safety according to the criteria of the Eloy Chaves Medal, which recognizes electricity companies for The Results Based Compensation program (PRR) is occupational accident prevention practices and for one form of recognition, retention and motivation, achieving the best accident metrics. which is calculated based on the performance of targets and skills. The targets are comprised of Analyzing behavioral and structural weaknesses Company and departmental metrics, while skills that impact the Company’s performance will be are assessed annually by peers, subordinates and the aim of a mitigation and control plan, with a superiors. This makes it possible to implement structured vision of processes and the disciplined mechanisms to incentivize teams, focusing on the deployment of plans for tracking and monitoring continual improvement of processes and fostering health and safety metrics. Energisa believes that it a culture of excellence. 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 community is always a top priority. It intends to prevent accidents in routine activities based on educational principles and strengthening accountability, commitment and planning and encouraging accident prevention amongst employees.

A Central Health and Safety Committee, a permanent 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 47

SAFETY PLAN

IMPLEMENT IDENTIFY issues REVIEW ISSUANCE of a STANDARDIZE OCCUPATIONAL procedures that and impacts, and update quarterly health occupational safety campaigns comprise the hazards and all operations and safety medicine actions for company Health and Safety risks related to and execution report by the staff and service Management work activities procedures, with Central Health providers System a focus on health and Safety throughout the and safety Committee concession area

INTENSIVE training PERMANENT OCCUPATIONAL CONTINUAL ADOPT new and program aimed inspections Health & Safety incentivization more efficient at standardized of vehicles, audtis at service of actions carried individual operating operating services providers out by Internal and collective procedures and indoor Commissions protection and safety and outdoor for Accident equipment working areas Prevention (Cipas)

Metrics

Energisa adopts specific metrics to assess and monitor 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. 48 SOCIAL AND SECTOR FRONT

FREQUENCY RATE – PROPRIETARY SERIOUSNESS RATE – PROPRIETARY

12 12,941 1.400 12,941 11,932 11,932 10 1.200 10,154 1.000 8 10,154 800 6 600 4 400 2 200 0 0 2015 2016 2017 2015 2016 2017

Frequency rate (FR) Seriousness rate (SR) Number of own staff Number of own staff ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 49

2017 initiatives •• Observe Program, aimed at leaders to nurture behavioral change in their teams 538,170 hours of mandatory training were provided over the year to 28,642 participants, 19% of which •• Monthly meeting with meter readers during was in mandatory training regulatory standards stoppages essential for carrying out technical activities safely. •• Integrated Sipat An Operational Procedure Commission (Cope), comprised of experts from technical, environmen- •• Safety clock tal and safety areas from all distribution companies, held forums in order to identify procedures •• In loco conversations (APR) with contractors; and implement improvements based on the experiences of each unit and external benchmark- •• Creating a noticeboard to make notes about ings. Lectures and meetings were also provided services to be carried out and ascertain the risks to raise awareness amongst employees and the and control measures that are exposed during community in relation to good safety practices. said activity

The main actions in 2017 included: •• Acquiring equipment to enhance field inspections. •• 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 provide 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 involving 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 TRAINING TYPE disseminate good practices;

•• Communications via the Integrated Operations +44% Center (COI), where the operator talks about 469 581 834 safety during field services (Anjos do Rádio); 83.7 72.1 78.9

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

•• Nocturnal inspections (Altas Horas) 27.9 21.1 16.3 •• Safety workshop for meter readers 2015 2016 2017* •• Safety workshop in the Live Line Logbook * estimate Mandatory safety

•• Interactive DDS; Additional safety 50 SOCIAL AND SECTOR FRONT

CLIENTS AND CONSUMERS

As part of the premises to be a Leading Group in the SERVICE next decade, Energisa undertakes to provide services safely, and with quality, efficiency, empathy, respect Technological breakthroughs have led to a series of and integrity. Every year it has been enhancing transformations in consumer behavior, including customer services to achieve these goals, becoming the demand for new forms of interacting with the increasingly agile. companies. To monitor this change, Energisa has been modernizing its digital services, investing R$ 3.4 In 2017, the Company consolidated the transfer of million since 2012. Introducing technologies focusing the call center to a single company, Multi Energisa on providing the best experience for clients in a Serviços S.A., making it possible to optimize time and straightforward and simple fashion is a top priority 2017 30,88 15,9 34,7 14,26 4,26 consequently improve the efficiency of customer for Energisa. services. Based in Eusébio (CE), the service center has a branch in Campo Grande (MS). Today it is possible to use digital channels to view 2016 32,59 17,88 42,91 6,620 statements, debits, simulate consumption, report The customer service center is assisted by a virtual energy theft and request a second copy of bills, recon- 2013 51,19 25,14 23,670 call center (CCV), which serves smaller customers just nect to the grid and change owner details, amongst as effectively, which account for some 35% of calls. other services. An important tool is Ligo Já, which Telephone In loco Virtual branch Application Totem The CCV was implemented for Sul and Sudeste in the customers can use to access the site of the switch- (call center) (loja) (internet) (Energisa ON) course of 2017, and in 2018 it is Mato Grosso do Sul's board or Energisa ON to inform their telephone turn, which is expected to be completed in January number. The distribution company then returns the Digital channels 53.22 2019. call, meaning the customer doesn’t have to wait for the call to be answered. Conventional channels 46.78 DIGITAL ADVANCE

2017 30,88 15,9 34,7 14,26 4,26

2016 32,59 17,88 42,91 6,620

2013 51,19 25,14 23,670

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

Digital channels 53.22

Conventional channels 46.78 52 SOCIAL AND SECTOR FRONT

New application-based services were rolled out in ACKNOWLEDGMENTS 2018, some of which were unprecedented, such as the Virtual Inspection, where it is possible to check Ongoing improvement in customer assistance whether everything is okay inside power meters was acknowledged by the 2017 Abradee Survey, before requesting an energy connection visit. held by the Brazilian Association of Electricity Distributors and by Instituto Innovare. Energisa To encourage the use of self-service channels training obtained the best score in the Perceived Quality was given to all the Group’s attendants providing Satisfaction Index (ISQP) among all the country’s guidance on the functionalities and applications of energy groups: 82.2%, as opposed to 80.6% for the Energisa On application and the Virtual Branch second place and the 76.8% country average. It (online services). Similarly, when the service is taking was a benchmark in the five attributes found in place they now explain how the digital channels the ISQP: supply, information and communica- work in order to encourage customers to use them. tions, light bill, assistance and image.

This and other similar actions led Energisa to exceed The group received ten trophies in eight cate- the landmark of 1 million digital service interactions gories. Energisa Paraíba was ranked first as the in a month via the site, application, social networks country’s award winner, besides being considered and electronic totems - outstripping the number of the best company in the Northeast of Brazil. interactions by conventional means - by telephone Energisa Mato Grosso do Sul earned the best-in- and in-person. Services through digital channels the-region award (Midwest). Energisa Sergipe accounted for 53.22% of the total. was awarded prizes for Economic and Financial Management and Operating Management, The good practices of using digital channels at and Energisa Borborema excelled in Social Energisa have become benchmarking for other Responsibility and Operating Management. companies. In July 2017, for example, the Company's employees gave a lecture about the matter at an In the Aneel Customer Satisfaction Rating (Iasc) Aneel seminar addressing digital advancement run by National Electricity Regulatory Agency trends for customer services, the changing profile of (Aneel), Energisa Sul-Sudeste was awarded first consumers and the use of technology as a facilitator place in the South-Southeast region with a towards a better experience for customers. 68.98% score, as opposed to the regional national average of 63.14%. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 53

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

1º 1º

2º 2º 2º 2º 3º 6º

9º

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 54 SOCIAL AND SECTOR FRONT

SUPPLIERS

As a result of all the vendor management prac- years, those rated as “unsatisfactory” reduced their tices put in place and enhanced in recent years, share in supply, and as of 2014 they were no longer improvements were obtained in average vendor part of the Energisa’s portfolio, having surrendered performance and a greater concentration of their position to vendors rated as excellent. purchases from vendors with good performance, as seen in the graph below. As of 2017 the quality indicator for the supply of materials and equipment was included in Senior Purchases in 2008 with vendors assessed as Management’s goals for formal monitoring of “excellent”, “good” and “satisfactory” performance non-conformity events, cause analysis, mitigating were equal to roughly 60% of the total, a percent- actions studies, implementing and problem solving. age that rose to 97.5% in 2017. In the course of the

IMPROVEMENT IN SUPPLIER PERFORMANCE

2017 0 2.46 20.54 36.15 40.84

2016 0 8.21 31.39 41.09 19.31

2015 0 5.9 30.81 39.35 23.94

2014 0 12.17 35.44 39.96 12.44

Unsatisfactory Poor Regular Good Excellent

Presidente Prudente - SP ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 55

SELECTING AND HIRING ACKNOWLEDGMENTS

Energisa stands out for the quality of acquired For the first time Energisa Group got together its products and services. To this end it enforces best vendors to acknowledge excellence of the strict criteria in the selection of its vendors, services provided, the quality of materials deliv- contained in the Energisa Group’s Vendor Quality ered, compliance with deadlines, among other Management Manual, updated in 2017. Among requisites that are carefully assessed, in the 2017 the chief improvements by the Manual, adapting Energisa Stakeholder Award. Acknowledgment to the ISO 9001:2015 new version stands out, reflects the outcome of performance for 2016. stressing the manufacturing process, inclusion of social and environmental guidelines, a require- The awarding event is an extension of the 100 ment to extend the management system to largest stakeholders supply ranking, which is sub-vendors and use of a standard for labeling. prepared by the Company every year. Vendors are assessed for financial soundness, quality In the case of strategic vendors (those dealing management system, compliance with contrac- with more relevant kinds of materials for the tual conditions, product quality, health, security business, such as meters, transformers, posts and and the environment, by means of six-monthly cables), as of June an Quality Assurance Manual performance monitoring. was adopted that defines the requisites needed for implementing the Quality Assurance Manual Those that do not reflect minimum supply (QA). These stakeholders are certified during 6 or requisites are placed in a formal recovery process 12 months and are exempted from new inspec- known as Escalada, managed in the Quality tions. QA provides greater agility in processes, Management System through Non-Conformity better prices, delivery terms and security, in Records (RNCs), with a joint creation of action addition to encouraging ongoing improvement by plans and monitoring of effectiveness of the vendors. actions adopted.

Checking that program requisites are met is The process is focused on not over ten vendors undertaken by a Potential Supply Risk Audit selected strategically at each cycle. Should a (ARPF) that assesses operating aspects (quality vendor not respond positively to the process, its of facilities, control, laboratory structure, among sales to Energisa may be temporarily or perma- others) and social and environmental quality nently suspended. (project assessment, impact management and practices) by vendors. Since being implemented in 2015, 27 vendors were submitted to Escalada and only six had their sales In order to meet a growing demand by society, reduced or blocked. The others improved their vendors also have begun to agree on an anti-cor- performance after submitting to the program. ruption clause when entering into agreements.

40.84% of suppliers were rated as having excellent performance 56 SOCIAL AND SECTOR FRONT

COMMUNITIES

Energisa Group’s social investment policy is demonstrates the Company's commitment to intended to encourage education, culture, sports, human and social development through the income generation, entrepreneurship, environmen- socio-cultural projects that it sponsors. tal preservation and social and economic development in the communities of its regions of activity. As part of the celebrations, the ‘Alegoria Elétrica’ panel of tiles was unveiled at Energisa S.A.'s head The initiatives received investments of R$ 8 million in offices in Cataguases, and the Humberto Mauro 2017, including company funding and tax incentives. 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 ORMEO JUNQUEIRA BOTELHO FOUNDATION people between October 2017 and February 2018.

The year was also notable for the commemora- The Foundation’s activities also encompass the tion of the 30th anniversary of the founding of development and upkeep of museums, archives the Ormeo Junqueira Botelho Foundation, the and libraries; the restoration of historical sites, branch of Energisa Group located in Cataguases works of art and architecture; the preservation of (MG) engaged in the technical and cultural folklore; and the sponsorship and scheduling of analysis of sponsored projects and is responsible cultural events and forms of expression. Further for the management of cultural facilities funded information about the Foundation, and the projects by Energisa (the map opposite shows where they and cultural facilities it develops and supports, can are located). The support for the Foundation 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 380.0 89.4 0 with Disabilities (Pronas/PCD) 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 57

João Pessoa (PB) Energisa Cultural Workshop

Cataguases (MG) Ivan Müller Botelho Amphitheater Humberto Mauro Cultural Center Humberto Mauro Memorial Energisa Museum Campo Grande (MS) Espaço Energisa Nova Friburgo (RJ) Energisa Nova Friburgo Cultural Workshop

Leopoldina (MG) Lya Maria Müller Botelho Reading Place

ORMEO JUNQUEIRA BOTELHO FOUNDATION

Cultural Workshops – these workshops promote Humberto Mauro Memorial and Cultural Center – the culture and science in centers in Nova Friburgo (RJ) Humberto Mauro Cultural Center is a multiple-use and João Pessoa (PB), through activities that involve space, located in the center of Cataguases (MG), literature, music, cinema, theater and plastic arts. The that hosts art exhibitions, stages Brazilian and two workshops promoted 477 events and welcomed international plays, dance presentations and musicals, 82,500 visitors in 2017. cinema festivals and seminars, and forums and talks involving different cultural sectors, meeting a demand that exists not only within Cataguases, but throughout the region. In 2017, more than 120 events were Energisa Museum – Located in Cataguases, this is held at the Center, which also includes the Humberto a museum designed to present the extensive and Mauro Memorial, and 16,120 people, including adults, wide-reaching history of the development of Energisa children and young people, enjoyed the activities. 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 Lya Botelho Reading Place – Located in Leopoldina plants). In 2017, the Energisa Museum developed a (MG), this is a multi-use space designed to host range of different socio-educational actions together cultural events that looks for different and varied with the school communities in Cataguases and ways of providing for the interests of its public. Its the surrounding region, benefiting a total of 11,360 exhibitions, focusing on issues relating to the history students in Cataguases, Leopoldina, Ubá and Muriaé. of Brazil, attract a great many visitors from all over the region, other states and abroad. In 2017, 19,780 Ivan Muller Botelho Amphitheater – Having remained people, including students and teachers from 16 local closed in 2017 due to work on the new Energisa head educational establishments, visited the center. offices, the ‘Anfiteatro Ivan Muller Botelho’ once again opened its doors for cultural activities in 2018. 58 SOCIAL AND SECTOR FRONT

Entrando em Cena – This project, staged in CULTURAL PROJECTS Bragança Paulista (SP), includes art-education activities using the languages of theater, circus, Zona da Mata Audiovisual Zone – This audiovisual Brazilian dance and aerial dance, culminating center creates opportunities for professional qualifi- annually in a spectacular show with the participa- cations, work and income, by promoting audiovisual tion of 150 young people. It is also expected that productions, offering technical training and staging five artistic groups developing out of the project festivals and events, thereby having a positive impact will receive support, and a Performing Arts festival on the economy of the region in Minas Gerais. In will be held with a series of free shows open to the 2017, the following films were produced: ‘Maria do community. Caritó’, a drama based upon a play by the playwright Newton Moreno; ‘Árvore dos Araújos’, a 26-part TV 50 years of the Acaba Group - A documentary on drama series, and ‘Coração das Trevas’, an drama in the history of this traditional, regional musical cartoon form. group, that researches, develops and disseminates the folklore of the states of Mato Grosso and Mato Serrinha Art Festival – Held every year for three weeks Grosso do Sul. The film includes contributions from in July in the town of Bragança Paulista (SP), this eight musicians who are members of the group as festival provides a moment for the celebration and well as interviews with more than 20 well-known artistic immersion in nature with workshops, experi- figures from the Pantanal region’s musical and ences, residences, music shows, performances, talks, cultural scenes. theater, cinema and art exhibitions. The theme of the 16th annual festival was “De quem é essa terra?” Art in the Company Program – Since 2002, Energisa (“Who Does the Earth Belong To?”) and it welcomed Sergipe has used the reception area of its head around 5,000 visitors. offices to present the art and culture of its employees and visitors, staging exhibitions by local artists or São Gonçalo Viva Festival – This event focusing on those who have settled in the region. Over its 15 years the traditional ‘viola caipira’ (country guitar) has one in existence, the program has allowed Energisa to competitive part, another for newcomers, and a third add to its collection, and provided an opportunity for which stages shows by famous masters of the instru- new talents to stage their first individual or collective ment. In 2017, it was held in Presidente Prudente (SP), exhibitions. as part of the town’s centenary celebrations.

Sergipe Youth Orchestra – This orchestra focuses on EDUCATIONAL PROJECTS 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 What do we want for the world? – Held in Mato benefits around 100 young people from a high-risk Grosso and Mato Grosso do Sul, this project develops area on the outskirts of the town of Aracaju. audiovisual technologies with the intention of providing an arena for an interaction between Watch and Make Movies Festival – held in teachers and students in public and private schools. Cataguases, the intention of this festival is to raise It looks to understand what children want for the awareness of the audio-visual languages amongst world, how new technologies can be turned into children and young people. Part of the festival functional tools for future generations, and whether involves the sponsorship of short films by young our lack of contact with nature is placing our ability directors from the Zona da Mata region of Minas to understand ourselves and relate with each other Gerais state. at risk. Over the course of 2017, the project benefited 103 educators and 2,587 children. Ballet do Amor Brasileiro – This dance spectacle, full of songs from the 1960s and 1970s, presents ballet Ensina Brasil – This is an innovative program couples dancing beautiful ‘pas de deux’. With songs developed by the ‘Ensina Brasil’ NGO, and inspired by by Tom and Vinicius, Villa Lobos, Edu, Caetano, Flavio the experiences of the global ‘Teach for All’ network. Venturini and Murilo Antunes, Roberto and Erasmo, Selects recently graduated professionals from João Bosco and Aldir, and Milton and Brant, the songs the best universities in the country for a spell in a are performed by both the Ouro Preto Orchestra, classroom, with the purpose of training leaderships arranged and conducted by the conductor Rodrigo committed with improving the country’s educa- Toffolo, and by the musician Rodrigo Torino. The show tional level. In 2017 ten schools in Mato Grosso and forms part of the 30th anniversary celebrations of seven in Mato Grosso do Sul joined the initiative the Ormeo Junqueira Botelho Foundation. sponsored by Energisa. Projeto Girarte

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 – A traveling art and education project that disseminates dance and theater by means of workshops, cultural presentations and scenic performances for students of learning institutions in the different municipalities where Energisa Group is active. Biblioteca Energisa and Balcão de Livros – Facilities located Aimed at cultural democratization and the creation of in a number of the Group’s units, they provide access and a dialog between art and education, this project has encourage reading as a tool for intellectual development. already staged presentations in theaters in the states A highlight was the 1st Balcão de Livros by Energisa in of Minas Gerais, Rio de Janeiro, Mato Grosso do Sul Mato Grosso do Sul, in the customer assistance facilities and Paraíba. In 2017, the project visited more than 20 in Dourados. Libraries account for a total of 6100 books in different locations taking art and education activities their shelves. and presentations to upstate Minas Gerais, Rio de Janeiro (Nova Friburgo) and Paraíba (João Pessoa).

