Performance

atuacao

Distribution and Transmission

Our four distribution subsidiaries provide power to a total of 13.8 million captive customers, with regulated tariffs by the granting authority in the states of Bahia, Pernambuco and Rio Grande do Norte, and part of the states of Paraíba (one municipality), São Paulo (223 municipalities) and Mato Grosso do Sul (five municipalities), covering a population of more than 34 million people (base date dec/ 18). In 2018, we sold 44.3 GWh of electricity in our companies: Coelba, Celpe, Cosern and Elektro, through more than 600 thousand kilometers of distribution networks.

We also operate in the transmission of electric power, which includes the operation and maintenance of transmission lines and substations with a voltage equal to or greater than 230 kV and which are part of SIN – National Interconnected System. The remuneration of these assets is made through an Annual Revenue Permitted (RAP) established by ANEEL and the result of the Transmission Auctions, which are paid by all SIN users, both generation and cargo. Currently, 679 km of transmission lines and 11 transmission substations located in the states of Bahia, Paraíba and Rio Grande do Norte are operating through Afluente T, Narandiba and Potiguar Sul. With the incorporation of Elektro Holding, on August 24, 2017, we added 578 km of new transmission lines to our electric grid and 10 transmission substations, one owned and nine shared, located in the states of Mato Grosso do Sul, São Paulo , Santa Catarina and Ceará, and which were sold at the Transmission Auction held by ANEEL in April 2017. In 2017, Neoenergia was once again winner in Auction n. 002/2017 -ANEEL when it acquired two new concessions – Lots 4 and 6 – of electric power transmission, which together comprise 4 transmission lines (1,074 km) and 6 substations, one owned and five shared, located in the States of Tocantins, Piauí, Bahia, Ceará and Paraíba.

In December 2018, at Auction n. 004/2018-ANEEL, in another successful participation Neoenergia won 4 new lots (1, 2, 3 and 4) corresponding to 13 transmission lines, or 3,001 km in circuits to be built, and works in 19 substations, 5 new and twelve shared. Thus, among assets in operation and under construction, we have a total portfolio of 5,332 km of transmission lines in circuits and 46 transmission substations. The victories in the last auctions carried out by ANEEL represent a volume of investments of R$ 8.9 billion in new assets and an increase in the Annual Revenue Allowed – RAP of the business Transmission of R$ 788 million/year, against RAP of R $60,6 million associated with concessions in operation.

Generation

We operate in both conventional and renewable energy generation. Our hydroelectric and gas-fired generating plants have a total installed capacity of 2.8 GW in operation, in addition to approximately 0.8 GW of projects under development, totaling more than 3.5 GW of installed capacity from 2020 onward.

Our generation portfolio mainly consists of assets that use clean and renewable sources, such as wind and hydroelectric power, and we also have a combined-cycle gas-fired thermal plant.

We have installed capacity of 516 MW of electric energy, operated through 17 wind farms. In the six-month period ended on June 30, 2018, we generated 459 GWh of power in our wind farms.

Our hydroelectric plants have over 2.2 MW of installed capacity in operation held by the hydroelectric plants Teles Pires, Itapebi, Dardanelos, Baguari, Corumbá III and Belo Monte. Together with our projects under construction, which include our share in the Belo Monte and Baixo Iguaçu hydroelectric plants, we intend to achieve a total installed capacity from hydroelectric plants of 3.0 MW in 2020.

We also have a conventional combined-cycle gas-fired generation plant Termopernambuco (Termope), a thermal plant located in the State of Pernambuco, with 532.8 MW of installed capacity in operation, which has an energy supply agreement (PPA – Power Purchase Agreement) for 455 average MW, valid until 2023. In the twelve-month period ended June 30, 2018, we generated 490.2 average MW of electricity at our thermal power plants.

Trading

With the merger of Elektro, on August 24, 2017, NC Energia also merged with Elektro Comercializadora. In the second quarter of 2018, sales amounted to 1,443 average MW.

In addition to the actual trading activities, our energy sales company also provides a wide range of services such as integrated energy management, risk management, representing of consumers and generators with CCEE, and making our energy projects feasible.

We also provide services involving energy management to both our affiliated companies and non-affiliated parties.