As filed with the Securities and Exchange Commission on April 16, 2025
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
20-F
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31
, 2024
Commission file number:
001-14668
COMPANHIA PARANAENSE DE ENERGIA – COPEL
(Exact Name of Registrant as Specified in its Charter)
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Energy Company of Paraná
(Translation of Registrant’s Name into English)
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The Federative Republic of
(Jurisdiction of Incorporation or Organization)
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(Address of Principal Executive Offices)
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55 41 3331 4011
–
ri@copel.com
(Name, telephone, e-mail and/or facsimile number and address of company contact person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common Shares, without par value
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N/A
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New York Stock Exchange*
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Preferred Class B Shares, without par value
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N/A
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New York Stock Exchange*
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| American Depositary Shares (as evidenced by American Depositary Receipts), each representing four Common Shares of COPEL |
ELPC
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New York Stock Exchange
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* Shares are not listed for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the New York Stock Exchange.
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the Issuer’s classes of capital or common stock as of December 31, 2024
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐
No
☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act:
Non-accelerated filer ☐ Emerging growth company
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (§ 15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
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Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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U.S. GAAP ☐
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IFRS -
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Other ☐
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If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
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TABLE OF CONTENTS
Form 20-F 25FY24 | COPEL and Subsidiaries |
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| CONSOLIDATED FINANCIAL STATEMENTS | ||
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Form 20-F 25FY24 | COPEL and Subsidiaries |
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PRESENTATION OF FINANCIAL AND OTHER INFORMATION
In this annual report, we refer to Companhia Paranaense de Energia ‒ Copel, and, unless the context otherwise requires, its consolidated subsidiaries as “Copel,” the “Company,” “we” or “us.”
References to (i) the “
real
,” “
reais
” or “R$” are to Brazilian
reais
(plural) and the Brazilian
real
(singular) and (ii) “U.S. dollars,” “dollars” or “US$” are to United States dollars. We maintain our books and records in
reais
. Certain figures included in this annual report have been subject to rounding adjustments.
Our audited consolidated financial statements as of December 31, 2024 and 2023 and for each of the years ended December 31, 2024, 2023 and 2022 are included in this annual report. We prepared our audited consolidated financial statements included in this annual report in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) (currently described as "IFRS Accounting Standards" by the IFRS Foundation).
References in this annual report to the “Common Shares,” “Class A Shares” and “Class B Shares” are to our common shares, class A preferred shares, and class B preferred shares, respectively. References to “American Depositary Shares” or “ADSs” are to our American Depositary Shares, which comprise our ADSs representing four Common Shares each (“Common Share ADSs”) and our ADSs representing four Class B Shares each (“Preferred Share ADSs”). ADSs are listed on “NYSE” (the New York Stock Exchange).
Certain terms are defined the first time they are used in this annual report. As used herein, all references to “GW” and “GWh” are to gigawatts and gigawatt hours, respectively, references to “kW” and “kWh” are to kilowatts and kilowatt hours, respectively, references to “MW” and “MWh” are to megawatts and megawatt hours, respectively, and references to “kV” are to kilovolts. These and other technical terms are defined in the “Technical Glossary”.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements. We may also make written or oral forward-looking statements in our annual report to shareholders, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees. These statements are not historical facts and are based on management’s current view and estimates of future economic circumstances, industry conditions, company performance and financial results. Forward-looking statements can be identified by the fact that they do not relate only to historical or current facts and may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “would,” “should,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions, although the absence of any such words or expressions does not mean that a particular statement is not a forward-looking statement. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
Forward-looking statements involve only the current view of management and are subject to a number of inherent risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to:
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Brazilian political and economic conditions;
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economic conditions in the State of Paraná;
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technical, operational, legal and regulatory conditions related to the provision of electricity services;
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the outcome of lawsuits against us;
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our ability to obtain financing;
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developments in other emerging market countries;
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changes in, or failure to comply with, governmental regulations;
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competition;
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electricity shortages;
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unfavorable hydrological conditions;
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climate-related developments;
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international economic and political developments;
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the impact of the ongoing conflicts in Ukraine and in the Middle East, the economic sanctions imposed on Russia, and their impact on the global economy, which are highly uncertain and difficult to predict;
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changes in global market conditions, impacting demand and pricing stability, including uncertainties related to global trade as a result of the imposition of tariffs between and among the United States and other countries and jurisdictions; and
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other factors discussed below under “Item 3. Key Information―Risk Factors.”
All forward-looking statements are expressly qualified in their entirety by this cautionary statement, and you should not place undue reliance on any forward-looking statement contained in this annual report.
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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ITEM 3. KEY INFORMATION
RISK FACTORS
The following is a summary of the material risks we face:
Risks Relating to Our Company and our Operations
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We are largely dependent on the economy of the State of Paraná.
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There is no guarantee that we will be able to maintain or renew all licenses, permits, concessions, registrations, authorizations, including environmental licenses, required for our current operations, or obtain the necessary licenses to develop and operate new projects
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Disruptions in the operation of, or deterioration of the quality of, our services could have an adverse effect on our business, financial condition, reputation and results of operations.
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Our financial and operational performance may be negatively affected by epidemics, natural disasters, and other catastrophes that affect biodiversity, society, and the Brazilian economy.
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We are subject to risks related to social and environmental impacts of our projects.
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Failures in dams under our responsibility may cause serious damages to the affected communities, to our results and to our reputation.
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We are involved in several lawsuits that could have a material adverse effect on our business, operational results, financial position, and reputation if their outcome is unfavorable to us.
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Failures in our cybersecurity controls or unauthorized disclosure of information, as well as failure to comply with existing data privacy and data security laws may adversely affect our business and reputation, including the risk of interruption in energy supply and suspension of operations
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The implementation of our new billing project may expose us to increased operational risks, and failures or delays in the implementation may prevent us from obtaining the benefits of this automated billing system..
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Our governance, compliance and internal controls may fail to prevent breaches of legal, regulatory, ethical or governance standards.
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The rules for electricity trading and market conditions may affect the sale prices of electricity.
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Our business is subject to risks related to our supply chain which may be substantially and adversely affected by internal or external economic, political, social and natural events, such as pandemics, terrorism acts, border disputes and armed conflicts, among others.
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We are subject to climate factors and to uncertainties that may adversely impact our operation and results.
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Failure to comply with ESG guidelines can adversely affect our operations, results and reputation.
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We may acquire other companies in the electric sector or new energy concessions which could increase our financial leverage and negatively impact our overall performance, and the integration of these new businesses may not yield the expected efficiency gains and economies of scale, potentially harming our operational and financial performance.
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Labor disputes may disrupt our operations from time to time.
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If we fail to attract, retain and manage qualified workforce, our business, financial condition, results of operations and prospects could be materially and adversely affected.
Risks Relating to the Brazilian Electricity Sector and Other Sectors that We Operate
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Our operating results depend on prevailing hydrological conditions, which have been volatile recently. The impact of water shortages and resulting measures taken by the government to conserve energy may have a material adverse effect on our business, financial condition and results of operations.
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ANEEL could penalize us for failing to comply with the terms of our concessions or with applicable laws and regulations, and we may not recover the full value of our investment in the event that any of our concessions are terminated.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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We are subject to comprehensive regulation of our business, which fundamentally affects our financial performance.
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Certain customers in our distribution concession area may cease to purchase energy from our distribution business.
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We generate a portion of our operating revenues from Free Customers who may seek other energy suppliers upon the expiration of their contracts with us.
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We may be forced to purchase or sell energy in the spot market at higher or lower prices and we may not be entitled to pass on any increased costs or incurred losses to our final customers in a timely manner, or at all
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We may be forced to purchase or sell energy in the spot market at higher or lower prices and we may not be entitled to pass on any increased costs or incurred losses to our final customers in a timely manner, or at all
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We are subject to a counterparty’s credit risk in agreements entered into with Copel Comercialização (Copel Mercado Livre) and in case of default, we may have to sell or purchase energy at a different base price.
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We are subject to the risk of exchange rate variation in connection with energy and import
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We are subject to unrealized losses or net gains arising out from the mark-to-market of the purchase and sale of energy contracts, which may expose us to the risk of future energy prices
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Our equipment, facilities and operations are subject to numerous environmental and health regulations, which may become more stringent in the future and may result in increased liabilities and increased capital expenditures.
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We are strictly liable for any damages resulting from inadequate provision of electricity services and our insurance policies may not fully cover such damages.
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We cannot assure we can keep up with the evolution the energy sector has been going through as a result of technology advances and the adoption of artificial intelligence.
Risks Relating to Brazil
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The Brazilian Government has significant influence over the Brazilian economy. Brazilian economic and political conditions— and investor perception of these conditions— have a direct impact on our operation.
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Inflation and governmental measures to curb inflation, particularly increases in interest rates, may contribute to economic uncertainty in Brazil, and could reduce our margins, results and the market price of the ADSs.
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Economic and political adversities in other countries, especially those in the United States and in developing countries, may negatively impact foreign investment in Brazil and the country’s economic growth.
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Geopolitical risks external to the market in which we operate and military hostilities, including the ongoing conflicts between Russia and Ukraine and between Israel and Hamas, as well as economic sanctions imposed as a result of such conflicts, may adversely impact our business.
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Our financial and operating performance may be adversely affected by epidemics, natural disasters and other catastrophes impacting Brazilian biodiversity, society and economy.
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Fluctuations in currency exchange rates and the devaluation of the real may adversely affect our net income and cash flow.
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Changes in Brazilian tax legislation and regulation may have an adverse effect on us and our shareholders.
Risks Relating to Our Company and our Operations
We are largely dependent on the economy of the State of Paraná.
The distribution market for most of our sales of electricity is the State of Paraná. Although a more competitive market involving possible sales to customers outside Paraná might develop in the future, our business depends and is expected to continue to depend to a very large extent on the economic conditions of Paraná.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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An increase in electricity prices, combined with poor economic performance in the State of Paraná, could affect the ability of some of our distributions customers to pay amounts owed to us. As of December 31, 2024, our overdue receivables in our distribution concession area with final customers were R$ 629.0 million in the aggregate and our allowance for doubtful accounts related to these receivables was R$ 76.1 million.
In addition, in the event of an economic recession combined with high energy prices, the number of our distribution customers that could start connecting illegally to our distribution grid may increase, which would then further reduce our revenue from electricity sales to final customers. Energy we lose due to illegal connections is considered a commercial loss (non-technical), and we may incur regulatory penalties if our commercial losses exceed certain established regulatory thresholds calculated by the Brazilian Electricity Regulatory Agency (
Agência Nacional de Energia Elétrica
“ANEEL”). If ANEEL determines that we were not efficient in inspecting and controlling the non-technical losses in the distribution grid, the agency may limit the transfer of such losses to the final customers.
There is no guarantee that we will be able to maintain or renew all licenses, permits, concessions, registrations, authorizations, including environmental licenses, required for our current operations, or obtain the necessary licenses to develop and operate new projects.
Our business relies on maintaining, renewing, and obtaining necessary licenses, permits, concessions, registrations, and authorizations, including environmental licenses for our operations and new projects and licenses from ANEEL and the Ministry of Mines and Energy (“MME”), as well as compliance with regulations governing our facilities and activities. The lack of any necessary licenses, permits, concessions, registrations, or authorizations or any challenges to our licenses, permits, concessions, registrations, and authorizations, or their expiration without renewal could materially and adversely affect our business, financial condition, results of operations, and reputation, and expose us to penalties under applicable regulations.
Delays in the issuance of licenses, permits, concessions, registrations, and authorizations by governmental agencies or other authorities may also result in delays in project implementation schedules and increase operating and project costs, which could adversely affect our operating and financial results. If we are unable to complete a project or if a project is delayed, our expected financial return from the project may be reduced, leading to potential losses. Additionally, decisions made by governmental authorities regarding the electric grid, environmental regulations, and other aspects of electricity generation may negatively impact the operation and profitability of our generation systems. If any of these factors occur, we may suffer material adverse effects on our financial condition, results of operations, and reputation
.
Disruptions in the operation of, or deterioration of the quality of, our services could have an adverse effect on our business, financial condition, reputation and results of operations.
We operate complex electricity generation, transmission and distribution systems and grids, which involves various risks, such as operational setbacks and unexpected interruptions, caused by accidents, breakdown or failure of equipment or processes, performance below expected levels of availability and efficiency of assets, or disasters (such as explosions, fires, natural phenomena, landslides, sabotage, vandalism, and similar events). In addition, operational decisions by authorities responsible for the electricity grid, environment matters, operations and other issues affecting the electricity generation, transmission or distribution could have an adverse effect on the performance and profitability of the operations of our generation, transmission and distribution systems. Our insurance could be insufficient to cover the costs and losses that we may incur as a result of the damages caused to our assets or due to outages.
The revenues that our subsidiaries generate from establishing, operating and maintaining their facilities are related to the availability of equipment and assets, and to the quality of the services (continuity and service in accordance with levels demanded by regulations). Under our concession agreements, we and our subsidiaries are subject to: (i) a reduction of the distributor revenue as a result of the reduction of the so-called “Portion B” allocation in the revenue calculation formula; (ii) a reduction of the Annual Permitted Revenue or APR, (
Receita Anual Permitida
, or “RAP”), for the transmission companies; (iii) the effects of the Availability Factor (
Fator de Disponibilidade
, or “FID”) and the offtake guarantee levels for the generation facilities; and (iv) the application of penalties and payment of compensation amounts, depending on the scope, severity and duration of non-availability of the services and equipment. Under Brazilian Law, we are strictly liable for direct and indirect damages resulting from the inadequate supply of electricity such as abrupt interruptions arising from the generation, transmission or distribution systems. Therefore, outages or stoppages in our generation, transmission and distribution facilities, or in substations or grids, may cause a material adverse effect on our business, financial situation, reputation and results of operations.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Our financial and operational performance may be negatively affected by epidemics, natural disasters, and other catastrophes that affect biodiversity, society, and the Brazilian economy.
We have implemented measures and health and safety protocols to mitigate the impact and protect our employees, business operations, and surrounding communities from the pandemic’s threats. The emergence of new epidemics, natural disasters, or other global or regional catastrophes could lead to reduced consumption in commercial and industrial segments, intermittent volatility in international and Brazilian markets, governmental and private actions including restrictions on the movement and transportation of people, goods, and services, and potentially result in the partial or complete shutdown of private establishments and public offices, disruptions in the supply chain, and increased government intervention in economies. These events may have a significant negative effect on both the global and Brazilian economies, potentially leading to a decrease in economic activity, currency devaluation and volatility, increased fiscal deficits and constraints on public investment, delays in judicial, arbitration, and administrative processes, temporary imposition of more burdensome taxation on our business activities, reduced liquidity in international and Brazilian markets; and volatility in the prices of raw materials and other inputs, among other effects. The occurrence and duration of any of these events could impact the liquidity and market value of our shares and have negative effects on our business operations. We cannot guarantee that there will be no regional and global outbreaks of communicable diseases, and if they occur, we cannot guarantee that we will be able to avoid adverse impacts on our businesses, operations, and financial results.
We are subject to risks related to social and environmental impacts of our projects.
The construction and operation of our assets may modify the ecosystem, particularly the natural state of the water resources and of the vegetation of the flooded river basin in the case of hydroelectric power plants. Our projects may cause direct and indirect impacts in the local communities, such as housing displacement. They may affect the economic outputs of the local communities, lead to the loss of cultural identity or increase the demand for government services. In these cases, we may be required to implement specific plans to minimize and mitigate those impacts, which may result in reputational damage and financial losses for our business.
Failures in dams under our responsibility may cause serious damages to the affected communities, to our results and to our reputation.
Dams are important infrastructures to our business, and are fundamental components of our hydroelectric power plants for the purposes of diking and storing water, accounting for the majority of our energy generation capacity. However, in any dam, there is an intrinsic risk of ruptures caused by different internal and external factors. Therefore, we are subject to the risk of a dam failure that could have repercussions much greater than just the loss of hydroelectric power generation capacity. A dam failure may result in economic, social, regulatory and environmental damages and potential loss of human life in the communities downstream from the dams, which may have a material adverse effect on our reputation, business, operational results and financial conditions.
We are involved in several lawsuits that could have a material adverse effect on our business, operational results, financial position, and reputation if their outcome is unfavorable to us.
We are the defendant in several legal proceedings, mainly relating to civil, administrative, labor, environmental and tax claims. The outcome of these proceedings is uncertain and, if decided against us, may result in obligations that could materially adversely affect our results of operations. As of December 31, 2024, our provisions for legal claims, which are probable (more likely than not) and estimated losses are reasonable, were R$ 956.7 million. For more information, see “Item 8. Financial Information—Consolidated Financial Information—Legal Proceedings.”
Unfavorable decisions against us, particularly in cases involving large amounts or that affect our ability to conduct our business as planned, may cause an adverse effect on our results, as well as on our business, reputation, financial position, and the market value of our shares. For more information, see “Item 10. Additional Information—Legal proceedings.”
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Failures in our cybersecurity controls or unauthorized disclosure of information, as well as failure to comply with existing data privacy and data security laws may adversely affect our business and reputation, including the risk of interruption in energy supply and suspension of operations.
We collect, store, process and use confidential information related to our business and operations. In our ordinary course of business, we also collect and store of our customers’ personal data in our data centers located at our own premises. We have suffered a cyber-attack in 2021 leading to the temporary unavailability of part of our systems. Despite our cybersecurity controls, information technology, operation technology and infrastructure, we have been subject to cyber attacks in previous years may be vulnerable to failures whether caused by technical failures, negligence, accident or cyber-attacks. Those failures may result in disclosure or theft of sensitive information, loss of data integrity, misappropriation of funds and disruptions to or interruption in our business operations.
We are subject to Brazilian laws and regulations relating to data protection and data privacy, mainly the Brazilian Federal Law No. 13,709/2018, the Brazilian data protection law (
Lei Geral de Proteção de Dados
, or “LGPD”) that sets forth the legal framework for the processing of personal data and administrative penalties applicable for non-compliance with LGPD. Violations of this statute and related regulations, including leakage of personal data, could result in individual or collective lawsuits against us, the imposition of fines of up to R$50 million, capped at 2% of the billing of the group in Brazil for infringement, among other civil, administrative and criminal penalties, as well as damage to our reputation, which could have an adverse effect on us and our business, reputation and results of operations.
The implementation of our new billing project may expose us to increased operational risks, and failures or delays in the implementation may prevent us from obtaining the benefits of this automated billing system.
We are currently implementing a new billing project, with go live scheduled for 2026, in line with our corporate strategy to seek innovation and operational efficiency. Although the purpose of the new system is to provide greater autonomy to our management areas and to provide more efficiency in application integration, process automation and data synchronization, we cannot assure you that we will be able to successfully implement this project or that we will be able to achieve these benefits. Failures in the implementation of this project may adversely affect our existing operations, particularly billing and collection functions, and may expose us to data breaches or other incidents, which could adversely affect our business.
Our governance, compliance and internal controls may fail to prevent breaches of legal, regulatory, ethical or governance standards.
We are subject to breaches of our internal policies and controls relating to anti-corruption, anti-money laundering, securities regulation and related laws and regulations, and to instances of fraudulent behavior, corrupt practices and dishonesty by our directors, officers, employees, contractors or other agents that we may not timely identify or prevent.
Further, we have a large number of contracts with suppliers, with wide distribution and outsourcing of the production chains, and we are not able to control all possible irregularities or to ensure that our selection processes will be sufficient to avoid situations where our suppliers have problems related to compliance with applicable law, sustainability or outsourcing of the production chain under inadequate safety conditions. These risks are increased by the fact that our portfolio includes affiliated companies, such as special purpose companies, in which we do not hold a controlling interest.
Although we have an integrity program with timely updates and a process for investigating complaints, our systems may not be effective in all circumstances. Any failure in our capacity to prevent or detect noncompliance with the applicable governance rules or regulatory obligations may cause damages to our reputation or other material adverse effects to our results of operation or financial condition.
The rules for electricity trading and market conditions may affect the sale prices of electricity.
We perform trading activities through power purchase and sale agreements, mainly in the unregulated electricity market (“Free Market”), through our generation and trading companies.
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Energy trading is affected by changes in the methodology used to calculate energy price in the short-term (
Preço de Liquidação de Diferenças
, or “PLD”). PLD is currently determined by the results of optimization models of operation of the interconnected systems used by the ONS and by Chamber of Commercialization of Electric Energy (
Câmara de Comercialização de Energia Elétrica
or “CCEE”). In such determination, there may be data entry errors or errors in the model, which may lead to an unexpected change of the PLD and possible future republications of the PLD. Any of such events may cause market uncertainty, reduction of liquidity, and financial losses with unexpected price variation. The PLD is calculated for each submarket on an hourly basis, as proposed by the Standing Committee for Analysis of Methodologies and Programs (
Comissão Permanente para Análise de Metodologias e programas Computacionais do Setor Elétrico
or “CPAMP”), in accordance with the implementation schedule defined by Ordinance No. 301/2019. Any change in the energy trading rules related to the increase of restrictions for the entry of new customers in the Free Market may adversely affect our energy trading business.
Excess supply of energy in the market, particularly as a result of new energy projects and incentivized renewable energy projects, including distributed generation projects, may cause a decrease in the energy prices and adversely impact our energy business, with the possibility of effects on electricity sales to final customers, electricity sales to distributors and use of the main distribution and transmission grid.
Our business is subject to risks related to our supply chain which may be substantially and adversely affected by internal or external economic, political, social and natural events, such as pandemics, terrorism acts, border disputes and armed conflicts, among others.
Suppliers, contractors and other third parties may fail to perform existing contracts and obligations, which may unfavorably impact our operations and financial results.
We are involved in various transmission and generation projects, which are subject to the performance obligations of various third parties over whom we have no control. In addition, project development is subject to environmental, engineering and construction risks that can lead to cost overruns, delays and other impediments to completing a project on time and within budget. We cannot assure you that we will be able to (i) obtain all required permits and approvals for our projects, (ii) secure private sector partners for any of our projects, or (iii) obtain adequate financing for our projects or that financing will be available on a non-recourse basis to us. If we are unable to complete a project or such project is delayed, this may decrease our expected financial return from the project, which may lead to impairment.
The operations of our suppliers and service providers could be substantially and adversely affected by factors and events beyond our control, such as fires, natural disasters, spread of diseases, pandemics, strikes, system failure, terrorist attacks, deforestation, and political or armed conflicts, including the ongoing conflicts between Russia and Ukraine and between Israel and Hamas, trade sanctions and other similar events, and the developments therein, such as high inflation, volatility in the commodities markets and financial markets, changes in currencies, lack of liquidity in the capital markets, among others. In such a scenario, if the impacted services cannot be replaced or reinstated in the affected region, the supply of electricity to our customers could be impacted or disrupted and our results could be adversely impacted.
We are subject to climate factors and to uncertainties that may adversely impact our operation and results.
Our energy generation, transmission and distribution operations are subject to climatic factors and uncertainties related to severe weather events, mainly cyclones, hurricanes, floods, droughts and fires. These events can affect minimum water storage levels in hydroelectric plant reservoirs and lead to the unavailability of our electricity supply systems, resulting in penalties by regulatory bodies, consumer complaints, lawsuits, costs for the restoration of systems, in addition to negatively affecting our results.
Further our wind farms operations are subject to climate factors and to uncertainties related to wind speed. The authorizations and licenses that govern our power generation activities in wind farms set forth certain performance covenants, which require us to generate minimum amounts of energy on annual and four-year bases in accordance with the energy amounts sold in the correspondent auctions. Non-compliance with such covenants may adversely impact our results.
We are also subject to impacts of uncertainties related to climate change, such as (i) demand for energy; (ii) carbon pricing; and (iii) regulatory requirements to reduce emissions. The potential impacts of such factors are taken into account in business planning and periodically monitored by our Board of Directors.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Our Integrated Risk Management Policy classifies and categorizes climate change effects that may affect our operations and business strategy, leading us to incur financial costs as follows: (i) physical climate risks - the possibility of the occurrence of losses caused by events associated with frequent and severe weather events (acute risks) or long-term environmental changes (chronic risks), which may be related to changes in weather patterns; and (ii) transition climate risks - the possibility of the occurrence of losses caused by events associated with the process of transition to a low-carbon economy, in which the emission of greenhouse gases is reduced or offset and the natural mechanisms for capturing these gases are preserved.
In the last few years there have been critical climate events, which lead us to promote research regarding future climate scenarios resulting from global warming in hydraulic generation assets (until 2100) and distribution assets (until 2050). If we fail to properly identify and incorporate the risks associated with climate change into our risk framework, to adequately measure, manage and disclose the various financial and operational risks that may result from climate change, or to adapt our strategy and business model to a changing regulatory and market environment, we could face a material adverse impact on our business growth rates, competitiveness, profitability, capital requirements and financial condition.
Failure to comply with ESG guidelines can adversely affect our operations, results and reputation.
Our ESG practices are continually developing. This includes making commitments to achieve specific standards or deadlines for better social, governance, and sustainability practices, as well as incorporating sustainability into our business operations. Failure to comply with corporate ESG guidelines or commitments, including our Integrated Report, could result in financial and operational losses, as well as reputational damage. We are completing the divestment of UTE Figueira in the phase of fulfilling the conditions precedent for closing the transaction.
We may acquire other companies in the electric sector or new energy concessions which could increase our financial leverage and negatively impact our overall performance, and the integration of these new businesses may not yield the expected efficiency gains and economies of scale, potentially harming our operational and financial performance.
We constantly prospect for businesses that are related to our corporate purpose and aligned with our strategic plan. To expand our business, we may participate in auctions for the construction and operation of new power generation and transmission ventures, as well as invest in other companies from the energy sector, as we have done in the past. These acquisitions can increase our financial leverage or reduce our profits. Additionally, the integration of the new businesses may not result in the synergies we expect in terms of efficiency gains and economies of scale for our operations, including as a result of our failure to follow our initial strategic plan or changes in market conditions. This may adversely affect our operational and financial performance.
We may also be held liable for contingencies related to such assets and businesses, including potential contingencies that are not currently known to us and that may be identified in the future. Any contingencies arising from the development and implementation of these assets prior to their incorporation into our assets may become our responsibility as a successor if the selling company fails to perform or proves unable to perform its obligations. If such contingencies materialize, we could incur significant costs and expenses, which could have a material adverse effect on our business, reputation and results.
Labor disputes may disrupt our operations from time to time.
Our employees are represented by unions. Disagreements regarding issues related to divestments, changes to our business strategy, our voluntary severance programs (
Programa de Desligamento Voluntário
or “PDV”), and reductions in the professional staff may lead employees to react negatively. Strikes, work interruptions, or other forms of protests in any of our major suppliers or contractors or at their facilities may undermine our ability to complete relevant projects on time, negatively impacting our results of operations, and adversely affect our ability to achieve long-term strategic goals.
We may also be held jointly or severally liable for any labor or social security obligations imposed by courts on employees of our third-party service providers, including the recognition of an employment relationship. This could lead to contingencies and indemnity payments, significantly and negatively impacting our business.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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If we fail to attract, retain and manage qualified workforce, our business, financial condition, results of operations and prospects could be materially and adversely affected.
Our operations depend in part on our ability to cost-effectively attract, retain and manage key management personnel and talents with the necessary expertise to work in our business and that can keep up with the latest developments in the industry, especially technological developments, while maintaining our business culture. If we are not able to retain or attract specialized personnel and key management personnel, our business and results of operations may be adversely impacted.
Risks Relating to the Brazilian Electricity Sector and Other Sectors that We Operate
Our operating results depend on prevailing hydrological conditions, which have been volatile recently. The impact of water shortages and resulting measures taken by the government to conserve energy may have a material adverse effect on our business, financial condition and results of operations.
We are dependent on the prevailing hydrological conditions throughout Brazil and in the geographic region in which we operate. According to data from ANEEL, approximately 55% of Brazil’s installed capacity currently comes from hydroelectric generation facilities. Hydrological conditions in our region, and Brazil in general, are frequently subject to changes because of non-cyclical deviations in average rainfall.
In previous periods of low rainfall, the Brazilian government reacted to poor hydrological conditions by seeking to reduce final customers’ electricity consumption by several means, from general campaigns to reduce energy consumption to rationing programs. The effect of campaigns to reduce energy consumption is not predictable, making it difficult for our distribution business to accurately estimate the volume of energy it needs to purchase for sale to final customers. In case of mandatory rationing program, our distribution business would be adversely affected because its revenues are partially based on the volume of electricity it provides through our distribution grid to final customers.
With respect to our generation business, in order to compensate for poor hydrological conditions and to maintain adequate water levels in reservoirs, the National Electric System Operator (
Operador Nacional do Sistema Elétrico
, or “ONS”) may order the reduction of generation from hydroelectric power plants, which would be partially compensated by increased generation by thermoelectric plants. This mechanism for replacing hydroelectric production with thermoelectric production may not provide all of the energy we need to fulfill our obligations under existing energy supply contracts. To compensate for this deficit, our generation business can be required to purchase energy in the short term (“spot”) market, typically at higher prices, and we would not be able to pass on these increased costs. This mechanism impacts all generation companies in Brazil regardless of whether the geographical region in which a specific generator is located is experiencing low rainfall and could have a material adverse effect on our generation business.
In addition, in an extreme scenario, given the increased presence of thermal generation in the national electric matrix, if a shortage of natural gas were to occur, this would increase the general demand for hydroelectric energy in the market and therefore increase the risk that a rationing program would be instated.
Regarding our energy trading business, the effect of volatility in hydrological conditions is the increase of the variation of energy price, which in turn increases the spot market volatility, thus affecting our operating results. Spot price (PLD) is determined by the results of optimization models of operation of the interconnected systems used by the ONS and by CCEE. The energy average spot prices are calculated by CCEE every hour and are set for each region.
When there is great availability of hydrological resources, the spot prices tends to remain at lower levels, which may not be enough to (i) cover the generation costs of this very same energy (when related to our generation business) and (ii) cover the cost of the power purchase and sale agreement in our energy trading business. In this scenario, long-term energy prices may also be impacted and remain at lower levels, which may reduce our margins or not be enough to cover the generation costs of this very same energy. Conversely, if hydrological availability is affected, spot prices tend to increase significantly, in addition to occasionally impacting the Generation Scaling Factor, which may adversely impact our costs of energy purchases, as the price set forth in power purchase and sale agreements may not be sufficient.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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ANEEL could penalize us for failing to comply with the terms of our concessions or with applicable laws and regulations, and we may not recover the full value of our investment in the event that any of our concessions are terminated.
Our concessions are for terms of 20 to 35 years and may be extended if certain conditions are met. In the event that we fail to comply with any term of our concessions or applicable law or regulation, ANEEL may impose penalties on us, which may include warnings, substantial fines and restrictions on our operations, among others. ANEEL may also terminate our concessions prior to the expiration of their terms if we fail to comply with their provisions or if they determine that terminating our concessions would be in the public interest, through a forfeiture or expropriation proceeding. In particular, our renewed distribution concession agreement contains both quality and financial metrics that become more restrictive over time, and that we must meet to ensure that our distribution concession agreement is not terminated. If ANEEL terminates any of our concessions before its expiration, we would not be able to operate the segment(s) of our business that had been authorized by the concession. Furthermore, any compensation that we may receive from the Brazilian government for the unamortized portion of our investment may not be sufficient for us to recover the full value of our investment. The early termination or non-renewal of any of our concessions or the imposition of severe fines or penalties by ANEEL could have a material adverse effect on our financial condition and results of operations. See “Item 4. Information on the Company—The Brazilian Electric Power Industry—Concessions.”
We are subject to comprehensive regulation of our business, which fundamentally affects our financial performance.
Our business is subject to extensive regulation by various Brazilian legal and regulatory authorities, particularly the MME and ANEEL, which regulate and oversee various aspects of our business and approve our tariffs. We may be required to reduce or interrupt the energy production (curtailment) of our plants by order of the National System Operator (ONS), especially from renewable sources, such as solar and wind, when the total energy production exceeds the loading capacity of the transmission system or the load of the electrical system. Changes to the laws and regulations governing our business, which have occurred in the past, could adversely affect our financial condition and results of operations.
For example, the tariffs that we charge for the sale of electricity to captive customers are determined pursuant to a concession agreement with the Brazilian government through ANEEL. The tariff rates we charge our customers are determined pursuant to a concession agreement and in accordance with ANEEL’s regulation. In addition, ANEEL’s decisions relating to our tariffs may be contested by public authorities or by our customers. Administrative and judicial decisions resulting from these challenges may modify ANEEL’s decisions in a manner that is unfavorable to us, which may adversely affect our financial condition and results of operations.
If any further regulations or new laws are passed by the Brazilian government to lower electricity prices, these new laws and regulations could have a material adverse effect on our results of operations.
Certain customers in our distribution concession area may cease to purchase energy from our distribution business.
Our distribution business generates a large portion of its revenues by selling energy that it purchases from generation companies. Large electricity customers within the geographic area of our concession that meet certain regulatory requirements may qualify as free customers (“Free Customers”). A Free Customer in our distribution concession area is entitled to purchase energy directly from generation and energy trading companies rather than through our distribution business, in which case that Free Customer would cease to pay our distribution business for that energy that we previously supplied.
In addition, ANEEL has issued regulations related to micro and mini distributed generation, which facilitates the purchase or lease of power generation equipment by customers, especially solar photovoltaic modules, to produce energy for their own consumption. Such regulation was revised following the adoption of a new legal framework for distributed generation in Brazil (Federal Law No. 14,300/2022). The legislation was recently regulated by ANEEL’s Normative Resolution No. 1059/2023.
If the number of customers with micro and mini distributed generation within the geographic area of our concession increases, our revenues and results of operations could also be adversely affected.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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We generate a portion of our operating revenues from Free Customers who may seek other energy suppliers upon the expiration of their contracts with us.
As of December 31, 2024, we served 1,529 Free Customers through our energy trading company, which accounted for approximately 8,4% of our consolidated operating revenues and about 16% of the total volume of electricity we sold. Such Free Customers may seek other energy suppliers upon the expiration of their contracts with us. Additionally, it is possible that our large industrial clients could be authorized by ANEEL to generate electric energy for their own consumption or sale to other parties, in which case they may obtain an authorization or concession for the generation of electric power in a given area, which could adversely affect our results of operations.
If we fail to establish new business relationships or maintain existing relationships on favorable terms, we may be unable to offer certain products and services to Free Costumers or to offer competitive prices and terms to Free Costumers, which could adversely affect our financial condition, results of operations and cash flows. We cannot assure you that we will be able to replace such Free Costumers in a timely manner and without material disruption to our operations, and the termination or rescission of any contract with a Free Costumers, even for reasons beyond our control, could have a material adverse effect on our operations and operating and financial results.
We may be forced to purchase or sell energy in the spot market at higher or lower prices and we may not be entitled to pass on any increased costs or incurred losses to our final customers in a timely manner, or at all.
Under the Law No 10,848/2004, New Industry Model Law, electric energy distributors, including us, must contract, through public bids conducted by ANEEL, 100% of the forecasted electric energy demand for their respective distribution concession areas. The auctions in which the distributors are allowed to purchase energy are held up to seven years prior to the actual delivery of electric energy. We cannot guarantee that our forecasts for energy demand in our distribution concession area will be accurate. If our forecasts fall short of actual electricity demand, or if we are unable to purchase energy through the regulated market due to the lack of energy supply in the market, or if energy we contracted for fails to be delivered, we may be forced to make up for the shortfall by entering into short-term agreements to purchase electricity in the spot market where we may pay significantly more for energy without being able to pass on these increased costs to our final customers. In addition, if we underestimate our distribution energy needs, we may be subject to penalties imposed by the CCEE. Moreover, if our forecasts surpass actual demand by more than the allowed margin (105% of actual demand), including where demand is depressed due to government campaigns in response to poor hydrological conditions or due to reduced economic activity, we may not be able to pass on to our final customers the cost of the excess energy that we acquire.
We are subject to a counterparty’s credit risk in agreements entered into with Copel Comercialização (Copel Mercado Livre) and in case of default, we may have to sell or purchase energy at a different base price.
Copel Comercialização is subject to a counterparty’s credit risk. When Copel Comercialização sells energy, the counterparties agreements may default on their contractual obligations, which may cause Copel Comercialização to sell energy at a different base price. In cases where we purchase energy, whether from energy generation projects, in operation or under construction, or even from energy trading, the selling counterparties may also default on the relevant contracts, and, consequently, Copel Comercialização may have to buy energy at a different base price and be subject to regulatory penalties imposed by CCEE due to insufficient contractual guarantees. The guarantees or collateral provided by our counterparties in connection with the power purchase and sale agreements may not be sufficient to cover losses we suffer if our counterparties fail to comply with their payment obligation or with their obligation to deliver energy, which may adversely affect our results.
We are subject to the risk of exchange rate variation in connection with energy and import..
Our subsidiary Copel Comercialização (
Copel Mercado Livre
) has obtained authorization from the MME to import energy from Argentina and Uruguay. In addition, Copel Comercialização has authorizations granted by the National Agency of Petroleum, Natural Gas and Biofuels (
Agência Nacional do Petróleo, Gás Natural e Biocombustíveis do Brasil
, “ANP”) for the activities of (i) loading of natural gas; (ii) commercialization of natural gas; (iii) foreign trade agent. In this sense, we will be exposed to exchange rate fluctuation in connection with any such energy import, as well as risk of exchange rate variation for the natural gas market, considering that part of these transactions may be carried out in foreign currencies.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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We are subject to unrealized losses or net gains arising out from the mark-to-market of the purchase and sale of energy contracts, which may expose us to the risk of future energy prices.
Our subsidiary Copel Comercialização (
Copel Mercado Livre
) is in the energy trading market,, and part of these trades are classified as derivative financial instruments measured at fair value through its results. Unrealized net losses or gains resulting from the mark-to-market of these contracts (difference between contracted prices and market prices) are recognized in the results of the fiscal year. This activity may adversely expose our results to the fluctuations of future energy prices.
Our equipment, facilities and operations are subject to numerous environmental and health regulations, which may become more stringent in the future and may result in increased liabilities and increased capital expenditures.
Our distribution, transmission and generation activities are subject to comprehensive federal, state and local legislation, as well as supervision by Brazilian governmental agencies that are responsible for the implementation of environmental and health laws and policies. These agencies could take enforcement action against us for our failure to comply with their regulations and with requirements established for the maintenance of our environmental licenses. These actions could result in, among other things, the imposition of fines, embargoes and revocation of licenses, which could have a material adverse effect on our financial condition and results of operations. It is also possible that enhanced environmental and health regulations will force us to allocate capital towards compliance, and consequently, divert funds away from planned investments. Such a diversion could have a material adverse effect on our financial condition and results of operations.
In accordance with the Stockholm Convention on Persistent Organic Pollutants, Brazilian legislation requires us to eliminate the use of polychlorinated biphenyls ('PCBs') in our equipment by 2025 and to carry out environmentally correct management of these PCB-containing liquids by 2028. Although we have removed the majority of PCB-containing equipment from our operations, this process is still ongoing. Their replacement includes risks to which we are exposed until the equipment is completely replaced, including the risk of contamination during operation and the possibility of damage or impact due to maintenance, as well as the additional costs involved.
We are strictly liable for any damages resulting from inadequate provision of electricity services and our insurance policies may not fully cover such damages.
We are strictly liable under Brazilian law for damages resulting from the inadequate provision of electricity distribution services, which means that we may incur in liability even for factors beyond our control and without our negligence. Liability in these cases can involve material amounts, which could have an negative effect on our results and financial condition. In addition, our distribution, transmission and generation utilities may be held liable for damages caused to others as a result of interruptions or disturbances arising from the Brazilian generation, transmission or distribution systems, whenever these interruptions or disturbances are not attributed to an identifiable member of ONS. We cannot assure you that our insurance policies will fully cover damages resulting from inadequate rendering of electricity services, which may have an adverse effect on us.
It is also not possible to guarantee that there will be insurance coverage and indemnification for all damages resulting from potential accidents related to safety, environmental and health risks, which, in the event of an incident, could adversely affect our results of operations.
Additionally, we may not be able to renew our existing insurance policies, and if renewed, we cannot guarantee that we will be able to renew them on the same contractual terms or at reasonable commercial rates or acceptable terms, either in terms of cost or coverage, which could have an adverse effect on our business, results, and financial condition.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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We cannot assure we can keep up with the evolution the energy sector has been going through as a result of technology advances and the adoption of artificial intelligence.
The electric energy sector has been going through changes driven by (i) the decentralization of the power generation systems; (ii) advances in energy storage technologies; (iii) dissemination of digital technologies that improve the efficiency of energy generation, transmission and consumption; (iv) increase of renewable energy sources, such as wind and solar energy; (v) a tendency of reducing carbon footprints in the energy system, as part of the global efforts to mitigate the effects of climate change; (vi) the adoption of artificial intelligence (“AI”), (vii) the opening of the Free Market, (viii) the development of smart cities, (ix) electric mobility, and (x) the commitment to reducing carbon emissions. These changes present many challenges and we may not be able to keep up with the pace of the increasing adoption of digital technologies in the electric energy sector and the significant potential of new technology solutions (both with respect to the improvement of processes and services provided to consumers and with respect to the development of new products that may lead to higher productivity gains, more affordable prices, higher competition and the creation of new markets). Investments in research and development may contribute to mitigate the risks related to the transformations of the energy sector and create new opportunities.
Risks Relating to Brazil
The Brazilian Government has significant influence over the Brazilian economy. Brazilian economic and political conditions— and investor perception of these conditions— have a direct impact on our operation.
Historically, the country’s political situation has influenced the performance of the Brazilian economy, and political crises have affected the confidence of investors and the public, which resulted in economic deceleration, the downgrading of credit ratings of the Brazilian government and Brazilian issuers, and heightened volatility in the securities issued abroad by Brazilian companies.
Additionally, the Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy and often changes monetary, fiscal, credit, exchange and other policies to influence Brazil’s economy. Our business, financial condition, results of operations and prospects may be adversely affected by changes in government policies, as well as other factors including, without limitation:
•
exchange rate movements and volatility;
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inflation and changes in interest rates;
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exchange control policies;
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fiscal policy and changes in tax laws;
•
other political, diplomatic, social and economic developments that may affect Brazil or the international markets;
•
controls on capital flows; and/or
•
limitation on foreign trade.
In the last few years, Brazil faced adverse fiscal developments and political instability. Brazilian GDP grew by 3.4% in 2024, grew by 2.9% in 2023 and grew by 2.9% in 2022. Unemployment rate was 6.6% in 2024, 7.4% in 2023, and 9.3% in 2022. Inflation, as reported by the consumer price index (IPCA), was 4.8% in 2024, 4.62% in 2023 and 5.79% in 2022. The Brazilian Central Bank’s base interest rate (SELIC) was 13.25% on December 31, 2024, 11.75% on December 31, 2023 and 13.75% on December 31, 2022. Future economic, social and political developments in Brazil may impair our business, financial condition or results of operations, or cause the market value of our securities to decline.
Changes in, or uncertainties regarding the implementation of, the policies above, might generate or contribute to uncertainties in the Brazilian economy. This would increase the volatility of the domestic capital market and the value of Brazilian securities traded abroad, and adversely affect our business, results of operations and financial condition.
Moreover, taking into account the Brazilian presidential system of government, and the considerable influence of the executive power, it is not possible to predict whether the government will have an adverse effect on the Brazilian economy, and consequently on our business.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Inflation and governmental measures to curb inflation, particularly increases in interest rates, may contribute to economic uncertainty in Brazil, and could reduce our margins, results and the market price of the ADSs.
Brazil has experienced extremely high rates of inflation in the past . Brazil’s annual inflation rate, measured in accordance with the variation of the
Índice Geral de Preços - Disponibilidade Interna
(“IGP-DI”) index, was 6,86 % in the year 2024, 3.30% in the year 2023, and 5.03% in the year 2022. The Brazilian Central Bank has taken measures to combat inflation in the past , such as raising the basic SELIC interest rates to high levels, and public speculation about possible future government actions has had significant negative effects on the Brazilian economy. Although our concession contracts provide for annual adjustments based on inflation indexes, if Brazil experiences substantial inflation in the future, and the Brazilian government adopts inflation control policies similar to those adopted in the past, our costs may increase faster than our revenues, our operating and net margins may decrease and, if investor confidence decreases, the price of the ADSs may fall. As a significant part of our debt is subject to the CDI rate or interest rates indexed to the IPCA index, any increase in inflation or interest rates results in an increase in our financial expenses. Higher interest rates also adversely impact the terms of our new financings. Inflationary pressures may also curtail our ability to access foreign financial markets and could lead to further government intervention in the economy, including the introduction of government policies that may adversely affect the overall performance of the Brazilian economy.
Economic and political adversities in other countries, especially those in the United States and in developing countries, may negatively impact foreign investment in Brazil and the country’s economic growth.
The perception of risk in other countries, including the United States, China, the European Union and emerging countries such as Russia may also adversely impact the price of our equity securities. Investors’ reaction to events in other countries may have a material adverse effect on the market value of Brazilian securities, especially those listed on the stock exchange. Crises in the United States, China, the European Union or emerging countries may reduce investor interest in Brazilian companies, including us.The US economy could face uncertainty with the adoption of trade tariffs on countries such as China, Canada and Mexico and their retaliatory measures. These tariffs raise the price of imported products and could put pressure on inflation as they are passed on to consumers. A possible trade war threatens to disrupt global supply chains and increases the risk of a recession in the US economy, which would have ripple effects in world economy. For example, the prices of stocks listed on the B3 have historically been affected by fluctuations in U.S. interest rates, as well as by variations in the main U.S. stock indexes. Events in other countries and capital markets may adversely affect the market price of our shares to the extent that they may in the future hinder or prevent access to capital markets and financing of investments on acceptable terms.
Historically, adverse developments in the economies of emerging markets have resulted in investors’ perception of greater risk from investments in such markets like Brazil. Such perceptions regarding emerging market countries have significantly affected the market value of securities of Brazilian issuers. Furthermore, although economic conditions are different in each country, investors’ reactions to developments in one country can impact the prices of securities in other countries, including those in Brazil, and this may diminish investors’ interest in securities of Brazilian issuers, including ours.
Geopolitical risks external to the market in which we operate and military hostilities, including the ongoing conflicts between Russia and Ukraine and between Israel and Hamas, as well as economic sanctions imposed as a result of such conflicts, may adversely impact our business.
We are subject to external risks related to our operations and to our supply chain. Global markets are experiencing volatility following the escalation of geopolitical tensions, in particular in connection with the military conflict between Russia and Ukraine, and Israel and Hamas. Economic sanctions and tariffs imposed by the United States, the European Union, the United Kingdom and other countries as a direct consequence of this conflict may impact supply chains, lead to market disruptions, including significant volatility in commodity prices and in the global financial system, including through credit and capital markets instability. These factors could adversely impact our business and increase our costs and expenses and consequently impact our financial condition or results of operations.
The escalation of the Russia-Ukraine and Israel-Hamas conflicts, and any other conflicts that may arise may increase geopolitical tensions around the world and cause further disruption to international trade, industrial supply chains and transport, increase market price volatility, with particular impact on the energy sector, as well as raise regulatory and contractual uncertainty, which may adversely affect our business.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Our financial and operating performance may be adversely affected by epidemics, natural disasters and other catastrophes impacting Brazilian biodiversity, society and economy.
The outbreak of new epidemics, natural disasters and other catastrophes on a regional or global scale, may result, at different levels, result in drop in consumption in the commercial and industrial segments, as well as sporadic volatility in the international and/or Brazilian markets, the adoption of governmental and private measures, including restrictions, as a whole or in part, on the circulation and transportation of persons, goods and services and consequently, in the total or partial closure of private establishments and public offices, interruptions to the supply chain, and increased intervention in economies.
These events may have a negative and significant effect on the world economy and on Brazil’s economy, and include or may include reduction in the level of economic activity; currency devaluation and volatility; increase in the fiscal deficit and public investment constraints; delays in judicial, arbitral and/or administrative proceedings; imposition, even if only temporarily, of a more onerous tax treatment of our business activities; decrease in the liquidity available in the international and/or Brazilian market; and volatility in the price of raw materials and other inputs, among other effects.
The occurrence of any of these events and their duration may impact the liquidity and market value of our shares and generate negative impacts on the business. We cannot guarantee that regional and/or global outbreaks of communicable diseases will not occur, and if they do occur, we cannot assure that we will be able to prevent a negative impact on our business, operations and financial results.
Fluctuations in currency exchange rates and the devaluation of the real may adversely affect our net income and cash flow.
The Brazilian currency has fluctuated periodically in the past in relation to the U.S. dollar and other foreign currencies. As of December 31, 2024, the Real vs. U.S. dollar exchange rate was R$6.19 to US$1.00, depreciating 27.42% as compared to December 31, 2023. Depreciation of the
Real
increases the cost of purchasing electricity from the Itaipu – a hydroelectric facility, one of our major suppliers, which adjusts its electricity prices based in part on its U.S. dollar costs. Indeed, depreciation generally curtails access to international capital markets and may prompt government intervention. It also reduces the U.S. dollar value of our dividends and the U.S. dollar equivalent of the market price of our ADSs.
Changes in Brazilian tax legislation and regulation may have an adverse effect on us and our shareholders.
The Brazilian government has historically altered tax policies in ways that impact the electric sector and may continue to do so. These changes have included tax rate increases affecting energy companies and, occasionally, the imposition of temporary taxes for specific governmental purposes. If we cannot adequately adjust our tariffs, our operations may be adversely affected.
On December 15, 2023, the Brazilian Congress approved a tax reform on consumption (Constitutional Amendment No. 132 – “EC 132”), which will gradually be implemented over a 7-year transition period starting in 2026. EC 132 seeks to simplify the Brazilian tax framework by replacing four existing taxes (ICMS, ISS, PIS, and COFINS) with two new value-added taxes: the state/municipal Tax on Goods and Services (Imposto sobre Bens e Serviços – “IBS”) and the federal Contribution on Goods and Services (Contribuição sobre Bens e Serviços – “CBS”). The new VAT system will tax consumption rather than production and revenue. IBS and CBS were regulated by Complementary Law No. 214, enacted on January 16, 2025 (“Complementary Law No. 214/25”). As a rule, the same IBS and CBS rates may apply to all goods and services, including rights, whether they are supplied through a local acquisition or import transaction. The actual rates for IBS and CBS are subject to sub-regulation yet to be determined (which is expected to occur during 2025), but they are projected to reach up to 28%, potentially the highest VAT rate globally. EC 132 also introduces a penalty tax, the federal Excise Tax (Imposto Seletivo – “IS”), to discourage the consumption of goods and services harmful to human health and the environment. We have formed a working group to assess the potential impacts and risks of these changes on our financial results. The group concluded that the direct impacts on us are likely to be low, given the regulated tariffs and bilateral contracts in our market.
In addition, the Brazilian government is considering changes in 2025 to taxes on income, especially regarding the possibility of imposing taxation on dividends.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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In February 2023, the Brazilian Supreme Court (“STF”) issued a decision recognizing the possibility of reversing final judgments issued by Brazilian courts in tax matters if the STF subsequently changes its interpretation of tax legislation and regulation. Although the impact of this decision is not material to our business, the issuance of similar judicial decisions with immediate effect on tax matters decided in final judgments could impact our business in the future. This could expose us to immediate tax liabilities if the STF changes its position on tax issues involving our business
.
Risks Relating to our Corporate Governance and the ADSs
After our transformation into a corporation with dispersed capital, we no longer have a controlling shareholder.
Following our transformation into a corporation with dispersed capital, the State of Paraná is no longer our controlling shareholder. Without a controlling shareholder, we may be more exposed to takeover attempts and different interests of shareholders and other stakeholders, coordinated voting by groups of shareholders and conflicts of interest. The absence of a controlling shareholder may also lead to deadlocks, challenges in convening meetings due to quorum issues, and difficulties in identifying shareholder conflicts or voting abuses. If another shareholder becomes our controlling shareholder in the future, that shareholder could significantly influence our business strategy, management and bylaws.
Our bylaws contain anti-takeover provisions, which may discourage third parties from attempting to acquire us and may adversely affect the rights of holders of our common stock.
Our bylaws include anti-takeover provisions, such as a poison pill and a limitation on voting rights for groups of shareholders voting more than 10% of their shares, and certain other provisions that may limit the ability of others to acquire control of us. Accordingly, shareholders may lose the opportunity to sell their shares at a premium to the prevailing market price as these provisions discourage third parties from seeking control of us through a tender offer or similar transactions.
ADSs holders may not have all the rights of our shareholders, and may be unable to exercise voting rights or preemptive rights relating to the shares underlying their ADSs.
The rights of ADS holders may be subject to certain limitations provided in the deposit agreement or by the securities intermediaries through which ADS holders hold their securities.
•
Although ADS holders are permitted to vote at shareholders’ meetings, there are procedural steps involved in the process that create practical limitations on the ability of ADS holders to vote. In the case of adoption of multiple voting for election of members of the Board of Directors, holders of ADSs may not have the same rights and may not be subject to the same rules as holders of common shares in the Brazilian securities market. In accordance with the Deposit Agreements, we will provide the notice to the depositary, which will in turn mail to holders of ADSs the notice of such meeting and a statement as to the manner in which instructions may be given by holders. To exercise their voting rights, ADS holders must then instruct the depositary how to vote their shares. Because of this extra procedural step involving the depositary, the process for exercising voting rights will take longer for ADS holders than for direct holders of Class B Shares or Common Shares. ADSs for which the depositary does not receive timely voting instructions will not be voted.
•
The holders of the Common Shares or Class B Shares may have fewer and less well-defined rights to protect your interests in connection with actions taken by our Board of Directors than under the laws of the United States and certain other jurisdictions outside Brazil. Although Brazilian law imposes restrictions on insider trading and price manipulation, the Brazilian securities markets are not as highly supervised as the United States securities markets or markets in certain other jurisdictions outside Brazil.
•
The ability of ADS holders to exercise preemptive rights is not assured, particularly if the applicable law in the holder’s jurisdiction (for example, the Securities Act in the United States) requires that either a registration statement be effective or an exemption from registration be available with respect to those rights, as is in the case in the United States. We are not obligated to extend the offer of preemptive rights to holders of ADSs, to file a registration statement in the United States, and we cannot assure that we will file any such registration statement. Accordingly, ADS holders may receive only the net proceeds from the sale of their preemptive rights by the Depositary or, if the preemptive rights cannot be sold, they will be allowed to lapse. If they are unable to participate in rights offerings, their holdings may also be diluted.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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ADS holders may not receive dividend payments if we incur net losses or our net profit does not reach certain levels. Under Brazilian Corporate Law and our by-laws, we must pay our shareholders a mandatory distribution equal to at least 25% of our adjusted net profit for the preceding fiscal year, with holders of preferred shares having priority of payment. According to our bylaws, Class A Shares and Class B Shares are entitled to receive annual, non-cumulative minimum dividends, which dividend per share shall be at least 10% higher than the dividends per share paid to the holders of the Common Shares. Class A Shares have a dividend priority over the Class B Shares to receive a minimum dividend equal to 10% of the total share capital represented by the Class A Shares outstanding at the end of the fiscal year in respect of which the dividends have been declared, and Class B Shares have a dividend priority over the Common Shares. ADSs are entitled to dividends equal to their underlying shares. In the event that we are unable to declare dividends, our management may nevertheless decide to defer payment of dividends or, in limited circumstances, not to declare dividends at all. We cannot make dividend payments from our legal reserve and capital reserve accounts.
Sales of a substantial number of shares or ADSs, or the perception that such sales might take place, could adversely affect the prevailing market price of our shares or ADSs.
As a result of the issuance of new shares or ADSs, sales of shares or ADSs by existing investors, or the perception that such a sale might occur, the market price of our shares and ADSs may decrease significantly. These issuances and sales may also make it more difficult for us to offer shares or ADSs in the future at a time and price range that we deem appropriate, or may even make it more difficult for investors to sell the securities at the price or above the price range they paid.
Future equity issuances may dilute the holdings of current holders of our shares or ADSs and could materially affect the market price for those securities.
We may in the future decide to offer additional equity to raise capital or for other purposes. Any such future equity offering could reduce the proportionate ownership and interests of holders of our shares and ADSs, as well as our earnings and net equity value per share or ADS. Any offering of shares and ADSs by us or our main shareholders, or a perception that any such offering is imminent, could have an adverse effect on the market price of these securities.
Holders of our ADSs may be unable to enforce judgments against our directors or officers.
All of our directors and officers named in this annual report reside in Brazil. Substantially all of our assets, as well as the assets of these persons, are located in Brazil. As a result, it may not be possible for holders of our ADSs to effect service of process upon us or our directors and officers within the United States or other jurisdictions outside Brazil, attach their assets or enforce against us or our directors and officers judgments obtained in the United States or other jurisdictions outside of Brazil. Because judgments of U.S. courts for civil liabilities based upon the U.S. federal securities laws may only be enforced in Brazil if certain requirements are met, holders of ADSs may face greater difficulties in protecting their interest in actions against us or our directors and officers than would shareholders of a corporation incorporated in a state or other jurisdiction of the United States.
Judgments of Brazilian courts with respect to our shares will be payable only in reais.
If proceedings are brought in the courts of Brazil seeking to enforce our obligations in respect of our shares, we will not be required to discharge any such obligations in a currency other than Reais (R$). Under Brazilian exchange control limitations, an obligation in Brazil to pay amounts denominated in a currency other than reais (R$) may only be satisfied in Brazilian currency at the exchange rate, as determined by the Brazilian Central Bank, in effect on the date the judgment is obtained, and any such amounts are then adjusted to reflect exchange rate variations through the effective payment date. The then prevailing exchange rate may not afford non Brazilian investors with full compensation for any claim arising out of, or related to, our obligations under our shares.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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The Brazilian government may impose exchange controls and restrictions on remittances abroad which may adversely affect your ability to convert funds in reais into other currencies and to remit other currencies abroad.
In the past, the Brazilian government has imposed restrictions on the remittance to foreign investors of the proceeds of their investments in Brazil and the conversion of Brazilian currency into foreign currencies. The Brazilian government could again choose to impose this type of restriction if, among other things, there is deterioration in Brazilian foreign currency reserves or a shift in Brazil’s exchange rate policy. Reintroduction of these restrictions would hinder or prevent your ability to convert dividends, distributions or the proceeds from any sale of ADSs, as the case may be, from reais into U.S. dollars or other currencies and to remit those funds abroad. We cannot assure you that the Brazilian government will not take similar measures in the future.
The relative volatility and illiquidity of the Brazilian securities markets may impair your ability to sell the shares underlying the ADSs.
The Brazilian securities markets are substantially smaller, less liquid, more concentrated and more volatile than major securities markets in the United States and certain other jurisdictions outside Brazil, and are not as highly regulated or supervised as some of these other markets. The illiquidity and relatively small market capitalization of the Brazilian equity markets may cause the market price of securities of Brazilian companies, including our ADSs, Common Shares and Class B Shares, to fluctuate in both the domestic and international markets, and may substantially limit your ability to sell the shares underlying your ADSs at a price and time at which you wish to do so. Our capital stock is currently composed of different types of equity securities (Common Shares, Class A Shares, Class B Shares and ADSs), which further contributes to a reduced liquidity.
Changes in Brazilian tax laws may have an adverse impact on the taxes applicable to a disposition of our shares or ADSs.
Law No. 10,833 of December 29, 2003, provides that the disposition of assets located in Brazil by a non-resident to either a Brazilian resident or a non-resident is subject to taxation in Brazil, regardless of whether the disposition occurs outside or within Brazil. This provision results in the imposition of income tax on the gains arising from a disposition of our common or preferred shares by a nonresident of Brazil to another non-resident of Brazil. There is no judicial guidance as to the application of Law No. 10,833 and, accordingly, we are unable to predict whether Brazilian courts may decide that it applies to dispositions of our ADS between nonresidents of Brazil. However, in the event that the disposition of assets is interpreted to include a disposition of our ADS, this tax law would accordingly result in the imposition of withholding taxes on the disposition of our ADS by a non-resident of Brazil to another non-resident of Brazil.
We are subject to obligations whose non-compliance may allow creditors to demand financial compensation, and in specific cases, may even lead to the acceleration of debt maturities.
In some of our financing, we are subject to financial covenants that require us to maintain certain financial ratios. Additionally, some of our financing agreements contain acceleration clauses that may be triggered if we fail to meet certain covenants. The acceleration of the maturity of a financing agreement may give other lenders the right to accelerate the maturity of their respective agreements under cross-default provisions. As a result, acceleration of the maturity of financing agreements or debt could adversely affect our financial condition and operational results.
We may be subject to the Brazilian Bankruptcy Law.
Law No. 11,101 of February 9, 2005, as amended (Brazilian Bankruptcy Law) provides for bankruptcy proceedings and judicial and out-of-court reorganization. Previously, as a state-controlled company, this law did not apply to us. Under the Brazilian Bankruptcy Law, third parties may file for our bankruptcy. Conversely, being subject to Brazilian bankruptcy law allows us to benefit from the procedures outlined in Brazilian bankruptcy law, which include certain advantages, such as the prohibition of attachment of our assets during the proceedings if such seizure relates to a loan or claim subject to judicial reorganization or bankruptcy proceedings. Any third-party bankruptcy filing against us may adversely affect our business and the price of our common stock.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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As a foreign private issuer, we are subject to different disclosure and other requirements than U.S. domestic registrants.
As a foreign private issuer under the Exchange Act, we may be subject to different disclosure and other requirements than U.S. domestic registrants. For example, as a foreign private issuer in the United States, we are not subject to the same disclosure requirements as a U.S. domestic registrant under the Exchange Act, including the requirement to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of certain significant events, the proxy rules applicable to U.S. domestic registrants under Section 14 of the Exchange Act or the insider trading and short-swing profit rules applicable to U.S. domestic registrants under Section 16 of the Exchange Act. In addition, we have exemptions from certain U.S. rules that allow us to comply with Brazilian legal requirements in lieu of some of the requirements applicable to U.S. domestic registrants.
In addition, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. As a result, even if we are required to file on Form 6-K disclosing information that we have made public or are required to make public under Brazilian law or that we are required to disseminate generally to our shareholders and that is relevant to us, you may not receive the same type or amount of information that is required to be disclosed to shareholders of a U.S. company.
A U.S. holder of our common stock may not be able to exercise preemptive and tag-along rights with respect to our common stock.
Holders of our U.S. common stock may not be able to exercise the preemptive and tag-along rights with respect to our common stock unless a registration statement under the Securities Act becomes effective with respect to such rights or an exemption from the registration requirements of the Securities Act is available. We have not filed, and are under no obligation to file, a registration statement registering such rights, and we cannot guarantee that we will file such a registration statement. Unless a registration statement is filed or an exemption from registration is available, a U.S. holder may receive only the net proceeds from the sale of its preemptive and tag-along rights or, if such rights cannot be sold, they will expire and the holder will receive no value for them.
ITEM 4. INFORMATION ON THE COMPANY
THE COMPANY
We engage in the generation, transmission, distribution and sale of electricity mainly in the Brazilian State of Paraná, pursuant to concessions granted by ANEEL, the Brazilian regulatory agency for the electricity sector. While our activities are more concentrated in the Brazilian State of Paraná, we also operate in ten different Brazilian states through our generation and transmission businesses.
As of December 31, 2024, we generated electricity from
18
18 hydroelectric plants, 43 wind plants, for a total installed capacity of 5,998,7 MW in operation, of which a 100% was derived from renewable sources. Including the installed capacity of generation companies in which we had an equity interest as of December 31, 2024, our total installed capacity was 6,553,9 MW
.
Our electric power business is subject to comprehensive regulation by ANEEL. We hold concessions to distribute electricity in 394 of the 399 municipalities in the State of Paraná and in the municipality of Porto União in the State of Santa Catarina. As of December 31, 2024, we owned and operated 3,704 km of transmission lines and 214,770 km of distribution lines, constituting one of the largest distribution grids in Brazil. Below is the distribution of electricity supply in 2024 by consumption class, including free customers:
•
35.2% was to industrial customers;
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27.2% was to residential customers;
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20.2% was to commercial customers; and
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14.6% was to rural and other customers.
Key elements of our business strategy are:
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Grow in market value in a consistent and sustainable way.
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Scale business with synergy “G
TDC”.
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Enter the self-production segment and expand in the retail segment.
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Improve the customer experience.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Offer innovative and digital services and products.
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Expand and disseminate ESG best practices.
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Have discipline in capital allocation, planning and execution of projects.
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Seek operational efficiency gains and cost optimization.
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Foster innovation to leverage results.
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Explore opportunities and regulatory frontiers, and consolidate sectoral protagonism.
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Prepare people with the necessary skills for new challenges.
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Promote management focused on people, team engagement and a culture of meritocracy.
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Caring for people’s safety, health and quality of life.
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Enhance organizational culture.
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Strengthen digital and cybersecurity culture.
Our revenues for each of the last three fiscal years by activity are described in “Item 5. Operating and Financial Review and Prospects — Results of operations for the years ended December 31, 2024, 2023 and 2022.”
Historical Background
We were formed in 1954 by the State of Paraná to engage in the generation, transmission and distribution of electricity, as part of a plan to bring the electric energy sector under state control. We acquired the principal private power companies located in the State of Paraná in the early 1970s. From 1970 to 1977, we significantly expanded our transmission and distribution grid and worked to increase the connectivity of our grid to grids in other Brazilian states. In 1979, a change in state law permitted us to extend our generating activities to include production from sources other than hydroelectric and thermal power plants.
Currently, we are the largest
energy company in the State of Paraná. We are a corporation incorporated and existing under the laws of Brazil, with the legal name Companhia Paranaense de Energia – Copel. Our head offices are located at Rua José Izidoro Biazetto, 158 – Bloco A, CEP 81200-240, Curitiba, Paraná, Brazil. Our telephone number at the head office is +55 (41) 3331-4011. Our website is
www.copel.com
and any filings we make electronically with the SEC will be available to the public over the Internet at the SEC’s website. The commercial name of each of our businesses is provided as follows.
Relationship with the State of Paraná
Until August 2023. the State of Paraná owned 69.7% of our Common Shares. This large ownership allowed the controlling shareholder to control the election of the majority of the members of our Board of Directors, members of our Supervisory Board, the appointment of senior management and our direction, future operations and business strategy. On August 11, 2023, the financial settlement of the secondary base offering of shares held by the State of Paraná and the primary base offering of new shares of Copel took place, resulting in the transformation of the Company into a corporation with dispersed capital and no controlling shareholder. With the settlement of the Base Offer, the State of Paraná reduced its stake in the voting shares to 27,57%, so that Copel ceased to be a mixed-capital company that is part of the indirect public administration of the State of Paraná and is no longer subject to the provisions set forth in Brazilian Federal Law No. 13,303/2016 (“State-Owned Companies Law”). Together with this transformation into a corporation with dispersed capital and without a controlling shareholder, we made changes to our bylaws, including:
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The creation of a special class of preferred shares, exclusively owned by the State of Paraná, with influence restricted to the right to veto minimum investments in Copel Distribuição (“Copel DIS”), the change of the Company's corporate name, the change of headquarters, the removal of the limitation on exercising votes at 10% and signing a shareholders' agreement aiming to regulate the exercise of voting rights in a number greater than the percentage corresponding to 10% (for more information, see item 7. Golden Share).
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We set a limit on how much any shareholder or group of shareholders can vote. No one can vote more than 10% of our cast votes and outstanding voting capital. Also, no one can enter into agreements to exercise voting rights for more than 10% of our issued securities and outstanding voting capital.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Corporate Structure
As a result of the restructuring initiated in 2001, Copel currently has four main wholly-owned subsidiaries in the generation, transmission, distribution and commercialization sectors, namely: Copel Geração e Transmissão, Copel Distribuição, Copel Comercialização and Copel Serviços. Finally, Copel holds 100% equity interest in several other special purpose companies.
•
In 2007, we divided the assets of our transmission business (Copel Transmissão S.A.) between our distribution business (Copel Distribuição S.A.) and our generation business (Copel Geração S.A., renamed to Copel Geração e Transmissão S.A. or “Copel GeT”).
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In 2016, we changed the corporate name of Copel Participações S.A. to Copel Comercialização S.A. and its corporate purpose to the sale of energy and rendering of related services in order to strength our positioning in the energy trading market and to allow greater efficiency in the sale of energy.
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In 2017, to optimize the management of operating activities, we carried out an organizational restructuring of our wholly owned subsidiary Copel Renováveis S.A., whose activities were absorbed by Copel GeT.
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In 2018, Copel GeT entered into a Share Exchange Agreement with Eletrosul with respect to the joint ventures Costa Oeste Transmissora de Energia S.A. (51% - Copel GeT and 49% - Eletrosul), Marumbi Transmissora de Energia S.A. (80% - Copel GeT and 20%- Eletrosul) and Transmissora Sul Brasileira de Energia S.A. (20% - Copel GeT and 80% - Eletrosul). As a result, Copel GeT acquired 100% in the joint ventures Costa Oeste and Marumbi, and Eletrosul acquired 100% in Transmissora Sul Brasileira.
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In 2019, Copel GeT acquired 100% of SPE Uirapuru Transmissora de Energia S.A. from Centrais Elétricas Brasileiras S.A. and Fundação Eletrosul de Previdência e Assistencial Social - Elos.
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In 2019, Copel GeT, through a consortium with its subsidiary Cutia Empreendimentos Eólicos, participated in the A-6 new energy generation auction and sold 14.4 average MW of the Jandaíra Wind Complex. The Jandaíra Wind Complex, with 90.1 MW of installed capacity and 46.9 average MW of Assured Energy, was built in the Northeastern state of Rio Grande do Norte, a region where we have other wind generation assets. The project came into operation, in a staggered manner, in 2022, with entry into commercial operation anticipated by more than two years.
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In August, 2021, we concluded the sale of our entire equity interest in Copel Telecomunicações S.A. (Copel Telecom), responsible for our telecommunication activities, to Bordeaux Multi-Strategic Investment Fund –
Bordeaux Fundo de Investimentos em Participações Multiestratégia
, for a purchase price of R$2.5 billion. The sale was made following an auction we conducted at [B]³ in November 2020.
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In November, 2021, we completed the acquisition of the Vilas Wind Power Complex (“Vilas Complex”) with an enterprise value of R$1.1 billion. As the project is partially financed by Banco do Nordeste (“BNB”), under a long-term loan agreement with final maturity in 2040, the total amount paid by us in the acquisition was R$597.7 million.
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In January 2023, we completed the acquisition of the Aventura and Santa Rosa Mundo Novo Wind Complexes for R$1,760.6 million. With the addition of this capacity, wind power now represents 17% of our generation portfolio, benefiting its portfolio with the increase of incentivized energy and the reduction of exposure to hydrological risk.
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In November 2023, we renewed the concession for three major hydroelectric power plants (“HPPs”), Governador Bento Munhoz da Rocha Netto (“HPP Foz do Areia”), Governador Ney Aminthas de Barros Braga (“HPP Segredo”), and Governador José Richa (“HPP Salto Caxias”). This was a key step in securing a new 30-year concession contract for these hydroelectric power plants.
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In August 2023, we completed our process of transformation into a corporation with dispersed capital and without a controlling shareholder. With the completion of the offering, the State of Paraná reduced its shareholding in our voting rights from 69.66% to approximately 27.6%. As a result, we ceased to be a mixed capital company under the indirect public administration of the State of Paraná, and we are not bound by the provisions of Federal Law No. 13,303/2016, known as the State-Owned Companies Law.
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On September 16, 2024, we completed the divestment of our entire 51% stake in Companhia Paranaense de Gás – Compagas (“Compagas”), part of our Corporate Strategic Planning - Vision 2030, strengthening the pillars for the continuity and sustainable growth of our business, with a focus on electricity.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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On July 1, 2024, we sold our 81.2% interest in the termeletric power plant UEGA to Âmbar Energia S.A. for for R$ 261.4 million. This divestment was also a part of our strategy to decarbonize our generation matrix.In July 2024, the transaction was closed, ensuring the Company a 100% renewable operational generation matrix.
