CPFL Energia Stock

CPFL Energia S.A., through its subsidiaries, distributes, generates, transmits and commercializes electricity in Brazil, as well as provides energy-related services.

The company is one of the major electricity distributor in Brazil, based on the 68,055 gigawatthour (GWh) of electricity it distributed to 9.8 million consumers in 2019. In electricity generation, the company’s installed capacity as of December 31, 2019 was 4,304 megawatt (MW). The company, through its interest in CPFL Energias Renováveis S.A. (CPFL Renováveis), involved in the construction of one small hydroelectric power plant (SHPP) and four wind farms.

The company also engages in power commercialization, buying and selling electricity to power producers, free consumers and power trading companies. It also provides agency services to free consumers before the Electric Energy Trading Chamber (CCEE) and other agents, as well as electricity-related services to its affiliates and unaffiliated parties. In 2019, the total amount of electricity sold by its commercialization subsidiaries was 89 GWh and 19,097 GWh to affiliated and unaffiliated parties, respectively. The company is also developing its electricity transmission business. In 2019, the total amount of electricity sold by the company’s commercialization subsidiaries was 89 GWh and 19,097 GWh to affiliated and unaffiliated parties, respectively.

Service Territory

Distribution

The company’s four distribution subsidiaries together supply electricity to a region covering 300,411 square kilometers, primarily in the states of São Paulo and Rio Grande do Sul. Their concession areas include 6871 municipalities and a population of 22.2 million people. Together, they provided electricity to 9.8 million consumers, as of December 31, 2019.

Distribution Companies

The company has the following four distribution subsidiaries:

Companhia Paulista de Força e Luz (CPFL Paulista): CPFL Paulista supplies electricity to a concession area covering 90,486 square kilometers in the state of São Paulo with a population of 10.3 million people. Its concession area covers 234 municipalities, including the cities of Campinas, Bauru, Ribeirão Preto, São José do Rio Preto, Araraquara and Piracicaba. CPFL Paulista had 4.6 million consumers, as of December 31, 2019. In 2019, CPFL Paulista distributed 21,030 GWh of electricity. Considering CPFL Paulista’s sales in its concession area, including sales to Captive Consumers and tariffs for the use of the distribution system (TUSD), CPFL Paulista sold 31,369 GWh of electricity in 2019, accounting for 24.3% of the total electricity distributed in the state of São Paulo and 6.6 % of the total electricity distributed in Brazil during the year.

Companhia Piratininga de Força e Luz (CPFL Piratininga): CPFL Piratininga supplies electricity to a concession area covering 6,954 square kilometers in the southern part of the state of São Paulo with a population of 3.9 million people. Its concession area covers 27 municipalities, including the cities of Santos, Sorocaba and Jundiaí. CPFL Piratininga had 1.8 million consumers, as of December 31, 2019. In 2019, CPFL Piratininga distributed 7,963 GWh of electricity. Considering CPFL Piratininga’s sales in its concession area, including sales to Captive Consumers and TUSD, CPFL Piratininga sold 14,058 GWh of electricity in 2019, accounting for 10.9% of the total electricity distributed in the state of São Paulo and 3.0% of the total electricity distributed in Brazil during the year.

RGE Sul Distribuidora de Energia S.A. (RGE): RGE supplies electricity to a concession area covering 182,722 square kilometers in the state of Rio Grande do Sul with a population of 6.9 million people. Its concession area covers 381 municipalities, including the cities of Canoas, São Leopoldo, Novo Hamburgo, Santa Maria, Uruguaiana, Caxias do Sul, Gravataí, Passo Fundo and Bento Gonçalves. RGE had 2.9 million consumers, as of December 31, 2019. In 2019, RGE distributed 14,573 GWh of electricity. Considering RGE’s sales in its concession area, including sales to Captive Consumers and TUSD, RGE sold 19,568 GWh of electricity in 2019, accounting for 70.9% of the total electricity distributed in the state of Rio Grande do Sul and 4.1% of the total electricity distributed in Brazil during the year. As of January 1, 2019, RGE is the surviving entity of its merger in December 2018 with the company’s previous distribution company Rio Grande Energia S.A.

