ABRADEE: Brazilian Association of Electric Energy Distributors.
ACL: Free Contracting Environment. Segment of the market comprising the purchase of electric power by deregulated agents (such as Free Consumers and electric power traders).
ACR: Regulated Contracting Environment. Segment of the market comprising the purchase by distributing companies, by means of bids and other mechanisms provided by Aneel.
ACTF - Agreement for Connection to Transmission Facilities (CCT, in portuguese) - Agreement entered into between the system user and the transmitter establishing the responsibilities for the implementation, operation and maintenance of the connection facilities and the respective charges, as well as commercial conditions, at the connection points.
AP - Adjustment Parcel: Compensates excess or deficit of revenues in the previous tariff cycle.
American Depositary Receipt or ADR: Receipt of the Company’s shares outside of the United States, issued by a bank and held in custody by an American bank. ADRs are negotiable instruments created so that issuers of securities from other countries may comply with US security registration regulations. They also facilitate the payment of dividends to investors in the United States. CPFL Energia no longer have ADRs since2019.
American Depositary Shares or ADSs: Each ADS is equivalent to 2 (two) common shares for CPFL Energia. The ADSs were issued under the terms of the deposit contract with Citibank N.A. as the depositary institution. ADSs are represented by American Depositary Receipts.
ANEEL: National Electric Energy Agency. The power sector’s regulatory body.
Annual General Shareholders’ Meeting (AGM): Mandatory annual meeting of the Company’s shareholders called by the Board of Directors, in order to:
a) acknowledge the management accounts
b) analyze and vote on the Company’s financial statements
c) decide on the allocation of net income
d) pay dividends
e) elect the Board of Directors and the Fiscal Council.
Annual Reference Value: The weighted average of electricity purchase prices for new generation projects in ANEEL auctions held 3 years and 5 years before the first delivery date, calculated for all distribution companies.
Allowed Annual Revenue (RAP, in portuguese): revenue authorized by ANEEL, by Resolution, for making the transmission system facilities available. Annual revenue to which the concessionaire is entitled from the start of commercial operation of the transmission facilities.
Annuity Basis (BAR, in portuguese): amount referring to investments considered for infrastructure of properties for administrative use, investments in vehicles and investments in IT systems.
APTS - Agreement for the Provision of Transmission Services (CPST, in portuguese): agreement approved by ANEEL, entered into between the ONS and transmission concessionaires holding transmission facilities that comprise the Basic Network, establishing the terms and conditions for the provision of electricity transmission services to users, under administration and coordination of the ONS.
Armored Base (Periodic Tariff Review): Amounts approved by an adjusted appraisal report, associated with assets in operation, excluding movements (write-offs and depreciation) and respective updates, in addition to the values for the Operations Warehouse accounts. The transmission facilities authorized to the extended concessionaires that were subject to indemnification, under the terms of the Interministerial Ordinance nº 580/MME/MF, of November 1th 2012, corresponding to the R2 revenue installments (associated with the cost of operating and maintenance expenses for transmission facilities) are also part of the Armored Base.
Assured energy or Physical Guarantee: Fixed amount of energy of a power plant, established by the granting power in the concession agreements. It represents the amount of energy available for sale in that enterprise.
AUTS - Agreement for the Use of the Transmission System (CUST, in portuguese): agreement approved by the ANEEL, entered into between the ONS, representing the Transmission Concessionaires and Users, establishing the terms and conditions for the use of the Basic Network by the User, including the provision of transmission services by the Transmission Concessionaires, under the control and supervision of the ONS, as well as the provision, by the ONS, of coordination and control services for the operation of the Interconnected Systems.
Average Tariff: Total sales revenue divided by the total megawatt-hours (MWh) sold in a given period.
B3 – B3 S.A. - Brasil, Bolsa, Balcão: São Paulo Stock Exchange.
BACEN: Central Bank of Brazil
BAESA: Energética Barra Grande S.A.