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On December 12, 2024, we entered into an agreement with Centrais Elétricas Brasileiras S.A. - Eletrobras and its subsidiary Eletrobras. for the transfer of Eletrobras' entire 49% stake in the Mauá Hydroelectric Power Plant and its entire 49.9% stake in the Mata de Santa Genebra S.A. transmission company, thereby consolidating 100% ownership of both assets to Copel for the Colíder Hydroelectric Power Plant and R$ 365.0 million in cash to Eletrobras This asset swap transaction aimed to optimize our portfolio, generating synergies by simplifying the operational and administrative structure and allowing the company to offset approximately R$ 170 million in tax losses related to Colíder’s impairment.
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On November 18, 2024, we renewed for 30 years the concessions for the generation of electric power at for HPP Foz do Areia, HPP Segredo and HPP Salto Caxias, for a combined amount of approximately R$4.1 billion.
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On November 25, 2024, our Board of Directors approved the creation of the first share buyback program for Common and Class B Preferred Shares (“Share Buyback Program”). The Share Buyback Program will involve the acquisition of Copel shares for treasury holding, cancellation or sale, without reducing the our share capital, as well as to comply with the restricted share granting plan and restricted shares for performance plan.
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We currently have four wholly owned subsidiaries: Copel Geração e Transmissão S.A., Copel Distribuição S.A., Copel Comercialização S.A. (“Copel Mercado Livre”) and Copel Serviços S.A. (“Copel SER”) We currently hold 100% of the shares in several Special Purpose Companies (“SPC”).
The current organization of our group is described below. All our subsidiaries are incorporated in Brazil and are subject to Brazilian law.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Form 20-F 25FY24 | COPEL and Subsidiaries |
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BUSINESS
In the past, our generation and distribution businesses were integrated, and we sold most of the electricity we generated to the customers of our distribution business. This changed as a result of the implementation of the New Industry Model Law, enacted in 2004. Today, open auctions on the regulated market are one of the primary channels by which our distribution business purchases energy to resell to Captive Customers and one of the channels by which our generation business generates revenues. Our generation business sells energy to our distribution business only through auctions in the regulated market. Moreover, our distribution business, like other certain Brazilian distribution companies, is also required to purchase energy from the hydroelectric facility of Itaipu, in an amount determined by the Brazilian government based on our proportionate share in the Brazilian electricity market. For more information, see “Item 4. Information on the Company—The Brazilian Electric Power Industry.”
The following table shows, for the last three years, the total electricity (i) we generated through entities in which we hold a 100.0% shareholding stake and the 51.0% and 30.0% of energy generated by Mauá and Baixo Iguaçu Hydroelectric Plants respectively (corresponding to the interest we hold in each of these assets), (ii) we purchased, broken down by the total amount of electricity generated and purchased by Copel Geração e Transmissão and our wind farm generation facilities described below (“Wind Farms”) and (iii) the total amount of electricity purchased by Copel Distribuição and Copel Mercado Livre”.
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Year ended December, 31
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2023
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2022
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(GWh) | (GWh) | (GWh) | ||||||||
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Copel Geração e Transmissão
(1)
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Electricity generated
(2)
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23,920 | 21,845 | 21,936 | ||||||||
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Electricity purchased from Copel Comercialização
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574 | 398 | 1,208 | ||||||||
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Electricity purchased from others
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134 | 134 | 134 | ||||||||
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Electricity purchased from Spot Market – CCEE
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0 | 296 | 63 | ||||||||
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Electricity received from the Interconnected System
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238 | 220 | 1,659 | ||||||||
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Total electricity generated and purchased by Copel Geração e Transmissão
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24,866 | 22,893 | 25,000 | ||||||||
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Wind Farms
(1)
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Electricity generated
(2)
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3,443 | 3,952 | 2,785 | ||||||||
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Electricity purchased from others
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257 | 127 | 108 | ||||||||
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Total electricity generated and purchased by Wind Farms
|
3,700 | 4,079 | 2,893 | ||||||||
|
Copel Distribuição
|
|
|
|
||||||||
|
Electricity purchased from Itaipu
(3)
|
4,560 | 4,761 | 5,272 | ||||||||
|
Electricity purchased from Auction – CCEAR – affiliates
|
249 | 233 | 155 | ||||||||
|
Electricity purchased from Auction – CCEAR – other
|
13,812 | 13,142 | 12,354 | ||||||||
|
Electricity purchased from Mechanism for Compensation of Surpluses and Deficits of New Energy (MCSD-EN))
|
52 | 69 | 392 | ||||||||
|
Electricity purchased from Spot Market – CCEE
|
373 | — | — | ||||||||
|
Electricity purchased from others
|
5,190 | 5,867 | 7,270 | ||||||||
|
Total electricity purchased by Copel Distribuição
|
24,236 | 24,072 | 25,443 | ||||||||
|
Copel Comercialização
|
|
|
|||||||||
|
Electricity purchased from Copel Geração e Transmissão
|
13,506 | 12,778 | 14,211 | ||||||||
|
Electricity purchased from others
|
8,972 | 9,581 | 10,594 | ||||||||
|
Electricity purchased from Spot Market – CCEE
|
0 | 91 | 12 | ||||||||
|
Total electricity purchased by Copel Comercialização
|
22,478 | 22,450 | 24,817 | ||||||||
|
Total electricity generated and purchased by Copel Geração e Transmissão, Copel Distribuição, Wind Farms and Copel Comercialização (excluding intra-group transactions)
|
60,705 | 59,979 | 62,521 | ||||||||
(1)
We adopt the criteria set forth by the CCEE to determine the energy flows in sale and purchase transactions.
(2)
Includes the electrical losses of wiring and interconnecting station and technical losses by delivering energy to the Interconnected System.
(3)
Distribution companies operating under concessions in the Midwest, South and Southeast regions of Brazil purchase electricity generated by Itaipu.
Form 20-F 25FY24 | COPEL and Subsidiaries |
26
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
The following table shows the total electricity we sold to Free Customers, Captive Customers, distributors, energy traders and other utilities service providers in the south of Brazil through the Interconnected Transmission System in the last three years.
|
|
Year ended December, 31
|
||||||||||
|
|
2024
|
2023
|
2022
|
||||||||
|
|
(GWh)
|
(GWh)
|
(GWh)
|
||||||||
|
Copel Geração e Transmissão
(1)
|
|
|
|
||||||||
|
Electricity delivered to Free Customers
|
0 | — | — | ||||||||
|
Electricity delivered to Bilateral Agreements (Copel Comercialização)
|
13,053 | 12,180 | 13,893 | ||||||||
|
Electricity delivered to Bilateral Agreements
|
167 | 270 | 258 | ||||||||
|
Electricity delivered under auction – CCEAR affiliates
(2)
|
127 | 122 | 123 | ||||||||
|
Electricity delivered under auction – CCEAR – other
(2)
|
2,345 | 3,772 | 2,215 | ||||||||
|
Electricity delivered to Spot Market – CCEE
(2)
|
386 | 188 | 854 | ||||||||
|
Electricity delivered to the Interconnected System
|
8,788 | 6,361 | 7,657 | ||||||||
|
Total electricity delivered by Copel Geração e Transmissão
|
24,866 | 22,893 | 25,000 | ||||||||
|
Wind Farms
(1)
|
|
|
|||||||||
|
Electricity delivered under auction – CCEAR – affiliates
|
131 | 111 | 32 | ||||||||
|
Electricity delivered to Bilateral Agreements
|
1,036 | 1,219 | 856 | ||||||||
|
Electricity delivered under auction – CCEAR – other
|
2,507 | 2,201 | 1,289 | ||||||||
|
Electricity delivered under auction – CER – other
|
924 | 916 | 916 | ||||||||
|
Electricity delivered to Spot Market – CCEE
(2)
|
(69) | (2) | 122 | ||||||||
|
Total electricity delivered by Wind Farms
|
4,529 | 4,445 | 3,215 | ||||||||
|
Copel Distribuição
|
|
|
|
||||||||
|
Electricity delivered to Captive Customers
|
21,285 | 20,173 | 19,370 | ||||||||
|
Electricity delivered to distributors in the State of Paraná
|
80 | 89 | 91 | ||||||||
|
CCEE
(3)
|
1,812 | 2,383 | 4,010 | ||||||||
|
Total electricity delivered by Copel Distribuição
|
23,177 | 22,645 | 23,471 | ||||||||
|
Copel Comercialização
|
|
|
|
||||||||
|
Electricity delivered to Free Customers
|
10,565 | 11,884 | 11,498 | ||||||||
|
Electricity delivered to Bilateral Agreements (Copel GeT)
|
820 | 504 | 1,208 | ||||||||
|
Electricity delivered to Bilateral Agreements
|
10,926 | 9,819 | 11,949 | ||||||||
|
Electricity delivered to Spot Market – CCEE
|
167 | 243 | 162 | ||||||||
|
Total electricity delivered by Copel Comercialização
|
22,478 | 22,450 | 24,817 | ||||||||
|
Total electricity we sold to Free Customers, Captive Customers, distributors, energy traders and other utilities service providers
(4)
|
75,050 | 72,433 | 76,503 | ||||||||
(1)
We adopt the criteria set forth by the CCEE to determine the energy flows in sale and purchase transactions.
(2)
Amounts from the Spot Market indicated as less than zero (negative numbers) are not considered as electricity sold nor as electricity delivered in the MRE.
(3)
Includes the Spot Market, MCSD EN and MVE.
(4)
Includes intra-group transactions.
Form 20-F 25FY24 | COPEL and Subsidiaries |
27
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Generation
As of December 31, 2024, the total installed capacity of all the generation assets in which we hold equity or the rights under concessions was 6,573 MW.
As of December 31, 2024, the total installed capacity of all our energy generation assets was 6,573 MW. Considering only the entities that we operate (solely or under consortium), including 100% of the energy produced by those in which we hold a 100.0% shareholding stake and 51.0% and 30.0% of the energy generated by Mauá and Baixo Iguaçu Hydroelectric Plants, respectively (corresponding to the interest we hold in each of these assets), we operated and sold energy through 20 hydroelectric plants, 43 wind plants and one Thermoelectric Plant, with a total installed capacity of 6,308.9 MW. Our Assured Energy totaled 2,759 average MW in 2024. Our generation varies yearly because of hydrological conditions and other factors. We generated 28,148 GWh in 2024, 25,122.8 GWh in 2023, 25,299 GWh in 2022.
The generation of electrical energy at our power plants is supervised, coordinated and operated by our Generation and Transmission Operation Center in the city of Curitiba. This operation center is responsible for coordinating the operations related to major part of our total installed capacity, including some of the plants in which we hold only partial ownership interests.
In 2021, ANEEL granted us the extension of concession of the following power plants to compensate for the assumption of non-hydrological risks (provided in the Energy Reallocation Mechanism or MRE adopted by the government under Law No. 14,052/2020):
|
Power Plant
|
Concession extension (days)
|
Authorization
|
||||||
|
Apucaraninha
|
472 |
Resolution No. 12,255/2022
|
||||||
|
Capivari Cachoeira
|
2,555 |
Resolution No. 12,255/2022
|
||||||
|
Cavernoso
|
898 |
Resolution No. 11,345/2022
|
||||||
|
Cavernoso 2
|
1,742 |
Resolution No. 11,345/2022
|
||||||
|
Chamine
|
717 |
Resolution No. 11,345/2022
|
||||||
|
Colíder
|
13 |
Resolution No. 12,255/2022
|
||||||
|
Derivação Do Rio Jordão
|
949 |
Resolution No. 12,255/2022
|
||||||
|
Foz do Areia
|
461 |
Resolution No. 11,345/2022
|
||||||
|
Guaricana
|
705 |
Resolution No. 11,345/2022
|
||||||
|
Mauá
|
2,083 |
Resolution No. 14,896/2023
|
||||||
|
Salto Caxias
|
1,051 |
Resolution No. 11,345/2022
|
||||||
|
Sao Jorge
|
598 |
Resolution No. 12,255/2022
|
||||||
|
Segredo
|
1,045 |
Resolution No. 11,345/2022
|
||||||
|
Baixo Iguaçu
|
34 |
Resolution No. 11,345/2022
|
||||||
|
Fundão
|
1,110 |
Resolution No. 11,345/2022
|
||||||
|
Santa Clara
|
1,078 |
Resolution No. 11,345/2022
|
||||||
|
Dona Francisca*
|
1,485 |
Resolution No. 11,132/2022
|
||||||
|
Arturo Andreoli*
|
844 |
Resolution No. 14,896/2023
|
||||||
*
Associates
Form 20-F 25FY24 | COPEL and Subsidiaries |
28
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Hydroelectric Generation Facilities
The following table sets forth certain information related to our main hydroelectric plants in operation during 2024:
|
Plant
|
Installed capacity
|
Assured energy
(1)
|
Placed in service
|
Concession expires
|
||||||||||
| (MW) | (Average MW) | |||||||||||||
|
Foz do Areia
|
1,676.0 | 567.6 |
1980
|
November 2054 | ||||||||||
|
Segredo
|
1,260.0 | 552.8 |
1992
|
November 2054 | ||||||||||
|
Salto Caxias
|
1,240.0 | 553.3 |
1999
|
November 2054 | ||||||||||
|
Capivari Cachoeira
|
260.0 | 103.6 |
1972
|
January 2053 | ||||||||||
|
Mauá
(2)
|
184.1
(3)
|
96.14 |
2012
|
June 2049 | ||||||||||
|
Baixo Iguaçu
|
105.1
(4)
|
51.72 |
2019
|
December 2049 | ||||||||||
|
Colíder
(2)
|
300.0 | 178.1 |
2019
|
January 2046 | ||||||||||
|
Others
|
132.5 | 77.1 |
N/A
|
N/A
|
||||||||||
(1)
Values used to determine volumes committed for sale.
(2)
Acquired in December 2024 from Eletrobrás. See”ITEM 4. INFORMATION ON THE COMPANY - The Company - Corporate Structure”
(3)
Corresponds to 51.0% of the installed capacity of the plant (361.1MW), corresponding to the interest we hold in this plant, as we operate this plant through a consortium.
(4)
Corresponds to 30.0% of the installed capacity of the plant (350.2MW), corresponding to the interest we hold in this plant, as we operate this plant through a consortium.
Governador Bento Munhoz da Rocha Netto (HPP Foz do Areia)
. The HPP Foz do Areia is located on the Iguaçu River, approximately 350 kilometers southwest of the city of Curitiba. The concession was renewed on November 19, 2024, pursuant to the terms of the Concession Agreement 01/2024, and is set to expire in November 2054.
Governador Ney Aminthas de Barros Braga (HPP Segredo) and Governador José Richa (HPP Salto Caxias)
. The HPP Segredo is located on the Iguaçu River, approximately 370 kilometers southwest of the city of Curitiba. The HPP Salto Caxias is located on the Iguaçu River, approximately 600 kilometers southwest of the city of Curitiba. These concessions were renewed in 2024, pursuant to the terms of the Concession Agreements 01/2024 and 02/2024, and are set to expire in November 2054.
Governador Pedro Viriato Parigot de Souza (HPP Capivari Cachoeira)
. The HPP Capivari Cachoeira is the largest underground hydroelectric plant in Southern Brazil. The reservoir is located on the Capivari River, approximately 50 kilometers north of the city of Curitiba, and the power station is located on the Cachoeira River, approximately 15 kilometers from the reservoir.
The current concession agreement with ANEEL to continue to operate this plant under an operation and maintenance regime until January 5, 2046. We paid R$574.8 million as signing bonus for this concession and we received an annual generation revenue (“AGR”) of R$144.1 million is subject to an annual tariff adjustment.. In 2024, the AGR was adjusted to R$167.9 million for the period from July 2024 to June 2025, in accordance with ANEEL Resolution No. 3353/2024.
The HPP Capivari Cachoeira has 260.0MW of installed capacity and Assured Energy of 103.6 MW. Since January 1, 2017, 70.0% of the energy generated by this plant has been allocated in quotas to the regulated market. Copel GeT will no longer bear the hydrological risk for the energy allocated in quotas under the MRE associated with the HPP Capivari Cachoeira until January 5, 2046. From this date until January 3, 2053, the power plant will operate entirely in the Free Market.
Mauá
. The Jayme Canet Júnior Hydroelectric Power Plant (“HPP Mauá”) is located on the Tibagi River, in the State of Paraná. It was constructed between 2008 and 2012 by Consórcio Energético Cruzeiro do Sul, in which we hold a 51.0% interest and CGT Eletrosul holds the remaining 49.0%. The facility is located approximately 250 kilometers from Curitiba, in the Municipality of Telêmaco Borba. See “ITEM 4. INFORMATION ON THE COMPANY - The Company - Corporate Structure”
Colíder
. HPP Colíder has an installed capacity of 300.0 MW and it is located on the Teles Pires River, in the State of Mato Grosso, between the municipalities of Nova Canaã do Norte and Itaúba, with the municipalities of Colíder and Cláudia are also affected by the reservoir. The construction of the plant began in 2011 and the work was totally concluded in 2019. The first Generating Unit entered commercial operation on March 9, 2019 and the last unit started operating on December 21, 2019. See”ITEM 4. INFORMATION ON THE COMPANY - The Company - Corporate Structure”
Form 20-F 25FY24 | COPEL and Subsidiaries |
29
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Baixo Iguaçu
. HPP Baixo Iguaçu has an installed capacity of 350.2 MW and is located on the Iguaçu River, in the municipalities of Capanema, Capitão Leonidas Marques, Planalto, Realeza and Nova Prata do Iguaçu, State of Paraná. Baixo Iguaçu HPP is the last large energy project planned for the main Iguaçu and it is located around 30 km downstream from the HPP Salto Caxias. It was constructed by a consortium in which Copel GeT holds a 30% interest and Geração Céu Azul S.A. holds the remaining 70.0%. This power plant became fully operational on April 10, 2019.
In addition to our generation facilities, we have ownership interests in several other hydroelectric generation companies as detailed below.
Bela Vista
. The SHP Bela Vista has 29.8 MW of installed capacity and 18.6 average MW of Assured Energy and is under construction in the Chopim river, in the São João and Verê municipalities, located in the southwest of the State of Paraná. The energy sales agreement has been effective since of January 1, 2024, for a 30-year term and will be subject to an annual adjustment by the IPCA. The construction of this unit started in the first half of 2019 and the third power generation unit began operations on August 12, 2021, totaling 29.3 MW in commercial operation (corresponding to 98.3% of the plant’s total capacity). The remaining unit with a complementary capacity of 0.5 MW started its operation on June 7, 2023.
Between 2004 and 2010, we were required by law to retain a majority of the voting shares of any company in which we obtained an ownership interest. Starting in 2010, it became possible for us to hold non-controlling interests in companies.
The following table sets forth information regarding the hydroelectric generation plants in which we had a partial equity interest as of December 31, 2024:
|
Plant
|
Installed capacity
|
Assured energy
|
Placed in service
|
Our ownership
|
Concession Expires
|
||||||||||||
| (MW) | (Average MW) | (%) | |||||||||||||||
|
Elejor Facility
|
|||||||||||||||||
| Santa Clara and Fundão | 240.34 | 128.1 |
August 2005
June 2006 |
70.0 |
May and June 2040
|
||||||||||||
| Santa Clara I and Fundão I | 6.07 | 4.9 |
August 2005
December 2006 |
70.0 |
Indefinetely
|
||||||||||||
|
Dona Francisca
|
125.0 | 72.5 | February 2001 | 23.0 | September 2037 | ||||||||||||
|
SHP Arturo Andreoli
(Foz do Chopim) |
29.1 | 20.4 | October 2001 | 35.8 | July 2034 | ||||||||||||
|
HPP Baixo Iguaçu
|
350.2 | 172.4 | April 2019 | 30.0 | November 2049 | ||||||||||||
Elejor Facility
. The Elejor Facility consists of the Santa Clara and Fundão Hydroelectric Power Plants, both of which are located on the Jordão River in the State of Paraná. The aggregate total installed capacity of the units is 246.41 MW, which includes two smaller hydroelectric generation units installed in the same location. Elejor signed a concession agreement with a term of 35 years for the Santa Clara and Fundão plants in October 2001. As of December 31, 2024, we own 70.0% of the common shares of Elejor, and Paineira Participações owns the remaining 30.0
%.
Elejor is required to make monthly payments to the Brazilian government for the use of hydroelectric resources, which in 2001 totaled R$19.0 million. This amount is adjusted on an annual basis by the IGP-M Index.
Since 2019, Elejor has been selling energy in the Free Market. In 2024, Elejor’s net operating revenue and net loss were R$ 91.4 million and R$89.3 million, respectively, while in 2023 its net operating revenue and net loss were R$140.8 million and R$2.9 million, respectively.
Dona Francisca. We own 23.03 % of the common shares of Dona Francisca Energética S.A. (“DFESA”). The other shareholders are Gerdau S.A. with a 51.82% interest, Celesc S.A. with a 23.03% interest and Statkraft S.A. with a 2.12% interest. DFESA Hydroelectric Power Plant is located on the Jacuí River in the State of Rio Grande do Sul. The plant began full operations in 2001. In April 2015, we signed a new ten year power purchase agreement with DFESA, valued at R$17.0 million annually, under which we purchase 23.03% of DFESA’s Assured Energy (proportional to our stake). In 2024, DFESA’s net operating revenue and net income were R$66.3 million and R$23.2 million, respectively, while in 2023 its net operating revenue and net income were R$66.2 million and R$23.2 million, respectively.
Form 20-F 25FY24 | COPEL and Subsidiaries |
30
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
SHP Arturo Andreoli (“Foz do Chopim” Hydroelectric Plant).
The Foz do Chopim Hydroelectric Plant is located on the Chopim River in the State of Paraná. We own 35.8% of the common shares of Foz do Chopim Energética Ltda., the entity that owns the Foz do Chopim Hydroelectric Plant. Silea Participações Ltda. owns the remaining 64.2%. The operation and maintenance of Foz do Chopim Hydroelectric Plant is performed by Copel Geração e Transmissão S.A. Energy supply agreements were executed at an Average Tariff of R$220.07/MWh. Foz do Chopim Energética Ltda. also had the authorization to operate Bela Vista SHP, a hydroelectric power plant that is located on the same river and has similar capacity, which was transferred to Bela Vista Geração de Energia S.A. (“Bela Vista Geração”), through the ANEEL’s Authorizing Resolution no. 7,802/2019. In 2024, Foz do Chopim’s net operating revenue and net income were R$53.4 million and R$40.3 million, respectively, while in 2023 its net operating revenue and net income were R$60.6 million and R$46.5 million, respectively.
Wind Farm Generation Facilities
Since 2013 we have been expanding our energy generation capacity and diversifying our energy matrix through the development of renewable energy sources, like the construction and acquisition of wind farms in the State of Rio Grande do Norte. The following table sets forth certain information relating to our wind farm plants in operation as of December 31, 2024:
|
Plant
|
Installed capacity
|
Assured Energy
|
Placed in Service
|
Concession Expires
|
||||||||||
| (MW) | (Average MW) | |||||||||||||
|
São Bento Energia
|
94.0 | 38.1 |
|
|
||||||||||
|
Boa Vista
|
14.0 | 5.2 | February 2015 | April 2046 | ||||||||||
|
Olho d’Água
|
30.0 | 12.8 | February 2015 | June 2046 | ||||||||||
|
São Bento do Norte
|
30.0 | 11.3 | February 2015 | May 2046 | ||||||||||
|
Farol
|
20.0 | 8.8 | February 2015 | April 2046 | ||||||||||
|
Copel Brisa Potiguar Wind Complex
|
183.6 | 89.4 |
|
|
||||||||||
|
Asa Branca I
|
27.0 | 12.1 | August 2015 | April 2046 | ||||||||||
|
Asa Branca II
|
27.0 | 11.9 | September 2015 | May 2046 | ||||||||||
|
Asa Branca III
|
27.0 | 12.3 | September 2015 | May 2046 | ||||||||||
|
Eurus IV
|
27.0 | 12.4 | August 2015 | April 2046 | ||||||||||
|
Santa Maria
|
29.7 | 15.7 | April 2015 | May 2047 | ||||||||||
|
Santa Helena
|
29.7 | 16.0 | May 2015 | April 2047 | ||||||||||
|
Ventos de Santo Uriel
|
16.2 | 9.0 | May 2015 | April 2047 | ||||||||||
|
Voltália São Miguel do Gostoso I
(1)
|
108.0 | 57.1 |
|
|
||||||||||
|
Carnaúbas
|
27.0 | 13.1 | June 2017 | April 2047 | ||||||||||
|
Reduto
|
27.0 | 14.4 | June 2015 | April 2047 | ||||||||||
|
Santo Cristo
|
27.0 | 15.3 | June 2015 | April 2047 | ||||||||||
|
São João
|
27.0 | 14.3 | June 2015 | March 2047 | ||||||||||
|
Cutia Empreendimentos Eólicos
|
180.6 | 71.4 |
|
|
||||||||||
|
Dreen Cutia
|
23.1 | 9.6 | December 2018 | January 2042 | ||||||||||
|
Dreen Guajiru
|
21.0 | 8.3 | December 2018 | January 2042 | ||||||||||
|
Esperança do Nordeste
|
27.3 | 9.1 | December 2018 | May 2050 | ||||||||||
|
GE Jangada
|
27.3 | 10.3 | December 2018 | January 2042 | ||||||||||
|
GE Maria Helena
|
27.3 | 12.0 | December 2018 | January 2042 | ||||||||||
|
GE Paraíso dos Ventos do Nordeste
|
27.3 | 10.6 | January 2019 | May 2050 | ||||||||||
|
Potiguar
|
27.3 | 11.5 | December 2018 | May 2050 | ||||||||||
|
Bento Miguel
|
132.3 | 58.7 |
|
|
||||||||||
|
São Bento do Norte I
|
23.1 | 10.1 | January 2019 | August 2050 | ||||||||||
|
São Bento do Norte II
|
23.1 | 10.8 | January 2019 | August 2050 | ||||||||||
|
São Bento do Norte III
|
23.1 | 10.2 | April 2019 | August 2050 | ||||||||||
|
São Miguel I
|
21.0 | 9.3 | February 2019 | August 2050 | ||||||||||
|
São Miguel II
|
21.0 | 9.1 | February 2019 | August 2050 | ||||||||||
|
São Miguel III
|
21.0 | 9.2 | February 2019 | August 2050 | ||||||||||
|
Vilas Complex
|
186.7 | 98.6 |
|
|
||||||||||
|
Vila Maranhão I
|
31.95 | 17.8 | February 2021 | January 2054 | ||||||||||
|
Vila Maranhão II
|
31.95 | 17.8 | March 2021 | January 2054 | ||||||||||
Form 20-F 25FY24 | COPEL and Subsidiaries |
31
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
|
Plant
|
Installed capacity
|
Assured Energy
|
Placed in Service
|
Concession Expires
|
||||||||||
| (MW) | (Average MW) | |||||||||||||
|
Vila Maranhão III
|
31.95 | 16.6 | September 2020 | January 2054 | ||||||||||
|
Vila Ceará I
|
31.95 | 17.8 | December 2020 | January 2054 | ||||||||||
|
Ventos de Vila Mato Grosso I
|
58.91 | 28.6 | June 2021 | December 2054 | ||||||||||
|
Aventura
|
105.0 | 65.0 |
|
|
||||||||||
|
Aventura II
|
21.0 | 13.1 | July 2021 | June 2053 | ||||||||||
|
Aventura III
|
25.2 | 15.5 | July 2021 | June 2053 | ||||||||||
|
Aventura IV
|
29.4 | 18.5 | July 2021 | June 2053 | ||||||||||
|
Aventura V
|
29.4 | 17.9 | July 2021 | June 2053 | ||||||||||
|
Santa Rosa e Mundo Novo
|
155.4 | 92.8 |
|
|
||||||||||
|
Santa Rosa e Mundo Novo I
|
33.6 | 17.3 | February 2022 | June 2053 | ||||||||||
|
Santa Rosa e Mundo Novo II
|
29.4 | 17.2 | December 2021 | June 2053 | ||||||||||
|
Santa Rosa e Mundo Novo III
|
33.6 | 21.5 | January 2022 | June 2053 | ||||||||||
|
Santa Rosa e Mundo Novo IV
|
33.6 | 21.0 | January 2022 | June 2053 | ||||||||||
|
Santa Rosa e Mundo Novo V
|
25.2 | 15.8 | December 2021 | June 2053 | ||||||||||
|
Jandaíra
|
90.09 | 46.9 |
|
|
||||||||||
|
Jandaíra I
|
10.39 | 5.6 | November 2022 | April 2055 | ||||||||||
|
Jandaíra II
|
24.26 | 12.3 | October 2022 | April 2055 | ||||||||||
|
Jandaíra III
|
27.72 | 14.8 | November 2022 | April 2055 | ||||||||||
|
Jandaíra IV
|
27.72 | 14.2 | October 2022 | April 2055 | ||||||||||
|
Palmas
(2)
|
2.5 | 0.4 | February 1999 | September 2029 | ||||||||||
(1)
We have a 49.0% interest in Voltália São Miguel do Gostoso.
(2)
The plant is part of the process of divestment of generation assets, according to Material Fact No. 10/2024
São Bento Energia.
In February 2015, the four wind farms (Boa Vista, Olho d’Água, São Bento do Norte and Farol) which are part of the São Bento Wind Farm Complex, located in the State of Rio Grande do Norte, began operations. With an installed capacity of 94 MW and Assured Energy of 38.1 average MW. In August 2010, 43.7 average MW was sold to fifteen distribution concessionaires in ANEEL public auctions at a weighted average price of R$133.97/MWh (annually adjusted by IPCA index). The energy generated by these wind farms is sold through 20-year term contracts.
Copel Brisa Potiguar Wind Complex.
In October 2015, we concluded the implementation of the Brisa Potiguar Wind Complex with an installed capacity 183.6 MW and Assured Energy of 89.4 average MW. An Assured Energy of 57.7 average MW (from Asa Branca I, Asa Branca II, Asa Branca III and Eurus IV wind farms) was committed under contract to electric power distributors in the alternative energy auction in August 2010 at a weighted average price of R$135.40/MWh (adjusted annually by IPCA inflation index) and an Assured Energy of 40.7 average MW (from WPPs Santa Helena, Santa Maria and Ventos de Santo Uriel) was committed under contract in the 4
th
Reserve Energy Auction held in August 2011 at a weighted average price of R$101.81/MWh (annually adjusted by the IPCA inflation index). The energy to be generated was sold through 20-year term contracts with payments beginning in April 2015.
Voltália São Miguel do Gostoso I.
In June 2014, we acquired a 49.0% interest in the São Miguel do Gostoso I Wind Farm Complex, in the State of Rio Grande do Norte. The São Miguel do Gostoso wind farm complex has 108.0 MW of installed capacity and Assured Energy of 57.1 average MW, and its energy was sold in the 4
th
Reserve Energy Auction at an average price of R$98.92/MWh through 20-year term contracts. In April 2015, we concluded the construction of this wind farm complex and ANEEL, in July and August 2015, classified it as ready for commercial operation. This wind farm complex began production in June 2017 after completion of the necessary transmission lines.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Cutia
. Cutia Empreendimentos Eólicos, which is our largest wind farm business, is divided into two large complexes totaling 312.9 MW of installed capacity: (a) Cutia Complex, composed of seven wind farms (Guajiru, Jangada, Potiguar, Cutia, Maria Helena, Esperança do Nordeste and Paraíso dos Ventos do Nordeste), with a total installed capacity of 180.6 MW, 71.4 average MW of Assured Energy and located in the State of Rio Grande do Norte; and (b) Bento Miguel Complex, composed of six wind farms (São Bento do Norte I, São Bento do Norte II, São Bento do Norte III, São Miguel I, São Miguel II and São Miguel III) with 132.3 MW of total installed capacity, 58.7 average MW of Assured Energy and located in the State of Rio Grande do Norte, in the same region of other wind farm complexes that belong to us. On October 31, 2014, at the 6th Reserve Energy Auction, we sold 71.2 average MW from the Cutia Complex for R$144.00/MWh (maximum auction price). In addition, at the 20th New Energy Auction (A-5), held on November 28, 2014, we sold 54.8 average MW from the six Bento Miguel wind farms for R$136.97/MWh, through Availability Agreements with a 20-year term.
Vilas Complex
. In November 2021, we acquired 100% of the Vilas Complex, located in the state of Rio Grande do Norte, from Voltalia Energia do Brasil Ltda (“Voltalia”). The Vilas Complex has 186.7 MW of installed capacity and 98.6 average MWm of Assured Energy. The Vilas Complex sold 32.7 average MW at the 28
th
New Energy Auction at the price of R$93.00/MWh, with supply beginning in 2024, and 3.3 average MW at the 29
th
New Energy Auction at the price of R$79.92/MWh, with supply beginning in 2023. The energy contracts are valid for 20 years. The Vilas Complex is fully operational.
Jandaíra Complex
. In November 2022, the four wind farms (Jandaíra I, Jandaíra II, Jandaíra III and Jandaíra IV), located in the State of Rio Grande do Norte, with an installed capacity of 90.09 MW and Assured Energy of 46.2 average MW, began operations. In October 2019, 14.4 average MW was sold to nine distribution concessionaires in a A-6 New Energy Auction at a weighted average price of R$98.00/MWh (annually adjusted by IPCA index). The energy generated by these wind farms is sold through 20-year term contracts.
Aventura Complex
. In January 2023, we acquired 100% of the Aventura Complex, located in the state of Rio Grande do Norte, from EDP Renováveis S.A. (“EDPR”). The Aventura Complex has 105 MW of installed capacity and 65 average MWm of Assured Energy. The Aventura Complex sold 53.6 average MW at the 26th New Energy Auction at the price of R$97.00/MWh, with supply beginning in 2023. The energy contracts are valid for 20 years. The Aventura Complex is fully operational.
Santa Rosa e Mundo Novo Complex
. In January 2023, we acquired 100% of the Santa Rosa e Mundo Novo Complex, located in the state of Rio Grande do Norte, from EDP Renováveis S.A. (“EDPR”). The Santa Rosa e Mundo Novo Complex has 155.4 MW of installed capacity and 92.8 average MWm of Assured Energy. The Santa Rosa e Mundo Novo Complex sold 67.1 average MW at the 26th New Energy Auction at the price of R$99.00/MWh, with supply beginning in 2023. The energy contracts are valid for 20 years. The Santa Rosa e Mundo Novo Complex is fully operational.
Thermoelectric Generation Facilities
The following table sets forth certain information about our Thermoelectric Plants in operation as of December 31, 2024:
|
Plant
|
Installed capacity
|
Assured energy
|
Placed in service
|
Our ownership
|
Concession/ authorization expires
|
||||||||||||
| (MW) | (Average MW) | (%) | |||||||||||||||
|
TPP Figueira
|
20.0 | 17.7 | April 1963 | 100.0 |
March 2019
(1)
|
||||||||||||
(1)
In light of the absence of terms for the new concession contract and our decarbonization and divestment plan, we required ANEEL the termination of the concession
Figueira.
The Figueira plant, with installed capacity of 20 MW coal-fired thermoelectric plant, is located in the city of Figueira, in the northeast of the state of Paraná (where the main coal basin of Paraná is located),and is in the process of being divested by the Company, with no current energy supply contracts. The plant is not currently in commercial operation.
Form 20-F 25FY24 | COPEL and Subsidiaries |
33
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Expansion and Maintenance of Generating Capacity
We expect to spend R$ 158.9 million in 2025 to expand and maintain our generation capacity, excluding participation in new businesses, of which R$ 82.1 million will be invested in hydroelectric plants and R$ 76.8 million will be invested in our wind farms. The remaining amount will be spent on small hydroelectric power plants and other projects.
Wind Farm Projects
The following table presents information about the wind complexes we acquired in January 2023, the Santa Rosa Mundo Novo (“SRMN”) and Aventura wind complexes, previously owned by EDP Renováveis Brasil S/A. and totaling 260.4 MW of installed capacity. The acquisition is part of our strategy for growth in renewable energy, expands the diversification of the generation portfolio and is fully in line with its Investment Policy.
The total transaction value (enterprise value) was R$1,760.6 million. Copel GeT has obtained a long-term financing, with final maturity in 2043, with Banco do Nordeste (“BNB”) for the project, with rates of IPCA + 2.19% p.a. (Aventura Complex) and IPCA + 1.98% p.a. (Santa Rosa Mundo Novo Complex).
|
Wind Farms
|
Installed Capacity (MW)
(1)
|
Assured Energy (MWmed)
|
Commercial Operation
|
Energy Trade - Regulated Contracting Enviroment (ACR)
|
|||||||||||||||||||||||||
|
Auction
|
Quantity (MWmed)
|
Price
(R$/MWh)
(2)
|
Start of Supply
|
End of Supply
|
End of Authorization
|
||||||||||||||||||||||||
|
Aventura II
|
105 | 65 |
Operational since July 21
|
A-6
2017 |
53.6 | 134.22 |
Jan/23
|
Dec/42
|
2053
|
||||||||||||||||||||
|
Aventura III
|
|||||||||||||||||||||||||||||
|
Aventura IV
|
|||||||||||||||||||||||||||||
|
Aventura V
|
|||||||||||||||||||||||||||||
|
SRMN I
|
155.4 | 92.8 |
Operational since Dec/21 - Feb/22
|
A-6
2017 |
67.1 | 136.99 |
Jan/23
|
Dec/42
|
2053
|
||||||||||||||||||||
|
SRMN II
|
|||||||||||||||||||||||||||||
|
SRMN III
|
|||||||||||||||||||||||||||||
|
SRMN IV
|
2052
|
||||||||||||||||||||||||||||
|
SRMN V
|
|||||||||||||||||||||||||||||
|
Total/Average
|
260.4 | 157.8 | — |
|
120.7 | 135.76 |
|
|
|
||||||||||||||||||||
(1)
Total of 62 wind turbines used in the project, manufacturer Vestas model V 150.
(2)
Base date 12/31/2024.
Development Projects
We are focused on initiatives to study the technical, economic, and environmental feasibility of the expansion of existing projects, particularly hydroelectric generation projects and the corporate restructuring of our holdings, always with an emphasis on value creation.
In 2024, we made progress in developing the capacity expansion projects for the Governador Bento Munhoz da Rocha Netto Hydroelectric Power Plant (GBM – Foz do Areia) and Governador Ney Braga Hydroelectric Power Plant (GNB – Segredo), aiming for the future viability of these projects in regulated auctions, with the first auction being scheduled for June 2025. Additionally, we entered into an asset swap with Eletrobras in December 2024 in which we acquired full ownership of the Mauá Hydroelectric Power Plant and the Mata de Santa Genebra transmission line, for our stake in the Colíder Hydroelectric Power Plant and cash consideration.
The table below provides information on our proposed generation projects that are currently considered viable from a technical, economic, social, environmental, and land-use perspective, according to our studies. The Salto Grande, Aventura Solar, and Salto Alemã projects were removed from the table in 2024 due to economic infeasibility in the current scenario and the sale of Copel's stake in the CGLP for Salto Alemã.
|
Proposed Projects(1)
|
Estimated Installed Capacity
|
Estimated Assured Energy
|
Copel’s property
|
||||||||
| (SM) | (MW médio) | (%) | |||||||||
| HPP São Jeronimo | 330 | 178 | 41 | ||||||||
|
HPP Foz do Areia
(2)
|
860 | 20 | 100 | ||||||||
|
HPP Segredo
(2)
|
1,266 | 100 | |||||||||
| TOTAL | 2 | 198,1 | 0 | ||||||||
(1) Does not include other proposed projects whose technical, economic, social, environmental and land viability are still under analysis.
(2) Expansion of existing plant
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Until 2024, we were also members of the Geração Luz Paranaense Consortium - CGLP, to which were granted exploration rights for the following projects: (i) Foz do Curucaca PCH, (ii) Salto Alemã PCH, (iii) Alto Chopim PCH and (iv) Rancho Grande PCH. After obtaining the applicable authorization from ANEEL and evaluating the hydraulic potential of each project, the consortium decided to carry out studies only on the Salto Alemã and Foz do Curucaca PCHs and to return the rights to operate the Alto Chopim and Rancho Grande PCH projects to ANEEL. The basic projects for the Salto Alemã PCH and the Foz do Curucaca PCH had already been approved by ANEEL and the environmental studies related to the Salto Alemã PCH had been registered with the competent body, the IAT - Instituto Água e Terra do Paraná, for analysis. Given the difficulties in obtaining environmental permits to implement the projects, we sold our stake in CGLP at the end of 2024.
Since 2018, we have been holding the rights to the Salto Grande HPP, located on the Chopim River in the state of Paraná. The environmental studies related to this project were registered with the IAT for analysis in February 2020 and the basic project was approved by ANEEL in November 2020. In the current scenario, we have no intention of implementing the project in the short term, due to economic feasibility analysis.
Aventura Solar was a project for a 10 MWac 1 Solar Generating Plant, located in the municipality of Touros, in the state of Rio Grande do Norte, which shared the same lot with the Aventura II Wind Farm. The solar project was approved by ANEEL and had obtained the environmental license. The solar plant was planned to be connected to the 230 kV Aventura II substation, which is connected to the 230 kV João Câmara II substation via a transmission line of approximately 13 kilometers. Due to difficulties in making the Aventura Solar project viable, it was discontinued in 2024.
The current scenario of high project implementation costs, the macroeconomic scenario and energy prices make it difficult to make new greenfield projects viable in the short term. However, we are also developing competitive projects with a focus on reserve energy capacity auctions. We will also constantly evaluate new hydroelectric plants, including reversible pumping plants and battery storage plants.
The partnership previously agreed with EPE - Empresa de Pesquisa Energética S.A., Minas PCH S.A. and SILEA Participações Ltda. for studies in the region of the lower Chopim River culminated in the development of four hydroelectric projects, but due to difficulties in the environmental licensing process and worsening conditions for the viability of the projects, we are studying a potential divestment in these projects.
We are currently developing projects to participate in energy reserve capacity auctions in the electricity sector, both for power availability and energy storage. This is a significant strategic challenge in the energy sector. In this context, we have been working to develop projects that are not only technically and environmentally viable, but also meet the regulatory standards set out by the MME. In addition, these projects are designed to excel in operational efficiency and sustainability. One notable project in this endeavor is the expansion of the Foz do Areia plant. This project has the potential to make a significant contribution to the National Interconnected System (Sistema Interligado Nacional), providing additional energy and increasing system security. Another similar project is the expansion of the capacity of the Segredo hydroelectric power station, which could almost double the installed capacity from 1,260 MW to around 2,520 MW, a project that could be made viable in the next capacity reserve auctions that will contract the availability of power for the SIN.
In the realm of innovation, we launched the Copel Volt Open Innovation program in 2021. This project aimed to strengthen partnerships within the startup ecosystem, streamline our internal processes, and promote innovative business solutions’ growth. Our first edition of Copel Volt, from October 2021 to May 2022, presented eight strategic challenges to the startup community, reflecting our innovation needs. The response was overwhelmingly enthusiastic, as evidenced by 286 startup registrations and 216 formal applications from 43 countries. This strengthened our innovation credentials and cultivated an open innovation culture within Copel.
Building on this success, the second edition of Copel Volt ran from May 2022 to September 2023. It featured five selected challenges and attracted 381 pre-registrations and 284 formal applications from 52 countries. The second edition was particularly notable for the adoption of groundbreaking technologies and ambitious initiatives, resulting in significant discoveries and valuable learning experiences. This edition further expanded our innovation capacity, with substantial investments in Proof of Concept (“PoCs”) amounting to R$1.8 million, reinforcing our commitment to fostering cutting-edge solutions and enhancing our overall innovation landscape.
Through both editions, Copel Volt directly impacted more than 667 startups worldwide, resulting in numerous PoC initiatives backed by an investment of more than USD 600,000 (R$3 million). These efforts have tested cutting-edge solutions and expanded our innovation capacity. The program demonstrated its effectiveness with a 40% rollout rate, highlighting our ability to translate innovative ideas into actionable business solutions. Notably, one of the startups from Copel Volt received investment from Copel Ventures, participated in a research and development project, and secured a service contract with Copel, showcasing the seamless integration of innovative startups into our operational framework.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
In addition, to demonstrate our commitment to sustainable development and innovation, we launched the Copel Ventures I fund in 2023. This Corporate Venture Capital (“CVC”) fund, carefully managed by VOX Capital - a preeminent investment firm with an excellent track record in impact investing – has been allocated USD 30 million (R$150 million). The fund targets investments in local and international startups that are leading the transition to sustainable energy solutions, underscoring our commitment to address the challenges of the energy sector in a sustainable and efficient manner. By the end of 2024, Copel Ventures had already made two investments totaling R$ 14.7 million, one in an e-mobility startup and another in a solar energy marketplace. For 2025, the fund's strategic focus remains on acquiring minority stakes, ranging from 10% to 15%. However, it will prioritize companies at more mature stages, such as Series A and B.
Simultaneously, Copel Ventures I has strategically invested in startups reflecting our future vision, particularly those focusing on disruptive technologies to accelerate the transition to a more sustainable energy scenario. This strategic move consolidates our role as a transformative force and innovation leader in the energy sector. Copel Ventures I is dedicated to the development of new technologies and the integration of these innovations into our business model. This facilitates the creation of new business opportunities and increases our adaptability to the dynamic global energy market.
Through Copel Volt and Copel Ventures I, we have strengthened our identity as an innovator in the energy sector, promoting a corporate culture open to experimentation and collaboration with start-ups and entrepreneurs. Our comprehensive innovation strategy drives new solutions’ development and fosters dynamic knowledge and technology exchange within the wider innovation ecosystem.
As we look to the future, we remain committed to strengthening our role within the innovation ecosystem, and to persistently seeking solutions that bring value and sustainability to both our business and society at large.
Regarding Distributed Generation, we finish implementation in 2024 three solar projects in Paraná, that are fully operational. These projects aim at providing energy compensation for our clients and involve a total capacity of 15 MW. Additionally, we have a stake in the Solar Paraná photovoltaic plants, holding a 49% share.
Transmission and Distribution
General
Electricity is transferred from power plants to customers through transmission and distribution systems. Transmission is the bulk transfer of electricity from generating facilities to the distribution system by means of the Interconnected Transmission System, in tension greater than or equal to 230 kV. Distribution is the transfer of electricity to final customers, in tension lesser or equal to 138 kV.
The following table sets forth certain information concerning our transmission and distribution grids on the dates presented.
|
|
2024
|
2023
|
2022
|
||||||||
|
Transmission lines (km):
|
|
|
|
||||||||
|
230 kV and 500 kV
|
3,698 | 3,698 | 3,698 | ||||||||
|
138 kV
|
7.2 | 7.2 | 7.2 | ||||||||
|
Distribution lines (km):
|
|
|
|||||||||
|
230 kV
|
— | — | — | ||||||||
|
138 kV
|
7,091 | 6,767 | 6,652 | ||||||||
|
69 kV
|
776 | 778 | 767 | ||||||||
|
34.5 kV
|
92,588 | 90,902 | 89,356 | ||||||||
|
13.8 kV
|
114,315 | 112,871 | 111,358 | ||||||||
|
Transformer capacity (MVA):
|
|
|
|||||||||
|
Transmission and distribution substations (69 kV – 500 kV)
(1)
|
27,797 | 27,374 | 27,391.0 | ||||||||
|
Generation (step up) substations
|
7,153 | 7,153 | 6,691.0 | ||||||||
|
Distribution substations (34.5 kV)
|
1,695 | 1,639 | 1,646.0 | ||||||||
|
Distribution transformers
|
16,260 | 17,222 | 15,138 | ||||||||
|
Total energy losses
(2)(3)
|
— | 7.8 | % | 7.6 | % | ||||||
(1)
This figure includes transformers with primary tensions of 69 kV and 138 kV which belong to Copel Distribuição but are implemented in 230 kV and 525 kV substations, which belong to Copel Geração e Transmissão.
(2)
Percentage of losses on the energy injected in the distributor (technical and non-technical losses on injected energy). Does not consider losses in the basic grid.
(3)
For a better representation and comparison of the percentage of losses, we considered the percentage obtained by dividing the total amount of technical and non-technical losses by the energy injected into the Copel Distribuição´s grid. This percentage may be compared to other companies and has a more accurate physical meaning as it utilizes the database of measured data and not information taken from agreements of the period being analyzed.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Transmission
Our transmission system consists of all our assets of 230 kV and greater and a small portion of our 138 kV assets, which are used to transmit the electricity we generate and the energy we receive from other sources. In addition to using our transmission lines to provide energy to customers in the State of Paraná, we also transmit energy through the Interconnected Transmission System. Two companies, Centrais Elétricas Brasileiras S.A. (Eletrobras) and its wholly-owned subsidiary Eletrobras CGT Eletrosul, also maintain significant transmission systems in the State of Paraná. Furnas is responsible for the transmission of electricity from Itaipu, while CGT Eletrosul’s transmission system links the states in the south of Brazil. We, like all other companies that own transmission facilities, are required to allow third party access to its transmission facilities in exchange for compensation at a level set by ANEEL.
Currently, we carry out the operation and maintenance of 3,704 km of transmission lines, 43 substations in the State of Paraná and two substations in the State of São Paulo. In addition, we have partnerships with other companies to operate 5,980 km of transmission lines and eight substations through SPCs.
The table below sets forth information regarding our transmission assets in operation in December 31, 2024:
|
Subsidiary / SPC
|
Transmission Lines
|
TL Extension(km)
(3)
|
Number of Substations
|
Concession Expiration Date
|
Our Ownership
|
APR
(¹)
(R$ million)
|
||||||||||||||
|
COPEL GeT
|
Main Transmission Concession
(1)
|
2,129 | 35 | January 2043 | 100 | % | 665.2 | |||||||||||||
|
COPEL GeT
|
TL Bateias - Jaguariaiva
|
137 | — | August 2031 | 100 | % | 17.0 | |||||||||||||
|
COPEL GeT
|
TL Bateias - Pilarzinho
|
32 | — | March 2038 | 100 | % | 2.8 | |||||||||||||
|
COPEL GeT
|
TL Foz - Cascavel Oeste
|
117 | — | November 2039 | 100 | % | 16.6 | |||||||||||||
|
COPEL GeT
|
Cerquilho III Substation
|
— | 1 | October 2040 | 100 | % | 7.3 | |||||||||||||
|
COPEL GeT
|
TL Londrina – Figueira C2
Foz do Chopim – Salto Osório
|
102 | — | August 2042 | 100 | % | 8.1 | |||||||||||||
|
COPEL GeT
|
TL Assis – Paraguaçu Paulista C1 and C2 Paraguaçu Paulista II Substation
|
83 | 1 | February 2043 | 100 | % | 11.7 | |||||||||||||
|
COPEL GeT
|
Curitiba Norte Substation
TL Bateias – Curitiba Norte
|
31 | 1 | January 2044 | 100 | % | 13.3 | |||||||||||||
|
COPEL GeT
|
Realeza Sul Substation
TL Foz do Chopim- Realeza Sul
|
52 | 1 | September 2044 | 100 | % | 13.5 | |||||||||||||
|
COPEL GeT
|
TL Assis – Londrina
|
122 | — | September 2044 | 100 | % | 28.1 | |||||||||||||
|
COPEL GeT
|
TL Araraquara II – Taubaté
|
334 | — | October 2040 | 100 | % | 45.3 | |||||||||||||
|
COPEL GeT
|
TL Baixo Iguaçu – Realeza
TL Baixo Iguaçu – Cascavel Oeste
TL Curitiba Centro – Uberaba
TL Curitiba Leste – Blumenau
Medianeira Norte Substation
Curitiba Centro Substation
Andirá Leste Substation
Baixo Iguaçu Substation
|
255 | 4 | April 2046 | 100 | % | 160.9 | |||||||||||||
|
Uirapuru (Copel GeT – 100%)
|
TL Ivaiporã - Londrina
|
122 | — | March 2035 | 100 | % | 27.0 | |||||||||||||
|
Costa Oeste (Copel GeT – 100%)
|
LT Cascavel Oeste - Cascavel Norte
TL Cascavel Norte - Umuarama Sul
Umuarama Sul Substation
|
159 | 1 | January 2042 | 100 | % | 19.7 | |||||||||||||
|
Marumbi (Copel GeT – 100%)
|
TL Curitiba – Curitiba Leste
Curitiba Leste Substation
|
29 | 1 | May 2042 | 100 | % | 28.3 | |||||||||||||
|
Subtotal Copel GeT
|
3,704 | 45 |
|
|
1,064.7 | |||||||||||||||
|
Caiuá Transmissora
|
TL Guaíra - Umuarama Sul
TL Cascavel Norte - Cascavel Oeste
Santa Quitéria Substation / Cascavel Norte Substation
|
142 | 2 | May 2042 |
49.0%
(2)
|
17.4 | ||||||||||||||
|
Integração Maranhense
|
TL Açailandia-Miranda II
|
365 | — | May 2042 |
49.0%
(2)
|
25.6 | ||||||||||||||
|
Matrinchã
|
TL Paranaíta - Ribeirãozinho
|
2,033 | 4 | May 2042 |
49.0%
(2)
|
138.8 | ||||||||||||||
|
Guaraciaba
|
TL Ribeirãozinho - Marimbondo
|
930 | 1 | May 2042 |
49.0%
(2)
|
71.7 | ||||||||||||||
|
Paranaíba
|
TL Barreiras II - Pirapora II
|
967 | — | May 2043 |
24.5%
(2)
|
47.7 | ||||||||||||||
|
Cantareira
|
TL Estreito – Fernão Dias
|
656 | — | September 2044 |
49.0%
(2)
|
70.7 | ||||||||||||||
|
Mata de Santa Genebra
|
TL Araraquara II - - Itatiba TL Araraquara 2 - Fernão Dias–
TL Bateias - Itatiba
|
887 | 1 | May 2044 |
50.1%
(2)
|
161.1 | ||||||||||||||
|
Subtotal SPCs
|
|
5,980 | 8 |
|
|
532.6 | ||||||||||||||
|
Total
|
|
9,685 | 53 |
|
|
1,597.4 | ||||||||||||||
(1)
Our main transmission concessions encompass several transmission lines. Proportionate to our stake in the enterprise. Amounts relating to the 2024-2025 cycle (pursuant to REH 3,348/2024), without taking into account the adjustment parcel (PA). Considers assets that were operational on December 20, 2024.
(2)
Refers to the equity interest held by Copel Geração e Transmissão.
(3)
Considers double circuits.
Form 20-F 25FY24 | COPEL and Subsidiaries |
37
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Expansion and Maintenance of Transmission Facilities
In the expansion and maintenance of transmission facilities, the construction of new transmission facilities of 230 kV and higher must be awarded through a bidding process or otherwise authorized by ANEEL. In recent years, Copel GeT has not been successful in ANEEL auctions. However, ANEEL permits us to make minor improvements to some of the existing 230 kV and 500 kV facilities, which are remunerated by an increase in the Annual Permitted Revenue (“APR”).
In addition to the works gained in the auctions promoted by Aneel, Copel Geração e Transmissão has works stemming from the authorization resolutions in order to expand and improve existing facilities, such as:
Authorization Resolution 9,219/2020: implementation of reinforcements in the 230 kV Guaíra substation, with an investment of approximately R$44.9 million and APR of approximately R$6.8 million, with the start of commercial operations in October 2024.
Authorization Resolution 10,688/2021: implementation of reinforcements in the 230 kV CIC substation, with an investment of approximately R$24.4 million and APR of approximately R$3.7 million, with the start of commercial operations in April 2024.
Authorizing Resolution n.º 12,638/2022: implementation of reinforcements in the 230 kV Campo do Assobio substation, with an investment of approximately R$65 million and APR of approximately R$9.7 million, as from the start of commercial operation, which Aneel expects to be November 2025.
Authorizing Resolution n.º 12,892/2022: recapacitation of the 230 kV Gralha Azul - Umbará transmission line, with an investment of approximately R$8.1 million and APR of approximately R$1.3 million, with the start of commercial operations in December 2024.
Authorizing Resolution No. 13,573/2023: sectioning of the 230 kV Cascavel – Salto Osório C1 transmission line at the Foz do Chopim substation, with the implementation of a double circuit section between the sectioning point and the Foz do Chopim substation and two input modules line at the Foz do Chopim substation, with a total investment of around R$25.5 million and APR of approximately R$4.0 million, from the start of commercial operation, whose deadline predicted by Aneel is February 2026.
Authorizing Resolution No. 14,531/2023: major improvements (replacement of transformers and reactors) at the Maringá, Cascavel, Campo Comprido, Figueira, Londrina COT, Ponta Grossa Sul and Uberaba substations, with a total investment of around R$135.5 million and APR of approximately R$22.5 million, upon entry into commercial operation of the projects, whose deadline set by Aneel is May 2026.
Authorizing Resolution No. 14,711/2023: implementation of reinforcements at the 230 kV Umuarama Sul substation, owned by Costa Oeste Transmissora de Energia S.A., a wholly owned subsidiary of Copel GeT, with an investment of around R$33.9 million and a APR of approximately R$4.5 million, upon entry into commercial operations, the deadline set by Aneel is November 2025.
Dispatch No. 1,373/2024-SCE/Aneel: implementation of reinforcements at the 230 kV Campo Mourão substation, with an investment of approximately R$ 34.4 million and an APR of about R$ 5.6 million, effective from the start of commercial operation, which is scheduled by Aneel for November 2026.
Dispatch No. 3,014/2024-SCE/Aneel: implementation of reinforcements at the 230 kV Realeza Sul substation, with an investment of approximately R$ 9.0 million and an APR of about R$ 1.2 million, effective from the start of commercial operation, which is scheduled by Aneel for April 2027.
Authorizing Resolution No. 15,532/2024: implementation of reinforcements at the 525 kV Curitiba Leste substation, granted to Marumbi Transmissora de Energia S.A., a wholly-owned subsidiary of Copel GeT, with an investment of approximately R$ 47.1 million and an APR of about R$ 6.4 million, effective from the start of commercial operation, which is scheduled by Aneel for April 2027.
Form 20-F 25FY24 | COPEL and Subsidiaries |
38
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Distribution
Our distribution system consists of a widespread grid of overhead lines and substations with voltages up to 138 kV assets. Higher Voltage electricity is supplied to bigger industrial and commercial customers and lower voltage electricity is supplied to residential, small industrial, and commercial customers in addition to other customers. As of December 31, 2024, we provided electricity in a geographic area encompassing approximately 97% of the State of Paraná and served 5.2 million customers.
Our distribution grid includes 214,770 km of distribution lines, 479,641 distribution transformers and 237 distribution substations of 34.5 kV, 36 substations of 69 kV and 130 substations of 138 kV. During 2024, 88,316 new captive customers were connected to our grid, including customers connected through the rural and urban electrification programs. We are continuing to implement compact grid design distribution lines in urban areas with large concentration of trees in the vicinity of the distribution grid.
We have three captive customers that are directly supplied with energy at a high voltage (69 kV and above) through connections to our distribution lines. The volume of energy commercialized for these customers was 4,222 MWh in 2024.
We are also responsible for expanding the 138 kV and 69 kV distribution grid within our concession area to meet any future demand growth.
On October 16, 2019, Copel Distribuição launched a program to modernize its distribution grid called “Transformation Program” (
Programa Transformação
). The Transformation Program is comprised of three projects: “Total Reliability” (
Confiabilidade Total
), “Three-phase Paraná” (
Paraná Trifásico
) and “Smart Grid Copel.” The goal is to improve infrastructure, particularly in rural areas, in order to enhance quality of energy supply and reduce supply restoration period in case of power outages. With investments of up to R$3.9 billion until 2025, which shall compose the Regulatory Remuneration Base, the Transformation Program involves the construction of approximately twenty-five 25,000 kilometers of power grids and the setting up of smart grid technology in the State of Paraná. The Smart Grid Project deals with the implementation of a communication network for distribution automation equipment and for smart meters. In addition, computer systems for efficient management of this communication network are included in this project. The “Transformation Program” project reached by December 2024, 20,540 km of power grids and 1,029,347 smart meters installed.
Performance of the Distribution System
Total losses are commonly divided into a technical and non-technical component. Technical losses are inherent to the transportation of electricity and consist mainly of power dissipation in the line grid. Non-technical (or commercial) losses are caused by actions external to the power system (for instance, electricity theft). Since total losses are comprised of both technical and non-technical parcels, the latter is easily calculated as the difference between total losses and the estimated technical losses inherent to the system.
Total losses in our distribution system are segmented between (i) losses in the basic grid (tension equal to or greater than 230kV), which are external to our distribution grid and have a technical cause, and (ii) losses in the distribution grid (internal to our distribution grid), which are usually caused by both technical and non-technical reasons.
Losses in the basic grid are calculated monthly by the CCEE as the difference between the total generation and the energy effectively delivered to the distribution grids. The total losses from our distribution grid are calculated as the difference between the energy allocated to the system and the energy supplied to the customers.
Our total energy distribution losses (including transmission system, technical and commercial losses) totaled 9.0% of the total energy amount available in 2024, being (i) 1.1% related to losses in the basic grid, (ii) 5.6% of technical losses and (iii) 2.3% of non-technical losses.
ANEEL grants the transfer of all energy losses to the final customers when the real losses are less than regulatory losses. The calculation is made within the regulatory period, that is different from a civil year, and thereby we will know the result just in the next tariff adjustment, in June 2025. But our simulation indicates that in the fiscal year, from January through December 2024, we will have all losses transferred to the final customers.
Form 20-F 25FY24 | COPEL and Subsidiaries |
39
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Furthermore, ANEEL requires distributors to observe certain standards for “energy supply continuity,” namely (i) duration of outages per customer per year or DEC –
Duração Equivalente de Interrupção por Unidade Consumidora
and (ii) frequency of outages per customer per year or FEC –
Frequência Equivalente de Interrupção por Unidade Consumidora
. Information regarding the duration and frequency of outages for our customers is set forth in the following chart for the years indicated.
|
Quality of supply indicator
|
2024
|
2023
|
2022
|
||||||||
|
DEC – Duration of outages per customer per year (in hours)
|
7h55min
|
7h51min
|
7h59min
|
||||||||
|
FEC – Frequency of outages per customer per year (number of outages)
|
5.36 | 5.21 | 5.29 | ||||||||
We comply with the quality indicators defined by ANEEL for 2024, which penalizes power outages in excess of an average number of hours per customer, in each case calculated on an annual basis. These limits vary depending on the geographic region, and the average limit established by ANEEL for our distribution company was 8 hours and 8 minutes of outages per customer per year, and a total of 5.36 outages per customer per year. Failure to comply with these predetermined standards with a Final Customer causes a reduction of the amount we can charge such Final Customer in future periods.
In addition, quality target indicators are taken into consideration by ANEEL during distribution concession renewal proceedings, and also influence ANEEL’s calculation of our tariff adjustments. For more information, see “–Concessions—Distribution Concessions” and “—The Brazilian Electric Power Industry—Distribution Tariffs.”
Purchases for the captive market
The following table contains information concerning volume, cost and Average Tariff for the main sources of the electricity we purchased for the captive market in the last three years.
|
Source
|
2024
|
2023
|
2022
|
||||||||
|
Itaipu
|
|
|
|
||||||||
|
Volume (GWh)
(1)
|
4,553 | 4,762 | 5,272 | ||||||||
|
Cost (R$ millions)
|
990.0 | 980.3 | 1,461.0 | ||||||||
|
Average Tariff (R$/MWh)
|
217.44 | 205.90 | 227.12 | ||||||||
|
Angra
|
|
|
|||||||||
|
Volume (GWh)
|
856 | 872 | 928 | ||||||||
|
Cost (R$ millions)
|
296.7 | 295.5 | 317.4 | ||||||||
|
Average Tariff (R$/MWh)
|
346.61 | 338.88 | 342.03 | ||||||||
|
CCGF
|
|
|
|||||||||
|
Volume (GWh)
|
3,914 | 4,568 | 5,901 | ||||||||
|
Cost (R$ millions)
|
686.3 | 723.6 | 755.2 | ||||||||
|
Average Tariff (R$/MWh)
|
175.34 | 158.41 | 127.98 | ||||||||
|
Auctions in the regulated market
|
|
|
|||||||||
|
Volume (GWh)
(2)
|
13,812 | 13,142 | 12,354 | ||||||||
|
Cost (R$ millions)
(3)
|
3,250.0 | 2,754.6 | 2,465.9 | ||||||||
|
Average Tariff (R$/MWh)
|
235.30 | 209.60 | 199.60 | ||||||||
(1)
According to ANEEL Homologatory Resolution No. 3,296/2023, rectified.
(2)
These numbers do not include assignments related to MCSD-EN and MVE.
(3)
These numbers do not include short-term energy purchased through the CCEE.
Itaipu
We purchased 4,553 GWh of electricity from Itaipu in 2024, which constituted 7.5% of our total available electricity in 2024 and 18.8% of Copel Distribuição’s total available electricity in 2024. Distribution companies operating under concessions in the midwest, south and southeast regions of Brazil are required by law to purchase Brazil’s portion of the energy generated by Itaipu in a proportion that correlates with the volume of electricity that they provide to customers. The rates at which these companies are required to purchase Itaipu’s energy are fixed to cover Itaipu’s operating expenses and payments of principal and interest on Itaipu’s U.S. dollar-denominated borrowings, as well as the cost of transmitting the power to their concession areas. These rates are denominated in U.S. dollars and were set at US$17.66 per kW in 2024.
Form 20-F 25FY24 | COPEL and Subsidiaries |
40
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
In 2024, we paid an Average Tariff of R$ 217.44/MWh for energy from Itaipu, compared to R$ 205.90/MWh in 2023. These figures do not include the transmission tariff that distribution companies must pay for the transmission of energy from Itaipu.
ANGRA
Because Eletronuclear renewed the generation concession of Angra under the 2013 Concession Renewal Law, the energy generated by Angra is no longer sold in auctions in the regulated market. Rather, under the 2013 Concession Renewal Law, this energy is sold to distributors in accordance with the quota system established by said law. For more information, see “Item 4. Information on the Company—The Brazilian Electric Power Industry.” As a result, Copel Distribuição was legally required to purchase 856 GWh from Angra in 2024, 872 GWh from Angra in 2023 and 928 GWh from Angra in 2022.
Assured Energy Quota Contract – CCGF
Under the 2013 Concession Renewal Law, certain generation concessionaires renewed their concession contracts, and therefore these concessionaires no longer sell the energy produced by these generation facilities at auctions in the regulated market. Rather, this energy is sold to distribution companies in accordance with the quota system established by the 2013 Concession Renewal Law. For more information, see “Item 4. Information on the Company—The Brazilian Electric Power Industry.” Copel Distribuição is obligated to purchase energy from these generation concessionaires that have renewed generation concessions under this quota system. Copel Distribução was legally required to purchase 3,914 in CCGF contracts in 2024, 4,568 in CCGF contracts in 2023 and 5,901 GWh in CCGF contracts in 2022.
Auctions in the Regulated Market
In 2024, we purchased 13,812 GWh of thermoelectric and hydroelectric energy through auctions in the regulated market. This energy represents 58% of the total electricity purchased by the Copel Distribuição. For more information on the regulated market and the Free Market, see “Item 4. Information on the Company—The Brazilian Electric Power Industry.”
Sales to Captive Customers
During 2024, we supplied approximately 97% of the energy distributed directly to Captive Customers in the State of Paraná. Our concession area includes nearly 5.2 million customers located in the State of Paraná and in one municipality in the State of Santa Catarina, located in the south of the State of Paraná. During 2024, the total power consumption of our Captive Customers was 21,285 GWh, a 5.5% increase as compared to 20,173 GWh during 2023.
|
Categories of purchaser
|
2024
|
2023
|
2022
|
||||||||
|
|
(GWh)
|
||||||||||
|
Industrial customers
|
1,718 | 1,941 | 2,102 | ||||||||
|
Residential
|
9,887 | 8,888 | 8,212 | ||||||||
|
Commercial
|
4,782 | 4,520 | 4,295 | ||||||||
|
Rural
|
2,507 | 2,352 | 2,357 | ||||||||
|
Other
(1)
|
2,391 | 2,472 | 2,404 | ||||||||
|
Total
(2)
|
21,285 | 20,173 | 19,370 | ||||||||
(1)
Includes public services such as street lighting, electricity supply for municipalities and other governmental agencies, as well as our own consumption.
(2)
Total GWh does not include our energy losses.
Form 20-F 25FY24 | COPEL and Subsidiaries |
41
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Sales to Free Customers
We operate in the ACL through our wholly owned subsidiaries Copel Geração e Transmissão and Copel Comercialização (
Copel Mercado Livre
). As of December 31, 2024, we had 1,529 Free Customers of our energy trading company, representing 8.4% of our consolidated operating revenue and 16% of the total quantity of electricity sold by us. During 2024, the total power consumption of our Free Customers was 10,565 GWh, a 11,1% decrease as compared to 11,886 GWh during 2023.
|
Categories of purchaser
|
2024
|
2023
|
2022
|
||||||||
|
|
(GWh)
|
||||||||||
|
Industrial customers
|
8,914 | 9,737 | 9,402 | ||||||||
|
Commercial
|
1,651 | 2,149 | 2,096 | ||||||||
|
Total
|
10,565 | 11,886 | 11,498 | ||||||||
The following table sets forth the number of our final customers, considering both Captive and Free Customers, in each category as of December 31, 2024.
|
Category
|
Number of Final Customers
|
||||
|
Industrial
|
68,247 | ||||
|
Residential
|
4,300,335 | ||||
|
Commercial
|
446,222 | ||||
|
Rural
|
314,508 | ||||
|
Other
(1)
|
56,539 | ||||
|
Total
|
5,185,851 | ||||
(1)
Includes street lighting, as well as electricity for municipalities and other governmental agencies, public services and own consumption.
Tariffs
Retail Tariffs
. We classify our customers in two groups (“Group A Customers” and “Group B Customers”), based on the voltage level at which electricity is supplied to them and on whether they are considered as industrial, commercial, residential or rural customers. Each customer falls within a certain tariff level defined by law and based on the customer’s classification, although some flexibility is available according to the nature of each customer’s demand. Under Brazilian regulation, low voltage customers such as residential customers (other than Low-income Residential Customers, as defined as follows) pay the highest tariff rates, followed by 13.8 kV and 34.5 kV voltage customers (usually commercial customers), and 69 kV and 138 kV voltage customers (usually industrial customers).
Group A Customers receive electricity at 2.3 kV or higher and the tariffs applied to them are based on the actual voltage level at which energy is supplied and the time of day the energy is supplied. Tariffs are comprised of two components: a “capacity charge” and an “energy charge.” The capacity charge, expressed in
reais
per kW, is based on the higher of (i) contracted firm capacity and (ii) power capacity actually used. The energy charge, expressed in
reais
per MWh, is based on the amount of electricity actually consumed as evidenced by our metering.
Group B Customers receive electricity at less than 2.3 kV, and the tariffs applied to them are comprised solely of an energy charge and are based on the classification of the customer.
ANEEL revises our tariffs annually, usually in June. For more information about the distribution tariff adjustments that have been made by ANEEL in recent years, see “Item 5. Operating and Financial Review and Prospects—Overview—Rates and Prices.”
Form 20-F 25FY24 | COPEL and Subsidiaries |
42
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
The following table sets forth the Average Tariffs for each category of Final Customer.
|
Tariffs
(1)
|
2024
|
2023
|
2022
|
||||||||
|
|
(R$/MWh)
|
||||||||||
|
Industrial
|
512.65 | 555.58 | 506.44 | ||||||||
|
Residential
|
544.13 | 551.81 | 530.23 | ||||||||
|
Commercial
|
569.45 | 619.93 | 598.00 | ||||||||
|
Rural
|
555.82 | 606.40 | 570.28 | ||||||||
|
Other customers
|
594.97 | 462.82 | 407.55 | ||||||||
|
Retail supply average tariff
|
594.01 | 618.52 | 583.46 | ||||||||
(1)
(i) Considers December as the reference month; (ii) Net revenue from “electricity sales to final customers” and “Use of the main distribution and transmission grid”; and (iii) Does not consider tariff flags.