Projeto Ilumina – Provides coaching in Mathematics ENVIRONMENTAL PROJECT to public school pupils by means of on-line games, a more entertaining and creative form of learning, in the Sponsorship of Falcon Park – Under an agreement that aid of teaching quality. Implemented in Cataguases runs through until 2018, Energisa Sergipe has made (MG) and Nova Friburgo (RJ), the project is the result improvements and supported the sustainable operation of a Cooperation Agreement entered into between of this park that shelters sick birds of prey, such as falcons, Energisa Minas Gerais and the Municipal Education hawks, owls and other animals, before returning them to Department of Cataguases, and Energisa Nova the wild. Open to visitors, its main aim is to raise society’s Friburgo and the Municipal Government of Nova awareness about the preservation of the environment, Friburgo. wildlife and, principally, birds of prey. Nossa Energia na Escola Project – Through educational talks on conscientious consumption, this project trains SPECIAL PROJECTS 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 Christmas – In various locations, Energisa is a partner creating habits that lead to sustainable development alongside the local government in putting on the and the combating of wasteful uses of electrical Christmas lighting display. In 2017, it was responsible for energy. the lighting that adorned the building of the Legislative Assembly in João Pessoa (PB), sponsored the Christmas Zé da Luz na Escola Program – This program aims to raise awareness amongst the community about the Lights in Palmas (TO) and Christmas in Usina (PB), with 30 risks and dangers of electricity, especially when it days of shows, choral presentations and the staging of comes to flying kites, a popular children’s activity with nativity scenes. In Mato Grosso do Sul, it put together the a high rate of accidents in the electricity network. Fifty Christmas Bus, lit up with LED bulbs, that held activities presentations were made in 2017. focused on the conscientious use of energy. 60 SOCIAL AND SECTOR FRONT

LOCAL DEVELOPMENT PROJECTS

Bem da Gente – The project undertakes initiatives The community’s schools have also benefited from that ease productive inclusion by means of training the energy efficiency actions. The classrooms have and entrepreneurship. In Mato Grosso do Sul, had air conditioning installed and the IT room has between 2016 and 2017, R$ 1.2 million was provided been refurbished with new computers. for an income creation project in the Furnas do Dionísio Quilombola Community. In partnership with In Paraíba, where the project has been in place since the Dom Bosco Catholic University, Energisa sup- 2012, the highlight of 2017 was the conclusion of ported the revision and renewal of the entire process the project in the Timbó community, in João Pessoa, performed by the community in its manufacture of where 45 business plans were developed, support brown sugar, cane syrup and muscovado sugar, to was provided for the raising of micro-credit to the adapt the local hygiene and production technology tune of more than R$ 71,000, 14 businesses were conditions to best market practices. formalized, and 7 new enterprises launched. In partnership with Sebrae, more than 70 people were The project takes different approaches to the trained in subjects relating to entrepreneurship. provision of support for the community, ranging from investments in improving the professionalism The Energisa units developed a series of local and of the sale of handicrafts to the structural reform of one-off actions in 2017 with the aim of supporting the headquarters of the Association of Small Rural government policies and developing the surround- Producers and replacement of old electrical instal- ing communities. lations, bulbs and equipment such as refrigerators, freezers and air conditioning units. The initiative also • Energisa Paraíba started distributing its bills contributes to the education of children and adults, in braille, thus making it easier for the visually aiming to raise awareness about waste and the safe impaired to read them, lent its support to the use of electricity. 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 opportunity 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 61

NO. OF LOW INCOME CUSTOMERS (000)

Company 2014 2015 2016 2017

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

LOW INCOME SAFETY IN THE COMMUNITY

At the close of 2017 Energisa’s distribution companies Energisa regularly performs different actions had over one million customers classed as low designed to raise awareness in relation to safety income, or 15% of total consumer units in its captive in the communities where it operates, with special market, with a 7% growth in billings to customers in focus on: this class. • Energy efficiency trucks/vans: Energisa trucks A number of actions by these companies sought fitted with cinema screens that perform activities to detect customers entitled to this right, with in the communities to explain safety procedures, discounts ranging from 10% to 65% in their electric- including the risks of going too near fallen cables ity bills, and ensure access to electricity and a drop or involvement in other situations of risk; in the risk of default. There was an interchange of information with local governments based on the • Energisa Teaches: talks designed to orient the Single Registry, the Ministry of Social Development, public about the safe use of electricity; as well as visits by social assistants, offers for inclusion in the electricity Social Fee during these • Talks in schools: Talks focusing on the conscien- visits and sending of reminders for re-registration. tious and safe use of electricity; This set of actions resulted in extending the benefit to roughly 170 thousand customers during the year. • Safety Minute: Radio programs containing guidance for the public;

UNIVERSAL ACCESS - LIGHT FOR ALL • Procedures for the Removal of Grids in Hazardous Conditions.

No A sixth stage of the Light for All (Luz para Tudos) In order to assess and monitor the results of these program was authorized in Tocantins with the aim of actions, the Company adopts specific indicators that speeding up its standardized implementation in 30 the senior management discusses every month, municipalities in the state in which the process has aiming to guarantee ongoing improvement in the still not been concluded. The Program, implemented prevention and control of the events. As a result, using federal, state and distribution company funds, there was a 20% reduction in accidents in the allows for the extension of energy services to remote communities in 2017 in relation to the previous year. 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. 62 SOCIAL AND SECTOR FRONT

INNOVATION

With the aim of developing projects that are OPEN INNOVATION more aligned and integrated with Energisa’s strategic objectives, the areas of Innovation, New Proposals and solutions for these issues were stud- Technologies, Energy Efficiency and Research and ied, developed and presented at two Open Ideation Development (R&D) were grouped together under Workshops held in 2017, at which executives the coordination of the Company's Innovation from the Energisa Group, together with internal Management department. specialists, and specialists from the Brazilian and international markets, met to share knowledge This restructuring started with an extensive and discuss new initiatives for solving the prob- diagnosis of the current situation of innovation lems facing the Group and which could potentially within the Group, followed by the development of be applied throughout the electrical sector. a methodology capable of maintaining, strengthening and fully implementing the internal culture The themes of the events were ‘Management of innovation. of Services in the Field’ and ‘Automation of the Network’. At the end of each workshop the best Based upon the identification of the main social, ideas developed in relation to the five dimensions economic and technological trends in society that the company considers to be strategic were and an assessment of the results in light of the chosen: ‘product and service logic’, ‘positioning’, Company's strategic objectives, three themes were ‘the value chain’, ‘marketing and sales’ and ‘the identified that will be able to guide the efforts logic of value creation’. There was also an analysis made to bring up new ideas: management of of the viability of adopting the idea in a practical services in the field, automation of the network, way. and photovoltaic generation/energy storage. As part of the strategic actions for the dissemination 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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 63

RESEARCH AND DEVELOPMENT R&D INVESTMENT (R$ MILLION) The initiatives of 2017 aimed to reinforce the positioning of the Company in the development 29.4 of strategic Research and Development (R&D) 26.2 projects with the potential to contribute in an innovative way to the supply of energy, providing 19.1 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: 2015 2016 2017

Climate disasters

This project consists of a short-term, high-resolution Supplies in the Pantanal region of south Mato meteorological alert system that can very precisely Grosso state and reliably, and in real time, identify severe storms that are capable of causing significant damage to In 2017, the results achieved in stage I of the the Brazilian electrical sector, be it due to rain or project were validated and its continuity insured. lightning at levels that are above the average for The research initiative seeks to balance the the country. Alongside this, the project also includes supply of complex islanded systems similar to the the development of a standard-contingency plan Pantanal region of south Mato Grosso state, which of responses to catastrophic events that will be have access problems due to widespread flooding suitable for the realities of the electricity distribu- and islanded areas. It therefore contributed to tion companies and can be integrated into the plans the universal access of energy in this region. In of other public and private entities. The alert system stage two 25 generation sites will be deployed in will be available for use by the centers of operation selected locations, exploring the various genera- of Energisa’s different departments and can also tion and supply possibilities. 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 understand 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 30 projects, source, without causing negative financial impacts approximately, involving research on electricity distribution companies and their consumers. The regulatory propositions prepared can and development were carried out in also be used to establish an agenda of discussions 2017 by the distribution companies, with the various stakeholders, regulatory agencies, in initiatives to be applied across entrepreneurs and consumers. Brazil’s electric sector 64 SOCIAL AND SECTOR FRONT

ENERGY EFFICIENCY Nossa Energia

The projects are carried out under the Energy The project is developed for communities with Efficiency Program (PEE) in accordance with the low purchasing power in all cities comprising the legislation established by the National Electricity Group’s concession areas, and aims to encourage Regulatory Agency (Aneel). R$ 68.1 million was the rational and efficient use of electricity. Consists invested in these projects in 2017, which were of a set of educational initiatives aimed at raising aimed at low-income residences, trade and services, awareness for combating waste and changing government authorities and industries. The initia- habits, promoting conscientious consumption and tives benefited 212,613 consumer units and made strengthening the bonds between Energisa and its possible energy savings of 79,666 MWh/year. customers.

The result of the projects are determined according All consumers, regardless of whether they are regis- to the procedures of Aneel’s energy efficiency tered for social electricity rates (TSEE), can exchange program (PROPEE) and the international measure- incandescent light bulbs for compact fluorescent ment & verification protocol (PIMVP). In 2017, the or LED bulbs, can replace inefficient refrigerators main projects carried out were Nossa Energia and with other more efficient refrigerators, and can Espaços Energisa. 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

Efficient equipment Investment No. of students Company (R$ thousands) Bulbs Fridges in lectures 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) Projeto Nossa Energia

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

ENERGY EFFICIENCY UNITS SERVED ENERGY SAVED (INVESTMENT1 – R$ THOUSAND) (NUMBER) (MWH/YEAR)

79,666 84,065 258,834 81,055 63,735 68,054 212,613 185,196 48,663

2015 2016 2017 2015 2016 2017 2015 2016 2017

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

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 Espaço Energia Seminar (Seenel), held in João Pessoa (PB). This event is held every two years by Aneel to The didactic and interactive compounds are disclose technological innovations developed installed at Energisa Paraíba (since 2005) and in the scope of regulated programs, exchange experiences and discuss regulations in force. Energisa Mato Grosso do Sul (since 2015), About the subject of Innovation and Integration: providing guidance to the population on the safe Local Replies to Global Barriers, Citenel was and efficient use of electricity. attended by key leaderships and the activity’s institutions. Electricity generating, transmitting, Espaço Energia provides visitors with the oppor- distributing and resale companies were present, tunity of becoming familiar with the principles as well as technology based companies, of Physics and with the history of electricity, manufacturers, industry agencies, research centers, certifiers and universities. During supported by models, prototypes, a video room, the event’s three days, attended by over 1.1 recreation room, audiovisual experiences, works thousand visitors, 2.7 thousand participants and by local artists and an area that represents a 1.3 thousand students (basic, middle and higher home of years ago and another current home, for education students) the first exhibition of goods comparing use and technology. and solutions took place, resulting from R&D and energy efficiency programs. There 144 projects being exhibited, with 27 booths and 89 products. In the course of 2017 both Espaço Energia were Energisa had an interactive booth, with a totem visited by 31,476 persons, of which 14,367 were robot, 360º projection and virtual reality goggles, basic and middle school students from public in addition to an R&D project exhibition and and private schools. 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. 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 69

COMPLIANCE with BEHAVIORAL change environmental, in response to occupational health environmental issues. and safety legislation, and with other legal requirements applicable.

FOSTERING of environmental COMMITMENT to continual education, prevention improvements in the of occupational illnesses quality of their processes, and optimization of living products and services, in standards of employees, a sustainable manner. ENVIRONMENTAL suppliers and the community. PRINCIPLES

USING natural resources WORK together with suppliers rationally and sustainably. and service providers in order to guide and monitor their activities to ensure they comply with environmental, health and safety standards. ENCOURAGE research aimed at adopting practices that encourage protecting the environment, the safety and health of employees and third parties.

Environmental preservation is one of the major An example of this concern is the new building that concerns by Energisa, which has a permanent com- will house the company’s head office and the new mitment for harmonious co-existence with natural Energisa Services Desk in Cataguases, projected resources, always bearing in mind the country’s based on sustainability concepts which reduce the development and comfort for customers through consumption of water and electricity and promote sustainable actions, from the social, economic and the proper disposal of waste (further information on environmental viewpoints. In 2017 R$ 89.2 million page 20). were invested in actions related to operating the Company and external programs. To minimize the impact of the operations on the environment, Energisa carries out environmental The Company has an Environmental, Health and inspections on substations, prepares and delivers an Safety Policy intended to provide an ongoing action plan to eradicate nonconformities and to pro- improvement of its goods and services, as well as vide operational training, renewed every six months, ensuring its economic feasibility, preservation of to coach technicians onto how to correctly carry out natural resources and care for the health and safety their activities. The identification card and pruning of its staff members. certification was introduced in 2017, displayed on employee helmets. 70 THE ENVIRONMENT

ENVIRONMENTAL MANAGEMENT In order to foresee as fast as possible any and all impacts (breaching of cables, scheduled outages and The Environment, Social and Occupational Health accidental outages) that the operations could have and Safety Management System - SGMASS imple- on the well-being of society, Energisa evaluates and mented at the Company is based on ISO 14001, describes procedures to eliminate or reduce the risks OSHAS 18001 and the applicable legislation. The involved in this operation, thereby guaranteeing system is renowned for its capacity to provide the efficient and preventive operations. To this end it means necessary to properly monitor social environ- uses suitable technology to ensure the quality and mental, health and safety issues and is based upon efficiency of services provided. The aim is to predict as the PDCA cycle philosophy (Plan, Do, Check, Act). fast as possible any and all impacts, thereby ensuring an efficient and preventive operation. The Company keeps its ISO 9001 – Quality Management System certification, 2015 version, at Major progress in 2017 was the updating of all the its units. Energisa Mato Grosso do Sul also has ISO environmental control instructions (ICAs) established 10002:2005 certification – Quality Management – by Energisa Group's 1st Environmental Workshop. The Customer Satisfaction. 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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 71

Conservation RESOURCE CONSUMPTION

The distribution companies adopted important environmental conservation measures to varying WATER degrees, such as: All distribution companies also have water • Controlled disposal of sodium vapor lamps, consumption reduction campaigns both internally mercury vapor lamps and fluorescent lamps and in the communities, in addition to awareness at its own facilities and in the public lighting raising activities and lectures when commemorat- infrastructure. ing Water Day. For internal consumption Energisa Mato Grosso do Sul takes in water from a deep • Insulated cables are used in low-voltage grids well in the Serra Geral aquifer and the distribution where trees could be more affected by contact companies of Energisa Sul-Sudeste taking water with the power lines. Protected cables are used from wells in the Bauru aquifer. in medium voltage grades close to trees, in order to avoid undesirable pruning New buildings were erected in Minas Gerais in 2017, where water is taken in and used and at • Water and energy consumption reduction Energisa Mato Grosso drinking fountains were campaigns, education based on the 3Rs changed and a smart flushing system installed in (Reduce, Reuse and Recycle) and education for the units’ restrooms. Notwithstanding the perma- conscious consumption by distributing leaflets nent actions and those in progress in the course and presenting lectures at schools (Water Day, of the year, consolidated consumption rose at the Environmental Week) and internal disclosure nine distribution companies rose by 3.2% in 2017. (intranet, stickers and notices put up by the company and screensavers).

• Initiatives commemorating Environmental WATER WITHDRAWAL BY SOURCE Week, Water Day and Tree Day; (m3) • Environmental Education Programs; 101,238 98,563 101,793 • Regenerating insulating oil used in its equip- 93 93 93 ment and recovering industrial lubricating oil, 20,065 26,677 29,95 ensuring the recycling of this material and 81,080 avoiding environmental pollution 71,793 72,451

• Retaining suppliers that have good environmental conduct

• Preventive servicing of all fleet vehicles and use 2015 2016 2017 of ethanol fuel in vehicles whenever possible, in order to diminish the impact of pollutant Supply (public system)

emissions. Groundwater (wells)

Surface extraction (waterways) 72 THE ENVIRONMENT

ENERGY ELECTRICITY CONSUMPTION Internal and external campaigns are promoting (GJ) lower energy consumption by way of an energy efficiency program. The actions adopted to reduce internal consumption include the replacement 1,013,148 of conventional bulbs with more efficient LED 891,984 900,975 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 2015 2016 2017 can be seen on the related page on our site http://www.energisa.com.br/Paginas/ sustentabilidade/eficiencia-energetica.aspx)

EMISSIONS One of the main issues and potential impacts of Energisa's operations is the risk of oil leaks The Group’s vehicle fleet is reviewed and inspected and ground contamination. To mitigate this risk regularly, in accordance with the existing envi- the equipment has a containment base and ronmental legislation, in order to ensure reduced maintenance teams carry environmental kits for emissions of pollutants in the atmosphere. The absorbing oil in the case of leaks at substations. distribution companies follow a fleet renewal pol- Employees are trained to respond to emergency icy in which vehicles are monitored and replaced leaks and preventive maintenance is carried out whenever necessary. periodically cleaning out water and oil segregation boxes and containing any leaks from transformers. To reduce CO2 emissions, Energisa Sul-Sudeste uses ethanol fuel in live vehicles whenever possible Hazardous waste classified as Class I (according and Diesel-S10 in diesel vehicles, with a maximum to ABNT NBR 10.004:2004) is collected and stored sulfur content of 10mg/kg (10 parts per million) differently, in accordance with the respective making it possible to reduce particulate matter legislation, and disposed of by licensed companies emissions by up to 80% and nitrogen oxides by up to ensure the correct handling, transportation and to 98%. final disposal.

Energisa’s distribution companies install insu- WASTE MATERIAL lated cables in low-voltage grids and shielded cables in the medium-voltage grids, significantly Energisa Group makes every effort to minimize reducing the need for pruning. The tree pruning waste and ensures all waste is properly disposed and easement cleaning teams in the processes of of. Part of nonhazardous waste is sold as scrap, an maintaining distribution and transmission lines and action that minimizes the environmental impact grids are trained to work in such a way as to have and strengthens the re-use chain, avoiding an a minimum impact on the scenery and animal and overload in landfills. plant wildlife. Pruning in general is conducted in partnership with municipal governments, with the The Company runs campaigns to reduce waste in generated waste always being correctly disposed of. 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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 73

BIODIVERSITY In addition to the simplified environmental reports - RAS, for the construction of high-volt- To honor the commitment undertaken to preserve age distribution lines preventive archeology plant and animal wildlife in the geographies, studies are carried out, supervised by the Energisa Group companies employ sustainable National Archaeological Heritage Institute management and projects avoid clearing land as (Iphan), which indicate the possibility of much as possible. In cases where land clearance archaeological remains, in addition to the is necessary, the impact is always mitigated by preparation of an Environmental Feasibility Study planting and community initiatives. (EVA), Environmental Control Plan (PCA) and Environmental Inspections. Energisa Sul-Sudeste planted and is maintaining 12.62 hectares of native tree species of the The biodiversity preservation initiatives at Atlantic Forest In degraded areas, in accordance Energisa Sergipe helped improve the restate- with the commitments made with environmental ment metric by transmission function (IDAT authorities, and the change of practice agree- Environmentally friendly companies) from ment with the prosecutions department. Urban 81.8 in 2016 to 88.5 in 2017, in addition to the pruning and tree planting manuals were also Performance Indicator of Perceived Quality Areas handed out to municipal governments, environ- (IDAR - Social Responsibility) from 78.6 to 83.6. mental departments, government agencies and communities produced through a partnership In partnership with landowners and municipal between ESS and the Consumer Council. governments in the concession area, Energisa Minas Gerais and Energisa Nova Friburgo The company prepares simplified environmental restored the springs and streams in Permanent reports on grids and lines that cross areas of Conservation Areas (APPs) and to restore forest or other types of permanent preservation degraded areas by planting and maintaining areas and Phytossociologic Studies when nec- native species from the Atlantic Forest. 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. 74 IBASE SOCIAL BALANCE SHEET

IBASE SOCIAL BALANCE SHEET

1 - Calculation base 2017 Amount (thousand reais) 2016 Amount (thousand reais)

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

Amount % % over Amount % of % over 2 - Internal social metrics (thousand) of FPB RL (thousand) FPB 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%

Amount % % over Amount % of % over 3 - External social metrics (thousand) over RO RL (thousand) RO 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%

Amount % % over Amount % of % over 4 - Environmental metrics (thousand) over RO RL (thousand) RO RL

Investments related to company 89,110 14.68% 0.65% 43,757 12.72% 0.37% production / operation 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 ( ) has no targets ( ) has no targets to minimize waste and overall consumption ( ) performs 0 to 50% ( ) performs 0 to 50% in production/operations and improve ( ) performs 51% to 75% ( ) performs 51% to 75% resource usage efficiency, the company ( x ) performs 76% to 100% ( x ) performs 76% to 100%

5 - Functional staff metrics 2017 2016

Number of employees at period-end 12,573 11,932 Number of new hires in the period 2,275 1,974 Number of outsourced employees 4,351 3,202 Number of trainees 387 427 Number of employees over 45 1,524 1,745 Number 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 71.46% 21.58% by black employees1 No. of employees with special needs 387 398 1 In 2016, this includes the proportion of the total managers and advisers and in 2017 it also includes coordinators. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 75