Companhia Jaguari de Energia (CPFL Santa Cruz): CPFL Santa Cruz supplies electricity to a concession area covering 20,250 square kilometers, which includes 45 municipalities in the northwest part of the state of São Paulo, three municipalities in the state of Paraná and three municipalities in the state of Minas Gerais. In 2019, CPFL Santa Cruz distributed 2,333 GWh of electricity to 0.5 million consumers. Considering CPFL Santa Cruz’s sales in its concession area, including sales to Captive Consumers and TUSD, CPFL Santa Cruz sold 3,061 GWh of electricity in 2019, accounting for 2.3% of the total electricity distributed in the state of São Paulo and 0.6% of the total electricity distributed in Brazil during the year.

Distribution Network

The company’s four distribution subsidiaries operate distribution lines with voltage levels ranging from 11.9 kilovolt (kV) to 138 kV.

As of December 31, 2019, the company’s distribution networks included 329,370 kilometers of distribution lines, including 476,474 distribution transformers, and 12,856 km of high voltage distribution lines between 34.5 kV and 138 kV. It had 525 transformer substations for transforming high voltage into medium voltages for subsequent distribution, with total transforming capacity of 18,743 mega-volt amperes. Of the industrial and commercial consumers in its concession area, 403 had 69 kV, 88 kV or 138 kV high-voltage electricity supplied through direct connections to its high voltage distribution lines.

Conventional Generation

Hydroelectric Power Plants

As of December 31, 2019, the company’s subsidiary CPFL Geração de Energia S.A. (CPFL Geração), owned a 51.54% interest in the assured energy from the Serra da Mesa Power Plant. Through its generation subsidiaries, Companhia Energética Rio das Antas (CERAN), Energética Barra Grande S.A., Campos Novos Energia S.A. (ENERCAN) and Chapecoense Geração S.A. (Chapecoense), CPFL Geração also owned interests in the Monte Claro, Barra Grande, Campos Novos, Castro Alves, 14 de Julho and Foz do Chapecó Energia S.A. (Foz do Chapecó) Power Plants. Through CPFL Jaguari Geração, the company owned a 4.15% (59.93% of 6.93%) interest in the assured energy from the Luis Eduardo Magalhães Power Plant.

Serra da Mesa: The company’s major hydroelectric facility in operation is the Serra da Mesa facility.

Serra da Mesa consists of three generation units located on the Tocantins River in the state of Goiás. The Serra da Mesa facility has a total installed capacity of 1,275 MW. The concession for the Serra da Mesa facility is owned by Furnas Centrais Elétricas S.A. (Furnas), which is also the operator, and the company owns part of the facility. Under Furnas’ agreement with the company, which has a 30-year term commencing in 1998, it has the right to 51.54% of the Assured Energy of the Serra da Mesa facility until 2028 even if, during the term of the concession, there is an expropriation or forfeiture of the concession or the term of the concession expires. The company sells all of such electricity to Furnas under an electricity purchase contract that was renewed in March 2014 at a price that is adjusted annually based on the IGP-M/FGV (market general price index) index. This contract expires in 2028. Its share of the installed capacity and assured energy of the Serra da Mesa facility is 657 MW and 2,879 GWh/year, respectively. In May 2014, the concession held by Furnas was formally extended to November 12, 2039. In 2016, due to the renegotiated GSF, the Serra da Mesa concession was extended to September 30, 2040, in accordance with ANEEL’s Authoritative Resolution No. 6,055/2016.

CERAN Hydroelectric Complex: The company owns a 65.0% interest in CERAN, a subsidiary that was granted a 35-year concession in March 2001 to construct, finance and operate the CERAN hydroelectric complex. The other shareholders are Rio Grande do Sul and Companhia Estadual de Energia Elétrica (CEEE) (with 30.0%) and Desenvix (with 5.0%). The CERAN hydroelectric complex consists of three Hydroelectric Power Plants: Monte Claro, Castro Alves and 14 de Julho. The CERAN hydroelectric complex is located on the Antas River 120 km north of Porto Alegre, near the city of Bento Gonçalves, in the state of Rio Grande do Sul. The entire CERAN hydroelectric complex has an installed capacity of 360 MW and estimated assured energy of 1,449 GWh per year, of which its share is 942 GWh/year. The company sells its participation in the assured energy of this complex to affiliates in its group. These facilities are operated by CERAN, under CPFL Geração’s supervision.