Low-income Residential Customers
. Under Brazilian law, we are required to provide reduced rates to certain low-income residential customers. In December 2024, we served approximately 600,000 low-income residential customers. For servicing these customers, in 2024 we received R$190 million in compensation from the Brazilian government, which was approved by ANEEL. Additionally, the State of Paraná, through the Energia Solidária program established by State Law 20,943/2021, covers the electricity bills of low-income families eligible for the Social Electricity Tariff, provided their monthly consumption does not exceed 150 kWh. In December 2024, this initiative benefited 315,720 families, with the State of Paraná contributing R$ 130.8 million.
The following table sets forth the current minimum discount rates approved by ANEEL for each category of Low-income Residential Customer.
|
Consumption
|
Discount from base tariff
|
||||
|
Up to 30 kWh per month
|
65 | % | |||
|
From 31 to 100 kWh per month
|
40 | % | |||
|
From 101 to 220 kWh per month
|
10 | % | |||
Free Customers
. Following the publication of MME Ordinance No. 50/2022, a customer of our distribution business qualified as Group A Customer (a “Free Customer”) may choose its energy supplier. A Free Customer that chooses to purchase energy from a supplier other than Copel Geração e Transmissão continues to use our distribution grid and to pay our distribution tariff. However, as an incentive for Free Customers to purchase from alternative sources, we are required to reduce the tariff paid by Free Customers by 50%. This discount is subsidized by the Brazilian government, and therefore does not impact the revenues of our distribution business.
Transmission Tariffs
. A transmission concessionaire is entitled to annual revenues based on the transmission grid it owns and operates. These revenues are annually readjusted according to criteria stipulated in the concession contract. We are directly a party to 12 transmission concession contracts in operation. Not all of the transmission concession contracts employ the same revenue model, 1.7% of our transmission revenues are updated on an annual basis by the IGP-M and the other 98.3% are subject to the tariff review process.
The first periodic revision related to our Main Transmission Concession scheduled for 2005 was only carried out in 2007, at which point ANEEL reduced the tariffs by 15.08%. This adjustment was applied retroactively to July 2005, and was passed on to our final customers until June 2009. In addition, in July 2010 pursuant to a second periodic revision of our principal concession, ANEEL granted provisional approval of a reduction in our transmission tariff by 22.88%, applied to the revenues of new installations in the Interconnected Transmission System, and applied retroactively from July 1, 2009 onward. In June 2011, ANEEL reviewed the figures of the second periodic revision and reduced the annual revenues by 19.94%. The remainder of our annual revenues was subject to adjustment by IGP-M or IPCA, as applicable.
By late 2012, we decided to anticipate the extension of our main transmission concession agreement (corresponding to 78% of our transmission lines then in operation) that would expire in 2015, pursuant to the new rules of the 2013 Concession Renewal Law. In December 2012, we executed the Third Addendum to the Concession Agreement 060/2001, extending this transmission concession agreement until December 31, 2042. In order to adjust these assets’ annual permitted revenue to the new rules of 2013 Concession Renewal Law, ANEEL reduced the transmission tariffs we charged by 61.9%.
Form 20-F 25FY24 | COPEL and Subsidiaries |
43
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Of all our transmission concessions in operational stage, our main transmission concession (which involves our main transmission facilities) accounted for about 71% of our gross transmission revenues in 2019.
In addition, we have ten (10) concession agreements for transmission lines and substations in operation and one (1) partially in operation, which correspond to an aggregate of 29% of our transmission revenues. The amount of revenues we are entitled to receive pursuant to one (1) of these contracts is updated on an annual basis by the IGP-M and is not subject to the tariff review process, but, pursuant to the terms set forth in this agreement, our revenues were reduced by 50% starting in June 2018. Other ten (10) agreements revenues are subject to the tariff review process and adjustments by the IPCA.
In relation to our main concession agreement, on April 22, 2016, Ordinance No. 120/2016 of the Ministry of Mines and Energy determined that the amounts ratified by ANEEL related to the non-depreciated transmission assets existing on May 31, 2000 (Basic Grid Existing System “RBSE”) should be incorporated to the Regulatory Remuneration Base, and that their cost of capital should be added to APR. The Ordinance also determined that the cost of capital would be composed of compensation and depreciation installments, plus related taxes, and recognized as of the 2017 tariff revision process, with adjustments and revisions in accordance with contractual conditions.
Also pursuant to the above mentioned Ordinance, the cost of capital not incorporated between the concessions’ extensions and the 2017 tariff revision process should be restated at the real cost of own capital of the transmission segment defined by ANEEL (10.4%) and, after the tariff revision process, it should be remunerated at the Weighted Average Cost of Capital (WACC) of 6.6%, also defined by that agency.
On May 9, 2017, ANEEL approved the result of the inspection of the appraisal report of the transmission assets existing on May 31, 2000 (RBSE and Other Transmission Facilities – “RPC”) related to our main transmission concession agreement. The Agency recognized the amount of R$667.6 million as the net value of the assets for the purposes of indemnification as of December 31, 2012. As of December 31, 2017, the net value of those assets for the purposes of indemnification amounted to R$1,418.4 million.
On June 27, 2017, ANEEL approved the Annual Permitted Revenue (
Receita Anual Permitida
, or “APR”) of the transmission assets of Copel GeT for the 2017/2018 cycle, including the commencement of receipt of the RBSE indemnification of our main transmission concession agreement.
In 2017, (i) our main transmission concession agreement was adjusted by the IPCA and by the portion related the commencement of receipt of the RBSE indemnification (average increase of 151.3%) (ii) one of our transmission concession agreements was adjusted by the IPCA and improvements to the system were approved by ANEEL (average increase of 3.7%), (iii) six transmission concession agreements were adjusted by the IPCA (3.6%), (iv) one transmission concession agreement was adjusted by the IGP-M (1.6%), and (v) one transmission agreement became operational in August 2017, adding R$18.9 million of annual permitted revenues. As a result, the annual permitted revenues for the 2017/2018 cycle for our transmission assets reflected an increase of 121.2% over our annual permitted revenues for the 2016/2017 cycle.
In June 2018, ANEEL approved the APR for the 2018/2019 cycle, considering (i) an adjustment of relevant amounts by the IGP-M and IPCA indexes, and (ii) the expansion of our transmission system with upgrades and revenues from other works classified as improvement measures.
Compared to our total APR for the 2017/2018 cycle, the APR of our main concession for the 2018/2019 cycle was reduced by 8.1%, as a result of the correction of a prior calculation made by ANEEL, which take into account certain financial and economic portions of unamortized and unrepaired assets related to the RBSE when determining the assets of the Regulatory Remuneration Base in the prior cycle.
The APR of concession No. 075/2001 was reduced by approximately 30.5%, as a result of a 50% reduction of the APR starting at the 16
th
anniversary of commercial operation, which occurred during the 2018/2019 cycle. Two of our concession agreements (022/2012 and 002/2013) were subject to a periodic review, which resulted in a lower APR in connection with increasing revenues related to upgrade works.
In June 2019, ANEEL approved the APR for the 2019/2020 cycle, considering (i) an adjustment of relevant amounts by the IGP-M and IPCA indexes, and (ii) the expansion of our transmission system with upgrade works and revenues from other works classified as improvement measures.
Form 20-F 25FY24 | COPEL and Subsidiaries |
44
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|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
In 2020, in the scope of the tariff review process for the contracts extended under Law No. 12,783/2013, holders of assets belonging to RBSE had their review ratified in June 2020 despite originally being scheduled for 2018, due to a two-year delay and the retroactive effects of REN 880/2020 on the 2018 tariff year. For us, this process was ratified through Homologation Resolution No. 2,715/2020 for concession agreement No. 060/2001, granted to Copel GeT. During review process, ANEEL decided that starting on the 2020/2021 cycle, the renumeration portion of the RBSE would be calculated by the cost of equity (“CoE”) as provided for in Ordinance MME No. 120/2016. The value not received during the three previous cycles (2017-2020) will be incorporated into the next three cycles (2020-2023) by the means of an Adjustment Installment (
Parcela de Ajuste
).
In view of the strong tariff impact of the increased risk of default in the electricity sector caused by the COVID-19 pandemic, on April 22, 2021, ANEEL changed the timeline for the payment of the financial component of the RBSE/RPC for 8 years and gradually for all the transmission concession agreements renewed under the terms of Law No. 12,783/2013. The new rule was approved by Resolution No. 2,847, of 04.22.2021, which changed the result of the periodic review of the APR, ratified in 2020, associated with Concession Agreement No. 060/2001.
Additionally, by means of Homologation Resolution No. 2,725/2020, ANEEL established the readjustment of APRs for electric energy transmission assets for the 2020-2021 cycle, effective from July 1, 2020 until June 30, 2021. According to this resolution, Copel GeT’s transmission asset APRs for the 2020-2021 cycle were R$777.2 million, of which R$703.4 million correspond to the revenue of operational assets. Considering the homologated APRs for the Special Purpose Companies (
Sociedades de Propósito Específicos
) in which Copel GeT has 100%, APR for the cycle were R$773.2. With the others in which it has equity ownership, the total consolidated value for Copel GeT is R$1,146.0 million. Along with beginning of commercial operations of Mata de Santa Genebra assets in its totality in 2020, GeT’s total consolidated value is R$1,161.2 million.
On July 13, 2021, ANEEL readjusted the APRs for electric energy transmission assets for the cycle from July 1, 2021 to June 30, 2022 through Resolutions 2,895/2021 and 2,959/2021. Copel GeT’s transmission assets APR was set at R$792.2 million of assets in operation. Considering the APRs approved for the Special Purpose Companies 100% owened by Copel Geração e Transmissão, the total consolidated amount reached R$1,220.1 million.
On July 12, 2022, ANEEL, through Homologation Resolution No. 3067/2022, established the readjustment of the Allowed Annual Revenues (“APR”) for electric power transmission concessionaires for the 2022-2023 cycle, effective from from July 1, 2022 to June 30, 2023. According to the resolution, the APR of the transmission concessions of Copel Geração e Transmissão for the 2022/2023 cycle is R$849.2 million, of which R$824.2 million correspond to the APR of assets in operation. Also, considering the approved APR for the SPCs in which Copel Geração e Transmissão has a 100% shareholding, the total APR value is R$921.9 million, of which R$896.9 million correspond to the APR of assets in operation. Throughout 2022, some reinforcements authorized by Aneel for Concession Contracts 060/2001 and 006/2008 were considered and, therefore, the APR of assets in operation was increase to R$901.3 million.
In Dispatch No. 402/2023, issued on March 3, 2023, ANEEL postponed the 2023 Periodic Tariff Review of the Annual Permitted Revenue (APR) for transmission concessionaires under Law No. 12,783/2013.
Homologatory Resolution No. 3,216/2023, published on July 7, 2023, set the Annual Permitted Revenue (APR) for the period from July 1, 2023, to June 30, 2024 (2023-2024 cycle), covering facilities managed by transmission companies. For Copel GeT, the approved APR for the 2023-2024 cycle is R$1.561 billion, broken down as follows: R$975.98 million for concessions fully owned by Copel GeT; R$73.2 million for SPEs fully owned by Copel GeT; and R$512.55 million for concessions with partial ownership by Copel GeT.
With Resolution No. 3,344/2024, Aneel approved the results of the 2023 tariff reviews of the concession contracts extended under Law No. 12,783/2013. For Copel GeT’s Concession Agreement No. 060/2001, the repositioning was -8.39%, largely due to the reduction in the Annual Permitted Revenue (APR)value referring to the RBSE economic component, affected by depreciation and write-offs in the 2018-2023 tariff cycle.
Resolution No. 3,348/2024, published on 19/07/2024, established the APR for the provision of facilities under the responsibility of transmission companies, for the period from 01/07/2024 to 30/06/2025 (2024-2025 cycle). For Copel GeT, the APR approved for the 2024-2025 cycle is R$ 1,595 million, with the following breakdown: R$ 987.2 million for 100% Copel GeT concessions; R$ 75 million for 100% Copel GeT SPEs; R$ 532.6 million for concessions with Copel GeT participation.
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Additionally, ANEEL authorized us to carry out reinforcement works expected to be operational by 2026 and 2027. These works should add approximately 6.9 million to the APR.
The table below shows our APR (R$ million) for the last three cycles of transmission lines over which we hold a 100% ownership in December 31, 2024:
|
Contract
|
Transmission Line / Substation
|
Jul. 2024
Jun. 2025 |
Jul. 2023
Jun. 2024 |
Jul. 2022
Jun. 2023 |
||||||||||
|
|
|
APR (R$ million)
|
|
|||||||||||
|
060/2001
|
Main Transmission Concession
(1)
|
665 | 661.3 | 524.4 | ||||||||||
|
075/2001
|
Bateias – Jaguariaiva
|
17.0 | 16.8 | 17.6 | ||||||||||
|
006/2008
|
Bateias – Pilarzinho
|
3 | 3.6 | 3.4 | ||||||||||
|
027/2009
|
Foz do Iguaçu - Cascavel Oeste
|
17 | 16.0 | 15.4 | ||||||||||
|
015/2010
|
Cerquilho III
|
7.3 | 7.0 | 6.7 | ||||||||||
|
022/2012
|
Foz do Chopim – Salto Osório
Londrina – Figueira C2
|
8.1 | 7.7 | 7.5 | ||||||||||
|
002/2013
|
Assis — Paraguaçu Paulista II C1 and C2
SE Paraguaçu Paulista II
|
11.7 | 12.2 | 11.8 | ||||||||||
|
005/2014
|
Bateias - Curitiba Norte
SE Curitiba Norte
|
13.3 | 12.8 | 12.4 | ||||||||||
|
021/2014
|
Foz do Chopim - Realeza
|
13.5 | 13.0 | 12.5 | ||||||||||
|
022/2014
|
Assis – Londrina
|
28.1 | 27.1 | 26.1 | ||||||||||
|
010/2010
|
Araraquara 2 – Taubaté
|
45.3 | 43.6 | 41.9 | ||||||||||
|
006/2016
|
TL Baixo Iguaçu - Realeza;
TL Baixo Iguaçu - Cascavel Oeste;
TL Uberaba - Curitiba Centro;
TL Curitiba Leste - Blumenau;
SE Medianeira;
SE Curitiba Centro;
SE Andirá leste;
SE Baixo Iguaçu;
Demais Seccionamentos
|
160.9 | 154.8 | 148.9 | ||||||||||
|
002/2005
|
Uirapuru
|
27.0 | 26.9 | 28.2 | ||||||||||
|
001/2012
|
Costa Oeste
|
19.7 | 19.0 | 18.3 | ||||||||||
|
008/2012
|
Marumbi
|
28.3 | 27.3 | 26.2 | ||||||||||
|
Total
|
|
1,064.7 | 1,049.2 | 901.3 | ||||||||||
(1)
Our main transmission concessions encompass several transmission lines.
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CONCESSIONS
We operate under concessions granted by the Brazilian government for our generation, transmission and distribution businesses. Under Brazilian law, concessions are subject to competitive bidding processes at the end of their respective terms.
2013 Concession Renewal Law
Until 2013, the Brazilian rules governing generation concessions gave concessionaires the right to renew for additional 20-year concession contracts that were entered into prior to December 11, 2003. For transmission and distribution concessions granted after 1995, concessionaires had the right to renew these contracts for an additional 30-year period.
On September 11, 2012, the Brazilian government enacted the Provisional Measure No. 579, subsequently converted into the 2013 Concession Renewal Law, which significantly changed the conditions under which concessionaires are able to renew concession contracts. Under the 2013 Concession Renewal Law, generation, transmission and distribution concessionaires may renew the concessions that were in effect as of 1995 (and, in the case of generation facilities, generation concession contracts entered into prior to 2003) for an additional period of 30 years (or an additional 20-year period in the case thermal plants), provided that the concessionaire agrees to amend the concession contract to reflect a series of new conditions that aim to ensure that services are provided in a continuous and efficient fashion and subject to low tariffs. Under the 2013 Concession Renewal Law, concessionaires must decide 60 months before the end of each concession term (or 24 months with respect to thermal plant concessions that it is 24 months) whether to amend and renew a concession contract or to terminate each concession contract at the end of its respective term.
For concessionaires of generation facilities existing at that time, the 2013 Concession Renewal Law changed the scope of the concession contracts at the moment they were renewed. Previously, a generation concessionaire had the right to sell the energy generated by the facilities subject to its concession for profit. In contrast, generation concessions renewed pursuant to the 2013 Concession Renewal Law do not grant concessionaires the right to sell the energy generated by these facilities. Instead, these concessions only cover the operation and maintenance of the generation facilities, subject to quality standards determined by Brazilian authorities. The energy generated by these facilities are allocated by the Brazilian government in quotas to the regulated market, for purchase by distribution concessionaires. For new generation facilities (i.e., generation facilities operated after the 2013 Concession Renewal Law), on the other hand, the concessionaire still has the right to sell the energy produced by the generation facility.
In addition to changing the scope of generation concessions, the 2013 Concession Renewal Law establishes a new tariff regime that significantly affects the treatment of amounts to be invested by concessionaires to improve and maintain generation plants. To this effect, several regulations were issued by MME and ANEEL to regulate the compensation due to concessionaires as a result of their investments to improve and maintain generation plants.
The 2013 Concession Renewal Law affects transmission and distribution concessions differently. The principal change is that amounts invested in modernization projects, structural reforms, equipment and contingencies are subject to prior ANEEL approval. However, the 2013 Concession Renewal Law does not affect the manner in which distribution and transmission concessionaires may recover amounts invested in transmission infrastructure.
With respect to the transmission agreements, the conditions for renewal set forth in the 2013 Concession Renewal Law are the acceptance of a fixed income as determined by ANEEL and compliance with quality standards set forth in applicable regulation.
The Federal Government issued Decree 11,314/2022 that regulates the bidding and the extension of transmission concessions at the end of their term, conditioning the extension of the concession when the bidding is unfeasible or results in damage to the public interest, as long as the concessionaire formalizes the extension request at least 36 months before the end of the concession.
With respect to distribution agreements, the conditions are set forth in the amendment to the concession agreement and are related to compliance with quality standards, economic-financial sustainability indicators and corporate governance
as set forth in the amendment to the concession agreement according to the parameters provided in the 2013 Concession Renewal Law
.
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The 2013 Concession Renewal Law applies to all generation, transmission and distribution contracts that were in effect as of 1995 (and, in the case of generation concessions, entered into prior to 2003), regardless of whether a contract grants to the concessionaire the right to renew a concession on its original terms. For example, several of our concession contracts contain provisions allowing us to renew these concessions for a period of 20 years. Under the 2013 Concession Renewal Law, in order to renew these contracts, we nonetheless would be required to accept the application of the conditions imposed by the 2013 Concession Renewal Law to the contract, and the concession contract would then be renewed for 30 years, rather than 20 years. If we choose to renew a concession contract that contains a renewal provision, we would be indemnified by the Brazilian government using funds from the RGR Fund (see Energy Sector Regulatory Charges) in an amount equal to the portion of our investments related to the concession that have not yet been amortized or depreciated, as calculated by ANEEL.
If a concessionaire decides not to accept the new tariff regime with respect to a concession contract and therefore decides not to renew the contract, the concession will terminate at the end of its original term, and the Brazilian government will conduct a new competitive bidding process for the concession. The original concessionaire may participate in the new competitive bidding process.
In the case of hydroelectric generation concessions with an installed capacity of more than 5,000 kW, upon the expiration of their original term and provided that the concessionaire does not request the extension of such term, the granting authority may submit the concession to a new bidding process. In the case of concessions for hydroelectric generation units with an installed capacity of 5,000 kW or less, upon the expiration of their original term, the concessions may be granted to the current concessionaire in the form of registration, for an indefinite term.
Generation Concessions
Of the 18 hydroelectric plants we operated in 2024, 14 were operated under the generation concession contracts that were in force prior to the 2013 Concession Renewal Law, and five were operated in accordance with the 2013 Concession Renewal Law (HPP Capivari Cachoeira, HPP Chopim I, HPP Marumbi, HPP Mauá and HPP Colíder). In 2013, 12 of the 13 hydro and thermoelectric generation concessions operated by us in 2013 (exception made only to HPP Rio dos Patos) were extended pursuant to the old regime and could be renewed again under the 2013 Concession Renewal Law. However, at the time the 2013 Concession Renewal Law was enacted, we elected not to renew the following generation concessions: Rio dos Patos (2014), Mourão I (2015), Chopim I (2015) and Capivari Cachoeira (2015), all of which had remaining terms of 60 months or less. Please see below for further information on each of these concessions.
HPP Foz do Areia.
Copel Geração e Transmissão did not elect to renew the original concession pursuant the 2013 Concession Renewal Law for the HPP Foz do Areia (Governador Bento Munhoz da Rocha Netto). However, in order to obtain a new concession for the HPP Foz do Areia for 30 years, Copel GeT transferred the ownership of this HPP to its subsidiary, the SPC F.D.A. Geração de Energia Elétrica S.A (“F.D.A”) on March 3, 2020, and, on the same date, requested a new concession from the MME pursuant to Federal Decree no. 9,271/2018, amended by Federal Decree No. 10,135/2019 and No. 10,893/2021, which allows this renewal associated with the privatization of the concession holder, within 12 months of the end of the term. On December 23, 2022, Decree No. 9,271 was further amended by Decree No. 11,307, to also enable the renewal of grants by privatization of a holder through a public offering of shares. This alternative is in line with the intention of the controlling shareholder to transform us into a company with dispersed capital and without a controlling shareholder. We have requested the MME for the full renewal of the concessions for our plants HPP Foz do Areia, HPP Segredo, and HPP Caxias, maintaining 100% participation. Our privatization enabled us to request the full renewal of the concessions for the Hydroelectric Plants HPP Foz do Areia HPP, HPP Segredo, and HPP Salto Caxias for 30 years from the signing of the new concession contract. The payment of the respective grant bonuses, stipulated at R$3,719.4 million according to Interministerial Ordinance of the Ministries of Mines and Energy and Finance - MME/MF No. 01, dated March 30, 2023, will occur within 20 days after the signing of the contracts, updated by the Selic pro rata die rate on the value of the grant bonus from January 1, 2024, until the effective payment. ANEEL approved the draft of the new concession agreements through Order No. 2,065/2023 Copel GeT and ANEEL entered into Concession Contract 01/2024 to renew the HPP Foz do Areia concession grant in November 19, 2024.
HPP Rio dos Patos
. The concession of HPP Rio dos Patos was terminated and not submitted to a further bidding process due to the lack operational conditions.
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HPP Mourão I and HPP Capivari Cachoeira
. The granting authority submitted the concessions for HPP Capivari Cachoeira and HPP Mourão I to new bidding processes, pursuant to which new agreements should be in force for a 30-year period. Copel GeT was the winner in the bidding process related to HPP Capivari Cachoeira. With respect to Capivari Cachoeira, although Copel GeT did not elect to renew the original concession for the HPP Capivari Cachoeira HPP, it participated in the new competitive bidding process and won. On January 5, 2016, Copel GeT executed a concession agreement with ANEEL so that it will continue to operate this plant under an operation and maintenance regime until 2046. We paid a total amount of R$574.8 million as signing bonus for this concession agreement. 100.0% of the energy generated by this plant in 2016 was allocated in quotas to the regulated market, and reduced to 70.0% on January 1, 2017. Copel GeT can sell remaining amount of energy generated by this plant on the Free Market or Spot Market.
HPP Chopin I.
As the installed capacity of HPP Chopin I also does not exceed 5,000 kW, the concession regime of this plant has been changed to a registration in our favor, valid for an indefinite term. In addition, pursuant to the same statute, we may notify the granting authority of our intention to extend: (i) in 2024, the concession of HPP Apucaraninha; and (ii) in 2025, the concessions of HPP Guaricana and HPP Chaminé. We have already requested ANEEL the renewal of HPP Apucaraninha for 30 years under Law n° 12,783, and plan to request renewals for HPP Guaricana and HPP Chaminé.
TPP Figueira
. Our concession for TPP Figueira expired on March 26, 2019. We had submitted a request to extend the concession for this plant on May 24, 2017, for an additional period of 20 years. On October 30, 2023, we requested the Granting Authority to cancel our previous application for the extension of the concession. This decision aligns with our Board of Directors’ directive, as outlined in Copel’s Strategic Planning 2030, to decarbonize our current portfolio and accelerate our move towards renewable energy.This plant has an installed capacity equivalent to 20 MW and underwent a recent modernization process. On February 23, 2024, ANEEL, through Order No. 561/2024, authorized the suspension of the commercial operation of the
TPP Figueira
generating unit. We expressed to the granting authority our expectation of receiving compensation for non-depreciated assets. This plant has an installed capacity equivalent to 20 MW and underwent a recent modernization process.
With respect to the concessions granted between 2011 and 2017 with no renewal right attached, we acquired the right to renew only one of the hydroelectric plants (“HPP Cavernoso II”) for a 30-year period, as a result of an amendment to the 2013 Concession Renewal Law by Law No. 13,360, of November 17, 2016.
In accordance with the 2013 Concession Renewal Law, we could have flagged to the granting authority by 2019 our intention to renew the concession of HPP São Jorge. However, we elected not to renew such concession and, consequently, we will be able to operate such HPP until July 2026 and request the conversion of this operating regime into a registration regime, as the installed capacity does not exceed 5,000 kW.
Concessions for generation projects granted after December 11, 2003 were not affected by the 2013 Concession Renewal Law and are non-renewable, meaning that upon expiration of their 35-year term, the concession will be granted subject to a new competitive bidding process. In 2019, we had three (3) hydroelectric plants operating in this condition (HPP Mauá, HPP Colíder and HPP Baixo Iguaçu). HPP Colíder is no longer under the Company’s operation in view of the asset swap transaction with Eletrobrás.
In September 2020, the GSF Law was passed, which established new conditions for the renegotiation of hydrological risk of electricity generation, amending Article 2 of Law No. 13,203/2015, among other measures. This procedure was regulated through Normative Resolution No. 1,035/2022, in which ANEEL established the methodology for calculating compensation to the owners of hydroelectric plants participating in the MRE. It also regulated the repatriation of hydrological risk to equate the issue of GSF and open debts in CCEE to allow for the return of normalcy and greater liquidity in the short-term electricity market, in exchange for the extension of the terms of grants given to hydroelectric plants to up to seven years.
In 2021, the government issued new legislation that changed the calculation method applied by CCEE for the financial compensation to plants participating in the MRE. For our plants 16 plants that adhered to the method, the compensation amount was R$1,570.5 million. ANEEL extended the terms of our grantings that adhered to new method to a total of 15,217 days (Resolutions No. 2,919 and No. 2,932).
In 2022, ANEEL authorized the extension of concession grants and authorizations and approved the amendment to the concession contracts for projects with our participation through Authorizing Resolutions nº 11,345/2022, nº 12,255/2022 and No. 11,132/2022.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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In 2023, ANEEL acknowledged the extension of the concession period for the Mauá Hydroelectric Power Plant (HPP) due to a request for exemption from liability, extending the concession's end date to October 15, 2043. As a result, CCEE recalculated the plant’s financial compensation. Following this, ANEEL authorized the extension of the concession through Authorizing Resolution No. 14,896/2023, increasing the compensation period from 1,789 to 2,083 days.
In 2024, we entered into new thirty-year concession agreements for the HPPs Foz do Areia, Salto Caxias e Segredo, in accordance with Federal Decree No. 9,271/2018, which does not provide for extensions. We also submitted a renewal request for HPP Apucaraninha under Law n° 12,783.
The following tables sets forth information relating to the actual terms as well as the renewals of our main generation hydroelectric, thermoelectric and wind farm plants and all of which we hold a direct ownership interest in:
|
Hydroelectric Plants
|
Initial concession date
|
First expiration date
|
Extension Date
|
Final expiration date
(5)
|
||||||||||
|
Foz do Areia
|
November 2024 | November 2054 | Not extendable | November 2054 | ||||||||||
|
Apucaraninha
|
October 1975 | October 2005 | April 2003 | January 2027 | ||||||||||
|
Guaricana
|
August 1976 | August 2006 | August 2005 | July 2028 | ||||||||||
|
Chaminé
|
August 1976 | August 2006 | August 2005 | August 2028 | ||||||||||
|
Segredo
|
November 2024 | November 2054 | Not extendable | November 2054 | ||||||||||
|
Derivação do Rio Jordão
|
November 1979 | November 2009 | September 2009 | June 2032 | ||||||||||
|
Salto Caxias
|
November 2024 | November 2054 | Not extendable | November 2054 | ||||||||||
|
Mauá
(1)
|
June 2007 | July 2042 |
Not extendable
|
June 2049 | ||||||||||
|
Colíder
(1)
|
January 2011 | January 2046 |
Not extendable
|
January 2046 | ||||||||||
|
Cavernoso II
|
February 2011 | February 2046 |
Not extendable
|
December 2050 | ||||||||||
|
Baixo Iguaçu
|
August 2012 | August 2047 |
Not extendable
|
December 2049 | ||||||||||
|
SHP Bela Vista
(2)
|
May 2007 | January 2041 |
Extendable
|
January 2041 | ||||||||||
(1)
Acquired in December 2024 from Eletrobrás. See”ITEM 4. INFORMATION ON THE COMPANY - The Company - Corporate Structure”
(2)
In December 2019, Copel GeT became the owner of 100% of Bela Vista Geração de Energia, who holds t ANEEL Auction No. 003/2018 for SHP Bela Vista. The commercial operations of generation units 1, 2 and 3 began in June 2021, July 2021, August 2021 and June 2023 respectively.
|
Thermoelectric Plants
|
Initial concession date
|
First expiration date
|
Extension date
|
Final expiration date
|
||||||||||
|
Figueira
|
March 1969 | March 1999 | June 1999 | March 2019 | ||||||||||
(1)
On October 30, 2023, a request was submitted to the Granting Authority to withdraw the request to extend the concession for this plant. On October 30, 2023, a request was submitted to the Granting Authority to withdraw the request to extend the concession for this plant. In December 9, 2024, we requested ANEEL the termination of the concession and exemption from the reversal of assets.
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Wind Plants
|
Initial concession date
|
First expiration date
|
||||||
|
Asa Branca I
|
April 2011 | April 2046 | ||||||
|
Asa Branca II
|
May 2011 | May 2046 | ||||||
|
Asa Branca III
|
May 2011 | May 2046 | ||||||
|
Eurus IV
|
April 2011 | April 2046 | ||||||
|
Santa Maria
|
May 2012 | May 2047 | ||||||
|
Santa Helena
|
April 2012 | April 2047 | ||||||
|
Ventos de Santo Uriel
|
April 2012 | April 2047 | ||||||
|
Boa Vista
|
April 2011 | April 2046 | ||||||
|
Farol
|
April 2011 | April 2046 | ||||||
|
Olho D’Água
|
June 2011 | June 2046 | ||||||
|
São Bento do Norte
|
May 2011 | May 2046 | ||||||
|
Cutia
|
January 2012 | January 2042 | ||||||
|
Guariju
|
January 2012 | January 2042 | ||||||
|
Jangada
|
January 2012 | January 2042 | ||||||
|
Maria Helena
|
January 2012 | January 2042 | ||||||
|
Palmas
|
September 1999 | September 2029 | ||||||
|
Potiguar
|
May 2015 | May 2050 | ||||||
|
Esperança do Nordeste
|
May 2015 | May 2050 | ||||||
|
Paraíso dos Ventos do Nordeste
|
May 2015 | May 2050 | ||||||
|
São Bento do Norte I
|
August 2015 | August 2050 | ||||||
|
São Bento do Norte II
|
August 2015 | August 2050 | ||||||
|
São Bento do Norte III
|
August 2015 | August 2050 | ||||||
|
São Miguel I
|
August 2015 | August 2050 | ||||||
|
São Miguel II
|
August 2015 | August 2050 | ||||||
|
São Miguel III
|
August 2015 | August 2050 | ||||||
|
Jandaíra I
|
April 2020 | April 2055 | ||||||
|
Jandaíra II
|
April 2020 | April 2055 | ||||||
|
Jandaíra III
|
April 2020 | April 2055 | ||||||
|
Jandaíra IV
|
April 2020 | April 2055 | ||||||
|
Vila Maranhão I
|
January 2019 | January 2054 | ||||||
|
Vila Maranhão II
|
January 2019 | January 2054 | ||||||
|
Vila Maranhão III
|
January 2019 | January 2054 | ||||||
|
Vila Ceará I
|
January 2019 | January 2054 | ||||||
|
Ventos de Vila Mato Grosso I
|
December 2019 | December 2054 | ||||||
|
Aventura II
(1)
|
June 2018 | June 2053 | ||||||
|
Aventura III
(1)
|
June 2018 | June 2053 | ||||||
|
Aventura IV
(1)
|
June 2018 | June 2053 | ||||||
|
Aventura V
(1)
|
June 2018 | June 2053 | ||||||
|
Santa Rosa e Mundo Novo I
(2)
|
June 2018 | June 2053 | ||||||
|
Santa Rosa e Mundo Novo II
(2)
|
June 2018 | June 2053 | ||||||
|
Santa Rosa e Mundo Novo III
(2)
|
June 2018 | June 2053 | ||||||
|
Santa Rosa e Mundo Novo IV
(2)
|
June 2018 | June 2053 | ||||||
|
Santa Rosa e Mundo Novo V
(2)
|
June 2018 | June 2053 | ||||||
(1)
Aventura Complex, located in the State of Rio Grande do Norte, which we acquired in January 2023.
(2)
Santa Rosa e Mundo Novo Complex, located in the State of Rio Grande do Norte, which we acquired in January 2023.
The following table sets forth information relating to the terms of our generation hydroelectric plant, whose concession agreement has been executed under the terms and conditions of the 2013 Concession Renewal Law:
|
Hydroelectric Plants
|
Initial concession date
|
First expiration date
|
Extension date
|
Final expiration date
|
||||||||||
|
Capivari Cachoeira (Gov Parigot de Souza)
|
January 2016 | January 2046 |
Not subject to extension
|
January 2053 | ||||||||||
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
The following table sets forth information relating to the terms of our generation hydroelectric plants which, once respective original concession period expires, will no longer be subject to a concession regime but rather to a registration proceeding with the ANEEL:
|
Hydroelectric Plants
(1)
|
Initial concession date
|
First expiration date
|
Final expiration date
|
||||||||
|
Chopim I
|
March 1964 | July 2015 |
Indefinitely
|
||||||||
|
São Jorge
|
December 1974 | July 2026 | — | ||||||||
|
Cavernoso
|
January 1981 | June 2033 | — | ||||||||
|
Melissa
|
May 2002 |
Indefinitely
|
— | ||||||||
|
Pitangui
|
May 2002 |
Indefinitely
|
— | ||||||||
|
Salto do Vau
|
May 2002 |
Indefinitely
|
— | ||||||||
|
Marumbi
|
March 1956 | May 2018 |
Indefinitely
|
||||||||
(1)
Upon the expiration of concessions or authorizations for hydroelectric energy generation with installed capacity equal to or less than 5,000 KW, the relevant projects are subject to a registration regime in accordance with Brazilian Federal Law No. 9,074/1995, as amended by Brazilian Federal Law No. 13,360/2016. The operation of hydroelectric and thermoelectric plans with installed capacity of up to 5,000 KW are not subject to any concession, permission or authorization and require solely the registration with the granting authority.
We also have ownership interests in 11 other generation projects. The following table sets forth information relating to the terms of the concessions of the generation facilities in which we had such partial ownership interest as of December 31, 2024.
|
Generation Facility
|
Company
|
Initial concession date
|
Expiration date
|
Extension
|
||||||||||
|
HPP Dona Francisca
|
Dona Francisca Energética SA ‒ DFESA
|
August 1998 | September 2037 |
Possible
|
||||||||||
|
HPP Santa Clara
|
Centrais Elétricas do Rio Jordão S.A. - ELEJOR
|
October 2001 | May 2040 |
Possible
|
||||||||||
|
HPP Fundão
|
Centrais Elétricas do Rio Jordão S.A. - ELEJOR
|
October 2001 | June 2040 |
Possible
|
||||||||||
|
SHP Santa Clara I
|
Centrais Elétricas do Rio Jordão S.A. - ELEJOR
|
December 2002 |
Indefinetely
|
— | ||||||||||
|
SHP Fundão I
|
Centrais Elétricas do Rio Jordão S.A. - ELEJOR
|
December 2002 |
Indefinetely
|
— | ||||||||||
|
HPP Arturo Andreoli
|
Foz do Chopim Energética
|
April 2000 | July 2034 |
Possible
|
||||||||||
|
WPP Carnaúbas
|
São Miguel do Gostoso I
|
April 2012 | April 2047 |
Possible
|
||||||||||
|
WPP Reduto
|
São Miguel do Gostoso I
|
April 2012 | April 2047 |
Possible
|
||||||||||
|
WPP Santo Cristo
|
São Miguel do Gostoso I
|
April 2012 | April 2047 |
Possible
|
||||||||||
|
WPP São João
|
São Miguel do Gostoso I
|
March 2012 | March 2047 |
Possible
|
||||||||||
Additionally, we hold a stake in the Solar Paraná photovoltaic plants. This venture operates in the distributed generation sector, meaning it is not classified as a generation project subject to authorization, concession, and registration, and it does not trade energy in the Electric Energy Trading Chamber (CCEE).
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Transmission Concessions
Pursuant to the 2013 Concession Renewal Law and the terms of our transmission concessions, we have the right to request 30-year extensions of the concessions from ANEEL, provided that such request is delivered within 60 months prior to the expiration of the contract. Our principal transmission concession, from which 67.1% of our transmission revenues in 2024 derived, has been renewed pursuant to the 2013 Concession Renewal Law, and will therefore now expire in January 2043.
In addition, in 2024, an aggregate of 32.9% of our transmission revenues derived from 11 other concession contracts for transmission lines and substations that are currently in operation and whose terms and extensions are set forth in the next table. In accordance with the 2013 Concession Renewal Law, each of these contracts can be extended for an additional 30-year period. However, Decree No. 11,314, of 12/28/2022 regulates the bidding and extension of public electricity transmission service concessions at the end of their term, and determines that the concessions will be subject to bidding, using the criterion of the lowest Annual Permitted Revenue (
Receita Anual Permitida
). Concessions may be extended if the bidding process is unfeasible or would harm the public interest, provided that the concessionaire applies to ANEEL at least 36 months before the end of the contractual term.
We intend to continue requesting extensions for all of our transmission concessions.
The following table sets forth certain information relating to the terms and extension terms of our main transmission concessions (all of which we hold a direct ownership interest), including the concession contracts for transmission lines and substations both in operation or under construction:
|
Transmission Facility
|
Initial concession Date
|
First expiration Date
|
Possibility of extension
|
Expected (or final) expiration date
|
||||||||||
|
Main transmission concession
|
July 2001 | July 2015 |
Extended
|
January 2043 | ||||||||||
|
Bateias – Jaguariaíva
|
August 2001 | August 2031 |
Possible
|
August 2061 | ||||||||||
|
Bateias – Pilarzinho
|
March 2008 | March 2038 |
Possible
|
March 2068 | ||||||||||
|
Foz do Iguaçu – Cascavel Oeste
|
November 2009 | November 2039 |
Possible
|
November 2069 | ||||||||||
|
Substation Cerquilho III
|
October 2010 | October 2040 |
Possible
|
October 2070 | ||||||||||
|
Araraquara 2 – Taubaté
|
October 2010 | October 2040 |
Possible
|
October 2070 | ||||||||||
|
Foz do Chopim - Salto Osorio
|
August 2012 | August 2042 |
Possible
|
August 2072 | ||||||||||
|
Assis – Paraguaçu Paulista II
|
February 2013 | February 2043 |
Possible
|
February 2073 | ||||||||||
|
Bateias – Curitiba Norte
|
January 2014 | January 2044 |
Possible
|
January 2074 | ||||||||||
|
Realeza Sul – Foz do Chopim
|
September 2014 | September 2044 |
Possible
|
September 2074 | ||||||||||
|
Assis - Londrina
|
September 2014 | September 2044 |
Possible
|
September 2074 | ||||||||||
|
Curitiba Leste – Blumenau
|
April 2016 | April 2046 |
Possible
|
April 2076 | ||||||||||
We have ownership interests in ten other transmission projects, through special purpose companies. The following table sets forth information relating to the terms of the concessions of the transmission facilities in which we had such partial ownership interest as of December 31, 2024:
|
Transmission Facility
|
Special Purpose Company (SPC)
|
Initial concession date
|
First Expiration date
|
Possibility of Extension
|
Expected (or final) expiration date
|
||||||||||||
|
Cascavel Oeste – Umuarama
|
Costa Oeste Transmissora de Energia S.A
|
January 2012
|
January 2042
|
Possible
|
January 2072
|
||||||||||||
|
Umuarama – Guaira
|
Caiuá Transmissora de Energia S.A
|
May 2012
|
May 2042
|
Possible
|
May,2072
|
||||||||||||
|
Açailândia – Miranda II
|
Integração Maranhense Transmissora de Energia S.A.
|
May 2012
|
May 2042
|
Possible
|
May 2072
|
||||||||||||
|
Curitiba – Curitiba Leste
|
Marumbi Transmissora de Energia S.A.
|
May 2012
|
May 2042
|
Possible
|
May 2072
|
||||||||||||
|
Paranaíta – Ribeirãozinho
|
Matrinchã Transmissora de Energia S.A.
|
May 2012
|
May 2042
|
Possible
|
May 2072
|
||||||||||||
|
Ribeirãozinho – Marimbondo II
|
Guaraciaba Transmissora de Energia S.A
|
May 2012
|
May 2042
|
Possible
|
May 2072
|
||||||||||||
|
Barreiras II – Pirapora II
|
Paranaíba Transmissora de Energia S.A
|
May 2013
|
May 2043
|
Possible
|
May 2073
|
||||||||||||
|
Itatiba – Bateias
|
Mata de Santa Genebra Transmissora S.A
|
May 2014
|
May 2044
|
Possible
|
May 2074
|
||||||||||||
|
Estreito – Fernão Dias
|
Cantareira Transmissora de Energia S.A.
|
September 2014
|
September 2044
|
Possible
|
September 2074
|
||||||||||||
|
Ivaiporã – Londrina
|
Uirapuru Transmissora de Energia S.A.
|
March 2005
|
March 2035
|
Possible
|
March 2065
|
||||||||||||
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Distribution Concessions
We originally operated our distribution business pursuant to a concession contract that was signed on June 24, 1999 (retroactive to July 7, 1995) and was set to expire on July 7, 2015. Under the 2013 Concession Renewal Law, we had the right to renew this concession for an additional 30-year period by accepting an amendment to the concession contract. In 2013, after a careful evaluation of the conditions imposed by the Brazilian government for the extension of our distribution concession, we decided to request the renewal of this contract and our renewal request was approved by the MME on November 11, 2015. On December 9, 2015, we executed the fifth amendment to the public Electricity Distribution Service Concession Agreement No. 46/1999 of Copel Distribuição S.A.
This amendment imposes efficiency conditions to Copel Distribuição that are measured through two different metrics: quality of the service and economic-financial sustainability of the company. Failure to comply with either of these metrics (i) for two consecutive years within the first four years of this renewed concession or (ii) in the fifth year of this concession, may, in each case, result in the termination of our distribution concession.
On November 17, 2020, ANEEL detailed the performance and efficiency indicators applicable to the electricity distribution services starting in 2021 with respect to no-interruption in supply and economic-financial management (pursuant to Resolution 948/2021). ANEEL also changed the parameters for the calculation of some variables of the economic-financial management indicator.
The economic-financial management indicator is breached when the cash flow generation, after deduction of the Regulatory Reintegration Quota
(cota de reintegração regulatória)
is below 111% of SELIC, which it is considered insufficient to comply with debt interest, or when the EBITDA is lower than the Regulatory Reintegration Quota or Regulatory Depreciation Expense (“QRR”). Non-compliance for one year obliges the concessionaire to limit the payment of dividends and interest on equity capital and prohibits new legal action and business deals between the concessionaire and its related parties. Non-compliance for two consecutive years allows ANEEL to terminate the concession.
The breach of indicators of no-interruption in supply for one year imposes the obligation to create a plan to improve results. Non-compliance for two consecutive years or three years within a five-year period, may lead to limitation on the distribution of dividends, and for a consecutive period of three years, may result in the termination of the concession. Performance evaluation occurs at the end of each calendar year.
The table below presents the economic and financial and quality indicators established for the last seven (7) years.
|
|
Economic and Financial Indicators
|
Quality Indicators
(1)
|
Quality Performed
|
||||||||||||||
|
Year
|
Indicator
|
DEC
i
(2)
|
FEC
i
(2)
|
DEC
i
(2)
|
FEC
i
(2)
|
||||||||||||
|
2017
|
EBITDA
(3)
≥ 0
|
12.54 | 12.54 | 12.54 | 12.54 | ||||||||||||
|
2018
|
[EBITDA (-) QRR
(4)
] ≥ 0
|
11.23 | 8.24 | 10.29 | 6.20 | ||||||||||||
|
2019
|
{Net Debt
(5)
/[EBITDA
(3)
(-) QRR
(4)
]}
≤ 1/(0.8*SELIC
(6)
)
|
10.12 | 7.74 | 9.10 | 6.00 | ||||||||||||
|
2020
|
{Net Debt
(5)
/[EBITDA
(3)
(-) QRR
(4)
]}
≤ 1/(1.11*SELIC
(6)
)
|
9.83 | 7.24 | 7.81 | 5.55 | ||||||||||||
|
2021
|
{Net Debt
(5)
/[EBITDA
(3)
(-) QRR
(4)
≥ 0]}
≤ 1/(1.11*SELIC
(7)
)
|
9.29 | 6.84 | 7.20 | 4.76 | ||||||||||||
|
2022
|
{Net Debt
(5)
/[EBITDA
(3)
(-) QRR
(4)
≥ 0]}
≤ 1/(1.11*SELIC
(7)
)
|
9.19 | 6.80 | 7.98 | 5.29 | ||||||||||||
|
2023
|
{Net Debt
(5)
/[EBITDA
(3)
(-) QRR
(4)
≥ 0]}
≤ 1/(1.11*SELIC
(7)
)
|
8.69 | 6.39 | 7.85 | 5.20 | ||||||||||||
|
2024
|
{Net Debt
(5)
/[EBITDA
(3)
(-) QRR
(4)
≥ 0]}
≤ 1/(1.11*SELIC
(7)
)
|
8.36 | 5.94 | 7.92 | 5.35 | ||||||||||||
(1)
According to ANEEL’s Technical Note No. 0335/2015.
(2)
DECi – Duration of outages per customer per year (in hours); and FECi – Frequency of outages per customer per year (number of outages).
(3)
Earnings before interest, tax depreciation and amortization, as calculated according to ANEEL regulations.
(4)
QRR: Regulatory Reintegration Quota or Regulatory Depreciation Expense. Until 2020, this value corresponds to the most recent Periodic Tariff Review (RTP), plus the General Market Price inflation index (IGP-M) between the month preceding the Periodic Tariff Review and the month preceding the twelve-month period of the economic and financial sustainability measurement. As of 2021, it reflects the defined value in the last periodic tariff review and updated by the Regulatory B Parcel, is calculated pro rata.
(5)
As calculated according to ANEEL regulations.
(6)
Selic base rate: limited to 12.87% per year.
(7)
Limited to 9.009 % per year if it exceeds this percentage, and to 6.006 % if it falls under said percentage.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
COMPETITION
We have concessions to distribute electricity in substantially all of the State of Paraná, and we do not face competition from the five utilities that have been granted concessions or permissions for the remainder of the state. As a result of legislation passed in 2004, however, other suppliers are able to offer electricity to our existing Free Customers at prices lower than those we currently charge. However, when a Captive Customer becomes a Free Customer, it is still required to pay to use our distribution grid. The reduction in net revenue of our distribution business is therefore compensated with a reduction in our costs for energy that we would otherwise acquire to sell to these customers.
Furthermore, under certain circumstances, Free Customers may be entitled to connect directly to the Interconnected Transmission System rather than our distribution grid. Unlike a Free Customer’s choice of another energy supplier, in which case that customer must still use our distribution grid and thus pay us the appropriate tariff, our distribution business ceases to collect tariffs from a customer that connects directly to the Interconnected Transmission System. The migration of customers from the distribution grid to the transmission grid therefore results in the loss of revenues for our distribution business.
Distribution and transmission companies are required to permit the use of their lines and ancillary facilities for the distribution and transmission of electricity by other parties upon payment of a tariff.
Free Customers are limited to, as from January 1, 2022, those with a demand of at least 1.0 MW at any voltage; and, after January 1, 2023, those with a demand of at least 500 kW at any voltage. After January 1, 2024, customers with individual loads of less than 500 kW are also included, provided they are represented by a retail agent before the CCEE.
Since 2023, free customers are costumers with demand of at least 500 kW that opt to be supplied energy by means of alternative sources, such as wind power projects, small hydroelectric power plants, biomass projects, solar plants and others.
In 2024, the customers classified as group A with a demand below 500kw can also choose to be supplied by other means of alternative sources (Ordinance 50/2020 MME). As of December 31, 2024, we had 1,529 Free Customers of our energy trading, representing approximately 50% of our consolidated operating revenue and approximately 45.6% of the total quantity of electricity sold by us.
In the generation business, any producer may be granted a concession to build or manage thermoelectric and small hydroelectric generating facilities in the State of Paraná. Brazilian law provides for competitive bidding for generation concessions for hydroelectric facilities and, since 2017, this requirement applies only to facilities with capacity higher than 50 MW.
In the transmission business, Brazilian law provides for competitive bidding for transmission concessions for facilities with a voltage of 230 kV or greater that will form part of the Interconnected Transmission System.
Brazilian law requires that all of our generation, transmission and distribution concessions be subject to a competitive bidding process upon their expiration. We may face significant competition from third parties in bidding for renewal of such concessions or for any new concessions. The loss of certain concessions could adversely affect our results of operations.
On June 2021, a study was published by the
Empresa de Pesquisa Energética
(“EPE”) projecting a 30 GW growth on Generation Distribution in the next 10 years. Generation Distribution refers to the generation of eletricity close to or within the consumer site, and can involve any power, technology or energy source. In early 2022, the government adopted a new legal framework for distributed generation in Brazil (Federal Law No. 14,300/2022), which established different categories of energy distribution, the creation of the Electric Energy Compensation System (
Sistema de Compensação de Energia Elétrica
– “SCEE”) and the Social Renewable Energy Program (
Programa de Energia Renovável Social
– “PERS”).
In June 2024, the Energy Research Company (
Empresa de Pesquisa Energética
or “EPE”) released a booklet on micro and mini generation as part of the studies for the development of their 2034 Ten-Year Energy Plan, indicating that the country has the potential to reach 58.8 GW of installed capacity in distributed generation by the end of 2034, with the possibility of even exceeding 70 GW in its upper bound scenario. The expansion of Generation Distribution services can adversely affect the demand of electricity and therefore impact the eletricity sector and the distribution concessionaires as a whole in the long-term.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Environmental, Social and Governance
We have been working to improve our environmental, social and governance practices and to integrate sustainability into our business through a comprehensive approach, based on systemic planning and execution, prioritizing risk and impact management and establishing a positive social, economic and environmental legacy in the communities where we operate. We also work to add value to our business by engaging with sustainable companies, which we believe are better prepared to manage economic, social and environmental risks.
As signatories of the Global Compact since 2000, we are committed to sustainability. As a founding member of the Global Compact Brazil Network Committee (Comitê da Rede Brasil do Pacto Global), created in 2003, we support the movement to disseminate the principles of the Global Compact in promoting effective and consistent links between governments, companies and social organizations in the face of social, environmental and economic challenges for sustainable development, as well as raising awareness among other Brazilian companies to engage and adopt corporate citizenship as a standard for managing their businesses.
We focus our business efforts on achieving better results in line with the Brazilian Electricity Sector’s priority Sustainable Development Goals (Objetivos de Desenvolvimento Sustentável, or SDGs), namely: 7 (Affordable and Clean Energy), 8 (Decent Work and Economic Growth), 9 (Industry, Innovation and Infrastructure), 11 (Sustainable Cities and Communities) and 13 (Climate Action). In addition, reinforcing our social commitment, we have been part of SDG 4 (Quality Education) since 2022. In 2024, for the 18th time, we were included in [B]³’s ISE - Corporate Sustainability Index portfolio, highlighting our commitment to ESG.
Our Board of Directors reviewed and approved the materiality process, established in 2023, revalidated in 2024, including one of the largest stakeholder consultations we ever carried out. Material topics are crucial to our strategic planning, indicating priorities for actions to be implemented in all areas and operations. They serve as important guidelines and contribute directly to our risk management. For the first time, we carried out a double materiality assessment, in line with best market practices. This approach considers ESG aspects alongside financial aspects, strengthening our corporate strategy. Ten material topics were defined: Corporate Governance; Economic and Financial Performance; Customer Satisfaction; Environmental Commitment; Social Commitment; People Management; Well-being, Health and Safety for the Workforce; Transformation of the Energy Sector; Safety of the Population; and Sustainable Supplier Management.
Environmental
Our activities in the construction and operation of electricity generation, transmission and distribution are subject to federal, state and municipal environmental regulations. We believe that we are in compliance with all material environmental regulations and, since the publication of Conama Resolution 01/1986, we have prepared Environmental Impact Studies to support our environmental licensing requests for projects subject to this broad licensing process by federal, state and municipal regulations.
All our activities follow our Sustainability Policies, which integrate corporate planning and sustainability management to optimize our financial, social and environmental performance. In addition, our activities follow the guidelines for mitigating greenhouse gas emissions and improving our business, assessing risks and opportunities related to climate change. Since 2008, we have published our annual greenhouse gas inventory using the GHG Protocol methodology.
Our operations are aligned with a low-carbon economy. Our shares are part of [B]³'s Carbon Efficient Index (ICO2) portfolio, demonstrating our commitment to the transparency of our emissions. We have made progress in Climate Change Management, where we maintain an A Score from the CDP (Carbon Disclosure Program), one of the main initiatives in the financial sector aimed at reducing companies' greenhouse gas emissions.
Our Carbon Neutrality Plan aims to neutralize the Scope 1 GHG emissions of the assets over which we have operational control, by reducing and offsetting residual emissions by 2030. All these efforts have enabled Copel to achieve 100% electricity generation from renewable sources, mostly hydroelectric, in 2024.
Our main strategic driver has become expanding our market share and becoming a benchmark in the generation, transmission, distribution and sale of renewable and sustainable energy. To achieve this goal, we have made significant commitments to decarbonize our businesses, further integrate the segments in which we operate to capture synergies and achieve scale in products and services with discipline in capital management.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Social
Our social responsibility is present both in the communities impacted by our business and in our internal actions. Our Sustainability Policy - Chapter 5 “Private Social Investment” guides our donations and contributions - voluntary and non-voluntary - in order to maximize positive impacts.
Our main social programs include Cultivate Energy (Cultivar Energia), which implements community gardens under power transmission lines; the EletriCidadania Corporate Volunteering Program, which encourages our employees to contribute to social causes; the Human Rights Program; and the EducaODS Program, which promotes actions to comply with the 2030 Agenda and the Voluntary Commitments made by Copel.
We also support vulnerable communities through initiatives such as Empowering Refugees Women (Empoderando Refugiadas), promoted in partnership with UN Women, UNHCR and the Global Compact, which aims to increase the employability of migrant and refugee women. This collaboration was carried out with the participation of Copel volunteers, consolidating our active role in global causes.
Our work has been recognized for its relevance and impact. The EletriCidadania Program was awarded in 2024 in the “Best Practices in Volunteer Management in Companies” category at the VOL Awards, standing out among the most innovative and effective corporate initiatives. This recognition reflects our commitment to bringing together sustainability, social responsibility and inclusion, consolidating us as a socially responsible company committed to sustainable development.
Internally, our actions are guided by the People Management Policy and best practices in safety, health and quality of life In 2021, we revised our Human Rights Policy, which is currently a specific chapter of our Sustainability Policy, whose guidelines reflect our commitment to preventing, mitigating and remedying risks related to the topic, protecting people's rights. The due diligence work on Human Rights, which began in 2022, continued in 2023 with training and the establishment of internal policies. This resulted in the identification of potential risks throughout the value chain, contributing to the improvement of our practices. In 2024, we acquired a new virtual course from a consultancy specializing in the subject, which remains available on the corporate university platform for all our employees and trainees. In addition, we revised our Code of Conduct, which is a clear guide for employees and other stakeholders on how we should act.
We also aim to promote diversity in leadership (40% increase in current female representation - base year 2022) and to achieve zero fatal accidents involving employees and contractors, reinforcing these processes as management priorities. In 2024, there were no cases of occupational diseases involving direct employees. However, there was one fatality resulting from an accident involving an outsourced employee.
Governance
In 2021, we created the Sustainable Development Committee, a permanent statutory body advising the Board of Directors, aiming to keep us among the companies with the best ESG governance practices and actions and guiding our sustainability strategy. In the same year, we implemented initiatives under our Carbon Neutrality Plan, which aims to achieve zero Scope 1 greenhouse gas emissions, among others.
In November 2021, we migrated to the Level 2 special listing segment of the [B]³. This move resulted in several improvements in our corporate governance, consolidating the progress made in recent years. Progress has been made with regard to the creation of other statutory committees and the revision of fundamental policies, such as the Integrity Policy and the Integrated Corporate Risk Management Policy.
Aiming at a balanced and consistent growth, we have improved our capital allocation process. Instruments created between 2021 and 2022 have improved governance for project development and increasingly structured decision-making: the new Investment and Innovation Committee, a permanent advisory body to the Board of Directors, and the approval of the Investment Policy, which establishes the criteria for selecting, evaluating, approving and monitoring investments.
We have adopted best practices to guide and evaluate our performance and compare practices with global and local benchmarks: [B]³’s Corporate Sustainability Index - ISE, Ethos Indicators for Sustainable and Responsible Business Models, Corporate Sustainability Assessment - CSA and other ratings and classifications related to ESG (Environmental, Social and Governance).
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
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Through an annual report, we reinforce our commitment to sustainable development and are accountable for our performance related to economic, social, environmental and governance aspects, the Copel Integrated Report (Relato Integrado Copel). This report follows the international guidelines of the Standards model of the Global Reporting Initiative and the International Integrated Reporting Initiative, and is submitted to independent assurance to guarantee the reliability of the information disclosed.
Understanding the relevance of ESG for all stakeholders, in 2022 we launched our Sustainability Portal (copelsustentabilidade.com/en/), which presents all our ESG information in accessible language.
On August 11, 2023, we ceased to be a state-owned company and became a corporation with dispersed capital and no controlling shareholder. In this context, our new bylaws came into force, which provide for:
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The Golden Share owned by the State of Paraná;
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Exclusion of the rules provided for in the State-Owned Companies Act;
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Barring shareholders or groups of shareholders from exercising votes corresponding to more than 10% of the total votes in any resolution
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Update of the statutory advisory committees to the Board of Directors, including the creation of the People Committee;
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The election of the Board of Directors by the General Meeting, expect for the right to vote separately by shareholders holding preferred shares that meet the requirements set out in article 141, paragraph 4 of the Brazilian Corporation Law
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Composition of our Audit Board of three members, for a one year term, and permitted re-election
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Calculation of reimbursement to dissenting shareholders exclusively on the basis of the book value per share, in accordance with the net equity in the latest financial statements approved by the general meeting; and
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Protect dispersed ownership with our poison pill
In 2023, senior management revised the regulations for the statutory bodies in light of the transformation into a dispersed ownership company and started the People Committee to advise the Board of Directors. This has made it possible to expand the spaces for qualified analysis, knowledge, and discussion of strategic issues to support the board's decisions.
On October 30, 2024, our Extraordinary Shareholder Meeting approved a new amendment of our Bylaws, the first after becoming a public company. After extensive benchmarking, we implemented important updates to our governance, with emphasis on adjusting:
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the powers of the General Shareholder Meeting, (i) enabling it to decide on any matters submitted to it by the Board of Directors; and (ii) strengthening the shareholder powers provided for in Brazilian Corporations Law;
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the composition and nomenclature of senior management, aligning executive functions with the best national and international practices;
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the percentage of independent members on our Board of Directors, which shall be composed of a majority of independent directors
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the composition of the Board of Directors - between 7 and 9 members –structuring it in such a way as to fully meet the demands, such as participation of members in statutory and non-statutory committees, in accordance with the experience required for each;
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the creation of a non-permanent Supervisory Board, in line with the majority of public companies. The installation of the Supervisory Board can be requested by shareholders holding 2% of common shares or 1% of preferred shares, in accordance with CVM Resolution 70/2022; and
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senior management work schedule, to provide for full-time work on an exclusive basis
Our wholly-owned subsidiaries, Copel DIS, Copel GeT, Copel Mercado Livre and Copel SER, also have their own Boards of Directors, focused on guiding and planning each business. Copel DIS and Copel GeT are registered as category B public companies before the CVM. These registrations are part of our strategic planning and are not aimed at issuing shares. These measures also reinforce transparency and governance practices, as well as opportunities to diversify financing sources and optimize our debt profile.
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PROPERTY, PLANT AND EQUIPMENT
Our principal properties consist of the generation facilities described in “Business.” Of the net book value of our total property, plant and equipment as of December 31, 2024 (including construction in progress), generation facilities represented 46.6% (considering Elejor’s value of property, plant and equipment) and wind farms represented 52.4%. We believe that our facilities generally are adequate for our present needs and suitable for their intended purposes.
In addition, the infrastructure used by the transmission and distribution business is classified as accounts receivable related to the concession, contract assets and intangible assets as described in Notes 4.4, 4.5 and 4.8 to our audited consolidated financial statements.
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THE EXPROPRIATION PROCESS
Although we receive concessions from the Brazilian government to construct hydroelectric facilities, we do not receive title to the land on which the facilities are to be located. In order for us to construct, the land must be expropriated. The land required for the implementation of a hydroelectric facility may only be expropriated pursuant to specific legislation, after proving its public interest. We generally negotiate with communities and individual owners occupying the land so as to resettle such communities in other areas and to compensate individual owners. Our policy of resettlement and compensation generally has resulted in the settlement of expropriation disputes, with friendly settlements for most of them. As of December 31, 2024, we estimated our liability related to the settlement of such disputes to be R$112.0 million. This amount is in addition to amounts for land expropriation included in each of our hydroelectric facility budgets.
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THE BRAZILIAN ELECTRIC POWER INDUSTRY
General
According to the Decennial Energy Plan - PDE 2034 released by the Empresa de Pesquisa Energética - EPE, the projected installed capacity of electricity generation in Brazil will be 331 GW in December 2034.
As of December 2024, approximately 22% of the installed power generating capacity of Brazil is currently owned by Eletrobras. Through its subsidiaries, Eletrobras is also responsible for approximately 38.49% of the total transmission lines of the National Interconnected System in its basic network. In addition, some Brazilian states control entities involved in the generation, transmission and distribution of electricity. They include Companhia Energética de Minas Gerais – CEMIG and Centrais Elétricas de Santa Catarina - CELESC, among others.
Principal Regulatory Authorities
Ministry of Mines and Energy – MME
The MME is the primary regulatory institution of the power industry and acts as the Brazilian governmental authority empowered with policymaking, regulatory and supervisory powers.
National Energy Policy Council – CNPE
The National Energy Policy Council (
Conselho Nacional de Política Energética
- “CNPE”), created in August 1997, provides advice to the President of the Republic of Brazil regarding the development and creation of a national energy policy. The CNPE is chaired by the MME and is composed of ten ministers of the Brazilian government and five members designated by the President of CNPE. The CNPE was created in order to optimize the use of energy resources in Brazil and ensure the national supply of electricity.
National Electric Energy Agency – ANEEL
The Brazilian power industry is regulated by ANEEL, an independent federal regulatory agency. ANEEL’s primary responsibility is to regulate and supervise the power industry in accordance with the policies set forth by the MME and to respond to matters which are delegated to it by the Brazilian government and the MME. ANEEL’s current responsibilities include, among others, (i) administering concessions for electric energy generation, transmission and distribution, including the approval of electricity tariffs, (ii) enacting regulations for the electric energy industry, (iii) implementing and regulating the utilization of energy sources, including the use of hydroelectric power, (iv) promoting, monitoring and managing the public bidding process for new concessions, (v) settling administrative disputes among electricity sector entities and electricity purchasers, and (vi) defining the criteria and methodology for the determination of transmission and distribution tariffs.
National Electric System Operator – ONS
The ONS is a non-profit private entity comprised of electric utilities engaged in the generation, transmission and distribution of electric energy, in addition to other private participants such as importers, exporters and Free Customers. The primary role of the ONS is to coordinate and regulate the generation and transmission operations in the Interconnected Transmission System, subject to the ANEEL’s regulation and supervision. The objectives and principal responsibilities of the ONS include, among others, operational planning for the generation industry, organizing the use of the domestic Interconnected Transmission System and international interconnections, ensuring that industry participants have access to the transmission grid in a non-discriminatory manner, assisting in the expansion of the electric energy system, proposing plans to the MME for extensions of the Interconnected Transmission System, and formulating regulations regarding the operation of the transmission system for ANEEL’s approval.
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Electric Energy Trading Chamber – CCEE
The CCEE (
Câmara de Comercialização de Energia Elétrica
) is a non-profit private entity subject to authorization, inspection and regulation by ANEEL. The CCEE is responsible for, among other things, (i) registering all energy purchase agreements in the regulated market,
Contratos de Comercialização de Energia no Ambiente Regulado
(“CCEAR”) and in the Free Market, (ii) accounting for and clearing short-term transactions and (iii) managing funds generated by some of the regulatory charges. The CCEE is composed of holders of concessions, permissions and authorizations in the electricity industry and Free Customers, and its board of directors is composed of five members, out of which four are appointed by these agents and one by the MME, who is the chairman of the board of directors.
Energy Sector Monitoring Committee – CMSE
The CMSE (C
omitê de Monitoramento do Setor Elétrico
) was created by the New Industry Model Law to monitor service conditions and to recommend preventative measures to ensure energy supply adequacy, including demand-side action and contracting of energy reserves.
Energy Research Company – EPE
In August 2004, the Brazilian government created the Energy Research Company (
Empresa de Pesquisa Energética
- “EPE”), a federal public company responsible for conducting strategic studies and research in the energy sector, including the industries of electric power, petroleum, natural gas, coal and renewable energy sources. The studies and research conducted by the EPE subsidize the formulation of energy policy by the MME.
Eletrobras
Eletrobras serves as a holding company for the following energy companies: Companhia Hidro Elétrica do São Francisco – CHESF, Furnas Centrais Elétricas S.A., CGT Eletrosul, Centrais Elétricas do Norte do Brasil S.A. – Eletronorte, Companhia de Geração Térmica de Energia Elétrica – CGTEE and Centro de Pesquisas de Energia Elétrica – Cepel.
ENBPar - Empresa Brasileira de Participações em Energia Nuclear e Binacional S.A.
ENBPar is a company linked to the MME, with the purpose of maintaining the operation of nuclear power plants under the Union’s control, maintaining the ownership of the capital stock and the acquisition of the electricity services of Itaipu Binacional, managing the marketing contracts for the energy generated by the projects contracted under the Program of Incentive to Alternative Sources of Electric Energy (Proinfa) and the energy generated by Itaipu, being the Marketing Agent of Itaipu’s Energy. It was created as a result of Federal Decree No. 10,791/2021, based on Law 14,182/2021, which provides for the privatization of Eletrobras and authorizes the Union to establish this public company.
Historical Background of Industry Legislation
The Brazilian constitution provides that the development, use and sale of electric energy may be undertaken directly by the Brazilian government or indirectly through the granting of concessions, permissions or authorizations. Historically, the Brazilian electric energy industry has been dominated by generation, transmission and distribution concessionaires controlled by the federal or state governments. Since 1995, the Brazilian government has taken a number of measures to reform the Brazilian electric energy industry. In general, these measures were aimed at increasing the role of private investment and eliminating foreign investment restrictions in order to increase overall competition and productivity in the industry.
The following is a summary of the principal developments in the regulatory and legal framework of the Brazilian electricity sector:
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In 1995, (i) the Brazilian constitution was amended to authorize foreign investment in power generation; (ii) the Concessions Law was enacted, requiring that all concessions for energy-related services be granted through public bidding processes, providing for the creation of independent producers and Free Customers and granting electricity suppliers and Free Customers open access to all distribution and transmission systems; and (iii) a portion of the controlling interests held by Eletrobras and various Brazilian states in generation and distribution companies were sold to private investors.
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In 1998, the Power Industry Law was enacted, providing for, among other things, the creation of the ONS and the appointment of BNDES, a development bank wholly owned by the Brazilian government, as the financing agent of the power industry, especially to support new generation projects.
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In 2001, Brazil faced a serious energy crisis that lasted through February 2002. During this period, the Brazilian government implemented an energy-rationing program in the most adversely affected regions, namely the southeast, central-west and northeast regions of Brazil. In April 2002, the Brazilian government for the first time implemented the extraordinary tariff adjustment to compensate the electricity suppliers for financial losses incurred as a result of the rationing period.
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In 2004, the Brazilian government enacted the New Industry Model Law (Law No. 10,848), in an effort to further restructure the power industry with the ultimate goal of providing customers with a stable supply of electricity at reasonable prices. The New Industry Model Law introduced material changes to the regulation of the electric energy industry, in order to (i) provide incentives to private and public entities to build and maintain generation capacity, and (ii) ensure the supply of electricity in Brazil at low tariffs through a competitive electricity public bidding process. The key elements of the New Industry Model Law include:
◦
Ensuring the existence of two markets: (i) the regulated market, a more stable market in terms of supply of electricity, and (ii) a market specifically addressed to certain participants (i.e., Free Customers and energy-trading companies), called the Free Market, that permits a certain degree of competition vis-à-vis the regulated market.
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Restrictions on certain distribution activities, including requiring distributors to focus on their core business of distribution activities in order to promote more efficient and reliable services to Captive Customers.
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Elimination of self-dealing by providing an incentive for distributors to purchase electricity at the lowest available prices rather than buying electricity from related parties.
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Upholding contracts executed prior to the New Industry Model Law, in order to provide regulatory stability for transactions carried out before its enactment.
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In 2004, Decree No. 5,163 was enacted to govern the purchase and sale of electricity in the regulated market and the Free Market, as well as the granting of authorizations and concessions for electricity generation projects. This decree includes, among other items, rules relating to auction procedures, the form of power purchase agreements and the mechanism for passing costs through to final customers. Among other matters, this decree:
◦
provides for the guidelines under which electricity-purchasing agents must contract their electricity demand. Electricity-selling agents must show that the energy to be sold comes from existing or planned power generation facilities. Agents that do not comply with such requirements are subject to penalties imposed by ANEEL.
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requires electricity distribution companies to contract for 100% of their energy needs primarily through public auctions. In addition to these auctions, distribution companies can purchase limited amounts (up to 10% of their demand) from: (i) generation companies that are connected directly to a distribution company (except for hydroelectric power plants with capacity higher than 30 MW and certain thermoelectric power plants) (ii) electricity generation projects participating in the initial phase of the Proinfa Program, (iii) the Itaipu Power Plant and (iv) quotas from those generation concession contracts extended or subject to a new competitive bidding process in accordance with the 2013 Concession Renewal Law.
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provides that the MME shall establish the total amount of energy that will be contracted in the regulated market, including the number and the type of generation projects that will be auctioned each year.
◦
requires all electricity generation, distribution and trading companies, independent producers and Free Customers to notify MME, by August 1
st
of each year, of their estimated electricity demand or estimated electricity generation, as the case may be, for each of the subsequent five years. In advance of each electricity auction, each distribution company is also required to inform MME of the amount of electricity that it intends to contract in the auction. In addition, distribution companies are required to specify the portion of the contracted amount they intend to use to supply potentially Free Customers.