6 - Material information regarding 2017 Meta 2018 corporate citizenship

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 ( x ) directors ( x ) directors implemented by the company were defined by: ( ) senior and middle management ( )senior and middle management ( ) all employees ( ) all employees Occupational health and safety ( x ) senior and middle management ( x ) senior and middle management standards have been defined by: ( ) all employees ( ) all employees ( ) all + Cipa ( ) all + Cipa Regarding freedom of association, the ( ) does not get involved ( ) will not get involved right to collective bargaining and internal ( x ) follows the OIT rules ( x ) will follow the OIT rules representation of workers, the company: ( ) promotes and follows ILO standards ( ) will promote and follow ILO standards The private pension embraces: ( ) directors ( ) directors ( ) senior and middle management ( ) senior and middle management ( x ) all employees ( x ) all employees Profit-sharing embraces: ( ) directors ( ) directors ( ) senior and middle management ( ) senior and middle management ( x ) all employees ( x ) all employees When selecting suppliers the same ethical, ( ) are not considered ( ) will not be considered social responsibility and environmental ( ) are suggested ( ) are suggested standards adopted by the company: ( x ) are demanded ( x ) are demanded In respect of employee participation in ( ) does not get involved ( ) will not get involved voluntary work programs, the company: ( ) gives support ( ) will support it ( x ) offers organization and incentives ( x ) will offer organization and incentives Total number of consumer to the Firm: 2,489,393 to the Firm: 2,064,664 complaints and criticism: at Procon: 11,341 at Procon: 6,588 to the Courts: 23,51 to the Courts: 18,290 % complaints and criticism handled or resolved: to the Firm: 86% to the Firm: 99% at Procon: 96% at Procon: 82% to the Courts: 66% 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% government 71% government 11% employees 9% employees 3% shareholders 2% shareholders 15% third parties 17% third parties 3% retained earnings 1% 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 76 ENERGISA MINAS GERAIS

ENERGISA MINAS GERAIS

Operating 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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 77

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 78 ENERGISA MINAS GERAIS

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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 79

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 134 171 155 type, employment contract and region 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 between 41 and 50 (%) 16.25% 17.5% 18.4% 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 13.04% 11.9% 11.3% positions (%) 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 80 ENERGISA MINAS GERAIS

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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 81

External social metrics Consumers

Service excellence 2017 2016 2015

Profile of consumers and clients 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. 82 ENERGISA MINAS GERAIS

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 3 4 7 Base

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/ 17.03% 17.2% 17.4% consumers) (%) 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 10.23% 11.00% 12.30% revenue (%) 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 0.6% 0.3% 0.5% employees (%) Number of monthly hours donated (released from normal working hours) by the 37.5 0 0 Company for voluntary work by employees

Company involvement in cultural, sporting and social projects 2017 2016 2015 (Rouanet Law, Sporting Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

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 Studio-school Princesa Caritó Project Leopoldina Musical Band Proposed by Versão Final Instituto Princesa Produção e Fábrica do Leopoldina Comunicação Futuro Musical Band Ltda.

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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 83

Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments Financing sources Investments Financing sources Investments Financing sources (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000)

Total (%) Company Third parties Client Total (%) Company Third parties Client Total (%) Company Third parties Client 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 1,119 52.2% 1,119 - - 1,006 52.0% 1,006 - - 1,327 56.7% 1,327 - - Residential 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.

Project type 2017 2016 2015

Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW)

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 7,476 707.4 12,510 - 2,087 - 2,774.6 - - Residential2 Public lighting 2 ------Municipal Energy ------Management 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. 84 ENERGISA MINAS GERAIS

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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 85

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 1,648 Percentage 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

Emissions Annual volume of greenhouse (CO , CH , N O, HFC, PFC, SF ), issued into the atmosphere 2 4 2 6 - - - (in tonnes of CO2 equivalent) Annual volume of ozone-depleting emissions - - - Effluents Total water discharge by quality and destination 1 - - - Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 306 354 340 Percentage 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 source Electricity consumption per kWh distributed (sold) 0.000390 0.000391 0.000396 Direct energy consumption by primary source in GJ 468,417 468,698 481,733 Diesel 365,938 364,259 382,368 Gasoline 102,479 104,439 99,365 Ethanol - - - Natural gas - - - Other (Specify) - - - Total water consumption by source (m3) Supply (public system) 6,523 7,320 7,315 Groundwater (wells) - - - Surface extraction (waterways) - - - Total water withdrawal (m3) 6,523 7,320 7,315 Water 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 58 Percentage 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 Not Not available available available In the Community Number of primary schools and high schools served 3 23 32 25 Number of primary school and high school students served 3 2,706 7,870 4,846 Number 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 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 86 ENERGISA NOVA FRIBURGO

ENERGISA NOVA FRIBURGO

Operating and productivity metrics

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

Number of consumers served - Captive 105,555 104,116 102,533 Number of consumers served - Free 8 4 0 Number of locations served (municipalities) 1 1 1 Number of own employees 128 127 120 Number of outsourced employees 24 25 50 Number of commercial offices 1 1 1 Electricity generated (GWh) NA NA NA 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 Global electric losses (GWh) 16.0 17.0 17.9 Electrical losses – (%) total on energy requirement 4.28% 4.60% 4.75% Technical losses – (%) on energy requirement 5.02% 5.15% 5.24% 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 Public lighting 20.83 20.85 20.80 Public utility 7.58 10.50 10.88 Substations (in Units) 5 5 5 Installed capacity (MVA) 119 119 119 Transmission lines (in km) 24 24 24 Distribution lines (in km) 2,029 1,963 1,929 Distribution transformers (in units) 3,597 3,553 3,748 Sale of energy through installed capacity (GWh/MVA*No. Hours/Year) 0.00029 0.00031 0.00031 Electricity sold by employee (MWh) 2 3 3 Number of consumers by employee 825 820 854 Added value/GWh sold 396.33 347.08 406.04 Overall equivalent outage duration per consumer “DEC” of the company - Amount 5.78 7.25 8.76 determined Overall equivalent outage duration per consumer “DEC” of the company - Limit 11.12 11.39 12.25 Overall equivalent outage frequency per consumer “FEC” of the company - Amount 3.82 7.42 6.95 determined Overall equivalent outage frequency per consumer “FEC” of the company - Limit 9.84 10.32 11.23 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 87

Corporate governance

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 Description of other fixed ------compensation Variable Compensation (R$ 000) - - - - - 564 - 564 - 307 - 307 Bonuses ------Profit sharing - 659 - 659 - 564 - 564 - 307 - 307 Attending meetings ------Commission ------Other ------Description of other variable ------compensation

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 88 ENERGISA NOVA FRIBURGO

Economic and financial metrics

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

Revenue 241,369 246,637 Revenue from energy sales and services 234,733 240,203 Other revenue 704 424 Revenue relating to construction of company assets 6,394 6,420 Formation and reversal of allowance for doubtful accounts (462) (410) (-) Consumables acquired from third parties 120,778 134,631 Cost of electricity sold 98,068 102,034 Materials and outsourced services 11,817 23,148 Other operating costs 10,893 9,449 Gross added value 120,591 112,006 Amortization and depreciation 7,674 7,957 Net added value 112,917 104,049 Transferred added value Finance income 8,898 7,247 Total added value to be distributed 121,815 111,296

Distribution of value added 2017 2016

Personnel Direct compensation 5,132 5,341 Benefits 2,501 2,394 FGTS 833 433 Taxes, charges and contributions Federal 13,618 13,226 State 58,896 55,113 Municipal 214 195 Intrasector Obligations 23,455 21,203 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 1,065 63.7% 679 expansion) Renewal of distribution/transmission 5,742 95.6% 5,490 Sub- transmission 0 0.0% 0 Total 6,807 10.3% 6,169 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 89

Internal social metrics Employees/ Employability/ D&O

General information 2017 2016 2015

Total number of employees 128 127 120 Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, 24 25 50 employment contract and region Employees aged 30 or under (%) 36.7% 37.8% 35.8% Employees aged between 31 and 40 (%) 30.5% 33.1% 35.0% Employees aged between 41 and 50 (%) 24.2% 19.7% 20.0% Employees aged over 50 (%) 8.6% 9.4% 9.2% Percentage of female employees out of total (%) 17.2% 18.9% 17.5% Women in managerial positions - out of total managerial positions (%) 33.3% 44.4% 42.9% Black female employees (black and mixed race) - out of total employees (%) 0.0% 0.8% 0.0% Black male employees (black and mixed race) - out of total employees (%) 14.8% 12.6% 13.3% Black employees (black and mixed race) in managerial positions out of total managerial positions (%) 0.0% 0.0% 0.0% Percentage of interns out of total employees (%) 0.8% 1.6% 1.7% Apprentice program employees (%) 5.0% 5.0% 5.0% Employees with special needs 3 3 3

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

Gross payroll 9,063 8,166 8,642 Compulsory social charges 2,554 1,773 2,046 Education 22 27 26 Food and Restaurants 1,377 1,276 1,121 Transportation 244 202 224 Health 596 672 335 Date Founded Not 128 183 available Occupational health and safety 230 101 79 Culture 0 0 0 Training and professional development 64 75 45 Day care and day care allowance 52 38 29 Other (funeral allowance, exceptional payments, retirement premium) 257 293 62

Profit sharing 2017 2016 2015

Total investment in company profit-sharing program (R$ 000) 1,043 1,270 1,190 Amounts distributed in relation to gross payroll (%) 11.51 15.6% 13.8% Highest compensation divided by the lowest compensation in cash paid by the company 30.49 21.59 17.07 Lowest compensation at the company divided by the minimum salary in force 1.14 1.22 1.26

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

Executive positions 44,395 42,050 36,825 Management positions 21,618 12,493 12,971 Administrative positions 2,462 3,141 2,687 Operating positions 1,843 1,763 1,668 90 ENERGISA NOVA FRIBURGO

Occupational health and safety 2017 2016 2015

Average overtime per employee/year 39.61 48.98 60.93 Total frequency rate of the company for the period - employees 0 11.96 3.87 Employee seriousness rate in the period 0 132 19 Total frequency rate of the company for the period - contractors 19.23 30.61 16.95 Seriousness Rate of outsourced/contracted employees in the period 576.92 5,714 51,229 Frequency rate of the company for the period - workforce (employees + contractors) 5.39 17.2 8.19 Severity rate for the period - workforce (employees + contractors) 43.08 1,700 16,397 Fatalities – employees 0 0 0 Fatalities – contractors 0 0 1

Professional development 2017 2016 2015

Education levels - specify percentage of total employees Primary Education 6.3% 8.6% 8.3% High School 58.6% 57.5% 59.2% Technical School 22.6% 19.7% 20.0% Undergraduate School 7.8% 11.8% 10.0% Graduate (specialist, Master's degree, PhD) 4.7% 2.4% 2.5% Amount invested in professional development and education (R$ 000) 86 75 45 Average number of hours of training per year per employee, broken down into job type Executive positions 0 0 0 Management positions 25 58 63 Administrative positions 31 35 43 Operating positions 72 120 104

Conduct in light of dismissals 2017 2016 2015

Churn rate 5.97% 6.90% 9.10% Labor claims (company and outsourced employees) Amounted provisioned in the period (R$ 000) - - 106 Number of labor claims brought against the company in the period 4 2 7 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

Investments in supplementary pensions (R$ 000) 107 128 183 Number of beneficiaries of supplementary pension plans 7 5 13 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 91

External social metrics Consumers

Service excellence 2017 2016 2015

Profile of consumers and clients Profile of consumers and clients Energy sales by rate class (GWh): % Total 51.19% 48.3% 46.8% Residential 3.10% 3.0% 2.9% Low-income residential 22.72% 23.1% 24.2% Sales 9.08% 12.3% 12.0% Industrial 1.65% 1.5% 1.4% Rural 7.16% 6.9% 6.6% Public lighting 2.61% 2.4% 3.4% Public utility 2.49% 2.6% 2.7%

Public Authorities 2017 2016 2015

Customer satisfaction 57.97 73.12 56.31 Satisfaction rates obtained by Iasc Survey - Aneel 83.5 73.4 72.3

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 1,310 952 Volume 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 Aneel – state/regional agencies 75 83 270 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.

92 ENERGISA NOVA FRIBURGO

Community

Impacts on health and safety 2017 2016 2015

Total number of nonfatal injuries involving the population 1 0 0 Total number of fatal injuries involving the population 0 0 1 Legal claims resulting from accidents involving the population - General Litigation Base 0 1 0

Low-income rate 2017 2016 2015

Number of low-income households served 5,125 5,062 5,148 Total low-income households out of total households served (residential customers/ 5.5% 5.5% 5.7% consumers) (%) Revenue from sales to low-income residential subsector (R$ 000) 4,537 4,976 4,987 Total revenue from sales to low-income residential subsector out of total residential 3.84% 4.3% 4.6% revenue (%) Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 1,721 1,374 1,465

Company involvement in social action 2017 2016 2015

Funds allocated to education (R$ 000) 123 68 206 Funds allocated to health care and sanitation (R$ 000) 0 0 0 Funds allocated to culture (R$ 000) 185 158 218 Funds allocated to sports (R$ 000) 0 0 0 Other funds allocated to social initiatives (R$ 000) 117 57 8 Employees conducting voluntary work in the community outside the Company/total 0% 0% 0% employees (%) Number of monthly hours donated (released from normal working hours) by the 0 0 0 Company for voluntary work by employees

Company involvement in cultural, sporting and social projects (Rouanet Law, Sporting 2017 2016 2015 Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

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

Funds allocated to the largest project (R$ 000) 0 0 150

Project name Nova Friburgo - - Audiovisual Pole Proposed by Instituto - Serrano de - Economia Criativa

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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 93

Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments Financing sources Investments Financing sources Investments Financing sources (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000)

Total (%) Company Third parties Client Total (%) Company Third parties Client Total (%) Company Third parties Client

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 216 43.0% 216 - - 292 54.7% 292 - - 321 56.0% 321 - - Residential 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.

Project type 2017 2016 2015

Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW)

Industrial ------Trade and Services ------Public Authorities 1 132.04 19.7 ------Public Utility ------Rural ------Residential 1,693 623.5 - 1,288 1,736.0 - 1,412 1,900.0 - Low-Income 617 289.0 74.0 2,488 - - 340 - - Residential Public Lighting ------Municipal Energy ------Management Educational ------TOTAL 2,311 1,044.6 93.7 3,776 1,736.0 - 1,752 1,900.0 - 94 ENERGISA NOVA FRIBURGO

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 - 6.4 24.1% 16.9 17.2% OP – Power System Operation 3.9 56.3% 11.6 43.2% 14.4 14.7% SC – Power System Supervision, Control and Protection 0 - 0 - 30.8 31.4% QC – Power Supply Quality and Reliability 3.0 43.7% 8.8 32.7% 17.9 18.2% 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 95

Environmental metrics

Recover degraded areas 2017 2016 2015

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

Waste generation and treatment 2017 2016 2015

Emissions

Annual volume of greenhouse (CO2, CH4, N2O, HFC, PFC, SF6), issued into the atmosphere (in Not Not Not tonnes of CO2 equivalent) available available available Annual volume of ozone-depleting emissions Not Not Not available available available Effluents Total water discharge by quality and destination 1 Not Not Not available available available Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 176 401 208 Percentage 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 source Electricity consumption per kWh distributed (sold) 0.000274 0.000280 0.00027 Direct energy consumption by primary source in GJ 84,213 90,091 87,480 Diesel 65,113 67,643 66,287 Gasoline 19,100 22,448 21,193 Ethanol 0 0 0 Natural gas 0 0 0 Other (Specify) 0 0 0 Total water consumption by source (m3) Supply (public system) 1,949 1,511 1,759 Groundwater (wells) 0 0 0 Surface extraction (waterways) 0 0 0 Total water withdrawal (m3) 1,949 1,511 1,759 Water withdrawal per employee (m3) 14 13 15

Environmental education and awareness raising 2017 2016 2015

At the Organization Number of employees trained in environmental education programs 11 11 21 Percentage 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 Not Not available available available In the Community Number of primary schools and high schools served 2 4 13 3 Number of primary school and high school students served 2 263 1,324 706 Number of teachers trained 0 0 0 Number of technical schools and high schools served 0 0 0 Number of technical school and graduate students served 0 0 0

1 Water waste is sanitary waste and relatively insignificant. 2 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 0.11 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 96 ENERGISA BORBOREMA

ENERGISA BORBOREMA Operating and productivity metrics

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

Number of consumers served - Captive 209,981 208,599 204,656 Number of consumers served - Free 12 7 2 Number of locations served (municipalities) 6 6 6 Number of own staff 233 236 242 Number of outsourced employees 1 26 30 31 Number of commercial offices 6 6 6 Electricity generated (GWh) NA NA NA Electricity purchased (GWh) 734.45 812.65 771.66 1) Itaipu 0.00 0.00 0.00 2) Auction (including federal generator auction (2002) 734.45 812.65 771.66 3) Energy sales of concession operator 0.00 0.00 0.00 Global electric losses (GWh) 41.7 48.5 51.5 Electrical losses – (%) total on energy requirement 5.87% 6.90% 6.71% Technical losses – (%) on energy requirement 7.64% 7.50% 6.58% 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 Public lighting 39.2 33.4 28.8 Public utility 8.1 6.9 8.7 Substations (in Units) 8 8 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 Sale of energy through installed capacity (GWh/MVA*No. Hours/Year) 0.00034 0.00037 0.00044 Electricity sold by employee (MWh) 2,356.2 2,549.6 2,728.1 Number of consumers by employee 901 884 846 Added value/GWh sold 376.20 301.36 324.50 Overall equivalent outage duration per consumer “DEC” of the company - Amount determined 4.03 4.94 5.53 Overall equivalent outage duration per consumer of the company - Limit 13.13 13.91 14.1 Overall equivalent outage frequency per consumer “FEC” of the company - Amount determined 2.46 3.22 3.84

Overall equivalent outage frequency per consumer “FEC” of the company - Limit 9.91 10.56 11.39

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.. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 97

Corporate governance

Managers 2017 2016 2015

CA DE CF 1 Total CA DE CF 1 Total CA DE CF 1 Total 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 Participations in committees ------Other (charges) 515 639 - 1,154 391 703 - 1,093 263 509 - 772 Description of other fixed ------compensation Variable Compensation (R$ 000) 515 639 - 1,154 391 703 - 1,093 263 509 - 772 Bonuses ------Profit sharing ------Participation in 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

Campina Grande - PB 98 ENERGISA BORBOREMA

Economic and financial metrics

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

Revenue 99,582 67,365 Revenue from energy sales and services 87,419 52,651 Other revenue 461 758 Revenue relating to construction of company assets 12,606 15,623 Formation and reversal of allowance for doubtful accounts (904) (1,667) (-) Consumables acquired from third parties 202,082 192,420 Cost of electricity sold 171,249 157,352 Materials and outsourced services 15,971 17,833 Other operating costs 14,862 17,235 Gross value added 197,500 174,945 Amortization and depreciation 4,755 7,193 Net added value 192,745 167,752 Transferred value added Finance income 13,788 13,574 Total added value to be distributed 206,533 181,326

Distribution of value added 2017 2016

Personnel Direct compensation 12,088 9,590 Benefits 4,348 4,136 Government Severance Indemnity Fund for Employees (FGTS) 1,155 1,104 Taxes, charges and contributions Federal 29,834 22,104 State 78,373 80,870 Municipal 143 125 Intrasector Obligations 35,699 31,089 Interest expenses Interest 13,882 15,193 Rent 272 180 Interest on equity Dividends 16,424 8,087 Additional dividends proposed 9,942 3,382 Legal reserve - 847 Income tax reduction reserve 4,373 4,619 206,533 181,326

Investments 2017 2016

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 Sub- transmission 0 0.0% 0 Total 14,325 -1.3% 14,513 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 99