Basic Network: Transmission installations of the National Interconnected System - SIN, owned by public transmission service concessionaires, with voltage equal or higher than 230 kV.
Biomass Thermoelectric Power Plant: a thermoelectric generator thatuses the combustion of organic matter forthe production of energy.
BNDES: National Bank of Economic and Social Development.
BNES - Basic Network Existing Systems (RBSE, in portuguese): Payment to the electricity transmission companies for reversible assets existing on May 31, 2000.?
BNNI - Basic Network New Investments (RBNI, in portuguese): Portion of revenue corresponding to new installations comprising the Basic Network, authorized and with revenue established by specific resolution.
Brazilian Corporate Law: Federal Law No. 6,404, enacted on December 15, 1976, which governs,among other things, corporations (sociedade por ações) and the rights and duties of their shareholders,directors and officers.
Bylaws: theCompany’s Bylaws.
Captive consumers: Consumers who may only acquire energy from the concessionaire to whose network they are connected.
CCEE: Energy Trading Chamber.
CDE: Energy Development Account, instituted by Law 10,438 of April 26, 2002, and subsequent amendments thereto. A fund managed by CCEE to foster electricity development in general and its production from alternative energy sources in particular, as well as the universalization of energy services in Brazil. All concessionaires contribute to this fund.
CERAN: Companhia Energética Rio das Antas, complex composed of Monte Claro, Castro Alves and 14 deJulhopower plants.
CMN: National Monetary Council.
CNPE: National Energy Policy Council. Aninter ministerial committee charged with formulating power-related policies and guidelines.
Company or CPFL Energia: CPFL Energia S.A. or the group of companies comprising CPFL Energia and its subsidiaries.
Consumer: An individual or legalentity that requests power supply from a concessionaire, assuming the responsibility of paying the bills and complying with other obligations determined by ANEEL.
CVA: A tracking account used to offset the variation in estimated fixed costs passed on to consumers in distribution tariff adjustments and the variation in actual fixed costs. These costs include:Energy Purchase,transport from Itaipu,Basic Network Contractand sector charges.
CVM: Brazilian Securities and Exchange Commission.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization): Measures a company’s operating cash flow before it is impacted by financial charges, depreciation and taxes.
EPC: Engineering, Procurement and Construction.
EPR (Expansion Plan and Reinforcements): Document annually prepared by the ONS, with the participation of the associated agents, which presents the expansions, the improvements and the reinforcements at the National Interconnected System, necessary to preserve or reach the ideal performance of the network, ensure the full functioning of the electricity market and allow free access to agents, on its analysis horizon.
Extraordinary General Shareholders’ Meeting (EGM): A meeting of the Company’s shareholders to discuss and decide on corporate matters, other than those dealt with by the AGM.
Federal Constitution: Constitution of the Federative Republic of Brazil.
Final consumers: Consumers who use electric power to meet their own needs.
FINAME: FINAME is a financing from BNDES for the production and acquisition of new and Brazilian-made machinery and equipment. The acronym FINAME stands for Financing of Machines and Equipment.
FMP (Facility Modernization Plan): Document annually prepared by the ONS that describes interventions classified as improvements to be implemented in facilities under the responsibility of Transmission, and interventions classified as improvements or reinforcements to be implemented in facilities under the responsibility of Distribution or Generation.
Free consumers: Group A Consumers who are supplied by generators or traders through bilateral contracts signed within the ACL (Free Contracting Environment). These consumers still have to pay the distributor where it is located for the use of the distribution system.
Free Float: The shares of a company that are traded in the organized stock markets.
FSA - Facilities Sharing Agreement (CCI, in portuguese): agreement that establishes the technical-operational procedures and commercial and civil responsibilities to regulate the sharing of facilities between transmitters.
IBAMA: Brazilian Institute of Environment and Renewable Natural Resources. The leading federal environmental agency
IBGE: Brazilian Institute of Geography and Statistics. Source of various economic indicators.