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In 2012, the Brazilian government enacted two Provisional Measures that brought important changes to the Brazilian electricity regulatory framework: (i) Provisional Measure No. 577/2012 (converted into Law No. 12,767/2012); and (ii) Provisional Measure No. 579/2012 (converted into the 2013 Concession Renewal Law). Provisional Measure No. 577 established the obligation of the granting authority to render electricity services in the event of termination of an electricity concession, as well as new rules related to the intervention by the granting authority in electricity concessions to ensure adequate performance of Utility services. The 2013 Concession Renewal Law established new rules that changed concessionaires’ ability to renew concession contracts. Under this Law, generation and distribution concessionaires may renew their concession contracts that were in effect as of 1995 and transmission concessionaires may renew their concession contracts that were in effect prior to and as of 1995 for an additional period of 30 years, provided that the concessionaires agree to amend the concession contracts to reflect a new tariff regime to be established by ANEEL. See “—Concessions.”
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In 2013, the 2013 Concession Renewal Law was enacted. This statute changed the nature of the concession agreements for generation facilities existing at the time. Prior to 2013, a generation concessionaire had the right to sell the energy generated by the facilities subject to its concession for profit. In contrast, generation concessions for existing generation facilities (including those renewed pursuant to the 2013 Concession Renewal Law) could no longer grant concessionaires the right to sell the energy generated by these facilities. Instead, these concessions started to cover the operation and maintenance of the generation facilities. The energy generated by these facilities was then allocated by the Brazilian government in quotas to the regulated market, for purchase by distribution concessionaires. In case of generation facilities created after the 2013 Concession Renewal Law, the concessionaire has the right to sell the energy produced by the facility. For further information, see “—Concessions—2013 Concession Renewal Law.”
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In 2015, the Brazilian government enacted Provisional Measure No. 688/ 2015, converted into Federal Law No. 13,203/2015, to revise the allocation of the hydrological risks borne by hydroelectric power plants that share hydrological risks under Energy Reallocation Mechanism. In 2014 and 2015, given poor hydrological conditions, the MRE participants generated less electricity than their assured energies, which was confirmed by a significant decrease of the Generating Scaling Factor (“GSF”), a measurement of the proportion between the electricity generated by the MRE participants and their respective Assured Energy. These generation deficits resulted in losses for the MRE participants given their exposure to hydrological risks. As a consequence, Federal Law No. 13,203 established an optional mechanism that allows each generation plant to transfer these risks to final customers upon payment of a risk premium to the Brazilian government, as well as certain temporary extensions of generation concessions to compensate for losses in 2015. We decided to opt-in with respect to all of Copel GeT´s and Elejor´s eligible Energy Agreements under this new hydrological risk allocation mechanism, which represented approximately 16% of Copel GeT´s total Assured Energy.
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In August 2017, Decree No. 9,143/2017 changed the frequency of the auctions for new energy and authorized the distribution companies to negotiate contracts for the sale of energy in the Free Market to Free Costumers and other agents (generators, marketers, and self-producers), provided that these contracts are linked to excess in energy contracted in auctions.
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In January 2018, Decree No 9,271/2018 regulated the granting of a new energy concession in the event of privatization of an energy generation concession holder that provides public services, in accordance with Law No 9.074, dated July 7, 1995. Pursuant to this decree, the Brazilian government may grant a new concession contract for a period of up to 30 years to the entity that results from a bidding process for the privatization of a concessionaire previously controlled directly or indirectly by a federal, state or municipal governmental entity. This decree determined that the concessionaire shall request a new concession contract during the remaining period of its concession (up to 60 months counted from the end of the concession) This decree was amended in November 2019 pursuant to Decree No 10,135 in order to reduce the deadline for the concessionaire to request the granting of a new agreement, from 60 months to 42 months counted from the end of the concession and required the privatization process to be concluded no later than 18 months prior to the termination of the prior concession. In December 2022, the decree was amended by Decree No. 11,307/2022, in order to contemplate other forms of privatization of the holder of the generation concession in addition to the transfer of share control.
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During 2018, the Brazilian government concluded the privatization of Eletrobras’ distribution companies Companhia Energética do Piauí - Cepisa, Companhia Energética de Rondônia S.A. - Ceron, Companhia de Eletricidade do Acre - Eletroacre, Boa Vista Energia S.A. - Boa Vista Energia, Companhia Energética de Alagoas - Ceal and Amazonas Distribuidora de Energia S.A. - Amazonas Distribuidora.
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In December 2019, MME published the Ordinance No. 465/2019, determining that MME will gradually decrease, over the next years, the power limits to contract electric power by customers served at any voltage, allowing them to purchase energy from conventional sources, considering the following schedule: (i) from January 1, 2021: customers with demand equal to or greater than 1,500 kW; (ii) from January 1, 2022: customers with demand equal to or greater than 1,000 kW; and (iii) January 1, 2023: customers with demand of 500 kW or more. Furthermore, by January 31, 2022, ANEEL and CCEE shall present studies on the regulatory measures necessary to allow the opening of the Free Market for customers with electric load below 500 kW.
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In September 2020, Law No. 14,052 (“GSF Law”) was passed, which established new conditions for the renegotiation of hydrological risk of electricity generation, amending Article 2 of Law No. 13,203/2015, among other measures. This procedure was regulated through Normative Resolution No. 895/2020, in which ANEEL established the methodology for calculating compensation to the owners of hydroelectric plants participating in the MRE. It also regulated the repatriation of hydrological risk to equate the issue of GSF and open debts in CCEE to allow for the return of normalcy and greater liquidity in the short-term electricity market, in exchange for the extension of the terms of grants given to hydroelectric plants to up to seven years. The resolution was amended by Normative Resolution No. 945/2021, changing the compensation methodology for plants that renegotiated the hydrological risk under Normative Resolution No. 684/2015. ANEEL later approved the deadlines for the extension of the grant of the plants participating in the MRE through Homologatory Resolutions No. 2,919/2021 and No. 2,932/2021. Those interested in adhering to new mechanism must withdraw from lawsuits related to the mitigation of hydrological risks of the MRE and execute a term of acceptance of such conditions.
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In December 2020, through Normative Resolution No. 905/2020, ANEEL consolidated the rules for Electric Energy Transmission Services in the National Electric System, effective January 1, 2021.
•
Additionally, 2020 and 2021 were atypical years due to the COVID-19 pandemic, which required the introduction of various legal and regulatory measures, as highlighted below:
◦
In March 2020, Decree No. 6 officially declared a state of emergency in Brazil, effective until December 31, 2020. On the same date, Decree no. 10,282 was released (complemented by Decree No. 10,288/2020), which regulated Law No. 13,979/2020 and dealt with the new COVID-19 measures, including directives regarding the operation of public services and essential activities, specifically the electricity sector and electricity generation, transmission and distribution. By means of Decree No. 117/2020, the MME also established a Crisis Committee within the Ministry’s scope to articulate, coordinate, monitor, guide and supervise the measures and actions taken against COVID-19 for the duration of the public health crisis. In line with the guidelines established by this decree, ANEEL issued Decree No. 6,335/2020, the Office of Monitoring the Electrical Situation (
Gabinete de Monitoramento da Situação Elétrica
), with the objective of identifying the effects of the COVID-19 pandemic on the electrical energy market and monitoring the economic-financial situation in relation to supply and demand, as well as coordinating studies of proposals to preserve equilibrium between different entities within the sector.
◦
On April 8, 2020, the Brazilian government issued Provisional Measure No. 950, which specified temporary emergency measures for the electricity sector to cope with the state of emergency by establishing an exemption in energy tariffs funded by the CDE for low-income customers for up to 220 kWh/month, for the period of April 1 to June 30, 2020. For this purpose, resources were provisioned by means of a credit operation aimed at providing financial relief to electricity distributors. On the same date, ANEEL published Order No. 986, authorizing the CCEE to transfer the surplus financial resources available in the reserve fund for future relief to the sector’s agents, based on consumption, with the aim of reinforcing the sector’s liquidity in the midst of the COVID-19 pandemic.
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On May 18, 2020, Decree No. 10,350 was issued by the Brazilian government, which regulated Provisional Measure No. 950/2020 and provided for the creation of the COVID-19 Fund. This fund was to receive resources to cover potential deficits or anticipate distributors’ revenues and regulate the use of tariffs by the CDE for the purpose of payments and receipts of amounts to cover or defer costs arising from the COVID-19 pandemic. Through Resolution No. 885/2020, ANEEL established criteria and procedures for the management of the COVID-19 Fund. The value of the resources of the COVID-19 Fund given to concessionaires were made operational by the CCEE throughout 2020, considering, for this purpose, the existence of a positive balance in the fund.
◦
In September 2020, due to important changes in the electricity sector rules to mitigate the effects on the consumer due to aid granted to companies as a result of the COVID-19 pandemic, Executive Order No. 998/2020 was issued, converted into Law 14.120, of March 1, 2021. In 2021, Law 14,120/2021 also allowed the reallocation of certain PD and energetic efficiency ( resources to the CDE account between 2021 and 2025 for certain projects. New enterprises for renewable energy among others are excluded from this benefit. New projects for hydrological energy with more than 30 MW capacity will be entitled to a discount in tariffs of 50% for 5 years counted a March 2, 2021 and 25% for the subsequent 5 years.
•
In January 2021, the CCEE adopted an hourly pricing model for the accounting and settlement of the short-term market. Thus, since January 1, 2021, the PLD is officially calculated for each submarket on an hourly basis, and implemented pursuant to a schedule defined by MME Directive 301/2019.
•
In April 2021, CNPE Resolution 24/2021 approved the Guidelines on Cybersecurity for the Electricity Sector, as established in CNPE Resolution 1 of February 10, 2021, which created a working group with consideration for prevention, treatment, response and systemic resilience. In December 2021, ANEEL enacted Resolution No. 964/2021, that provides guidelines for cybersecurity policies and activities for the sector.
•
In April 2021, Law No. 14,134/2021 was approved, establishing the new regulatory framework for the natural gas market in Brazil. This law sets rules for the economic activities of transportation of natural gas through pipelines and changed the regime for economic exploration of such activity from concession to authorization to be granted by ANP. It also regulated the import, export, treatment, processing, storage and commercialization of natural gas, among other related activities.
•
In June 2021, several measures were adopted by the Federal Government to address the scarcity of hydroelectric power. Provisional Measure 1,055/2021 created the Chamber of Exceptional Rules for Hydroelectric Management (“CREG”) to establish emergency measures for the optimization of the use of hydroelectric resources and to combat water shortage, in order to preserve the continuity and security of the electro energetic supply in Brazil. The CREG was entitled to approve urgent measures proposed by the Comitê de Monitoramento do Setor Elétrico (“CMSE”) and if approved, compliance was mandatory by other regulatory agencies and entities in the sector. Among the measures adopted by CREG, the following stand out: (i) creation of an incentive program for the voluntary reduction of consumption by customers of Groups A and B in the regulated market; (ii) the regulation of Tariffs Flags, (associating the tariffs to level of scarcity of water and hydrological shortages); and (iii) the adoption of a simplified procedure to demand reserved capacity from 2022 to 2025.
•
In December 2021, the Brazilian government published Provisional Measure No. 1,078/2021, which allows the structuring of credit operations using the Energy Development Account (“CDE”) for amortization, the same structure used for
Conta-Covid
. This measure mitigates the mismatch between revenues collected from the tariff and the costs of generating energy through loans to distributors to equalize these costs. Decree 10,939/2022 further regulated the matter. Additionally, the measure also provides for the institution of extraordinary tariff flags when necessary. In December 2021, ANEEL published REN No. 1,000/2021, which defines in a simpler and more objective manner the responsibilities of the agents and the procedures to be followed by consumers so that universal access to the electric power service is available in an efficient and valuable manner
.
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In January 2022, the Federal Government published Decree No. 10,946/2022, which regulates the assignment of use of physical spaces and the use of natural resources in internal waters owned by the Union, in the territorial sea, in the exclusive economic zone and on the continental shelf for the generation of electricity from offshore projects. As a result, the MME published Normative Ordinance No. 052/2022, establishing the complementary procedures related to the assignment of onerous use for exploitation of offshore generation enterprise as well as creating, together with the Ministry of Environment, through Interministerial Ordinance No. 03/2022, the Unified Portal for Management of the Use of Offshore Areas for Power Generation.
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Also, in January 2022, Federal Decree No. 10,939 regulated measures to address the financial impacts resulting from the water shortage that affected the country throughout 2021. CCEE authorized us to contract a loan for the creation and management of the Hydric Shortage Account, intended to cover, totally or partially, the costs of the balance of the centralizing account of the tariff flags for April 2022 and the importation of energy referring to July and August 2021. For Copel Distribuição S/A, an amount of R$145.8 million was received, fully reverted as a negative financial component, reducing the customers’ tariff in the tariff process of June 24, 2022. The payment will be diluted in the customers’ tariffs, in 54 installments, starting in the 2023 tariff readjustment process.
•
Throughout 2022, the increase in rainfall led to the recovery of water inflow, raising the reservoir levels and reducing the need to purchase energy from thermal plants, which have a higher generation cost compared to other sources. This situation favored the reduction of the value charged to the customers regarding the tariff flags, which were at the “Hydric Shortage” level from January to April 2022, changing to the green flag from May to December 2022
.
•
In January 2022, the Government enacted Law No. 14,300/2022, which established the legal framework for distributed microgeneration and minigeneration, the Electric Energy Compensation System (“SCEE”), and the Social Renewable Energy Program (“PERS”). In compliance with the approved Law, ANEEL approved Normative Resolution No. 1,059 that improves the rules for the connection and billing of microgeneration and minigeneration plants distributed in electricity distribution systems, as well as the rules of the Electric Energy Compensation System.
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In June 2022, the Government enacted Law No. 14,385/2022, which regulated the exclusion of ICMS from the PIS and COFINS tax base and the refund of overpaid tax amounts by public service providers of electricity distribution. The refunded amounts are intended for tariff reduction. A key provision of Law 14,385/2022 was the resolution of the liability related to the collection of overpaid taxes by the distributors. The law mandates that these amounts be fully returned to customers through tariff processes, based on equitable criteria. In the tariff readjustment of Copel Distribuição S/A on June 24, 2022, a PIS and COFINS credit of R$1,592.9 billion was considered as a financial component that reduced the tariff for the period from July 2022 to June 2023.
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In June 2022, the Complementary Law Bill (“PLP”) No. 18/2022 to limit the collection of ICMS on fuel, electricity, communications, and public transportation was converted into Complementary Law No. 194/2022, as they are considered essential and indispensable goods and services.
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In June 2022, ANEEL altered the methodology for calculating the TUST and TUSD through Normative Resolution No. 1,024/2022, defining components that intensify the locational signal for defining the tariffs, applicable from the 2022/2023 cycle. Consecutively, Normative Resolution No. 1,041/2022 was published, establishing a transition period until 2027 for the full application of the new rules.
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In July 2022, the CNPE approved, through Resolution 08/2022, the Plan for the Recovery of the Regularization Reservoirs of Hydroelectric Power Plants, over a period of up to 10 years, proposing short, medium and long-term actions, with the objective of improving, in an integrated manner, the policy, planning, governance, and regulation of the electric power sector and other sectors that use water resources, so as to optimize the multiple use of water.
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In September 2022, ANEEL published Normative Resolution No. 1,040/2022, creating the Demand Response framework program, which allows the possibility of voluntary reduction or displacement of electricity demand by large consumers, as an alternative to be employed by ONS in the planning of the SIN operation. In September 2022, the MME published Ordinance No. 050/2022, which established that as of January 1, 2024, customers classified as Group A (high voltage) may opt to purchase electricity from any concessionaire, permissionaire, or authorized power supplier in the National Interconnected System.
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In December 2022, the Federal Government issued Decree No. 11,314 regulating the bidding and the extension of transmission concessions at the end of their term, conditioning the extension of the concession when the bidding is unfeasible or results in damage to the public interest, as long as the concessionaire formalizes the extension request at least 36 months before the end of the concession.
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In February 2023, ANEEL approved the regulation of the Law No. 14,300/2022, establishing new guidelines, among other aspects (i) for charging for the use of the distribution grid, (ii) deadlines for distributors to carry out connection works, (iii) presentation of performance bonds. ANEEL’s Normative Resolution No. 1,059/2023 establishes how to insert the cost of tariff benefits of participants in the Electric Energy Compensation System - (“SCEE”) in the Energy Development Account (“CDE”) and in the tariff processes of distributors companies. From now on, new GD projects are subject, among other rules, to staggered payments of the so-called “Fio B,” starting at a percentage of 15% from this year until reaching full payment in 2029.
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In March 2023, the MME established the General Protocol for Security and Management of Crisis Situations for Assets in the Electricity Infrastructure, Mining, Oil and its derivatives, Natural Gas, and Biofuels (PGC) through Normative Ordinance No. 61/2023 - MME. This protocol manages crises resulting from incidents that compromise the integrity or availability of services. Additionally, the Crisis Management Committee (CGC) was formed, comprising representatives from the MME and the General Directors of the regulatory agencies for electricity (ANEEL), mining (ANM), oil, natural gas, and biofuels (ANP), and the National Nuclear Security Authority (ANSN).
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In August 2023, ANEEL published Normative Resolution No. 1,070/2023 to amend the regulations regarding the procedures and requirements for conducting hydroelectric inventory studies of river basins, exploration, and granting of hydroelectric projects consolidated in Normative Resolution No. 875/2020. Additionally, Normative Resolution No. 1,071/2023 regulated the requirements and procedures to obtain authorization for wind, photovoltaic, thermal, hybrid, and other alternative energy generating plants, replacing Normative Resolution No. 876/2020.
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In October 2023, the MME, in conjunction with the Ministry of Communications, through the Interministerial Ordinance MCOM/MME No. 10,563, established the National Policy for Sharing Poles - “Legal Pole” between electric power distributors and telecommunications service providers.
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In November 2023, ANEEL published Normative Resolution No. 1,077/2023 to establish criteria for approving the transfer plan of corporate control of concessionaires, permit holders, or authorized entities for services and installations of electricity generation and transmission whose project is under implementation or in the process of expansion, as an alternative to the extinction of the concession, thereby amending Normative Resolution No. 846/2019.
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In December 2023, ANEEL published Normative Resolution No. 1,081 to improve the regulatory framework concerning retail electricity trading, in terms of easing the requirements for migration to the Free Contracting Environment and other measures related to changes in the Trading Rules and Procedures by the CCEE.
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In March 2024, Normative Resolution 1,085/2024 was published to change the criteria and procedures for the participation of non-centrally dispatched hydroelectric projects in the Energy Reallocation Mechanism (Mecanismo de Realocação de Energia - MRE).
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Also in March 2024, Normative Resolution No. 1,084/2024 was published, approving a new version of Submodule 6.8 of the Tariff Regulation Procedures - PRORET, which deals with Tariff Levels, with the incorporation of generation outside the merit order, for reasons of energy security, in the methodology for triggering Tariff Levels, among other points
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In April 2024, Executive Order No. 1,212/2024 was enacted, with the aim of promoting the generation of clean electricity and mitigating, in the short term, the increase in energy tariffs caused by readjustments. It extended by 36 months for renewable source projects to begin the commercial operation of all of their generating units enjoying a reduced Distribution System Use Tariff (Tarifa de Uso do Sistema de Distribuição - TUSD). This measure has expired, but while it was in force, it allowed ANEEL to approve 601 of the more than 2,000 requests for extensions made by generators, which would add up to around 25.5 GW of installed power in projects located in 10 states across the country;
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Also in April 2024, ANEEL made changes to the Electricity Trading Rules and Procedures by means of Normative Resolution No. 1,087/2024, approving revisions to Modules 11, 18 and 20 of the Trading Rules, as well as revisions to Submodules 1.3 and 7.1 of the Trading Procedures in light of the provisions on the Electricity Trading Chamber regulated by Decree No. 11,835 of 2023. ANEEL also published Normative Resolution No. 1,089/2024, updating the Electric Energy Trading Rules applicable to the Accounting and Settlement System, to collect subsidies for the proposal to amend the Trading Rules linked to the characterization and allocation of costs of hydraulic displacement motivated by inflexible thermoelectric generation.
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In May 2024, due to the State of Public Calamity in the State of Rio Grande do Sul, caused by extreme weather events with heavy rains and historic floods, ANEEL published Normative Resolution No. 1,092/2024 to make the Rules for the Provision of the Public Electricity Distribution Service more flexible in order to deal with this public calamity, prioritizing actions related to urgent and emergency services and the supply of energy to services and activities considered essential, as well as making the deadlines for cuts due to defaults and the temporary suspension of collection proceedings more flexible. Also in May, ANEEL published Normative Resolution No. 1,090/2024, changing the methodology for calculating the penalty for insufficient guarantee the for sale and for contractual coverage of electricity consumption, effective from January 1, 2025, as well as Normative Resolution No. 1,094/2024, regulating articles 21 and 24 of Law No. 14,300/2022, which deal with involuntary overcontracting and the sale of surpluses resulting from the distributed microgeneration and minigeneration regime.
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In June 2024, Federal Decree No. 12.068/2024 was enacted, regulating the bidding process and the extension of the electricity distribution concessions referred to in Law No. 9.074/1995, and establishing guidelines for the modernization of public electricity distribution service concessions aiming at greater quality and flexibility in future contracts. Federal Decree No. 12.084/2024, which instituted the Clean Energy in My House, My Life Program (Programa Energia Limpa no Minha Casa, Minha Vida) with the aim of promoting the implementation of renewable electricity generation as a priority for housing units in the My House, My Life Program in the Urban 1 and Rural 1 bands.
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Also in June 2024, Normative Resolution No. 1,096/2024 was enacted, approving the revision of Submodules 9.1 and 9.2 of the Tariff Regulation Procedures - PRORET, which establish the general concepts, applicable methodologies and procedures for carrying out periodic reviews, applicable to public service transmission concessionaires with extended and tendered projects. Also in June 2024, Homologatory Resolution No. 3,336/2024 approved Copel DIS’ Annual Tariff Adjustment index for the 2024-2025 cycle, which produced an average effect to be perceived by consumers of 0.00%, of which 0.05% for High Voltage consumers and -0.03% for Low Voltage consumers, in addition to setting the Distribution System Use Tariffs (TUSD) and the electricity tariffs applicable to Copel DIS’ consumers and users.
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In July 2024, MME Ordinance No. 797/2024 was enacted, providing that entrepreneurs who negotiate electricity from wind power in the auctions dealt with in Decrees 5.163/2004 and 6.353/2008, must start taking permanent anemometric and climatic wind measurements at the site of the generation park within one hundred and eighty days of signing the CCEAR or CER. MME Normative Order No. 95/2024 was also enacted, which establishes guidelines for holding the Auction for the Purchase of Electricity from New Generation Projects, called the 2025 “A-5” New Energy Auction.
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Also in July 2024, ANEEL, through Homologatory Resolution No. 3,348, established the readjustment of the APR for electricity transmission assets for the 2024-2025 cycle, effective from July 1, 2024 until June 30, 2025. According to this resolution, the APR for the 2024/2025 cycle of the transmission assets in operation by Copel GeT and its holdings became R$ 1,594.8 million, an increase of approximately 2.1%, already taking into account the effects of the reduction in the economic component of the RBSE. With Homologatory Resolutions No. 3,342/2024 and No. 3,343/2024, ANEEL approved the review of the APR of the Concession Contracts relating to the projects tendered with a review date in July 2023 and July 2024, and with Homologatory Resolution No. 3,344/2024, the agency approved the result of the Second Periodic Review of the APR of the transmission concession holders that were extended under the terms of Law No. 12,783/2013, which will take effect between July 1, 2024 and June 30, 2028.
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In August 2024, Law 14.948/2024 was enacted, which establishes the legal framework for low-carbon hydrogen, which regulates the production of hydrogen considered to be low-carbon and establishes voluntary certification, as well as providing tax incentives for the sector.
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In September 2024, the ONS adopted new mechanisms for balancing and managing the SIN to deal with situations related to curtailment restrictions, in the case of generation cuts at wind and solar power plants due to an oversupply of energy, as well as the opposite situation, when demand remains high with the increase in load curves at nighttime peak times, but solar generation becomes unavailable, and is solved by activating thermal power plants or increasing the power of hydroelectric power plants when available. Seeking a more balanced distribution of cuts, as well as the implementation of new capacity reserve auctions so that thermal or hydroelectric plants can be activated in these periods, as well as the expansion of international exchange with neighboring countries, as well as seeking new alternatives to meet demand, such as those based on storage systems using batteries, topics that are gaining attention in the sector.
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Also in September 2024, ANEEL enacted Normative Resolution No. 1,103/2024 to establish the provisions relating to the contracting of Capacity Reserve in the form of power and to approve the model contract of the Power Use Contract for Capacity Reserve - Copcap, among other measures.
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In October 2024, Normative Resolution No. 1,104/2024 was enacted, approving the revisions to the Network Procedures and the Commercialization Rules and Procedures. Also in October 2024, the MME published Ordinance GM/MME No. 87/2024, with the guidelines for importing electricity from Paraguay in firm contracts, for negotiation in the Free Contracting Environment (ACL). The proposal regarding the import of energy with guarantees was made available for Public Consultation (CP No. 174/2024).
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In December 2024, ANEEL published Normative Resolution No. 1,109/2024, which, among other things, amends ANEEL Normative Resolution No. 1,030/2022, adjusting the language of article 16, paragraph 3, as well as correcting a methodological inconsistency pointed out by the Electric Energy Trading Chamber - CCEE article 16, paragraph 4, in order to distribute the energy frustration of the set of plants only among the plants that have positive energy frustration. Also in December 2024, ANEEL published Normative Resolution No. 1,110/2024, contemplating changes to the regulation and operation of retail trading, approving the Electric Energy Trading Rules applicable to the Accounting and Settlement System - SCL, the Electric Energy Trading Procedures, as well as adjustments to related Normative Resolutions. Law 15.042/2024 was also passed, which regulates the carbon market in the Brazil, establishing the Brazilian Greenhouse Gas Emissions Trading System (Sistema Brasileiro de Comércio de Emissões de Gases de Efeito Estufa -SBCE). The legislation allows for the purchase and sale of carbon credits, enabling emissions of polluting gases to become tradable financial assets.
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In January 2025, Law 15.097/2025 was enacted, which proposes the legal framework for the exploration and development of energy generation from offshore installation sources, whether wind, solar or tidal. Also in January 2025, law 15.103/25 was passed, establishing the Energy Transition Acceleration Program (Programa de Aceleração da Transição Energética - Paten), with the aim of encouraging sustainable development projects, i.e. companies that have receivables from the Federal Government, such as precatórios and tax credits, will be able to access these credits to finance projects linked to the energy transition.
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In March 2025, ANEEL Order No. 517/2025 was published, through which ANEEL approved the addendum that will allow distribution concessionaires not covered by Law No. 12,783/2013 to extend their electricity distribution concessions for a period of 30 years under the terms of Decree No. 12,068/2024.
Potential New Regulatory Framework
The following potential changes to the Brazilian regulatory framework may have a direct impact in our operations, as our business is subject to comprehensive regulation by various Brazilian legal and regulatory bodies, especially the MME (which proposes sector policies) and ANEEL (which regulates, supervises and inspects various aspects of our business, including our tariff rates).
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In February 2018, the MME published on its website a report of the public hearing, reflecting the final proposal for improvements to the energy regulatory framework, which were especially motivated by technological, social and environmental matters, as well as difficulties arising from the current business models. Among the discussed topics, the following stand out:
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Termination of the quota system applicable to hydropower plants concessions that have been extended or granted through competitive biddings, in accordance with Federal Law No. 12,783/2013, and allocation of part of the economic benefit of grants to the CDE in order to reduce what is charged to the population;
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Lowering the minimum thresholds for accessing the Free Market;
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Approach between the short-term price formation and the operating cost of the system;
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Whether energy and ballast (currently combined for commercialization purposes) should be segregated;
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Effects of the migration of customers to the Free Market;
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Market for environmental attributes;
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Attraction of foreign capital for investments in the Brazilian energy sector;
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More efficient tariff discounts;
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Allocation of resources from the global reversion reserve to the transmission segment;
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Guidelines for the use of research and development resources;
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Modernization of the regulated market; and
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Reduction of judicial disputes regarding the hydrological risk.
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In May 2018, most of the improvements proposed by the MME with respect to the regulatory framework applicable to the energy sector were included in Bill No. 1,917/2015 of the House of Representatives, known as the bill for the energy bill portability (
Projeto de Lei da Portabilidade da Conta de Lu
z). This bill is still subject to analysis in the House of Representatives and, if approved, will depend on further approval by the Senate and the President of Brazil.
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Also, there are initiatives in order to promote the modernization of the energy sector. Ordinance MME No. 187/2019 established a working group in order to develop proposals for the modernization of the energy sector, which released a report in October 2019 with measures that should be adopted or studied, including topics such as (i) opening of the consumer market; (ii) pricing mechanism for the short-market; (iii) expansion of the Free Market accommodating new technologies and new business models; (iv) Energy Reallocation Mechanism; (v) cost and risk allocation; (vi) introduction of new technologies; and (vii) sustainable distribution services. This working group has been appointed for a 2-year term, which may be extended for 1 additional year.
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In 2020, due to the COVID-19 pandemic, discussions beginning in 2017 between the MME and the electric sector with regards to proposals for the industry’s improvement of the legal and regulatory framework were interrupted. This meant limited progress on measures such as PL No. 1,917/2015 and PLS No. 232/2016, which address issues such as the commercial model of the electric sector, the portability of electricity bills and concessions for electric energy generation. The COVID-19 pandemic also allowed for compromise within Special Commission of the House of Representatives, established in August 2019, regarding the Brazilian Electric Energy Code, which aims to consolidate electricity legislation that is currently scattered between ordinances issued by various government agencies. In 2021, the Congress reinitiated the discussions towards PL Nos. 1,917/2015 and PLS No. 232/2016 (now PL No. 414), the later now being labeled a priority bill under consideration of the Congress.
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With regards to distributed generation, we highlight the publication of Law no. 14,300/2022, which establishes the legal framework for distributed microgeneration and minigeneration, the Electric Energy Compensation System (SCEE), and the Social Renewable Energy Program (“PERS”).
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The law allowed existing consumer units and those that file an access request within 12 months of its publication, to continue until December 31, 2045, the benefits currently granted through the Electric Energy Compensation System (“SCEE”). For consumer units requesting access after this deadline, the law established a transition period for the gradual charging of the compensated energy for tariff components not associated with the cost of energy.
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In benefit of the modernization of the electric sector, the publication of Normative Rule no. 050/2022 stands out, establishing that as of January 1, 2024, customers classified as Group A may opt to purchase electricity from any concessionaire, permissionaire or authorized power supplier of the SIN, taking an important step towards the opening of the free power market, also making it possible that in the future customers connected at low voltage may benefit from it.
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In October 2022, the MME launched Public Consultation 137/2022 with a proposal for the publication of an ordinance providing for the reduction of load limits for the contracting of electricity in the free market by customers connected at low voltage, as of January 1, 2028, with these customers to be represented by a retail agent before the CCEE.
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In November 2022, in face of the insufficient capacity of the transmission system to flow the electric energy generated by new plants, the MME made available the drafts of the Ministerial Order referring to the guidelines and systematics of the competitive procedure for contracting the flow margin for generation, regulated by Decree No. 10,893/2021, which will allow the participation of generation projects, from solar, wind, biomass, or qualified cogeneration, which requested the granting of authorization without the presentation of access information, and for other projects that do not have a contract for the use of the transmission and distribution system.
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In September 2023, through Ordinance No. 749/2023, the MME released Public Consultation No. 156/2023. This consultation included a proposal for a normative ordinance that establishes “General guidelines for addressing emergency situations of temporary restriction of electricity supply or situations with potential imminent risk of suspension of electricity supply in the Brazilian Electric System (“SEB”), related to specific actions deliberated by the Electric Sector Monitoring Committee (“CMSE”). Based on the contributions made by agents during the consultation, this proposed mormative ordinance is under evaluation by the MME.
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We also highlight the following public consultations by the MME: (i) Public Consultation No. 152/2023 on expiring distribution concessions, submitting for Public Consultation the guidelines to be observed by the MME in conducting the process of the 20 electric power distribution concessions expiring between 2025 and 2031; (ii) Public Consultation No. 157/2023, in which the proposal for a CNPE resolution with new institutional governance and guidelines for methodologies and computer programs of the Brazilian electric sector was discussed; (iii) Public Consultation No. 158/2023, in which the proposal for a normative ordinance to establish guidelines for optimizing the use of inflexible electricity generation from thermal power plants in the National Interconnected System in a scenario of energy surpluses was discussed.
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In December 2023, with the publication by ANEEL of Normative Resolution No. 1,081 for the improvement of the regulatory framework concerning retail electricity trading, with a focus on easing the requirements for migration to the Free Contracting Environment, it was determined that CCEE should submit a proposal for changes in the Trading Rules and Procedures for the opening of the second phase of Public Consultation No. 28/2023.
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Also, in 2023, ANEEL published the Public Consultation No. 39/2023 to improve the Regulatory Impact Analysis Report on the regulation for Electric Energy Storage, including Reversible Plants, aiming to develop future proposals for regulatory adjustments necessary for the integration of storage systems in the Brazilian electricity sector.
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There was no significant progress in 2024 on the debates on the legal framework and improving the regulatory framework for the electricity sector, especially Bills 414/2021 and 1,917/2015. These issues are still under analysis, both by the legislative bodies and by the federal government.
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Bill No. 3.249/2024, from the House of Representatives, and Bill No. 2.907/2024 - from the Senate, which aims to create the National Clean Energy Certification System, are in the initial stages of being voted
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Bill 671/2024 aims to prohibit electricity distribution concessionaires and permit holders or by their subsidiaries, affiliates or controlling companies from electricity generation by micro-generation or distributed mini-generation and the economic exploitation of these facilities. The matter is currently being analyzed in the House of Representatives. Once approved, it will be sent to the Federal Senate for consideration.
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Bill 6,041/2023 provides for electricity concessionaires to be mandated to create contingency plans to deal with “heat waves” and other extreme weather events. The matter is currently being considered by the House of Representatives and is also due to be considered by the Federal Senate.
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A series of Public Consultations and other similar public participation mechanisms were carried out in 2024
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MME Public Consultation No. 159/2024 on proposed procedures for requesting that distributed mini-generation projects be included in the Special Incentive Regime for Infrastructure Development – REIDI
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MME Public Consultation No. 160/2024 for an Ordinance containing the guidelines for holding power auctions, from new and existing generation projects, called the Capacity Reserve Auction in the form of Power - LRCAP 2024 and subsequently Public Consultation No. 176/2024 for the LRCAP Storage of 2025;
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MME Public Consultation No. 165/2024 for an Ordinance on Guidelines for the 2024 “A-4” and “A-6” Auctions for the Purchase of Electricity from New Generation Projects
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MME Public Consultation No. 175/2024 containing drafts for an Ordinance and the Regulatory Impact Analysis Report that amends the parameters that must be used in the application of the metrics of the general criterion of guarantee of supply to assess the adequacy of the power supply in the System, established in art. 1 of CNPE Resolution No. 29/2019;
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Public Consultation No. 178/2024 on the CDE Budget for the execution of the Light for All Program in 2025;
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MME Public Consultation No. 179/2024, regarding the improvement of the Ten-Year Energy Plan - PDE 2034 and the guidelines for the PDE 2035
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ANEEL Public Consultation No. 9/2024, for contributions to the Regulatory Impact Analysis Report on proposed alternatives for calculating the required energy and non-technical losses in electricity distribution systems, considering the effects of Minigeneration and Distributed Microgeneration - MMGD, in addition to contributions regarding changes to current regulations and proposals for standardizing and improving the information provided in the Market Information Monitoring System for Economic Regulation - SAMP.
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ANEEL Public Consultation No. 29/2024, on the regulation of the tariff consequences of the early settlement of Covid and Water Scarcity Accounts, under the terms of Executive Order No. 1. 212/2024 and Interministerial Ordinance MME/MF No. 1/2024, as well as Public Consultation No. 37/2024 on the Requests for Extraordinary Tariff Review - RTE of the concessionaires Neoenergia Coelba, Neoenergia Brasília, Light, Neoenergia Cosern, Neoenergia Pernambuco and Copel, for economic rebalancing, under the terms of Submodule 2. 10 of PRORET, due to the effects of the reduction in the market and the increase in defaults resulting from the Covid-19 pandemic.
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ANEEL Call for Guidance (Tomada de subsidios, an early stage public consultation) No. 11/2024, to define a roadmap on regulatory issues and actions necessary for the modernization of distribution tariffs, No. 13/2024, to improve the study “Evaluation of regulatory models for the implementation of smart metering systems in the Brazilian distribution system”
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ANEEL Call for Guidance No. 14/2024, to assess possible measures to improve the regulatory framework, monitoring and inspection of issues involving competition aspects in the retail electricity market.
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ANEEL Subsidy Call No. 25/2024 for the improvement of the ANEEL Reference Price Bank, used in the processes of authorization, bidding for concession and tariff review of electricity transmission concessionaires, according to Homologatory Resolution No. 758/2009,
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ANEEL Call for Guidance No. 8/2024 (2nd phase), for amendments to Regulation of Decree No. 11. 314, of December 28, 2022, relating to the regulatory treatment for indemnification of transmission assets that have not been depreciated or amortized in cases of concession replacement or termination; and
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ANEEL Call for Guidance No. 27/2024, to disclose information on the implementation of Tariff Sandboxes projects and receive contributions on how ANEEL should communicate the partial and final results of the projects;
These potential changes to the regulatory framework applicable to the Brazilian Energy Sector may impact our operations in the coming years.
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Concessions
The companies or consortia that wish to build or operate facilities for generation, transmission or distribution of electricity in Brazil must participate in a competitive bidding process or must apply to the MME or to ANEEL for a concession, permission or authorization, as the case may be. Concessions grant rights to generate, transmit or distribute electricity in a specific concession area for a specified period. This period is 35 years for generation concessions granted after 2003, and 30 years for new transmission or distribution concessions. In accordance with the 2013 Concession Renewal Law, generation and distribution concessionaires may renew their concession contracts that were in effect as of 1995 and transmission concessionaires may renew their concession contracts that were in effect prior to and as of 1995 for an additional period of 30 years, provided that the concessionaires agree to amend the concession contracts to reflect certain new terms and conditions established by the law. The 2013 Concession Renewal Law does not impact generation concessions granted after 2003, as they are non-renewable.
The Concessions Law establishes, among others, the conditions that the concessionaire must comply with when providing electricity services, customers’ rights and the respective rights and obligations of the concessionaire and the granting authority. In addition to the Concessions Law, the concessionaire must also comply with the general regulations governing the electricity sector. The main provisions of the Concessions Law and related ANEEL regulations are summarized as follows:
Adequate service
. The concessionaire must render adequate service to all customers in its concession and must maintain certain standards with respect to regularity, continuity, efficiency, safety and accessibility.
Use of land.
The concessionaire may use public land or request that the granting authority expropriate necessary private land for the benefit of the concessionaire. In the latter case, the concessionaire must compensate the affected private landowners.
Strict liability
. The concessionaire is strictly liable for all damages arising from the provision of its services.
Changes in controlling interest
. The granting authority must approve any direct or indirect change in the concessionaire’s controlling interest.
Intervention by the granting authority
. The granting authority may intervene in the concession, through ANEEL, to ensure the adequate performance of services, as well as the full compliance with applicable contractual and regulatory provisions. Once ANEEL determines the intervention, limited to one year, but extendable for additional two years, it must designate a third party to manage the concession. Within 30 days of the determination of the intervention, the granting authority’s representative must commence an administrative proceeding in which the concessionaire is entitled to contest the intervention. The administrative proceeding must be completed within 1 year. The shareholders of the concessionaire under intervention must submit to ANEEL, within 60 days of the determination of the intervention, a recovery and correction plan. If ANEEL approves such plan, the intervention is terminated. In the event ANEEL does not approve the plan, the granting authority may: (i) declare forfeiture of the concession; (ii) determine the spin-off, incorporation, merger or transformation of the concessionaire, incorporation of a subsidiary or assignment of quotas/shares to a third party; (iii) determine the change of control of the concessionaire; (iv) determine a capital increase of the concessionaire; or (v) determine the incorporation of a special purpose company.
Termination of the concession
. The termination of the concession agreement may occur by means of expropriation and/or forfeiture. Expropriation is the early termination of a concession for reasons related to the public interest. An expropriation must be specifically approved by law or decree. Forfeiture must be declared by the granting authority after ANEEL or the MME has made a final administrative ruling that the concessionaire, among other things, (i) has failed to render adequate service or comply with an applicable law or regulation, (ii) no longer has the technical, financial or economic capacity to provide adequate service, or (iii) has not complied with penalties assessed by the granting authority. The concessionaire may contest any expropriation or forfeiture in the courts.
A concession agreement may also be terminated (i) through the mutual agreement of the parties, (ii) upon the bankruptcy or dissolution of the concessionaire, or (iii) following a final, non-appealable judicial decision rendered in a proceeding filed by the concessionaire.
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When a concession agreement is terminated, all assets, rights and privileges that are materially related to the rendering of electricity services revert to the Brazilian government. Following termination, the concessionaire is entitled to indemnification for its investments in assets that have not been fully amortized or depreciated, after deduction of any amounts due by the concessionaire related to fines and damages.
Expiration
. When the concession expires, all assets, rights and privileges that are materially related to the rendering of the electricity services revert to the Brazilian government. Following the expiration, the concessionaire is entitled to indemnification for its investments in assets that have not been fully amortized or depreciated as of the expiration.
Penalties
. ANEEL regulations govern the imposition of sanctions against electricity sector participants and determine the appropriate penalties based on the nature and importance of the breach (including warnings, fines, temporary suspension from the right to participate in bidding procedures for new concessions, licenses or authorizations and forfeiture). For each infraction, the fines can be up to 2% of the revenue (net of value-added tax and services tax) of the concessionaire in the 12-month period preceding any penalty notice. Some infractions that may result in fines relate to the failure to request ANEEL’s approval to, among other things: (i) execute certain contracts between related parties; (ii) sell or assign the assets related to services rendered as well as impose any encumbrance (including any security, bond, guaranty, pledge and mortgage) on these or any other assets related to the concession or the revenues from electricity services; (iii) effect a change in the controlling interest of the holder of the authorization or concession; and (iv) make certain changes to the bylaws. In the case of contracts executed between related parties that are submitted for ANEEL’s approval, ANEEL may seek to impose restrictions on the terms and conditions of these contracts and, in extreme circumstances, require that the contract be rescinded.
Parallel Environment for the Trading of Electric Energy
Under the New Industry Model Law, the purchase and sale of electricity is carried out in two different segments: (i) the regulated market, which contemplates that distribution companies will purchase by public auction all the electricity they need to supply their customers; and (ii) the Free Market, which provides for the purchase of electricity by non-regulated entities (such as the Free Customers and energy traders).
However, the electricity arising from the following is subject to specific rules different from the rules applicable to the regulated market and to the Free Market: (i) low capacity generation projects located near consumption points (such as certain co-generation plants and small hydroelectric power plants), (ii) plants qualified under the Proinfa Program, an initiative established by the Brazilian government to create incentives for the development of alternative energy sources, such as wind power projects, small hydroelectric power plants and biomass projects, (iii) Itaipu, (iv) Angra 1 and 2 as from 2013 and (v) those generation concession contracts extended or subject to a new bidding process in accordance with the 2013 Concession Renewal Law.
The electricity generated by Itaipu will continue to be sold by ENBPar to the distribution concessionaires operating in the South, Southeast and Midwest portions of the Interconnected Transmission System. The rates at which Itaipu-generated electricity is traded are denominated in U.S. dollars and established pursuant to a treaty between Brazil and Paraguay. As a consequence, Itaipu rates rise or fall in accordance with the variation of the
real
/U.S. dollar exchange rate. Changes in the price of Itaipu-generated electricity are, however, subject to the Parcel A cost recovery mechanism discussed as follows under “–Distribution Tariffs.”
Beginning January 2013, the energy generated by nuclear plants Angra 1 and 2 started to be sold by Eletronuclear to the distribution concessionaires at a rate calculated by ANEEL.
The New Industry Model Law does not affect Bilateral Agreements entered into before 2004.
The Regulated Market
In the regulated market, distribution companies must purchase their expected electricity requirements for their Captive Customers in the regulated market through a public auction process. The auction process is administered by ANEEL, either directly or through the CCEE, under certain guidelines provided by the MME.
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Electricity purchases are generally made through three types of Bilateral Agreements: (i) Energy Agreements (
Contratos de Quantidade de Energia
), (ii) Availability Agreements (
Contratos de Disponibilidade de Energia
) and (iii) allocation of energy quotas, as defined by the ANEEL. Under an Energy Agreement, a generator commits to supply a certain amount of electricity and assumes the risk that its electricity supply could be adversely affected by hydrological conditions and low reservoir levels, among other conditions, which could interrupt the supply of electricity. In such case, the generator would be required to purchase electricity elsewhere in order to comply with its supply commitments. Under an Availability Agreement, a generator commits to making a certain amount of capacity available to the regulated market. In such case, the generator’s revenue is guaranteed and the distributors must bear the risk of a supply shortage. With respect to the third method (introduced by the 2013 Concession Renewal Law), the plants that have had their concession renewed under the 2013 Concession Renewal Law lost the right to sell their energy, and from now on will only receive compensation under the energy quota system as a result of the operation and maintenance of such facilities. As a result, energy generated by these generation concessionaires are passed on to distributors at a lower cost through quotas that match the size of the markets served.
With respect to the generation plants with expired concessions, which are subject to a new competitive bidding process, the winner of the competitive bidding process may be required to allocate up to 100% of the energy generated by this plant in quotas to the regulated Market depending on the criteria adopted in the relevant auction process.
The estimate of demand from distributors is the principal factor in determining how much electricity the system as a whole will contract. A distributor is obligated to contract all of its projected electricity needs. A deviation in actual demand from projected demand could result in penalties to distributors. In the event of under-contracting, the distributor is penalized directly in an amount that increases as the difference between the amounts of energy contracted for and actual demand increases. An under-contracting distributor must also pay to meet its demand by purchasing energy in the Spot Market.
In the event of over-contracting, where the contracted volume falls between 100% and 105% of actual demand, the distributor is not penalized and the additional costs are compensated customers’ tariffs. Where the contracted volume is over 105% of actual demand, the distributor must sell energy in the Spot Market. If the contract price proves lower than the current Spot Market price, the distributor sells its excess energy for a profit. On the other hand, if the contract price is higher than the Spot Market price, the distributor sells its excess energy at a loss. The Federal Law No. 13,360, dated November 17, 2016, also permitted the sale of excess energy by distribution companies in the Free Market. Resolution No. 1,009, dated March 22, 2022, have recently provided additional rules on the methodology to be adopted by distribution companies with respect to the Mechanism of Surplus Sales (
Mecanismo de Venda de Excedente
s, or “MVE”).
With respect to the granting of new concessions, regulations provide that bids for new hydroelectric generation facilities may include, among other things, the minimum percentage of electricity to be supplied in auctions in the regulated market. Concessions for new generation projects, such as Mauá and Colíder in our case, are non-renewable, meaning that upon expiration, the concessionaire must again complete a competitive bidding process.
The Free Market
The Free Market covers transactions between generation concessionaires, Independent Power Producers – IPPs, self-generators, energy traders, exporters and importers of electric energy and Free Customers. The Free Market also covers bilateral agreements between generators and distributors signed under the old model, until they expire. Upon expiration, such contracts must be executed under the New Industry Model Law guidelines.
A consumer that is eligible to choose its supplier may only do so upon the expiration of its contract with the local distributor and with advance notice or, in the case of a contract with no expiration date, upon 15 days’ notice in advance of the date on which the distributor must provide MME with its estimated electricity demand for the year. In the latter case, the contract will only be terminated in the following year. Once a consumer has chosen the Free Market, it may only return to the regulated system with five years prior notice to its regional distributor, provided that the distributor may reduce such term at its discretion. This extended period of notice seeks to assure that, if necessary, the distributor can buy additional energy in auctions on the regulated market without imposing extra costs on the captive market.
Private generators may sell electricity directly to Free Customers. State-owned generators may sell electricity directly to Free Customers but are obligated to do so only through private auctions carried out by the state-owned generators exclusively to Free Customers or by the Free Customers.
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As mentioned above, recently, Federal Law No. 13,360, dated November 17, 2016, also permitted the sale of excess energy by distribution companies in the Free Market, but the effectiveness of the rule is still subject to further regulation by ANEEL.
Focusing on the future of the electricity sector, the Ministry of Mines and Energy launched Public Consultation No. 33/2017 with the purpose of obtaining the view of different participants around improvements in the business model of the sector. Issues such as the expansion of the Free Market and removal of barriers to the entry of its participants, hourly energy price, adequate allocation of risks, security of supply and socio-environmental sustainability were discussed. Further regulation is expected for the years to come with bills being discussed in the Brazilian Congress in order to implement reforms in the power sector. For more information see “–Potential New Regulatory Framework.”
Regulation under the New Industry Model Law and further rules enacted
A July 2004 decree governs the purchase and sale of electricity in the regulated market and the Free Market, as well as the granting of authorizations and concessions for electricity generation projects. This decree includes, among other items, regulations relating to auction procedures, the form of power purchase agreements and the mechanism for passing costs through to final customers.
These regulations establish the guidelines under which electricity-purchasing agents must contract their electricity demand. Electricity-selling agents must show that the energy to be sold comes from existing or planned power generation facilities. Agents that do not comply with such requirements are subject to penalties imposed by ANEEL.
These regulations also require electricity distribution companies to contract for 100% of their energy needs primarily through public auctions. In addition to these auctions, distribution companies can purchase limited amounts (up to 10% of their demand) from: (i) generation companies that are connected directly to the distribution company (except for hydroelectric power plants with capacity higher than 30 MW and certain thermoelectric power plants) (ii) electricity generation projects participating in the initial phase of the Proinfa Program, (iii) the Itaipu Power Plant and (iv) quotas from those generation concession contracts extended or subject to a new competitive bidding process in accordance with the 2013 Concession Renewal Law.
The MME establishes the total amount of energy that will be contracted in the regulated market, the number and the type of generation projects that will be auctioned each year.
All electricity generation, distribution and trading companies, independent producers and Free Customers are required to notify MME, by August 1
st
of each year of their estimated electricity demand or estimated electricity generation, as the case may be, for each of the subsequent five years. In advance of each electricity auction, each distribution company is also required to inform MME of the amount of electricity that it intends to contract in the auction. In addition, distribution companies are required to specify the portion of the contracted amount they intend to use to supply potentially Free Customers.
Auctions in the Regulated Market
Electricity auctions for new generation projects are held from the third to the seventh year before the initial delivery date of electricity. Electricity auctions for existing generation projects are held (i) from the first to the fifth year before the initial delivery date, and (ii) up to four months before the initial delivery date (“Adjustment Auctions”).
New and existing power generators may participate in the Reserve Energy Auctions as long as these generators increase the power system capacity or if they did not achieve commercial operation by January 2008. Invitations to bid in the auctions are prepared by ANEEL in accordance with guidelines established by the MME, including the requirement that the lowest bid wins the auction. Each generation company that participates in the auction executes a contract for the purchase and sale of electricity with each distribution company, in proportion to the distribution companies’ respective estimated demand for electricity, except for the market adjustment and Reserve Energy Auctions.
The contracts for new generation projects have a term between 15 and 35 years, and the contracts for existing generation projects have a term between 1 and 15 years. Contracts arising from market Adjustment Auctions are limited to a two-year term. The reserve energy contracts are limited to a 35-year term.
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The quantity of energy contracted from existing generation facilities may be reduced for three reasons: (i) to compensate for Captive Customers that become Free Customers; (ii) to compensate for market deviations from the estimated market projections (up to 4% per year of the annual contracted amount, beginning two years after the initial electricity demand is estimated); and (iii) to adjust the quantity of contracted energy in bilateral agreements entered into prior to the enactment of the New Industry Model Law.
With regard to (i) above, the reduction in net revenue caused when a Captive Customer becomes a Free Customer is partially compensated by the increased amounts that Free Customers are required to pay to use our distribution system. However, a Free Customer may disconnect from our distribution grid (and therefore cease to pay us a distribution tariff) if it chooses to connect directly to the Interconnected Transmission System or if it generates energy for self-consumption and transports this energy without using our distribution grid. Because a Free Customer that connects directly to the Interconnected Transmission System no longer pays us a distribution tariff, we might not be able to fully recover this loss in revenues.
Since 2004, CCEE has conducted 35 auctions for new generation projects, 32 auctions for energy from existing power generation facilities, ten auctions for reserve energy in order to increase energy supply security, three auctions from alternative energy sources, 17 auctions for market adjustments, one simplified competitive procedures and two capacity reserve auction. No later than August 1
st
of each year, the generators and distributors provide their estimated electricity generation or estimated electricity demand for the five subsequent years. Based on this information, MME establishes the total amount of electricity to be traded in the auction and determines which generation companies will participate in the auction. The auction is carried out electronically in two phases.
After the completion of the auction (except in the case of Reserve Energy Auction), generators and distributors execute the CCEAR, in which the parties establish the price and amount of the energy contracted in the auction. The price is adjusted annually based on price variations published by the IPCA. The distributors grant financial guarantees to the generators (mainly receivables from the distribution service) to secure their payment obligations under the CCEAR.
Also, after completion of the Reserve Energy Auction, the generation concessionaire and the CCEE execute the
Contrato de Energia de Reserva
, in which the parties establish the price and amount of the energy contracted for in the auction. The distributors, Free Customers and self-producing customers then execute the
Contrato de Uso da Energia de Reserva
(“CONUER”) with CCEE, in order to provide for the terms of the use of the reserve energy. The reserve energy customers grant financial guarantees to CCEE to secure their payment obligations under CONUER.
The 2013 Concession Renewal Law established that generation concessions entered into prior to 2003 that were not renewed would be subject to a new competitive bidding process and that the energy generated by these facilities will be allocated by the Brazilian government in quotas to the regulated market, for purchase by distribution concessionaires. On November 25, 2015, ANEEL carried out a competitive bidding process for the grant of new 30-year concessions of 29 hydroelectric plants in accordance with the 2013 Concession Renewal Law. Until December 31, 2016, 100% of the electricity generated by such 29 hydroelectric plants must be destined to the regulated market and, as of January 1, 2017, the percentage was reduced to 70%. On September 27, 2017, the ANEEL carried another competitive bidding process for the grant of new 30-year concessions of 4 hydroelectric plants in accordance with the 2013 Concession Renewal Law. In this auction, the percentage destined to the regulate market was 70% since the beginning of the concession.
The Annual Reference Value
Brazilian regulation establishes a mechanism (“Annual Reference Value”) that limits the costs that can be passed through to final customers.
The regulation establishes certain limitations on the ability of distribution companies to pass-through costs to customers, such as no pass-through of costs for electricity purchases that exceed 105% of actual demand.
The MME establishes the maximum acquisition price for electricity generated by existing projects. If distributors do not comply with the obligation to fully contract their demand, the pass-through of costs from energy acquired in the short-term market is the lower of the Spot Market price and the Annual Reference Value.
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Electric Energy Trading Convention
The Electric Energy Trading Convention (
Convenção de Comercialização de Energia Elétrica
) regulates the organization and functioning of the CCEE and defines, among other things, (i) the rights and obligations of CCEE participants, (ii) the penalties to be imposed on defaulting agents, (iii) the means of dispute resolution, (iv) trading rules in the regulated and Free Markets, and (v) the accounting and clearing process for short-term transactions.
Restricted Activities of Distributors
Distributors in the Interconnected Transmission System are not permitted to (i) engage in activities related to the generation or transmission of electric energy, (ii) hold, directly or indirectly, any interest in any other company, corporation or strategic agreement, or (iii) engage in activities that are unrelated to their respective concessions, except for those permitted by law or the relevant concession agreement. According to Law No. 13,360/2016, distributors are allowed to sell energy to Free Customers. This possibility is regulated by ANEEL through Normative Resolution No. 1,009/2022, with the application of the MVE.
Elimination of Self-Dealing
Since the purchase of electricity for Captive Customers is now performed through auctions in the regulated market, “self-dealing” (under which distributors were permitted to meet up to 30% of their energy needs using energy that was either self-produced or acquired from affiliated companies) is no longer permitted.
Challenges to the Constitutionality of the New Industry Model Law
The New Industry Model Law is currently being challenged on constitutional grounds before the Brazilian Supreme Court. The Brazilian government moved to dismiss the actions, arguing that the constitutional challenges were moot because they related to a provisional measure that had already been converted into law. To date, the Supreme Court has not reached a final decision and we do not know when such a decision may be reached. While the Supreme Court is reviewing the law, its provisions have remained in effect. Regardless of the Supreme Court’s final decision, certain portions of the New Industry Model Law relating to restrictions on distributors performing activities unrelated to the distribution of electricity, including sales of energy by distributors to Free Customers and the elimination of self-dealing, are expected to remain in full force and effect.
Tariffs for the Use of the Distribution and Transmission Systems
ANEEL regulates access to the distribution and transmission systems and establishes tariffs for the use of these systems. The tariffs are (i) distribution system usage charges, which are charges for the use of the proprietary local grid of distribution companies (“TUSD”) and (ii) for the use of the transmission system, which is the Interconnected Transmission System and its ancillary facilities (“TUST”).
TUSD
Users of a distribution grid pay the distribution concessionaire a tariff known as the TUSD (
Tarifa de Uso dos Sistemas Elétricos de Distribuição
). The TUSD is divided into two parts: one related to the contracted power in R$/kW and another related to the regulatory charges in R$/kWh. The amount paid by the users of a distribution grid is calculated by multiplying the maximum contracted power for each of the customer’s points of connection to the concessionaire’s distribution grid, by the tariff in R$/kW, plus the product of the power consumption by the tariff in R$/kWh, per month.
In relation to the Captive Customers, the TUSD is part of the supply tariff that is calculated based on the voltage used by each customer.
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TUST
The TUST (
Tarifa de Uso do Sistema de Transmissão
) is paid by distribution companies, generators and Free Customers to transmission companies for the use of the Interconnected Transmission System (electrical transmission system with a voltage equal or higher than 230 kV). This tariff is revised annually according to (i) the location of the user of the Interconnected Transmission System and (ii) the annual revenues that a transmission company is permitted to collect for the use of its assets in the Interconnected Transmission System. The ONS, an entity that represents all transmission companies that own assets in the Interconnected Transmission System, coordinates the payment of transmission tariffs to these transmission companies. Users of the Interconnected Transmission System sign contracts with the ONS, which allows them to use the transmission grid in return for paying TUST.
Distribution Tariffs
Distribution tariff rates to final customers are subject to review by ANEEL, which has the authority to adjust and review these tariffs in response to changes in energy purchase costs and market conditions. When adjusting distribution tariffs, ANEEL divides the costs of distribution companies into (i) costs that are beyond the control of the distributor (“Parcel A costs”), and (ii) costs that are under control of distributors (“Parcel B costs”). ANEEL’s tariff adjustment formula treats these two categories differently.
Parcel A costs include, among others, the following:
•
costs of electricity purchased by the concessionaire to attend Captive Customers, in accordance to the regulatory model in force;
•
charges for the connection to and use of the transmission and distribution grids; and
•
energy sector regulatory charges
.
Parcel B costs include, among others, the following:
•
a component designed to pay the distributor for the investments made by the distributor on the concession assets;
•
depreciation costs; and
•
a component designed to compensate the distributor for its operating and maintenance costs.
Each distribution company’s concession agreement provides annual adjustments. In general, Parcel A costs are fully passed through to customers. Parcel B costs, however, are adjusted for inflation in accordance with the IPCA Index, minus the X factor.
Electricity distribution concessionaires are also entitled to periodic tariff revisions (
revisão periódica
) every four or five years. In these processes, Parcel B is recalculated, taking into account incentives for efficiency, quality improvement and reasonable tariff. These revisions are aimed at (i) assuring necessary revenues to cover efficient Parcel B operational costs and adequate compensation for investments deemed essential for services provided within the scope of each such company’s concession and (ii) determining the “X factor.” The fifth amendment to our concession agreement, which establishes the renewal of our concession agreement, determines the Periodic Tariff Review every five years.
The X factor for each distribution company is calculated based on the following components:
•
P, based on the concessionaire's productivity, which is calculated through the distribution segment productivity (PTF), determined by the ratio between the variation in the tariff market and operating and capital costs, plus the average growth of the concessionaire’s own tariff market;
•
T, based on the trajectory of the concessionaire’s operating costs, measured as the difference between the cost benchmarks established by ANEEL and the concessionaire’s actual operating costs; and
•
Q, based on quality target indicators that measure the interruption of energy supply to final customers, and other quality indicators.
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In addition, a distribution concessionaire may request an Extraordinary Tariff Review of its tariffs in case of evident economic-financial imbalance, according to the admissibility criteria established through the Tariff Regulation Procedures (PRORET), sub-module 2.9. Extraordinary tariff adjustments were granted (i) in June 1999 to compensate for increased costs of electricity purchased from Itaipu as a result of the devaluation of the real against the dollar; (ii) in 2000 to compensate for the increase in Social Security Financing Contribution (
Contribuição para o Financiamento da Seguridade Social
– “COFINS”) from 2% to 3%; (iii) in December 2001 to compensate for losses caused by the Rationing Program; (iv) in January 2013, due to the enactment of 2013 Concession Renewal Law; (v) in March 2015, to compensate the costs related to the quotas of the CDE and increased costs with the purchase of energy, and (vi) in March 2017, to compensate the amount unduly included in the tariffs for captive customers in 2016, referring to the Angra III plant.
Since October 2004, on the date of a subsequent tariff adjustment or tariff revision, whichever occurs earlier, distribution companies have been required to execute separate contracts for the connection and use of the distribution grid and for the sale of electricity to their potentially Free Customers.
Tariff Flags (Bandeiras Tarifárias)
Effective as of January 1, 2015, a new system has been introduced by the ANEEL to permit distribution concessionaires to pass on to their Final Customer certain variable cost increases attributable to changes in hydrological conditions in Brazil, prior to the formal tariffs periodic revisions made by ANEEL.
In accordance with this model, a green, yellow or red flag, as determined by ANEEL, is included in electricity bills sent to final customers, reflecting nationwide hydrological conditions (except for the State of Roraima). If a green flag is added to final customers’ bills due to satisfactory hydrological conditions, no additional charges are added. On the other hand, if these bills contain yellow or red flags, this indicates that distribution concessionaires are facing higher variable costs from the acquisition of electricity and will pass these costs on to final customers.
Incentives
In 2000, a federal decree created the Thermoelectric Priority Program, (
Programa Prioritário de Termoeletricidade
, or “PPT”), for the purposes of diversifying the Brazilian energy matrix and decreasing Brazil’s strong dependence on hydroelectric plants. The incentives granted to the Thermoelectric Plants included in the PPT were: (i) guarantee of gas supply for 20 years, as per a MME regulation, (ii) assurance that the costs related to the acquisition of the electric energy produced by Thermoelectric Plants will be passed on to customers through tariffs up to the normative value established by ANEEL, and (iii) guarantee of access to a special BNDES financing program for the electric energy industry.
In 2002, the Brazilian government established the Proinfa Program to encourage the generation of alternative energy sources. Under the Proinfa Program, Eletrobras would purchase the energy generated by alternative sources for a period of 20 years. In its initial phase, the Proinfa Program was limited to a total contracted capacity of 3,300 MW. In its second phase, which should start after the 3,300 MW cap has been reached, the Proinfa Program intends to purchase up to 10% of Brazil’s annual electric energy consumption from alternative sources. The first phase of the Proinfa program commenced in 2004 and it so far has supported the construction of 131 alternative energy plants which is expected to reach the production of 11.2 million MWh. According to a decision of ANEEL, the total investment to the Proinfa Program in 2025 will be R$ 6,161.6 million.
Energy Sector Regulatory Charges
EER
The Encargo de Energia de Reserva
(“EER”) is a regulatory charge designed to raise funds for energy reserves that have been contracted through CCEE and which are deposited in the Reserve Energy Account (
Conta de Energia de Reserva
– CONER). These energy reserves, which are mandatory, were created in order to attempt to ensure a sufficient supply of energy in the Interconnected Transmission System. The EER shall be collected from final customers of the Interconnected Transmission System. Beginning in 2010, this charge has been collected on a monthly basis.
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RGR Fund
In certain circumstances, electric energy companies are compensated for certain assets used in connection with a concession if the concession is revoked or is not renewed. In 1971, the Brazilian Congress created a reserve fund designed to provide these compensatory payments (“RGR Fund”). In February 1999, ANEEL established a fee requiring public-industry electric companies to make monthly contributions to the RGR Fund at an annual rate equal to 2.5% of the company’s fixed assets in service, not to exceed 3% of total operating revenues in any year. Since the enactment of the 2013 Concession Renewal Law, the RGR Fund has been used to fund the compensations arising from the termination of non-renewed concessions. The 2013 Concession Renewal Law also allowed the funds from the RGR Fund to be transferred to the CDE.
According to 2013 Concession Renewal Law, as from January 1, 2013, the concession contracts from concessionaires of (i) distribution; (ii) transmission which competitive bidding process occurred after September 12, 2012; and (iii) transmission and generation which had their concession contract renewed or had their underlying facilities subject to a new competitive bidding process are no longer obliged to pay the annual RGR fee.
UBP
Some hydroelectric generation enterprises (except small hydroelectric power plants) are required to make contributions for using a public asset (
Uso do Bem Público
- “UBP”) in accordance with the rules established in the concession contracts. See Note 23 to our audited consolidated financial statements.
ESS
The costs related to maintaining system reliability and stability when Thermoelectric Plants generate energy to meet demand in the National Connection System (“SIN”) are called System Service Charges, or
Encargos de Serviços de Sistema
(“ESS”). These amounts are paid by each entity that purchases energy in the Spot Market (“CCEE”), proportional to each such entity’s consumption.
ESS is expressed in R$/MWh and paid only to Thermoelectric Plants that generate energy in response to requests by the ONS.
ERCAP
The costs arising from the contracting of reserve capacity, in the form of power, in order to meet the need for power required by the National Interconnected System are called the Capacity Reserve Charge (Encargo de Reserva de Capacidade - ERCAP). The amounts are paid by the end users of electricity in the National Interconnected System (SIN), in proportion to energy consumption, to the generation projects that have entered into Capacity Reserve Power Contracts (Contratos de Potência de Reserva de Capacidade - CRCAP).
CDE
In 2002, the Brazilian government instituted the Electric Energy Development Account,
Conta de Desenvolvimento Energético
(“CDE”). The CDE is funded by (i) annual payments made by concessionaires for the use of public assets, (ii) penalties imposed by ANEEL, (iii) the annual fees paid by agents offering electric energy to final customers, by means of an additional charge added to the tariffs for the use of the transmission and distribution grids and (iv) transfer of resources from the Federal General Budget. The CDE was originally created, amongst others, to promote the availability of electric energy services to all of Brazil and the competitiveness of the energy produced by alternative sources.
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Currently, CDE aims to fund several public policies in the Brazilian electricity sector, such as: universalization of the electricity service throughout the national territory; granting of tariff discounts to various users of the service (low income; rural; Irrigating; public water, sewage and sanitation services; incentive energy generation and consumption, etc.); low tariff on isolated electricity systems (Fuel Consumption Account - CCC); competitiveness of electricity generation from the national coal source; among others. The CDE is managed by CCEE since May 2017, pursuant to Federal Law No. 13,360/2016. This charge had been substantially reduced by the 2013 Concession Renewal Law (approximately 75% compared to its December 31, 2011 amount) in an attempt to reduce the cost of electricity paid by final customers. The 2013 Concession Renewal Law also allowed the funds from the RGR Fund to be transferred to the CDE, provided that the Federal Treasury would also contribute with the CDE and permit the funds deposited in the CDE to be used in support of the electricity generation program in non-integrated electric grids (
sistemas elétricos isolados
) as well as to partially offset the increased costs borne by distribution concessionaires for the purchase of energy in the Spot Market as a result of the non-renewal of generation concessions due to the 2013 Concession Renewal Law.
On March 7, 2014, the Brazilian government also permitted the transfer to distribution concessionaires of funds deposited in the CDE to cover their respective costs arising from involuntary exposure to the Spot Market in January 2014 as a result of poor hydrological conditions in 2013 and 2014, which mandated the acquisition of thermoelectric energy at higher prices in the Spot Market, costs which distribution concessionaires were not able to pass on to final customers through regular Retail Tariffs prior to annual adjustments or formal tariffs periodic revisions made by ANEEL.
Distribution concessionaires will be able to pass on to its Final Customers CDE charge, to the extent necessary to repay their respective financing obligations contracted by the CCEE through the ACR Account. See “—Regulated Market Account–ACR Account.”
On February 27, 2015, ANEEL approved a significant increase of the CDE fee charged to cover all of these additional costs supported by the CDE. ABRACE, an association of Free Customers filed lawsuits to contest the increase of the CDE fee. Since July 2015, the Free Customers associated with ABRACE benefit from an injunction suspending the increase of the CDE fee. Associations of distributors of energy (ABRADEE, with whom Copel Distribuição is associated) also obtained injunctions suspending its obligation to withhold such CDE fees while ABRACE´s and other consumers’ injunction remains in force.
Federal Law No. 13,360/2016 established that the Brazilian government must prepare a plan for a structural reduction of the CDE charge until December 31, 2017, and it also provided that the revenues, expenses and beneficiaries of the CDE must be published monthly by CCEE, among other changes. As a result, Decree nº 9,642/2018 was published, which determined the gradual reduction, in 5 years, of discounts granted to consumer units classified as Rural and Public Service of Water, Sewage and Sanitation, in Groups A (high voltage) and B (low voltage).
Regulated Market Account – ACR Account.
On April 2014, the Brazilian government created the Regulated Market Account,
Conta no Ambiente de Contratação Regulada – Conta-ACR
(“ACR Account”), to assist distribution concessionaires to cover their respective costs for the acquisition of thermoelectric energy for the period from February 2014 to December 2014, incurred as a result of poor hydrological conditions. Distributors incurred higher costs as a result of adverse hydrological conditions because they were required to buy thermoelectric energy at higher prices in the Spot Market, and were unable to pass all these costs on to final customers prior to a formal tariff periodic revision made by ANEEL. To fund the ACR Account, the Brazilian government authorized the CCEE to enter into credit agreements with certain Brazilian financial institutions. An aggregate of R$21.7 billion, composed of nine tranches, was deposited in the ACR Account. Distribution concessionaires have been repaying this loan since 2015 by charging its final customers with additional CDE amounts on a monthly basis. At first, the amount deposited in the ACR Account should be repaid by 2020. However, in March 2019, ANEEL authorized CCEE to negotiate with the creditor financial institutions and seek early termination of the corresponding loans, which occurred in September 2019.
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Water Scarcity Account
Created through Decree No. 10,939, of January 13, 2022 and regulated by ANEEL Normative Resolution No. 1. 008/2022, the Water Scarcity Account is intended to receive funds to cover, in whole or in part, the additional costs arising from water shortage for the concessionaires and permissionaires of public service of electricity distribution. The Water Scarcity Account allowed the postponement and payment in installments of the tariff impacts arising from the period of hydrological crisis, not immediately impacting the energy bills in the year 2021, through financial operations using the tariff charge of the Energy Development Account (“CDE”). The Electricity Trading Chamber is responsible for contracting the financial operations aimed at raising funds and managing the Water Scarcity Account, ensuring the full transfer of the costs related to these operations to the CDE, as regulated by ANEEL.
Itaipu Transmission Fee
The Itaipu Hydroelectric Plant has an exclusive transmission grid and is not part of the Interconnected Transmission System. Companies that are entitled to receive electricity from Itaipu pay a transmission fee in an amount equal to their proportional share of the Itaipu generated electricity.