Monte Claro: Monte Claro’s first generating unit, which became operational in 2004, has an installed capacity of 65 MW and the second generating unit, which became operational in 2006, also has an installed capacity of 65 MW, giving total installed capacity of 130 MW and assured energy of 491.5 GWh per year.

Castro Alves: Castro Alves power plant has total installed capacity of 43.4 MW. In April 2008, the second generation unit became operational, with installed capacity of 43.4 MW. In June 2008, this plant became fully operational (when the third generation unit started operations), giving total installed capacity of 130 MW and annual assured energy of 541.4 GWh per year.

14 de Julho: The first generation unit of the 14 de Julho Power Plant became operational in December 2008, and the second generation unit became fully operational in March 2009. This plant has a total installed capacity of 100 MW and an annual Assured Energy of 416.1 GWh.

Barra Grande: This facility became fully operational in May 2006 with a total installed capacity of 690 MW and total assured energy of 3,266 GWh per year. CPFL Geração owns a 25.01% interest in this plant. The other shareholders of the joint venture are Alcoa (42.18%), CBA (Companhia Brasileira de Alumínio) (15.0%), Departamento Municipal de Eletricidade de Poços de Caldas (8.82%), and Camargo Corrêa Cimentos S.A. (9.0%). The company sells its participation in the assured energy of this facility to affiliates in its group.

Campos Novos: The company owns a 48.72% interest in ENERCAN, a joint venture formed by a consortium of private and public sector companies that was granted a 35-year concession in May 2000 to construct, finance and operate the Campos Novos Hydroelectric Facility. The plant was constructed on the Canoas River in the state of Santa Catarina, and became fully operational in May 2007 with a total installed capacity of 880 MW and assured energy of 3,327 GWh per year, of which its interest is 1,621 GWh per year. The other shareholders of ENERCAN are CBA (33.14%), Votorantim Metais Níqueis S.A. (11.63%) and CEEE (6.51%). The plant is operated by ENERCAN under CPFL Geração’s supervision. The company sells its participation in the assured energy of this joint venture to affiliates in its group.

Foz do Chapecó: The company owns a 51.0% interest in Chapecoense, a joint venture formed by a consortium of private and public sector companies that was granted a 35-year concession in November 2001 to construct, finance and operate the Foz do Chapecó Hydroelectric Power Plant. The remaining 49.0% interest in the joint venture is divided among Furnas, which holds a 40.0% interest, and CEEE, which holds a 9.0% interest. The Foz do Chapecó Hydroelectric Power Plant is located on the Uruguay River, on the border between the states of Santa Catarina and Rio Grande do Sul. The Foz do Chapecó Power Plant became fully operational in March 2011 with 855 MW of total installed capacity and assured energy of 3,743 GWh per year. The company sells 40.0% of its share in the assured energy of this project to affiliates in its group and 60.0% through CCEARs. In January 2013, at the request of ANEEL, the company began the process of transferring the Foz do Chapecó Substation and exclusive transmission lines to the basic network. The transfer process was completed in October 2016.

Luis Eduardo Magalhães: The company owns a 4.15% (59.93% of 6.93%) interest in the assured energy from the Luis Eduardo Magalhães Power Plant, also known as UHE Lajeado. The plant is located on the Tocantins River in the state of Tocantins and became fully operational in November 2002 with a total installed capacity of 902.5 MW and assured energy of 4,425 GWh per year. The plant was built by Investco S.A., a consortium including Lajeado Energia, Energias de Portugal, Companhia Energética de Brasília and Paulista Lajeado Energia S.A. (which the company acquired in 2007).