IBrX- Brazil Index: is anindex that measures the return on a theoretical portfolio composed by 100 stocks selected among B3’s most actively traded securities, in terms of number of trades and financial value. The component stocks are weighted according to the outstanding shares’ market value.
IBrX-50 - Brazil Index 50: is anindex that measures the total return on a theoretical portfolio composed by 50 stocks selected among B3’s most actively traded securities in terms of liquidity, weighted according to the outstanding shares’ market value.
IBOV -Ibovespa Index: is the main indicator of the Brazilian stock market’s average performance. IBOV’srelevance comes from the fact that it reflects the variation of B3’s most traded stocks.
ICO2 - Carbon Efficient Index - This index comprises the shares of companies participating in the IBrX-100 index that have agreed to join this initiative, by adopting transparent practices with respect to their greenhouse gas emissions (GHGs). It takes into account, for weighting the shares of the component companies, their degree of efficiency in GHG emissions, in addition to the free float of each one.
IEE - The Electric Power Index: It was launched in August 1996 to measure the performance of the electric power sector. In this sense, the index is an instrument that makes possible the performance analysis of portfolios specialized in the electric power sector.
IFRS – International Financial Reporting Standards: the International Accounting Standards, which seekfora standard accepted in many countriesin orderto facilitate the comparability of information between companies in different countries. In Brazil, IFRS was implemented in 2010.
IGC - Special Corporate Governance Stock Index: is designed to measure the return of a theoretical portfolio composed of shares of companies with a good level of corporate governance. Such companies should be traded onB3´s "Novo Mercado" or should be classified atB3´s "Level 1" or "Level 2".
IGP-M: General Market Price Index, calculated by theFundaçãoGetúlio Vargas.
Installed capacity: Maximum amount of energy that can be delivered by a particular generating unit on a full continuous charge basis under specific conditions as designated by the manufacturer.
Improvement: It is the installation, replacement or renovation of equipment in existing Transmission Facilities, or the adequacy of these facilities, in order to preserve the provision of adequate electricity transmission service, as provided for in Law No. 8.987, of February 13th.
ISE - Corporate Sustainability Index: is designed to measure the return on a portfolio composed of shares of companies highly committed to social responsibility and corporate sustainability, and also to promote good practices in the Brazilian corporate environment
ITAG - Special Tag Along Stock Index: is designed to measure the return of a theoretical portfolio composed of shares of companies which offer, in case of control sale, better conditions to minority shareholders than those required by law.
ITR: Quarterly Information.
IPO (Initial Public Offering): A company’s first public share issue.
IPCA: Extended National Consumer Price Index, calculated by the IBGE.
Itaipu: Itaipu Binacional, a hydroelectric facility jointly owned by Brazil and Paraguay.
Lock-up: a period of impediment to trading or any other form of sale of shares by the Company and by the Selling Shareholders.
Low Income consumers: As defined by Law 12,212/10, it is the residential consumer who benefits from the Social Electricity Tariff, characterized by discounts on the tariff applicable to the residential segment of distributors, calculated cumulatively, as shown below:
- for the portion of electricity consumption less than or equal to 30 kWh/month, the discount will be 65%;
- for the portion of consumption between 31kWh/month and 100kWh/month, the discount will be 40%;
- for the portion of consumption between 101kWh/month and 220kWh/month, the discount will be 10%;
- for the portion of consumption greater than 220kWh/month, there will be no discount.
This tariff is applied to consumer units classified in the Residential - Low Income segment, since they meet at least one of the following conditions:
- its residents belong to a family enrolled in the Federal Government's Registry for Social Programs - CadÚnico, with a monthly per capita family income equal or lower than half the national minimum wage; or
- have among their residents a person who receives the benefit of continued provision of social assistance, under the terms of Law 8,742/93.
Operating Warehouse: it is linked to the operation and maintenance of machinery, installations and equipment necessary for the provision of the public electricity transmission service, it is considered to compose the remuneration basis.