Use of Water Resources Tax
Holders of concessions and authorizations that allow for the exploitation of water resources must pay a total tax of 7.00% of the value of the energy they generate, which for the purposes of this calculation is based on a rate set by ANEEL. Beginning on January 1, 2021, ANEEL set this rate at R$76.00/MWh. The proceeds of this tax are shared among the states and municipalities where the plant or the plant’s reservoir is located, as well as with certain federal agencies.
ANEEL Inspection Fee (TFSEE)
The ANEEL Inspection Fee is an annual fee due by the holders of concessions, permissions or authorizations equal to an ANEEL determined percentage of their revenues. The ANEEL Inspection Fee requires these holders to pay up to 0.4% of their annual revenue to ANEEL in 12 monthly installments.
Default on the Payment of Regulatory Charges
The failure to pay required contributions to the RGR Fund, Proinfa Program or CDE or to make certain payments, such as those due from the purchase of electric energy in the regulated market or from Itaipu, will prevent the defaulting party from receiving adjustments or reviews of their tariffs (except for an extraordinary review) and will also prevent the defaulting party from receiving funds from the RGR Fund or CDE. We comply with payment obligations related to Regulatory Charges.
Energy Reallocation Mechanism
The Energy Reallocation Mechanism (
Mecanismo de Realocação de Energia
, or “MRE”) attempts to mitigate the risks borne by hydroelectric generators due to variations in river flows (hydrological risk).
Under Brazilian law, each hydroelectric plant is assigned a determined amount of “Assured Energy,” according to an energy supply risk criterion defined by MME, based on historical river flow records. The Assured Energy also represents the maximum energy that can be sold by the generator, which is set forth in each concession agreement, irrespective of the volume of electricity actually generated by the facility.
The MRE tries to guarantee that all participating plants receive the revenue corresponding to their Assured Energy, irrespective of the volume of electricity generated by them. In other words, the MRE effectively reallocates the electricity, transferring the surplus from those who have produced in excess of their Assured Energy to those that have produced less than their Assured Energy. The relocation, which occurs in the Interconnected Transmission System, is determined by the ONS, considering the nationwide electricity demand and hydrological conditions, regardless of the power purchase agreement of each individual generator. The volume of electricity actually generated by the plant, whether more or less than their assigned Assured Energy quotient, is priced pursuant to a tariff known as the “Energy Optimization Tariff,” designed to cover only the variable operation and maintenance costs of the plant, so that generators are largely unaffected by the actual dispatch of their plants.
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Each hydroelectric plant which has its concession contract renewed in accordance to 2013 Concession Renewal Law will no longer participate in the MRE, and the hydrological risk from those plants will be borne by the distribution concessionaires under the National Interconnected Power Grid. For the generation plants with expired concessions, which were subject to a new competitive bidding process under the 2013 Concession Renewal Law, 30% of the generated energy available for the generation concessionaire to sell in the market is also subject to the MRE hydrological risk allocation mechanism. This risk does not impact our distribution business, since we are allowed to increase the tariffs of our distribution customers to compensate any costs arising from this hydrological risk.
Research and Development
A company holding concessions and authorizations for generation and transmission of electricity must invest a minimum of 1% of its annual net operational revenues in research and development. A company that generates electricity exclusively from small hydroelectric power plants, cogeneration or alternative energy projects is not subject to this requirement.
The amount to be invested in research and development must be distributed as follows:
•
40% to our research and development projects, under the supervision of ANEEL;
•
40% to the Ministry of Sciences and Technology, to be invested in national research and development projects; and
•
20% to the MME, to defray EPE
.
Companies holding concessions and permissions for the distribution of electricity are required to invest a minimum of 0.50% of their annual net operational revenues in research and development and 0.50% in energy efficiency programs. Starting January 1, 2023, these percentages were set to change to 0.75% and 0.25%, respectively. However, on July 19, 2023, Law 14,514 extended the 0.50% percentage for energy efficiency programs and research and development until December 31, 2025.
In March 2021, Law 14,120/2021 and ANEEL Resolution 929/2021 changed the allocation of research and development resources.
The amount not yet committed to the research and development program until September 2020 will be transferred to CDE as a way to promote tariff moderateness. In the same way, until December 2025, a minimum of 70% of the percentages defined by law must continue to be invested in research and development programs while the difference will be transferred to CDE.
These measures do not impact the amounts to be invested by the concessionaires, but rather their destination.
Environmental Regulation
The Federal Constitution includes environmental matters among those subject to concurrent legislative jurisdiction. This means that the federal government announces general rules that can be complemented by rules approved by states and municipalities, whose attributions are set out in Complementary Law 140/2011. The system aims to integrate environmental policies, which are always guided by a national guideline, while still giving some power to the states and municipalities to regulate and act locally.
In 1981, the National Environmental Policy (Federal Law 6.938/1981) was enacted in Brazil, with the aim of preserving, improving and restoring the environment in Brazil, establishing various principles to be met by different parties. This culminated in an extensive regulatory framework for the conscious use, conservation and effective protection of natural resources.
For example, in 1988, article 225 of the Federal Constitution alluded to environmental issues, providing for the right of all citizens to an ecologically balanced environment and the duty of the community to defend and preserve the environment for future generations. In 1998, the Federal Environmental Crimes Law (Law 9.605/1998) was enacted, providing for criminal and administrative sanctions for conduct and activities considered harmful to the environment.
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The entities that make up the National Environmental System and the publications of the National Environmental Council, which regulate numerous issues, especially those related to the environmental licensing process for projects, are also relevant to Brazil's efforts to protect the environment. Among the main provisions are Conama Resolutions 001/1986, 009/1997 and 237/1997, which deal respectively with environmental impacts, impact reports and environmental licensing for implementation and operation.
Additional federal laws and statutes established the National Water Resources Administration System and the National Water Resources Council to deal with the main environmental issues associated with the hydroelectric sector and water use. In 2000, the Federal Government created an independent agency, the National Water Resources Agency, to regulate and supervise the use of water resources. In 2008, Federal Decree 6.514/2008 was issued to further establish administrative responsibility for environmental infractions.
The Brazilian Forest Code (Federal Law No. 12.651/2012) and related regulations establish rules regarding vegetation that may be impacted by the implementation of projects associated with hydroelectric reservoirs, as well as the National Biodiversity Policy (Decree No. 4.339/2002), and the Convention on Biological Diversity (Decree 2.519/1998). Federal Law No. 9.985/2000 conceptualizes and classifies the different categories of conservation units, establishing the National System of Nature Conservation Units to protect flora and fauna.
Intervening Bodies also play an important role in regulation, which are entities related to the environmental licensing process. However, the Intervening Bodies also act on more specific issues, the most frequent of which are related to the National Indigenous Foundation (
Fundação Nacional do Índio - Funai
), the National Historical and Artistic Heritage Institute (
Instituto do Patrimônio Histórico e Artístico Nacional - Iphan
), the Palmares Foundation, the Chico Mendes Institute for Biodiversity Conservation (
Instituto Chico Mendes de Conservação da Biodiversidade - ICMBio
), among others.
All these regulations can increase the costs associated with implementing power generation and transmission projects, since utilities need to fully adhere to all environmental laws and regulations.
According to Brazilian environmental legislation, any action that poses an environmental risk can result in up to three types of liability: civil, administrative and criminal. Thus, anyone who violates an environmental law may be subject to administrative and criminal sanctions and, in cases of environmental damage, will have the obligation to repair or compensate the affected party and the environment. Administrative sanctions can include significant fines and suspension of activities. Criminal sanctions can be applied to us and individual company representatives simultaneously and can include fines, and for individuals, including directors and employees of companies that have committed environmental crimes, possible imprisonment.
All of our energy generation, distribution and transmission facilities are subject to environmental licensing procedures and the environmental licenses obtained by these facilities may establish various technical criteria. The maintenance of these licenses will still be subject to compliance with certain requirements, which is why we act consistently in compliance with applicable environmental legislation.
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Recent Developments
On February 21, 2025, Copel GeT exercised its right of first refusal to acquire all shares of Geração Céu Azul S.A. (“Céu Azul”), currently owned by Neoenergia S.A., which holds a 70% stake in the Consórcio Empreendedor Baixo Iguaçu (“CEBI”), responsible for operating the Baixo Iguaçu HPP, for an equity value of R$984 million. The acquisition commitment was formalized through adherence to a CCVA that had already been negotiated between Neoenergia and the original potential buyer of this stake.
After exercising the right of first refusal, Copel GeT entered into another CCVA with DK Holding Investments, S.R.O. to sell: (i) the entirety of its equity interest in Céu Azul, and (ii) its 30% minority stake in CEBI, for an equity value of R$570 million, so that the buyer will become the indirect owner of 100% of the Baixo Iguaçu HPP. The total transaction amounts to R$1,554 million in equity value.
The transaction is subject to the fulfillment of certain conditions precedent usual to this type of operation.
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ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The information presented in this section should be read together with our audited consolidated financial statements that have been prepared in accordance with IFRS Accounting Standards as issued by the IASB. For more information see “Presentation of Financial and Other Information” and Note 3 to our audited consolidated financial statements for the year ended December 31, 2024.
The information presented in this section focuses on material events and uncertainties known to our management that could result in reported financial information not being indicative of future operating results or future financial condition, including a quantitative and qualitative description of the reasons underlying material changes. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from those discussed in the forward-looking statements for several reasons, including, without limitation, the risks described in “Forward-Looking Statements” and “Item 3. Key Information - Risk Factors.”
OVERVIEW
Brazilian Economic Conditions
All of our operations are in Brazil, and we are affected by general Brazilian economic conditions. In particular, the general performance of the Brazilian economy affects demand for electricity, and inflation affects our costs and our margins. The Brazilian economic environment faced periods of instability in recent years, impacting the performance of the Brazilian GDP growth rates.
In 2022, the growth rate increased by 2.9%. In 2023, the growth rate increased by 2.9%. In 2024, the growth rate increased by 3.4%.
The following table shows selected economic data for the periods indicated:
|
|
Year ended December 31,
|
||||||||||
|
|
2024
|
2023
|
2022
|
||||||||
|
Inflation (IPCA)
|
4.83 | % | 4.62 | % | 5.79 | % | |||||
|
Inflation (IGP-DI)
(5)
|
6.86 | % | (3.30) | % | 5.03 | % | |||||
|
Appreciation (depreciation) of the real vs. U.S. dollar
|
(27.9) | % | (7.8) | % | (6.5) | % | |||||
|
Period-end exchange rate – US$1.00
|
6.1923
(1)
|
4.8407
(2)
|
5.2171
(3)
|
||||||||
|
Average exchange rate – US$1.00
|
5.3920 | 4.9947 | 5.1648 | ||||||||
|
Change in real GDP
|
3.4 | % | 2.9 | % | 2.9 | % | |||||
|
Average interbank interest rates
(4)
|
10.8 | % | 13.2 | % | 12.5 | % | |||||
(1)
The
rea
l/U.S. dollar exchange rate at December 31, 2024 was R$6,1923 per US$1.00.
(2)
The
rea
l/U.S. dollar exchange rate at December 31, 2023 was R$ 4,8413 per US$1.00.
(3)
The
rea
l/U.S. dollar exchange rate at December 31, 2022 was R$5,2177 per US$1.00.
(4)
Calculated in accordance with Central Clearing and Custody House, or
Central de Custódia e Liquidação Financeira de Títulos
(“CETIP”), methodology (based on nominal rates).
(5)
Sources: FGV ‒ Fundação Getúlio Vargas, the Brazilian Central Bank, the Brazilian Geography and Statistics Institute IBGE and CETIP.
Rates and Prices
Our operational results are significantly affected by changes in the prices at which our generation business sells energy, and by the prices at which our distribution and trading business buys and resells energy.
Our generation business sells energy at unregulated prices in the regulated market, in the Free Market and in the Spot Market. Our generation business allocates the amount of energy that it sells in each of these markets seeking to maximize returns and subject to applicable restrictions, based on factors such as: (i) the requirements of its concession contracts, many of which set a minimum percentage of energy generated in a particular concession that must be sold in the regulated market; (ii) the volume of energy that we plan to sell to Free Customers for a given year; and (iii) the outlook of the short-term, medium-term and long-term for energy prices generally. Although sales in the Free Market and the Spot Market are not directly regulated, they are influenced by energy regulatory policy. The prices at which our generation business sells energy are not regulated.
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Our distribution business purchases enough energy to meet 100% of the demand we forecast for our final customers in auctions at unregulated prices in the regulated market. Our distribution business resells that energy to final customers at regulated tariffs that take into consideration the price at which the energy was purchased. If our forecasts fall short of the actual electricity demand of our final customers, we may be required to enter into short-term agreements to purchase electricity in the Spot Market. If our forecasts exceed the actual demand of our final customers, our distribution business sells the excess energy in the Spot Market. The margins in our distribution business tend to be relatively stable due to the regulated nature of the distribution business, while the margins in our generation business are typically larger but less stable, since they are not substantially market regulated.
Sales to final customers (which include sales by our distribution business to Captive Customers, sales by our generation business and sales by our trading business to Free Customers) represented 61.3% of the volume of electricity we made available in 2024, and accounted for 66.5% of our energy sales revenues, including revenues related to “Electricity Sales to Final Customers” and “Electricity Sales to Distributors”. For more information, see “Item 4. Information on the Company—The Brazilian Electric Power Industry—Distribution Tariffs.” In general, if our costs for energy increase, the tariff process permits us to recover these costs from our customers through higher rates in future periods. However, if we do not receive tariff increases to cover our costs, if the recovery of these costs is delayed, our profits and cash flows may be adversely affected.
ANEEL modifies our Retail Tariffs annually, generally in June. Since January 2013, the adjustments have been as follows.
•
In January 2013, due to the enactment of 2013 Concession Renewal Law, we were subject to an extraordinary revision approved by ANEEL. The average impact of this extraordinary review in the tariffs we charge our customers was a decrease of 19.28%.
•
In June 2013, ANEEL approved the annual revision of our Retail Tariffs, increasing them by an average of 13.08%, of which 11.40% related to the tariff increase and 1.68% referred to an increase in recovery of deferred regulatory accounts (CVA). After giving effect to the recovery of Parcel A costs, the average effect of this tariff adjustment on our Captive Customers was an increase of 14.61%. However, Copel Distribuição requested a partial deferral of this adjustment, which was authorized by ANEEL and approved on July 9, 2013. The amount of R$255.9 million was therefore deferred and included as a financial component in the 2014 annual revision. This deferral reduced the average effect of the tariff adjustment to 9.55%.
•
In June 2014, ANEEL approved the annual adjustment of our Retail Tariffs, increasing them by an average of 35.38%, of which 25.05% related to the tariff increase and 10.34% related to an increase in recovery of deferred regulatory accounts (CVA). After giving effect to the recovery of Parcel A costs, the average effect of this tariff adjustment on our Captive Customers was an increase of 39.71%. However, Copel Distribuição requested a partial deferral of this adjustment, which was authorized by ANEEL and approved on July 22, 2014. The amount of R$898.3 million was therefore deferred and included as a financial component in the 2015 annual adjustment. This deferral reduced the average effect of the tariff revision to 24.86%.
•
In March 2015, ANEEL approved an extraordinary revision due to a series of events that significantly impacted the distribution concessionaires’ costs, which were not originally foreseen in the 2014 Retail Tariff increase, such as the increase of Itaipu tariffs (46.14%) and higher prices to purchase energy in recent energy auctions. Copel Distribuição’s Average Tariff revision approved by ANEEL was 36.79% starting from March 2, 2015. Of this total, 22.14% related to CDE charges that have been passed to customers and 14.65% relates to (i) Itaipu’s tariff increase and (ii) the higher prices paid by us to purchase energy in recent energy auctions that have been passed to customers.
•
In June 2015, ANEEL authorized the annual revision of Copel Distribuição’s tariff to final customers, increasing them by an average of 15.32%, of which (i) 20.58% related to the inclusion of the financial components, which will be recovered in the 12 months subsequent to the adjustment (including the amount of R$935.3 million corresponding to the deferrals in 2013 and 2014), (ii) 0.34% related to the restatement of Portion B, (iii) (3.25)% related to the adjustment of Portion A, and (iv) (2.35)% reflected the removal of the financial components from the previous process. The adjustment was fully applied to Copel Distribuição’s tariffs as of June 24, 2015.
•
In June 2016, ANEEL approved the fourth periodic review of our Retail Tariffs, decreasing them by 12.87%, of which: (1.73)% related to the inclusion of financial components; 4.48% due to the update of Portion B; (2.57)% related to the update of Portion A; and (13.05)% reflecting the removal of the financial components of the previous tariff process.
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•
In March 2017, ANEEL approved an extraordinary tariff revision to correct the amount unduly included in the tariffs for captive customers in 2016. The return corresponded to the energy that was to be generated by the Angra III power plant; however, the plant was not yet in commercial operation. The refund of the amount charged the most was made in a single installment during the month of April 2017, and, as of May 2017, the tariffs were adjusted to disregard the amount that was being charged. The decision, of extraordinary character, affected 90 distributors of electric power of the country. Our retail tariff (residential B1) was reduced by an average of 11.8% during April 2017 due to the adjustment resulting from the removal of the Reserve Energy Charge (EER) tariff coverage of the Angra III plant, retroactive to the last Periodic Tariff Review, held in June/2016. As of May 2017, the tariff was reset, disregarding the effect arising from the retroactive adjustment, but maintaining the exclusion of the EER (Reserve Energy Charge) component of Angra III for the coming months, until June 2017, the month of the adjustment annual tariff.
•
In June 2017, ANEEL approved the annual revision of our Retail Tariffs, increasing them by an average of 3.13%, of which 3.86% related to the tariff increase and (0.73)% related to the inclusion of financial components. After the removal of the financial components of the previous tariff process, the average effect of this tariff adjustment on our Customers was an increase of 5.85%.
•
In June 2018, ANEEL approved the annual revision of our Retail Tariffs, increasing them by an average of 14.32%, of which 7.80% related to the tariff increase and 6.52% related to the inclusion of financial components. After the removal of the financial components of the previous tariff process, the average effect of this tariff adjustment on our Customers was an increase of 15.99%.
•
In June 2019, ANEEL approved the annual adjustment of our Tariffs, increasing them on average by 8.57%, with -1.96% related to the variation in economic revenue and 10.54% related to the inclusion of financial components. After removing the financial components from the previous tariff process, the average effect of the tariff adjustment on our customers was an increase by 3.41%.
•
In June 2020, ANEEL approved the annual adjustment of our supply tariffs, which represented a tariff repositioning index of 15.84%, comprised of a variation of 8.68% in the economic components and 7.16% in the financial components. After removing the effect of the financial variables from the previous tariff process, the average effect perceived by the customers would be 5.39%. However, in an aim to reduce the impact on electric bills due to the financial consequences of the COVID-19 pandemic, ANEEL created the COVID-19 Fund, a loan operation between various banks contracted by the CCEE in order to dilute tariff increases in the next five years. Thus, Copel Distribution asked that the effects the COVID-19 Fund be applied to our annual tariff adjustment in the amount of R$536.4 million, equivalent to the accumulated total of the Compensation Account for the Variation of Items of Parcel A (“CVA”), considered a negative financial component, ultimately reducing the effect on the consumer. With the removal of the previous year’s financial components, the final average effect perceived by the consumer was 0.41%.
•
In June 2021, ANEEL approved the fifth periodic review of our Retail Tariffs, increasing them by 9.89% in average, of which: 1.19% related to the inclusion of financial components; 1.05% due to the update of Portion B; 8.62% related to the update of Portion A; and (0.98)% reflecting the removal of the financial components of the previous tariff process.
•
In June 2022, ANEEL approved our annual tariff adjustment with an average tariff increase of 4.90%, of which: -3.04% referring to the inclusion of financial components; 3.14% due to the update of Part B; 5.04% referring to the update of Part A; and -0.24% reflecting the withdrawal of financial components from the previous tariff process.
•
In June 2023, ANEEL approved our annual tariff adjustment with an average tariff increase of 10.50%, consisting of: -3.00% for the inclusion of financial components; 0.47% for the update of Part B; 9.66% for the update of Part A; and 3.37% for the withdrawal of financial components from the previous tariff process.
•
In 2024, ANEEL approved our annual tariff readjustment with an average tariff readjustment of 0.00%, of which: -4.45% referring to the inclusion of financial components; 1.10% due to the update of Part B; 0.97% referring to the update of Part A; and 2.39% reflecting the withdrawal of financial components from the previous tariff process
.
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Purchase and Resale of Energy
Our distribution business purchases energy from generation companies and resells this energy to final customers at regulated rates. For more information, see “Item 4. Information on the Company— Business—Generation” and “Item 4. Information on the Company—Business—Purchases for the captive market.” Our major long-term contracts or purchase obligations are described as follows.
•
We purchase energy from Itaipu at prices that are determined based on the Itaipu project’s costs, including servicing its U.S. dollar-denominated debt. In 2024, our electricity purchases from Itaipu amounted to R
$950.4 million;
•
Our distribution business is required to purchase a large portion of its energy needs from the regulated market. For more information, see “Item 4. Information on the Company—The Brazilian Electric Power—Industry—Concessions—Auctions in the Regulated Market.
”
Under current legislation, the amount that our distribution business charges final customers is composed of two fees: a fee for the actual energy consumed and a fee for the use of our distribution grid. Since the regulated rates at which our distribution business sells energy to final customers are substantially the same as the rates at which it purchases energy (after accounting for deductions and the cost of energy purchased for resale), our distribution business does not generate operating profit from the sale of electricity to final customers. Rather, our distribution business generates operating profit principally by collecting tariffs for the use of our distribution grid.
Special Obligations
The contributions received from the Brazilian government and our customers exclusively for investment in our generation assets, transmission and distribution grid are named as special obligations. We record the amount of these contributions on our statement of financial position as a reduction of assets, under the caption “special obligations,” and, upon the conclusion or termination of the operating concession granted to us, the amount of these contributions is offset against the assets. The highest amount we recorded as special liabilities in service as of December 31, 2024, from the distribution segment, was R$2,909.6 million as a reduction of intangible assets and R$99.3 million as a reduction of contract assets. More information in Notes 10.1 and 16.1 to our Financial Statements.
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ANALYSIS OF ELECTRICITY SALES AND COST OF ELECTRICITY PURCHASED
The following table sets forth the volume and Average Rate components of electricity sales and purchases for the years ended December 31, 2024, 2023 and 2022:
|
Categories of purchaser
|
2024
|
2023
|
2022
|
||||||||
| Electricty Sales | |||||||||||
|
Electricity sales to Final Customers
(2)
|
|||||||||||
|
Average price (R$/MWh):
(1)
|
|||||||||||
| All customers | 357.40 | 315.54 | 369.09 | ||||||||
| Volume (GWh): | |||||||||||
| All customers | 31,850 | 32,911 | 30,868 | ||||||||
|
Total gross revenues from sales to Final Customers (millions of R$)
|
11,384 | 10,385 | 11,393 | ||||||||
|
Electricity sales to distributors
(3)
|
|||||||||||
|
Average price (R$/MWh)
(1)
|
182.39 | 157.70 | 155.58 | ||||||||
| Volume (GWh) | 20,147 | 26,861 | 29,950 | ||||||||
|
Total gross revenues to distributors (millions of R$)
|
3,675 | 4,236 | 4,644 | ||||||||
|
Electricity Purchases
(6)
|
|||||||||||
| Purchases from Itaipu | |||||||||||
|
Average cost (R$/MWh)
(4)
|
217.42 | 205.86 | 277.12 | ||||||||
| Volume (GWh) | 4,553 | 4,762 | 5,272 | ||||||||
| Percentage of total Itaipu production purchased | 8.6 | 7.5 | 7.5 | ||||||||
|
Total cost (millions of R$)
(5)
|
950.4 | 980.3 | 1,461.0 | ||||||||
| Purchases from Angra | |||||||||||
| Average cost (R$/MWh) | 346.12 | 338.88 | 342.03 | ||||||||
| Volume (GWh) | 856 | 872 | 928 | ||||||||
|
Total cost (millions of R$)
(5)
|
296.7 | 295.5 | 317.4 | ||||||||
| Purchases from CCGF | |||||||||||
| Average cost (R$/MWh) | 175.39 | 158.41 | 127.98 | ||||||||
| Volume (GWh) | 3,914 | 4,568 | 5,901 | ||||||||
|
Total cost (millions of R$)
(5)
|
686.3 | 723.6 | 755.2 | ||||||||
|
Purchases from others
(3)
|
|||||||||||
| Average cost (R$/MWh) | 262.83 | 159.10 | 154.43 | ||||||||
| Volume (GWh) | 24,019 | 35,932 | 36,024 | ||||||||
|
Total cost (millions of R$)
(5)
|
6,312.9 | 5,716.7 | 5,563.3 | ||||||||
(1)
Average prices or costs do not consider “use of main distribution and transmission grid” revenue and were calculated by dividing (i) the corresponding revenues, including taxes, by (ii) MWh of electricity sold.
(2)
Includes Free Customers, public services such as street lighting, as well as the supply of electricity to government agencies, and Donations and grants.
(3)
Energy traded between our subsidiaries not included.
(4)
Our purchases of electricity generated by Itaipu are stated in
reais
and paid for on the basis of a capacity charge expressed in U.S. dollars per kW plus a “wheeling” (or transportation) charge expressed in
reais
per kWh.
(5)
See “Item 4. Information on the Company—Business—Generation” and “Item 4. Information on the Company—Business— Purchases for the captive market” for an explanation of our expenses relating to electricity purchases
(6)
As of 2024, eliminations and reclassifications were considered
Form 20-F 25FY24 | COPEL and Subsidiaries |
92
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
For commentary on our results of operations for the year 2023 compared with 2022, please see page 98 of our Form 20-F for the year ended December 31, 2023.
The following table summarizes our results of operations for the years ended December 31, 2024 and 2023.
|
|
Year ended December 31,
|
|||||||
|
|
2024
|
2023
|
||||||
|
|
(R$ million)
|
|||||||
|
Net Operating Revenues:
|
||||||||
|
Electricity sales to Final Customers:
|
11,383.9 | 10,384.9 | ||||||
|
Electricity sales to distributors
|
3,674.6 | 4,235.6 | ||||||
|
Use of main distribution and transmission grid
|
12,737.9 | 10,930.6 | ||||||
|
Construction income
|
2,550.8 | 2,333.8 | ||||||
|
Result of Sectorial financial assets and liabilities
|
923.7 | 1,070.2 | ||||||
|
Other operating revenues
|
620.8 | 629.8 | ||||||
|
Fair value of assets from the indemnity for the concession
|
82.4 | 62.2 | ||||||
|
(-) Revenue deductions
|
(9,323.1) | (8,167.6) | ||||||
|
|
22,651.0 | 21,479.5 | ||||||
|
Operating Costs and Expense:
|
|
|
||||||
|
Electricity purchased for resale
|
(8,924.9) | (7,716.2) | ||||||
|
Charge of the main distribution and transmission grid
|
(2,865.5) | (2,896.7) | ||||||
|
Personnel and management
|
(1,081.8) | (1,878.3) | ||||||
|
Pension and healthcare plans
|
(259.4) | (260.2) | ||||||
|
Material
|
(86.9) | (102.7) | ||||||
|
Materials and supplies for power electricity
|
(0.9) | (17.7) | ||||||
|
Third-party services
|
(1,074.3) | (996.3) | ||||||
|
Depreciation and amortization
|
(1,465.5) | (1,382.0) | ||||||
|
Credit losses, provisions and reversals
|
(345.1) | (92.2) | ||||||
|
Construction cost
|
(2,522.9) | (2,319.7) | ||||||
|
Other operational costs and expenses, net
|
(240.8) | (430.5) | ||||||
|
|
(18,868.0) | (18,092.6) | ||||||
|
Equity in earnings of investees
|
281.2 | 307.8 | ||||||
|
Financial results
|
(1,157.0) | (1,205.0) | ||||||
|
Operating profit
|
2,907.2 | 2,489.7 | ||||||
|
Income tax and social contribution on profit
|
(599.4) | (354.1) | ||||||
|
Net income from continuing operations
|
2,307.8 | 2,135.7 | ||||||
|
Net income (loss) from discontinued operations
|
491.6 | 191.5 | ||||||
|
Net income
|
2,799.4 | 2,327.2 | ||||||
|
Net income attributable to controlling shareholders
|
2,809.7 | 2,258.8 | ||||||
|
Net income attributable to non-controlling interest
|
(10.3) | 68.4 | ||||||
|
Other comprehensive income
|
239.5 | (254.3) | ||||||
|
Comprehensive income
|
3,038.9 | 2,072.8 | ||||||
|
Comprehensive income attributable to controlling shareholders
|
3,049.3 | 2,005.0 | ||||||
|
Comprehensive income attributable to non-controlling interest
|
(10.4) | 67.8 | ||||||
Below is a discussion of the significant components of our results of operations, on a consolidated basis. For more information on our reportable segments, see Note 31 to our audited consolidated financial statements.
Results of Operations for 2024 compared with 2023
| Variation | ||||||||||||||
|
Net Operating Revenue
|
2024 (R$ million)
|
2023 (R$ million)
|
R$ million
|
% | ||||||||||
| Electricity sales to final customers | 8,454.99 | 7,946.17 | 508.82 | 6.4 | ||||||||||
| Electricity sales to distributors | 3,120.63 | 3,602.79 | (482.16) | (13.4) | ||||||||||
| Use of the main distribution and transmission grid | 7,048.04 | 6,002.19 | 1,045.84 | 17.4 | ||||||||||
| Construction income | 2,550.81 | 2,333.79 | 217.02 | 9.3 | ||||||||||
| Fair value of assets from the indemnity for the concession | 82.42 | 62.17 | 20.26 | 32.6 | ||||||||||
| Sectorial financial assets and liabilities | 838.28 | 971.20 | (132.92) | (13.7) | ||||||||||
| Other operating revenue | 555.87 | 561.16 | (5.29) | (0.9) | ||||||||||
| 22,651.04 | 21,479.47 | 21,479.47 | 5.5 | |||||||||||
Form 20-F 25FY24 | COPEL and Subsidiaries |
93
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Our variation in Net Operating Revenue increased by 5.5% to $22,651.0 million in 2024 from $21,479.5 million in 2023 is mainly due to:
•
Electricity sales to final customers.
Our electricity sales to final customers increased by 6.4% or R$508.8 million, primarily due to Periodic Tariff Adjustments (an increase of 17.37% between June 24, 2023, and June 23, 2024, and a reduction of 4.0% starting June 24, 2024) and an increase in billed captive market revenue of 5.5% (1,112 GWh) mainly due to higher residential consumption (+999 GWh or +11.3%) and commercial consumption (+262 GWh or +5.8%), while industrial consumption fell by 223 GWh (-11.5%). The free market, on the other hand, showed a significant drop of 1,321 GWh (-11.1%), with emphasis on the reduction of 498 GWh (-23.2%) in the commercial segment.
•
Electricity sales to distributors.
Our electricity sales to distributors decreased by 13.4% or R$482.3 million, mainly due to the 13.4% reduction in the average price of energy sold in the free contracting environment (FCE) (R$ 178.72 compared to R$ 206.63 in 2023), the termination of contracts by Copel GeT in the regulated contracting environment (RCE), and a higher provision for generation deviation in wind projects due to operational transmission restrictions imposed by the ONS and mainly due to the decreased wind levels, there was a sharp drop of 6,714 GWh (-25%) in volume sold, which reflects a more challenging market environment and lower contracted energy demand.
•
Use of the main distribution and transmission grid
. Our use of the main distribution and transmission grid increased by 17.4% or R$1,045.8 million, primarily due to Periodic Tariff Adjustments (an increase of 6.32% between June 24, 2023, and June 23, 2024, and 2.69% starting June 24, 2024), as well as a 7.3% increase in the wire market of Copel DIS, in addition to the updating of transmission contract asset balances, partially offset by the impacts of the tariff review of Copel GeT's transmission concession contracts;
•
Construction income.
Our construction income increased by 9.3% or R$217.0 million, essentially due to the increase in the volume of works related to the “Transformation Program”, which encompasses investments aimed at improving and modernizing infrastructure and improvements in service to consumers in the construction segment distribution;
•
Sectorial financial assets and liabilities
. Our sectorial financial assets and liabilities, primarily due to the growth of the billed market and better adherence of tariff coverage in relation to the actual costs of Portion A (non-manageable costs).
Operating Costs and Expense (continuing operations)
| Variation | ||||||||||||||
|
2024 (R$ million)
|
2023 (R$ million) | R$ million | % | |||||||||||
| Electricity purchased for resale | 8,924.9 | 7,716.2 | 1,208.7 | 15.7 | ||||||||||
| Charge of the main distribution and transmission grid | 2,865.5 | 2,896.7 | (31.2) | (1.1) | ||||||||||
| Materials and supplies for power electricity | 0.9 | 17.7 | (16.8) | (94.9) | ||||||||||
| Personnel and management | 1,081.8 | 1,878.3 | (796.5) | (42.4) | ||||||||||
| Pension and healthcare plans | 259.4 | 260.2 | (0.8) | (0.3) | ||||||||||
| Materials | 86.9 | 102.7 | (15.8) | (15.4) | ||||||||||
| Third-party services | 1,074.3 | 996.3 | 78.0 | 7.8 | ||||||||||
| Credit losses, provisions and reversals | 345.1 | 92.2 | 252.9 | 274.3 | ||||||||||
|
Other operational costs and expenses, net
|
240.8 | 430.5 | (189.7) | (44.1) | ||||||||||
| Depreciation and amortization | 1,465.5 | 1,382.0 | 83.5 | 6.0 | ||||||||||
| Construction costs | 2,522.9 | 2,319.7 | 203.2 | 8.8 | ||||||||||
| 18,868.0 | 18,092.5 | 775.5 | 4.3 | |||||||||||
Form 20-F 25FY24 | COPEL and Subsidiaries |
94
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
The variation in operational costs and expenses is primarily due to:
1)
Electricity Purchased for Resale
. Our electricity purchased for resale increased by 15.7% or R$1,208.7 million, mainly resulting from the increase in the volume of energy received from mini and micro generators, the incorporation, starting in January 2024, of New Energy Auctions impacting the CCEAR, and the increased purchases in the spot market – CCEE. The average cost per MWh increased significantly for all sources, with Itaipu rising R$11.54/MWh (+5.60%), Angra R$7.73/MWh (+2.28%), CCGF R$16.93/MWh (+10.69%) and regulated market auctions R$25.70/MWh (+12.26%). The most substantial impact on costs came from auction purchases, where total expenses increased by R$495.4 million (+17.98%), reflecting the increase in energy prices. On the other hand, CCGF costs fell by R$37.3 million (-5.15%) due to lower volumes purchased.
2)
Personnel and Management
. Our personnel and management expenses decreased by 1.1% or R$31.2 million, reflecting primarily the compensation for the second additional third of vacation for the withdrawal of benefits from the Collective Labor Agreement (CLA), amounting to R$ 138.0 million, and the provision for the Voluntary Dismissal Program (PDV) of R$ 610.0 million, both in 2023, in addition to the reduction in workforce in 2024, partially offset by the increase in administrators' fees in 2024, the salary adjustment resulting from the collective labor agreement of 4.51% in October 2023, and the provision of R$ 15.6 million related to the impacts of the CLA 2024 approved in 2025;
3)
Third-Party Services
. Our third-party services expenses increased by 7.8% or R$78.0 million especially due to the increase in costs associated with the maintenance of the electrical system and installations;
4)
Credit losses, provisions and reversals.
The variation in our credit losses, provisions and reversals is the result of the impairment reversal of R$174.5 million recorded in 2023, which is non-recurring in 2024, and the increase in provisions for legal claims in 2024, mainly civil and labor disputes;
5)
Other operational income (expenses).
Our other operational income (expenses) decreased by 44.1% or R$189.7 million, mainly due to gains from the sale of non-operational properties related to the concessions of Copel GeT and FDA;
6)
Depreciation and Amortization
. Our depreciation and amortization increased by 6.0% or R$83.5 million, primarily due to the commissioning of new assets resulting from increased investments by Copel DIS;
7)
Construction Costs
. Our construction costs increased by 8.8% or R$203.2 million, reflecting primarily the investments made in the infrastructure of the electric distribution segment.
Equity in earnings of investees
The Equity in earnings of investees for 2024 amounted to R$ 281.2 million, which is 8.6% lower than the R$ 307.8 million recorded in 2023. This decrease is primarily due to the equity method results from jointly controlled electric power transmission entities, considering, among other events, the tariff review gains recorded in 2023 that were not recurring in 2024.
Financial Results
The financial result showed a positive variation of R$ 48.0 million, primarily due to the increase in income from financial investments, resulting from a higher volume of invested amounts, an increase in arrears charges on bills, and a reduction in monetary and exchange variation and debt charges, which was partially offset by an increase in monetary variation and adjustment to present value of accounts payable related to the concession, which refers to the balances resulting from the payments of the concessions for the HPPs.
Net Income (loss) for the year
In 2024, our consolidated net income amounted to R$ 2,799.4 million, which is 20.3% higher than the R$ 2,327.2 million recorded in 2023. This increase is attributed to the variation in financial results, as previously detailed, in addition to the effects of the gain from the sale of equity interests in UEGA and Compagas, presented in the line for discontinued operations. These amounts were partially offset by a higher income tax and social contribution due, primarily, to the increase in the period's results.
Form 20-F 25FY24 | COPEL and Subsidiaries |
95
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
LIQUIDITY AND CAPITAL RESOURCES
Our principal liquidity and capital requirements are allocated to finance the expansion and improvement of our distribution and transmission infrastructure and to finance the expansion of our generation facilities.
We believe our working capital is sufficient for our present requirements and the next 12 months. We expect to finance our liquidity and capital requirements primarily with our own resources, arising from retained earnings and cash generation from our operations and third-party resources (BNDES, other financial institutions and capital markets). As of December 31, 2024, our Current Liquidity, an index ratio that measures our current assets over our current liabilities reached 1.3 x (as opposed to 1.5x as of December 31, 2023) with a cash and equivalents, bonds and securities of R$4,162.6 million (as opposed to R$5,639.4 million as of December 31, 2023).
With respect to long term capital needs, we use a model of five years to monitor our needs in a series of scenarios and variables, including Net Debt/EBITDA and minimum cash balance with the intention to preserve the liquidity and improve the capital structure. In this context, we work to anticipate exercises of liability management to improve liquidity if conditions are favorable.
All of our future liquidity conditions rely on a series of scenarios and may be adversely affected depending on market and other conditions. Actual liquidity may differ significantly for several reasons, including, without limitation, the risks described in “Forward-Looking Statements” and “Item 3. Key Information - Risk Factors.”
We have not engaged in any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the registrant’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
We monitor our financial liquidity continuously and, for that purpose, we consider (i) on the external side, the possibility of raising funds through the Financial Institutions, Capital Markets and other Sectoral Institutions, and (b) on the internal side, taking the necessary actions in our operations by reducing expenses or postponing investments in order to guarantee the timely fulfillment of financial obligations. Accordingly, we expect to preserve the working capital required for our operations throughout the period.
In addition to working capital, our other principal uses of cash are capital expenditures, dividend payments and debt servicing. The following table sets forth a breakdown of our capital expenditures for the periods indicated. Our capital expenditures are focused on projects located in Brazil.
|
|
Year ended December 31,
|
||||||||||
|
|
2024
|
2023
|
2022
|
||||||||
|
|
(R$ million)
|
||||||||||
|
Generation and transmission
(1)
|
263.0 | 240.1 | 472.7 | ||||||||
|
Distribution
|
2,196.9 | 1,966.5 | 1,848.1 | ||||||||
|
Elejor
|
10.7 | 4.6 | 7.3 | ||||||||
|
Others
|
43.9 | 45.5 | 8.9 | ||||||||
|
Total
|
2,514.5 | 2,256.7 | 2,337.0 | ||||||||
(1)
Considers investment in projects held 100% by Copel GeT.
As in previous years, our capital requirement will be financed by cash from our operations and/or by external financing, which may serve to offset commitments arising from the maturity of previous external financing.
Our total budgeted capital expenditures for our wholly-owned subsidiaries for 2025 is R$ 3,029.1 million, of which:
•
R$ 464.1 million are for generation and transmission;
•
R$ 2,501.9 million are for our distribution business;
•
R$ 63.1 million are for other investments.
Form 20-F 25FY24 | COPEL and Subsidiaries |
96
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Elejor, which is not wholly owned by us, also budgeted their own capital expenditures for 2025 in the amount of R$15.5 million.
Historically, we have financed our liquidity and capital requirements primarily with cash provided by our operations and through external financing. Our principal source of funds in 2024 was our operating activities. Net cash outflow from financing activities was R$803.9 million in 2024, compared with R$2,696.6 million in 2023. Net cash inflow from operating activities was R$3,393.5 million in 2024, compared with R$3,518.5 million in 2023 and R$3,902.6 million in 2022. The decrease in 2024, compared to 2023, was mainly due to the net cash inflow from discontinued operations in 2023.
Long-term debt has generally been used to finance our major capital expenditure projects, in particular capital expenditures acquisition financing programs offered by Federal Development Bank, as BNDES. The scheduled maturities of these long-term loans have been structured to match the expected cash flow from the conclusion of the related capital expenditure projects and, as a result, reduce the risk of any significant deterioration of our liquidity position.
The following table shows the maturity of loans, financing and debentures:
|
|
(R$ million)
|
|||||||||||||||||||||||||
|
|
Short Term
|
Long Term
|
||||||||||||||||||||||||
|
|
2025
|
2026
|
2027
|
2028
|
2029
|
2030
|
2030
|
Total
|
||||||||||||||||||
|
Domestic Currency
|
3,333.5 | 2,455.7 | 2,037.5 | 1,359.2 | 1,740.0 | 1,981.5 | 4,846.30 | 17,753.8 | ||||||||||||||||||
|
Foreign Currency
|
— | — | — | — | — | — | — | — | ||||||||||||||||||
|
Total
|
3,333.5 | 2,455.7 | 2,037.5 | 1,359.2 | 1,740.0 | 1,981.5 | 4,846.30 | 17,753.8 | ||||||||||||||||||
As in prior years, we plan to make significant investments in future periods to expand and upgrade our generation, transmission and distribution businesses. In addition, we may seek to invest in other existing electric utilities, in communications services or in other areas, each of which may require additional domestic and international financing. Our ability to generate cash sufficient to meet our planned expenditures is dependent upon a variety of factors, including our ability to maintain adequate tariff levels, to obtain the required regulatory and environmental authorizations, to access domestic and international capital markets, and a variety of operating and other contingencies. We anticipate that our cash provided by operations may be insufficient to meet these planned capital expenditures, and that we may require additional financing from sources such as BNDES and the Brazilian and international capital markets.
ANEEL’s regulations require prior approval from ANEEL for any transfer of funds from our subsidiaries to us in the form of loans or advances. ANEEL approval is not required for cash dividends, as long as cash dividends do not exceed a dividend threshold (“Dividend Threshold”) equal to the greater of adjusted net income or income reserves available for distribution. The Dividend Threshold is established by Brazilian Corporate Law.
The cash dividends we have received from our subsidiaries have been historically sufficient to meet our cash flow requirements without exceeding the Dividend Threshold. As a result, we have not sought approval from ANEEL to receive either loans or advances from our subsidiaries or cash dividends from our subsidiaries in excess of the Dividend Threshold. We do not expect these restrictions on loans and advances and on cash dividends exceeding the Dividend Threshold to impact our ability to meet our cash obligations, since we expect cash dividends below the Dividend Threshold to be sufficient in the future.
Our outstanding loans and financing (including debentures) as of December 31, 2024, which also consider those associated with assets held for sale, totaled R$ 17,753.8 million. As of December 31, 2024, we had no debt outstanding denominated in U.S. dollars. We are not subject to seasonality with respect to our borrowing requirements. Our major loans and financing arrangements are:
Banco do Brasil:
•
As of December 31, 2024, we had R$ 751.5 million of outstanding debt with Banco do Brasil (not including the debentures listed below), consisting of financings we contracted to increase our working capital.
Form 20-F 25FY24 | COPEL and Subsidiaries |
97
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Banco Itaú:
•
In October 2022, Copel GeT issued R$1 billion in commercial notes, in a single series, with an interest rate of DI + spread of 1.22% per year, maturing in three years and paying interest every six months. On December 31, 2024, we had an aggregate outstanding balance of R$ 1,036.3 million under these commercial notes;
Debentures:
•
In March 2016, Nova Asa Branca I, Nova Asa Branca II, Nova Asa Branca III, Nova Eurus IV and Ventos de Santo Uriel Wind Farms issued R$300.8 million in non-convertible debentures, with sixteen-year maturity and payment of interest on monthly basis. The interest rate of TJLP index + 2.02% per year is applicable to R$147.6 million and IPCA index + 9.87% per year is applicable to R$153.2 million. As of December 31, 2024, we had an aggregate balance of R$ 183.2 million of outstanding debt under these debentures;
•
In September 2018, Copel GeT issued R$290.0 million, 5th issuance, in simple, non-convertible debentures. These debentures have an interest rate equal to IPCA index + 7.6475% per year, with a seven-year maturity and payment of interest on a semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 82.6 million under these debentures;
•
In March 2019, Cutia Empreendimentos issued R$360.0 million in simple, non-convertible debentures. These debentures have an interest rate equal to IPCA index + 5.8813% per year, with a thirteen-year maturity and payment of interest on a semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 327.7 million under these debentures;
•
In July 2019, Copel GeT issued R$1 billion, 6th issuance, in simple, non-convertible debentures, in two series, with an interest rate of 109% of the CDI index per year and IPCA index + 3.90% with a five-years and six-years maturity and payment of interest on a semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 276.2 million under these debentures;
•
In November 2019, Copel Distribuição issued R$850 million, 5th issuance, in simple, non-convertible debentures, in two series, with an interest rate of IPCA index + 4.20% per year and CDI index + 1.45% per year with an eight-years and three-years maturity and payment of interest on a semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 678.7 million under these debentures;
•
In June 2021, Copel Distribuição issued R$1.5 billion, 6th issuance, in simple, non-convertible debentures, in two series, with an interest rate of IPCA index + 4.7742% per year and CDI index + 1.95% per year with a ten-year and five-year maturity and payment of interest on a semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 1,620.2 million under these debentures;
•
In October 2021, Copel GeT issued R$1.5 billion, 7th issuance, in simple, non-convertible debentures, in two series, with an interest rate of CDI index + 1.38% per year and IPCA index + 5.7138% per year with a five-year and ten-year maturity and payment of interest on a semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 1,598.8 million under these debentures;
•
In May 2022, Copel Distribuição issued R$1.5 billion, 7th issuance, in simple, non-convertible debentures, in three series, with an interest rate of IPCA index + 6.1732% per year, CDI + 1.21% per year and CDI + 1.36% per year with a three-year, five year and ten-year maturity and payment of interest on semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 1,386.8 million under these debentures.
•
In January 2023, Copel GeT issued R$1.3 billion, 8th issuance, in simple debentures, not convertible into shares, in two series, with an interest rate of CDI + 1.40% p.a. and IPCA + 6.82% p.a. with a term of seven years and a term of twelve years and semi-annual interest payments. On December 31, 2024, we had a total outstanding balance of R$ 1,386.8 million under these debentures;
•
In June 2023, Copel Distribuição issued R$1.6 billion, 8th issuance, in simple, non-convertible debentures, in three series, with an interest rate of CDI + 1.45% per year, CDI + 2.00 per year and CDI + 2.25% per year with a one year, four year and five-year maturity and payment of interest on semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 1,206.5 million under these debentures;
•
In May 2024, Copel Serviços issued R$70.0 million, 1st issuance, non-convertible, in one series, with an interest rate of CDI + 1,20% with a term of seven years and semi-annual interest payments. On December 31, 2024, we had a total outstanding balance of R$ 71.2 million under these debentures;
Form 20-F 25FY24 | COPEL and Subsidiaries |
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•
In May 2024, Copel DIS issued R$2.25 billion, 9th issuance, in simple, non-convertible debentures, in two series, with an interest rate of CDI + 0.60% per year and IPCA + 6.28% per year with a seven year and twelve-year maturity and payment of interest on semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 2,306.8 million under these debentures;
•
In October 2024, Copel GeT issued R$1.6 billion, 9th issuance, in simple, non-convertible debentures, in three series, with an interest rate of CDI + 0.52% per year, CDI + 0.69% and CDI + 0.95% per year per year with a five year, seven year and ten-year maturity and payment of interest on a semester basis. As of December 31, 2024, we had an aggregate outstanding balance of R$ 1,637.7 million under these debentures;
BNDES
•
In December 2013, we received approval for the BNDES financing of HPP Colíder in an aggregate amount of R$1,041.2 million, maturing in October 2031. As of December 31, 2013, we had received R$840.1 million of this amount, with the remaining disbursements to be made in accordance with the construction schedule of HPP Colíder. Additionally, BNDES approved the finance of the Cerquilho III transmission substation in the amount of R$17.6 million, which was disbursed in a single installment. As of December 31, 2024, the aggregate outstanding balance of these two contracts totaled R$ 491.9 million;
•
BNDES has provided a loan to us of R$339.0 million to finance the construction of the Mauá Hydroelectric Plant. Mauá is owned by Consórcio Energético Cruzeiro do Sul, in which we have a 51.0% interest and Eletrosul has a 49.0% interest. BNDES is providing 50.0% of the loan amount, and Banco do Brasil S.A. is providing the remaining 50.0%. All the receivables arising from this plant were pledged in favor of BNDES and Banco do Brasil until full repayment of the loan. As of December 31, 2024, we had an aggregate of R$ 75.0 million in outstanding debt with BNDES and Banco do Brasil under this facility;
•
In December 2011, we entered into a financing contract with BNDES in the total value of R$44.7 million for the construction of Transmission Line Foz do Iguacu - Cascavel Oeste, with maturity in 14 years. As of December 31, 2024, we had an aggregate of R$ 4.56 million in outstanding debt under this financing contract;
•
In March 2012, we entered into a financing contract with BNDES in the total value of R$282.1 million for the construction of GE Farol, Ge Boa Vista, GE São Bento do Norte and GE Olho D’Água Wind Farms with maturity in 16 years. As of December 31, 2024, we had an aggregate of R$ 116.7 million in outstanding debt under this financing contract;
•
In September 2012, we entered into a financing contract with BNDES in the total value of R$73.1 million for the construction of SHP Cavernoso II, with maturity in 16 years. As of December 31, 2024, we had an aggregate balance of R$ 22.7 million of outstanding debt under this financing contract;
•
In June 2015, we entered into a financing contract with BNDES in the total value of R$154.6 million for the construction Santa Helena and Santa Maria Wind Farm, with maturity in 16 years. As of December 31, 2024, we had an aggregate balance of R$ 56.5 million of outstanding debt under this financing contract;
•
In December 2015, we entered into a financing contract with BNDES in the total value of R$55.8 million for the construction of Transmission Line Assis - Paraguaçu Paulista II and Londrina - Figueira e Salto Osório - Foz do Chopim C2, with maturity in 15 years. As of December 31, 2024, we had an aggregate balance of R$ 18.9 million of outstanding debt under this financing contract;
•
In November 2018, we entered into a financing contract with BNDES in the total value of R$194.0 million for the implementing Baixo Iguaçu Hydroelectric Power Plant as well as its associated transmission system, with maturity in 17 years. As of December 31, 2024, we had an aggregate balance of R$ 136.7 million of outstanding debt under this financing contract;
•
In October 2018, we entered into a financing contract with BNDES in the total value of R$619.4 million for the construction and implementing Cutia Empreendimentos Eólicos Wind Farms, with maturity in 17 years. As of December 31, 2024, we had an aggregate balance of R$ 497.2 million of outstanding debt under this financing contract.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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•
In August 2018, Copel GeT signed a share exchange agreement with Eletrosul in the controlled ventures Costa Oeste Transmissora de Energia S.A. (51% Copel GeT and 49% Eletrosul), Marumbi Transmissora de Energia S.A. (80% Copel GeT and 20% Eletrosul) and Transmissora Sul Brasileira de Energia S.A. (20% Copel GeT and 80% Eletrosul). With this contract, Copel GeT starts to hold 100% interest in the Costa Oeste and Marumbi undertakings and Eletrosul now holds 100% stake in Transmissora Sul Brasileira.
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Marumbi has an agreement signed with BNDES in 2014, in the amount of R$55 million, for the Implementation of the 525 kV Transmission Line between SE Curitiba and SE Curitiba Leste and the implementation of SE Curitiba, with maturity in 14 years. It has a balance on December 31, 2024 of R$ 11.9 million.
•
Costa Oeste has an agreement signed with BNDES in 2013, in the amount of R$27.6 million, for the implementation of the 230 kV Transmission Line between SE Cascavel Oeste and SE Umuarama Sul and the implementation of the SE, with maturity in 14 years. It has a balance on December 31, 2024 of R$ 8.7 million.
•
In June 2020, we entered into a financing contract with BNDES in the total value of R$432.1 million for the implementing of the Transmission Line SE Medianeira, SE Curitiba Centro, SE Curitiba Uberaba, SE Andirá Leste, Curitiba Leste-Blumenau and Baixo Iguaçu Realeza as well as its associated transmission system, with maturity in 23 years. As of December 31, 2024, we had an aggregate balance of R$ 395.1 million of outstanding debt under this financing contract.
CAIXA ECONÔMICA FEDERAL (CEF)
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As of December 31, 2024, we had R$ 3.8 million in outstanding debt related to government programs to finance distribution projects.
BANCO DO NORDESTE
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In May 2021, we entered into a financing contract with BNB for a total value of R$208.7 million for the construction of Jandaíra I, Jandaíra II, Jandaíra III and Jandaíra IV Wind Farms, with a maturity of 17 years. As of December 31, 2024, we had an aggregate balance of R$ 178.4 million of outstanding debt under this financing contract.
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In November 2021, we completed the acquisition of Vilas Complex, which is finance until 2039 for the Vila Maranhão I, Vila Maranhão II, Vila Maranhão III and Vila Ceará I, and until 2040 for and Vila Mato Grosso I. As of December 31, 2024, we had an aggregate balance of R$ 505.1 million of outstanding debt under this financing contract; and
•
In January 2023, we completed the acquisition of Aventura and Santa Rosa Mundo Novo Wind Farms, which are financed until 2039 for Aventura II, Aventura III, Aventura IV and Aventura V, and until 2043 for Santa Rosa e Mundo Novo I, Santa Rosa e Mundo Novo II, Santa Rosa e Mundo Novo III, Santa Rosa e Mundo Novo IV and Santa Rosa e Mundo Novo V. As of December 31, 2024, we had an aggregate balance of R$ 845.5 million of outstanding debt under this financing contract.
In May 2022, Copel Distribuição received the amount of R$145.8 million, recognized as a financial component to cover the additional costs associated with tfhe water scarcity situation that affected the country throughout 2021, the amount started to be collected monthly for the CDE Water Scarcity Account, in quotas approved by ANEEL as of June 2023. The balance of the CDE Water Scarcity Account on 12/31/2024 is R$51.6 million and on 12/31/2023 it was R$45.2 million. By determination of Aneel, Order 3,056 10/09/24, the collection was interrupted from September/2024. (See Note 28 - 28.2.1 of Financial Statement 2024).
We are party to several legal proceedings that could have a material adverse impact on our liquidity if the rulings are unfavorable to us. These contingencies are described in “Item 8. Financial Information—
LEGAL PROCEEDINGS
.”
In addition, we have commitments not yet incurred related to long-term contracts, and therefore not recognized in the financial statements, as presented in Note 34 to our consolidated financial statements. The main amount refers to energy purchase and transportation contracts commitments, totaling R$102,761.1 million on December 31, 2024. These commitments are expected to be settled as follows: R$6,377.0 million in less than a year, R$21,696.2 million from one to 5 years and R$74,687.8 million after 5 years.
In Note 32.2.2 to our consolidated financial statements, we present the expected values for settlement of contractual obligations undiscounted in each time range. Our projections are based on financial indicators linked to the related financial instruments and forecast according to average market expectations as disclosed in the Brazilian Central Bank’s Focus Report.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
We are managed by:
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a Board of Directors, which is currently composed of 9 members; and
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an Executive Board, which is currently composed of 9 members.
BOARD OF DIRECTORS
The Board of Directors ordinarily meets monthly. A majority of the members of the Board of Directors is required for the meeting to be held, and decisions are taken by a majority vote of those present at the meeting. For additional information, see “Item 10. Additional Information—Memorandum and Articles of Association.” The members of the Board of Directors are elected to serve for two-year terms and may be reelected. Among the current nine members of the Board of Directors:
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six were elected by shareholders holding ordinary shares;
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one was elected by minority shareholders (holding voting shares);
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one was elected by minority shareholders (holding outstanding non-voting shares); and
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one was elected by our employees.
According to Brazilian Federal Law, and considering also that we no longer have a controlling shareholder, minority shareholders are entitled to appoint and remove at least one member of the Board of Directors, in a separate election, if such minority shareholders hold at least 10% of our outstanding non-voting shares. Minority shareholders holding at least 5% of our voting shares are entitled to request that a multiple voting procedure be adopted, a proceeding that grants each voting share as many votes as there are members of the Board of Directors and the right for all the voting shareholders to vote for only one candidate or to distribute his votes among several candidates, also in accordance with the Federal Law 6404/1976.
The terms of the current members of the Board of Directors expire in April 2025. The current members of our Board of Directors
are:
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Name
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Position
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Since
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||||||
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Marcel Martins Malczewski
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Chairman
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2019
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Marcelo Souza Monteiro
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Director
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2023
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Carlos Biedermann
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Director
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2019
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Fausto Augusto de Souza
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Director
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2021
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Marco Antônio Barbosa Cândido
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Director
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2018
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Jacildo Lara Martins
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Director
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2023
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Geraldo Corrêa de Lyra Junior
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Director
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2023
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Viviane Isabela de Oliveira Martins
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Director
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2024 | ||||||
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Pedro Franco Sales
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Director
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2024 | ||||||
The following are brief biographies of the current members of our Board of Directors:
Marcel Martins Malczewski.
Mr. Malczewski was born on December 8, 1964. He holds a Master’s degree in Industrial Sciences and Computing from Universidade Tecnológica Federal do Paraná (1989); and a Bachelor’s degree in Electrical Engineering from Universidade Federal do Paraná (1987). Mr. Malczewski also attended the Owner/President Management Program at Harvard Business School (2004). He attended professional programs at the Brazilian Institute of Corporate Governance (IBGC), such as Improvement in Governance for Directors and Fiscal Councilors of State-Owned Companies and Mixed Economy Corporations (2022) and Continued Development Plan for Directors (2022). He is currently the Chairman of the Board of Directors of Companhia Paranaense de Energia - Copel. He is also member of the Board of Directors of Positivo Tecnologia, AMcom, InfoPrice and Velsis. Additionally, Mr. Malczewski is a partner at M3 Investimentos Ltda. and at Trivella M3 Investimentos S.A. Mr. Malczewski has considerable experience as a board member in several sectors
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Carlos Biedermann
. Mr. Biedermann was born on August 18, 1953. Mr. Biedermann attended the Executive Program of the Singularity University (2019) and the International Business Programme at INSEAD/Harvard in France (1995). He holds a post-graduate degree in Financial Markets from Fundação Getúlio Vargas - FGV (1979) and Bachelors’ degrees in Accounting, from Unisinos (1977), and in Business Management and Public Management, from Universidade Federal do Rio Grande do Sul (1975). He attended professional programs at the Brazilian Institute of Corporate Governance (IBGC), such as Improvement in Governance for Directors and Coordinator and Fiscal Councilors of State-Owned Companies and Mixed Economy Corporations (2022) and Continued Development Plan for Directors (2022). He is currently a member of the Board of Directors and Financial expert member of the Statutory Audit Committee of Companhia Paranaense de Energia - Copel. Mr. Biedermann has considerable experience as a board member in several sectors, including organizations such as Amcham/RS and the Association of Marketing and Sales Directors of Brazil - ADVB/RS. At present, he is Chairman of the Board of Directors of Brivia Dez and also has seats in the Board of Directors of Lojas Lebes, and Solar. He is a member of the Audit Committee of Suzano Papel e Celulose, Grupo Algar, Grupo Cornélio Brennand, Moinho Paulista, Banrisul, Grupo Raymundo da Fonte and Tribanco. Additionally, he is an instructor at the Brazilian Institute of Corporate Governance - IBGC and a partner at Biedermann Consulting.
Fausto Augusto de Souza
. Mr. Souza was born on November 04, 1980. He holds an Executive MBA in Finance and Capital Markets from FAE Business School (2022), an Executive MBA in Management - Electricity Sector from Fundação Getúlio Vargas (2019), a Master’s degree in Electrical Engineering from Universidade Federal do Paraná (2015), a Bachelor’s degree in Electrotechnical Engineering fom Universidade Tuiuti do Paraná (2011) and a Specialization in Automation and Industrial Process Control from Universidade Tecnológica Federal do Paraná (2005). He formerly took courses in Technologist in Electrotechnics: Automation and Industrial Drives (2003) and Technician in Electrotechnics at Universidade Tecnológica Federal do Paraná (1999). He is currently a member of theBoard of Directors and of the Sustainable Development Committee of Companhia Paranaense de Energia - Copel, and he also serves as Electro-technical Technician at Copel Distribuição S.A.
Marco Antônio Barbosa Cândido
. Mr. Cândido was born on March 6, 1969. Mr. Cândido holds a Ph.D. and a Master’s degree in Production Engineering from Universidade Federal de Santa Catarina - UFSC (1997 and 1994), and a degree in Aeronautical Mechanics Engineering from Instituto Tecnológico de Aeronáutica - ITA (1991). He attended professional programs such as Improvement in Governance for Directors and Fiscal Councilors of State-Owned Companies and Mixed Economy Corporations by IBGC (2022) and Continued Development Plan for Directors by IBGC (2022). Mr. Cândido is currently a member of our Board of Directors, and Coordinator of the Investment and Innovation Committee. He is also Chief Executive Officer and Founding Partner at MBC Consultoria, and member of the Board of Aebel, Expreso Princesa dos Campos and Athena Saúde S.A. Previously, at Copel he was Chairman of the Statutory Audit Committee (2017-2023); member of the Sustainable Development Committee in addition member of the Board of Directors of Copel Distribuição S.A.
Geraldo Corrêa de Lyra Junior
. Mr. Lyra was born on August 15, 1964. He holds an MBA in Politics and Defense from Centro Universitário de Lins - UNILINS (2015), an MBA in Advanced Executive Development - Process Management at Fluminense Federal University (2008); and a Bachelor of Aeronautical Sciences as Colonel Aviator at the Air Force Academy - AFA (1987). He also attended several courses such as Higher Defense Course from Escola Superior de Guerra - ESG (2015); Aerospace Policy and Strategy Course from Escola de Comando e Estado-Maior da Aeronáutica (2015); and Command and General Staff Course at the Aeronautics Command and General Staff School (2008). At Copel, he is member of the Board of Directors and Coordinator of the Sustainable Development Committee.
Jacildo Lara Martins.
Mr. Martins was born on October 28, 1966. He holds a Bachelor of Laws from UniOpet University (2012) and is pursuing a Post-graduation degree in Public Law with emphasis on Constitutional Law and a Post-graduation in Environmental Law, both at Escola Superior Verbo Jurídico. At Copel, he is a Member of the Board of Directors and Coordinator of the Cyber and Information Security Committe. He previously was Member of the Minority Committee at Copel (2023); Information Technology Manager at Itaipu Binacional (1991-2019); and Data Processing Center Manager at Cetil Data Processing (1980-1985).
Marcelo Souza Monteiro
. Mr. Monteiro was born on November 3, 1963. He holds a Master’s Degree in Economics from the Pontifical Catholic University of Rio de Janeiro - PUC/RJ (1993) and a Bachelor’s Degree in Economics from the Fluminense Federal University - UFF (1986). At Copel, he is member of the Board of Directors, member of the Investment and Innovation Committee and member of the People Committee.
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Viviane Isabela de Oliveira Martins
. Ms. Martins was born on August 22, 1976. She holds a degree in Industrial Mechanical Engineering from CEFET-MG (2000), a post-graduate degree in Business Management from Fundação Dom Cabral in Belo Horizonte (2001), a Professional Master's Degree in Business Administration, with an emphasis on Finance, from Fundação Pedro Leopoldo (2005), a PhD in Business Administration - International Business, from PUC Minas (2016) and an extension course Advisor Trends Innovation: certification program, from Inova Business School in São Paulo (2020). Ms. Martins is currently a member of our Board of Directors, Member of the People Committee and Member of the Ethics Committee.
Pedro Franco Sale
s. Mr. Sales was born on September 7, 1977. He is a CFA Charterholder (2006) and holds a degree in Electrical Production Engineering, from PUC Rio de Janeiro (2000). At Copel, he is currently Member of the Board of Directors, Member of Investment and Innovation Committee and Member of the People Committee. He is also Member of the Board of Directors at GPS Participações e Empreendimentos S.A. and at Hospital Mater Dei S.A.
EXECUTIVE BOARD
Our Executive Board meets fortnightly and is responsible for our daily management. Each Executive Officer also has individual responsibilities established by our bylaws and the Internal Regulations.
According to our bylaws, our Executive Board consists of nine members. The Executive Officers are elected by the Board of Directors for two-year terms, reelection being permitted, but may be removed by the Board of Directors at any time. The terms of the current members of the Executive Board expire in May 2026. The current members are as follows:
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Name
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Position
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Since
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||||||
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Daniel Pimentel Slaviero
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Chief Executive Officer
|
2019
|
||||||
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Márcia Cristine Ribeirete Baena
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Vice President of People and Management
|
2024 | ||||||
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Felipe Gutterres Ramella
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Vice President of Finance and Investor Relations
|
2024 | ||||||
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Diogo Mac Cord De Faria
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Vice President of Strategy, New Business and Digital Transformation
|
2024 | ||||||
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Yuri Müller Ledra
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Vice President of Legal and Compliance
|
2024 | ||||||
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Vicente Loiácono Neto
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Executive Director of Governance, Risk and Compliance
|
2018
|
||||||
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David Campos
|
Executive Director of Communication
|
2019
|
||||||
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André Luiz Gomes da Silva
|
Vice President of Regulation and Market
|
2024
|
||||||
|
Anderson Cotias e Silva
|
Executive Director of Supply
|
2024 | ||||||
The following are brief biographies of the current members of our Executive Board:
Daniel Pimentel Slaviero
. Mr. Slaviero was born on November 22, 1980. Mr. Slaviero attended the Owner/President Management - OPM program (2015) and the YPO Harvard President Seminar (2010), both from Harvard Business School. Mr. Slaviero also completed the Executive Business Program (STC) from Kellog School of Management/Fundação Dom Cabral (2009); and holds a degree in Business Administration from Universidade Positivo - UP (2001). He attended professional development programs such as Improvement in Governance for Administrators and Supervisory Board members of State-Owned and Mixed Economy Companies by IBGC (2022); Continuous Development Plan for Administrators by IBGC (2022). He is currently our Chief Executive Officer and serves as Chairman of the Board of Directors of our wholly-owned subsidiaries Copel Geração e Transmissão S.A., Copel Distribuição S.A., Copel Comercialização S.A., and Copel Renováveis S.A. (currently Copel Serviços S.A.). He is also Full member in the consumption category of the Board of Directors of ONS - Operador Nacional do Sistema Elétrico. Previously at Copel he acted as Member and Executive Secretary of the Board of Directors (2019-2023); Member of the Investment and Innovation Committee (2021-2023); and Member of the Sustainable Development Committee (2021-2023).
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Vicente Loiácono Neto
. Mr. Loiácono was born on June 4, 1983. He holds a Master’s Degree in Business Law and Citizenship from Centro Universitário Curitiba - Unicuritiba (2021); a post-graduate degree in Civil Procedure Law - Great Transformations from Universidade do Sul de Santa Catarina (2010), and a Bachelor’s degree in Law from Centro Universitário Curitiba – Unicuritiba (2007). He attended several professional development courses such as PDCA 2022/2023 - Workshop on Human Capital by IBGC (2023); Improvement in Governance for Administrators and Supervisory Board Members of State-owned Companies and Mixed Economy Companies by IBGC (2022) and Continued Development Plan for Administrators by IBGC (2022). He is currently the Executive Director of Governance, Risk and Compliance, Coordinator of the Ethics Committee and Member of the Cyber and Information Security Committee. Mr. Loiácono has been a lawyer at the company since 2011, where he also served as Legal and Compliance Chief Officer, Advisor to the Chief Executive Office and to the Chief Legal Office (2013); and as Member of the Ethical Guidance Council.
David Campos
. Mr. Campos was born on November 05, 1969. Mr. Campos received a Bachelor’s degree in Social Communication - Journalism from Universidade Estadual de Ponta Grossa - UEPG (1990). He attended several professional development courses such as PDCA 2022/2023 - Workshop on Human Capital by IBGC (2023); Improvement in Governance for Administrators and Supervisory Board Members of State-owned Companies and Mixed Economy Companies by IBGC (2022) and Continued Development Plan for Administrators by IBGC (2022). He is currently our Executive Director of Communication.
Felipe Gutterres Ramella
. Mr. Gutterres was born on April 14, 1973. He holds a Specialization degree in Business Administration, from Instituto de Pós-Graduação em Administração, Universidade Federal do Rio de Janeiro - UFRJ (2000) and a Degree in Economics also from UFRJ (1996). He attended several professional development programs such as Board Member Training Program, at Fundação Dom Cabral - FDC (2020), General Management Program, at Harvard Business School, Boston - USA (2009), Industrial Marketing Management, at Escola de Marketing Industrial (2003), Executive MBA - COPPEAD, at UFRJ (2001); Project Finance, at Euromoney Training - New York - USA (1999); and Planning and Financial Decision Making in Oil and Gas, at Shell Lensbury Center - Teddington, England (1998). At Copel he currently is Vice President of Finance and Investor Relations, being also Chief Finance and Investor Relations Officer at Copel Geração e Transmissão S.A., Copel Distribuição S.A., Copel Comercialização S.A. and Copel Serviços S.A.
Márcia Cristine Ribeirete Baena
. Ms. Baena was born on January 19, 1972. She holds a Post-MBA degree for completing the Advanced Boardroom Program for Women, from Saint Paul Business School (2019), besides holding an Executive MBA degree in Business Management and Strategy from Universidade Federal do Paraná - UFPR (2003), a Specialization degree in Business, with an emphasis on Human Resources, from Pró-Reitoria de Pesquisa e Pós-Graduação, PUC-PR (1998), and a degree in Psychology, from UFPR (1995). She attended several professional development programs, such as People, Culture and Governance Committee, from IBGC (2023), Leading Innovation as Board Members - Lessons from Israel, Tel-Aviv University (2022), Digital on Board - Training Program for Board Members with Digital Fluency, by HSM (2020-2021), Women in Business, by the London School of Economics - LSE (2019), Transition into Leadership, by the Cargill Leadership Academy, USA/ARG/BRA (2009), Change Management Training, from Prosci Change Management Learning Institute, USA (2008), Leadership Architect 101 - 9 Box Lominger Methodology - Buenos Aires, Argentina (2008), Cargill Women's Forum 2006 - Minneapolis, USA, (2006) and Training for Coordinators in Group Dynamics, from Sociedade Brasileira de Dinâmica dos Grupos - SBDG (2000). At Copel she is currently Vice President of People and Management, being also a member of the Board of Directors of Copel Distribuição S.A. and Copel Serviços S.A.