Internal social metrics Employees/ Employability/ D&O

General information 2017 2016 2015

Total number of employees 233 236 242 Number of outsourced employees (outsourced, subcontractors, freelancers) by employment 26 30 31 type, employment contract and region 1 Employees aged 30 or under (%) 16.3% 17.0% 21.5% 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% Percentage of female employees out of total (%) 13.7% 15.3% 14.9% Women in managerial positions - out of total managerial positions (%) 22.7% 0.0% 0.0% Black female employees (black and mixed race) - out of total employees (%) 4.7% 5.5% 6.2% Black male employees (black and mixed race) - out of total employees (%) 37.7% 37.3% 37.6% Black employees (black and mixed race) in managerial positions out of total managerial 22.7% 0.0% 0.0% positions (%) Percentage of interns out of total employees (%) 2.1% 3.8% 5.0% Apprentice program employees (%) 3.4% 0.0% 0.8% Employees with special needs 9 11 7

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

Gross payroll 15,205 14,918 13,745 Compulsory social charges 4,068 3,720 3,803 Education 10 65 40 Food and Restaurants 2,274 2,192 1,995 Transportation 87 - 403 Health 1,089 1,086 907 Date Founded 187 153 222 Occupational health and safety 412 0 0 Culture 0 0 0 Training and professional development 24 9 34 Day care and day care allowance 403 329 267 Other (funeral allowance, exceptional payments, retirement premium) 87 490 35

Profit sharing 2017 2016 2015

Total investment in company profit-sharing program (R$ 000) 1,531 1,895 1,719 Amounts distributed in relation to gross payroll (%) 10.07% 12.7% 12.5% Highest compensation divided by the lowest compensation in cash paid by the company 9.85 9.85 18.16 Lowest compensation at the company divided by the minimum salary in force 1.03 1.03 1.13

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

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 1,741 100 ENERGISA BORBOREMA

Occupational health and safety 2017 2016 2015

Average overtime per employee/year 62.9 51.7 52.6 Total frequency rate of the company for the period - employees 4.65 6.21 1.88 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 Frequency rate of the company for the period - workforce (employees + contractors) 4.84 4.65 5.55 Severity rate for the period - workforce (employees + contractors) 64.51 15.5 62.39 Fatalities – employees 0 0 0 Fatalities – contractors 0 0 0

Professional development 2017 2016 2015

Education levels - specify percentage of total employees Primary Education 15.2% 11.0% 11.2% High School 64.3% 69.9% 69.8% Technical School 4.3% 4.2% 3.7% Undergraduate School 14.5% 14.0% 14.5% Graduate (specialist, Master's degree, PhD) 1.7% 0.8% 0.8% Amount invested in professional development and education (R$ 000) 23 9 34 Average number of hours of training per year per employee, broken down into job type 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

Conduct in light of dismissals 2017 2016 2015

Churn rate 5.28% 2.85% 9.96% Labor claims (company and outsourced employees) Amounted provisioned in the period (R$ 000) 1,300 3,750 4,089 Number of labor claims brought against the company in the period 40 22 32 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

Investments in supplementary pensions (R$ 000) 187 153 222 Number of beneficiaries of supplementary pension plans 38 49 51

1 From 2016, this does not include outsourced employees working at other Group companies. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 101

External social metrics Consumers

Excellence in service 2017 2016 2015

Profile of consumers and clients Profile of consumers and clients Energy sales by rate class (GWh): % Total 35.7% 31.3% 27.2% Residential 8.2% 7.9% 7.7% Low-income residential 25.5% 24.4% 23.5% 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 utility 5.9% 5.4% 5.0%

Public Authorities 2017 2016 2015

Customer satisfaction 65.85 78.70 63.87 Satisfaction rates obtained by Iasc Survey - Aneel 83.30 85.50 86.63

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% INS - Level of Service Rate (%) 0.73% 0.52% 0.76% 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 (unit) 2,700 2,171 2,430 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 Aneel – state/regional agencies 10 9 13 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.

102 ENERGISA BORBOREMA

Community

Impacts on health and safety 2017 2016 2015

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 1 0 1 Proceedings

Low-income rate 2017 2016 2015

Number of low-income households served 39,647 42,466 40,430 Total low-income households out of total households served (residential customers/ 22.3% 24.1% 23.4% consumers) (%) Revenue from sales to low-income residential subsector (R$ 000) 1 19,505 20,881 21,823 Total revenue from sales to low-income residential subsector out of total residential 13.0% 14.9% 15.8% revenue (%) Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 1 8,325 8,848 8,310

Company involvement in social action 2017 2016 2015

Funds allocated to education (R$ 000) 119 0 0 Funds allocated to health care and sanitation (R$ 000) 0 30 46 Funds allocated to culture (R$ 000) 269 96 172 Funds allocated to sports (R$ 000) 20 15 23 Other funds allocated to social initiatives (R$ 000) 6 75 8 Employees carrying out voluntary work in the community outside the Company/total 0.0% 0.0% 0.0% employees Number of hours donated a month (released from normal working hours by the 0% 0% 0% Company for employee volunteer work

Company involvement in cultural, sporting and social projects (Rouanet Law, Sporting 2017 2016 2015 Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

Funds allocated to projects (R$ 000) 121 170 170 Funds allocated to the largest project (R$ 000) 33 50 70 Project name Youth Energisa Youth Orchestra Cultural Orchestra Workshop - Visual Arts Occupation Bidder Instituto Dyogenes Instituto Banese Chaves Banese Atelier Ltda.

1 Revised figures published in 2016

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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 103

Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments Financing sources Investments Financing sources Investments Financing sources (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000)

Total (%) Company Third parties Client Total (%) Company Third parties Client Total (%) Company Third parties Client

Industrial ------Trade and Services ------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 ------Municipal Energy ------Management 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.

Project type 2017 2016 2015

Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW)

Industrial ------Trade and Services ------Public Authorities ------1 82.00 41.0 Public Utility ------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 Public Lighting ------Municipal Energy ------Management Education ------TOTAL 1,675 897.2 185.6 4,225 2,645.0 889.4 3,643 2,169.0 393.0 104 ENERGISA BORBOREMA

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 - 46.2 63.5% 46.8 15.8% 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% QC – Power Supply Quality and Reliability 66.5 94.3% 26.5 36.5% 45.2 15.3% 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% ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 105

Environmental metrics

Recover degraded areas 2017 2016 2015

Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 749 735 544 Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 43.4% 42.5% 38.0%

Waste generation and treatment 2017 2016 2015

Emissions Annual volume of greenhouse gases (CO , CH , N O, HFC, PFC and SF ) emitted (in tons of 2 4 2 6 285 343 409 CO2 equivalent) Annual volume of ozone-depleting emissions 0 Not available Not available Effluents Total water discharge by quality and destination 1 0 0 0 Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 2,300 2,500 3,800 Percentage 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 source Electricity consumption per kWh distributed (sold) 2 0.00047 0.00044 0.00006 Direct energy consumption by primary source in GJ 184,573 40,669 38,352 Diesel 3,497 3,747 3,519 Gasoline 2,929 3,201 3,167 Ethanol 0 0 0 Natural gas 0 0 0 Other 0 0 0 Total water consumption by source (m3) Supply (public system) 1,200.0 1,350.0 1,419.0 Groundwater (wells) Not available Not available Not available Surface extraction (waterways) 86.1 86.1 86.1 Total water withdrawal (m3) 1,200.0 1,436.1 1,505.1 Water withdrawal per employee (m3) 5.3 6.1 6.2

Environmental education and awareness raising 2017 2016 2015

At the Organization Number of employees trained in environmental education programs 6 15 15 Percentage 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 7 Number of primary school and high school students served 600 126 519 Number of teachers trained 0 62 83 Number of universities and technical schools served 2 0 0 Number of technical school and graduate students served 30 0 0

1 Water waste is sanitary waste and relatively insignificant. 2 Revised figures published in 2016 3 2016 and 2015 data included which had not been previously reported

Performance metrics 2017 2016 2015

Deforestation (hectares of land cleared by quarter) 0 0 0 Tree pruning (volume of waste created by month in kg) Not available 430 380 Oil leaks (leakage sites by month) 0 0 0 106 ENERGISA PARAÍBA

ENERGISA PARAÍBA Operating and productivity metrics

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

Number of consumers served - Captive 1 1,404,298 1,378,693 1,355,210 Number of consumers served - Free 45 34 21 Number of locations served (municipalities) 216 216 216 Number of own staff 1,807 1,941 1,979 Number of outsourced employees 2 342 360 387 Number of commercial offices 217 217 218 Electricity generated (GWh) NA NA NA Electricity purchased (GWh) 4,686.7 5,107.5 4,729.2 1) Itaipu 0 0 0 2) Auction (including federal generator auction (2002) 4,686.7 5,107.5 4,729.2 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% Technical losses – (%) on energy requirement 10.23% 10.26% 10.37% 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 Public lighting 258.6 240.0 253.4 Public utility 186.6 178.5 194.3 Substations (in Units) 64 63 62 Installed capacity (MVA) 1,181.0 1,230.0 1,170.8 Transmission lines (in km) 2,321 2,378 2,255 Distribution lines (in km) 1 74,374 70,371 69,826 Distribution transformers (in units) 1 60,332 59,166 55,572 Sale of energy through installed capacity (GWh/MVA*No. Hours/Year) 0.00035 0.00034 0.00037 Electricity sold by employee (MWh) 1,879.7 1,900.6 1,908 Number of consumers by employee 1 725 710 685 Added value/GWh sold 339.65 328.56 313.04 Overall equivalent outage duration per consumer “DEC” of the company - Amount determined 14.60 16.44 18.20 Overall equivalent outage duration per consumer “DEC” of the company - Limit 17.62 19.31 21.39 Overall equivalent outage frequency per consumer “FEC” of the company - Amount determined 6.30 6.81 7.98

Overall equivalent outage frequency per consumer “FEC” of the company - Limit 11.16 12.44 13.94

1 Revised figures published in 2016 2 Revised figures published in 2016 - this does not include outsourced employees working at other Group companies.

ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 107

Corporate governance

Managers 2017 2016 2015

CA DE CF 1 Total CA DE CF 1 Total CA DE CF 1 Total 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 Direct or indirect benefits 39 426 - 465 81 430 - 510 72 521 - 594 Participations in committees ------Other (charges) 390 2,567 - 2,957 383 257 - 640 356 256 - 612 Description of other fixed ------compensation - - - - - 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 ------Description of other variable - - - - - compensation ------

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

João Pessoa - PB 108 ENERGISA PARAÍBA

Economic and financial metrics

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

Revenue 2,512,036 2,417,362 Revenue from energy sales and services 2,386,728 2,271,188 Other revenue 14,565 14,031 Revenue relating to construction of company assets 123,228 147,718 Formation and reversal of allowance for doubtful accounts (12,485) (15,575) (-) Consumables acquired from third parties 1,275,027 1,207,374 Cost of electricity sold 1,005,966 923,527 Materials and outsourced services 117,306 114,231 Other operating costs 151,755 169,616 Gross added value 1,237,009 1,209,988 Amortization and depreciation 75,323 62,860 Net added value 1,161,686 1,147,128 Transferred added value Finance income 74,969 84,547 Total added value to be distributed 1,236,655 1,231,675

Distribution of value added 2017 2016

Personnel Direct compensation 94,847 83,427 Benefits 26,373 25,113 FGTS 6,369 7,985 Taxes, charges and contributions Federal 156,404 225,682 State 515,551 473,562 Municipal 700 577 Intrasector Obligations 122,022 159,158 Interest expenses Interest 79,788 90,184 Rent 2,031 2,123 Interest on equity Dividends 80,313 97,352 Additional dividends proposed 107,383 58,319 Legal reserve - 8,193 Income tax reduction reserve 44,874 - 1,236,655 1,231,675

Investments 2017 2016

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 Sub- transmission 0 0.0% 0 Total 140,364 10.7% 126,812 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 109

Internal social metrics Employees/ Employability/ D&O

General information 2017 2016 2015

Total number of employees 1,807 1,941 1,979 Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, 342 360 387 employment contract and region 1 Employees aged 30 or under (%) 26.0% 27.2% 30.4% Employees aged between 31 and 40 (%) 51.2% 50.2% 46.9% Employees aged between 41 and 50 (%) 15.8% 15.3% 15.0% Employees aged over 50 (%) 6.9% 7.4% 7.7% Percentage of female employees out of total (%) 14.4% 15.8% 16.1% Women in managerial positions - out of total managerial positions (%) 30.0% 27.3% 25.6% Black female employees (black and mixed race) - out of total employees (%) 5.3% 6.2% 6.3% Black male employees (black and mixed race) - out of total employees (%) 43.9% 44.4% 43.8% Black employees (black and mixed race) in managerial positions out of total managerial positions (%) 25.7% 15.2% 24.0% Percentage of interns out of total employees (%) 5.2% 4.7% 4.6% Apprentice program employees (%) 4.0% 0.0% 3.1% Employees with special needs 102 100 71

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

Gross payroll 91,476 103,785 93,876 Compulsory social charges 25,173 26,175 24,366 Education 126 395 361 Food and Restaurants 18,297 18,215 16,595 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 Day care and day care allowance 223 225 187 Other (funeral allowance, exceptional payments, retirement premium) 2,456 2,443 455

Profit sharing 2017 2016 2015

Total investment in company profit-sharing program (R$ 000) 6,938 9,356 8,021 Amounts distributed in relation to gross payroll (%) 7.58% 9.0% 8.5% Highest compensation divided by the lowest compensation in cash paid by the company 24.6 21.5 24 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 36,835 18,490 26,957 Management positions 12,132 11,086 15,062 Administrative positions 2,636 3,405 2,823 Operating positions 1,325 1,251 1,550 110 ENERGISA PARAÍBA

Occupational health and safety 2017 2016 2015

Average overtime per employee/year 80.71 63.76 70.25 Total frequency rate of the company for the period - employees 6.72 8.43 1.3 Employee seriousness rate in the period 1,747.92 100 8.57 Total frequency rate of the company for the period - contractors 2.41 1.25 2.53 Seriousness Rate of outsourced/contracted employees in the period 3,664.26 37.55 114.07 Frequency rate of the company for the period - workforce (employees + contractors) 5.35 6.26 3.41 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

Professional development 2017 2016 2015

Education levels - specify percentage of total employees Primary Education 3.1% 4.7% 5.1% High School 70.7% 73.9% 73.6% Technical School 2.9% 3.0% 2.7% Undergraduate School 21.3% 16.1% 16.5% Graduate (specialist, Master's degree, PhD) 2.0% 2.3% 2.1% Amount invested in professional development and education (R$ 000) 567 739 553 Average number of hours of training per year per employee, broken down into job type Executive positions 48.16 67.25 172.5 Management positions 58.83 58.15 68 Administrative positions 30.34 45.96 51 Operating positions 71.21 86.52 94

Conduct in light of dismissals 2017 2016 2015

Churn rate 8.88% 8.59% 9.01% Labor claims (company and outsourced employees) Amounted provisioned in the period (R$ 000) 9,048 18,165 21,956 Number of labor claims brought against the company in the period 161 126 177 Number of labor claims upheld in the period 98 144 58 Number of labor claims deemed misplaced in the period 62 67 54 Value of damages and fines paid under court awards in the period (R$ 000) 1,667 1,702 3,685

Preparation for retirement 2017 2016 2015

Investments in supplementary pensions (R$ 000) 22,767 23,115 10,655 Number of beneficiaries of supplementary pension plans 408 444 537

1 Revised figures published in 2016 - this does not include outsourced employees working at other Group companies. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 111

External social metrics Consumers

Service excellence 2017 2016 2015

Profile of consumers and clients Energy sales by rate class (GWh): % Total Residential 34.5% 33.3% 30.9% Low-income residential 11.3% 11.0% 11.3% Sales 19.1% 19.1% 18.9% Industrial 9.2% 11.9% 13.5% Rural 7.3% 7.2% 7.3% Public lighting 7.1% 6.5% 6.7% Public utility 5.1% 4.8% 5.1% Public Authorities 6.4% 6.2% 6.2%

Customer satisfaction 2017 2016 2015

Satisfaction rates obtained by Iasc Survey - Aneel 67.62 76.75 63.08 Satisfaction rates obtained by other entities and/or proprietary surveys - Abradee Survey 83.80 76.74 77.24

Consumer service 2017 2016 2015

Call Center Calls received (unit) 1,872,124 1,841,831 1,591,226 Average number of agents (unit) 42 25 103 INS - Level of Service Rate (%) 90.28% 92.19% 80.66% IAB - Abandonment rate (%) 1.74% 1.07% 4.21% ICO - Busy Call Rate (%) 0.00% 0.11% 4.21% TMA - Average interaction time (s) 171 170 177 Compensation for electrical damages Volume of Applications (unit) 2,959 3,313 3,396 Upheld (unit) 325 348 395

Complaints metrics 2017 2016 2015

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 Violation of commercial service terms Service interactions (unit) 308,269 312,515 326,306 Service interactions completed late (unit) 15,996 26,209 16,736 Service efficiency (%) 94.81% 91.61% 94.87%

Number of customer complaints escalated to 2017 2016 2015

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.

112 ENERGISA PARAÍBA

Community

Impacts on health and safety 2017 2016 2015

Total number of nonfatal injuries involving the population 7 13 3 Total number of fatal injuries involving the population 6 9 14 Legal claims resulting from accidents involving the population - General Litigation 12 1 4 Base

Low-income rate 2017 2016 2015

Number of low-income households served 353,692 345,052 335,769 Total low-income households out of total households served (residential customers/ 30.6% 30.4% 30.2% consumers) (%) Revenue from sales to low-income residential subsector (R$ 000) 196,657 180,167 185,146 Total revenue from sales to low-income residential subsector out of total residential 18.7% 19.1% 20.0% revenue (%) Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 1 77,631 70,920 67,959

Company involvement in social action 2017 2016 2015

Funds allocated to education (R$ 000) 805 469 453 Funds allocated to health care and sanitation (R$ 000) 0 0 541 Funds allocated to culture (R$ 000) 1,344 528 1311 Funds allocated to sports (R$ 000) 125 66 177 Other funds allocated to social initiatives (R$ 000) 531 1,954 1,265 Employees conducting voluntary work in the community outside the Company/total 1.4% 0.0% 0.0% employees (%) Number of monthly hours donated (released from normal working hours) by the 124 0 0 Company for voluntary work by employees

Company involvement in cultural, sporting and social projects 2017 2016 2015 (Rouanet Law, Sporting Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

Funds allocated to projects (R$ 000) 812 435 1654 Funds allocated to the largest project (R$ 000) 402 66 341 Project name Iluminarte Projeto Vela Usina Criativa Teatral Jovem de Cinema Proposed by Carolina Confederação Instituto Paiva Neves Brasileira de Fábrica do Frade da Vela Futuro Cruz

1 Revised figures published in 2016

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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 113

Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments Financing Investments Financing Investments Financing (R$ 000) 1 sources (R$ 000) (R$ 000) 1 sources (R$ 000) (R$ 000) 1 sources (R$ 000)

Total (%) Company Third parties Client Total (%) Company Third parties Client Total (%) Company Third parties Client

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 Low-Income 2,621 47.9% 2,621 - - 2,910 43.9% 2,910 - - 3,333 40.9% 3,333 - - Residential Public Lighting ------1,299 15.9% 1,299 - - Municipal Energy ------Management 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 - 555 1 Excludes funds used in project management

Project type 2017 2016 2015

Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW)

Industrial ------Trade and Services 17,001 14,459.8 54.01 ------Public Authorities 1 167.4 174.70 ------Public Utility ------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 Municipal Energy ------Management 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 2,169.5 114 ENERGISA PARAÍBA

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 - 105.9 2.4% 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 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% QC – Power Supply Quality and Reliability 152.6 8.1% 500.6 18.0% 186.7 4.4% 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%

1 Excludes funds used in project management ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 115

Environmental metrics

Recover degraded areas 2017 2016 2015

Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 4,668 4,544 4,235 Percentage of shielded and insulted lines out of total distribution lines in urban 37.3% 36.5% 32.7% areas (%)

Waste generation and treatment 2017 2016 2015

Emissions

Annual volume of greenhouse (CO2, CH4, N2O, HFC, PFC, SF6), issued into the 2,280 2,447 3,418 atmosphere (in tonnes of CO2 equivalent) Annual volume of ozone-depleting emissions 1 108.8 Not available Not available Effluents Total water discharge by quality and destination 2 224 302 310 Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 47,000 30,095 128,580 Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 100% 100% Not available