Other Transmission Facilities (DIT, in portuguese): Transmission Installations recognized by ANEEL as part of the Transmission Concessionaire's fixed assets, not part of the Basic Network and made available, with onus, to public distribution service concessionaires and to concessionaires, licensees and authorized generation companies. Installations with less than 230 kV.
Parcel A costs: Distributors’non-manageablecosts, including the cost of electricity purchased for resale, connection and use oftransmissionsystem charges and sector charges.
PPA: Power Purchase Agreement.
Proinfa: Incentive Program for Alternative Electric Energy Sources, under Law 10,438 of April 26, 2002, and subsequent amendments thereto.
Registrar bank: an institution hired by the company that has shares traded on the stock exchange to hold, update, coordinate corporate events, pay dividends and interest on equity, in addition to providing services to shareholders.
Regulated Market: Market segment in which distribution companies purchase all the electricity needed to supply customers through public auctions. The auction process is administered by ANEEL, either directly or through CCEE, under certain guidelines provided by the MME.Regulated Market is generally considered to be more stable in terms of supply of electricity.
Reinforcement: is the installation, replacement or refurbishment of equipment in existing transmission installations, or the adaptation of these installations, to increase transmission capacity, SIN reliability, useful life or to connect a system user.
RPC: Parcel of AAR corresponding to the facilities classified as Other Transmission Facilities, defined in the Annex of Resolution Nº166/2000.
RTA: Annual Tariff Adjustment (reajuste tarifário anual).
RTE: Extraordinary Tariff Adjustment (reajuste tarifário extraordinário).
RTP: Periodic Tariff Revision (revisão tarifária periódica).
SAIDI: System Average Interruption Duration Index, measured by the average duration of power interruptions in hours per consumer in a given period, normally a month or last 12 months.
SAIFI: System Average Interruption Frequency Index, measured by the average number of power interruptions in hours per consumer in a given period.
SDGs: United Nations Sustainable Development Goals, 17 sustainable development goals established by the United Nations and 169 specific targets that apply to all countries and cover abroad range sustainability issues, including poverty, hunger, health, education, climate change, gender equality, water, sanitation, energy, environment and social justice. See //sustainabledevelopment.un.org/sdgs for more information.
SEC (Securities and Exchange Commission): The institution responsible for protecting investors and maintaining the integrity of the securities market in the United States. Its area of authority covers the stock exchange, financial and capital market brokers and dealers, investment consultants, mutual funds and listed companies.
Self-producer: A consumer of electric energy that is granted a concession, permission or authorization to produce electric energy for its own consumption.
SIN: National Interconnected System, comprising the Basic Network and other transmission installations connecting generators and distributors inBrazil.
Small Hydroelectric Power Plants (or SHPPs): Hydroelectric plants with an installed capacity of between3MW and 30 MW.
Special Free Consumer: Special category of free consumers who are qualified to purchase energy on the free market only from incentivized sources (solar, wind, biomass or SHPP).
Substation: A set of equipment that connects, alters and/or controls the voltage in a transmission and distribution system.
System user: Distributor, Generator, authorized to import and/or export electricity, as well as the Free Consumer.
Tag along: The right of minority shareholders to sell their shares, at the same price of the controlling shareholders, in the event of the dispose of control.
Transmission: High-voltage lines conducting electricity over long distances with a voltage equal to or higher than 69 kV, connecting substations.
TUSD: Tariff for the Use of the Distribution Grid,annually adjusted by ANEEL.
TUST: Tariff for the Use of Transmission System, is paid by distributors, generators, free and special consumers, for the use of the Basic Network and Other Transmission Installations.
Transmission network: Network or system for the transmission of electric energy between areas or countries to supply the distribution networks.
Thermoelectric Power Plant (or TPP): A generating unit which uses fossil fuels such as coal, oil, diesel, natural gas or others as the source of energy to drive the turbine.