Thermoelectric Power Plants

The company operates two thermoelectric power plants. Termonordeste, which commenced operations in December 2010, and Termoparaíba, which commenced operations in January 2011 under ANEEL authorizations, are powered by fuel oil from the Centrais Elétricas da Paraíba S.A. complex, with total installed capacity of 341.7 MW and total assured energy of 2,170 GWh per year. In December 2019, the company owned an aggregate 53.34% interest in Termonordeste and Termoparaíba. The Termonordeste and Termoparaíba Thermoelectric Power Plants are located in the city of João Pessoa, in the state of Paraíba. The electricity from these power plants was sold in CCEARs, and part of this energy was purchased by its own distributors. In 2018, ANEEL passed Resolution No. 822/2018, allowing thermoelectric power plants to perform, and be compensated for, the recovery of system operational reserves for frequency control as an ancillary service.

SHPPs

As of December 31, 2019, 10 of the company’s 48 SHPPs were under the management of two of its conventional generation subsidiaries, CPFL Geração and CPFL Centrais Geradoras Ltda. These 10 SHPPs reported their results within the conventional generation segment. They consist of two groups of facilities.

Renewable Generation

As of December 31, 2019, the company owned a 99.94% interest in CPFL Renováveis, a company resulting from an association with another Brazilian renewable energy producer, ERSA – Energias Renováveis S.A., which holds its subsidiaries engaged in the generation of electricity from renewable sources. Through CPFL Renováveis, in August 2011, the company became the major renewable energy generation group in Brazil in terms of installed capacity and capacity under construction, according to ANEEL. In October 2014, CPFL Renováveis acquired 100% of the shares of DESA through an issuance of shares of CPFL Renováveis, resulting in a decrease in its shareholding of CPFL Renováveis from 58.84% to 51.61%. In November 2018, State Grid Brazil Power Participações S.A. (State Grid) acquired CPFL Renováveis through a mandatory tender offer that State Grid was required to carry out upon gaining control of the company in accordance with applicable Brazilian law. As a result of this mandatory tender offer, State Grid and the company, indirectly through its subsidiary CPFL Geração and the company, held 99.94% of CPFL Renováveis’ total capital stock.

In September 2019, the company, together with State Grid, announced the closing of the purchase and sale of the shares issued by CPFL Renováveis and the transfer by State Grid to the company of all the shares of CPFL Renováveis directly held by State Grid.

CPFL Renováveis invests in independent renewable energy production sources with low environmental and social impact, such as SHPPs, wind farms, biomass-fueled thermoelectric power plants and photovoltaic solar plants, focusing exclusively on the Brazilian market. CPFL Renováveis engages in the development, acquisition, construction and operation of electricity-generating plants using renewable energy sources. CPFL Renováveis operates in eight Brazilian states.

All installed capacity and assured energy numbers stated below refer to the full capacity of the plant in question rather than the company’s consolidated share of such energy, which reflects its interest in the plant.

23 subsidiaries involved in the generation of electric energy through 41 SHPPs, consisting of 40 SHPPs that are operational, with aggregate installed capacity of 453.1 MW, located in the states of São Paulo, Santa Catarina, Rio Grande do Sul, Paraná, Minas Gerais and Mato Grosso; and one SHPP, SHPP Lucia Cherobim, with 28 MW of installed capacity, which is under construction and scheduled to commence operations by 2024.

43 subsidiaries involved in the generation of electric energy from wind sources. 49 wind farms, located in the states of Ceará, Rio Grande do Norte and Rio Grande do Sul, consisting of 45 wind farms that are operational, with an aggregate installed capacity of 1,308.6 MW; and four wind farms (Gameleira, Figueira Branca, Farol de Touros and Costa das Dunas), with an aggregate installed capacity of 69.3 MW, which are under construction and scheduled to commence operations by 2024.

Eight subsidiaries involved in the generation of electric energy from biomass, all of which are operational, with total installed capacity of 370 MW, located in the states of Minas Gerais, Paraná, São Paulo and Rio Grande do Norte.

One subsidiary involved in the generation of electric energy from a solar power plant, Tanquinho, which is located in the state of São Paulo and has total installed capacity of 1.1 MW. Tanquinho started operations on November 27, 2012 and has the capacity to generate 1.7 GWh/year.