Diogo Mac Cord de Faria
. Mr. Faria was born on March 20, 1983. He holds a Master’s Degree in Public Administration from Harvard University (2017); PhD in Sciences from the Electrical Engineering Program at USP (2016); Master's Degree in Technology Development from Lactec (2013); and a Degree in Mechanical Production Engineering from PUC-PR (2007). He is currently our Vice-President of Strategy, New Business and Digital Transformation, Member of the Cyber and Information Security Committee, General Director of Copel Serviços S.A., Member of the Board of Directors of Copel Serviços S.A., Copel Geração e Transmissão S.A. and Copel Comercialização S.A.
Yuri Müller Ledra
. Mr. Ledra was born on June 12, 1986. He holds a Specialization degree in Civil and Business Law from Pontifícia Universidade Católica do Paraná (2015), a Law degree from Faculdade de Ciências Sociais de Florianópolis (2010); and a Degree in Business Administration, with a major in Foreign Trade, from Centro de Educação Superior Unica (2009). He is currently our Vice President of Legal and Compliance and Legal and Compliance Officer at Copel Geração e Transmissão S.A., Copel Distribuição S.A., Copel Comercialização S.A. and Copel Serviços S.A.
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André Luiz Gomes da Silva
. Mr. Silva was born on August 10, 1976. He holds a Master's Degree in Economics from Instituto Brasileiro de Ensino, Desenvolvimento e Pesquisa de Brasília (2023) and a Degree in Electrical Engineering from Universidade Federal de Engenharia de Itajubá (1999). He attended professional development programs such as Course for Board Members, by the Brazilian Institute of Corporate Governance - IBGC (2023). He is currently our Vice President of Regulation and Market.
Anderson Cotias e Silva
. Mr. Silva was born on July 30, 1979. Mr. Silva holds an Executive MBA degree (Program for Management Development) in General Management, from IESE Business School (2023); MBA in Business Management from IBMEC-RJ (2015); Specialization in Metallurgical Engineering with an emphasis on Steelmaking, from PUC-RJ (2008); and a Degree in Business Administration from Universidade do Grande Rio (2007). He attended professional development programs such as Business for All - Management, from Harvard Business School (2023); Digital Transformation, from MIT Sloan Executive Education (2022); Innovation Leadership Program, from Tel Aviv University - Lahav Executive Education (2022); Green Belt - Six Sigma, by Seta Desenvolvimento Gerencial (2011); and Training Course in Business Logistics, COPPEAD, from Federal University of Rio de Janeiro - UFRJ (2006). He is currently our Executive Director of Supply.
SUPERVISORY BOARD
Our Supervisory Board is a non-permanent functioning body. The Supervisory Board consist of three members and three alternates elected for one year terms by the shareholders at the annual meeting. The Supervisory Board, which is independent of our management and of our external auditors, has the responsibilities provided in Federal Law No. 6,404/1976, which include, among others:
•
reviewing our financial statements and reporting on them to our shareholders;
•
issuing reports on proposed changes in capitalization, corporate budgets and proposed dividend distributions and any corporate reorganization to be submitted to the shareholders; and
•
in general, supervising the activities of management and reporting on them to our shareholders.
The following table lists the current and alternate members of the Supervisory Board, who were appointed at the 69
th
annual shareholders’ meeting, held on April 22, 2024. The term of all members of the Supervisory Board indicated below will expire in April 2025.
|
Name
|
Since
|
||||
|
Demetrius Nichele Macei
|
2024 | ||||
|
Francisco Olinto Velo Schmitt
|
2024 | ||||
|
Filipe Bordalo di Luccio
|
2024 | ||||
|
Alternates
|
|
||||
|
José Paulo da Silva Filho
|
2024 | ||||
|
Kuno Dietmar Frank
|
2024 | ||||
|
Patricia da Silva Barros
|
2024 | ||||
STATUTORY AUDIT COMMITTEE
Our Bylaws provide for the functioning of our Statutory Audit Committee, composed of three to five members, with an unified term of office of two years, elected and dismissed by the Board of Directors, reelection being permitted, and whose characteristics, composition, functioning and expertise requirements are provided for in specific Internal Regulations. This Committee is subordinate to the Board of Directors, to which it is directly linked. The majority of its members shall be independent. At least one member shall also be a member of the Board of Directors, one member shall not be a member of the Board of Directors and one member shall have recognized professional expertise in corporation accounting, audit and finance matters.
Pursuant to the rules of procedure of the Statutory Audit Committee, each member must be appointed by, and may be replaced by, a resolution of our Board of Directors. The current members of our Audit Committee are Mr. Carlos Biedermann (Coordinator and audit committee financial expert), Mr. Pedro Franco Sales and Mr. Luiz Claudio Maia Vieira, all of them independent members.
Form 20-F 25FY24 | COPEL and Subsidiaries |
105
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
The Statutory Audit Committee is responsible for supervising the processes related to the preparation of our financial statements, ensuring that we are in compliance with all legal requirements related to our reporting obligations, monitoring the work of the independent auditors and our staff who are responsible for our internal auditing and reviewing the effectiveness of our internal control and risk management procedures and staff. The Statutory Audit Committee meets at least monthly or extraordinarily whenever necessary.
In accordance with our bylaws, the Statutory Audit Committee also plays a role in organizing our Internal Audit area an internal function linked to our Board of Directors through our Statutory Audit Committee. Our Board of Directors will approve the Annual Internal Audit plan, as proposed by the Internal Audit, with the help of Statutory Audit Committee and will name the head of the Internal Audit after the recommendation of the Statutory Audit Committee. Our Internal Audit is responsible for submit a risk-based audit plan to, and carrying out audit work requested by the Board of Directors, the Statutory Audit Committee and management, following up on findings and corrective actions and periodically report to senior management and the Statutory Audit Committee on any corrective actions not effectively implemented, and ensuring that the principles of integrity, objectivity, confidentiality and competence are applied and complied with.
APPOINTMENT AND EVALUATION COMMITTEE
(“CIA”)
The Nomination and Evaluation Committee was terminated following our transformation into a corporation with dispersed capital and without a controlling shareholder on August 11, 2023.
INVESTMENT AND INNOVATION COMMITTEE
(“CII”)
In 2021, we created the Investments and Innovation Committee (“The CII”), an advisory body to the Board of Directors, and approved the Investment Policy to improve capital allocation, an essential tool for the execution of our Strategic Guidelines of sustainable growth, value generation for shareholders and the longevity of our energy business. The policy establishes criteria for the selection, prioritization, evaluation, approval and monitoring of investments. As such, the development of projects takes this Policy and our Strategic Guidelines into account. Our Investment Policy is available in our website ri.copel.com/en/.
The CII is a permanent member of our statutory body which provides support to our Board of Directors. The CII’s purpose is to analyze and issue recommendations regarding our investment plans, in order to facilitate robust oversight of our investments by the Board of Directors. The CII works closely with us and its scope may be extended to controlled companies, affiliates and other companies in which we hold equity interests.
It is composed of three members, with an unified term of office of two years, elected and dismissed by the Board of Directors, reelection being permitted.
|
Member
|
Position
|
Date of Appointment
|
||||||
|
Marco Antônio Barbosa Cândido
|
Coordinator
|
September 20, 2023 | ||||||
|
Pedro Franco Sales
|
Member
|
May 9, 2024 | ||||||
|
Marcelo Souza Monteiro
|
Member
|
September 20, 2023 | ||||||
SUSTAINABLE DEVELOPMENT COMMITTEE
(“CDS”)
The Sustainable Development Committee (“CDS”) is an independent and permanent body that advises the Board of Directors. CDS may interact with companies directly or indirectly controlled by us when determined by the Board of Directors. Its role, operation and composition are determined by internal policies approved by the Board of Directors. Among its activities, we highlight the assistance to the set of guidelines, policies and principles for the management of personnel and our sustainable development, focusing on social, environmental and governance (“ESG”) matters, based on best market practices.
It is composed of three members, with an unified term of office of two years, elected and dismissed by the Board of Directors, reelection being permitted.
|
Member
|
Position
|
Date of Appointment
|
||||||
|
Geraldo Corrêa de Lyra Junior
|
Coordinator
|
May 9, 2024 | ||||||
|
Lavinia Rocha de Hollanda
|
Member
|
September 20, 2023 | ||||||
|
Fausto Augusto de Souza
|
Member
|
September 20, 2023 | ||||||
Form 20-F 25FY24 | COPEL and Subsidiaries |
106
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
MINORITY SHAREHOLDERS COMMITTEE
(“CDM”)
The Minority Shareholders Committee was terminated following our transformation into a corporation with dispersed capital and without a controlling shareholder on August 11, 2023.
PEOPLE COMITTEE
Our People Committee is an independent and permanent body that advises the Board of Directors. Its main role, is to work on the proposition of policies and guidelines in respect of managing people. Further information on this operation is detailed in internal policies approved by the Board of Directors.
It is composed of three members, with an unified term of office of two years, elected and dismissed by the Board of Directors, reelection being permitted.
|
Member
|
Position
|
Date of Appointment
|
||||||
| Viviane Isabela de Oliveira Martins | Coordinator | May 9, 2024 | ||||||
|
Marcelo Souza Monteiro
|
Member
|
September 20, 2023 | ||||||
| Mario Cunha Campos | Member | May 9, 2024 | ||||||
EXECUTIVE COMPENSATION
In accordance with Brazilian corporate law, the total compensation of the Board of Directors, the Executive Board and the Supervisory Board is established annually by our annual shareholder meeting. Under the terms of paragraph 3 of article 162 of the Brazilian Corporate Law, the compensation of the members of our Supervisory Board must be equal to or greater than 10% of the average compensation paid to the members of our Executive Board (excluding benefits, representation funds and profit-sharing plans, if applicable). The members of our Supervisory Board received in 2024 10.58 % of the average compensation paid to the members of our Executive Board.
The members of our Audit Committee received 34% more (the coordinator and 60.23% more) than the monthly fixed compensation paid to members of the Board of Directors.
For the year ended December 31, 2024, the aggregate amount of compensation paid by us to the members of our Board of Directors, Executive Board and Supervisory Board was R$31.8 million, of which 83.1% went to our Executive Board, 10.7% to our Board of Directors, 4.7% to our Committees and 1.5% to our Supervisory Board, as approved by the 69th annual shareholder meeting and the 210th extraordinary shareholder meeting of April 22, 2024.
The following table shows additional details on the compensation paid to the members of our Board of Directors, Executive Board and Supervisory Board for the periods indicated
|
|
Compensation (R$’000) in the years ended December 31,
|
||||||||||||||||||||||||||||
|
|
Board of Directors
|
Executive Officers
|
Supervisory Board
|
||||||||||||||||||||||||||
|
Area
|
2024 | 2023 |
2022
|
2024
|
2023
|
2022
|
2024
|
2023
|
2022
|
||||||||||||||||||||
|
Number of members
(1)
|
8.83 | 9.08 | 9.00 |
8.58
|
7.08 | 7.00 |
3.0
|
4.42 | 5.00 | ||||||||||||||||||||
|
Total Salary
|
3,185.48 | 1,736.60 | 1,151.02 |
8,190.45
|
6,292.88 | 5,073.34 |
466.65
|
622.74 | 659.43 | ||||||||||||||||||||
|
Largest Salary
|
818.41 | 411.61 | 227.83 |
1,584.92
|
1,051.87 | 879.23 |
168.74
|
155.50 | 131.89 | ||||||||||||||||||||
|
Smallest Salary
|
313.20 | 267.55 | 131.89 | 799,41 | 891.48 | 381.90 |
168.74
|
141.37 | 10.99 | ||||||||||||||||||||
|
Average Salary
|
360.62 |
179,1
|
185.36 |
954.23
|
824,7
|
708.83 |
155.55
|
102,7
|
127.86 | ||||||||||||||||||||
|
Compensation for attending committees
(2)
|
1,505.65 | 1,124.06 | 814.54 |
0
|
— | — | — | — | — | ||||||||||||||||||||
|
Others
(3)
|
3,675.62 | 129.68 | 92.41 |
32,064.72
|
3,742.15 | 755.74 | — | 4.11 | 12.60 | ||||||||||||||||||||
|
Total
(4)
|
8,366.75 | 2,990.34 | 2,057.98 |
40,255.16
|
10,035.03 | 5,829.08 | 466,65 | 626.85 | 672.02 | ||||||||||||||||||||
(1)
This figure corresponds to the average number of members per year.
(2) Refers to Private Pension Contribuition, Assistance Plan, Bonuses (only Directors) and Food Allowance (only Directors) and labor charges (year 2021). In compliance with the Circular Letter/ANUAL-2022- CVM/SEP, the 2022 and 2023 position does not present the amounts related to labor charges.
(3) Comprises Total Salary, Compensation for attending committees and Others.
As a remuneration/indemnity mechanism for directors in the event of removal from office, at the discretion of the Board of Directors, we offer extraordinary compensation for entering into a non-compete agreement and and for the safeguarding of confidential information.
Form 20-F 25FY24 | COPEL and Subsidiaries |
107
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Long-Term Incentive Plan - ILP
On April 22, 2024, the Extraordinary General Meeting approved the “Plan for Granting Restricted Shares and Performance Shares” (the “Plan”) that aims at: (i) aligning the compensation of management and key positions with our long-term objectives; (ii) attach part of the compensation to the value generation for the Company; (iii) foster a culture of meritocracy and high performance; and (iv) retain and attract talent that adds value to the Company.
The Plan is managed by the Board of Directors, with support from the People Committee. The members of the Board of Directors are eligible only to be granted restricted shares and the Directors and Employees are eligible to be granted both restricted shares and restricted shares for performance. (See note 27.6. from Financial Statement)
Granting of restricted shares
Within the scope of the Plan, restricted shares corresponding to up to 0.2% of the our share capital may be granted. The acquisition of rights occurs after 2 years from the date of granting, in compliance with the terms and conditions set forth in the Plan, programs and specific contracts, except for the first grant signed in 2024 for members of the Board of Directors, which has a term equal to the remaining period of the current terms of office.
The shares received by participants are subject to a restriction period, starting from their delivery, for a period defined by the Board of Directors, with a minimum of 2 years for participants who are Board Members. During the restriction period, the participant will be entitled to the proceeds corresponding to the shares, and may also exercise the political rights of the share without any restriction.
As of December 31, 2024, only the restricted share detailed in the table below had been granted, and the expense recognized in the income statement for the year against Equity was R$5,595. (See note 27.6. from Financial Statement)
|
Shares granted
|
Fair value R$ (*) | CAD approval | Granting and start of vesting | Acquisition of rights (vesting date) | Restriction until | Status | ||||||||||||||
|
397,742
|
8.12 |
Aug, 2024
|
05.02.2024 | 05.01.2024 | 05.01.2027 |
In progress(**)
|
||||||||||||||
|
516,047
|
7.60 |
Oct. 2024
|
05.02.2024 | 10.25.2025 |
n/a
|
In progress(**)
|
||||||||||||||
|
516,050
|
7.34 |
Oct. 2024
|
05.02.2024 | 10.25.2026 |
n/a
|
In progress(**)
|
||||||||||||||
|
516,058
|
7.02 |
Oct. 2024
|
05.02.2024 | 10.25.2027 |
n/a
|
In progress(**)
|
||||||||||||||
(*) Calculation method: Price of common shares on the date of grant, adjusted for expected dividends
(**) The acquisition of share rights has not yet occurred (vesting period).
EMPLOYEES
On December 31, 2024, we had 4,389 employees, compared to 5,804 employees on December 31, 2023 and 5,875 employees on December 31, 2022. The following table shows the number of employees and the distribution of employees by area of activity on the dates indicated in each area of activity. The following table shows the number of employees and the distribution of employees by area of activity on the dates indicated in each area of activity.
|
As of December 31,
|
|||||||||||
|
Area
|
2024
|
2023
|
2022
|
||||||||
|
Generation and transmission
|
1,091
|
1,477
|
1,487
|
||||||||
|
Distribution
|
3,199
|
4,203
|
4,257
|
||||||||
|
Services
|
0 |
0
|
0
|
||||||||
|
Corporation staff and research and development
|
60 |
83
|
84
|
||||||||
|
Other employees
|
39 |
41
|
47
|
||||||||
|
Total employees of Copel and wholly-owned subsidiaries
|
4,389
|
5,804
|
5,875
|
||||||||
|
Compagas
|
0 |
129
|
132
|
||||||||
|
Elejor
|
7 |
7
|
7
|
||||||||
|
Araucária
|
0 |
14
|
15
|
||||||||
|
Total
|
4,396
|
5,954
|
6,029
|
||||||||
Form 20-F 25FY24 | COPEL and Subsidiaries |
108
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
All of our employees are covered by collective bargaining agreements that we renegotiate annually with unions representing the various professional categories. In 2024, we negotiated and entered into agreements with the unions representing our employees, effective as of October, for a period of one year. We agreed to salary adjustments of 4.09%.
We provide a number of benefits to our employees. The most significant is our sponsorship of
Fundação Copel de Previdência e Assistência Socia
l (“Fundação Copel”), which supplements the Brazilian government retirement and health benefits available to our employees. As of December 31, 2024, approximately 99.1% of our employees had elected to participate in a defined contribution plan.
In accordance with federal law and our compensation policy, our employees participate in a profit-sharing plan. The Board of Directors and the shareholders within the Annual Shareholders’ Meeting must approve the amount of such compensation, which is determined in accordance with an agreement between an employee committee and us. An employee’s receipt of compensation is conditioned on us meeting certain benchmarks set out by our annual shareholders meeting. The amount of profit-sharing distributions reserved and approved for the 2024 fiscal year was R$ 125.1 million.
On February 12, 2020 the Board of Directors approved the implementation, within Copel and its wholly-owned subsidiaries, of a short-term incentive program called Performance Incentive Program, or
Prêmio Por Desempenho
(“PPD”) directed at aligning efforts throughout different organizational levels to our strategic objectives. The last cycle of the program began on January 1, 2023 and ended on December 31, 2023. Payment occurred in April 2024. The results obtained at the end of this final cycle show that 35.4% of our areas met or exceeded our goals and the Goal Achievement Index average (Indice de Cumprimento de Metas or “ICM”) was 83.1%. The 2024 cycle will be audited and payment is scheduled for April 2025.
Form 20-F 25FY24 | COPEL and Subsidiaries |
109
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
SHARE OWNERSHIP
As of January, 2025, board members and executive officers held, collectively, directly or indirectly, less than 1.0% of any class of our shares.
The following table indicates the board members, executive officers and members of the Supervisory Board who held shares as of January, 2025 and their respective share ownership as of such date, considering shares traded on the [B]³. No other board member, executive officer, members or alternate members of the Supervisory Board held shares issued by us on January, 2025.
|
|
Number of shares
(1)
|
||||||||||
|
Common
|
Class A
|
Class B
|
|||||||||
|
Board of Directors
|
|||||||||||
|
Marcel Martins Malczewski
|
— | — | — | ||||||||
|
Marco Antônio Barbosa Cândido
|
— | — | — | ||||||||
|
Carlos Biedermann
|
— | — | — | ||||||||
|
Fausto Augusto de Souza
|
— | — | — | ||||||||
|
Marcelo Souza Monteiro
|
10
|
— | — | ||||||||
|
Geraldo Corrêa de Lyra Junior
|
— | — | — | ||||||||
|
Jacildo Lara Martins
|
— | — | — | ||||||||
|
Pedro Franco Sales
|
603,700
|
— | — | ||||||||
|
Viviane Isabela de Oliveira Martins
|
— | — | — | ||||||||
|
Executive Officers
|
— | — | — | ||||||||
|
Daniel Pimentel Slaviero
|
— | — | — | ||||||||
|
David Campos
|
— | — | — | ||||||||
|
Felipe Gutterres Ramella
|
— | — | — | ||||||||
|
Anderson Cotias E Silva
|
— | — | — | ||||||||
|
André Luiz Gomes Da Silva
|
— | — | — | ||||||||
|
Diogo Mac Cord de Faria
|
— | — | — | ||||||||
|
Márcia Cristine Ribeirete Baena
|
— | — | — | ||||||||
|
Yuri Müller Ledra
|
— | — | — | ||||||||
|
Vicente Loiacono Neto
|
— | — | — | ||||||||
|
Fernando Mano da Silva
|
— | — | — | ||||||||
|
Adriano Fedalto
|
— | — | — | ||||||||
|
Marcio Raphael Ploszaj
|
— | — | — | ||||||||
|
Marco Antonio Villela de Abreu
|
— | — | — | ||||||||
|
Julio Shigeaki Omori
|
— | — | — | ||||||||
|
Karine Matsunaga Lopes Torres
|
— | — | — | ||||||||
|
Rodolfo Moraes Fontes Lima
|
— | — | — | ||||||||
|
Supervisory Board – Members
|
— | — | — | ||||||||
|
Demetrius Nichele Macei
|
— | — |
|
||||||||
|
Filipe Bordalo Di Luccio
|
— | — | — | ||||||||
|
Francisco Olinto Velo Schmitt
|
— | — | — | ||||||||
|
Kuno Dietmar Frank
|
— | — | — | ||||||||
|
Patricia da Silva Barros
|
— | — | — | ||||||||
(1)
Considers the share split and the shares held directly or indirectly.
Form 20-F 25FY24 | COPEL and Subsidiaries |
110
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
MAJOR SHAREHOLDERS
On August 11, 2023, the financial settlement of the secondary base offering of shares held by the State of Paraná and the primary base offering of new COPEL shares took place, resulting in our transformation into a corporation with dispersed capital and without a controlling shareholder. Upon completion of the Base Offering, the State of Paraná reduced its voting share ownership. On September 11, 2023, the complementary offering (greenshoe) to the Base Offering was settled. As of December 31, 2024, the State of Paraná directly held 27.57% of the common shares.
On December 31, 2024, BNDESPAR owned directly 10.09% of our Common Shares.
The following table, sets forth certain information regarding the ownership of our Common Shares on December 31, 2024:
|
Shareholder
|
Common shares
(1)
|
|||||||
|
|
(thousands)
|
(% of total)
|
||||||
|
State of Paraná
|
358,562,509 | 12.02 | ||||||
|
BNDESPAR
|
131,161,562 | 4.40 | ||||||
|
Public Float - Traded as part of ADS
|
14,500,773 | 0.49 | ||||||
|
Public Float - Traded on the [B]³
|
790,177,462 | 26.49 | ||||||
|
All directors and officers as a group with trading on [B]³
(2)
|
603,710 | 0.02 | ||||||
|
Public Float – Traded on Latibex
|
208 | 0.01 | ||||||
|
Other
(3)
|
3,112,727 | 0.10 | ||||||
| Treasury | 2,623,800 | 0.09 | ||||||
|
Total
|
1,300,347,300 | 43.59 | ||||||
(1)
Includes shares held through ADS.
(2)
As of December 31, 2024, our directors and officers owned an aggregate of 603,710 Common Shares. None of our directors and officers holds more than 1% of our Common Shares.
(3)
Shares held directly in the records of our registrar.
The following table, sets forth certain information regarding the ownership of our Class B Shares on December 31, 2024:
|
Shareholder
|
Class B Shares
(1)
|
|||||||
|
|
(thousand)
|
(% of total)
|
||||||
|
State of Paraná
|
116,081,402 | 3.89 | ||||||
|
BNDESPAR
|
524,646,248 | 17.59 | ||||||
|
Traded as ADSs
|
87.882.836
|
2.95 | ||||||
|
Traded on the [B]³
|
945,052,336 | 31.68 | ||||||
|
All directors and officers as a group with trading on [B]³
(2)
|
— | 0.00 | ||||||
|
Traded on Latibex
|
1,647,643 | 0.06 | ||||||
|
Other
(3)
|
950,225 | 0.03 | ||||||
|
Treasury
|
3,074,600 | 0.10 | ||||||
|
Total
|
1,679,335,290 | 56.30 | ||||||
(1)
Considers shares held through ADS.
(2)
On December 31, 2023, our directors and officers held an aggregate of 101,700 Class B Shares, including ADSs.
(3)
Shares held directly in the records of our registrar.
As of March 31, 2025, 22.88% of Common Shares and 15.61% of Class B Shares were held by United States residents registered at [B]³ and ADSs listed on the NYSE represented 1.02% of Common Shares and 5.20% of Class B Shares.
Upon our migration to Level 2 of Governance Standards of [B]³, in December 2021, the holder of Preferred Shares was granted restricted voting rights in relation to certain matters.
Form 20-F 25FY24 | COPEL and Subsidiaries |
111
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
On August 11, 2023, the financial settlement of the secondary base offering of shares held by the State of Paraná and the primary base offering of new Copel shares occurred, transforming us into a corporation with dispersed capital and no controlling shareholder. The primary distribution public offering, consisting of a base offering (229,886,000) plus supplementary lot (16,370,841), generated an increase of 246,256,841 common shares in our share capital.
Primary Secondary Offering
Following the completion of the primary and secondary offerings, with the Base Offering ending on August 11, 2023, and the supplementary offering on September 11, 2023, our share capital is now R$12,831,618,938.25, consisting of 2,982,810,591 shares without par value, of which 1,300,347,300 are common shares and 1,682,463,291 are preferred shares, of which 3,128,000 are Class A shares and 1,679,335,290 are Class B shares, and 1 special class of preferred shares (Golden Share) held exclusively by the State of Paraná.
Golden Share
The Paraná State Law 22,272/2022, which allowed our transformation into a corporation with dispersed capital and without a controlling shareholder, created a special class of preferred share called the Golden Share, owned exclusively by the State of Paraná. The Golden Share grants the State of Paraná the power to veto decisions at our general meetings on certain issues, such as:
i)
Approving and executing the Annual Investment Plan of Copel Distribuição S.A., if the investments from the 2021/2025 tariff cycle onwards do not reach at least twice the Regulatory Reinstatement Quota (QRR) for this cycle or in total until the end of the concession.
ii)
Modiying our bylaws to remove or alter:
a.
the obligation to maintain the Company's current name;
b.
the obligation to maintain the Company's headquarters in the State of Paraná;
c.
the rule that prevents any shareholder or group from voting more than 10% of the total voting shares;
d.
the rule that prohibits making, filing and registering shareholder agreements for the exercise of voting rights, except for forming blocks with a number of votes with fewer votes than the Bylaws limit.
The Golden Share was created by converting one common share held by the State of Paraná into a preferred share, and it gives the holder priority in getting their capital back, without any premium, if the company is liquidated, based on the shares percentage of our capital.
Share Dispersion Protection
Any shareholder or group of shareholders that directly or indirectly acquires common shares exceeding 25% of our voting capital must, if they do not reduce their holdings to below this threshold within 120 days, make a public offer to acquire all remaining common shares. This offer must be at a value at least 100% higher than the highest price of the common shares in the last 504 trading sessions prior to the date when the shareholder or group exceeded the limit, updated daily at the Special Settlement and Custody System (“SELIC”) rate. However, this obligation does not apply to shareholders who, as of August 11, 2023, held more than the specified limit. It will apply if (1) their shareholding increases and exceeds 25% of the voting capital after a reduction, or (2) they acquire additional shares without reducing their shareholding below the set percentage and do not sell these within the specified period. For shareholders who acquire more than 50% of the our voting capital and do not reduce their holdings to below this level within 120 days, a public offer must be made to acquire all remaining common shares. This offer must be at a value, at the minimum, 200% higher than the highest price of the common shares in the last 504 trading sessions before the date the limit is exceeded, updated daily at the SELIC rate.
Termination of Units Program
In April 2021, we launched the Unit Program with the conversion of ordinary and preference shares in the ratio of 1 CPLE3 and 4 CPLE6 into 1 CPLE11 (Unit). The conversion of shares and the creation of units were subject to a minimum subscription of approximately 60% of the then outstanding shares. As a result of our recent transformation into a corporation with dispersed capital and without controlling shareholder, the liquidity of our ordinary shares has increased significantly and the Unit Program no longer serves the purpose for which it was established.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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At the Extraordinary General Meeting held on December 18, 2023, our sharehoders approved the termination of the Unit program. The termination entailed the cancellation of the depositary receipts for shares, known as “Units” (CPLE11). In accordance with the program’s termination, each unit was subsequently disaggregated into its underlying shares, resulting in the delivery of one common share (CPLE3) and four class “B” preferred shares (CPLE6) for each unit held. The rights, benefits, and restrictions associated with these shares remain unchanged post-disaggregation.
RELATED PARTY TRANSACTIONS
We engage in transactions, including the sale of electric energy and charges for use of the transmission system, with our major shareholders and with our Joint ventures and Associates. The tariffs we charge on electric energy sold to our related parties are approved by ANEEL, and the amounts are not material. We also provide guarantees in the context of financing transactions and power purchase agreements entered into by our subsidiaries in the ordinary course of business.
Related party transactions are subject to specific governance rules regarding approval and disclosure pursuant to Brazilian corporation law and CVM and ANEEL regulations, as applicable, the Company’s Bylaws, our Related Party Transactions Policy (available at Copel investors’ relation website - https://ri.copel.com) and other internal policies.
The following summarizes the most significant transactions with our related party. For more information, see Note 33 to our audited consolidated financial statements.
Transactions with entities with significant influence
BNDES and BNDESPAR
BNDESPAR, a wholly-owned subsidiary of BNDES, owns 10.1% of our Common Shares. BNDES has granted us loans to finance the construction of generation and transmission facilities and both BNDES and BNDESPAR have purchased debentures issued by Cutia, Nova Asa Branca I, Nova Asa Branca II, Nova Asa Branca III, Nova Eurus IV and Ventos de Santo Uriel Wind Farms, which are our subsidiaries. As of December 31, 2024, we had an aggregate of R$1,979.9 million in outstanding net debt with BNDES and BNDESPAR under these financing transactions. For additional information, please see Notes 19 and 20 to our audited consolidated financial statements, as well as Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources.
State of Paraná
As of December 31, 2024, we had R$23.3 million in receivables from the State of Paraná. The amount refers mainly to the
Energia Solidária
program, established by State Law No. 20,943/2021, that defines certain benefits relating to electricity consumption by residential consumer units of low-income families residing in the State of Paraná.
Transactions with Joint Ventures and Associates
As of December 31, 2024, we had R$2.7 million in receivables and R$1.4 million in liabilities with our Joint Ventures and Associates, referring to operation and maintenance services agreements, facility sharing agreements and power purchase and sale agreements.
Transactions with other related parties
Fundação Copel
Fundação Copel
is a closed pension fund sponsored by us and other entities that runs and operates benefit plans, welfare and social assistance. In 2024, we made payments to Fundação Copel consisting of rental and for expenditure on pension and welfare plans as disclosed in Notes 21 and 33 to our audited consolidated financial statements.
Other
As of December 31, 2024, we had we have balances receivable and payable from other related parties relating mainly to contracts for the provision of services, research and development, the sale of energy and basic sanitation, as disclosed in Note 33 to our audited consolidated financial statements.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Transactions with key management staff
The fees and social security charges and the pension and healthcare plans expenses with the Management are disclosed in Notes 21 and 29.2 to our audited consolidated financial statements.
ITEM 8. FINANCIAL INFORMATION
See section Financials Information.
A. Consolidated Financial Information
See “Item 5. Operating and Financial Review and Prospects—Overview” and “Item 18. Financial Statements.”
LEGAL PROCEEDINGS
We are currently subject to numerous proceedings relating to civil, administrative, labor and tax claims. Our audited consolidated financial statements only include provisions (i) when we have a present obligation (legal or constructive) resulting from a past event, (ii) it is probable (i.e., more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation, (iii) and a reliable estimate can be made of the amount necessary to settle the obligation. As of December 31, 2024, our provisions for legal claims in which the losses are rated probable were R$956.7 million (does not include the provision of R$1,580.6 million referred to below in the item “Tax and Social Contribution Claims”). However, it is possible that some amounts actually paid are different from the estimates made in recognizing these provisions because of determinations of final judgments and/or liquidations of the award.
As of December 31, 2024, we estimate the value of R$2,807.9 million in claims against us for which no provisions have been made because it is not probable an outflow of resources that incorporate economic benefits to settle the obligation, of which R$293.1 million correspond to labor claims; R$10.3 million to employee benefits; R$1,605.5 million to regulatory claims; R$454.8 million to civil claims; and R$444.2 million to tax claims. For more information, see Note 26 to our audited consolidated financial statements.
Tax and Social Contribution Claims
In the second half of 2010, two lawsuits were decided before the Federal Regional Court (
Tribunal Regional Federal
) in favor of the Brazilian government, reversing the prior judgment that recognized our immunity regarding the payment of COFINS tax. As a result, the Federal Internal Revenue Service (
Receita Federal
) issued an infraction notice demanding the payment of COFINS tax from the period between August 1995 and December 1996. As of December 31, 2024, we had provisioned R$143.8 million to cover expected losses related to these lawsuits.
Based on a final and unappealable decision in June 2020, in a lawsuit filed in 2009, Copel DIS was granted the right to exclude the full amount of ICMS from the PIS/COFINS tax base. In June 2022, the Federal Government enacted Federal Law 14,385/2022, which defines the destination of mandatory tax amounts that were collected in excess by the providers of the public electric energy distribution service in the country, due to the collection of PIS/COFINS on ICMS, recognized by the courts as undue. As a result of the law, the company recorded a provision that refers for the period comprising the 11
th
and the 16
th
year from the date of the final and unappealable decision of the lawsuit, based on the risk assessment carried out by our management and supported by the opinions of legal advisors. As of December 31, 2024, the provision recorded is R$1,580.6 million. The Company is evaluating the appropriate measures to be taken, including legal measures, considering the protection given to unappealable decisions and applicable limitation periods.
C
oncomitantly, on December 12, 2022, the Brazilian Association of Electric Energy Distributors - Abradee filed a Direct Action of Unconstitutionality - “ADI” with the Federal Supreme Court - “STF”, questioning Law No. 14,385/2022. On September 4, 2024, the ministers formed a majority in favor of the constitutionality of the law. However, regarding the limitation period for the collection of amounts from consumers, so far five ministers voted for the application of the ten-year term (10 years), in line with the understanding of Copel Management, and two ministers voted for the application of the five-year term (5 years). The judgment is suspended due to the request for review by Minister Luis Roberto Barroso. The Company is awaiting the judgment's finalization.
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Additionally, we are party to administrative and judicial proceedings pursuant to which we are challenging claims of the Brazilian Social Security authorities to pay additional security contributions, for which we estimate the amount of our expected loss to be R$22.0 million and we also are party to other tax claims for which we have provisions totaling R$51.5 million as of December 31, 2024.
Labor-related Claims and Employee benefits
We are the defendant in several lawsuits filed by either current or past employees of ours, related to overtime claims, dangerous work conditions, relocation, and other matters, for which, as of December 31, 2024, we have provisions totaling R$307.1 million.
We also are party to labor claims filed by former retired employees against Fundação Copel, which could have financial impacts for us if additional contributions are deemed necesary. As of December 31, 2024, we have set aside provisions totaling R$40.5 million.
Regulatory
We are disputing certain regulatory and legal proceedings in connection with ANEEL’s allegations that we violated regulatory standards. As of December 31, 2024, we have provisions totaling R$9.0 million.
Additional Claims
We are party to several lawsuits brought by landowners whose land has been affected by our transmission and distributions lines for which, as of December 31, 2024, we have provisions totaling R$210.1 million.
We are party to several lawsuits related, mainly to accidents involving equipment used in our electricity transmission and distribution grids and actions involving billing, supposed irregular procedures, administrative contracts, and vehicle accidents. As of December 31, 2024, we have provisions totaling R$172.9 million reflecting the expected losses related to these lawsuits.
With regard to arbitration process that began in 2015, stemming from a dispute over a commitment term signed by the parties and us in December 2012, on January 25, 2024, the parties reached a settlement to terminate the case. We agreed to pay R$672.0 million in two installments: the first installment of R$336.0 million was paid on January 31, 2024, and the second and final installment, adjusted by the Selic rate, was paid on March 31, 2025. For more information, see Note 25.1 to our audited consolidated financial statements.
In January 2019, the Federal Prosecution Office (Ministério Público Federal – “MPF”) filed criminal charges against us before the 2nd Federal Court of Sinop. The MPF alleges that our construction activities at the Colíder Hydroelectric Plant in the Teles Pires River, within the Municipality of Colíder in May 2014, led to significant environmental pollution and the death of over 50 tons of fish, amounting to an environmental crime. As a consequence, the MPF is seeking a punitive fine for the alleged infraction. We have submitted our legal defense. Witnesses were heard and documents and technical reports were submitted. Copel received a favorable sentence, which was appealed by the MPF, pending judgment by the TRF. The timeline for the court’s final decision remains uncertain. We are committed to vigorously defending against this lawsuit.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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DIVIDEND PAYMENT
In accordance with our bylaws and Brazilian Corporate Law, we must, except if decided otherwise, pay annual dividends for each fiscal year within sixty days of the declaration of the dividends at the annual shareholders’ meeting or by the Board of Directors. To the extent amounts are available for distribution, we are required to distribute as a mandatory dividend an aggregate amount equal to at least 25.0% of our adjusted net profit. Dividends are allocated pursuant to the formula described in “Dividend Priority of Class A Shares and Class B Shares” below. Under Brazilian Corporate Law, we are not permitted to suspend the mandatory dividend payable with respect to the Common Shares, Class A Shares and Class B Shares for any year, except for retaining part of the mandatory dividend in a special reserve for unrealized profits when the realized part of the net profit is smaller than the mandatory dividend. Brazilian Corporate Law permits, however, a company to suspend the payment of all dividends if our management, with the approval of the Supervisory Board, reports at the shareholders’ meeting that the distribution would be detrimental to the Company given its financial circumstances. In such a case, companies with publicly traded securities must submit a report to the CVM providing the reasons for the suspension of dividend payments. Notwithstanding the above, Brazilian Corporate Law and our bylaws provide that Class A Shares and Class B Shares shall acquire voting rights if we suspend the mandatory dividend payments for more than three consecutive fiscal years, and such voting rights will continue until all dividend payments, including back payments, have been made. We are not subject to any contractual limitations on our ability to pay dividends.
In accordance with our dividends policy, we may distribute yearly regular dividends higher than the mandatory minimum of 25% following certain guidelines related to our Financial Leverage Ratio, defined as the ratio between Ebitda and net debt:
•
If our Financial Leverage Ratio is below 1.5x, we shall distribute 65% of our adjusted net profits.
•
If our Financial Leverage Ratio is in between 1.5x and 2.7x, we shall distribute 50% of our adjusted net profits.
•
If our Financial Leverage Ratio is higher than 2.7x, we shall distribute the mandatory minimum of 25% of our adjusted net profits.
Any distribution of dividends higher than the minimum amount of 25% of our adjusted net profits is constrained to the Available Cash Flow of the same year, defined as the operating cash flow minus net cash flow used for investment.
Calculation of Adjusted Net Income
Annual dividends are payable from our adjusted net profit for such period. Brazilian Corporate Law defines “net profit” for any fiscal year as the profits of a fiscal year after the deduction of income and social contribution taxes for that fiscal year and after the deduction of any amounts allocated to employees’ and management’s participation in our results in such fiscal year. The “net profit” for a fiscal year is subject to adjustment by the addition or subtraction of amounts allocated to legal and other reserves, the result of which is known as our adjusted net profit.
In accordance with Brazilian Corporate Law, we must maintain a legal reserve, to which we must allocate 5% of our net profits for each fiscal year until such reserve reaches an amount equal to 20.0% of our capital stock (calculated in accordance with Brazilian Corporate Law). However, we are not required to make any allocations to our legal reserve in a fiscal year in which the legal reserve, when added to other established capital reserves, exceeds 30.0% of our total capital stock. The amounts to be allocated to such reserve must be approved by our shareholders in a shareholders’ meeting and may be used only for the increase of our capital stock or compensation of losses.
On December 31, 2024, our legal reserve was R$1,766.1 million, or 13.8% of our share capital at that date.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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In addition to deducting amounts for the legal reserve, under Brazilian Corporate Law net profit may also be adjusted by deducting amounts allocated to:
•
the contingency reserve: under Brazilian Corporate Law, our shareholders’ meeting, upon a justified proposal of our management, may decide to allocate a percentage of our net profits to a contingency reserve for anticipated losses that are deemed probable in future years, which amount may be estimated;
•
the tax incentives reserve: under Brazilian Corporate Law, our shareholders’ meeting, upon a justified proposal of our management, may decide to allocate a percentage of our net profits resulting from government donations or subsidies for investment purposes.
On the other hand, net profits may also be increased by:
•
the reversal of any amounts previously allocated to a contingency reserve in the fiscal year in which the loss that had been anticipated does not occur as projected or in which the anticipated loss occurs but is lower than the contingency allocated to it; and
•
any amounts included in the unrealized profits reserve that have been realized in the relevant fiscal year and have not been used to offset losses, as approved by our shareholders’ meeting.
Moreover, our net profits are also adjusted by adding the realization of amounts registered under “Equity Value Adjustments.” The account “Equity Value Adjustments” was created as a result of the first-time adoption of IFRS by us in 2010, which caused a fair value revaluation of certain fixed assets and the adoption of the fair value as its “deemed cost” at that date. The increase of the deemed cost of fixed assets led to an increase in depreciation costs. Thus, our management has decided to add to the adjusted net profits the realization of the “Equity Value Adjustments” in order to compensate for effects of the increased depreciation costs. In 2024, our adjusted net profits used to calculate our dividends was increased by R$33.4 million as a result of the deemed cost realization in the this fiscal year.
Dividend Priority of Class A Shares and Class B Shares
According to our bylaws, Class A Shares and Class B Shares are entitled to receive annual, non-cumulative minimum dividends, which dividend per share shall be at least 10% higher than the dividends per share paid to the holders of the Common Shares. Class A Shares have a dividend priority over the Class B Shares, and Class B Shares have a dividend priority over the Common Shares. To the extent that dividends are paid, they are to be paid in the following order:
•
first, the holders of Class A Shares have the right to receive a minimum dividend equal to 10% of the total share capital represented by the Class A Shares outstanding at the end of the fiscal year in respect of which the dividends have been declared;
•
second, to the extent there are additional amounts to be distributed after all amounts allocated to the Class A Shares have been paid in accordance with the first bullet point above, the holders of Class B Shares have the right to receive a minimum dividend per share equal to (i) 25% of the adjusted net profit (ii) the total number of Class B Shares outstanding at the end of the fiscal year in respect of which the dividends have been declared; and
•
third, to the extent that there are additional amounts to be distributed after all amounts allocated to the Class A Shares and the Class B Shares have been paid, the holders of Common Shares have the right to receive an amount per share equal to (i) the mandatory dividend divided by (ii) the total number of Common Shares outstanding at the end of the fiscal year in respect of which dividends have been declared, provided that the Class A Shares and Class B Shares receive dividends per share at least 10% higher than the dividends per share paid to the Common Shares.
To the extent that there are additional amounts to be distributed after all amounts described in the preceding items have been paid and in the form therein described, any such additional amount will be divided equally among all our shareholders. Holders of ADSs are paid dividends equal to those of their underlying shares.
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Payment of Dividends
We are required to hold an annual shareholders’ meeting by April 30
th
of each year at which, among other things, an annual dividend may be declared by decision of the shareholders on the recommendation of the management, as approved by the Board of Directors. The payment of annual dividends is based on the financial statements prepared for the fiscal year ending December 31. Under Brazilian Corporate Law, we must pay dividends to shareholders of record within 60 days of the date of the shareholders meeting that declared the dividends. A shareholders’ resolution may set forth another date of payment, which must occur prior to the end of the fiscal year in which such dividend was declared. We are not required to adjust the amount of paid-in capital for inflation for the period from the end of the last fiscal year to the date of declaration or to adjust the amount of the dividend for inflation for the period from the end of the relevant fiscal year to the payment date. Consequently, the amount of dividends paid to holders of ADSs may be substantially reduced due to inflation.
Pursuant to our bylaws, our management may declare interim dividends to be paid from profits in our semi-annual financial statements, in accordance with our dividend policy. Any payment of interim dividends counts towards the mandatory dividend for the year in which the interim dividends were paid. In accordance with our dividends policy, Board of Directors should approve at least once a year interim dividends.
Pursuant to Brazilian Corporate Law, we may pay interest on equity in lieu of dividends as an alternative form of making distributions to shareholders. We may treat a payment of interest on equity as a deductible expense for tax purposes, provided that it does not exceed the lesser of:
•
the total amount resulting from (i) Long-Term Interest Rate
(Taxa de Juros a Longo Prazo
, or “TJLP”) multiplied by (ii) the total shareholders’ equity (determined in accordance with Brazilian tax legislation), less certain deductions prescribed by Brazilian tax legislation; and
•
the greater of (i) 50.0% of current net income (after the deduction of social contribution on profits (
Contribuição Social sobre o Lucro Líquido
, or “CSLL”) and before taking such distributions and any deductions for corporate income tax) for the year in respect of which the payment is made or (ii) 50.0% of retained earnings and profit reserves for the year prior to the year in respect of which the payment is made.
In order to be eligible to receive amounts remitted in foreign currency outside of Brazil, shareholders who are not residents of Brazil and directly owns our shares must register with the Brazilian Central Bank in order to receive dividends, sales proceeds or other amounts with respect to their shares. The shares underlying the ADSs are held in Brazil by the Custodian, as agent for the Depositary, which is the registered owner of our shares.
Payments of cash dividends and distributions, if any, will be made in Brazilian currency to the Custodian on behalf of the Depositary, which will then convert such proceeds into U.S. dollars and will cause such U.S. dollars to be delivered to the Depositary for distribution to holders of ADSs. In the event that the Custodian is unable to immediately convert the Brazilian currency received as dividends into U.S. dollars, the amount of U.S. dollars payable to holders of ADSs may be adversely affected by devaluations of the Brazilian currency that occur before such dividends are converted and remitted. In the event the holder of an ADS fails to collect its dividends from the Custodian within three (3) years, counted as of the date when such dividend was made available, Brazilian Corporate Law states that such dividends may be returned to us. In this case, the ADS holder shall lose its right to receive the dividends.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
The table below sets forth the cash distributions we paid/will pay as dividends and as interest on equity for the periods indicated.
|
Year
|
Payment date
|
Distribution (R$ thousands)
|
Payment per share (R$)
|
|||||||||||||||||
|
Common
|
Preferred A
|
Preferred B
|
UNIT
|
|||||||||||||||||
|
2014
|
Jun 2015 | 622,523 | 0.21723600 | 0.25250700 | 0.23900000 | — | ||||||||||||||
|
2015
|
Jun 2016 | 326,795 | 0.11371600 | 0.25250700 | 0.12547300 | — | ||||||||||||||
|
2016
|
Jun 2017 | 282,947 | 0.09853900 | 0.28905000 | 0.10841000 | — | ||||||||||||||
|
2016
|
Dec 2017 | 223,266 | 0.07792700 | — | 0.08593200 | — | ||||||||||||||
|
2017
|
Aug 2018 | 266,000 | 0.09262400 | 0.28905000 | 0.10188700 | — | ||||||||||||||
|
2017
|
Aug 2018 | 23,401 | 0.00817700 | — | 0.00899600 | — | ||||||||||||||
|
2018
|
Jun 2019 | 280,000 | 0.09751500 | 0.28905000 | 0.10727000 | — | ||||||||||||||
|
2018
|
Jun 2019 | 98,542 | 0.03443500 | — | 0.03788100 | — | ||||||||||||||
|
2019
|
Jun 2020 | 321,500 | 0.11211739 | 0.19732848 | 0.12334596 | — | ||||||||||||||
|
2019
|
Sep 2020 | 321,500 | 0.11211739 | 0.19732848 | 0.12334596 | — | ||||||||||||||
|
2020
|
Sep 2020 | 781,000 | — | 0.23912059 | — | — | ||||||||||||||
|
2020
|
Aug 2021 | 807,500 | 0.28183240 | 0.31001564 | 0.31001564 | — | ||||||||||||||
|
2020
|
Aug 2021 | 210,276 | 0.07231977 | 0.14384143 | 0.07955175 | 0.39052677 | ||||||||||||||
|
profit reserves
|
Apr 2021 | 1,250,000 | 0.43627306 | 0.47990038 | 0.47990038 | — | ||||||||||||||
|
profit reserves
|
Aug 2021 | 123,257 | 0.04301883 | 0.04732072 | 0.04732072 | — | ||||||||||||||
|
profit reserves
|
Aug 2021 | 134,192 | 0.04683557 | 0.05151910 | 0.05151910 | — | ||||||||||||||
| 2021 | Nov 2021 | 239,636 | 0.08249641 | 0.09074606 | 0.09074606 | 0.44548065 | ||||||||||||||
| 2021 | Nov 2021 | 1,197,000 | 0.41207756 | 0.45328533 | 0.45328533 | 2.22521888 | ||||||||||||||
|
profit reserves
|
Jun 2022 | 283,173 | 0.09748467 | 0.10723314 | 0.10723314 | 0.52641723 | ||||||||||||||
| 2021 | Jun 2022 | 1,368,675 | 0.47117031 | 0.51829476 | 0.51829476 | 2.54435609 | ||||||||||||||
|
2022
|
Nov 2022 | 600,000 | 0.20655465 | 0.22721013 | 0.22721013 | 1.11539517 | ||||||||||||||
|
profit reserves
|
Jun 2023 | 370,000 | 0.12737536 | 0.14011292 | 0.14011292 | 0.68782704 | ||||||||||||||
|
profit reserves
|
Jun 2023 | 521,000 | 0.17935829 | 0.19729413 | 0.19729413 | 0.96853481 | ||||||||||||||
|
2022
|
Jun 2023 | 258,000 | — | 0.09697927 | — | — | ||||||||||||||
|
2023
|
Nov 2023
|
456,920 | 0.14500531 | 0.15950586 | 0.15950586 | 0.78302875 | ||||||||||||||
| 2023 |
Jun 2024
|
456,920 | 0.14500531 | 0.15950586 | 0.15950586 | 0.78302875 | ||||||||||||||
| Profit reserves |
Jun 2024
|
44,160 | 0.01401431 | 0.01541576 | 0.01541576 | 0.07567735 | ||||||||||||||
| 2023 |
Jun 2024
|
131,211 | 0.04154092 | 0.14592215 | 0.04569505 | — | ||||||||||||||
| 2024 |
Nov 2024
|
283,000 | 0.08981113 | 0.09879225 | 0.09879225 | — | ||||||||||||||
| 2024 |
Nov 2024
|
202,111 | 0.06414087 | 0.07055498 | 0.07055498 | — | ||||||||||||||
| 2024 |
Dez 2024
|
485,112 | 0.15395195 | 0.16934727 | 0.16934727 | — | ||||||||||||||
| profit reserves |
Dez 2024
|
114,888 | 0.03646027 | 0.04010632 | 0.04010632 | — | ||||||||||||||
| profit reserves |
until 06/30/2025 (*)
|
577,570 | 0.18364410 | 0.20200864 | 0.20200864 | — | ||||||||||||||
| 2024 |
until 06/30/2025 (*)
|
672,454 | 0.21381346 | 0.23519481 | 0.23519481 | — | ||||||||||||||
*
approval of the date by resolution of the AGM
Form 20-F 25FY24 | COPEL and Subsidiaries |
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The table below sets forth the cash distributions we paid/will pay as dividends and as interest on equity, translated into US$ based on the exchange rate at year-end, for the periods indicated.
|
Year
|
Payment date
|
Distribution (US$ thousands)
|
Payment per shares (US$)
|
|||||||||||||||||
|
|
|
|
Common
|
Preferred A
|
Preferred B
|
Unit
|
||||||||||||||
|
2014
|
Jun 2015 | 234,366 | 0.08178450 | 0.09506325 | 0.08997816 | — | ||||||||||||||
|
2015
|
Jun 2016 | 83,691 | 0.02912211 | 0.06466580 | 0.03213302 | — | ||||||||||||||
|
2016
|
Jun 2017 | 86,818 | 0.03023503 | 0.08869013 | 0.03326378 | — | ||||||||||||||
|
2016
|
Dec 2017 | 68,505 | 0.02391059 | — | 0.02636679 | — | ||||||||||||||
| 2017 | Aug 2018 | 81,618 | 0.02800000 | 0.08737908 | 0.03080018 | — | ||||||||||||||
| 2017 | Aug 2018 | 7,074 | 0.00247189 | — | 0.00271947 | — | ||||||||||||||
| 2018 | Jun 2019 | 72,262 | 0.02516646 | 0.07459740 | 0.02768401 | — | ||||||||||||||
| 2018 | Jun 2019 | 25,431 | 0.00888691 | — | 0.00977625 | — | ||||||||||||||
| 2019 | Jun 2020 | 79,763 | 0.02781586 | 0.04895638 | 0.03060162 | — | ||||||||||||||
| 2019 | Sep 2020 | 79,763 | 0.02781586 | 0.04895638 | 0.03060162 | — | ||||||||||||||
| 2020 | Sep 2020 | 150 | — | 0.04601390 | — | — | ||||||||||||||
| 2020 | Aug 2021 | 155,387 | 0.05423296 | 0.05965625 | 0.05965625 | — | ||||||||||||||
| 2020 | Aug 2021 | 40,463 | 0.01391648 | 0.02767938 | 0.01530813 | 0.07514899 | ||||||||||||||
| profit reserves | Apr 2021 | 219,402 | 0.07657541 | 0.08423295 | 0.08423295 | — | ||||||||||||||
| profit reserves | Aug 2021 | 21,634 | 0.00755074 | 0.00830582 | 0.00830582 | — | ||||||||||||||
| profit reserves | Aug 2021 | 23,554 | 0.00822066 | 0.00904272 | 0.00904272 | — | ||||||||||||||
|
2021
(¹)
|
Nov 2021 | 44,056 | 0.07575791 | 0.08333370 | 0.08333370 | 0.40909271 | ||||||||||||||
|
2021
(¹)
|
Nov 2021 | 220,061 | 0.01516645 | 0.01668310 | 0.01668310 | 0.08189886 | ||||||||||||||
|
profit reserves
(²)
|
Jun 2022 | 50,743 | 0.01746881 | 0.01921569 | 0.01921569 | 0.09433155 | ||||||||||||||
|
2021
(²)
|
Jun 2022 | 245,260 | 0.08443156 | 0.09287604 | 0.09287604 | 0.45593694 | ||||||||||||||
|
2022
(3)
|
nov/22 | 113,334 | 0.03901601 | 0.04291761 | 0.04291761 | 0.21068645 | ||||||||||||||
|
2022
(4)
|
jun/23 | 70,912 | 0.02441217 | 0.02685339 | 0.02685339 | 0.13182572 | ||||||||||||||
|
Profit reserves
(4)
|
jun/23 | 4,9453 | — | 0.01858873 | — | — | ||||||||||||||
|
2023
(5)
|
Nov 2023 | 94,380 | 0.02995173 | 0.03294691 | 0.03294691 | 0.16173936 | ||||||||||||||
|
2023
(5)
|
Jun 2024 | 94,380 | 0.02995173 | 0.03294691 | 0.03294691 | 0.16173936 | ||||||||||||||
|
profit reserves
(5)
|
Jun 2024 | 9,122 | 0.00289474 | 0.00318422 | 0.00318422 | 0.01563162 | ||||||||||||||
|
2023
(5)
|
Jun 2024 | 27,102 | 0.00858053 | 0.03014111 | 0.00943859 | — | ||||||||||||||
|
2024
(6)
|
Nov 2024 | 45,702 | 0.01450368 | 0.01595405 | 0.01595405 | — | ||||||||||||||
|
2024
(6)
|
Nov 2024 | 32,639 | 0.01035817 | 0.01139399 | 0.01139399 | — | ||||||||||||||
|
2024
(6)
|
Dec 2024 | 78,341 | 0.02486184 | 0.02734804 | 0.02734804 | — | ||||||||||||||
|
profit reserves
(6)
|
Dec 2024 | 18,553 | 0.00588800 | 0.00647681 | 0.00647681 | — | ||||||||||||||
|
profit reserves
(6)
|
until jun 2025 | 93,272 | 0.02965685 | 0.03262255 | 0.03262255 | — | ||||||||||||||
|
2024
(6)
|
until jun 2025 | 108,595 | 0.03452892 | 0.03798182 | 0.03798182 | — | ||||||||||||||
*
approval of the date by resolution of the AGM
(1)
US$ based on the exchange rate of 9/30/2021, R$ 5,4394
(2)
US$ based on the exchange rate of 12/30/2021, R$ 5.5805
(3)
US$ based on the exchange rate of 11/30/2022, R$ 5,2941
(4)
US$ based on the exchange rate of 12/30/2022, R$ 5,2177
(5)
US$ based on the exchange rate of 12/29/2023, R$ 4,8413
(6)
US$ based on the exchange rate of 12/31/2024, R$ 6,1923
(7)
US$ based on the exchange rate of 03/31/2025, R$ 5,7422
ITEM 9. THE OFFER AND LISTING
The principal trading market for our shares (including our Class B Shares and Common Shares) is the [B]³ (Brasil, Bolsa, and Balcão) market. Our Common Shares trade on [B]³ under the ticker “CPLE3” and our Class B Shares trade under the ticker “CPLE6.” On January 31,2025, approximately 285,928 shareholders held our CPLE6 shares and 86,741 owned CPLE3 shares.
In the United States, our shares are traded in the form of ADSs, issued by the Depositary pursuant to the Deposit Agreement by and between us, the Depositary and the registered holders and beneficial owners from time to time of the ADSs. The Common Share ADSs and Preferred Share ADSs trade on the NYSE under the ticker “ELPC” and “ELP,” respectively.
On June 19, 2002, our shares were listed on Latibex, an Euro-based market for Latin American securities. The shares trade under the tickers “XCOP” and “XCOPO” for Common Shares and Preferred Shares, respectively.
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ITEM 10. ADDITIONAL INFORMATION
MEMORANDUM AND ARTICLES OF ASSOCIATION
Organization
We are a publicly traded company duly registered with the CVM under No. 1431-1. According to Article Four of our bylaws, we are authorized to pursue, directly or through consortia or in partnership with private companies, the following objectives and purposes:
•
researching and studying, technically and economically, all energy sources, providing solutions for a sustainable development;
•
researching, studying, planning, constructing and developing the production, transformation, transportation, storage, distribution and trade of energy in any of its forms, chiefly electric power, as well as fuels and energy raw materials;
•
studying, planning, designing, constructing and operating dams and their reservoirs, as well as other undertakings for multiple uses of water resources;
•
providing services in energy trading, energy infrastructure, information and technical assistance concerning the rational use of energy to business undertakings with the aim of implementing and developing economic activities deemed relevant for the development of the State of Paraná, upon approval by the Board of Directors; and
•
developing activities in the areas of energy generation, electronic data transmission, electronic communications and control, cellular telephone systems, and other endeavors that may be deemed relevant to us and the State of Paraná, being authorized, for such aims, upon approval by the Board of Directors, and for the aims set forth in the second and third bullet points above, to join, preferably holding major stakes or controlling interest, consortia or concerns with private companies, pension funds or other private entities, to participate in bidding processes of new concessions and/or already established special purpose companies to exploit already existing concessions, having taken into consideration, besides the projects’ general features, their respective social and environmental impacts.
Except as described in this section, our bylaws do not contain provisions addressing the duties, authority, or liabilities of directors and management, which are instead established by Brazilian Corporate Law.
Qualification of Board of Directors
In the Bylaws consolidated on October 30, 2024, as of the next term of office (April 2025 to April 2027), the CAD will be made up of 7 to 9 members, of which: one elected by the holders of preferred shares; and up to eight elected by the holders of ordinary shares. For the current term (Apr. 2023 to Apr. 2025), the CAD has 9 members, 1 of whom is elected by the employees.
Limitations on Directors’ Powers
Under Brazilian Corporate Law and our Related Parties Transactions and Conflict Of Interest Policy, if a director or an executive officer has a conflict of interest with us in connection with any proposed transaction, the director or executive officer may not vote in any decision of the Board of Directors or of the Executive Board related to that transaction, and must disclose the nature and extent of the conflict of interest for transcription in the minutes of the meeting. A director or an executive officer may not transact any business with a company, including accepting any loans, except on reasonable and fair terms for us and conditions that are identical to the terms and conditions prevailing in the market or offered by third parties. According to our bylaws, shareholders set the aggregate compensation payable to directors, executive officers, and members of the Supervisory Board. For more information, see “Item 6. Directors, Senior Management and Employees.” Our bylaws do not establish any mandatory retirement age limits.
Board of Directors and Executive Board
According to our bylaws, we are managed by a Board of Directors, currently composed of nine members and an Executive Board, composed of 9 members.
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Our Board of Directors ordinarily meets monthly and is responsible, among other things, for: (i) establishing our corporate strategy; (ii) defining the general orientation of our business; (iii) defining the responsibilities of members of our Executive Board; and (iv) electing the members of our Executive Board.
Our Executive Board meets every two weeks and is responsible for our daily management. Each Executive Officer also has individual responsibilities established by our bylaws.
The members of our Board of Directors, of our Executive Board, our Supervisory Board and of our statutory committees shall be liable for any loss or damages resulting from the performance of their duties, in compliance with the applicable law. Notwithstanding, we shall ensure, provided no conflict with our own interests arises, legal assistance for members or former members of statutory bodies in judicial and administrative proceedings brought by third parties, during or after their term of office, for the performance of the duties of their office, in accordance to the terms and provisions of our bylaws.
For further information, see “Item 6. “Directors, Senior Management and Employees—Board of Directors” and “—Executive Board.”
Shareholders’ Meetings
The convening of our shareholders’ meeting is made through publication of a notice to shareholders in a newspaper. As provided by Brazilian Corporate Law, publications have to be made in a newspaper with wide circulation in the same city as our corporate headquarters. The notice must be published no fewer than three times, beginning at least 21 calendar days prior to the scheduled meeting date. We make local notices in the
Valor Econômico
.
In order for a shareholders’ meeting to be held on first call, shareholders representing at least one-quarter of the voting capital have to be present, except as otherwise provided for under Brazilian law. If no such quorum is verified, a second meeting may be called by notice given at least 8 calendar days prior to such meeting and in accordance with the same rules of publication previously described. The quorum requirements will not apply to a second meeting, subject to the minimum quorum and voting requirements for certain matters, as discussed as follows. A shareholder without a right to vote may attend a general shareholders’ meeting and take part in the discussion of matters submitted for consideration.
A shareholder may be represented at a general shareholders’ meeting by a proxy appointed in accordance with applicable Brazilian law not more than one year before the meeting, who must be a shareholder, a company officer, a lawyer or a financial institution.
Right of Withdrawal
Our common shares and preferred shares are not redeemable, except that under certain circumstances provided for in Brazilian Corporate Law, a dissenting shareholder has the right to withdraw their equity interest from us and receive reimbursement. According to Article 107 of our bylaws, the amount to be paid by us for the reimbursement of shares held by shareholders who have exercised their right of withdrawal, in cases authorized by law, shall correspond to the book value per share, determined based on the last set of financial statements approved by the general assembly. Shareholders may also request a special balance sheet in cases provided for in Article 45 of the Brazilian Corporate Law.
This right of withdrawal arises if any of the following matters are decided upon at a shareholders’ meeting:
•
creation of a new class of preferred shares or a disproportionate increase in an existing class of preferred shares relative to other classes of shares, unless such action is provided for in or authorized by our bylaws, which, as of the this date, is not the case;
•
modification to the preference, privilege or conditions for redemption or amortization granted to one or more classes of preferred shares, or the creation of a new class of preferred shares with greater privileges than the existing classes of preferred shares;
•
reduction of the mandatory dividend;
•
consolidation or merger into another company;
•
participation in a group of companies (grupo de sociedades), as defined by Brazilian Corporate Law;
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•
the transfer of all shares to another company or receipt of shares by another company, in such a way as to make the company whose shares were transferred a wholly-owned subsidiary of the other;
•
changes to our corporate purpose; or
•
a spin-off that results in (a) a change to our corporate purpose (unless the spin-off company’s assets and liabilities are transferred to a company that has substantially the same corporate purpose); (b) a reduction in any mandatory dividend (although in our case, our preferred shares do not carry mandatory dividends); or (c) any participation in a group of companies.
The right of withdrawal also arises if a spin-off or merger occurs but the new company fails to register as a public stock corporation (and, if applicable, fails to list its shares on the stock exchange) within 120 days of the date of the shareholders’ meeting that approved the spin-off or merger.
Preferred Shares Rights
Pursuant to Brazilian Corporate Law, each preferred share of a class that is admitted to trading on a Brazilian stock exchange must have the certain rights under the Company’s bylaws.
Our bylaws comply with the directives provided by Brazilian Corporate Law as follows: (i) our Class A Shares shall have priority in the distribution of minimum dividends of 10% per year,
pro rata
, calculated as a percentage of the paid-in capital stock represented by such shares on December 31
of the previous fiscal year; (ii) our Class B Shares shall have priority in the distribution of minimum dividends,
pro rata
, in the amount equivalent to 25.0% of our net profits, as adjusted in accordance with Article202 of Law No. 6,404/76, calculated as a proportion of the paid-in capital stock represented by such shares on December 31
st
of the previous fiscal year; (iii) the dividends paid on Class B Shares pursuant to item (ii) above shall be paid only from any remaining profits after the payment of priority dividends to Class A Shares; and (iv) the dividends to be paid per preferred share, regardless of the class, shall be at least 10% higher than the dividends to be paid per Common Share; (v) the preferred shares will acquire voting rights if, during three consecutive fiscal years, we fail to pay a fixed or minimum dividend to which the preferred shares are entitled; and (vi) each ADS receives dividends for its underlying shares. For more information on our dividend policy, see “Item 8. Financial Information—Dividend Payment.”
Voting Rights
As a general rule, only our Common Shares are entitled to vote and each Common Share corresponds to one vote. Holders of preferred shares acquire voting rights if, during three consecutive fiscal years, we fail to pay a fixed or minimum dividend to which the preferred shares are entitled. If a holder of preferred shares acquires voting rights in this manner, such rights will be identical to the voting rights of a holder of Common Shares and will continue until the dividend is paid.
Furthermore, in accordance with our bylaws holders of preferred shares are entitled to voting rights in regards of specific matter discussed in a shareholders’ meeting:
•
Change in our corporate type into another, as well as incorporation, merger or spin-off.
•
Agreements between us and our controlling shareholder, directly or through a third party, or an entity influenced by the controlling shareholder, when such agreements shall be discussed in a shareholders’ meeting by force of statute or our bylaws.
•
Appraisal of assets for paying in our capital increase.
•
Choice of an entity to be hired for the assessment of our economic value.
•
Change or revocation of articles in our bylaws that alter or modify any of the requirements set forth in item 4.1. of the regulation of the Level 2 of [B]³, while the Level 2 participation contract is still in effect.
•
Appointment and removal of a member of the Board of Directors in a separate election, when requested by shareholders which have preferred shares equal to at least 10% of our total shares.
•
Exclusion or change in our bylaws aimed to suppress the right set forth in article 28, XXIX of our bylaws, which provides for the adoption of the full tariff set by a granting authority, requires the approval of most of the preferred
shares.
Holders of ADSs may exercise their voting rights in accordance with its underlying shares.
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Preemptive Rights
Our shareholders have a general preemptive right to subscribe for shares in any capital increase, in proportion to his or her ownership, as provided for in the Brazilian Corporate Law. A minimum period of 30 days following the publication of notice of a capital increase is assured for the exercise of the right, and the right is transferable. We may issue shares up to the limit of the authorized capital, excluding right of first refusal to the shareholders, as provided for in the Brazilian Corporate Law and in our bylaws.
Liquidation
In the event of our liquidation, after all creditors have been paid, all shareholders will participate equally and ratably in any remaining residual assets.
Liability of the Shareholders for Further Capital Calls
Neither Brazilian Corporate Law nor our bylaws provide for capital calls after shares are paid in. The shareholders’ liability is limited to the payment of the issue price of the shares subscribed or acquired.
Conversion Rights
Our bylaws permit the conversion of shares under specific conditions:
•
Class A preferred shares may be converted into Class B preferred shares at any time.
•
Common shares may be converted into preferred Class B shares, in accordance with the terms, conditions, and procedures defined by the Board of Directors, solely for the purpose of forming units, as defined in our bylaws.
•
Class A and Class B preferred shares may be converted into common shares, subject to the terms, conditions, and procedures established by the Board of Directors.
•
Common shares and Class B preferred shares cannot be converted into Class A preferred shares.
Form and Transfer
Our shares are maintained in book-entry form with a transfer agent (“Transfer Agent”). To make a transfer of shares, the Transfer Agent makes an entry in the register, debits the share account of the transferor and credits the share account of the transferee.
Transfers of shares by foreign investors are made in the manner described above and are executed by the investor’s local agent on the investor’s behalf. However, if the original investment was registered with the Brazilian Central Bank pursuant to a foreign investment mechanism regulated by Resolution No. 4,373 of September 29, 2014 of the Brazilian Central Bank (“Resolution No. 4,373”) as described under “Exchange Controls” as follows, the foreign investor must declare the transfer in its electronic registration.
A shareholder may choose, in its individual discretion, to hold its shares through [B]³. Shares are added to the [B]³ system through Brazilian institutions that have clearing accounts with the [B]³. Our shareholder registry indicates which shares are listed on the [B]³ system. Each participating shareholder is in turn registered in a register of beneficial shareholders maintained by the [B]³ and is treated in the same manner as the other registered shareholders.
Changes in Rights of Shareholders
A General Meeting of Shareholders must be held whenever we intend to change the rights of holders of our common shares or preferred shares. Under Brazilian Corporate Law the proposed changes must be approved by a majority of the class of shareholders that would be affected. Certain changes related to the rights of preferred shares, such as changes in preferences, advantages or conditions of redemption or amortization, may result in the exercise of rights to withdraw by the holders of the shares affected.
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Regulation of and Restrictions on Foreign Investors
Foreign investors face no legal restrictions barring them from holding Common Shares, Class A Shares, Class B Shares or ADSs.
The ability to convert into foreign currency dividend payments and proceeds from the sale of Common Shares or, Preferred Shares or from the exercise of preemptive rights, and to remit such amounts outside Brazil is subject to restrictions under foreign investment legislation which generally requires, among other things, the registration of the relevant investment with the Brazilian Central Bank. Any foreign investor who registers with the CVM in accordance with Resolution No. 4,373 may buy and sell securities on Brazilian stock exchanges without obtaining a separate certificate of registration for each transaction.
Annex II to Resolution No. 4,373 (“Annex II Regulations”) allows Brazilian companies to issue depositary receipts in foreign exchange markets. Our ADS program is duly registered with the Brazilian Central Bank and the CVM.
Our bylaws do not impose any limitation on the rights of Brazilian residents or non-residents to hold our shares and exercise the rights in connection therewith.
Disclosure of Shareholder Ownership
Under Brazilian regulations any person or group of persons representing the same interest that carries out a relevant trading involving shares or securities issued by a publicly traded company must disclose its share ownership to the investor relations officer of such company, which, in turn, must disclose such information to the CVM and to any relevant stock exchange. A relevant trading is defined as a transaction by which the direct or indirect equity stake of the persons referred above reaches an equity interest corresponding to 5% or its multiples (10%, 15%, and so on), of a type or class of shares representing the company’s capital stock. Any subsequent increase or decrease of 5% or its multiples in ownership of any class of shares must be similarly disclosed. The same reporting obligation applies to the acquisition of any rights over the shares and other securities mentioned in applicable regulation and to the execution of any derivative financial instruments referenced in shares. If such increase results in change of corporate control or administrative structure, or if the increase imposes a public offering, in addition to informing the investor relations officer, a statement containing certain required information must be published in newspapers that are widely circulated in Brazil.
Arbitration
As provided for in our bylaws, we, our shareholders, directors, officers and members of the supervisory board shall resolve through arbitration any dispute or conflict that may arise between them, regarding, among others, the application, validity, effectiveness, interpretation, violation and corresponding effects of the provisions of our bylaws, of the current applicable law, of the rules applicable to the capital markets in general, as well as those of the regulation of the level 2 of corporate governance of [B]³ S.A. - Brasil, Bolsa e Balcão (“Level 2”), of the Level 2 participation contract, and of the Sanctions and the Arbitration Regulations of the [B]³ Market Arbitration Chamber.