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

Total electricity consumption by source Electricity consumption per kWh distributed (sold) 0.001132 0.001207 0.000015 Direct energy consumption by primary source in GJ 57,823 59,249 58,001 Diesel 37,105 37,561 35,503 Gasoline 20,718 21,688 22,498 Ethanol 0 0 0 Natural gas 0 0 0 Other 0 0 0 Total water consumption by source (m3) Supply (public system) 4,646 5,500 5,856 Groundwater (wells) Not available Not available Not available Surface extraction (waterways) Not available Not available Not available Total water withdrawal (m3) 4,646 5,535 6,207 Water withdrawal per employee (m3) 2.46 3.8 3.13

Environmental education and awareness raising 2017 2016 2015

At the Organization Number of employees trained in environmental education programs 140 125 116 Percentage of employees trained in environmental education programs/total 7.4% 6.4% 1.8% employees 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 384 271 327 Number of primary school and high school students served 32,357 24,324 17,812 Number of teachers trained 61 1,342 1,029 Number of technical schools and high schools served 4 18 23 Number of technical school and graduate students served 225 1,233 1,331

1 Revised figures informed in 2016 2 Revised figures informed in 2015 and 2016

Performance metrics 2017 2016 2015

Deforestation (hectares of land cleared by quarter) 0 0 0 Tree pruning (volume of waste created by month in kg) Not available 4,200 4,054 Oil leaks (leakage sites by month) 1 22 21 5

1 Revised figures informed in 2016 116 ENERGISA SERGIPE

ENERGISA SERGIPE Operating and productivity metrics

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

Number of consumers served - Captive 761,924 748,538 731,480 Number of consumers served - Free 41 36 18 Number of locations served (municipalities) 63 63 63 Number of own staff 825 900 916 Number of outsourced employees 1, 3 97 75 75 Number of commercial offices 63 63 63 Electricity generated (GWh) NA NA NA Electricity purchased (GWh) 3,808.40 3,739.64 3,324.78 1) Itaipu 0.00 0.00 0.00 2) Auction (including federal generator auction (2002) 3,417.27 3,300.23 3,324.78 3) Energy sales of concession operator 391.13 439.41 412.07 Global electric losses (GWh) 2 334.26 349.6 345.8 Electrical losses – (%) total on energy requirement 3 8.79% 9.02% 8.83% Technical losses – (%) on energy requirement 6.85% 6.90% 6.05% Non-technical losses – (%) on energy requirement 1.94% 2.12% 2.78% 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 Distribution lines (in km) 2 26,848 26,010 24,802 Distribution transformers (in units) 45,295 41,308 39,389 Sale of energy through installed capacity (GWh/MVA*No. Hours/Year) 0.00036 0.00039 0.00041 Electricity sold by employee (MWh) 2,854 2,677 2,667 Number of consumers by employee 924 817 799 Added value/GWh sold 368.46 318.62 307.63 Overall equivalent outage duration per consumer “DEC” of the company - Amount determined 12.09 12.27 13.38 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 - Amount determined 6.99 7.21 7.75 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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 117

Corporate governance

Managers 2017 2016 2015

CA DE CF 1 Total CA DE CF 1 Total CA DE CF 1 Total No. of members 7 6 - 13 7 6 - 13 8 6 - 14 Annual Fixed Compensation (R$ 000) 916 5,016 - 5,932 982 2,107 - 3,089 880 2,089 - 2,969 Salary or management fees 643 1,676 - 2,319 754 1,465 - 2,219 677 1,436 - 2,113 Direct or indirect benefits 22 316 - 338 34 266 - 300 30 288 - 318 Participations in committees ------Other (charges) 251 2,108 - 2,359 194 376 - 570 172 365 - 538 Description of other fixed - - - - compensation ------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 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

Aracaju - SE 118 ENERGISA SERGIPE

Economic and financial metrics

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

Revenue 1,708,651 1,559,118 Revenue from energy sales and services 1,593,671 1,488,346 Other revenue 14,445 5,503 Revenue relating to construction of company assets 96,059 71,405 Formation and reversal of allowance for doubtful accounts 4,476 (6,136) (-) Consumables acquired from third parties 914,963 796,784 Cost of electricity sold 724,751 649,095 Materials and outsourced services 75,066 64,701 Other operating costs 115,146 82,988 Gross added value 793,688 762,334 Amortization and depreciation 65,587 55,451 Net added value 728,101 706,883 Transferred added value Finance income 139,448 60,675 Total added value to be distributed 867,549 767,558

Distribution of value added 2017 2016

Personnel Direct compensation 88,147 56,099 Benefits 14,609 16,359 FGTS 6,146 5,034 Taxes, charges and contributions Federal 126,264 141,179 State 279,827 265,479 Municipal 876 874 Intrasector Obligations 105,721 111,303 Interest expenses Interest 105,522 71,367 Rent 1,440 1,436 Interest on equity Dividends 39,975 75,508 Additional dividends proposed 75,320 10,266 Legal reserve 6,950 4,921 Tax incentive reserve 16,752 17,575 Accumulated losses - (9,842) 867,549 767,558

Investments 2017 2016

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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 119

Internal social metrics Employees/ Employability/ D&O

General information 2017 2016 2015

Total number of employees 825 900 916 Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, 97 75 75 employment contract and region 1, 2 Employees aged 30 or under (%) 37.8% 35.2% 35.9% Employees aged between 31 and 40 (%) 41.7% 41.3% 38.8% Employees aged between 41 and 50 (%) 14.1% 15.1% 16.5% Employees aged over 50 (%) 6.4% 8.4% 8.8% Percentage of female employees out of total (%) 12.2% 14.4% 15.0% Women in managerial positions - out of total managerial positions (%) 26.9% 20.0% 19.0% Black female employees (black and mixed race) - out of total employees (%) 9.2% 13.3% 11.0% Black male employees (black and mixed race) - out of total employees (%) 71.5% 84.2% 70.0% Black employees (black and mixed race) in managerial positions out of total managerial positions (%) 70.6% 73.3% 13.0% Percentage of interns out of total employees (%) 5.8% 5.9% 5.0% Apprentice program employees (%) 4.2% 5.0% 5.0% Employees with special needs 40 41 37

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

Gross payroll 2 60,778 64,874 61,254 Compulsory social charges 17,893 15,711 14,622 Education 123 92 98 Food and Restaurants 8,514 8,550 7,976 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 Training and professional development 85 284 373 Day care and day care allowance 107 535 488 Other (funeral allowance, exceptional payments, retirement premium) 1,546 585 309

Profit sharing 2017 2016 2015

Total investment in company profit-sharing program (R$ 000) 3,685 5,108 4,872 Amounts distributed in relation to gross payroll (%) 2 6.1% 7.9% 8.0% Highest compensation divided by the lowest compensation in cash paid by the company 19.9 18.9 18.9 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 45,475 44,899 38,333 Management positions 12,494 11,849 10,815 Administrative positions 2,969 2,941 2,706 Operating positions 1,692 1,742 1,690 120 ENERGISA SERGIPE

Occupational health and safety 2017 2016 2015

Average overtime per employee/year 58 59 59 Total frequency rate of the company for the period - employees 13.51 4.88 10.7 Employee seriousness rate in the period 63.70 48.18 25.33 Total frequency rate of the company for the period - contractors 1.99 3.11 3.44 Seriousness Rate of outsourced/contracted employees in the period 16.93 93.17 34.4 Frequency rate of the company for the period - workforce (employees + contractors) 8.99 4.32 9.31 Severity rate for the period - workforce (employees + contractors) 45.34 60 32.83 Fatalities – employees 0 0 0 Fatalities – contractors 0 0 0

Professional development 2017 2016 2015

Education levels - specify percentage of total employees 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% Amount invested in professional development and education (R$ 000) 297 284 373 Average number of hours of training per year per employee, broken down into job type Executive positions 40 35 38 Management positions 56 69 87 Administrative positions 80 60 51 Operating positions 107 112 102

Conduct in light of dismissals 2017 2016 2015

Churn rate 9.58% 8.19% 6.44% Labor claims (company and outsourced employees) Amounted provisioned in the period (R$ 000) 21,091 19,718 18,714 Number of labor claims brought against the company in the period 60 60 115 Number of labor claims upheld in the period 46 43 38 Number of labor claims deemed misplaced in the period 14 21 17 Value of damages and fines paid under court awards in the period (R$ 000) 5,722.79 4,086.74 5,306.33

Preparation for retirement 2017 2016 2015

Investments in supplementary pensions (R$ 000) 23,595 17,533 15,870 Number of beneficiaries of supplementary pension plans 575 450 478

1 In 2016, this does not include outsourced employees working at other Group companies. 2 Revised figures published in 2015. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 121

External social metrics Consumers

Service excellence 2017 2016 2015

Profile of consumers and clients Energy sales by rate class (GWh): % Total 2,357 2,413 2,443 Residential 34.1% 34.1% 32.6% Low-income residential 8.9% 8.1% 8.2% Sales 20.8% 21.3% 21.9% Industrial 9.1% 10.0% 11.8% Rural 4.6% 4.9% 4.8% Public lighting 7.8% 7.4% 6.6% Public utility 9.0% 8.5% 8.4% Public Authorities 5.7% 5.7% 5.6%

Customer satisfaction 2017 2016 2015

Satisfaction rates obtained by Iasc Survey - Aneel 63.64 68.48 58.81 Satisfaction rates obtained by other entities and/or proprietary surveys - Abradee Survey 85.6 82.9 84.8

Consumer service 2017 2016 2015

Call Center Calls received (unit) 872,092 812,647 746,543 Average number of agents (unit) 52 44 66 INS - Level of Service Rate (%) 90.69% 92.30% 89.00% IAB - Abandonment rate (%) 1.02% 0.95% 1.66% ICO - Busy Call Rate (%) 0.00% 0.03% 0.35% TMA - Average interaction time (s) 183 174 163 Compensation for electrical damages Volume of Applications (unit) 4,162 3,164 3,210 Upheld (unit) 721 507 627

Complaints metrics 2017 2016 2015

Confirmed Complaints (unit) 119,630 104,128 112,152 DER (hours) 151.34 370.53 263.04 FER (unit) 2.98 2.67 2.79 Violation of commercial service terms Service interactions (unit) 1 216,960 210,123 161,569 Service interactions completed late (unit) 1 16,189 9,136 6,233 Service efficiency (%) 92.54% 95.65% 96.14%

Number of customer complaints escalated to 2017 2016 2015

The company 161,237 132,824 143,389 Aneel – state/regional agencies 539 469 526 Procon 122 60 83 to the courts 1,362 1,110 1,038

1 Revised figures published in 2016 122 ENERGISA SERGIPE

Community

Impacts on health and safety 2017 2016 2015

Total number of nonfatal injuries involving the population 2 5 2 Total number of fatal injuries involving the population 2 3 4 Legal claims resulting from accidents involving the population - General Litigation Base 13 2 3

Low-income rate 2017 2016 2015

Number of low-income households served 204,098 173,923 167,866 Total low-income households out of total households served (residential customers/ 42.2% 33.5% 26.1% consumers) (%) Revenue from sales to low-income residential subsector (R$ 000) 87,900 76,789 77,696 Total revenue from sales to low-income residential subsector out of total residential 16.5% 15.1% 15.3% revenue (%) Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 40,917 35,704 32,675

Company involvement in social action 2017 2016 2015

Funds allocated to education (R$ 000) 123 70 66 Funds allocated to health care and sanitation (R$ 000) 0 0 0 Funds allocated to culture (R$ 000) 198 62 97 Funds allocated to sports (R$ 000) 1 85 114 127 Other funds allocated to social initiatives (R$ 000) 109 604 667 Employees conducting voluntary work in the community outside the Company/total 0.7% 1.1% 0.9% employees (%) Number of monthly hours donated (released from normal working hours) by the Not available 116 Not available Company for voluntary work by employees

Company involvement in cultural, sporting and social projects (Rouanet Law, Sporting 2017 2016 2015 Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

Funds allocated to projects (R$ 000) 666 0 121 Funds allocated to the largest project (R$ 000) 300 0 71 Project name Film Arigó Sergipe Sergipe Youth Youth Orchestra Orchestra Proposed by Write Instituto Instituto Produções Banese Banese Artísticas Ltda.

1 Revised figures published in 2016

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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 123

Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments Financing sources Investments Financing sources Investments Financing sources (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000)

Total (%) Company Third parties Client Total (%) Company Third parties Client Total (%) Company Third parties Client

Industrial ------Trade and Services ------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 2,923 59.3% 2,923 - - 2,846 57.0% 2,846 - - 2,843 59.3% 2,843 - - Residential 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

Project type 2017 2016 2015

Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW)

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 Low-Income 96,302 6,750.0 1,575.0 69,162 3,984.0 2,079.0 62,619 6,556.0 3,509.0 Residential Public Lighting 0 0.0 0.0 0 0.0 0.0 0 0.0 0.0 Municipal Energy 0 0.0 0.0 0 0.0 0.0 0 0.0 0.0 Management 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 6,723.0 124 ENERGISA SERGIPE

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 - 140.2 21.7% 239.9 15.8% OP – Power System Operation 288.2 73.6% 189.1 29.3% 238.2 15.6% SC – Power System Supervision, Control and Protection 8.8 2.3% 10.9 1.7% 0 - QC – Power Supply Quality and Reliability 94.7 24.2% 178.5 27.7% 202.6 13.3% 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%

1 Excludes funds used in project management ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 125

Environmental metrics

Recover degraded areas 2017 2016 2015

Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 143.6 145.6 145.0 Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 6.8% 1.1% 1.7%

Waste generation and treatment 2017 2016 2015

Emissions

Annual volume of greenhouse (CO2, CH4, N2O, HFC, PFC, SF6), issued into the atmosphere (in Not Not Not tonnes of CO2 equivalent) available available available Annual volume of ozone-depleting emissions Not Not Not available available available Effluents Total water discharge by quality and destination 4,909 3,806 5,920 Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 640.04 318.06 83.89 Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 0% 0% 0%

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

Total electricity consumption by source Electricity consumption per kWh distributed (sold) 0.001353 0.001860 0.00118 Direct energy consumption by primary source in GJ 26,875.45 27,075.17 26,716.94 Diesel 18,044.65 17,355.75 17,482.55 Gasoline 8,830.80 9,719.42 9,234.39 Ethanol - - - Natural gas - - - Other - - - Total water consumption by source (m3) Supply (public system) 14,877 11,532 17,501 Groundwater (wells) 528 528 528 Surface extraction (waterways) 7 7 7 Total water withdrawal (m3) 14,884 12,067 18,036 Water withdrawal per employee (m3) 16.2 13.2 19.7

Environmental education and awareness raising 2017 2016 2015

At the Organization Number of employees trained in environmental education programs 128 72 153 Percentage 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 56 Number of primary school and high school students served 10,584 9,600 9,114 Number of teachers trained - - - Number of technical schools and high schools served 2 2 4 Number of technical school and graduate students served 12 24 67

Performance metrics 2017 2016 2015

Deforestation (hectares of land cleared by quarter) 0 10 0 Tree pruning (volume of waste created by month in kg) 179,537 158,080 140,000 Oil leaks (leakage sites by month) 0 0 Not available 126 ENERGISA MATO GROSSO

ENERGISA MATO GROSSO Operating and productivity metrics

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

Number of consumers served - Captive 1,365,659 1,327,938 1,296,639 Number of consumers served - Free 200 164 95 Number of locations served (municipalities) 141 141 141 Number of own employees 1 2,423 2,302 2,366 Number of outsourced employees 1, 2 1,389 827 442 Number of commercial offices 144 144 144 Electricity generated (GWh) NA NA NA Electricity purchased (GWh) 8,897.3 8,771.4 8,673.1 1) Itaipu 1,310.7 1,329.3 1,379.5 2) Auction (including federal generator auction (2002) 7,586.6 7,442.1 7,293.6 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 Electrical losses – (%) total on energy requirement 14.59% 15.44% 14.61% Technical losses – (%) on energy requirement 9.51% 9.82% 9.92% Non-technical losses – (%) on energy requirement 5.08% 5.62% 4.69% 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 Substations (in Units) 159 157 156 Installed capacity (MVA) 3,841 3,679 3,431 Transmission lines (in km) 6,302 5,916 6,008 Distribution lines (in km) 176,044 157,457 153,177 Distribution transformers (in units) 182,079 150,919 144,055 Sale of energy through installed capacity (GWh/MVA*No. Hours/Year) 0.00025 0.00025 0.00023 Electricity sold by employee (MWh) 3,321 3,267 2,926 Number of consumers by employee 539 546 548 Added value/GWh sold 366.20 382.98 416.92 Overall equivalent outage duration per consumer “DEC” of the company - Amount determined 25.35 23.57 30.24 Overall equivalent outage duration per consumer “DEC” of the company - Limit 23.94 24.85 25.52 Overall equivalent outage frequency per consumer “FEC” of the company - Amount determined 12.49 14.27 24.13 Overall equivalent outage frequency per consumer “FEC” of the company - Limit 19.85 20.93 21.62

1 2015 figures revised 2 In 2016, this does not include outsourced employees working at other Group companies. 3 Excludes proprietary consumption. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 127

Corporate governance

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 Participations in committees ------Other (charges) 315 1,022 - 1,337 71 565 46 682 54 351 94 499 Description of other fixed ------compensation 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 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

Cuiabá - MT 128 ENERGISA MATO GROSSO

Economic and financial metrics

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

Revenue 5,982,010 5,404,829 Revenue from energy sales and services 5,500,192 4,728,533 Other revenue 54,477 25,506 Revenue relating to construction of company assets 497,954 615,266 Formation and reversal of allowance for doubtful accounts (70,613) 35,524 (-) Consumables acquired from third parties 3,364,412 2,865,369 Cost of electricity sold 2,453,535 1,946,547 Materials and outsourced services 277,873 250,554 Other operating costs 633,004 668,268 Gross added value 2,617,598 2,539,460 Amortization and depreciation 194,377 141,165 Net added value 2,423,221 2,398,295 Transferred added value Finance income 146,384 184,912 Total added value to be distributed 2,569,605 2,583,207

Distribution of value added 2017 2016

Personnel Direct compensation 108,005 104,325 Benefits 42,660 40,704 FGTS 11,536 14,350 Taxes, charges and contributions Federal 352,069 289,484 State 1,191,364 1,089,499 Municipal 1,133 911 Intrasector Obligations 425,272 465,738 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

Investments 2017 2016

R$ 000 ∆% R$ 000 Expansion of distribution/transmission (reinforcement expansion) 64,284 - 87.4% 508,739 Renewal of distribution/transmission 636,702 15.4% 98,173 Sub- transmission 0 0.0% 0 Total 700,985 15.5% 606,912 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 129

Internal social metrics Employees/ Employability/ D&O

General information 2017 2016 2015

Total number of employees 1 2,423 2,302 2,366 Number of outsourced employees (outsourced, subcontractors, freelancers) by 1,389 827 442 employment type, employment contract and region 1, 2 Employees aged 30 or under (%) 38.0% 37.1% 40.0% Employees aged between 31 and 40 (%) 44.7% 44.1% 42.0% Employees aged between 41 and 50 (%) 13.2% 13.4% 12.9% Employees aged over 50 (%) 4.1% 5.4% 5.1% Percentage of female employees out of total (%) 12.8% 16.0% 16.0% Women in managerial positions - out of total managerial positions (%) 27.3% 0.3% 31.0% Black female employees (black and mixed race) - out of total employees (%) 7.9% 8.9% 9.0% Black male employees (black and mixed race) - out of total employees (%) 64.5% 7.6% 61.0% Black employees (black and mixed race) in managerial positions out of total managerial 36.4% 0.6% 31.0% positions (%) Percentage of interns out of total employees (%) 2.1% 3.0% 2.0% Apprentice program employees (%) 0.0% 2.5% 2.0% Employees with special needs 97 119 112