Existing Installed Capacity

The following includes the company’s existing and operational renewable generation plants:

SHPPs

SHPPs are plants with generation capacity between 5 MW and 30 MW and a reservoir area of approximately three square kilometers.

Biomass Thermoelectric Power Plants

Biomass-fueled thermoelectric power plants are generators that use the combustion of organic matter for the production of energy. The company has eight biomass-fueled thermoelectric power plants under the authorization regime, located in the states of São Paulo, Minas Gerais, Rio Grande do Norte and Paraná.

CPFL Alvorada: The UTE Alvorada plant is located in the city of Araporã, in the state of Minas Gerais. The total installed capacity of UTE Alvorada is 50 MW and assured energy is 163.8 GWh. This project has an associated PPA in force until 2032 with CPFL Comercialização Brasil S.A. (CPFL Brasil).

CPFL Bioenergia: In partnership with Baldin Bioenergia, the company has constructed a co-generation plant in the city of Pirassununga, in the state of São Paulo. This co-generation plant has total installed capacity of 45 MW. The plant has an assured energy of 91.1 GWh and all its electricity is sold to CPFL Brasil.

CPFL Bio Formosa: In 2009, CPFL Brasil established the Baía Formosa power plant (CPFL Bio Formosa), located in the city of Baía Formosa, in the state of Rio Grande do Norte, with total Installed Capacity of 40 MW. 11 MWavg of energy were sold in the A-5 auction with CCEARs in force until 2025.

CPFL Bio Buriti: In March 2010, CPFL Bio Buriti, which was formed to develop electric energy generation projects using sugarcane bagasse, executed a partnership agreement with Grupo Pedra Agroindustrial to develop new biomass generation projects. The CPFL Bio Buriti plant, located in the city of Buritizal, in the state of São Paulo, began its operations in October 2011. The total installed capacity of this plant is 50 MW. CPFL Bio Buriti has an associated PPA of 184.1 GWh in force until 2030 with CPFL Brasil.

CPFL Bio Ester: In October 2012, CPFL Renováveis completed the acquisition of the electricity and steam co-generation assets of SPE Lacenas Participações Ltda., which controls the Ester Thermoelectric Power Plant, located in the municipality of Cosmópolis, in the state of São Paulo. The assets have total installed capacity of 40 MW. Approximately 7 MWavg of co-generation energy from the Ester Thermoelectric Power Plant was commercialized in the 2007 alternative energy sources auction, for a period of 15 years. The remaining energy produced is sold on the free market for 21 years.

CPFL Bio Ipê: In March 2010, CPFL Bio Ipê, which was formed to develop electric energy generation projects using sugarcane bagasse, executed a partnership agreement with Grupo Pedra Agroindustrial to develop new biomass generation projects. The CPFL Bio Ipê plant, located in Nova Independência, in the state of São Paulo, began its operations in May 2012. The total Installed Capacity of this plant is 25 MW. This project has an associated PPA of 71.7 GWh in force until 2030 and the energy has been entirely sold to CPFL Brasil.

CPFL Bio Pedra: In March 2010, CPFL Bio Pedra, which the company formed to develop electric energy generation projects using sugarcane bagasse, executed a partnership agreement with Grupo Pedra Agroindustrial to develop new biomass generation projects. CPFL Bio Pedra, located in Serrana, in the state of São Paulo, started operations in May 2012 with total installed capacity of 70 MW and assured energy of 209.4 GWh. The electricity from CPFL Bio Pedra has been sold through an auction held in 2010, with CCEARs in force until 2027.

CPFL Coopcana: The construction of UTE Coopcana began in 2012 in the city of São Carlos do Ivaí, in the state of Paraná, and operations started on August 28, 2013. The total installed capacity of UTE Coopcana is of 50 MW and assured energy is 157.7 GWh. This project has an associated PPA in force until 2033 with CPFL Brasil.

Solar Power Plant

Tanquinho: The Tanquinho Solar Power Plant, in the state of São Paulo, started operations in November 2012, with total installed capacity of 1.1 MW. The company intends Tanquinho to generate 1.7 GWh per year.