MATERIAL CONTRACTS
For information concerning our material contracts, see “Item 4. Information on the Company” and “Item 5. Operating and Financial Review and Prospects.”
EXCHANGE CONTROLS
The ownership of Class A Shares, Class B Shares or Common Shares of the Company by individuals or legal entities domiciled outside Brazil is subject to certain conditions established under Brazilian law, as described below.
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The right to convert dividend payments and proceeds from the sale of shares into foreign currency and to remit such amounts outside Brazil is subject to restrictions under Brazilian foreign investment legislation, which generally requires, among other things, that the relevant investments have been registered with the Brazilian Central Bank. Such restrictions on the remittance of foreign capital abroad may hinder or prevent Itaú Unibanco S.A., as custodian for the Common Shares and Preferred Shares represented by ADSs (“Custodian”), or holders who have exchanged ADSs for Common Shares and Preferred Shares from converting dividends, distributions or the proceeds from any sale of such Common Shares and Preferred Shares, as the case may be, into U.S. dollars and remitting such U.S. dollars abroad. Holders of ADSs could be adversely affected by delays in, or refusal to grant any, required government approval for conversions of Brazilian currency payments and remittances abroad of the Common Shares and Preferred Shares underlying the ADSs.
Under Resolution No. 4,373, foreign investors may invest in almost all financial assets and engage in almost all transactions available in the Brazilian financial and capital markets, provided that certain requirements are fulfilled. The definition of foreign investor includes individuals, legal entities, mutual funds and other collective investment entities, domiciled or headquartered abroad.
To be eligible to invest in the Brazilian financial and capital markets, foreign investors must:
1.
appoint at least one representative in Brazil with powers to perform actions relating to foreign investments;
2.
register as a foreign investor with the CVM, pursuant to CVM Resolution No. 13/2020;
3.
register the foreign investment with the Brazilian Central Bank; and
4.
constitute at least one custodian institution authorized by CVM, provided that this provision is not applicable to foreign investors who are individuals.
Securities and other financial assets held by foreign investors must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the Brazilian Central Bank or the CVM. In addition, securities trading is restricted to transactions carried out in the stock exchanges or organized over-the-counter markets licensed by the CVM.
The Annex II Regulations provide for the issuance of depositary receipts in foreign markets in respect of shares of Brazilian issuers. Prior to the issuance of the ADSs, the ADS program was approved by the Brazilian Central Bank and the CVM under the Annex V to CMN Resolution No. 2,689, which allowed Brazilian companies to issue depositary receipts in foreign exchange markets and was in force by the time the ADSs were issued. Depositary receipts are currently governed by Resolution No. 4,373. The proceeds from the sale of ADSs by ADS holders outside Brazil are free of Brazilian foreign investment controls and should not be subject to taxation in Brazil. The withdrawal and the disposal of Common Shares and Preferred Shares upon cancellation of ADS will be subject to taxation in Brazil. For more information, see “Item 10. Additional Information—Taxation—Brazilian Tax Considerations—Taxation of Gains Outside Brazil.”
An electronic registration has been issued in the name of the Depositary with respect to the ADSs and is maintained by the Custodian on behalf of the Depositary. Pursuant to this electronic registration, the Custodian and the Depositary are able to convert dividends and other distributions with respect to the Common Shares and Preferred Shares represented by ADSs into foreign currency and remit the proceeds outside Brazil. In the event that a holder of ADSs exchanges such ADSs for Common Shares and Preferred Shares, such holder must seek to obtain its own electronic registration with the Brazilian Central Bank.
Pursuant to Resolution No. 4,373, the withdrawal of Common Shares and Preferred Shares upon cancellation of ADSs may require simultaneous exchange transactions in the event the investor decides not to dispose of those Common Shares and Preferred Shares. The simultaneous exchange transactions may be required in order to obtain a certificate of registration of Common Shares and Preferred Shares with the Brazilian Central Bank. This transaction will be subject to tax in Brazil. For more information, see “Item 10. Additional Information—Taxation—Brazilian Tax Considerations—Other Brazilian Taxes.”
Thereafter, any holder of Common Shares and Preferred Shares may not be able to convert into foreign currency and remit outside Brazil the proceeds from the disposition of, or distributions with respect to, such Common Shares and Preferred Shares, unless such holder obtains his own electronic registration. A holder that obtains an electronic registration may be subject to less favorable Brazilian tax treatment than a holder of ADSs. For more information, see “Item 10. Additional Information—Taxation—Brazilian Tax Considerations.”
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TAXATION
The following summary contains a description of the principal Brazilian and U.S. federal income tax consequences of the acquisition, ownership and disposition of Common Shares, Preferred Shares or ADSs, but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase Common Shares, Preferred Shares or ADSs. The summary is based upon the tax laws of Brazil and regulations thereunder and on the tax laws of the United States and regulations thereunder as in effect on the date hereof, which are subject to change. Prospective purchasers of Common Shares, Preferred Shares or ADSs should consult their own tax advisors as to the tax consequences of the acquisition, ownership and disposition of Common Shares, Preferred Shares or ADSs.
Although there is at present no income tax treaty between Brazil and the United Statesto avoid double taxation, the tax authorities of the two countries have had discussions that may culminate in such a treaty. No assurance can be given, however, as to whether or when a treaty will enter into force or how it will affect the U.S. holders of Common Shares, Preferred Shares or ADSs. The countries have entered into a Tax Information Exchange Agreement (“TIEA”)enactedin BrazilthroughDecree No. 8,003/2013. This agreement allows for the exchange of tax-related information between the two jurisdictions upon specific request.Additionally, Brazilrecognizes reciprocityintax matterspursuant toSection 1, Paragraphs 2 and 3 of Normative Ruling No. 208/2002 and Declaratory Act No. 28/2000.Prospective holders of Common Shares, Preferred Shares or ADSs should consult their own tax advisors as to the tax consequences of the acquisition, ownership and disposition of Common Shares, Preferred Shares or ADSs in their particular circumstances.
Brazilian Tax Considerations
The following discussion summarizes the principal Brazilian tax consequences of the acquisition, ownership and disposition of Common Shares, Preferred Shares or ADSs by an individual, entity, trust or organization resident or domiciled outside Brazil for purposes of Brazilian taxation (“Non-Brazilian Holder”). It is based on Brazilian law currently in effect, which is subject to differing interpretations and changes that may apply retroactively. This discussion does not address all the Brazilian tax considerations that may be applicable to any particular Non-Brazilian Holder, and each Non-Brazilian Holder should consult its own tax advisor about the Brazilian tax consequences of investing in Common Shares, Preferred Shares or ADSs.
Taxation of Dividends
Dividends paid by the Company in cash or in kind from profits of periods beginning on or after January 1, 1996 (i) to the Depositary in respect of Common Shares and Preferred Shares underlying ADSs or (ii) to a Non-Brazilian Holder in respect of Common Shares or Preferred Shares generally will not be subject to Brazilian withholding income tax. Dividends paid from profits generated before January 1, 1996 may be subject to Brazilian withholding income tax at varying rates depending upon the year in which the profits have been obtained.
There are discussions in the Brazilian Congress regarding a potential income tax reform aiming at revoking the this exemption and imposing income taxation on the payment of dividends. However, it is still unclear if and how such reform will eventually pass. In this context, a bill of law (Bill No. 1,087/2025) has been introduced by the Federal Government, proposing an income tax reform. This bill includes the introduction of withholding income tax on dividend payments to non-residents at a 10% rate, with a recovery mechanism in case the combined taxation (corporate income taxes and dividends) – exceeds the nominal CIT rate, which is currently 34%. According to reports, the rapporteur of the bill may be basing his approach on previous income tax reform proposals, which suggested income tax rates ranging between 15% e 20%.This proposal is still under review by the Brazilian Congress and will need to be approved before any changes are implemented.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Distributions of Interest on Equity
In accordance with Law No. 9,249, dated December 26, 1995, as amended, Brazilian corporations may make payments to shareholders characterized as distributions of interest on the equity of the company as an alternative form of making dividend distributions. The rate of interest may not be higher than TJLP, as determined by the Brazilian Central Bank from time to time. The total amount distributed as interest on equity may not exceed, for tax purposes, the greater of (i) 50.0% of net income (after the deduction of the social contribution on net profits and before taking into account the provision for corporate income tax and the amounts attributable to shareholders as net interest on equity) related to the period in respect of which the payment is made and (ii) 50.0% of the sum of retained profits and profit reserves as of the date of the beginning of the period in respect of which the payment is made.
As of January 1, 2024, Law No. 14,789/2023introducedcertain amendments to the methodologyfor calculatinginterest on equity,mostnotablywithrespecttothe equity accountsto be considered for purposes of applying TJLP.Accordingly, thecalculationmusttake into accountthe following accounts: (i) paid-in capital; (ii) capital reservesarisingfrom share issuance; (iii) profit reserves (excluding tax incentive reserves); (iv) treasury shares; and (v) retained earnings and accumulated losses.
Distributions of interest on equity paid to Brazilian and Non-Brazilian Holders of Common Shares and Preferred Shares, including payments to the Depositary in respect of Common Shares and Preferred Shares underlying ADSs, are deductible by the Company for Brazilian corporate income tax and social contribution on net profits purposes as far as the limits above described are observed. Such payments to shareholders are subject to Brazilian withholding income tax at the rate of 15.0%, except for payments to shareholders situated in tax haven jurisdictions (that is, a country or location that does not impose income tax or where the maximum income tax rate is lower than 17% or where the local legislation imposes restrictions on disclosing the shareholding composition or the ownership of the investment or the beneficial owner of the income derived from transactions carried out and attributable to a Non-Brazilian Holder – “Tax Haven Holder”), which payments are subject to withholding income tax at a 25.0% rate. The list of tax haven jurisdictions is currently provided in Normative Ruling No. 1,037. These payments may be included, at their net value, as part of any mandatory dividend. To the extent that payment of interest on net equity is so included, the corporation is required to distribute to shareholders an additional amount to ensure that the net amount received by them, after payment of the applicable withholding income tax, plus the amount of declared dividends, is at least equal to the mandatory dividend.
Taxation of Gains Outside Brazil
According to Law No. 10,833 of December 29, 2003 (“Law No. 10,833/03”), capital gains realized on the disposition of assets located in Brazil by a Non-Brazilian Holder, whether to another non-Brazilian resident or to Brazilian residents, are subject to taxation in Brazil. In this sense, if the Common Shares or Preferred Shares are disposed of by a Non-Brazilian Holder, as they are defined as assets located in Brazil, such holder will be subject to income tax on the gains assessed, following the rules described below, whether the disposition is conducted in Brazil or abroad and with a Brazilian resident or not.
A disposition of Common Shares and Preferred Shares can occur abroad if an investor decides to cancel its investment in ADSs and register the underlying Common Shares and Preferred Shares as a direct foreign investment under Law No. 4,131. Any capital gain arising from sales or other dispositions of Common Shares and Preferred Shares outside Brazil would be subject to Brazilian income tax at the rates that range from 15% to 22.5% depending on the amount of the gain, as follows: (i) 15% on gains not exceeding R$5,000,000.00; (ii) 17.5% on gains that exceed R$5,000,000.00 and do not exceed R$10,000,000.00; (iii) 20% on gains that exceed R$10,000,000.00 and do not exceed R$30,000,000.00; and (iv) 22.5% on gains exceeding R$30,000,000.00 or, if the investor is a Tax Haven Holder, 25.0%, which should be withheld by the purchaser of the Common Shares and Preferred Shares outside Brazil or its attorney-in-fact in Brazil.
Regarding ADSs, although the matter is not free from doubt, the gains realized by a Non-Brazilian Holder on the disposition of ADSs to another Non-Brazilian Holder should not be taxed in Brazil, based on the theory that ADSs do not constitute assets located in Brazil for purposes of Law No. 10,833/03. However, we cannot assure you that Brazilian courts would adopt this theory. Thus, the gain on a disposition of ADSs by a Non-Brazilian Holder to a resident in Brazil (or possibly even to a Non-Brazilian Holder in the event that courts determine that ADSs would constitute assets located in Brazil) may be subject to income tax in Brazil.
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Taxation of Gains in Brazil
For purposes of Brazilian taxation, the income tax rules on gains related to disposition of Common Shares or Preferred Shares vary depending on the domicile of the Non-Brazilian Holder, the form by which such Non-Brazilian Holder has registered its investment before the Brazilian Central Bank and/or how the disposition is carried out, as described below.
Any other gains assessed on a disposition of the Common Shares or Preferred Shares that is not carried out on the Brazilian stock exchange are:
1.
subject to income tax at the rate of 15%, when realized by a Non-Resident Holder that (i) is a 4,373 Holder; and (ii) is not a Tax Haven Holder, although different interpretations may be raised to sustain the application of the progressive rates ranging from 15% to 22.5%;
2.
subject to income tax at the progressive rates ranging from 15% to 22.5%, when realized by a Non-Resident Holder that is not a 4,373 Holder and is not a Tax Haven Holder; and
3.
subject to income tax at the rate of 25.0%, when realized by a Tax Haven Holder who are subject to an income tax rate of 25.0%.
There can be no assurance that the current preferential treatment for 4,373 Holders will continue in the future.
If these gains are related to transactions conducted on the Brazilian non-organized, over-the-counter market, through an intermediary, the withholding income tax of 0.005% on the sale value shall also be applicable and can be offset with the eventual income tax due on the capital gain. Such withholding does not apply to a 4,373 Holder that is not a Tax Haven Holder.
The deposit of Common Shares and Preferred Shares in exchange for the ADSs may be subject to Brazilian income tax. In this case, the difference between the acquisition cost and the market price of the Common Shares and Preferred Shares would be subject to income tax at the progressive rates ranging from 15% to 22.5% or 25.0% in the case of investors that are Tax Haven Holders. There may be arguments to claim that this taxation is not applicable in the case of a Non-Brazilian Holder that is registered under Resolution 4,373 (other than Tax Haven Holders), which should not be subject to income tax in such a transaction.
The withdrawal of Common Shares and Preferred Shares upon cancellation of ADSs should not be subject to Brazilian income tax, as long as the regulatory rules are appropriately observed with respect to the registration of the investment before the Brazilian Central Bank.
In the case of redemption of the Common Shares or Preferred Shares or ADSs or capital reduction by a Brazilian corporation, with subsequent withdrawal of the ADSs, such as our company, the positive difference between the amount effectively received by the Non-Brazilian Holder and the acquisition cost of the securities redeemed is treated as capital gain derived from the sale or exchange of shares not carried out on a Brazilian stock exchange market and is therefore subject to income tax at the progressive rates ranging from 15.0% to 22.5% or 25.0%, as the case may be.
Any exercise of preemptive rights relating to the Common Shares, Preferred Shares or ADSs will not be subject to Brazilian taxation. Gains on the sale or assignment of preemptive rights will be subject to the same tax treatment applicable to disposition of Common Shares or Preferred Shares.
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Other Brazilian Taxes
There are no Brazilian inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of Common Shares, Preferred Shares or ADSs by a Non-Brazilian Holder except for gift and inheritance taxes levied by some states in Brazil on gifts made or inheritances bestowed by individuals or entities not resident or domiciled in Brazil or in the relevant State to individuals or entities that are resident or domiciled within such State in Brazil. In this regard, it is important to highlight the Tax on Donations and Inheritance (“ITCMD”), a state tax levied at rates that may vary depending on the competent state, but subject to a current maximum rate of 8%. It is worth noting that, in the judgment of Extraordinary Appeal No. 851,108 (Theme 825), the Brazilian Supreme Court held that, in the absence of a federal supplementary law, Brazilian states are not constitutionally authorized to impose ITCMD in cases where: (i) the donor is domiciled abroad, or (ii) the deceased was domiciled or resident abroad, held assets abroad, or had estate proceedings initiated outside Brazil. As of the date hereof, no such federal supplementary law has been enacted. In addition, the tax reform on consumption introduced by Constitutional Amendment No. 132 (“EC 132/2023”) brought certain changes to the ITCMD framework, including: the introduction of progressive rates, the imposition of the tax on transactions between related parties that may be construed as donations and the establishment of specific rules for determining the tax basis of certain assets (e.g., equity interest based on market value). In parallel, other legislative initiatives aim to increase the maximum rate from 8% to up to 16% or more (Senate Bill No. 57/2019).
There are no Brazilian stamp, issue, registration, or similar taxes or duties payable by holders of Common Shares, Preferred Shares or ADSs.
Pursuant to Decree No. 6,306 of December 14, 2007 (“Decree No. 6,306/07”), a tax on foreign exchange transactions (“IOF/Exchange”) may be imposed on the conversion of Brazilian currency into foreign currency (e.g., for purposes of paying dividends and interest) or
vice-versa
. Currently, for most exchange transactions, the rate of IOF/Exchange is 0.38%, except for: (i) foreign exchange transactions for the inflow of funds related to investments in variable income effectuated by a Non-Brazilian Holder in the Brazilian financial and capital market, in which case the rate is 0%, and (ii) payment of dividends, and interest on shareholders’ equity related to the investment mentioned under item (i) above, in which case the rate is zero. Nonetheless, the Brazilian government may increase the rate to a maximum of 25.0%. Any such increase will be applicable only prospectively.
Pursuant to Decree No 6,306/07, the Tax on Bonds and Securities Transactions (“IOF/Bonds”) may be imposed on any transactions involving bonds and securities, including those carried out on Brazilian stock, futures and commodities exchanges. The rate of IOF/Bonds Tax applicable to transactions involving common shares is currently zero if the redemption, transfer or renegotiation occurs after 30 days of their acquisition. As from December 24, 2013, the IOF/Bonds levies at a rate of zero percent on the transfer (
cessão
) of shares traded in a Brazilian stock exchange environment with the specific purpose of enabling the issuance of depositary receipts to be traded outside Brazil. The Brazilian government is permitted to increase such rate at any time up to 1.5% per day, but only in respect of future transactions.
U.S. Federal Income Tax Considerations
The statements regarding U.S. tax law set forth below are based on U.S. law as in force on the date of this annual report, and changes to such law subsequent to the date of this annual report may affect the tax consequences described herein (possibly with retroactive effect). This summary describes the principal U.S. federal income tax consequences of the ownership and disposition of Common Shares, Preferred Shares or ADSs, but it does not purport to be a comprehensive description of all of the U.S. tax consequences that may be relevant to a decision to hold or dispose of Common Shares, Preferred Shares or ADSs. This summary applies only to purchasers of Common Shares, Preferred Shares or ADSs who will hold the Common Shares, Preferred Shares or ADSs as capital assets and does not apply to special classes of holders such as brokers or dealers in securities or currencies, holders whose functional currency is not the U.S. dollar, holders of 10% or more of our shares by vote or value (taking into account shares held directly or through depositary arrangements), tax-exempt organizations, financial institutions, holders liable for the alternative minimum tax, securities traders who elect to account for their investment in Common Shares, Preferred Shares or ADSs on a mark-to-market basis, regulated investment companies, partnerships or other pass-through entities (or partners or members therein), insurance companies, U.S. expatriates, and persons holding Common Shares, Preferred Shares or ADSs in a hedging transaction or as part of a straddle, conversion or other integrated transaction for U.S. federal income tax purposes. Moreover, this summary does not address the Medicare tax on net investment income or the tax consequences to U.S. holders of acquiring, owning or disposing of Common Shares, Preferred Shares or ADSs under any U.S. federal estate or gift, state, local or foreign taxes.
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Each holder is encouraged to consult such holder’s tax advisor concerning the overall tax consequences to it, including the consequences under laws other than U.S. federal income tax laws, of an investment in Common Shares, Preferred Shares or ADSs.
In this discussion, references to a “U.S. holder” are to a beneficial holder of a Common Shares, Preferred Shares or an ADS that is (i) an individual citizen or resident of the United States of America, (ii) a corporation, or any other entity taxable as a corporation, organized under the laws of the United States of America, any state thereof, or the District of Columbia, or (iii) otherwise subject to U.S. federal income taxation on a net basis with respect to the Common Shares, Preferred Shares or ADSs.
For purposes of the U.S. Internal Revenue Code of 1986, as amended, which we call the “Code,” holders of ADSs will generally be treated as owners of the Common Shares or Preferred Shares represented by such ADSs.
Taxation of Distributions
A U.S. holder will recognize dividend income for U.S. federal income tax purposes in an amount equal to the amount of any cash and the value of any property distributed by us as a dividend to the extent that such distribution is paid out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes, when such distribution is received by the custodian (or by the U.S. holder in the case of a holder of Common Shares or Preferred Shares).
We do not expect to maintain calculations of our earnings and profits in accordance with U.S. federal income tax principles. U.S. holders therefore should expect that distributions generally will be treated as dividends for U.S. federal income tax purpose.
If you are a U.S. holder, the amount of any distribution will include the amount of Brazilian tax withheld on the amount distributed, and the amount of a distribution paid in reais will be measured by reference to the exchange rate for converting reais into U.S. dollars in effect on the date the distribution is received by the custodian (or by a U.S. holder in the case of a holder of Common Shares or Preferred Shares). If the custodian (or U.S. holder in the case of a holder of Common Shares or Preferred Shares) does not convert such reais into U.S. dollars on the date it receives them, it is possible that the U.S. holder will recognize foreign currency loss or gain, which would be ordinary loss or gain, when the reais are converted into U.S. dollars. Dividends paid by us will not be eligible for the dividends received deduction allowed to corporations under the Code.
The U.S. dollar amount of dividends received by an individual, with respect to the ADSs, will be subject to taxation at preferential rates if the dividends are “qualified dividends.” Subject to certain exceptions for short-term and hedged positions, dividends paid on the ADSs will be treated as qualified dividends if (i) the ADSs are readily tradable on an established securities market in the United States and (ii) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a passive foreign investment company (“PFIC”). The ADSs are listed on the New York Stock Exchange, and will qualify as readily tradable on an established securities market in the United States so long as they are so listed. Based on our audited consolidated financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2024 and 2023 taxable years. In addition, based on our audited consolidated financial statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for the 2025 taxable year. Based on existing guidance, it is not clear whether dividends received with respect to the Common Shares or Preferred Shares will be treated as qualified dividends, because the Common Shares and Preferred Shares themselves are not listed on a U.S. exchange. Holders of ADSs, Common Shares and Preferred Shares should consult their own tax advisers regarding the availability of the reduced dividend tax rate in light of the considerations discussed above and their own particular circumstances.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Subject to generally applicable limitations and conditions, Brazilian withholding tax on dividends with respect to Common Shares, Preferred Shares or ADSs that is paid at the appropriate rate applicable to the U.S. holder may be eligible for credit against such U.S. holder’s U.S. federal income tax liability. These generally applicable limitations and conditions include requirements adopted by the IRS in regulations promulgated in December 2021, and any Brazilian tax generally will need to satisfy these requirements in order to be eligible to be a creditable tax for a U.S. holder. In the case of a U.S. holder that consistently elects to apply a modified version of these rules under recently issued temporary guidance and complies with specific requirements set forth in such guidance, the Brazilian withholding tax on dividends generally will be treated as meeting the new requirements and therefore as a creditable tax. In the case of all other U.S. holders, the application of these requirements to the Brazilian tax on dividends is uncertain and we have not determined whether these requirements have been met. If the Brazilian tax is not a creditable tax for a U.S. holder or the U.S. holder does not elect to claim a foreign tax credit for any foreign income taxes, the U.S. holder may be able to deduct the Brazilian tax in computing such U.S. holder’s taxable income for U.S. federal income tax purposes. For U.S. holders that do elect to claim foreign tax credits, dividend distributions will constitute income from sources without the United States and generally will constitute “passive category income” for foreign tax credit purposes. The availability and calculation of foreign tax credits and deductions for foreign taxes involve the application of complex rules and also vary depending upon on a U.S. holder’s particular circumstances. The temporary guidance discussed above also indicates that the Treasury and the IRS are considering proposing amendments to the December 2021 regulations and that the temporary guidance can be relied upon until additional guidance is issued that withdraws or modifies the temporary guidance. U.S. holders should consult their own tax advisors regarding the application of these rules to their particular situations.
Distributions of additional shares to holders with respect to their Common Shares, Preferred Shares or ADSs that are made as part of a pro rata distribution to all our shareholders generally will not be subject to U.S. federal income tax.
Holders of Common Shares, Preferred Shares or ADSs that are foreign corporations or nonresident alien individuals, which we call “non-U.S. Holders,” generally will not be subject to U.S. federal income tax or withholding tax on distributions with respect to Common Shares, Preferred Shares or ADSs that are treated as dividend income for U.S. federal income tax purposes unless such dividends are effectively connected with the conduct by the holder of a trade or business in the United States.
Taxation of Capital Gains
Upon the sale or other taxable disposition of the Common Shares, Preferred Shares or ADSs, a U.S. holder will recognize gain or loss for U.S. federal income tax purposes. The amount of the gain or loss will be equal to the difference between the amount realized in consideration for the disposition of the Common Shares, Preferred Shares or ADSs (including the gross amount of the proceeds before the deduction of any Brazilian tax) and the U.S. holder’s tax basis in the Common Shares, Preferred Shares or ADS. Such gain or loss generally will be subject to U.S. federal income tax as capital gain or loss and will be long-term capital gain or loss if the Common Shares, Preferred Shares or ADSs has been held for more than one year on the date of the disposition. The net amount of long-term capital gain recognized by an individual holder generally is subject to taxation at preferential rates. Capital losses may be deducted from taxable income, subject to certain limitations.
A U.S. holder generally will not be entitled to credit any Brazilian tax imposed on the sale or other disposition of the Common Shares, Preferred Shares or ADSs against such U.S. holder’s U.S. federal income tax liability, except in the case of a U.S. holder that consistently elects to apply a modified version of the U.S. foreign tax credit rules that is permitted under recently issued temporary guidance and complies with the specific requirements set forth in such guidance. Additionally, capital gain or loss recognized by a U.S. holder on the sale or other disposition of the Common Shares, Preferred Shares, or ADSs generally will be U.S. source gain or loss for U.S. foreign tax credit purposes. Consequently, even if the withholding tax qualifies as a creditable tax, a U.S. holder may not be able to credit the tax against its U.S. federal income tax liability unless such credit can be applied (subject to generally applicable conditions and limitations) against tax due on other income treated as derived from foreign sources. If the Brazilian tax is not a creditable tax, the tax would reduce the amount realized on the sale or other disposition of the Common Shares, Preferred Shares or ADSs even if the U.S. holder has elected to claim a foreign tax credit for other taxes in the same year. The temporary guidance discussed above also indicates that the Treasury and the IRS are considering proposing amendments to the December 2021 regulations and that the temporary guidance can be relied upon until additional guidance is issued that withdraws or modifies the temporary guidance. U.S. holders should consult their own tax advisors regarding the application of the foreign tax credit rules to a sale or other disposition of the Common Shares, Preferred Shares or ADSs and any Brazilian tax imposed on such sale or disposition.
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A non-U.S. Holder will not be subject to U.S. federal income tax or withholding tax on gain realized on the sale or other disposition of the Common Shares, Preferred Shares or ADSs unless (i) such gain is effectively connected with the conduct by the holder of a trade or business in the United States, or (ii) such holder is an individual who is present in the United States of America for 183 days or more in the taxable year of the sale and certain other conditions are met.
Foreign Financial Asset Reporting
Certain U.S. Holders that own “specified foreign financial assets” with an aggregate value in excess of US$50,000 on the last day of the taxable year or US$75,000 at any time during the taxable year are generally required to file an information statement along with their tax returns, currently on IRS Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial accounts held at a non-U.S. financial institution, as well as securities issued by a non-U.S. issuer that are not held in accounts maintained by financial institutions. The understatement of income attributable to “specified foreign financial assets” in excess of US$5,000 extends the statute of limitations with respect to the tax return to six years after the return was filed. U.S. Holders who fail to report the required information could be subject to substantial penalties. U.S. Holders are encouraged to consult with their own tax advisors regarding the possible application of these rules, including the application of the rules to their particular circumstances.
Backup Withholding and Information Reporting
Dividends paid on, and proceeds from the sale or other disposition of, the ADSs or Common Shares or Preferred Shares to a U.S. holder generally may be subject to the information reporting requirements of the Code and may be subject to backup withholding unless the U.S. holder (i) is a corporation or other exempt recipient or (ii) provides an accurate taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred.
A holder that is not a “United States person” (as defined in the Code) generally will be exempt from these information reporting requirements and backup withholding tax, but may be required to comply with certain certification and identification procedures in order to establish its eligibility for such exemption in connection with payments received within the United States or through certain U.S.-related intermediaries.
The amount of any backup withholding collected from a payment to a holder will be allowed as a credit against the holder’s U.S. federal income tax liability and may entitle the holder to a refund, provided that certain required information is furnished to the Internal Revenue Service.
DOCUMENTS ON DISPLAY
We file reports, including annual reports on Form 20-F and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. We are required to make filings with the SEC by electronic means. Any filings we make electronically will be available to the public over the Internet at SEC’s website.
For more information about our securities, see Exhibit 2.4 to this annual report.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See Note 32.2.3 to our audited consolidated financial statements for disclosure about market risk.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
ITEM 12A. DEBT SECURITIES
Not applicable.
ITEM 12B. WARRANTS AND RIGHTS
Not applicable.
ITEM 12C. OTHER SECURITIES
Not applicable.
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ITEM 12D. AMERICAN DEPOSITARY SHARES
In the United States, our shares trade in the form of ADSs. Common Share ADS represents four Common Shares each, and Preferred Share ADSs represents four Class B Shares each. Our ADSs were issued by The Bank of New York Mellon (or the Depositary) pursuant to the Deposit Agreement for Common Share ADSs and the Deposit Agreement for Preferred Share ADSs. The Common Share ADSs trade under the ticker “ELPC” and the Preferred Share ADSs trade under the symbol “ELP.” ADS holders are required to pay various fees to the Depositary, and the Depositary may refuse to provide any service for which a fee is assessed until the applicable fee has been paid. The Depositary is located at 240 Greenwich Street, New York, NY 10286.
ADS holders are required to pay the Depositary: (i) an annual fee of up to US$ 0.05 per ADS (or portion thereof) for administering the ADS program, and (ii) amounts in respect of expenses incurred by the Depositary or its agents on behalf of ADS holders, including expenses arising from compliance with applicable law, taxes or other governmental charges, cable, telex and facsimile transmission, or conversion of foreign currency into U.S. dollars. In both cases, the Depositary may decide in its sole discretion to seek payment by either billing holders or by deducting the fee from one or more cash dividends or other cash distributions.
ADS holders are also required to pay additional fees for certain services provided by the Depositary, as set forth in the table below.
| Depositary service | Fee payable by ADS holders | |||||||
|
Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
|
US$5.00 or less per 100 ADSs (or portion thereof) | |||||||
|
Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
|
US$5.00 or less per 100 ADSs (or portion thereof) | |||||||
|
Distribution of cash dividends or other cash distribution
|
US$ 0.05 or less per ADS
|
|||||||
|
Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADS registered holders
|
A fee equivalent to the fee that would be payable if securities distributed to the holder had been shares and the shares had been deposited for issuance of ADSs | |||||||
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Depositary services
|
US$ 0.05 (or less) per ADS per calendar year
|
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|
Transfer and registration of shares on the Depositary’s share register or a foreign registrar’s share register to or from the name of the Depositary or its agent when the holder deposits or withdraws shares
|
Registration or transfer fees | |||||||
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Cable, telex and facsimile transmissions (except when expressly provided for in the respective deposit agreement)
|
Expenses of the Depositary | |||||||
|
Converting foreign currency to U.S. dollars
|
Expenses of the Depositary | |||||||
|
Taxes and other governmental charges the Depositary or the custodian are required to pay on any ADS or share underlying an ADS (e.g., stock transfer taxes, stamp duty or withholding taxes)
|
As necessary | |||||||
| Any other charges incurred by the Depositary or its agents for servicing the deposited securities | As necessary | |||||||
Payments by the Depositary
Our current contract was entered into in November 2024 and defines that payments will be made using the “Revenue Sharing Payments” method. In any Contract Year during the Term that the Depositary has collected net issuance fees, net cancellation fees, net cash dividend fees and/or net Depositary Service Fees (“DSFs”) greater than US$150,000 (the “Fee Threshold”), the Depositary will pay us 99% of the net fees collected in excess of the Fee Threshold during the remainder of the applicable Contract Year (each a “Revenue Sharing Payment” and together the “Revenue Sharing Payments”). “Net issuance fees” and “net cancellation fees” are defined as gross issuance fees and gross cancellation fees collected by the Depositary, as the case may be, less the Depositary’s custody expenses, provided that, for such purposes, “net issuance fees” and “net cancellation fees” does not include any issuance or cancellation fees collected by the Depositary resulting from corporate actions or upon termination of the Facilities. “Net cash dividend fees” is defined as gross cash dividend fees collected by the Depositary less any expenses incurred by the Depositary relating to the collection of such fees. “Net DSFs” are defined as gross DSFs collected by the Depositary less any expenses incurred by the Depositary relating to the collection of such DSFs, including any charges by The Depository Trust Clearing Corporation or any other central securities depository. In December 31, 2024, the gross amount received from the Depositary was US$933,458.71, and the net amount was US$653,421.09.
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not applicable.
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ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15. CONTROL AND PROCEDURES
2024 Fiscal Year
Disclosure Controls and Procedures, and Report on Internal Control over Financial Reporting
(a) Disclosure Control and Procedures
We evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024 with the participation of our Chief Executive Officer and Chief Financial Officer. Based on our assessment, we concluded that, as of December 31, 2024, our disclosure controls and procedures were effective in providing reasonable assurance that information that we are required to disclose in the reports we present or submit under the Exchange Act is recorded, processed, summarized and reported, within the deadlines specified in the applicable rules and forms, and are accumulated and reported to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding any required disclosure.
(b) Management Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating the effectiveness of internal control over financial reporting. The process of internal controls over financial reporting is designed by our Chief Executive Officer and our Chief Financial Officer, under the supervision of our Board of Directors, and is carried out by our management and other employees as a means to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS Accounting Standards, issued by the IASB.
Rules 13a-15(f) and 15d-15(f) under the Exchange Act define internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes policies and procedures that (1) refer to record keeping that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to enable the preparation of financial statements in accordance with generally accepted accounting principles, and that Company’s receipts and expenses are being made only with authorization from Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Company’s assets that could have a material effect on the audited consolidated financial statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any assessment of effectiveness for future periods are subject to numerous risks, including that controls may become inadequate due to changes in conditions.
Our management has assessed the effectiveness of our internal controls over financial reporting as of December 31, 2024, was based on the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Based on such assessments and criteria, management has concluded that, as of December 31, 2024, our internal control over financial reporting is effective.
Our independent registered public accounting firm has examined the effectiveness of our internal control over financial reporting, as indicated in the report included in this document.
(c) Attestation Report of the Registered Public Accounting Firm
The effectiveness of our internal control over financial reporting as of December 31, 2024, has been audited by PricewaterhouseCoopers Auditores Independentes Ltda., the Company’s independent registered public accounting firm. Their integrated report, is included in our audited consolidated financial statements included in this Form 20-F.
d) Changes in Internal Control on Financial Reporting
Our management has not identified any other changes in its internal controls over financial disclosure reporting during the year ended December 31, 2024 that has significantly affected, or is reasonably likely to materially affect, its internal control over financial reporting.
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ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
On September 20, 2024, our Board of Directors reviewed the qualifications and backgrounds of the members of the Audit Committee and determined that Mr. Carlos Biedermann an “audit committee financial expert” within the meaning of Item 16A of Form 20-F and satisfied the requirements of independence of Rule 10A-3 under the Securities Exchange Act. For more information regarding our Audit Committee, see “Item 6. Directors, Senior Management and Employees—Audit Committee.”
ITEM 16B. CODE OF ETHICS
Our code of ethics, called “Code of Conduct,” was adopted for the first time in 2003. Over the years, the document has been revised to adapt it to the Company’s reality. The current version of the Code of Conduct was approved on December 12, 2024 by the Board of Directors.
The Code of Conduct applies to all of our employees, interns, suppliers, service providers, contractors, directors and officers (including our Chief Executive Officer, our Chief Financial Officer and the head of our accounting department), as well as of our wholly owned subsidiaries. Since the adoption of our Code of Conduct, we have not granted any express or implied waiver of any section of our code to the persons to whom it applies.
Our Code is available on our website (ri.copel.com/en) and copies can also be mailed upon written request to the address given on the front cover.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit and Non-Audit Fees
PricewaterhouseCoopers Auditores Independentes Ltda., PCAOB ID No. 1351 and located in Curitiba, Brazil, acted as our independent registered public accounting firm for the fiscal year ended December 31, 2024. Deloitte Touche Tohmatsu Auditores Independentes Ltda., PCAOB ID No. 1045, acted as our independent registered public accounting firm for the fiscal year ended December 31, 2023.
The following table sets forth the total amount billed to independent registered public accounting firms for services performed 2024 and 2023, and breakdown these amounts by category of service.
| Year ended December 31, | ||||||||
| Billed | 2024 | 2023 | ||||||
| (R$ million) | ||||||||
| PricewaterhouseCoopers Auditores Independentes Ltda | ||||||||
|
Audit fees
|
4.4 | — | ||||||
|
Audit-related fees
|
0.2 | — | ||||||
| Deloitte Touche Tohmatsu Auditores Independentes Ltda | ||||||||
|
Audit fees
|
2.5 | 10.9 | ||||||
|
Audit-related fees
|
0.1 | — | ||||||
|
Tax fees
|
0.1 | 0.1 | ||||||
|
Total
|
7.3 | 11.0 | ||||||
Audit Fees
Audit fees are fees billed for the audit of our annual financial statements and for the reviews of our quarterly financial information in connection with statutory and regulatory filings or engagements. In 2023, the amount of R$5.4 million refers to auditing services related to the Public Offering within the scope of the Securities and Exchange Commission (“SEC”) and the Brazilian Securities and Exchange Commission (“CVM”).
Audit-related fees
Audit-related fees are fees refer to costs associated with the assurance of Integrated Reporting information and the control structure for the process of compiling and calculating the financial ratio.
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Tax Fees
Tax fees are fees billed for the review of fiscal and tax procedures, including the examination of the procedures in force for the calculation, retention, registration, control, collection, recovery and accounting of taxes, including ancillary obligations.
Audit Committee Pre-Approval Policies and Procedures
When hiring other services from its external auditors, the Company’s practice provides for prior analysis by the Audit Committee of the Board of Directors, which must consider in this assessment whether a relationship or service provided by an independent auditor: (i) creates conflicting interests with your audit client; (ii) puts them in a position to audit their own work; (iii) results in acting as a manager or as an employee of the audit client; or (iv) puts them in a position of attorney for the audit client.
The Audit Committee also considers, in this type of assessment, whether any service provided by the independent auditing company may impair, in fact or apparently, the firm’s independence. Whenever necessary, the Audit Committee can count on the technical support of the Internal Audit, or of an independent consultancy, for technical evaluation that may be required in each specific case, with discussions on the contracting of other services being recorded in the minutes of this collegiate meeting independent auditor.
For more information regarding our Board of Directors and Audit Committee, see “Item 6. Directors, Senior Management and Employees.”
ITEM 16D. EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Absent an exemption, a listed company must establish an audit committee composed of independent members of the board of directors that meets specified independence requirements set forth in Rule 10A-3 under the Securities Exchange Act. We rely on our Audit Committee, established pursuant to CVM Resolution No. 23/2021 to meet the exemption requirements under paragraph (c)(3) of Rule 10A-3. Under our bylaws and the Audit Committee’s charter, (i) our Audit Committee shall have three to five members, (ii) a majority of its member must comply with the independence requirements of our bylaws, (iii) at least one member must be an independent member of our Board of Directors, (iv) at least one member must not be a member of our Board of Directors and (v) at least one member must be must satisfy accounting / financial expertise requirements.
Currently, our Audit Committee is composed of three members. Mr. Carlos Biedermann, Mr. Pedro Franco Sales and Mr. Luiz Claudio Maia Vieira. Mr Luiz Claudio Maia Vieira is characterized as an external member. For more information regarding our Audit Committee, see “Item 6. Directors, Senior Management and Employees—Audit Committee.”
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Share Buyback Program
On November 25, 2024, the Board of Directors approved the creation of the first Share Buyback Program for Common and Preferred Class B Shares, issued by the Company itself, with the aim of keeping them in treasury, canceling them or selling them, without reducing the Company's share capital, as well as complying with the Performance Shares plan.
In December 2024, the Company bought 2,623,800 common shares and 3,074,600 preferred shares, amounting to 5,698,400 shares, through [B]³ S.A. - Brasil, Bolsa, Balcão at market price. The total amount paid for the shares was R$50,044 thousand, which is shown as a reduction in Equity. The Company has 18 months from the approval of the program to cancel, resell or comply with the share grant plan (See note 27.7 from Financial Statement).
In January 2025, the Company bought 3,544,700 common shares and 4,278,300 preferred shares, amounting to 7,823,000 shares, through [B]³ S.A. - Brasil, Bolsa, Balcão at market price. The total amount paid for the shares was R$120,003 thousand. The Company currently has 13,521,400 shares in treasury.
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ITEM 16F. CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
|
Section
|
New York Stock Exchange Corporate Governance Rules for U.S. Domestic Issuers
|
Our Approach
|
||||||
|
Director Independence
|
||||||||
|
303A.01
|
A company listed on the New York Stock Exchange (a “listed company”) must have a majority of independent directors on its Board of Directors. “Controlled companies” are not required to comply with this requirement.
|
Under our Bylaws, the majority of the members of our board must be independent, as determined by our shareholders and registered in the minutes of the General Meeting that elects these board members, in accordance with our Bylaws, Federal Law 6,404/1976, [B]³’s Level 2 Corporate Governance Regulation. Currently, 8 out of the 9 directors on the Board of Directors are independent in accordance with applicable legislation
|
||||||
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303A.03
|
The non-management directors of a listed company must meet at regularly scheduled executive sessions without management.
|
Our Chief Executive Officer is not a member of the board of directors. Our non-managing directors regularly hold executive sessions without management, which are usually scheduled to occur at the end of every board meeting.
|
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Nominating/Corporate Governance Committee
|
||||||||
|
303A.04
|
A listed company must have a Nominating/ Corporate Governance Committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. “Controlled companies” are not required to comply with this requirement.
|
We have a permanent statutory committee, the People Committee, to advise the Board of Directors, and responsible for monitoring the nomination and evaluation processes applicable to our management, the members of our Board of Directors, the Supervisory Board and the committees of the Board of Directors. This committee is composed of members elected by the Board of Directors. | ||||||
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Compensation Committee
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|
303A.05
|
A listed company must have a compensation committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. “Controlled companies” are not required to comply with this requirement. | We have a permanent statutory committee, the People Committee, to advise the Board of Directors, responsible for preparing and monitoring the remuneration strategy for managers, members of advisory committees and fiscal advisors. This committee is composed of members elected by the Board of Directors. | ||||||
|
Audit Committee
|
||||||||
|
303A.06
303A.07
|
A listed company must have an audit committee with a minimum of three (3) independent directors who satisfy the independence requirements of Rule 10A-3 under the Securities Exchange Act, with a written charter that covers certain minimum specified duties. |
We have a Statutory Audit Committee, an independent advisory body to the Board of Directors, as per Article 51 of our Bylaws (Holding Company), whose responsibilities, duties, competencies and attributions are established in specific internal regulations, in compliance with the laws of Brazil and the United States, including the provisions of the Sarbanes-Oxley Act (SOX); SEC and NYSE rules and best practices. We rely on the Statutory Audit Committee currently to comply with the exemption requirements of Rules 10A-3(c)(3), and the Audit Committee is composed of three independent members.
We have an internal audit function. |
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Equity Compensation Plans
|
||||||||
|
303A.08
|
Shareholders must be given the opportunity to vote on all equity compensation plans and material revisions thereto, with limited exemptions set forth in the NYSE rules. | Under Brazilian Corporate Law, shareholder pre-approval is required for the adoption of any equity compensation plans and material revisions thereto. | ||||||
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Section
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New York Stock Exchange Corporate Governance Rules for U.S. Domestic Issuers
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Our Approach
|
||||||
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Corporate Governance Guidelines
|
||||||||
|
303A.09
|
A listed company must adopt and disclose corporate governance guidelines that cover certain minimum specified subjects. | Although the corporate governance practices adopted by us do not comply with all the terms specified in the rules of the NYSE, they fulfill the requirements established for companies listed on level 2 of corporate governance of Brasil, Bolsa e Balcão S.A ([B]³). We also adopt the Code of Better Corporate Governance Practices of the Brazilian Institute for Corporate Governance (“IBGC”) and the Brazilian Code of Corporate Governance (“Companhias Abertas”). | ||||||
|
Code of Ethics for Directors, Officers and Employees
|
||||||||
|
303A.10
|
A listed company must adopt and disclose a code of business conduct and ethics for its directors, officers and employees, and must promptly disclose any waivers of the code for directors or executive officers. | We have adopted a code of ethics, a set of rules that guide the actions of all persons who perform activities on behalf of us and our wholly owned and controlled subsidiaries, including employees (regardless of their function or hierarchical position), administrators (members of the Board of Directors and Executive Board), members of the Audit Committee, interns, suppliers, service providers and outsourced personnel. All such individuals are responsible for abiding by the code’s provisions and applying its content within their respective roles, in addition to promoting disclosure, understanding and integration of our code of ethics. | ||||||
|
Certification Requirements
|
||||||||
|
303A.12
|
A CEO of a listed company must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any material non-compliance with any applicable provisions of Section 303A and certify he or she is not aware of any violation by the listed company of NYSE corporate governance listing standards, qualifying the certification to the extent necessary. Each listed company must submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim Written Affirmation as and when required by the interim Written Affirmation form specified by the NYSE. |
Our CEO will promptly notify the NYSE in writing after any of our executive officer’s become aware of any material non-compliance with any applicable provisions of the NYSE corporate governance rules and will also certify if he is not aware of any violation by the listed company of NYSE corporate governance listing standards.
We submit every year an Annual Written Affirmation to the NYSE and will submit an interim Written Affirmation when required. |
||||||
|
Clawback Policy
|
||||||||
|
303A.14
|
The issuer must adopt and comply with a written Recovery Policy providing that the issuer will recover reasonably promptly the amount of erroneously awarded incentive-based compensation in the event that the issuer is required to prepare an accounting restatement due to the material noncompliance of the issuer with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. | We have adopted a Clawback Policy that complies with the requirements of Section 303A.14 of the NYSE Listed Company Manual. | ||||||
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
Establishing guidelines to be observed and followed regarding additional rules to those provided for in Brazilian Federal Law No. 6,404/1976 and Brazilian SEC (CVM) Resolution No. 44/2021, which cover the business carried out by the Company, by direct or indirect controlling shareholders, executive directors, members of the board of directors, of the supervisory board and of any bodies with technical or advisory functions, created by statutory provision, referred to herein, by the related persons, with regard to the trading of securities issued by Companhia Paranaense de Energia.
For further information on our
insider trading policies and procedures
, see Exhibit 11 to this annual report.
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ITEM 16K. CYBERSECURITY
Risk Management and Strategy
Cybersecurity has been identified as one of the most significant risks in today’s business environment, and we have classified it as such within our risk management framework. Our Risk Management Policy provides an
integrated
vision of managing this risk. It includes strategies and performance monitoring regularly reporting to the Audit Committee and the Board of Directors. These bodies are tasked with overseeing our risk management efforts. Our risk management processes are independently audited to comply with the Sarbanes-Oxley Act. These rules apply to our Group Divisions, wholly owned and controlled subsidiaries, and are recommended for entities we jointly control, affiliates, and other investments.
Our comprehensive cybersecurity risk management program is designed to safeguard the integrity of our information and maintain the resilience of our cyber environment. It includes the following measures:
•
Conforming our cyber practices to internationally established cybersecurity framework best practice standards set out by the National Institute of Standards and Technology Cybersecurity Framework (NIST-CSF).
•
Utilizing material components in our cybersecurity framework, such as multifactor authentication, identity governance and administration, privilege access management, network firewalls, web application firewalls, antivirus, endpoint detection and response, vulnerability assessment/management, external offensive security testing and penetration testing, threat intelligence services, security awareness training platform and Security Operation Center (24/7).
•
Involving a comprehensive team responsible for day-to-day cybersecurity related matters including our Information Security team, Privacy, Legal, Compliance, Audit, Human Resources, and Corporate teams.
•
Conducting annual cybersecurity awareness training for employees, interns, contractors and executive management team involved in our systems using a security awareness training platform that includes regular phishing testing with additional reinforcement training if necessary.
•
Maintaining a robust incident response plan which includes definition of Copel’s communication team (Crisis Commission) with representatives from various areas such as IT, Legal, Compliance, Investor Relations, Marketing, Data Protection Officer and business areas. This team is responsible for internal communication, including reports to the boards of directors and deliberations regarding the progress of external communication to the various stakeholders involved.
•
Regularly reviewing, testing, updating and approving cybersecurity processes by conducting penetration testing, external offensive security testing vulnerability scanning and attack simulation.
•
Involvement in broader industry initiatives and organizations relating to cybersecurity such as collaborating with organizations across different industries to share best practices, fight cybercrime, enhance privacy, discuss new technologies, and advance capabilities in these areas.
Our Information and Cybersecurity Policy outlines the key strategies we follow to safeguard our corporate information and other assets. It helps us manage risks effectively and ensure the ongoing operation of our business. Additionally, we have a Privacy and Data Protection Policy that governs how we collect, use, and share information obtained through our websites. This policy adheres to the requirements of the Brazilian General Personal Data Protection Law (“LGPD”).
In 2024, our business strategy, results of operations and financial condition
have not been materially affected by risks from cybersecurity threats
, including as a result of previous cybersecurity incidents. We cannot provide assurance that they will not be materially affected in the future by such risks and any future material incidents.
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Governance
Board of Directors
The Cybersecurity and Information Security Committee (CSCI) is an auxiliary collegial body to the
Board of Directors
created with the mission of ensuring the direction and strategic definitions related to support, processes and compliance, relating to cybersecurity and company security. information, equally considering the areas of controls, business and information technology.
It also aims to contribute to ensuring that the Company is led by principles that are in line with Copel and Corporate Governance values, with guidelines that impact all interested parties.
The Committee is made up of members of the Governance, Risk and Compliance Board, the Vice-Presidency of Strategy, New Business and Digital Transformation, the Distribution Board, the Generation and Transmission Board and a member of the Board of Directors. The body, by its deliberation, may invite the Director of the area involved in the matter in question and the President of Copel Holding to assist in decision-making.
Management
ITEM 17. FINANCIAL STATEMENTS
Not applicable.
ITEM 18. FINANCIAL STATEMENTS
Not applicable.
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ITEM 19. EXHIBITS
| 1.1* | |||||
| 2.1** |
Deposit Agreement (preferred shares) dated as of March 21, 1996, as amended and restated as of December 28, 2023.
(incorporated by reference to Exhibit 2.1 of Copel’s annual report on Form 20-F for the year ended December 31, 2023)
|
||||
| 2.2** | |||||
| 2.4* | |||||
| 8.1* | |||||
| 11* | |||||
|
12.1*
|
|||||
|
12.2*
|
|||||
|
13.1*
|
|||||
|
13.2*
|
|||||
|
15.1*
|
|||||
| 15.2* | |||||
| 97* | |||||
| 101.INS | XBRL Instance Document. | ||||
| 101.SCH | XBRL Taxonomy Extension Schema Document. | ||||
| 101. CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101. DEF | XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
* Filed herewith.
** Incorporated by reference herein
We omitted from the exhibits filed with or incorporated by reference into this annual report certain promissory notes and other instruments and agreements with respect to our long-term debt, none of which authorizes securities in a total amount that exceeds 10% of our total assets. We hereby agree to furnish to the Securities and Exchange Commission copies of any such omitted promissory notes or other instruments or agreements as the Commission requests.
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TECHNICAL GLOSSARY
2013 Concession Renewal Law:
Brazilian Law No. 12,783 enacted on January 11, 2013, under which most generation, transmission and distribution concessionaires may be renewed at the request of the concessionaire for an additional period of 30 years, but only if the concessionaire agrees to amend the terms of the concession contract to reflect a new tariff regime to be established by ANEEL.
ADSs:
American Depositary Shares.
ANEEL:
The Brazilian Electricity Regulatory Agency, or the
Agência Nacional de Energia Elétrica
.
APR:
Annual Permitted Revenues, or
Receita Anual Permitida
, the annual revenue established by ANEEL to be charged by a transmission concessionaire for the use of its transmission lines by third parties, which include Free Customers, generators and distributors.
Assured Energy:
Determined amount assigned to each hydroelectric plant according to the energy supply risk criteria defined by MME. The Assured Energy also represents the maximum energy that can be sold by the generator, which is set forth in each concession agreement, irrespective of the volume of electricity actually generated by the facility.
Availability Agreement:
Agreement under which a generator commits to making a certain amount of electrical capacity available to the Regulated Market. In such case, the generator’s revenue is guaranteed, and the distributors must bear the risk of a supply shortage.
Average Tariff or Rate:
Total sales revenue divided by total megawatt hours (MWh) sold for each relevant period, including in the case of the Company, unbilled electricity, or electricity which has been delivered to a customer, but for which the utility has yet to deliver a bill. Total sales revenue, for the purpose of computing average tariff or rate, includes both gross billings before deducting value-added tax and unbilled electricity sales upon which such taxes have not yet accrued.
Base Offering:
Our primary offering and secondary offering, considered together, excluding the supplementary lot of our shares and ADRs.
Bilateral Agreement:
Legal instrument that formalizes the purchase and sale of electric energy between Agents of the Chamber of Commercialization of Electric Energy - CCEE, with the purpose of establishing prices, terms and amounts of supply at determined time intervals.
BNDES
: the National Bank for Economic and Social Development, or
Banco Nacional de Desenvolvimento Econômico e Social
.
Brazilian Central Bank
: The Brazilian Central Bank, or
Banco Central do Brasil
.
Brazilian Forestry Code
: Federal Law No. 12,651/2012.
[B]³ (Brasil, Bolsa, Balcão):
[B]³ S.A. - Brasil, Bolsa, Balcão, the securities, commodities and futures exchange, headquartered in São Paulo, Brazil.
Captive Customers:
customers whose energy is supplied by the distributor in which the consumer unit is connected, such as that the amount paid already includes the energy cost and service cost for use of transmission and distribution - wire service. The consumer is not free to negotiate the conditions and the flexibility of energy supplied to meet the needs of its business, instead having to follow the determinations set forth by the distributor. The consumer is subject to the unpredictability of the annual variation of the value of the distributors’ tariffs.
CCEE (Câmara de Comercialização de Energia Elétrica):
Chamber of Commercialization of Electric Energy.
CDE:
the Electric Energy Development Account, or
Conta de Desenvolvimento Energético
.
CER:
Reserve Energy Contract (
Contrato de Energia Reserva
).
Class A Shares:
Our class A preferred shares.
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Class B Shares:
Our class B preferred shares.
CLA: Collective Labor Agreement
CMN:
The National Monetary Council of Brazil, or
Conselho Monetário Nacional.
Code:
The U.S. Internal Revenue Code of 1986, as amended.
Common Shares:
Our common shares.
Compagas: Companhia Paranaense de Gás
– Compagas
Copel Distribuição: Copel Distribuição S.A.
, Our entity engaged in the distribution business.
Copel Geração e Transmissão S.A. or Copel GeT:
Our entity engaged in the generation and transmission business.
CRC Account:
The recoverable rate deficit account, or
Conta de Resultados a Compensar
.
Custodian:
Itaú Unibanco S.A., as custodian for the shares underlying the ADSs.
CVM (Comissão de Valores Mobiliários):
Securities and Exchange Commission
Decree No. 6,306/07:
Brazilian tax Decree No. 6,306 dated December 14, 2007, which regulates tax on credit, exchange and insurance, or relating to securities – IOF.
Deloitte:
Deloitte Touche Tohmatsu Auditores Independentes Ltda.
Deposit Agreement:
A Deposit Agreement between us, the Depositary and the registered holders and beneficial owners from time to time of the ADSs.
Depositary:
The Bank of New York Mellon, as depositary.
Distribution:
The transfer of electricity from the transmission lines at grid supply points and its delivery to customers through distribution lines at voltages between 13.8 kV and 44 kV.
Distributor: An entity supplying electrical energy to a group of customers by means of a distribution grid.
Elejor:
Centrais Elétricas do Rio Jordão S.A.
Eletrosul:
Eletrosul Centrais Elétricas S.A.
Energy Agreement:
Agreement under which a generator commits to supply a certain amount of electricity and assumes the risk that its electricity supply could be adversely affected by hydrological conditions and low reservoir levels, which could interrupt the supply of electricity. In such case, the generator would be required to purchase electricity elsewhere in order to comply with its supply commitments.
FDA: Foz do Areia
Final Customer:
A party that uses electricity for its own needs.
Free Customers:
Electricity customers that are able to choose their own power suppliers since they meet the following requirements: as from January 1, 2022, with demand of at least 1.0 MW at any voltage; after January 1, 2023, with demand of at least 500 kW at any voltage; and after January 1, 2024 any Group A Customer.
Free Market:
Market segment that permits a certain degree of competition. The Free Market specifically contemplates purchase of electricity by non-regulated entities such as Free Customers and energy traders.
Furnas:
Furnas Centrais Elétricas S.A
.
Generating Unit:
An electric generator together with the turbine or other device that drives it.
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Gigawatt (GW):
One billion watts.
Gigawatt hour (GWh):
One gigawatt of power supplied or demanded for one hour, or one billionwatt hours.
Group A Customers:
A group of customers that uses electricity at 2.3 kV or higher. Tariffs applied to this group are based on the actual voltage level at which energy is supplied and the time of day and year the energy is supplied.
Group B Customers:
A group of customers that uses electricity at less than 2.3 kV. Tariffs applied to this group are comprised solely of an energy charge and are based on the classification of the customer.
GSF:
Generation Scaling Factor.
GTDC
: Generation, Transmission, Distribution and Commercialization.
HPP or Hydroelectric Power Plant:
A generating unit that uses water power to drive the electric generator.
IASB:
International Accounting Standards Board.
IFRS:
International Financial Reporting Standards.
IGP-DI:
The
Índice Geral de Preços—Disponibilidade Interna inflation index
.
IGP-M Index:
The Brazilian General Market Price inflation index, or the
Índice Geral de Preços do Mercado
.
Installed Capacity:
The level of electricity that can be delivered from a particular generating unit on a full-load continuous basis under specified conditions as designated by the manufacturer.
Interconnected Transmission System:
Systems or grids for the transmission of energy, connected together by means of one or more lines and transformers.
IPCA: Índice Nacional de Preços ao Consumidor Amplo
- IPCA inflation index.
IPP:
Independent Power Producer, a legal entity or consortium holding a concession or authorization for power generation for sale for its own account to public Utility concessionaires or Free Customers.
Itaipu:
Itaipu Binacional, a hydroelectric facility equally owned by Brazil and Paraguay, with an installed capacity of 14,000 MW.
Kilovolt (kV):
One thousand volts.
Kilowatt (kW):
One thousand watts.
Kilowatt hour (kWh):
One kilowatt of power supplied or demanded for one hour, or one thousand watt hours.
Latibex: A Euro-based market for Latin American securities, which is part of the Madrid Stock Exchange.
LGPD:
Brazilian Federal Law No. 13,709/2018, or
Lei Geral de Proteção de Dados Pessoais
.
Low-income Residential Customers:
A group of customers that consumes less than 220 kWh per month and has filed an application to receive benefits under any of the Brazilian government’s social programs. Low-income residential customers are considered a subgroup of residential customers and are not subject to payment of emergency capacity and emergency acquisition charges or any extraordinary tariff approved by ANEEL.
Main Transmission Concession:
transmission concession contract No. 060/2001 comprised of different transmission assets that were in operation in the year of 2001 (date of execution of the concession agreement).
MCSD:
The Mechanism for Compensation of Surpluses and Deficits (
Mecanismo de Compensação de Sobras e Déficits
), which corresponds to the process of reallocation of energy surpluses and deficits undertaken in accordance with the Regulated Contracting Environment – ACR among the distribution agents that participate in CCEE.
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MCSD-EN:
The Mechanism for Compensation of Surpluses and Deficits of New Energy (
Mecanismo de Compensação de Sobras e Déficits de Energia Nova
), which allows distribution agents to offset amounts of electric energy and power acquired in auctions of new generation projects, and allows the reduction of amounts contracted with generating agents bound to new generation ventures.
Megawatt (MW):
One million watts.
Megawatt hour (MWh):
One megawatt of power supplied or demanded for one hour, or one million watt hours.
MME:
The Brazilian Ministry of Mines and Energy, or the
Ministério de Minas e Energia
.
MRE:
The Energy Reallocation Mechanism is a mechanism which attempts to mitigate the risks borne by hydroelectric generators due to variations in river flows (hydrological risk).
MVE:
The Mechanism of Surplus Sales, or the
Mecanismo de Venda de Excedentes
, which allows distribution companies to sell energy surpluses and, in the case of sales related to amounts within the regulatory limits or involuntary over contracting, allows distribution companies to revert the acquired benefit to customers through tariff adjustments.
Non-Brazilian Holder:
An individual, entity, trust or organization resident or domiciled outside Brazil for purposes of Brazilian taxation that acquires, owns and disposes of Common Shares, Preferred Shares or ADSs.
PLD:
Difference Settlement Price or,
Preço de Liquidação de Diferenças
.
PPD:
Performance Incentive Program, or
Prêmio Por De
s
empenho.
Preferred Shares:
Our preferred shares, divided between Classe A Shares and Class B Shares.
ONS:
The National Electric System Operator, or the
Operador Nacional do Sistema Elétrico
.
Rationing Program:
A program instituted by the Brazilian government to reduce electricity consumption, in effect from June 1, 2001 to February 28, 2002, given it was a period of low rainfall in Brazil.
Real, Reais or R$:
Brazilian
reais
(plural) and the Brazilian
real
(singular).
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. The regulated market is generally considered to be more stable in terms of supply of electricity.
Regulatory Remuneration Base:
The aggregate amount of investments made by the distribution companies in connection with the services compensated by tariffs charged to customers (
Base de Remuneração Regulatória
).
Reserve Energy Auction:
mechanism for the contracting of reserve energy created to increase the security in the supplied of energy by the National Interconnected System (SIN). The reserve auction acts as an insurance contracted by distributors to be used when there is a mismatch between forecasted demand and supply. This modality of contracting is formalized through the conclusion of the CER between the selling agents in the auctions and the CCEE.
Retail Tariff:
Revenue charged by distribution companies to its customers. Each customer falls within a certain tariff level defined by law and based on the customer’s classification, although some flexibility is available according to the nature of each customer’s demand. Retails tariffs are subject to annual revision by ANEEL.
RGR Fund:
A reserve fund designed to provide compensatory payments to energy companies for certain assets used in connection with a concession if the concession is revoked or is not renewed.
Sanepar:
Companhia de Saneamento do Paraná – Sanepar.
Securities Act:
The United States Securities Act of 1933, as amended.
Securities Exchange Act:
The United States Securities Exchange Act of 1934, as amended.
Form 20-F 25FY24 | COPEL and Subsidiaries |
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Sercomtel:
Sercomtel Telecomunicações S.A.
SHP ‒ Small Hydroelectric Plant:
Hydroelectric plants with generating capacity between 1,000 kW and 30,000 kW with a reservoir covering an area equal to or less than 3.0 km
2
.
SPC:
Special Purpose Company, or
Sociedade de Propósito Específico
.
Special Customers:
A group of customers that uses at least 500 kV. A Special Customer may choose its energy supplier if that supplier derives its energy from alternative sources, such as small hydroelectric plants, wind plants or biomass plants.
Spot Market:
Deregulated market segment in which electricity is bought or sold for immediate delivery. In general, prices of spot market energy purchases tend to be substantially higher than the price of energy under long-term energy purchase agreements.
Substation:
An assemblage of equipment, which switches and/or changes or regulates the voltage of electricity in a transmission and distribution system.
Tax Haven Holder:
A shareholder situated in tax haven jurisdictions (that is, a country or location that does not impose income tax or where the maximum income tax rate is lower than 20% (or 17%, as the case may be) or where the local legislation imposes restrictions on disclosing the shareholding composition or the ownership of the investment or the beneficial owner of the income derived from transactions carried out and attributable to a Non-Brazilian Holder). The list of tax haven jurisdictions is currently provided in Normative Ruling No. 1,037.
Thermoelectric Plant or TPP:
A generating unit which uses combustible fuel, such as coal, oil, diesel natural gas or other hydrocarbon as the source of energy to drive the electric generator.
TJLP:
The Long-Term Interest Rate, or the
Taxa de Juros a Longo Prazo
, the Brazilian government’s long-term interest rate.
Transmission:
The bulk transfer of electricity from generating facilities to the distribution grid at load center station by means of the transmission grid (in lines with capacity between 69 kV and 525 kV).
Transmission Tariff:
Revenue charged by a transmission concessionaire based on the transmission grid it owns and operates. Transmission tariffs are subject to periodic revisions by ANEEL.
TUST:
The tariff established by ANEEL for the use of the transmission system, which is the Interconnected Transmission System and its ancillary facilities.
HPP GBM:
Governador Bento Munhoz da Rocha Netto Hydroelectric Power Plant.
Unit(s):
depositary receipt traded in [B]³ and Latibex, and depending on the context, the depositary receipt represented by ADS traded in NYSE, in each case composed by one Common Share and four Class B Shares.
U.S. Dollars, dollars, or US$:
United States dollars.
U.S. Holder:
A beneficial holder of a Common Share, a Preferred Share or an ADS that is (i) an individual citizen or resident of the United States of America, (ii) a corporation, or any other entity taxable as a corporation, organized under the laws of the United States of America, any state thereof, or the District of Columbia, or (iii) otherwise subject to U.S. federal income taxation on a net basis with respect to the Common Share, Preferred Share or ADS.
Utility:
An entity that is the holder of a concession or authorization to engage in the generation, transmission or distribution of electric energy in Brazil.
Volt:
The basic unit of electric force analogous to water pressure in pounds per square inch.
Watt:
The basic unit of electrical power.
Form 20-F 25FY24 | COPEL and Subsidiaries |
147
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| Companhia Paranaense De Energia – Copel | |||||||||||
| By: | /s/ | Daniel Pimentel Slaviero | |||||||||
| Name: | Daniel Pimentel Slaviero | ||||||||||
| Title: | Chief Executive Officer | ||||||||||
| By: | /s/ | Felipe Gutterres Ramella | |||||||||
| Name: |
Felipe Gutterres Ramella
|
||||||||||
| Title: |
Chief Financial and Investor Relations Officer
|
||||||||||
| Date: April 16, 2025 | |||||||||||
Form 20-F 25FY24 | COPEL and Subsidiaries |
148
COMPANHIA PARANAENSE DE ENERGIA
COPEL and Subsidiaries
COPEL and Subsidiaries
CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2024 and 2023
and for the years ended December 31, 2024, 2023 and 2022 and
Report of Independent Registered Public Accounting Firm
| Auditor Data Elements: | ||||||||||||||
|
Years ended December 31, 2024, 2023 and 2022
|
||||||||||||||
| Auditor Name: | Auditor Location | Auditor Firm ID: | ||||||||||||
|
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
| INDEX | ||
| CONSOLIDATED FINANCIAL STATEMENTS | ||
| F# | ||
Consolidated Financial Statements | Form 20-F 25FY24 | COPEL and Subsidiaries |
F-1
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Companhia Paranaense de Energia - Copel
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial position of Companhia Paranaense de Energia - Copel and its subsidiaries (the “Company”) as of December 31, 2024, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the year ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated
Framework
(2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management Annual Report on Internal Control over Financial Reporting Item 15B. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provide a reasonable basis for our opinions.
Independent Registered Public Accounting Firm | Consolidated Financial Statements | Form 20-F 25FY24 | COPEL and Subsidiaries |
F-2
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Renewal of Generation Concession Contracts
As described in Note 1, 15.5 and 16.2 to the consolidated financial statements, in November 2024, the Company concluded the renewal of the concession of three hydroelectric plants, for an additional period of 30 years, paying a grant bonus of R$4,073,915 thousand, that will be amortized on a straight-line basis over the term of the renewed concession. Management applied significant judgment in evaluating regulatory aspects of the renewed contracts to conclude that the previously existing assets related to the infrastructure totaling R$ 1,902,935 thousand remain recorded as property, plant and equipment and depreciated on a straight-line basis over the useful life established by the Brazilian Electricity Regulatory Agency (“ANEEL”), limited to the concession contract term.
The principal considerations for our determination that performing procedures relating to renewal of generation concession contracts is a critical audit matter are (i) the significant judgment by management related to the regulatory aspects of the renewal; (ii) a high degree of auditor judgement and effort, in performing procedures and evaluating management´s significant judgments to determine the accounting effects of the contractual and regulatory aspects of the renewal; (iii) the audit efforts involved the use of professionals with specialized skill and knowledge for the analysis of the regulatory terms associated with the renewal.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to period ending financial reporting. These procedures also included, among others,(i) reviewing the concession contracts, as well as the internal memorandum evaluating the regulatory and accounting aspects prepared by management, to assess the terms, conditions, and renewal periods with the support of professionals with specialized skill and knowledge; (ii) comparing the values of the grant bonuses with the accounting records and the respective proofs of payment and (iii) reviewing the disclosures made in the financial statements.
Independent Registered Public Accounting Firm | Consolidated Financial Statements | Form 20-F 25FY24 | COPEL and Subsidiaries |
F-3
Provisions for Legal Claims and Contingent Liabilities
As described in Note 4.10 and 26 to the consolidated financial statements, the Company and its subsidiaries are party to judicial and administrative proceedings of a civil, regulatory, tax, and labor nature, for which management records a provision when it considers that the risk of losses are probable and the amount of the loss can be reasonably estimated. No liability for an estimated loss is accrued in the consolidated financial statements for unfavorable outcomes when, after assessing the information available, (i) management concludes that it is not probable that a loss has been incurred in any of the pending litigation or (ii) management is unable to estimate the loss or range of loss for any of the pending matters. The Company also discloses the contingency in circumstances where management concludes no loss is probable or reasonably estimable, but it is reasonably possible that a loss may be incurred.
The principal consideration for our determination that performing procedures relating to the provisions for legal claims and contingent liabilities is a critical audit matter are (i) the significant judgment by management when assessing the likelihood of a loss being incurred and when determining whether a reliable estimate of the loss can be made; (ii) a high degree of auditor judgment, subjectivity and effort, in performing procedures and evaluating audit evidence related to management's significant assessment of the loss contingencies associated with litigation claims; (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the provisions for legal claims and contingent liabilities, including controls over assessing whether a loss is probable and when determining whether the amount of the loss or range of loss can be reasonably estimated, as well as financial statement disclosures.
These procedures also included, among others (i) confirming with internal and external legal counsel the possibility or probability of an unfavorable outcome and the extent to which the loss or range of loss is reasonably estimable; (ii) evaluating the reasonableness of management’s assessment regarding whether an unfavorable outcome is reasonably possible or probable and reasonably estimable; and (iii) evaluating the sufficiency of the Company’s litigation contingency disclosures. Professionals with specialized skill and knowledge were used to assist int the evaluation of Company´s assessment regarding reasonableness of the estimates for the major contingencies.
Unbilled revenue from electricity sales to final customers
As detailed in Notes 4.11and 28 of the consolidated financial statements, of the total revenues recognized by the Company for the year ended December 31, 2024, R$ 930,801 thousand are related to amounts to be billed to final customers of the electricity distribution segment (Note 7). When the revenue billing period is not aligned with the account closing date, management estimates the amount to be recognized for services rendered and not yet billed at the month-end. These estimates for determining unbilled amounts to be recognized as revenue are based on each consumer's consumption history and the applicable tariff rates. This recognition is determined by comparing the billed amounts to the actual energy sold, taking into account management's judgments and historical data, as well as contracted energy levels and seasonality effects for the month.