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

Gross payroll 171,032 284,290 232,541 Compulsory social charges 44,621 60,719 48,395 Education 90 109 0 Food and Restaurants 28,081 26,740 21,966 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 Not Not Not Culture available available available Training and professional development 881 314 630 Day care and day care allowance 277 297 274 Other (funeral allowance, exceptional payments, retirement premium) 1,419 1,956 779

Profit sharing 2017 2016 2015

Total investment in company profit-sharing program (R$ 000) 4,324 2,109 4,121 Amounts distributed in relation to gross payroll (%) 2 3.80% 0.70% 1.80% Highest compensation divided by the lowest compensation in cash paid by the company 11.92 42.97 34.21 Lowest compensation at the company divided by the minimum salary in force 1.4 1.4 1.5

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

Executive positions 23,285 20,618 13,263 Management positions 15,291 11,738 13,554 Administrative positions 2,351 3,069 2,886 Operating positions 2,176 2,498 1,564 130 ENERGISA MATO GROSSO

Occupational health and safety 2017 2016 2015

Average overtime per employee/year 32.29 154.61 17.84 Total frequency rate of the company for the period - employees 5.79 7.65 6.93 Employee seriousness rate in the period 1,381.64 1,383.69 100 Total frequency rate of the company for the period - contractors 8.18 13.46 12.29 Seriousness Rate of outsourced/contracted employees in the period 369.20 1,814 3,138 Frequency rate of the company for the period - workforce (employees + contractors) 13.97 21.11 9.36 Severity rate for the period - workforce (employees + contractors) 1,750.84 3,197 1,480 Fatalities – employees 1 1 0 Fatalities – contractors 0 1 2

Professional development 2017 2016 2015

Education levels - specify percentage of total employees Primary Education 1.6% 1.6% 1.4% High School 82.0% 73.7% 72.7% Not Not Not Technical School available available available Undergraduate School 14.6% 23.1% 23.7% Graduate (specialist, Master's degree, PhD) 1.8% 1.9% 2.3% Amount invested in professional development and education (R$ 000) 716 314 630 Average number of hours of training per year per employee, broken down into job type Executive positions 0 3.7 16 Management positions 31 55.2 48.4 Administrative positions 30 43.2 82.9 Operating positions 85.9 70.1 125

Conduct in light of dismissals 2017 2016 2015

Not 13.1% 13.2% Churn rate available Labor claims (company and outsourced employees) Amounted provisioned in the period (R$ 000) 3,858 3,322 9,009 Number of labor claims brought against the company in the period 249 234 158 Number of labor claims upheld in the period 117 93 30 Number of labor claims deemed misplaced in the period 60 131 49 Value of damages and fines paid under court awards in the period (R$ 000) 1,955 2,786 8,981

Preparation for retirement 2017 2016 2015

Investments in supplementary pensions (R$ 000) 5,799 4,363 3,821 Not Not Not Number of beneficiaries of supplementary pension plans available available available

1 Revised figures published in 2015. 2 In 2016, this does not include outsourced employees working at other Group companies. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 131

External social metrics Consumers

Service excellence 2017 2016 2015

Profile of consumers and clients Energy sales by rate class (GWh): % Total Residential 36.0% 34.8% 33.8% Low-income residential 3.5% 3.7% 3.3% Sales 21.7% 22.3% 23.2% Industrial 9.3% 10.9% 12.9% Rural 16.1% 15.3% 14.2% Public lighting 5.2% 4.8% 4.7% Public utility 2.7% 2.8% 2.6% Public Authorities 5.4% 5.4% 5.3%

Customer satisfaction 2017 2016 2015

Satisfaction rates obtained by Iasc Survey - Aneel 55.67 52.87 44.8 Satisfaction rates obtained by other entities and/or proprietary surveys - Abradee Survey 77.7 78.9 81.4

Consumer service 2017 2016 2015

Call Center Calls received (unit) 3,011,475 2,589,328 2,687,689 Average number of agents (unit) 73 37 50 INS - Level of Service Rate (%) 86.45% 92.97% 82.96% IAB - Abandonment rate (%) 1.82% 1.39% 4.56% ICO - Busy Call Rate (%) 0.00% 0.16% 21.74% TMA - Average interaction time (s) 186 199 231 Compensation for electrical damages Volume of Applications (unit) 8,814 7,953 8,011 Upheld (unit) 1,742 1,396 1,427

Complaints metrics 2017 2016 2015

Confirmed Complaints (unit) 374,528 415,323 453,731 DER (hours) 199.32 157.52 249.37 FER (unit) 8.67 7.79 9.58 Violation of commercial service terms Service interactions (unit) 710,420 582,618 726,494 Service interactions completed late (unit) 36,329 31,474 20,655 Service efficiency (%) 94.9% 94.6% 97.2%

Number of customer complaints escalated to 2017 2016 2015

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 3,759 132 ENERGISA MATO GROSSO

Community

Impacts on health and safety 2017 2016 2015

Total number of nonfatal injuries involving the population 4 8 9 Total number of fatal injuries involving the population 13 7 10 Legal claims resulting from accidents involving the population - General Litigation Base 23 24 16

Low-income rate 1 2017 2016 2015

Number of low-income households served 141,445 128,508 129,377 Total low-income households out of total households served (residential customers/ 13.3% 12.4% 12.9% consumers) (%) Revenue from sales to low-income residential subsector (R$ 000) 130,860 132,929 7,989 Total revenue from sales to low-income residential subsector out of total residential 6.7% 7.5% 6.8% revenue (%) Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 38,361 41,956 3,100

Company involvement in social action 2017 2016 2015

Funds allocated to education (R$ 000) 220 0 128,419 Funds allocated to health care and sanitation (R$ 000) 0 78 0 Funds allocated to culture (R$ 000) 205 313 0 Funds allocated to sports (R$ 000) 18 82 0 Other funds allocated to social initiatives (R$ 000) 104 43 0 Employees conducting voluntary work in the community outside the Company/total Not available Not available Not available employees (%) Number of monthly hours donated (released from normal working hours) by the Not available Not available Not available Company for voluntary work by employees

Company involvement in cultural, sporting and social projects (Rouanet Law, Sporting 2017 2016 2015 Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

Funds allocated to projects (R$ 000) 0 0 0 Funds allocated to the largest project (R$ 000) 0 0 0 Project name - - - Bidder - - -

Electric sector metrics Universal electricity access

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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 133

Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments Financing sources Investments Financing sources Investments Financing sources (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000)

Total (%) Company Third parties Client Total (%) Company Third parties Client Total (%) Company Third parties Client

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 Low-Income 5,608 23.0% 5,608 - - 8,389 19.8% 8,389 - - 7,282 26.0% 7,282 - - Residential Public Lighting - 0.0% - - - - 0.0% ------Municipal Energy - 0.0% - - - - 0.0% ------Management 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 - 3,695 1 Excludes funds used in project management

Project type 2017 2016 2015

Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW)

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 - Public Lighting ------Municipal Energy ------Management Educational ------TOTAL 3,168 21,669.2 7,871.1 38,174 13,133.5 2,897.0 13,198 8,108.3 3,273.0 134 ENERGISA MATO GROSSO

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 572.6 6.5% 33.5 0.4% 148.2 2.0% 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 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%

1 Excludes funds used in project management ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 135

Environmental metrics

Recover degraded areas 2017 2016 2015

Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 8,848 8,222 7,752 Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 40.8% 40.6% 37.0%

Waste generation and treatment 2017 2016 2015

Emissions Annual volume of greenhouse (CO , CH , N O, HFC, PFC, SF ), issued into the atmosphere 2 4 2 6 3,966 7,647 6,232 (in tonnes of CO2 equivalent) Annual volume of ozone-depleting emissions 0 0 0 Effluents Total water discharge by quality and destination 1 NA NA NA Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 101 52 111 Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 99.7% 99.7% 0.0%

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

Total electricity consumption by source Electricity consumption per kWh distributed (sold) 0.000029 0.000011 0.00001 Direct energy consumption by primary source in GJ 50,759 75,912 67,990 Diesel 41,592 56,761 51,588 Gasoline 7,967 10,379 4,322 Ethanol 1,201 8,772 12,081 Natural gas NA NA NA Other NA NA NA Total water consumption by source (m3) Supply (public system) 9,333 8,574 10,092 Groundwater (wells) 175 175 0 Surface extraction (waterways) 0 0 0 Total water withdrawal (m3) 9,508 8,749 10,092 Water withdrawal per employee (m3) 3.9 3.6 4.1

Environmental education and awareness raising 2017 2016 2015

At the Organization Number of employees trained in environmental education programs 719 321 288 Percentage 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 available Number of primary school and high school students served Not available 76,417 Not available Number of teachers trained Not available 2,990 Not available Number of technical schools and high schools served Not available Not available Not available Number of technical school and graduate students served Not available Not available Not available

1 Water waste is sanitary waste and relatively insignificant.

Performance metrics 2017 2016 2015

Deforestation (hectares of land cleared by quarter) 1 59 130 150 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

1 Revised data for 2016 and 2015 published in the 2016 report 136 ENERGISA MATO GROSSO DO SUL

ENERGISA MATO GROSSO DO SUL Operating and productivity metrics

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

Number of consumers served - Captive 1,015,526 990,556 970,635 Number of consumers served - Free 139 113 73 Number of locations served (municipalities) 74 74 74 Number of own staff 1,345 1,389 1,320 Number of outsourced employees 1 823 776 912 Number of commercial offices 79 79 79 Electricity generated (GWh) NA NA NA Electricity purchased (GWh) 5,350.6 6,021.7 5,357.8 1) Itaipu 906.8 862.1 733.8 2) Auction (including federal generator auction (2002) 4,443.8 5,159.6 4,624.0 3) Energy sales of concession operator 0 0 Global electric losses (GWh) 805.0 780.5 828.5 Electrical losses – (%) total on energy requirement 13.44% 13.72% 14.24% Technical losses – (%) on energy requirement 10.00% 9.83% 9.82% Non-technical losses – (%) on energy requirement 3.44% 3.89% 4.42% Energy Sold (GWh) 2 4,314 4,310 4,477 Residential 1,793 1,693 1,686 Industrial 324 452 584 Commercial 1,041 1,038 1,094 Rural 530 487 473 Government 248 222 246 Public lighting 232 233 226 Public utility 146 185 169 Substations (in Units) 101 100 98 Installed capacity (MVA) 2,466 2,357 2,223 Transmission lines (in km) 3,869 3,803 3,796 Distribution lines (in km) 100,444 87,895 86,268 Distribution transformers (in units) 82,533 65,308 61,276 Sale of energy through installed capacity (GWh/MVA*No. Hours/Year) 0.00020 0.00021 0.00023 Electricity sold by employee (MWh) 3,019 2,970 3,397 Number of consumers by employee 368 683 735 Added value/GWh sold 367.35 364.92 369.99 Overall equivalent outage duration per consumer “DEC” of the company - Amount determined 11.92 11.81 13.93 Overall equivalent outage duration per consumer “DEC” of the company - Limit 12.26 12.75 13.28 Overall equivalent outage frequency per consumer “FEC” of the company - Amount determined 5.72 5.93 7.16 Overall equivalent outage frequency per consumer “FEC” of the company - Limit 9.22 9.76 10.47

1 In 2016, this does not include outsourced employees working at other Group companies. 2 Excludes proprietary consumption. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 137

Corporate governance

Managers 2017 2016 2015

CA DE CF 1 Total CA DE CF 1 Total CA DE CF 1 Total 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 Salary or management fees 322 1,920 - 2,242 253 2,079 - 2,332 139 2,357 - 2,496 Direct or indirect benefits 13 314 - 327 0 682 - 682 - 0 - 0 Participations in committees ------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 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

Campo Grande - MS 138 ENERGISA MATO GROSSO DO SUL

Economic and financial metrics

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

Revenue 3,324,688 2,985,318 Revenue from energy sales and services 3,055,187 2,772,621 Other revenue 46,426 16,731 Revenue relating to construction of company assets 223,455 230,186 Formation and reversal of allowance for doubtful accounts (380) (34,220) (-) Consumables acquired from third parties 1,743,980 1,462,900 Cost of electricity sold 1,265,734 1,072,465 Materials and outsourced services 193,754 116,821 Other operating costs 284,492 273,614 Gross added value 1,580,708 1,522,418 Amortization and depreciation 97,552 76,561 Net added value 1,483,156 1,445,857 Transferred added value Finance income 101,594 126,946 Total added value to be distributed 1,584,750 1,572,803

Distribution of value added 2017 2016

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 Additional dividends proposed 46,993 75,655 Legal Reserve 5,207 5,369 Profit retention - - Retained earnings (accumulated losses) - - 1,584,750 1,572,803

Investments 2017 2016

R$ 000 ∆% R$ 000 Expansion of distribution/transmission (reinforcement 221,431 0.4% 220,610 expansion) Renewal of distribution/transmission 246,151 929.6% 23,907 Sub- transmission - - - Total 467,582 91.2% 244,516 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 139

Internal social metrics Employees/ Employability/ D&O

General information 2017 2016 2015

Total number of employees 1,345 1,389 1,320 Number of outsourced employees (outsourced, subcontractors, freelancers) by employment type, 823 776 912 employment contract and region Employees aged 30 or under (%) 39.6% 40.9% 39.7% Employees aged between 31 and 40 (%) 43.5% 38.9% 34.9% Employees aged between 41 and 50 (%) 10.2% 11.5% 12.8% Employees aged over 50 (%) 6.7% 8.8% 12.6% Percentage of female employees out of total (%) 13.6% 14.1% 14.2% Women in managerial positions - out of total managerial positions (%) 20.0% 21.1% 17.8% Black female employees (black and mixed race) - out of total employees (%) 2.7% 3.2% 3.0% Black male employees (black and mixed race) - out of total employees (%) 38.6% 41.1% 35.1% Black employees (black and mixed race) in managerial positions out of total managerial positions (%) 6.7% 5.3% 16.3% Percentage of interns out of total employees (%) 3.4% 4.2% 4.0% Apprentice program employees (%) 1.6% 1.1% 0.1% Employees with special needs 41 41 36

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

Gross payroll 192,134 196,145 161,776 Compulsory social charges 35,562 37,365 32,690 Education 169 121 162 Food and Restaurants 21,848 19,908 17,460 Not 2,243 2,164 Transportation available Health 17,448 14,914 15,024 Not 4,205 4,005 Date Founded available Not 0 194 Occupational health and safety available Culture 337 285 0 Training and professional development 576 329 631 Day care and day care allowance 260 183 119 Not 593 0 Other (funeral allowance, exceptional payments, retirement premium) available

Profit sharing 2017 2016 2015

Total investment in company profit-sharing program (R$ 000) 6,821 4,774 7,951 Amounts distributed in relation to gross payroll (%) 3.6 2.4% 4.9% Highest compensation divided by the lowest compensation in cash paid by the company 18.55 15.83 29.96 Lowest compensation at the company divided by the minimum salary in force 1.46 1.53 1.6

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

Executive positions 39,000 52,865 47,564.00 Management positions 10,543 14,776 11,159 Administrative positions 4,142 4,788 4,234 Operating positions 1,923 1,974 2,704 140 ENERGISA MATO GROSSO DO SUL

Occupational health and safety 2017 2016 2015

Average overtime per employee/year 16.83 16.6 24.18 Total frequency rate of the company for the period - employees 8.23 7.73 12.24 Employee seriousness rate in the period 2,244.41 114.94 2,400.75 Total frequency rate of the company for the period - contractors 8.99 12.52 22.31 Seriousness Rate of outsourced/contracted employees in the period 2,058.12 161.42 20,174 Frequency rate of the company for the period - workforce (employees + contractors) 17.22 20.25 34.55 Severity rate for the period - workforce (employees + contractors) 4,302.53 276.36 22,575 Fatalities – employees 1 0 1 Fatalities – contractors 1 0 2

Professional development 2017 2016 2015

Education levels - specify percentage of total employees Primary Education 0.6% 1.4% 2.2% High School 81.7% 55.9% 51.0% Technical School 0.0% 22.5% 20.4% Undergraduate School 17.4% 19.8% 22.9% Graduate (specialist, Master's degree, PhD) 0.3% 0.3% 3.5% Amount invested in professional development and education (R$ 000) 638 329 631 Average number of hours of training per year per employee, broken down into job type 82.1 83.8 83.4 Executive positions 0.0 2.7 1.5 Management positions 84.9 86.2 51.0 Administrative positions 51.1 57.1 70.3 Operating positions 92.7 94.2 91.3

Conduct in light of dismissals 2017 2016 2015

Churn rate 11.41% 14.81% 1.01% Labor claims (company and outsourced employees) Amounted provisioned in the period (R$ 000) 139,350 137,034 115,919 Number of labor claims brought against the company in the period 503 329 337 Number of labor claims upheld in the period 77 97 85 Number of labor claims deemed misplaced in the period 108 145 127 Value of damages and fines paid under court awards in the period (R$ 000) 6,113 10,929 11,111

Preparation for retirement 2017 2016 2015

Not 4,205 4,005 Investments in supplementary pensions (R$ 000) available Not 1,275 1,059 Number of beneficiaries of supplementary pension plans available ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 141

External social metrics Consumers

Service excellence 2017 2016 2015

Profile of consumers and clients Energy sales by rate class (GWh): % Total Residential 37.5% 35.1% 31.1% Low-income residential 4.1% 4.2% 6.5% Sales 24.1% 24.1% 24.4% Industrial 7.5% 10.5% 13.0% Rural 12.3% 11.3% 10.6% Public lighting 5.4% 5.1% 5.0% Public utility 3.4% 5.4% 3.8% Public Authorities 5.7% 4.3% 5.6%

Customer satisfaction 2017 2016 2015

Satisfaction rates obtained by Iasc Survey - Aneel 64.44 66.85 50.29 Satisfaction rates obtained by other entities and/or proprietary surveys - Abradee Survey 82.64 72.10 77.90

Consumer service 2017 2016 2015

Call Center Calls received (unit) 1,673,738 1,584,790 1,125,666 Average number of agents (unit) 20 55 42 INS - Level of Service Rate (%) 99.68% 94.80% 88.82% IAB - Abandonment rate (%) 0.19% 0.59% 1.36% ICO - Busy Call Rate (%) 0.00 0.25% 0.85% TMA - Average interaction time (s) 167 177 192 Compensation for electrical damages Volume of Applications (unit) 3,638 4,498 3,851 Upheld (unit) 593 874 2,100

Complaints metrics 2017 2016 2015

Confirmed Complaints (unit) 337,055 412,929 403,292 DER (hours) 105.72 124.84 285.36 FER (unit) 8.69 15.17 26.66 Violation of commercial service terms Service interactions (unit) 469,325 475,733 454,722 Service interactions completed late (unit) 12,540 33,159 55,021 Service efficiency (%) 97.33% 93.03% 87.90% 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 2,568 142 ENERGISA MATO GROSSO DO SUL

Community

Impacts on health and safety 2017 2016 2015

Total number of nonfatal injuries involving the population 4 3 3 Total number of fatal injuries involving the population 4 4 4 Legal claims resulting from accidents involving the population - General Litigation Base 39 37 45

Low-income rate 1 2017 2016 2015

Number of low-income households served 115,974 104,173 133,467 Total low-income households out of total households served (residential customers/ 11.42% 13.00% 17.00% consumers) (%) Revenue from sales to low-income residential subsector (R$ 000) 101,501 58,725 63,202 Total revenue from sales to low-income residential subsector out of total residential 3.18% 7.20% 8.10% revenue (%) Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 31,609 30,211 30,518

Company involvement in social action 2017 2016 2015

Funds allocated to education (R$ 000) 406 0 0 Funds allocated to health care and sanitation (R$ 000) 31 35 64 Funds allocated to culture (R$ 000) 337 285 258 Funds allocated to sports (R$ 000) 84 76 64 Other funds allocated to social initiatives (R$ 000) 252 70 192 Employees conducting voluntary work in the community outside the Company/total Not Not Not employees (%) available available available Number of monthly hours donated (released from normal working hours) by the Company Not Not Not for voluntary work by employees available available available

Company involvement in cultural, sporting and social projects (Rouanet Law, Sporting 2017 2016 2015 Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

Funds allocated to projects (R$ 000) 673 425 578 Funds allocated to the largest project (R$ 000) 300 278 230 Project name Mitos Lampz Curva do Rio Indígenas Sujo em Travessia Proposed by Zureta Tem Dende DM Filmes e Serviços e Produções Prod. Article Produções Ltda. – ME Artísticas Ltda. – ME

Electric sector metrics Universal electricity access

2017 2016 2015

Service targets 1 0 3,051 846 Calls handled (no.) 0 1,253 329 Performance of targets (%) NA 41% 39% Total municipalities with universal access 74 74 52 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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 143

Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments Financing sources Investments Financing sources Investments Financing sources (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000)

Total (%) Company Third parties Client Total (%) Company Third parties Client Total (%) Company Third parties Client

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 - - Low-Income 5,480 52.9% 5,480 - - 7,193 54.4% 7,193 - - 7,219 63.2% 7,219 - - Residential Public Lighting ------Municipal Energy ------Management 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

Project type 2017 2016 2015

Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW)

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 Public Utility ------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 Low-Income 21,840 1,575.0 38,872 1,810.2 26,875 778.1 2,463.8 6,823.5 2,414.3 Residential Public Lighting ------Municipal Energy - - - - 7,713 - - - - Management 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 1,474.4 144 ENERGISA MATO GROSSO DO SUL

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 464.2 11.7% 5,724.5 78.7% 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 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%

1 Excludes funds used in project management ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 145

Environmental metrics

Recover degraded areas 2017 2016 2015 Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 705.9 704.8 559.3 Percentage 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 2015 Emissions Annual volume of greenhouse (CO , CH , N O, HFC, PFC, SF ), issued into the atmosphere 2 4 2 6 798 717 557,763 (in tonnes of CO2 equivalent) Annual volume of ozone-depleting emissions 0 0 - Effluents Total water discharge by quality and destination 1 21,085 22,222 22,889 Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 362.88 169 21,010 Percentage 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 source Electricity consumption per kWh distributed (sold) 0.000015 0.000015 0.000015 Direct energy consumption by primary source in GJ 62,226 64,959 67,489 Diesel 52,624 55,652 57,083 Gasoline 9,602 9,303 10,398 Ethanol Not available 4 8 Natural gas Not available Not available Not available Other Not available Not available Not available Total water consumption by source (m3) Supply (public system) 8,705 15,035 19,168 Groundwater (wells) 21,005 16,711 13,530 Surface extraction (waterways) Not available Not available Not available Total water withdrawal (m3) 17,409 31,746 32,698 Water withdrawal per employee (m3) 12.2 21.9 24.8 Environmental education and awareness raising 2017 2016 2015 At the Organization Number of employees trained in environmental education programs 286 372 187 Percentage 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.