Wind Farms

The company has 45 wind farms under the authorization regime, located in the states of Ceará, Rio Grande do Norte and Rio Grande do Sul.

Atlântica Complex: The Atlântica complex consists of the Atlântica I, II, IV and V Wind Farms. The complex has an aggregate installed capacity of 120 MW and aggregate assured energy of 449.4 GWh. The electricity from these wind farms has been sold through an alternative energy auction held in 2010, or the 2010 Alternative Sources Auction, with CCEARs in force until 2033. The Atlântica complex commenced operations in March 2014.

Bons Ventos: Bons Ventos Wind Farm, in the state of Ceará, has an installed capacity of 50 MW and an associated agreement with Eletrobras under the Proinfa Program to sell all of the energy generated for a period of 20 years. The acquisition of Bons Ventos Wind Farm was concluded in June 2012.

Campo dos Ventos II Wind Farm: In 2010, CPFL Geração acquired Campo dos Ventos II Wind Farm (CPFL Renováveis holds this investment) in the cities of João Câmara and Parazinho, in the state of Rio Grande do Norte, which began operations in September 2013. This wind farm has an installed capacity of 30 MW and assured energy of 131.4 GWh. The electricity from Campo dos Ventos II has been sold through an auction held in 2010, with PPAs in force until August 2033.

Canoa Quebrada: Canoa Quebrada Wind Farm, in the state of Ceará, has an installed capacity of 57 MW and an associated agreement with Eletrobras under the Proinfa Program to sell all of the energy generated for a period of 20 years.

Enacel: Enacel Wind Farm, in the state of Ceará, has an installed capacity of 31.5 MW and an associated agreement with Eletrobras under the Proinfa Program to sell all of the energy generated for a period of 20 years.

Eurus Complex: Eurus complex consists of the Eurus I and Eurus III Wind Farms. The complex has an aggregate installed capacity of 60 MW and aggregate assured energy of 31.6 MWavg.

Foz do Rio Choró: Foz do Rio Choró Wind Farm, in the state of Ceará, has an installed capacity of 25.2 MW and an associated agreement with Eletrobras under the Proinfa Program to sell all of the energy generated for a period of 20 years. The PPA is in force until June 2029.

Icaraizinho: Icaraizinho Wind Farm, in the state of Ceará, has an installed capacity of 54.6 MW and an associated agreement with Eletrobras under the Proinfa Program to sell all of the energy generated for a period of 20 years. The PPA is in force until October 2029.

Macacos Complex: The Macacos complex consists of the Pedra Preta, Costa Branca, Juremas and Macacos Wind Farms. The complex has an aggregate installed capacity of 78.2 MW and aggregate assured energy of 37.5 MWavg.

Morro dos Ventos Complex: The Morro dos Ventos complex consists of the Morro dos Ventos I, Morro dos Ventos III, Morro dos Ventos IV, Morro dos Ventos VI and Morro dos Ventos IX Wind Farms. The complex has an aggregate installed capacity of 145.2 MW and aggregate assured energy of 68.6 MWavg.

Morro dos Ventos II: Morro dos Ventos II wind farm, in the state of Rio Grande do Norte, has an installed capacity of 29.2 MW and aggregate assured energy of 15.4 MWavg. This wind farm commenced operations in April 2015.

Paracuru: Paracuru Wind Farm, in the state of Ceará, has an installed capacity of 25.2 MW and an associated PPA in force until November 2028.

Pedra Cheirosa: The Pedra Cheirosa complex, located in the state of Ceará, consists of the Pedra Cheirosa I and Pedra Cheirosa II Wind Farms, which have an aggregate installed capacity of 48.3 MW and aggregate assured energy of 27.5 MWavg. This wind farm commenced operations in June 2017.

Praia Formosa: Praia Formosa Wind Farm, in the state of Ceará, has an installed capacity of 105 MW and an associated agreement with Eletrobras under the Proinfa Program to sell all of the energy generated for a period of 20 years. The PPA is in force until August 2029.

Rosa dos Ventos Wind Farm: In June 2013, CPFL Renováveis acquired Rosa dos Ventos Wind Farm (Canoa Quebrada and Lagoa do Mato fields), located in the state of Ceará. This wind farm has an installed capacity of 13.7 MW and the electricity produced by Rosa dos Ventos is subject to an agreement with Eletrobras under the Proinfa Program.

Santa Clara Complex: Santa Clara complex, in the state of Rio Grande do Norte, includes seven wind farms with an installed capacity of 188 MW and an associated CCEAR in force until June 2032. The Santa Clara wind farms sold their energy through the 2009 Reserve Energy Auction.

São Benedito and Campo dos Ventos Complexes: The São Benedito complex consists of the Ventos de São Benedito, Ventos de Santo Dimas, Santa Mônica, São Domingos, Ventos do São Martinho and Santa Úrsula wind farms. The São Domingos and Ventos de São Martinho Wind Farms, previously part of the Campo dos Ventos complex, were allocated to the São Benedito complex to increase synergies. The Campo dos Ventos complex consists of Campo dos Ventos I, III and V Wind Farms. Together, they have an installed capacity of 231 MW.

Taíba Albatroz: Taíba Albatroz Wind Farm, in the state of Ceará, has an installed capacity of 16.5 MW and an associated agreement with Eletrobras under the Proinfa Program to sell all of the energy generated for a period of 20 years. The acquisition of Taíba Albatroz Wind Farm was concluded in June 2012.

Expansion of Installed Capacity

SHPP Lucia Cherobim: SHPP Lucia Cherobim is located in the state of Paraná and is expected to commence operations in 2024. It is expected to have an aggregate Installed Capacity of 28 MW and aggregate assured energy of 145.2 GWh/year. In August 2018, in the A-6/2018 Energy Auction, SHPP Lucia Cherobim sold 16.5 MWavg.

Gameleira Wind Complex: Gameleira wind complex is located in the state of Rio Grande do Norte and is expected to commence operations in 2024. It is expected to have an aggregate installed capacity of 81.7 MW and aggregate assured energy of 345.2 GWh/year. In August 2018, in the A-6/2018 Energy Auction, the Gameleira wind complex sold 12.0 MWavg of the energy to be generated by it. Additionally, the Gameleira wind complex sold its remaining energy in the free market.

Energy Commercialization

The company carries out electricity commercialization activities mainly through its subsidiary, CPFL Brasil. The key areas of this activity are procuring electricity for commercialization activities by entering into bilateral contracts with energy companies (including its generation subsidiaries and third parties) and purchasing electricity in public auctions; reselling electricity to free consumers and/or other players in the market; reselling electricity to distribution companies (including CPFL Paulista, CPFL Piratininga and RGE) and other agents in the electricity market through bilateral contracts; and providing agency services to free consumers and power generators before the CCEE and other agents, such as guidance on their operational requirements.

As a retailer trade company, CPFL Brasil is also responsible for the energy load of free and special consumers, centralizing the management of contracts and the relationship with the CCEE. The focus of CPFL Brasil’s activities in retail market are potentially free consumers, such as retail chains, banks, supermarkets, universities, among others.

Services

Through CPFL Serviços, Equipamentos, Industria e Comércio S.A. (CPFL Serviços), CPFL Atende Centro de Contatos e Atendimento Ltda. (CPFL Atende), CPFL Total Serviços Administrativos Ltda. (CPFL Total), CPFL Eficiência Energética S.A (CPFL Eficiência), Nect Serviços Administrativos de Infraestrutura Ltda (CPFL Infra), Nect Servicos Adm de Suprimentos E Logistica Ltda (CPFL Supre), Nect Servicos Administrativos Financeiros Ltda (CPFL Finanças) and Nect Servicos Administrativos de Recursos Humanos Ltda (CPFL Pessoas), the company offers its consumers a range of electricity-related services. Its main electricity-related services include the following:

Transmission Networks: CPFL Serviços offers energy solutions in transmission assets of approximately 138 kV, plans and drafts the civil, electrical and electromechanical projects, carries out material and equipment logistics, constructs transmission lines and Substations and, additionally, carries out the preventive and corrective maintenance of these assets afterwards in consideration of each consumer’s needs and growth expectations and in accordance with safety criteria.