Performance metrics 2017 2016 2015

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) 1 em nov. e 0 Not available 1 em dez.

1 Individuals removed: 86 for easement (Eletrosul-CGII), 62 for Eletrosul-Cuiabá easement, 17 for construction of SD Tamandaré. 146 ENERGISA TOCANTINS

ENERGISA TOCANTINS Operating and productivity metrics

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

Number of consumers served - Captive 573,855 566,139 567,469 Number of consumers served - Free 21 15 7 Number of locations served (municipalities) 139 139 139 Number of own staff 1,174 1,223 1,257 Number of outsourced employees 1 714 585 511 Number of commercial offices 139 139 139 Electricity generated (GWh) NA NA NA Electricity purchased (GWh) 2,561.31 3,063.25 2,144.13 1) Itaipu 0.00 Not available Not available 2) Auction (including federal generator auction (2002) 2,561.31 3,063.25 2,144.13 3) Energy sales of concession operator 0 Not available Not available Global electric losses (GWh) 334.5 377.5 359.2 Electrical losses – (%) total on energy requirement 12.95% 14.71% 14.62% Technical losses – (%) on energy requirement 11.41% 11.52% 11.81% 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 Industrial 173 253 287 Commercial 403 411 397 Rural 221 205 199 Government 162 159 152 Public lighting 121 115 111 Public utility 60 59 56 Substations (in Units) 101 101 99 Installed capacity (MVA) 1,454 1,381 1,346 Transmission lines (in km) 2,735 2,637 2,637 Distribution lines (in km) 92,327 85,936 83,194 Distribution transformers (in units) 76,974 76,452 72,914 Sale of energy through installed capacity (GWh/MVA*No. Hours/Year) 0.00017 0.00017 0.00017 Electricity sold by employee (MWh) 1,780 1,690 1,620 Number of consumers by employee 489 451 451 Added value/GWh sold 4 393.03 332.99 348.22 Overall equivalent outage duration per consumer “DEC” of the company - Amount 27.98 32.24 33.22 determined 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 12.72 14.47 16.09 determined 4 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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 147

Corporate governance

Managers 2017 2016 2015

CA DE CF 1 Total CA DE CF 1 Total CA DE CF 1 Total No. of members 5 8 - 13 5 8 - 13 5 8 - Annual Fixed Compensation (R$ 000) 290 2,003 - 2,293 124 1,645 - 1,769 72 1,729 - 1,801 Salary or management fees 189 1,136 - 1,325 95 1,163 - 1,259 60 1,425 - 1,486 Direct or indirect benefits - 244 - 244 0 130 - 130 - 1 - 1 Participations in committees ------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 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

Palmas - TO 148 ENERGISA TOCANTINS

Economic and financial metrics

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

Revenue 1,824,971 1,676,405 Revenue from energy sales and services 1,630,741 1,443,561 Other revenue 8,553 9,727 Revenue relating to construction of company assets 191,565 235,381 Formation and reversal of allowance for doubtful accounts (5,888) (12,264) (-) Consumables acquired from third parties 1,028,483 999,491 Cost of electricity sold 661,063 614,520 Materials and outsourced services 123,980 102,593 Other operating costs 243,440 282,378 Gross added value 796,488 676,914 Amortization and depreciation 52,575 43,343 Net added value 743,913 633,571 Transferred added value Finance income 77,137 72,028 Total added value to be distributed 821,050 705,599

Distribution of value added 2017 2016

Personnel Direct compensation 59,157 62,558 Benefits 22,958 19,218 FGTS 6,090 5,507 Taxes, charges and contributions Federal 153,495 96,102 State 307,968 265,566 Municipal 1,226 286 Intrasector Obligations 64,192 86,561 Interest expenses Interest 95,685 128,371 Rent 2,406 2,982 Interest on equity Dividends 50,489 8,035 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

Investments 2017 2016

R$ 000 ∆% R$ 000 Expansion of distribution/transmission (reinforcement 50,240 -54.1% 109,536 expansion) Renewal of distribution/transmission 195,888 225.5% 60,182 Sub- transmission 0 - 0 Total 246,128 45.0% 169,718 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 149

Internal social metrics Employees/ Employability/ D&O

General information 2017 2016 2015

Total number of employees 1,174 1,223 1,257 Number of outsourced employees (outsourced, subcontractors, freelancers) by employment 714 585 511 type, employment contract and region 1 Employees aged 30 or under (%) 36.5% 38.9% 42.5% Employees aged between 31 and 40 (%) 45.6% 44.1% 41.7% Employees aged between 41 and 50 (%) 14.2% 12.9% 11.3% Employees aged over 50 (%) 3.8% 4.0% 4.6% Percentage of female employees out of total (%) 10.8% 13.5% 14.6% Women in managerial positions - out of total managerial positions (%) 12.5% 29.7% 21.4% Black female employees (black and mixed race) - out of total employees (%) 5.8% 6.5% 6.1% Black male employees (black and mixed race) - out of total employees (%) 71.2% 69.2% 67.0% Black employees (black and mixed race) in managerial positions out of total managerial 18.2% 21.6% 28.6% positions (%) Percentage of interns out of total employees (%) 1.2% 1.2% 1.1% Apprentice program employees (%) 37 2.4% 1.7% Employees with special needs 49 49 49

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

Gross payroll 2 63,982 97,108 69,399 Compulsory social charges 20,702 20,313 15,976 Education 92 61 107 Food and Restaurants 13,067 11,192 9,457 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 Day care and day care allowance 211 183 172 Other (funeral allowance, exceptional payments, retirement premium) 296 302 279

Profit sharing 2017 2016 2015

Total investment in company profit-sharing program (R$ 000) 2,997 6,718 2,538 Amounts distributed in relation to gross payroll (%) 2 4.7% 6.9% 3.7% Highest compensation divided by the lowest compensation in cash paid by the company 13.89 17.85 14.48 Lowest compensation at the company divided by the minimum salary in force 1.3 1.3 0.78

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

Executive positions 3 17,696.76 11,742.12 2,171.00 Management positions 14,490 9,951 8,656 Administrative positions 3,825 2,666 2,505 Operating positions 2,154 1,587 1,444 150 ENERGISA TOCANTINS

Occupational health and safety 2017 2016 2015

Average overtime per employee/year 11.5 9.28 13.32 Total frequency rate of the company for the period - employees 8.57 6.7 6.03 Employee seriousness rate in the period 135.88 62 45 Total frequency rate of the company for the period - contractors 6.12 4.41 9.17 Seriousness Rate of outsourced/contracted employees in the period 2,618 2,114 406 Frequency rate of the company for the period - workforce (employees + contractors) 7.21 5.39 8.05 Severity rate for the period - workforce (employees + contractors) 1,349 1,127 277 Fatalities – employees 0 0 0 Fatalities – contractors 1 2 0

Professional development 2017 2016 2015

Education levels - specify percentage of total employees Primary Education 1.9% 0.5% 0.5% High School 82.8% 83.4% 82.9% Technical School 0.0% 0.0% - Undergraduate School 13.5% 14.2% 15.1% Graduate (specialist, Master's degree, PhD) 2.9% 1.9% 1.5% Amount invested in professional development and education (R$ 000) 499 235 489 Average number of hours of training per year per employee, broken down into job type Executive positions 15.83 5.33 5.33 Management positions 70.18 62.41 70.9 Administrative positions 48.19 99.76 50.26 Operating positions 72.09 43.74 70.31

Conduct in light of dismissals 2017 2016 2015

Churn rate 2 10.64% 9.09% 7.67% Labor claims (company and outsourced employees) Amounted provisioned in the period (R$ 000) 27,359 19,994 15,752 Number of labor claims brought against the company in the period 815 356 256 Number of labor claims upheld in the period 19 8 - Number of labor claims deemed misplaced in the period 21 15 7 Value of damages and fines paid under court awards in the period (R$ 000) 4 11,471 10,624 6,381

Preparation for retirement 2017 2016 2015

Investments in supplementary pensions (R$ 000) 2,402 1,904 2,040 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.

ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 151

External social metrics Consumers

Service excellence 2017 2016 2015

Profile of consumers and clients Energy sales by rate class (GWh): % Total Residential 37.7% 35.9% 34.4% Low-income residential 7.7% 7.4% 6.6% Sales 19.3% 11.9% 14.1% Industrial 8.3% 19.4% 19.5% Rural 10.6% 9.7% 9.8% Public lighting 5.8% 7.5% 7.5% Public utility 2.9% 5.4% 5.4% Public Authorities 7.7% 2.8% 2.7%

Customer satisfaction 2017 2016 2015

Satisfaction rates obtained by Iasc Survey - Aneel 45.15 59.18 47.96 Satisfaction rates obtained by other entities and/or proprietary surveys - Abradee Survey 76.7 84.2 86.6

Consumer service 2017 2016 2015

Call Center Calls received (unit) 1,762,517 1,561,365 1,626,660 Average number of agents (unit) 57 55 57 INS - Level of Service Rate (%) 90.20% 93.81% 85.14% IAB - Abandonment rate (%) 1.11% 1.45% 2.11% ICO - Busy Call Rate (%) 0.00% 0.05% 0.00% TMA - Average interaction time (s) 173.00 179.00 208.00 Compensation for electrical damages Volume of Applications (unit) 3,866 3,028 2,517 Upheld (unit) 619 433 548

Complaints metrics 2017 2016 2015

Confirmed Complaints (unit) 259,222 233,684 242,194 DER (hours) 198.2 156.47 365.3 FER (unit) 9.22 8.28 9.57 Violation of commercial service terms 1 Service interactions (unit) 382,210 319,784 342,271 Service interactions completed late (unit) 20,010 17,500 23,655 Service efficiency (%) 93.71% 94.53% 93.09%

Number of customer complaints escalated to 2017 2016 2015

The company 350,344 311,801 312,679 Aneel – state/regional agencies 1,154 955 845 Procon 466 320 270 to the courts 1,016 915 647 1 Revised figures published in 2015. 152 ENERGISA TOCANTINS

Community

Impacts on health and safety 2017 2016 2015

Total number of nonfatal injuries involving the population 12 7 10 Total number of fatal injuries involving the population 4 4 5 Legal claims resulting from accidents involving the population - General Litigation Base 22 24 28

Low-income rate 1 2017 2016 2015

Number of low-income households served 1 141,445 116,612 103,196 Total low-income households out of total households served (residential customers/ 13.3% 24.8% 22.9% consumers) (%) Revenue from sales to low-income residential subsector (R$ 000) 130,860 76,405 37,377 Total revenue from sales to low-income residential subsector out of total residential 6.7% 11.6% 10.6% revenue (%) Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 41,956 32,434 22,667

Company involvement in social action 2017 2016 2015

Funds allocated to education (R$ 000) 71,390 8 0 Funds allocated to health care and sanitation (R$ 000) 126 128 374 Funds allocated to culture (R$ 000) 400 280 282 Funds allocated to sports (R$ 000) 6 98 94 Other funds allocated to social initiatives (R$ 000) 45,769 14 139 Employees conducting voluntary work in the community outside the Company/total 0.0% 0.0% 0.0% employees (%) Number of monthly hours donated (released from normal working hours) by the 0 0 0 Company for voluntary work by employees

2017 2016 2015 Company involvement in cultural, sporting and social projects (Rouanet Law, Sporting

Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

Funds allocated to projects (R$ 000) 655 528 844 Funds allocated to the largest project (R$ 000) 400 280 220 Project name What do we What do we Rota want for the want for the Tocantins world? world? Proposed by Cocriativa Cocriativa Lamira Artes Conteúdos Conteúdos Audiovisuais Audiovisuais Ltda. Ltda. 1 Revised figures for 2015 and 2016

Electric sector metrics Universal electricity access

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% Total municipalities with universal access 39 30 34 Municipalities with universal access (%) 1 28.1% 21.6% 24.5% ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 153

Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments Financing sources Investments Financing sources Investments Financing sources (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000)

Total (%) Company Third parties Client Total (%) Company Third parties Client Total (%) Company Third parties Client

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 - - Low-Income 3,672 73.8% 3,672 - - 4,196 54.2% 4,197 - - 7,103 81.0% 7,103 - - Residential Public Lighting ------Municipal Energy ------Management 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

Project type 2017 2016 2015

Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW)

Industrial ------Trade and Services 2 251.5 60.7 ------Public Authorities ------Public Utility ------Rural ------Residential - - - 1,553 2,084.0 1,883.0 64 24.0 5.0 Low-Income 5,923 1,195.7 655.6 2,688 644.0 353.0 9,268 1,805.0 1,009.0 Residential Public Lighting ------Municipal Energy ------Management Educational ------TOTAL 5,925 1,447.2 716.3 4,241 2,728.0 2,236.0 9,332 1,828.0 1,014.0 154 ENERGISA TOCANTINS

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 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 155

Environmental metrics

Recover degraded areas 2017 2016 2015

Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 3,858.1 3,660.8 3,185.9 Percentage of shielded and insulted lines out of total distribution lines in urban 37.6% 36.9% 34.4% areas (%)

Waste generation and treatment 2017 2016 2015

Emissions Annual volume of greenhouse (CO , CH , N O, HFC, PFC, SF ), issued into the 2 4 2 6 208,325 178,527 261,974 atmosphere (in tonnes of CO2 equivalent) Annual volume of ozone-depleting emissions Not available Not available Not available Effluents Total water discharge by quality and destination Not available Not available Not available Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 8.49 46.17 95.16 Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) 0% 0% 0%

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

Total electricity consumption by source Electricity consumption per kWh distributed (sold) 0.001820 0.001753 0.0018592 Direct energy consumption by primary source in GJ 47,294 41,802 34,914 Diesel 28,225 24,841 21,207 Gasoline 19,049 16,938 13,699 Ethanol 20 24 8 Natural gas NA NA NA Other NA NA NA Total water consumption by source (m3) Supply (public system) 15,145 11,788 10,212 Groundwater (wells) Not available Not available Not available Surface extraction (waterways) - - - Total water withdrawal (m3) 15,145 11,788 10,212 Water withdrawal per employee (m3) 12.58 9.05 7.91

Environmental education and awareness raising 2017 2016 2015

At the Organization Number of employees trained in environmental education programs 148 19 2 Percentage of employees trained in environmental education programs/total 12.3% 1.5% 0.2% employees 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 13 Number of primary school and high school students served 349 323 848 Number of teachers trained - - - Number of technical schools and high schools served - - 1 Number of technical school and graduate students served - - 93

Performance metrics 2017 2016 2015

ENERGISA SUL-SUDESTE Operating and productivity metrics

Number of consumers served - Captive 2017 2016 2015

Number of consumers served - Free 767,611 756,139 741,943 Number of locations served (municipalities) 130 76 26 Number of own staff 82 82 82 Number of outsourced employees 1 1,064 1,142 1,184 Number of commercial offices 194 260 342 Electricity generated (GWh) 83 83 82 Electricity purchased (GWh) NA NA NA 1) Itaipu 4,280.85 4,350.32 3,986.50 2) Auction (including federal generator auction (2002) 746.41 760.19 790.61 3) Energy sales of concession operator 3,502.44 3,320.56 2,905.43 Global electric losses (GWh) 32.00 269.57 290.46 Electrical losses – (%) total on energy requirement 283.4 292.7 289.6 Technical losses – (%) on energy requirement 6.32% 6.74% 6.62% Non-technical losses – (%) on energy requirement 6.53% 6.25% 6.25% 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 Government 295 281 275 Public lighting 117 115 122 Public utility 190 187 186 Substations (in Units) 164 161 153 Installed capacity (MVA) 93 90 90 Transmission lines (in km) 2,335 2,290 2,333 Distribution lines (in km) 421 415 415 Distribution transformers (in units) 32,205 31,234 30,924 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 Added value/GWh sold 688.56 626.01 596.44 Overall equivalent outage duration per consumer “DEC” of the company - Amount 243.22 81.70 - determined Overall equivalent outage duration per consumer “DEC” of the company - Limit 6.60 7.91 10.27 Overall equivalent outage frequency per consumer “FEC” of the company - Amount determined 8.55 8.70 9.29 Overall equivalent outage frequency per consumer “FEC” of the company - Limit 4.97 6.54 7.93

Overall equivalent outage frequency per consumer “FEC” of the company - Limit 8.77 9.22 9.82

1 In 2016, this does not include outsourced employees working at other Group companies. 2 Excludes proprietary consumption. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 157

Corporate governance

Managers 2017 2016 2015

CA DE CF 1 Total CA DE CF 1 Total CA DE CF 1 Total 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 Participations in committees ------Other (charges) - 1,189 - 1,189 - 385 385 - - 243 - 243 Description of other fixed ------compensation 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 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

Presidente Prudente - SP 158 ENERGISA SUL-SUDESTE

Economic and financial metrics

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

Revenue 1,742,182 615,409 Revenue from energy sales and services 1,630,015 589,347 Other revenue 6,071 12 Revenue relating to construction of company assets 106,857 26,852 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) Gross added value 747,443 272,768 Amortization and depreciation (31,744) (17,515) Net added value 715,699 255,253 Transferred added value Finance income 77,209 19,100 Total added value to be distributed 792,908 274,353

Distribution of value added 2017 2016

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 Intrasector Obligations 184,549 79,057 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 Additional dividends proposed 792,908 274,353

Investment 2017 2016

R$ 000 ∆% R$ 000 Expansion of distribution/transmission (reinforcement expansion) 9,872 -68.3% 31,096 Renewal of distribution/transmission 141,648 446.0% 25,942 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. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 159