Distribution Networks: CPFL Serviços plans, constructs and performs maintenance on electric energy distribution system networks of approximately 34.5 kV, including above and underground electricity grids, medium-voltage Substations and transformers and lighting solutions.

Self-production Networks and Energy-efficiency Programs: The self-production networks consist of electric energy production alternatives. It offers diesel and natural gas generators that operate mainly as a back-up energy source, and in peak periods. Its natural gas co-generation activities include the simultaneous and sequential production of electricity and heat using a single fuel type. It also offers solutions in acclimatization and energy-efficiency projects, as well as distributed generation of solar energy. After October 2014, all self-production activities were transferred to CPFL Eficiência, adding self-production to its services portfolio, which also includes services relating to cooling, cogeneration, motive power and lighting for the creation of customized solutions, promoting savings, sustainability and power security.

CPFL Eficiência also offers distributed generation services, through CPFL Geraçção Distribuída de Energia Ltda., a source of generation that injects power directly into the local distribution grid. One such service is the company’s solar photovoltaic systems (solar panels), which are offered through its Envo business line (created in 2017 to broaden the scope of services it offers to its customers, and its activities are directed at residential and smaller commercial customers), which enable customers to generate their own energy. In 2019, Envo provided services in connection with the construction of the Americana Solar Power Plant (Usina Solar Americana). In particular, Envo assisted in preparing the plans for the power plant, furnished and installed the solar photovoltaic systems (solar panels) and assisted in securing the power plant’s access to the local distribution grid. The Americana Solar Power Plant has 3,320 generator units, 1.12 MW of power and annual generation capacity of 1,771 MWh, enough to supply electricity to 738 residences with average consumption of 200 KWh/month during the period.

Equipment Recovery: CPFL Serviços has its own framework for reverse logistics operation, which is responsible for the collection and disposal of all unusable material from the electricity grid. The reverse logistics operation engages in renovating approximately 34 kV electrical equipment to restore efficiency. It also engages in retrofitting equipment, which also allows it to produce distribution transformers. The retrofitting equipment is ISO 9001 and ISO 14001 certified and has the Inmetro quality certification seal for the process of renovating distribution transformers. CPFL Serviços has an insulating oil regeneration park, as well as a laboratory with the ability to perform all current tests according to Brazilian technical standards. It also produces and manufactures measuring panels, as well as panels for protection and control networks.

CPFL Atende: CPFL Atende is a contact center and customer relationship company, created to provide services both for companies within its group and for other companies. Among these services are face-to-face service, back office services, credit recovery, toll free customer support, ombudsman services, service desks and sales.

CPFL Total: CPFL Total provides the ‘Serviço em Conta’, which enables it to charge business customers for additional products and services through their electricity bills. Operations related to the collections and onlending activities offering bill payment services were discontinued as of 2016.

CPFL Infra: CPFL Infra provides asset management services, such as services with respect to car fleets, real estate and administrative functions and building maintenance and security.

CPFL Supre: CPFL Supre provides planning and logistics and supply chain management services. These services include purchasing, materials coordination, distribution and logistics.

CPFL Finanças: CPFL Finanças provides financial organization and operating services to support the company’s businesses’ decision making. These services include accounting, budget, billings and payments.

CPFL Pessoas: CPFL Pessoas provides human resources and people management services. These services include payroll, benefits, third party management and recruiting, selecting and hiring employees.

Strategy

The key elements of the company's strategy include to complete the development of its existing renewable generation projects and expand its generation portfolio by developing new conventional and renewable energy generation projects; expand and strengthen its commercialization; Position itself to take advantage of consolidation in its industry by using its experience in integrating and restructuring other operations; management for sustainable development and social responsibility; maintain a strategic focus on a low carbon business portfolio; and follow enhanced corporate governance standards.

Consumers

The company classifies its consumers into five principal categories, such as industrial consumers; residential consumers; commercial consumers, which include service businesses, universities and hospitals; rural consumers; and other consumers, which include public and municipal services, such as street lighting.

History

CPFL Energia S.A. was founded in 1998. The company was incorporated and existing under the laws of Brazil in 1998.