Internal social metrics Employees/ Employability/ D&O

General information 2017 2016 2015

Total number of employees 1,064 1,142 1,184 Number of outsourced employees (outsourced, subcontractors, freelancers) by 194 260 342 employment type, employment contract and region 1 Employees aged 30 or under (%) 31.7% 29.6% 33.4% Employees aged between 31 and 40 (%) 38.6% 37.8% 36.1% Employees aged between 41 and 50 (%) 18.3% 19.3% 18.8% Employees aged over 50 (%) 11.5% 13.3% 11.7% Percentage of female employees out of total (%) 14.4% 18.0% 20.1% Women in managerial positions - out of total managerial positions (%) 7.0% 6.8% 7.6% Black female employees (black and mixed race) - out of total employees (%) 1.5% 2.4% 2.5% Black male employees (black and mixed race) - out of total employees (%) 12.8% 11.0% 9.6% Black employees (black and mixed race) in managerial positions out of total managerial 7.1% 6.8% 5.0% positions (%) Percentage of interns out of total employees (%) 3.5% 4.0% 6.7% Apprentice program employees (%) 2.0% 3.0% 3.7% Employees with special needs 23 31 32

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

Gross payroll 92,857 101,050 87,346 Compulsory social charges 20,142 18,078 16,714 Education 0 0 0 Food and Restaurants 11,236 12,549 10,402 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 Training and professional development 451 297 536 Day care and day care allowance 334 151 159 Other (funeral allowance, exceptional payments, retirement premium) 128 148 206

Profit sharing 2017 2016 2015

Total investment in company profit-sharing program (R$ 000) 6,889 3,696 4,625 Amounts distributed in relation to gross payroll (%) 6.44% 3.00% 3.68% Highest compensation divided by the lowest compensation in cash paid by the company 15.07 7.99 14.87 Lowest compensation at the company divided by the minimum salary in force 18.34 6.55 7.35

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

Executive positions Not available Not available Not available Management positions 12,355 55,531 46,154 Administrative positions 2,659 13,819 10,646 Operating positions 2,050 8,965 10,940 160 ENERGISA SUL-SUDESTE

Occupational health and safety 2017 2016 2015

Average overtime per employee/year 5.94 7.42 6.29 Total frequency rate of the company for the period - employees 3.2 6.9 13.5 Employee seriousness rate in the period 66 132 136 Total frequency rate of the company for the period - contractors 4.89 11.84 10.3 Seriousness Rate of outsourced/contracted employees in the period 147 356 309 Frequency rate of the company for the period - workforce (employees + contractors) 3.76 8.42 12.64 Severity rate for the period - workforce (employees + contractors) 92 200 184 Fatalities – employees 0 0 0 Fatalities – contractors 0 0 0

Professional development 2017 2016 2015

Education levels - specify percentage of total employees Primary Education 7.71% 9.1% 10.5% High School 56.03% 50.7% 59.7% Technical School 11.20% 5.0% 7.4% Undergraduate School 21.74% 30.5% 18.1% Graduate (specialist, Master's degree, PhD) 3.32% 4.7% 4.3% Amount invested in professional development and education (R$ 000) 452 Not Not available available Average number of hours of training per year per employee, broken down into job type Executive positions 0 0 0.24 Management positions 23.90 44.03 23.88 Administrative positions 125.17 49.78 22.06 Operating positions 94.51 80.18 49.33

Conduct in light of dismissals 2017 2016 2015

Churn rate 1.29% 1.71% 1.21% Labor claims (company and outsourced employees) Amounted provisioned in the period (R$ 000) 2,316 1,326 1,825 Number of labor claims brought against the company in the period 227 83 71 Number of labor claims upheld in the period 31 31 28 Number of labor claims deemed misplaced in the period 7 13 9 Value of damages and fines paid under court awards in the period (R$ 000) 1,286 2,788 3,867

Preparation for retirement 2017 2016 2015

Investments in supplementary pensions (R$ 000) 1,998 2,716 2,745 Number of beneficiaries of supplementary pension plans 1,117 1,201 1,227 1 In 2016, this does not include outsourced employees working at other Group companies. ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 161

External social metrics Consumers

Service excellence 2017 2016 2015 Profile of consumers and clients Energy sales by rate class (GWh): % Total Residential 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 2015 Satisfaction rates obtained by Iasc Survey - Aneel 68.98 - - Bragantina - 68.60 61.29 Caiuá - 71.34 56.25 Força e Luz do Oeste - 78.15 63.21 Nacional - 72.08 65.91 Vale Paranapanema - 72.4 56.97 Satisfaction rates obtained by other entities and/or proprietary surveys - 81.47 - - Abradee Survey Bragantina 76.51 76.30 77.90 Caiuá 75.88 75.30 83.70 Força e Luz do Oeste 90.12 85.00 84.70 Nacional 81.39 79.10 92.20 Vale Paranapanema 90.56 85.20 91.00 Consumer service 2017 2016 2015 Call Center Calls received (unit) 1,018,922 1,075,798 1,165,107 Average number of agents (unit) 27 17 17 INS - Level of Service Rate (%) 90.85 94.81 85.58 IAB - Abandonment rate (%) 0.81 0.65 3.24 ICO - Busy Call Rate (%) 0.00 0.07 0.55 TMA - Average interaction time (s) 193 192 212 Compensation for electrical damages Volume of Applications (unit) 5,461 4,057 4,865 Upheld (unit) 1,446 1,568 960 Complaints metrics 2017 2016 2015 Confirmed Complaints (unit)2 139,007 Not available Not available DER (hours) 3 159.19 Not available Not available FER (unit) 3 3.84 Not available Not available Violation of commercial service terms Service interactions (unit) 272,883 311,508 292,929 Service interactions completed late (unit) 6493 8,067 9,987 Service efficiency (%) 98% 97,41% 97% Number of customer complaints escalated to 2017 2016 2015 The company 4 190,003 Not available Not available Aneel – state/regional agencies 258 216 223 Procon 312 271 286 to 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.

162 ENERGISA SUL-SUDESTE

Community

Impacts on health and safety 2017 2016 2015

Total number of nonfatal injuries involving the population 1 4 2 Total number of fatal injuries involving the population 1 5 1 Legal claims resulting from accidents involving the population - General Litigation Base 9 7 0

Low-income rate 1 2017 2016 2015

Number of low-income households served 60,956 56,872 53,377 Total low-income households out of total households served (residential customers/ 10.39% 9.82% 9.31% consumers) (%) Revenue from sales to low-income residential subsector (R$ 000) 41,073 39,939 36,387 Total revenue from sales to low-income residential subsector out of total residential 5.20% 5.11% 4.64% revenue (%) Subsidy received (Eletrobrás) for low-income consumers (R$ 000) 14,679 15,960 12,652

Company involvement in social action 2017 2016 2015

Funds allocated to education (R$ 000) 161 0 0 Funds allocated to health care and sanitation (R$ 000) 0 0 7 Funds allocated to culture (R$ 000) 536 0 27 Funds allocated to sports (R$ 000) 60 0 7 Other funds allocated to social initiatives (R$ 000) 172 0 55 Employees conducting voluntary work in the community outside the Company/total Not available Not available Not available employees (%) Number of monthly hours donated (released from normal working hours) by the Not available Not available Not available Company for voluntary work by employees

2017 2016 2015 Company involvement in cultural, sporting and social projects (Rouanet Law, Sporting

Incentive Law, Pronon, Pronas, Infant and Adolescent Fund, Fund for the Elderly)

Funds allocated to projects (R$ 000) 415 2,657 471 Funds allocated to the largest project (R$ 000) 227 344 150 Project name Iluminarte Serrinha 2015 Serrinha Música Art Festival- Art Festival Annual Plan ‘Ressonhando -2016 Mundos’

Bidder Carolina Espaço Edith Espaço Edith Paiva Neves Cultura Cultura Frade da Cruz

Electric sector metrics Universal electricity access

2017 2016 2015

Service targets NA NA NA Calls handled (no.) 17,023 18,627 26,465 Performance of targets (%) 100% 100% 100% Total municipalities with universal access 82 82 82 Municipalities with universal access (%) 1 100% 100% 100% ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 163

Energy Efficiency Program (PEE)

Project type 2017 2016 2015

Investments Financing sources Investments Financing sources Investments Financing sources (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000) (R$ 000) 1 (R$ 000) Total (%) Company Third parties Client Total (%) Company Third parties Client Total (%) Company Third parties Client

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 - - Municipal Energy - 0.0% - - - - 0.0% - - - - 0.0% - - - Management 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 1 Excludes funds used in project management

Project type 2017 2016 2015

Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW) Units served Energy savings (MWh/year) Shaving Peak (kW)

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 - - Municipal Energy 0 0.0 ------0 Management Educational 0 0 0.0 ------TOTAL 2,199 2,222 589 8,391 9,501 912 12,843 1,716.0 2,889 164 ENERGISA SUL-SUDESTE

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 1,043.0 15.9% 0 - 0 - GT – Thermal Generation 0 - 0 - 0 - GB – River Basin and Reservoir Management 0 - 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 ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT 165

Environmental metrics

Recover degraded areas 2017 2016 2015

Shielded and insulated lines (ecological grid or green lines) in urban areas (km) 2,420 2,068 1,825 Percentage of shielded and insulted lines out of total distribution lines in urban areas (%) 22% 20% 18%

Waste generation and treatment 2017 2016 2015

Emissions Annual volume of greenhouse (CO , CH , N O, HFC, PFC, SF ), issued into the atmosphere (in 2 4 2 6 2,522 2,633 2,489 tonnes of CO2 equivalent) Annual volume of ozone-depleting emissions - - - Effluents Total water discharge by quality and destination 8,058 7,346 6,206 Solids Annual quantity (in tons) of solid waste generated (refuse, waste, rubble etc.) 7.3 316.83 Not available Percentage of equipment replaced by insulating mineral oil without PCB (ascarel) Not Not Not available available available

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

Total electricity consumption by source Electricity consumption per kWh distributed (sold) 0.001014 0.001011 0.000874642 Direct energy consumption by primary source in GJ 30,968 32,520 29,308 Diesel 22,833 23,736 19,735 Gasoline 3,416 2,985 2,081 Ethanol 4,719 5,799 7,492 Natural gas 0 0 0 Other 0 0 0 Total water consumption by source (m3) Supply (public system) 10,073 9,183 7,758 Groundwater (wells) 7,487 9,263 6007 Surface extraction (waterways) 0 0 0 Total water withdrawal (m3) 17,560 18,446 13,765 Water withdrawal per employee (m3) 15.75 15.27 11.07

Environmental education and awareness raising 2017 2016 2015

At the Organization Number of employees trained in environmental education programs 349 709 526 Percentage 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 Not 0.6% Not available available In the Community Number of primary schools and high schools served 5 7 49 Number of primary school and high school students served 1,910 1,370 4,901 Number of teachers trained 11 50 Not available Number of technical schools and high schools served 0 4 1 Number of technical school and graduate students served 0 900 120

Performance metrics 2017 2016 2015

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

CORPORATE INFORMATION

ENERGISA S.A. Fernando Lima Costalonga – TECHNICAL AND COMMERCIAL OFFICER Board of Directors Alexandre Nogueira Ferreira – REGULATORY AFFAIRS AND STRATEGY OFFICER Ivan Müller Botelho – CHAIRMAN Ricardo Perez Botelho – DEPUTY CHAIRMAN Address Directors Av. Manoel Ignácio Peixoto, s/nº – Industrial – Cataguases/MG 30140 131 Omar Carneiro da Cunha Sobrinho CEP Marcílio Marques Moreira Antônio José de Almeida Carneiro ENERGISA NOVA FRIBURGO

Luiz Henrique Fraga Executive Board José Luiz Alquéres Eduardo Alves Mantovani – CEO Alternates Maurício Perez Botelho – CFO Maurício Perez Botelho Gustavo Nasser Moreira – SUPPLIES AND LOGISTICS OFFICER Pedro Boardman Carneiro Daniele Araújo Salomão Castelo – PERSONNEL MANAGEMENT OFFICER Andre La Saigne de Botton Fernando Lima Costalonga – TECHNICAL AND COMMERCIAL OFFICER Marcelo Silveira da Rocha Fernando Cezar Maia – REGULATORY AFFAIRS AND STRATEGY OFFICER Guilherme Fernandes Cesar Coelho Leonardo Prado Damião Address Av. Euterpe Friburguense, 111/113 – Centro – Nova Friburgo/RJ 28605 130 Executive Board CEP - Ricardo Perez Botelho – CEO Maurício Perez Botelho – CFO AND INVESTOR RELATIONS OFFICER ENERGISA PARAÍBA Gustavo Nasser Moreira – SUPPLIES AND LOGISTICS OFFICER Board of Directors Daniele Araújo Salomão Castelo – PERSONNEL MANAGEMENT OFFICER Ivan Müller Botelho – CHAIRMAN Alexandre Nogueira Ferreira – REGULATORY AFFAIRS AND STRATEGY OFFICER Ricardo Perez Botelho – DEPUTY CHAIRMAN

Directors Address André la Saigne de Botton Av. Pasteur, 110 – 6º andar Botafogo, Rio de Janeiro/RJ Marcílio Marques Moreira CEP 22290-240 Omar Carneiro da Cunha Sobrinho Marcelo Silveira da Richa ENERGISA MINAS GERAIS Substitute Board of Directors Maurício Perez Botelho Ivan Müller Botelho – CHAIRMAN Ricardo Perez Botelho – DEPUTY CHAIRMAN Executive Board Directors André Luís Cabral Theobald – CEO Marcílio Marques Moreira Maurício Perez Botelho – CFO Omar Carneiro da Cunha Sobrinho Gustavo Nasser Moreira – SUPPLIES AND LOGISTICS OFFICER Marcelo Silveira da Rocha Daniele Araújo Salomão Castelo – PERSONNEL MANAGEMENT OFFICER Substitute Jairo Kennedy Soares Perez – TECHNICAL AND COMMERCIAL OFFICER Maurício Perez Botelho Alexandre Nogueira Ferreira – REGULATORY AFFAIRS AND STRATEGY OFFICER

Executive Board Address 230 25 Eduardo Alves Mantovani – CEO BR- , Km – Cristo Redentor – João Pessoa/PB 58071 680 Maurício Perez Botelho – CFO CEP - Gustavo Nasser Moreira – SUPPLIES AND LOGISTICS OFFICER Daniele Araújo Salomão Castelo – PERSONNEL MANAGEMENT OFFICER ENERGISA 2017 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY REPORT

ENERGISA BORBOREMA ENERGISA MATO GROSSO Board of Directors Board of Directors Ivan Müller Botelho – CHAIRMAN Ivan Müller Botelho – CHAIRMAN Ricardo Perez Botelho – DEPUTY CHAIRMAN Ricardo Perez Botelho – DEPUTY CHAIRMAN

Directors Directors André La Saigne de Botton Marcelo Silveira da Rocha Marcílio Marques Moreira Hélio Tito Simões de Arruda Omar Carneiro da Cunha Sobrinho André La Saigne de Button Antônio José de Almeida Carneiro Aristóteles Luiz Menezes Vasconcellos Drummond Substitutes Maurício Perez Botelho Executive Board Pedro Boardman Carneiro Riberto José Barbanera – CEO Maurício Perez Botelho – CFO Executive Board Fernando Cezar Maia – REGULATORY AFFAIRS AND STRATEGY OFFICER André Luís Cabral Theobald – CEO Alessandro Brum – TECHNICAL AND COMMERCIAL OFFICER Jairo Kennedy Soares Perez – TECHNICAL AND COMMERCIAL OFFICER José Souza Silva – ADMINISTRATIVE AND CONTROL OFFICER Maurício Perez Botelho – CFO Carlos Marcio Ferreira –OFFICER WITH NO SPECIFIC TITLE Gustavo Nasser Moreira – SUPPLIES AND LOGISTICS OFFICER Daniele Araújo Salomão Castelo –OFFICER WITH NO SPECIFIC TITLE Daniele Araújo Salomão Castelo – Roberto Carlos Pereira Currais –OFFICER WITH NO SPECIFIC TITLE

PERSONNEL MANAGEMENT OFFICER Alexandre Nogueira Ferreira – REGULATORY Address AFFAIRS AND STRATEGY OFFICER Rua Manoel dos Santos Coimbra, 184-B – Bandeirantes – Cuiabá/MT 78010-900 Address CEP BR 230, Km 158, Alça Sudoeste 3 Irmãs – Campina Grande/PB CEP 58423-700 ENERGISA MATO GROSSO DO SUL Board of Directors ENERGISA SERGIPE Ivan Müller Botelho – CHAIRMAN Board of Directors Ricardo Perez Botelho – DEPUTY CHAIRMAN Ivan Müller Botelho – CHAIRMAN Directors Ricardo Perez Botelho – DEPUTY CHAIRMAN Marcelo Silveira da Rocha

Directors Maurício Perez Botelho Sérgio Alves de Souza Claudio Rogério Balbuena Leão Marcílio Marques Moreira Omar Carneiro da Cunha Sobrinho Executive Board Marcelo Silveira da Rocha Marcelo Vinhaes – CEO AND ADMINISTRATIVE AND CONTROL OFFICER Substitute Maurício Perez Botelho – CFO Maurício Perez Botelho Marcelo Vinhaes Monteiro – TECHNICAL AND COMMERCIAL OFFICER Alexandre Nogueira Ferreira – REGULATORY AFFAIRS AND STRATEGY OFFICER Carlos Marcio Ferreira –OFFICER WITH NO SPECIFIC TITLE Executive Board Daniele Araújo Salomão Castelo –OFFICER WITH NO SPECIFIC TITLE Ricardo José Charbel – CEO Roberto Carlos Pereira Currais –OFFICER WITH NO SPECIFIC TITLE Maurício Perez Botelho – CFO Gustavo Nasser Moreira – SUPPLIES AND LOGISTICS OFFICER Daniele Araújo Salomão Castelo – Address 8000 PERSONNEL MANAGEMENT OFFICER Av. Gury Marques, – Campo Grande/MS 79072 900 Amaury Antônio Damiance – TECHNICAL AND COMMERCIAL OFFICER CEP - Fernando Cezar Maia – REGULATORY AFFAIRS AND STRATEGY OFFICER

Address Rua Min. Apolônio Sales, 81 – Inácio Barbosa – Aracaju/SE CEP 49040-150 INFORMAÇÕES CORPORATIVAS

ENERGISA TOCANTINS Board of Directors Ivan Müller Botelho – CHAIRMAN Ricardo Perez Botelho – DEPUTY CHAIRMAN

Directors Antônio José de Almeida Carneiro André La Saigne de Botton Alankardek Ferreira Moreira

Executive Board Márcio Mário Zidan – CEO Maurício Perez Botelho – CFO Juliano Ferraz de Palma – TECHNICAL AND COMMERCIAL OFFICER Daniele Araújo Salomão Castelo – ADMINISTRATIVE AND CONTROL OFFICER Alexandre Nogueira Ferreira – REGULATORY AFFAIRS AND STRATEGY OFFICER Alankardek Ferreira Moreira – INSTITUTIONAL RELATIONS OFFICER Roberto Carlos Pereira Currais –OFFICER WITH NO SPECIFIC TITLE

Address Av. LO – Conjunto 104 Norte 44, Lote 12 A – Palmas/TO CEP 77006-032

ENERGISA SUL-SUDESTE Executive Board Gabriel Alves Pereira Junior – CEO Maurício Perez Botelho – CFO Fernando Cezar Maia – REGULATORY AFFAIRS AND STRATEGY OFFICER José Adriano Mendes Silva – TECHNICAL AND COMMERCIAL OFFICER Daniele Araújo Salomão Castelo –OFFICER WITH NO SPECIFIC TITLE Carlos Marcio Ferreira –OFFICER WITH NO SPECIFIC TITLE Roberto Carlos Pereira Currais –OFFICER WITH NO SPECIFIC TITLE

Address Rodovia SP 425 (Assis Chateaubriand) Km 455 + 600m – CHAIRMAN Prudente/SP ACKNOWLEDGMENTS CEP 19001-970 General coordination Corporate Strategic Management Division Tatiana de Oliveira Feliciano

Content coordination Paula Christina Ribeiro Laranjeira da Silva Victor Marcius Campos de Oliveira

Wording and editing Editora Contadino

Layout Multi Design

Photos Energisa Archive