The principal consideration for our determination that performing procedures relating to unbilled revenue is a critical audit matter are (i) the significant judgment by management when assessing the likelihood of unbilled recognition of revenue and when determining methods and key assumptions used to estimate unbilled revenues, including the appropriate tariff applicable to each customer, and (ii) a high degree of auditor judgment and effort, in performing procedures and evaluating management's significant assessment related to method of calculation.
Independent Registered Public Accounting Firm | Consolidated Financial Statements | Form 20-F 25FY24 | COPEL and Subsidiaries |
F-4
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to revenue recognition of electricity distribution segment, including controls over the determination of estimated unbilled revenues and IT general controls over the main systems involved in the process. These procedures also included, among others (i) evaluating the appropriateness of the method of calculation used (ii) evaluating the reasonableness of significant assumptions used by management and data used in determining the estimate of unbilled revenue and (iii) evaluating the sufficiency of the Company’s unbilled recognition of revenue disclosures.
/s/ PricewaterhouseCoopers
Auditores Independentes Ltda.
Curitiba, Brazil
April 16, 2025
We have served as the Company’s auditor since 2024.
Independent Registered Public Accounting Firm | Consolidated Financial Statements | Form 20-F 25FY24 | COPEL and Subsidiaries |
F-5
|
Deloitte Touche Tohmatsu
Rua Nunes Machado, 68, The Five East Batel - 18º andar 80250-000 - Curitiba - PR Brazil Tel.: + 55 (41) 3312-1400 Fax: + 55 (41) 3312-1470 www.deloitte.com.br |
||||
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
Companhia Paranaense de Energia - Copel
Companhia Paranaense de Energia - Copel
Opinion on the financial statements
We have audited the accompanying consolidated statement of financial position of Companhia Paranaense de Energia - Copel and subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and of its cash flows for each of the two years in the period ended December 31, 2023, in conformity with International Financial Reporting Standards - IFRS, as issued by the International Accounting Standards Board - IASB.
Basis for opinion
These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by Management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ DELOITTE TOUCHE TOHMATSU
Auditores Independentes Ltda.
Curitiba, Brazil
April 10, 2024
We began serving as the Company´s auditor in 2016. In 2024 we became the predecessor auditor.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our people deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society, and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 457,000 people worldwide make an impact that matters at www.deloitte.com.
© 2025. For information, contact Deloitte Global.
Independent Registered Public Accounting Firm | Consolidated Financial Statements | Form 20-F 25FY24 | COPEL and Subsidiaries |
F-6
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Consolidated Statements of Financial Position
As of December 31, 2024 and 2023
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
| ASSETS | Note | 12.31.2024 | 12.31.2023 | ||||||||
| CURRENT ASSETS | |||||||||||
| Cash and cash equivalents | 5 |
|
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| Bonds and securities | 6 |
|
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| Collaterals and escrow accounts |
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| Trade accounts receivable | 7 |
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| Dividends receivable |
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| Sectorial financial assets | 8 |
|
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||||||||
| Accounts receivable – concessions | 9 |
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| Contract assets | 10 |
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||||||||
| Fair value in the purchase and sale of power | 32.2.10 |
|
|
||||||||
| Other current receivables | 11 |
|
|
||||||||
| Inventories |
|
|
|||||||||
| Income tax and social contribution receivable |
|
|
|||||||||
| Other current recoverable taxes | 12.2 |
|
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| Prepaid expenses |
|
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| Receivable from related parties | 33 |
|
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||||||||||
| Assets held for sale | 37 |
|
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| NONCURRENT ASSETS | |||||||||||
| Long Term Assets | |||||||||||
| Bonds and securities | 6 |
|
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| Other temporary investments |
|
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|||||||||
| Trade accounts receivable | 7 |
|
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||||||||
| Judicial deposits | 13 |
|
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| Sectorial financial assets | 8 |
|
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||||||||
| Accounts receivable – concessions | 9 |
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| Contract assets | 10 |
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| Fair value in the purchase and sale of power | 32.2.10 |
|
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| Other noncurrent receivables | 11 |
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| Income tax and social contribution receivable |
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| Deferred income tax and social contribution | 12.1 |
|
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||||||||
| Other noncurrent recoverable taxes | 12.2 |
|
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|
||||||||||
| Investments | 14 |
|
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||||||||
| Property, plant and equipment | 15 |
|
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| Intangible assets | 16 |
|
|
||||||||
| Right-of-use asset | 24.1 |
|
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| TOTAL ASSETS |
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| Notes are an integral part of these financial statements | |||||||||||
F-7
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COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Consolidated Statements of Financial Position
As of December 31, 2024 and 2023
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
| LIABILITIES | Note | 12.31.2024 | 12.31.2023 | ||||||||
| CURRENT LIABILITIES | |||||||||||
| Payroll, social charges and accruals | 17 |
|
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| Accounts payable to suppliers | 18 |
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| Income tax and social contribution payable |
|
|
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| Other taxes due | 12.2 |
|
|
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| Loans and financing | 19 |
|
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| Debentures | 20 |
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| Dividend payable |
|
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|||||||||
| Post-employment benefits | 21 |
|
|
||||||||
| Sectorial charges payable |
|
|
|||||||||
| Research and development and Energy efficiency | 22 |
|
|
||||||||
| Accounts payable related to concession | 23 |
|
|
||||||||
| Sectorial financial liabilities | 8 |
|
|
||||||||
| Lease liability | 24.2 |
|
|
||||||||
| Fair value in the purchase and sale of power | 32.2.10 |
|
|
||||||||
| Other accounts payable | 25 |
|
|
||||||||
| PIS and Cofins to be refunded to consumers | 12.3.1 |
|
|
||||||||
| Provision for allocation of PIS and Cofins credits | 12.3.1 |
|
|
||||||||
| Provisions for legal claims | 26 |
|
|
||||||||
|
|
|
||||||||||
| Liabilities associated with assets held for sale | 37 |
|
|
||||||||
|
|
|
||||||||||
| NONCURRENT LIABILITIES | |||||||||||
| Payroll, social charges and accruals | 17 |
|
|
||||||||
| Accounts payable to suppliers | 18 |
|
|
||||||||
| Deferred income tax and social contribution | 12.1 |
|
|
||||||||
| Other taxes due | 12.2 |
|
|
||||||||
| Loans and financing | 19 |
|
|
||||||||
| Debentures | 20 |
|
|
||||||||
| Post-employment benefits | 21 |
|
|
||||||||
| Research and development and Energy efficiency | 22 |
|
|
||||||||
| Accounts payable related to concession | 23 |
|
|
||||||||
| Sectorial financial liabilities | 8 |
|
|
||||||||
| Lease liability | 24.2 |
|
|
||||||||
| Fair value in the purchase and sale of power | 32.2.10 |
|
|
||||||||
| Other accounts payable | 25 |
|
|
||||||||
| PIS and Cofins to be refunded to consumers | 12.3.1 |
|
|
||||||||
| Provision for allocation of PIS and Cofins credits | 12.3.1 |
|
|
||||||||
| Provisions for legal claims | 26 |
|
|
||||||||
|
|
|
||||||||||
| EQUITY | |||||||||||
| Attributable to controlling shareholders | |||||||||||
| Capital | 27.1 |
|
|
||||||||
| Capital reserves | 27.6 |
|
|
||||||||
| Equity valuation adjustments | 27.2 |
|
|
||||||||
| Treasury shares | 27.7 |
(
|
|
||||||||
| Legal reserve | 27.3 |
|
|
||||||||
| Profit retention reserve | 27.3 |
|
|
||||||||
| Additional dividends proposed | 27.4 |
|
|
||||||||
|
|
|
||||||||||
| Attributable to non-controlling interests | 14.2.2 |
(
|
|
||||||||
|
|
|
||||||||||
| TOTAL LIABILITIES EQUITY |
|
|
|||||||||
| Notes are an integral part of these financial statements | |||||||||||
F-8
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Consolidated Statements of Income
For the years ended December 31, 2024, 2023 and 2022
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
| Note | 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||||
| CONTINUING OPERATIONS | ||||||||||||||
| NET OPERATING REVENUE | 28 |
|
|
|
||||||||||
| Operating costs | 29 |
(
|
(
|
(
|
||||||||||
| GROSS OPERATING PROFIT |
|
|
|
|||||||||||
| Other operational expenses / income | ||||||||||||||
| Selling expenses | 29 |
(
|
(
|
(
|
||||||||||
| General and administrative expenses | 29 |
(
|
(
|
(
|
||||||||||
| Other operational income (expenses), net | 29 |
(
|
(
|
(
|
||||||||||
| Provision for allocation of PIS and Cofins credits | 12.3.1 |
|
|
(
|
||||||||||
| Equity in earnings of investees |
|
|
|
|||||||||||
|
(
|
(
|
(
|
||||||||||||
| PROFIT BEFORE FINANCIAL RESULTS AND TAXES |
|
|
|
|||||||||||
| Financial results | 30 | |||||||||||||
| Financial income |
|
|
|
|||||||||||
| Financial expenses |
(
|
(
|
(
|
|||||||||||
| Update of provision for allocation of PIS and Cofins credits | 12.3.1 |
|
|
(
|
||||||||||
|
(
|
(
|
(
|
||||||||||||
| OPERATING PROFIT |
|
|
|
|||||||||||
| INCOME TAX AND SOCIAL CONTRIBUTION | 12.4 | |||||||||||||
| Current |
(
|
(
|
(
|
|||||||||||
| Deferred |
(
|
|
|
|||||||||||
|
(
|
(
|
|
||||||||||||
| NET INCOME FROM CONTINUING OPERATIONS |
|
|
|
|||||||||||
| DISCONTINUED OPERATIONS | ||||||||||||||
| Net income from discontinued operations | 37 |
|
|
(
|
||||||||||
| NET INCOME |
|
|
|
|||||||||||
| Attributed to shareholders of the parent company arising from continuing operations |
|
|
|
|||||||||||
| Attributed to shareholders of the parent company due to discontinued operations |
|
|
(
|
|||||||||||
| Attributed to non-controlling shareholders resulting from continuing operations | 14.2.2 |
(
|
|
(
|
||||||||||
| Attributed to non-controlling shareholders arising from discontinued operations | 14.2.2 |
|
|
|
||||||||||
| BASIC EARNING PER SHARE ATTRIBUTED TO CONTROLLING SHAREHOLDERS – CONTINUING OPERATIONS - Expressed in Brazilian Reais | 27.5 | |||||||||||||
| Common shares |
|
|
|
|||||||||||
| Class "A" Preferred shares |
|
|
|
|||||||||||
| Class "B" Preferred shares |
|
|
|
|||||||||||
| DILUTED EARNING PER SHARE ATTRIBUTED TO CONTROLLING SHAREHOLDERS - CONTINUING OPERATIONS – Expressed in Brazilian Reais | 27.5 | |||||||||||||
| Common shares |
|
|
|
|||||||||||
| Class "A" Preferred shares |
|
|
|
|||||||||||
| Class "B" Preferred shares |
|
|
|
|||||||||||
| BASIC EARNING PER SHARE ATTRIBUTED TO CONTROLLING SHAREHOLDERS – Expressed in Brazilian Reais | 27.5 | |||||||||||||
| Common shares |
|
|
|
|||||||||||
| Class "A" Preferred shares |
|
|
|
|||||||||||
| Class "B" Preferred shares |
|
|
|
|||||||||||
| DILUTED EARNING PER SHARE ATTRIBUTED TO CONTROLLING SHAREHOLDERS – Expressed in Brazilian Reais | 27.5 | |||||||||||||
| Common shares |
|
|
|
|||||||||||
| Class "A" Preferred shares |
|
|
|
|||||||||||
| Class "B" Preferred shares |
|
|
|
|||||||||||
| Notes are an integral part of these financial statements | ||||||||||||||
F-9
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2024, 2023 and 2022
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
| Note | 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||||
| NET INCOME |
|
|
|
|||||||||||
| Other comprehensive income | ||||||||||||||
| Items that will never be reclassified to profit or loss | ||||||||||||||
| Adjustments related to actuarial liabilities | 27.2 | |||||||||||||
| Post employment benefits |
|
(
|
|
|||||||||||
| Taxes on other comprehensive income |
(
|
|
(
|
|||||||||||
| Items that may be reclassified to profit or loss | 27.2 | |||||||||||||
| Adjustments related to financial assets |
(
|
(
|
|
|||||||||||
| Taxes on other comprehensive income |
|
|
(
|
|||||||||||
| Total other comprehensive income, net of taxes |
|
(
|
|
|||||||||||
| TOTAL COMPREHENSIVE INCOME |
|
|
|
|||||||||||
| Attributed to shareholders of the parent company resulting from continuing operations |
|
|
|
|||||||||||
| Attributed to shareholders of the parent company due to discontinued operations |
|
|
(
|
|||||||||||
| Attributed to non-controlling shareholders resulting from continuing operations |
(
|
(
|
|
|||||||||||
| Attributed to non-controlling shareholders due to discontinued operations |
|
|
|
|||||||||||
| Notes are an integral part of these financial statements | ||||||||||||||
F-10
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Consolidated Statements of Changes in Equity
For the years ended December 31, 2024, 2023 and 2022
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
| Attributable to controlling shareholders | Attributable to non-controlling interests | Equity Consolidated | |||||||||||||||||||||||||||||||||||||||
| Capital | Capital reserves | Treasury shares | Equity valuation adjustments | Profit reserves | Shareholders’ equity | ||||||||||||||||||||||||||||||||||||
| Deemed cost | Other comprehensive income | Legal reserve | Profit retention reserve | Additional proposed dividends | Accumulated profit | ||||||||||||||||||||||||||||||||||||
| Note | |||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2022 |
|
|
|
|
(
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net Income | — | — | — | — | — | — | — | — |
|
|
|
|
|||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||
| Adjustments related to actuarial liabilities, net of taxes | — | — | — | — |
|
— | — | — | — |
|
|
|
|||||||||||||||||||||||||||||
| Adjustments related to financial assets | — | — | — |
|
|
|
|
||||||||||||||||||||||||||||||||||
| Total comprehensive income | — | — | — | — |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Realization - deemed cost, net of taxes | — | — | — |
(
|
— | — | — | — |
|
— | — |
|
|||||||||||||||||||||||||||||
| Realization - actuarial gain | — | — | — | — |
(
|
— |
|
— | — | — | — |
|
|||||||||||||||||||||||||||||
| Deliberation of additional dividends proposed | — | — | — | — | — | — | — |
(
|
— |
(
|
— |
(
|
|||||||||||||||||||||||||||||
| Dividends and Interest on equity (JSCP) | 27.4 | — | — | — | — | — | — |
(
|
— |
(
|
(
|
(
|
(
|
||||||||||||||||||||||||||||
| Allocation proposed to Annual General Meeting - AGM:- | |||||||||||||||||||||||||||||||||||||||||
| Legal reserve | — | — | — | — | — |
|
— | — |
(
|
— | — |
|
|||||||||||||||||||||||||||||
| Dividends | 27.4 | — | — | — | — | — | — | — | — |
(
|
(
|
(
|
(
|
||||||||||||||||||||||||||||
| Profit retention reserve | — | — | — | — | — | — |
|
— |
(
|
— | — |
|
|||||||||||||||||||||||||||||
| Balance as of December 31, 2022 |
|
|
|
|
(
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | — |
|
|
|
|
|||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||
| Adjustments related to actuarial liabilities, net of taxes | 27.2 | — | — | — | — |
(
|
— | — | — | — |
(
|
|
(
|
||||||||||||||||||||||||||||
| Adjustments related to financial assets | 27.2 | — | — | — | — |
(
|
— | — | — | — |
(
|
(
|
(
|
||||||||||||||||||||||||||||
| Total comprehensive income | — | — | — | — |
(
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Realization - deemed cost, net of taxes | 27.2 | — | — | — |
(
|
— | — | — | — |
|
— | — |
|
||||||||||||||||||||||||||||
| Issuing shares | 27.1 |
|
— | — | — | — | — | — | — | — |
|
— |
|
||||||||||||||||||||||||||||
| Dividends and Interest on equity (JSCP) | — | — | — | — | — | — | — | — | — | — |
(
|
(
|
|||||||||||||||||||||||||||||
| Allocation proposed to Annual General Meeting - AGM: | |||||||||||||||||||||||||||||||||||||||||
| Legal reserve | — | — | — | — | — |
|
— | — |
(
|
— | — |
|
|||||||||||||||||||||||||||||
| Interest on own capital | 14.2.2 and 27.4 | — | — | — | — | — | — |
(
|
— |
(
|
(
|
(
|
(
|
||||||||||||||||||||||||||||
| Dividends | 14.2.2 and 27.4 | — | — | — | — | — | — | — |
|
(
|
— |
(
|
(
|
||||||||||||||||||||||||||||
| Profit retention reserve | — | — | — | — | — | — |
|
— |
(
|
— | — |
|
|||||||||||||||||||||||||||||
| Balance as of December 31, 2023 |
|
|
|
|
(
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | — |
|
|
(
|
|
|||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||
| Adjustments related to actuarial liabilities, net of taxes | 27.2 | — | — | — | — |
|
— | — | — | — |
|
|
|
||||||||||||||||||||||||||||
| Adjustments related to financial assets | 27.2 | — | — | — | — |
(
|
— | — | — | — |
(
|
(
|
(
|
||||||||||||||||||||||||||||
| Total comprehensive income | — | — | — | — |
|
|
|
|
|
|
(
|
|
|||||||||||||||||||||||||||||
| Realization - deemed cost, net of taxes | 27.2 | — | — | — |
(
|
— | — | — | — |
|
— | — |
|
||||||||||||||||||||||||||||
| Realization - actuarial gain | 27.2 | — | — | — | — |
|
— |
(
|
— | — | — | — |
|
||||||||||||||||||||||||||||
| Investment disposal | 14.2.2 | — | — | — | — | — | — | — | — | — | — |
(
|
(
|
||||||||||||||||||||||||||||
| Long-Term Incentive Plan - ILP | 27.6 | — |
|
— | — | — | — | — | — | — |
|
— |
|
||||||||||||||||||||||||||||
| Share buyback | 27.7 | — | — |
(
|
— | — | — | — | — | — |
(
|
— |
(
|
||||||||||||||||||||||||||||
| Deliberation of additional dividends proposed | 27.4 | — | — | — | — | — | — | — |
(
|
— |
(
|
— |
(
|
||||||||||||||||||||||||||||
| Dividends and Interest on equity (JSCP) | 27.4 | — | — | — | — | — | — |
(
|
— |
(
|
(
|
(
|
(
|
||||||||||||||||||||||||||||
| Allocation proposed to Annual General Meeting – AGM: | |||||||||||||||||||||||||||||||||||||||||
| Legal reserve | — | — | — | — | — |
|
— | — |
(
|
— | — |
|
|||||||||||||||||||||||||||||
| Dividends | 27.4 | — | — | — | — | — | — |
(
|
|
(
|
— | — |
|
||||||||||||||||||||||||||||
| Profit retention reserve | — | — | — | — | — | — |
|
— |
(
|
— | — |
|
|||||||||||||||||||||||||||||
| Balance as of December 31, 2024 |
|
|
(
|
|
(
|
|
|
|
|
|
(
|
|
|||||||||||||||||||||||||||||
| Notes are an integral part of these financial statements | |||||||||||||||||||||||||||||||||||||||||
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Consolidated Statements of Cash Flows
For the years ended December 31, 2024, 2023 and 2022
All amounts expressed in thousands of Brazilian reais, unless otherwise stated
| Note | 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||||
| CASH FLOWS FROM OPERATIONAL ACTIVITIES | ||||||||||||||
| Net income from continuing operations |
|
|
|
|||||||||||
| Adjustments to reconcile net income for the period with cash generation from operating activities: | ||||||||||||||
| Unrealized monetary and exchange variation and debt charges – net |
|
|
|
|||||||||||
| Interest – bonus from the grant of concession agreements under the quota system | 9.2 |
(
|
(
|
(
|
||||||||||
| Remuneration of transmission concession contracts | 10.2 |
(
|
(
|
(
|
||||||||||
| Provision for allocation of PIS and Cofins credits |
|
|
|
|||||||||||
| Income tax and social contribution | 12.4 |
|
|
|
||||||||||
| Deferred income tax and social contribution | 12.4 |
|
(
|
(
|
||||||||||
| Equity in earnings of investees |
(
|
(
|
(
|
|||||||||||
| Appropriation of post-employment benefits obligations | 21.3 |
|
|
|
||||||||||
| Appropriation of research and development and energy efficiency programs | 22.1 |
|
|
|
||||||||||
| Recognition of fair value of assets from the indemnity for the concession | 28 |
(
|
(
|
(
|
||||||||||
| Sectorial financial assets and liabilities result | 28 |
(
|
(
|
(
|
||||||||||
| Depreciation and amortization | 29 |
|
|
|
||||||||||
| Provision arising from the dismissal program | 29.2 |
|
|
|
||||||||||
| Long-Term Incentive Plan - ILP | 29.2 |
|
|
|
||||||||||
| Net operating estimated losses, provisions and reversals | 29.4 |
|
|
|
||||||||||
| Realization of added value in business combinations | 10.2 |
(
|
(
|
(
|
||||||||||
| Fair value in energy purchase and sale operations | 28.1 e 29.1 |
|
(
|
(
|
||||||||||
| Derivatives fair value |
|
|
|
|||||||||||
| Result of write-offs of accounts receivable related to concession | 9.1 |
|
|
|
||||||||||
| Result of write-offs or disposal of contract assets | 10.1 |
|
|
|
||||||||||
| Result of write-offs or disposal of property, plant and equipment | 15.2 |
|
|
|
||||||||||
| Result of write-offs or disposal of intangible assets | 16.1 e 16.3 |
|
|
|
||||||||||
| Result of write-offs of use rights of assets and liabilities of leases – net | 24.1 e 24.2 |
(
|
|
(
|
||||||||||
| Result on the sale of properties | 29.6.1 |
(
|
|
|
||||||||||
|
|
|
|
||||||||||||
| Decrease (increase) in assets | ||||||||||||||
| Trade accounts receivable |
|
|
|
|||||||||||
| Dividends and interest on own capital received |
|
|
|
|||||||||||
| Judicial deposits |
|
|
|
|||||||||||
| Sectorial financial assets |
|
|
|
|||||||||||
| Other receivables |
(
|
(
|
|
|||||||||||
| Inventories |
|
|
|
|||||||||||
| Income tax and social contribution recoverable |
(
|
(
|
(
|
|||||||||||
| Other taxes recoverable |
(
|
(
|
|
|||||||||||
| Prepaid expenses |
(
|
(
|
(
|
|||||||||||
| Related parties |
|
(
|
(
|
|||||||||||
|
|
|
|
||||||||||||
| Increase (decrease) in liabilities | ||||||||||||||
| Payroll, social charges and accruals |
(
|
|
(
|
|||||||||||
| Suppliers |
|
|
(
|
|||||||||||
| Other taxes |
|
|
|
|||||||||||
| Post-employment benefits | 21.3 |
(
|
(
|
(
|
||||||||||
| Sectorial charges due |
(
|
|
(
|
|||||||||||
| Research and development and energy efficiency | 22.1 |
(
|
(
|
(
|
||||||||||
| Payable related to the concession | 23.1 |
(
|
(
|
(
|
||||||||||
| Other accounts payable |
(
|
|
|
|||||||||||
| Provisions for legal claims | 26.1 |
(
|
(
|
(
|
||||||||||
|
(
|
|
(
|
||||||||||||
| CASH GENERATED BY OPERATING ACTIVITIES |
|
|
|
|||||||||||
| Income tax and social contribution paid |
(
|
(
|
(
|
|||||||||||
| Loans and financing - interest due and paid | 19.2 |
(
|
(
|
(
|
||||||||||
| Debentures - interest due and paid |
(
|
(
|
(
|
|||||||||||
| Charges for lease liabilities paid |
(
|
(
|
(
|
|||||||||||
| NET CASH GENERATED BY OPERATING ACTIVITIES FROM CONTINUING OPERATIONS |
|
|
|
|||||||||||
| NET CASH GENERATED BY OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS | 37 |
|
|
|
||||||||||
| NET CASH GENERATED FROM OPERATING ACTIVITIES |
|
|
|
|||||||||||
| (continued) | ||||||||||||||
F-12
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
| Note | 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||||
| CASH FLOWS FROM INVESTMENT ACTIVITIES | ||||||||||||||
| Financial investments |
(
|
(
|
|
|||||||||||
| Additions to contract assets |
(
|
(
|
(
|
|||||||||||
| Acquisitions of subsidiaries, net of cash acquired |
|
(
|
(
|
|||||||||||
| Investment disposal | 1.1 e 37 |
|
|
|
||||||||||
| Additions in investments | 14.1 |
|
(
|
(
|
||||||||||
| Capital reduction of investees | 14.1 |
|
|
|
||||||||||
| Additions to property, plant and equipment |
(
|
(
|
(
|
|||||||||||
| Disposal of property, plant and equipment | 29.6.1 |
|
|
|
||||||||||
| Additions to intangible assets | 16.2 e 16.3 |
(
|
(
|
(
|
||||||||||
| NET CASH USED BY INVESTMENT ACTIVITIES FROM CONTINUING OPERATIONS |
(
|
(
|
(
|
|||||||||||
| NET CASH GENERATED (USED) BY INVESTMENT ACTIVITIES FROM DISCONTINUED OPERATIONS | 37 |
|
(
|
(
|
||||||||||
| NET CASH USED FROM INVESTING ACTIVITIES |
(
|
(
|
(
|
|||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||
| Loans and financing obtained from third parties | 19.2 |
|
|
|
||||||||||
| Transaction costs of loans and financing obtained from third parties | 19.2 |
(
|
(
|
(
|
||||||||||
| Issue of debentures | 20.2 |
|
|
|
||||||||||
| Transaction costs in the issuing of debentures | 20.2 |
(
|
(
|
(
|
||||||||||
| Payments of principal - loans and financing | 19.2 |
(
|
(
|
(
|
||||||||||
| Payments of principal - debentures |
(
|
(
|
(
|
|||||||||||
| Payments of principal of lease liabilities |
(
|
(
|
(
|
|||||||||||
| Capital increase |
|
|
|
|||||||||||
| Transaction costs in capital increase |
|
(
|
|
|||||||||||
| Share buyback | 27.7 |
(
|
|
|
||||||||||
| Dividends and interest on own capital paid |
(
|
(
|
(
|
|||||||||||
| NET CASH GENERATED (USED) BY FINANCING ACTIVITIES FROM CONTINUING OPERATIONS |
|
|
(
|
|||||||||||
| NET CASH GENERATED (USED) BY FINANCING ACTIVITIES FROM DISCONTINUED OPERATIONS | 37 |
(
|
|
(
|
||||||||||
| NET CASH GENERATED (USED) FROM FINANCING ACTIVITIES |
|
|
(
|
|||||||||||
| TOTAL EFFECTS ON CASH AND CASH EQUIVALENTS |
(
|
|
(
|
|||||||||||
| Cash and cash equivalents at the beginning of the period | 5 |
|
|
|
||||||||||
| Cash and cash equivalents at the end of the period | 5 |
|
|
|
||||||||||
| Cash and cash equivalents variations from discontinued operations |
(
|
|
|
|||||||||||
| CHANGE IN CASH AND CASH EQUIVALENTS |
(
|
|
(
|
|||||||||||
| Notes are an integral part of these financial statements | ||||||||||||||
F-13
|
|
|
COMPANHIA PARANAENSE DE ENERGIA | |||||||||
| COPEL and Subsidiaries | |||||||||||
Notes to the Consolidated Financial Statements
(All amounts expressed in thousands of Brazilian reais, unless otherwise stated)
1. Operations
Companhia Paranaense de Energia (Copel, Company), with its head office located at Rua José Izidoro Biazetto, 158, bloco A, Curitiba - State of Paraná, is a publicly-held company, whose shares are traded at Corporate Governance Level 2 of the Special Listing Segments of B3 S.A. - Brasil, Bolsa Balcão Stock Exchange and on the New York Stock Exchange (NYSE) and on the Madrid Stock Exchange, in the Latin American segment (Latibex).
The core activities of Copel and its subsidiaries, which are regulated by the Brazilian Electricity Regulatory Agency (Aneel), linked to the Brazilian Ministry of Mines and Energy (MME), are to carry out research, study, plan, build and explore the production, transformation, transport, distribution and trading of energy, in any of its forms, mainly electricity. Furthermore, Copel participates in consortiums and in private sector for the purpose of engaging in activities, mainly in areas of energy.
Renewal of concessions
The transformation of Copel into a “Corporation” in 2023 enabled, under the terms of Law 9,074/95, the full renewal of the concessions of the Governador Bento Munhoz da Rocha Netto Hydroelectric Plants - GBM (“Foz do Areia”), Governador Ney Braga - GNB (“Segredo”) and Governador José Richa - GJR (“Salto Caxias”) for 30 years from the signing of the new concession contract, celebrated in November 19, 2024.
On November 21, 2024 the grant bonus for the renewal of the concessions was paid, in the updated amount of R$
4,073,915
, in the terms the Interministerial Ordinance of the Brazilian Ministry of Mines and Energy and Ministry of Finance - MME/MF No. 01, dated March 30, 2023 (Note 16.2).
From November 2024, in view of the continuity of operations, all the assets linked to these three plants will be depreciated on a linear basis over the useful life period established by Aneel. If this term exceeds the expiration of the concession contract, the term of the contract will be used, without residual value (Note 15.5).
The new concession contracts were agreed upon under the Independent Energy Production (“PIE”) exploration regime and will have payment for the Use of Public Property (“UBP’) for five years (Note 23).
1.1. Equity interests of Copel
Copel has direct and indirect interests in subsidiaries (1.1.1), joint ventures (1.1.2), associates (1.1.3) and joint operations (1.1.4).
During the year 2024, the following events occurred that resulted in changes in relation to the equity interests of December 31, 2023:
▪
completion of the divestments of UEGA and Compagas (Note 37);
▪
creation of 13 special purpose companies as a result of the divestment process of the small generation plants of Copel GeT (Note 37);
▪
sale of the equity interest in the subsidiary Carbocampel (Note 14.1).
F-14
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
1.1.1. Subsidiaries
| Subsidiaries | Headquarters | Main activity | Interest | |||||||||||
| % | Investor | |||||||||||||
|
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||||||||||
(a) Wind farm with 99.99992% interest in Copel Get and 0.00008% in Brownfield.
F-15
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
1.1.2. Joint Ventures
| Joint ventures | Headquarters | Main activity | Interest | |||||||||||
| % | Investor | |||||||||||||
|
|
|
|
|
|
||||||||||
|
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||||||||||
|
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||||||||||
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||||||||||
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||||||||||
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||||||||||
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||||||||||
|
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||||||||||
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|
||||||||||
(a) The controlling company of Voltalia São Miguel do Gostoso Participações S.A., which in turn is the holding company for 4 SPEs: São João Wind Power Plant S.A., Carnaúba Wind Power Plant S.A., Reduto Wind Power Plant S.A. and Santo Cristo Wind Power Plant S.A.
(b) Holding of 5 Special Purpose Entities (SPEs) operating in the distributed generation sector (photovoltaic plants): Pharma Solar II, Pharma Solar III, Pharma Solar IV, in commercial operation, and Bandeirantes Solar I and Bandeirantes Solar II, for which the maintenance or extinction of the SPEs is under study.
1.1.3. Associates
| Associated companies | Headquarters | Main activity | Interest | |||||||||||
| % | Investor | |||||||||||||
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
||||||||||
1.1.4. Joint operations (consortiums)
The Company has interests in some joint operations. The two relevant consortiums, with amounts recorded in the Company's property, plant and equipment, are presented in Note 15.3.
2. Concessions and Authorizations
2.1. Concession contracts or authorizations obtained by Copel
| Concession agreement / authorization of the equity | Interest % | Maturity | |||||||||
| Copel DIS |
|
|
|
||||||||
| Elejor |
|
|
|
||||||||
|
|
|
||||||||||
|
|
(a) | ||||||||||
| Dona Francisca Energética |
|
|
|
||||||||
| Usina de Energia Eólica São João S.A. |
|
|
|
||||||||
| Usina de Energia Eólica Carnaúba S.A. |
|
|
|
||||||||
| Usina de Energia Eólica Reduto S.A. |
|
|
|
||||||||
| Usina de Energia Eólica Santo Cristo S.A. |
|
|
|
||||||||
(a) Projects had the conversion of authorization into registration, according to Authorizing Resolutions No. 14,744/2023 and 14,745/2023.
Hydroelectric Power Plant – HPP
Small Hydroelectric Plant – SHP
Wind Power Plant – WPP
F-16
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
2.2. Concession contracts or authorizations obtained by Copel Get and its investees
| Generation concession | Interest % | Maturity | |||||||||
| Generation Concession Contract 002/2024 - HPP Gov. Ney Aminthas de Barros Braga (Segredo) (Note 1) |
|
|
|||||||||
| Generation Concession Contract 002/2024 - HPP Gov. José Richa (Salto Caxias) (Note 1) |
|
|
|||||||||
| Generation Concession Contract 003/2016 – HPP Gov. Pedro Viriato Parigot de Souza (GPS) |
|
|
|||||||||
| Authorization – Ordinance 133/2011 – SHP Cavernoso II |
|
|
|||||||||
| Generation Concession Contract 002/2012 – HPP Baixo Iguaçu |
|
|
|||||||||
| Generation Concession Contract 001/2007 – HPP Gov. Jayme Canet Júnior (Mauá) |
|
|
|||||||||
| Generation Concession Contract 001/2011 – HPP Colíder |
|
|
|||||||||
| Generation Concession Contract 005/2024 - HPP Cavernoso (Note 37) |
|
|
|||||||||
| Generation Concession Contract 007/2013 - HPP Derivação do Rio Jordão |
|
|
|||||||||
| Authorization – Resolution 278/1999 – WPP Palmas (Note 37) |
|
|
|||||||||
| Generation Concession Contract 004/2024 - HPP Chaminé (Note 37) |
|
|
|||||||||
| Generation Concession Contract 001/2020 - HPP Guaricana (Note 37) |
|
|
|||||||||
| Generation Concession Contract 003/2024 - HPP Apucaraninha (Note 37) |
|
|
|||||||||
| Generation Concession Contract 006/2024 - HPP São Jorge (Note 37) |
|
|
|||||||||
| Concession contract 045/1999 - TPP Figueira (Note 37) |
|
|
|||||||||
| Dispatch 182/2002 - Hydroelectric Generating Plant - HGP Melissa, HGP Pitangui and HGP Salto do Vau (only register with ANEEL) |
|
— | |||||||||
| HPP Marumbi - Power generating plant registration: CGH. PH. PR. 001501-6.02 |
|
|
|||||||||
| Authorization Aneel 5,373/2015 – HGP Chopim I (only register with ANEEL) |
|
|
|||||||||
| Concession agreement / authorization of the equity | |||||||||||
| Nova Asa Branca I | MME Ordinance 267/2011 – WPP Asa Branca I |
|
|
||||||||
| Nova Asa Branca II | MME Ordinance 333/2011 – WPP Asa Branca II |
|
|
||||||||
| Nova Asa Branca III | MME Ordinance 334/2011 – WPP Asa Branca III |
|
|
||||||||
| Nova Eurus IV | MME Ordinance 273/2011 -WPP Eurus IV |
|
|
||||||||
| Santa Maria | MME Ordinance 274/2012 – WPP SM |
|
|
||||||||
| Santa Helena | MME Ordinance 207/2012 – WPP Santa Helena |
|
|
||||||||
| Ventos de Santo Uriel | MME Ordinance 201/2012 – WPP Santo Uriel |
|
|
||||||||
| GE Boa Vista | MME Ordinance 276 /2011 – WPP Dreen Boa Vista |
|
|
||||||||
| GE Farol | MME Ordinance 263 /2011 – WPP Farol |
|
|
||||||||
| GE Olho D’Água | MME Ordinance 343 /2011 – WPP Dreen Olho D'Água |
|
|
||||||||
| GE São Bento do Norte | MME Ordinance 310 /2011 – WPP Dreen São Bento do Norte |
|
|
||||||||
| Esperança do Nordeste | MME Ordinance 183/2015 – WPP Esperança do Nordeste |
|
|
||||||||
| Paraíso dos Ventos do Nordeste | MME Ordinance 182/2015 – WPP Paraíso dos Ventos do Nordeste |
|
|
||||||||
| Usina de Energia Eólica Jangada | Resolution 3,257/2011 – WPP GE Jangada |
|
|
||||||||
| Maria Helena | Resolution 3,259/2011 – WPP GE Maria Helena |
|
|
||||||||
| Usina de Energia Eólica Potiguar | MME Ordinance 179/2015 – WPP Potiguar |
|
|
||||||||
| Usina de Energia Eólica Guajiru | Resolution 3,256/2011 – WPP Dreen Guajiru |
|
|
||||||||
| Usina de Energia Eólica Cutia | Resolution 3,258/2011 – WPP Dreen Cutia |
|
|
||||||||
| São Bento do Norte I | Ordinance 349/2015 – WPP São Bento do Norte I |
|
|
||||||||
| São Bento do Norte II | Ordinance 348/2015 – WPP São Bento do Norte II |
|
|
||||||||
| São Bento do Norte III | Ordinance 347/2015 – WPP São Bento do Norte III |
|
|
||||||||
| São Miguel I | Ordinance 352/2015 – WPP São Miguel I |
|
|
||||||||
| São MigueI lI | Ordinance 351/2015 – WPP São Miguel II |
|
|
||||||||
| São Miguel III | Ordinance 350/2015 – WPP São Miguel III |
|
|
||||||||
| Foz do Chopim | Authorization 114/2000 – SHP Arturo Andreoli |
|
|
||||||||
| SHP Bela Vista | Resolution 913/2017 – transfer of title under Resolution 7,802/2019 |
|
|
||||||||
| F.D.A. Electricity Generation (Note 1) | Generation Concession Contract contract 002/2020 |
|
|
||||||||
| Jandaíra I Energias Renováveis | Ordinance 140/2020 – WPP Jandaíra I |
|
|
||||||||
| Jandaíra II Energias Renováveis | Ordinance 141/2020 – WPP Jandaíra II |
|
|
||||||||
| Jandaíra III Energias Renováveis | Ordinance 142/2020 – WPP Jandaíra III |
|
|
||||||||
| Jandaíra IV Energias Renováveis | Ordinance 139/2020 – WPP Jandaíra IV |
|
|
||||||||
| EOL Potiguar B 141 SPE S.A. | Ordinance 02/2019 – WPP Vila Maranhão I |
|
|
||||||||
| EOL Potiguar B 142 SPE S.A. | Ordinance 12/2019 – WPP Vila Maranhão II |
|
|
||||||||
| EOL Potiguar B 143 SPE S.A. | Ordinance 13/2019 – WPP Vila Maranhão III |
|
|
||||||||
| EOL Potiguar B 61 SPE S.A. | Ordinance 453/2019 – WPP Ventos de Vila Mato Grosso I |
|
|
||||||||
| Ventos de Vila Paraíba IV SPE S.A | Ordinance 10/2019 - WPP Vila Ceará I |
|
|
||||||||
| EOL Aventura II | Ordinance 209/2018 - Aventura II |
|
|
||||||||
| EOL Aventura III | Ordinance 220/2018 - Aventura III - REA n° 7.820/2019 |
|
|
||||||||
F-17
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Generation concession | Interest % | Maturity | |||||||||
| EOL Aventura IV | Ordinance 215/2018 - Aventura IV |
|
|
||||||||
| EOL Aventura V | Ordinance 213/2018 - Aventura V |
|
|
||||||||
| EOL SRMN I S.A. | Ordinance 196/2018 - Santa Rosa e Novo Mundo I |
|
|
||||||||
| EOL SRMN II S.A. | Ordinance 194/2018 - Santa Rosa e Novo Mundo II |
|
|
||||||||
| EOL SRMN III S.A. | Ordinance 197/2018 - Santa Rosa e Novo Mundo III |
|
|
||||||||
| EOL SRMN IV S.A. | Ordinance 188/2018 - Santa Rosa e Novo Mundo IV |
|
|
||||||||
| EOL SRMN V S.A. | Ordinance 189/2018 - Santa Rosa e Novo Mundo V - Resolution 7.783/2019 |
|
|
||||||||
F-18
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Transmission lines and substations concession agreements | Interest % | Maturity |
Next tariff
review
|
|||||||||||
| Contract 060/2001 – Transmission facilities (sundry Transmission lines and Substations) – extended by the 3rd additive term |
|
|
|
|||||||||||
| Contract 075/2001 – Transmission line 230 kV Bateias – Jaguariaíva |
|
|
|
|||||||||||
| Contract 006/2008 – Transmission line 230 kV Bateias – Pilarzinho |
|
|
|
|||||||||||
| Contract 027/2009 – Transmission line 525 kV Foz do Iguaçu – Cascavel Oeste |
|
|
|
|||||||||||
| Contract 010/2010 – Transmission line 500 kV Araraquara II – Taubaté |
|
|
|
|||||||||||
| Contract 015/2010 – Substation Cerquilho III 230/138 kV |
|
|
|
|||||||||||
| Contract 022/2012 – Transmission line 230 kV Londrina – Figueira and Transmission line 230 kV Foz do Chopim – Salto Osório |
|
|
|
|||||||||||
| Contract 002/2013 – Transmission line 230 kV Assis – Paraguaçu Paulista II e Substation Paraguaçu Paulista II 230 kV |
|
|
|
|||||||||||
| Contract 005/2014 – Transmission line 230 kV Bateias – Curitiba Norte e Substation Curitiba Norte 230/138 kV |
|
|
|
|||||||||||
| Contract 021/2014 – Transmission line 230 kV Foz do Chopim – Realeza e Substation Realeza 230/138 kV |
|
|
|
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| Contract 022/2014 – Transmission line 500 kV Assis – Londrina |
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| Contract 006/2016 |
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| Contract 006/2016 – Transmission line 525 kV Curitiba Leste – Blumenau | ||||||||||||||
| Contract 006/2016 – Transmission line 230 kV Baixo Iguaçu – Realeza | ||||||||||||||
| Contract 006/2016 – Transmission line 230 kV Curitiba Centro – Uberaba | ||||||||||||||
| Contract 006/2016 – Substation Medianeira 230/138 kV | ||||||||||||||
| Contract 006/2016 – Substation Curitiba Centro 230/138 kV | ||||||||||||||
| Contract 006/2016 – Substation Andirá Leste 230/138 kV | ||||||||||||||
| Concession agreement / authorization of the equity | ||||||||||||||
| Costa Oeste Transmissora | Contract 001/2012: |
|
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| Transmission line 230 kV Cascavel Oeste – Umuarama | ||||||||||||||
| Substation Umuarama 230/138 kV | ||||||||||||||
| Caiuá Transmissora | Contract 007/2012: |
|
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| Transmission line 230 kV Umuarama - Guaíra | ||||||||||||||
| Transmission line 230 kV Cascavel Oeste – Cascavel Norte | ||||||||||||||
| Substation Santa Quitéria 230/138/13,8 kV | ||||||||||||||
| Substation Cascavel Norte 230/138/13,8 kV | ||||||||||||||
| Marumbi Transmissora | Contract 008/2012: |
|
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| Transmission line 525 kV Curitiba – Curitiba Leste | ||||||||||||||
| Substation Curitiba Leste 525/230 kV | ||||||||||||||
| Integração Maranhense | Contract 011/2012: Transmission line 500 Kv Açailândia – Miranda II |
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| Matrinchã Transmissora | Contract 012/2012: |
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| Transmission line 500 kV Paranaíta – Cláudia | ||||||||||||||
| Transmission line 500 kV Cláudia – Paranatinga | ||||||||||||||
| Transmission line 500 kV Paranatinga – Ribeirãozinho | ||||||||||||||
| Substation Paranaíta 500 kV | ||||||||||||||
| Substation Cláudia 500 kV | ||||||||||||||
| Substation Paranatinga 500 kV | ||||||||||||||
| Guaraciaba Transmissora | Contract 013/2012: |
|
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| Transmission line 500 kV Ribeirãozinho – Rio Verde Norte | ||||||||||||||
| Transmission line 500 kV Rio Verde Norte – Marimbondo II | ||||||||||||||
| Substation Marimbondo II 500 kV | ||||||||||||||
| Paranaíba Transmissora | Contract 007/2013: |
|
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| Transmission line 500 kV Barreiras II – Rio das Éguas | ||||||||||||||
| Transmission line 500 kV Rio das Éguas – Luziânia | ||||||||||||||
| Transmission line 500 kV Luziânia – Pirapora 2 | ||||||||||||||
| Mata de Santa Genebra | Contract 001/2014: |
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| Transmission line 500 kV Itatiba – Bateias | ||||||||||||||
| Transmission line 500 kV Araraquara 2 – Itatiba | ||||||||||||||
| Transmission line 500 kV Araraquara 2 – Fernão Dias | ||||||||||||||
| Substation Santa Bárbara D ́Oeste 440 kV | ||||||||||||||
| Substation Itatiba 500 kV | ||||||||||||||
| Substation Fernão Dias 500/440 kV | ||||||||||||||
| Cantareira Transmissora | Contract 019/2014: Transmission line Estreito – Fernão Dias |
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| Uirapuru Transmissora | Contract 002/2005: Transmission line 525 kV Ivaiporã – Londrina |
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(a) Do not undergo tariff review and RAP reduces to 50% in the 16th year.
(b) Approval Resolution No. 3,344/2024 approved the result of the Periodic Tariff Reviews of the Permitted Annual Revenue – RAP of the extended Concession Contracts, including Concession Contract No. 060/2001.
(c) Approval Resolution No. 3,342/2024 approved the complementary result of the Periodic Tariff Reviews of the Permitted Annual Revenue - RAP of 2023 of the auctioned concession contracts, including concession contracts 006/2008, 002/2013 and 007/2013. In 2028, the 4th RTP of concession contract 006/2008 will take place, therefore, there will no longer be a recalculation of the cost of third-party capital of this contract.
(d) Approval Resolution No. 3,343/2024 approved the result of the Periodic Tariff Reviews of the Annual Permitted Revenue – RAP of 2024 of the auctioned transmission contracts, including concession contracts No. 001/2014 and 005/2014.
F-19
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
3. Basis of Preparation
3.1. Declaration of conformity
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), currently referred to by the IFRS Foundation as “IFRS® Accounting Standards”, including the interpretations issued by the IFRS Interpretations Committee (IFRIC® Interpretations) or its predecessor body, the Standing Interpretations Committee (SIC® Interpretations), and show all relevant information specific to the financial statements, and only this information, which is consistent with that used by the administration in its management.
The issuance of these consolidated financial statements was authorized by the Board of Directors on April 16, 2025.
3.2. Basis of measurement
The consolidated financial statements were prepared based on the historical cost, except for certain financial instruments measured at fair value, as described in the respective accounting policies and notes.
3.3. Functional and presentation currency
The consolidated financial statements are presented in Brazilian Reais, which is the functional and presentation currency of the Company. Balances herein have been rounded to the nearest thousand, unless otherwise indicated.
3.4. Use of estimates and judgments
In the preparation of these consolidated financial statements, Management used judgments, estimates and assumptions that affect the application of accounting policies of the Company and its subsidiaries. Actual results may differ from those estimates, which are reviewed on a continuous basis. The revisions to the estimates are recognized prospectively.
The areas that require a higher level of judgment and are more complex, as well as those in which proposals and estimates are significant for consolidated financial projections, are as follows:
•
Notes 4.17 and 37 - Assets held for sale and discontinued operations: assessment of sale as highly probable.
•
Notes 4.3 and 8 - Sectorial financial assets and liabilities: forecast of values that will be included in the tariff review process;
•
Notes 4.4 and 9 - Accounts receivable related to the concession: forecast of cash flows and the indemnifiable balance of the concession contracts;
•
Notes 4.5 and 10 - Contract assets: definition of the contract remuneration rate, allocation of price to performance obligations and forecast of cash flows;
•
Notes 4.7 and 15 - Property, plant and equipment: estimated useful life of assets;
•
Notes 4.8 and 16 - Intangible assets: estimated useful life of assets;
•
Notes 4.9.1 and 7.3 - Expected Credit Losses: estimate of amounts that will not be received;
•
Notes 4.9.2 and 15.4 - Impairment of non-financial assets: definition of assumptions, determination of the discount rate and forecast of cash flows;
•
Notes 4.10 and 26 - Provisions for legal claims and contingent liabilities: estimated losses on legal claims;
•
Notes 4.10 and 12.3.1 - Provision for allocation of PIS and Cofins credits: assessment of amounts that may be required to be refunded to consumers;
•
Notes 4.11 - Revenue recognition: estimate of unbilled amounts and construction margin;
F-20
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
•
Notes 4.12 and 32.2.10 - Derivative financial instruments: mark to market of energy purchase and sale contracts;
•
Notes 4.13 and 12.1 - Deferred income tax and social contribution: forecast of future taxable income for recoverability of taxes;
•
Notes 4.14 and 21 - Post-employment benefits: actuarial assumptions for evaluating pension and assistance plans;
•
Notes 4.16 and 24 - Right to Use Assets and Lease Liabilities: definition of the discount rate for contracts.
3.5. Management’s judgment on going concern
Management has concluded that there are no material uncertainties that cast doubt on the Company's ability to continue as a going concern. It is reasonable to expect that the Company has adequate resources to continue as a going concern for the foreseeable future, and no events or conditions have been identified that would individually or collectively cast significant doubt on the Company's ability to continue as a going concern.
The main bases of judgment used for such conclusion are: (i) main activities resulting from long-term public concessions; (ii) equity value; (iii) operating cash generation, including financial capacity to settle commitments entered into with financial institutions; (iv) historical profitability; and (v) fulfillment of the objectives and targets outlined in the Company's Strategic Planning, which is approved by Management, monitored and reviewed periodically, seeking the continuity of its activities.
4. Material Accounting Policies
The main accounting policies employed in the preparation of these consolidated financial statements are outlined below. These policies have been consistently applied over the years presented.
4.1. Basis of consolidation
4.1.1. Subsidiaries
The subsidiaries are entities to which the Company has control. The financial statements of the subsidiaries are included in the consolidated financial statements as from the date they start to be controlled by the Company until the date such control ceases.
In a business combination, the assets identified, liabilities and contingent liabilities acquired are measured at their respective fair values on the acquisition date.
The excess of the acquisition cost over the fair value of the net assets acquired (identifiable assets acquired, net of assumed liabilities) is recognized as goodwill, presented under intangible asset in the consolidated financial statements. When the difference between the acquisition cost and the fair value of the net assets acquired indicates a negative amount, the gain on the bargain purchase is recognized directly in the income statement.
The amount paid that refers specifically to the concession right acquired in a business combination where the acquired entity is a concession operator, whose right to the concession has a known and defined term, is not characterized as goodwill and, therefore, is amortized over the concession period. Goodwill arising solely from the recognition of deferred tax (
34
%) on the gain/loss recorded in the business combination is classified as technical goodwill and is not amortized but only tested for impairment.
4.1.2. Joint ventures, joint operations (consortiums) and associates
Associates are entities over which the Company has significant influence, but does not control.
Joint arrangements are entities over which the Company has shared control with one or more other parties. They can be classified as joint operations or joint ventures.
Joint operation is a joint business according to which parties that jointly control the business have rights on assets and obligations regarding liabilities related to the business.
F-21
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
Joint ventures are entities over which the Company, subject to an agreement, has the ability to affect returns exerting its power in conjunction with other parties, irrespective of the percentage of interest in the voting capital.
Investments in associates and joint ventures are accounted for using the equity method and are initially recognized at cost.
4.2. Financial Instruments
Financial instruments are recognized immediately on the trade date, that is, when the obligation or right arises. They are initially recorded at fair value, unless it is a trade receivable without a significant financing component, plus, for an item not measured at fair value through profit or loss, any directly attributable transaction costs. Accounts receivable from customers without a significant component of financing are initially measured at the price of the transaction.
Fair values are determined based on market prices for financial instruments with active market, and by the present value method of expected cash flows, for those that have no quotation available in the market.
Following initial recognition, financial assets are only reclassified if the Company changes its business model for managing financial assets, and this reclassification is applied prospectively.
The Company's financial instruments are classified and measured as described below.
4.2.1. Financial assets recorded at fair value through profit or loss
Financial assets recorded at fair value through profit or loss include assets classified as held for trading, financial assets designated upon initial recognition as at fair value through profit or loss or financial assets required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of being sold or repurchased in the near term. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. After initial recognition, transaction costs and attributable interest expenses, when incurred, are recognized through profit or loss.
4.2.2. Financial assets measured at amortized cost
These are so classified and measured when: (i) the financial asset is maintained within a business model whose objective is to maintain financial assets in order to receive contractual cash flows; and (ii) the contractual terms of the financial asset give rise, on specified dates, to cash flows that exclusively comprise payments of principal and interest on the principal amount outstanding.
4.2.3. Financial assets recorded at fair value through other comprehensive income
They mainly comprise investments in equity instruments held for medium to long-term strategic purposes, designated at fair value through other comprehensive income, since recognizing short-term fluctuations in the fair value of these investments in profit or loss would not be in line with the Company's strategy of maintaining and observing its long-term performance potential.
4.2.4. Financial liabilities measured at amortized cost
Financial liabilities are measured at amortized cost using the effective interest method. This method is also used to allocate interest expense of these liabilities for the period. The effective interest rate is the rate that discounts estimated future cash flows (including fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) over the expected life of the financial liability or, when appropriate, over a shorter period, for the initial recognition of the net carrying amount.
4.2.5. Financial liabilities measured at fair value through Profit or Loss
These are liabilities designated upon initial recognition as at fair value through profit or loss and those classified as held for trading. Financial liabilities designated fair value through profit or loss are stated at fair value with the respective gains or losses in fair value recognized in the statement of income. Net gains or losses recognized in profit or loss include the interest paid on the financial liability.
F-22
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
4.2.6. Derecognition of financial assets and liabilities
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
The Company derecognizes financial liabilities only when its obligations are discharged, cancelled or settled. The difference between the carrying amount of the derecognized financial liability and the corresponding disbursement made, or to be made, is recorded to profit or loss.
4.3. Net sectorial financial assets and liabilities
In the power distribution segment, the Company records changes in sectorial financial assets and liabilities to maintain neutrality between the billed amounts of consumer tariffs, to cover energy costs, charges and other related items, and the forecast for tariff coverage, according to the term amendment to the distribution concessionaires concession.
The amounts are updated until the date of the tariff readjustment/revision and, after approval by Aneel, the new tariff is applied for the current tariff year, providing for collection or return of constituted assets and liabilities, which are then amortized.
In the event of termination of the concession for any reason, the residual values of Portion A items and other financial components, not recovered or returned through tariff, must be incorporated in the calculation of the compensation, keeping rights or obligations of the concessionaire with the Granting Authority safeguarded.
4.4. Accounts receivable related to the concession
Refer to financial assets of the concessions with unconditional right to receive cash by the Company, guaranteed by the Granting Authority by contractual clause and specific legislation.
4.4.1. Power distribution service concession
The concession agreement for electricity distribution provides that the users of the public service remunerate part of the investments made by the concessionaire and the Granting Authority at the end of the concession indemnifies the other party. This model provides for the recognition of financial assets, contract assets in the construction period and intangible assets.
The portion recognized as a financial asset refers to the indemnity set forth in the public power distribution service concession agreements, which the Company understands as an unconditional right to cash payments from the Granting Authority upon expiration of the concession. This indemnification aims to reimburse the Company for investments made in infrastructure, without recovery, through the tariff.
The cash flows related to these assets are determined taking into account the Regulatory Compensation Basis (BRR), defined by the Granting Authority, and the fair value is recorded based on the replacement cost methodology of the assets included in the distribution infrastructure linked to the concession.
4.4.2. Bonus for the grant of quota system generation concession agreement
The generation concession contract under the quota system provides for the payment of a bonus for the grant to the Granting Authority, pursuant to paragraph 7 of article 8 of Law 12,783/2013, which is recognized as a financial asset because it represents an unconditional right to receive cash, guaranteed by the Granting Authority during the term of the concession and without demand risk.
The remuneration of this financial asset is based on the Weighted Average Cost of Capital - WACC defined by the National Energy Policy Council (CNPE) in Resolution 2/2015, which is being presented in the statement of income as operating revenue in accordance with the Company's business model.
F-23
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
4.4.3. Concession of power generation
The Company has operated and operates concession agreements for power generation that contain indemnification clauses for the infrastructure not depreciated, amortized and/or received during the concession term. After maturity, the residual balances of the assets are transferred to Accounts receivable related to the concession. At the end of each reporting period, Management evaluates the recoverability of the asset, remeasuring its cash flow based on its best estimate.
4.5. Contract assets
Represented by the contractual right of the Company related to the construction of the infrastructure delegated by the Granting Authority, conditional upon the receipt of revenue not only by the passage of time, but after fulfilling the performance obligation to maintain and operate the infrastructure.
4.5.1. Power distribution service concession
Represents the concessionaire's contractual right related to the works under construction to meet the needs of the concession, accounted for at cost plus financial charges, when applicable.
When the assets are put into operation, the assets are transferred to the intangible asset, in the amount equivalent to what will be remunerated by the user through payment of the fee for the use of the services, or to the accounts receivable associated to the concession, in the amount equivalent to the residual portion of the assets not amortized, which will be reverted to the Granting Authority through indemnification at the end of the concession.
4.5.2. Power transmission concession
Represents the balance of public electricity transmission contracts signed with the Granting Authority to build, operate and maintain the high voltage lines and substations.
During the term of the concession agreement, the Company receives, subject to its performance, a remuneration denominated Annual Revenue Allowance (RAP) that remunerates the investments made in the construction of the infrastructure and covers also, the costs of operation and maintenance incurred.
The Company estimates its revenue in the construction phase at fair value based on the budgeted cost of the work and used by management as a parameter for bidding on the concession auction. Fair value revenue comprises the budgeted cost for the entire construction period plus the construction margin, which represents sufficient parcel to cover the costs of managing and monitoring the work.
The implicitly remuneration rate of each concession is determined by the projection of the expected cost, the profit margin in the construction phase and the projection of the Annual Permitted Revenue (“RAP”) to be received, net of the variable consideration estimate (“PV”) and the portion intended to remunerate Operation and Maintenance (OM). This remuneration rate is fixed at the initial period and does not change during the performance of the contract.
The assets arising from the construction of the transmission infrastructure are formed by the recognition of construction revenue, according to the percentage of completion of the construction (Note 4.11.3), and by their financial remuneration (Note 4.11.2).
After the start of commercial operation and to the extent that the operation and maintenance (OM) service is provided, the part of the RAP referring to OM revenue is recognized in the income statement at fair value, on a monthly basis, and billed together with the part of the revenue recognized in the construction phase. This invoiced amount is transferred to financial assets under trade accounts receivable until it is actually received. The rates defined by Aneel are used as a reference, since these rates were the subject of technical and statistical studies and represent the best estimate of the useful life of each asset.
The Company recognizes gains and losses due to efficiency or inefficiency in the construction of the infrastructure and due to periodic tariff review (RTP), when incurred, directly in the statement of income for the year.
F-24
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
4.6. Accounts payable related to the concession
These refer to the amounts set forth in the concession agreement in connection with the right to explore hydraulic power generation potential (onerous concession), whose agreement is signed as Use of Public Property (UBP) agreements. The obligation is recognized on the date of signature of the concession agreement corresponding to the present value of future cash payments for the concession. The liability is then remeasured using the effective interest rate and reduced by contractual payments.
4.7. Property, Plant and Equipment
These rights relate to tangible assets intended for the maintenance of the entity's activities or exercised for this purpose. This includes rights arising from transactions that transfer the benefits, risks, and control of these assets to the entity.
The property, plant and equipment related to the public service concession agreement are depreciated according to the straight-line method based on annual rates set forth and reviewed periodically by Aneel, which are used and accepted by the market as representative of the economic useful lives of the assets related to concession's infrastructure.
Property, plant and equipment related to contracts for the use of public property under the independent electricity producer scheme are depreciated based on annual rates established by Aneel limited to the concession period. All other property, plant and equipment are depreciated using the straight-line method based on estimates of their useful lives.
Costs directly attributable to construction works as well as interest and financial charges on borrowings from third parties during construction are recorded under property, plant and equipment in progress, if it is probable that they will result in future economic benefits for the Company.
4.8. Intangible Assets
They mainly comprise the assets arising from the concession contracts detailed below, in addition to the concession/authorization rights generated in business combinations (Note 4.1.1) and balances of software acquired from third parties and software developed in-house which are measured at acquisition cost and amortized over
five years
.
4.8.1. Acquisition of exploration rights
Corresponds to acquisition of exploration rights on certain hydropower potential whose contract is signed including the payment of Use of Public Property - UBP and/or Grant Bonus.
This asset is recognized at the present value of future cash disbursements during the Concession Agreement term. At the date of start of commercial operation or acquisition of exploration rights on hydropower potential, the amount presented is fixed and amortized over the concession period.
4.8.2. Hydrological risk renegotiation (Generation Scaling Factor - GSF)
Asset consisting of the renegotiation of the hydrological risk under the terms of Law No. 13,203/2015 and subsequent changes, arising from the amounts recovered from the cost with the adjustment of the Energy Reallocation Mechanism - MRE (GSF). The amount was transformed by Aneel into an extension of the concession period, which is amortized on a straight-line basis until the end of the new concession period.
4.8.3. Power distribution service concession
This comprises the right to control infrastructure, built or acquired as part of the electric energy public service concession, and the right to charge fees to the users of the public service.
Intangible assets are recorded at their fair acquisition and construction value, less accumulated amortization and impairment losses, when applicable. The amortization of intangible assets reflects the pattern in which it is expected that future economic benefits will flow to the Company during the concession period.
During the infrastructure construction phase costs are classified as contract assets (Note 4.5).
F-25
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
4.9. Impairment of assets
Assets are assessed to detect evidence of impairment.
4.9.1. Financial assets
Provisions for losses on financial assets are based on assumptions about default risk, existing market conditions and future estimates at the end of each year.
The Company applies the simplified approach of IFRS 9 to the measurement of expected credit losses, considering estimates for all trade accounts receivable, grouped based on shared credit risk characteristics, number of days late, in the amount considered enough to cover losses on the realization of these assets, based on specific criteria of the payment history, collection actions carried out for the credit recovery and relevance of the amount due in the receivables portfolio.
4.9.2. Non-financial assets
When there is a loss arising from situations in which the asset's book value exceeds its recoverable amount, defined as the higher of the asset's value in use and the fair value net of the asset's selling expenses, this loss is recognized in profit or loss for the year.
For impairment testing purposes, assets are grouped at the lowest levels for which there are separately identifiable cash flows (Cash Generating Units - CGU).
The amount of the impairment of non-financial assets is reviewed at the reporting date. In case of reversal of impairment losses that had been recorded in prior years, this reversal is recognized in current year's profit or loss.
Assets arising from onerous concession and rights of concession and/or authorization to generate electricity, classified as intangible assets, have their impairment tested along with the other assets of that cash-generating unit.
The impairment of contract assets in their construction phase is tested immediately, mainly considering the use of the effective interest rate fixed at the beginning of the project and carried to the end of the concession cash flow. After the beginning of the commercial operation, the portion of revenue recognized is tested for impairment in the accounts receivable from customers. For the receivable part conditioned to fulfill the performance obligation to maintain and operate the infrastructure, the Company has no history and no expectation of losses, since amount is subject to guarantee structures, via shared apportionment of eventual default losses among the other members of the national interconnected system managed by National Electric System Operator (ONS) and by the jurisdiction of the sector.
4.10. Provisions
Provisions are recognized when: i) the Company has a present obligation (legal or not formalized) resulting from a past event, ii) it is probable (i.e., more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation, and iii) a reliable estimate can be made of the amount to settle the obligation.
The estimates of outcomes and financial impacts are determined by the Company, which requires use of judgment by Management, supplemented by the experience of similar past transactions and, in some cases, by independent expert reports.
The amounts corresponding to the main portion of the provision are recognized in the operating result or in assets and the monetary restatement, if any, is recognized in the financial result. Socio-environmental provisions are recorded under assets when incurred during the implementation phase of projects, or even later, after entry into commercial operation, when considered conditions for obtaining/renewing operation and maintenance licenses.
Provisions for dismantling or decommissioning assets are recorded against the cost of the respective asset, at present value, when they meet the recognition and measurement criteria. The asset is depreciated along with the items of property, plant, and equipment, while the liability is reconstituted by the passage of time. In the event of a revision of the provisioned amounts, if these are not due solely to the passage of time, they are recognized again against the cost of the asset and depreciated until the end of their useful life.
F-26
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
Contingent assets and liabilities are not recognized in accounting but are disclosed in notes to the financial statements when it is probable that future economic benefits will be recognized, for the assets, or when the probability of an outflow of resources is assessed as possible, in the case of liabilities.
4.11. Revenue recognition
4.11.1. Revenue from contracts with customers
Revenue is measured based on the consideration that the Company expects to receive in a contract with the customer, net of any variable consideration. The Company recognizes revenues when it transfers control of the product or service to the customer and when it is probable to receive the consideration considering the client's ability and intention to pay the consideration when due. The Company's operating revenue comes mainly from the electricity supply and from the electric network availability.
The revenue from electricity sales to distributors is recognized monthly based on the data for billing that are determined by the average MW of contracted electricity and declared with the CCEE. When the information is not available, the Company estimates the revenue considering the contracts’ rules and price and volume estimates.
For wind power generation companies subject to minimum generation amounts, the Company understands that it is subject to variable consideration, and for this reason, includes a provision for non-performance based on the annual generation estimates, reducing revenue.
Revenue from electricity sales to final customers and from use of main distribution and transmission grid is recognized monthly based on measured and effectively billed energy and, in addition, the Company records unbilled revenue, by estimate based on the last measurement taken and/or considering the contracted and seasonalized energy in the month. In both cases, the accounting considers the application of the current tariff rates. The concession contract for the public electricity distribution service provides for compensation for non-performance of quality indicators which, when incurred, are accounted for as a reduction in revenue from the use of the main distribution and transmission grid.
Information on the transmission segment's revenue is described in Note 4.5.2.
4.11.2. Interest income
Interest income is recognized when it is probable that future economic benefits will flow to the Company and its amount can be reliably measured. Interest income is recognized based on time and the effective interest rate on outstanding principal amounts. The effective interest rate is the one that discounts the estimated future cash receipts calculated during the estimated life of the financial asset in relation to initial net carrying amount of that asset.
Regarding the contract assets of the power transmission concession, financial compensation revenue is recognized using the implicit remuneration rate established at the beginning of each project, which is presented in the statement of income as operating income in accordance with the Company's business model.
4.11.3. Construction revenue and margin
Revenue related to construction services for infrastructure in the power transmission and distribution services, are recognized over time based on the stage of completion of the work.
The respective costs are recognized when incurred, in the statement of income for the year, as construction cost.
Given that Copel Distribuição outsources the construction of distribution infrastructure to unrelated parties, through works carried out in the short term, the construction margin for the energy distribution activity results in insignificant amounts, which leads to its non-recognition in construction revenue.
4.12. Derivative Financial Instruments
The Company negotiates energy purchase and sale agreements and part of its contracts are classified as derivative financial instruments measured at fair value through profit or loss.
F-27
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
Unrealized net gains or losses arising from the mark-to-market of these contracts (difference between contractual and market prices) are recorded as operating income or operating costs in the Statement of income.
4.13. Deferred income tax and social contribution
The Company, based on its profitability history and the expectation of generating future taxable profits, based on its internal projections prepared for reasonable periods for its business, sets up a deferred tax asset on temporary differences between the tax bases and on tax losses and negative tax basis.
The deferred income tax and social contribution are recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used for tax calculation purposes, to the extent that there will probably be sufficient taxable profits against which the temporary differences can be utilized and the tax losses can be offset.
4.14. Post-employment benefits
The Company and its subsidiaries sponsor pension plans to supplement retirement and pension plans and the Assistance Plan (medical and dental assistance) for their active employees and post-employment and their legal dependents. The amounts of these actuarial commitments (contributions, costs, liabilities and/or assets) are evaluated annually by an independent actuary, with the base date that coincides with the end of the year. The economic and financial assumptions for the purposes of the actuarial valuation are discussed with the independent actuary and approved by the Management.
The assets of the benefit plans are valued at market value (marked-to-market). The value of the net plan liability is recognized at the present value of the actuarial obligation, less the fair value of the plan assets. The adoption of the projected credit unit method adds each year of service as a triggering event for an additional benefit unit, adding up to the calculation of the final obligation.
Other actuarial assumptions are used, which take into account biometric and economic tables in addition to historical data from the benefits plans, obtained from the manager of these plans, Fundação Copel de Previdência e Assistência Social.
Actuarial gains or losses caused by changes in assumptions and/or actuarial adjustments are recognized in other comprehensive income.
4.15. Share-based compensation
The Company implements Long-Term Incentive Plans (ILP) through which it receives the services rendered by eligible participants (managers and/or employees). These services are settled with equity instruments (shares). The total expense is recognized in the income statement under personnel and management, with a corresponding increase in equity over the vesting period.
4.16. Right to use lease assets and liabilities
Upon entering into a lease agreement, the right to use assets is recorded at present value, with a corresponding entry to a lease liability of the same amount, except for agreements that meet the exemption criteria of the accounting standard (short-term leases, low value or those that foresee variable remuneration). After initial measurement, the amortization of the right-of-use asset is recorded in operating result and interest on the lease liability in financial result. To define the interest rate, the Company uses as a basis the nominal rate practiced in the last funding of the Copel group, disregarding subsidized or incentivized funding.
F-28
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
4.17. Assets and liabilities held for sale and discontinued operation
Assets and liabilities are classified as held for sale when the sale is highly probable, i.e., when they are available for immediate sale under current conditions and senior management is committed to the divestment, which is expected to be completed within
12
months of the reclassification date. Assets held for sale and associated liabilities are measured at book value or fair value net of selling expenses, whichever is the lower. If the asset represents an important separate line of business, the transaction is classified as a discontinued operation, and its results and cash flows are presented separately.
4.18. Treasury shares
The value of the shares repurchased by the Company, along with the transaction costs incurred in the repurchase process, is recorded in equity. These amounts are not restated as long as the shares remain in treasury. In the event of the sale of these shares, if the result, net of transaction costs, results in a gain, it is recorded in a capital reserve. If there is a loss, it is recorded in the account that originated the funds for the acquisition.
4.19. Standards applicable to the Company effective January 1, 2024
As of January 1, 2024, the following changes in standards are in effect, with no significant impact on the Company's financial statements:
(i)
IAS 7 - Statement of Cash Flows and IFRS 7 - Financial Instruments: requirements for disclosure of supplier financing agreements;
(ii)
IAS 1: requirements for categorizing liabilities as current or non-current and for presenting non-current liabilities with covenants;
(iii)
IFRS 16 - Leases: modifications related to sale and leaseback transactions.
4.20. New standards that are not yet in effect
As of the following financial years, the new and/or revised standards below will be in effect:
(i)
IAS 21 - Effects of Changes in Exchange Rates Entitled Lack of Convertibility (effective as of January 1, 2025);
(ii)
IFRS 9 / IFRS 7 - Classification and measurement of financial instruments and Contracts with reference to energy and whose generation depends on nature (effective as of January 1, 2026);
(iii)
IFRS 18 - Presentation and Disclosure in Financial Statements (effective as of January 1, 2027);
(iv)
IFRS 19 - Subsidiaries without Public Accountability: Disclosures (effective as of January 1, 2027).
The Company does not expect significant impacts on the financial statements as a result of these changes in standards, except for IFRS 18, for which management is assessing the impacts of adoption.
5. Cash and Cash Equivalents
| 12.31.2024 | 12.31.2023 | |||||||
| Cash and bank accounts |
|
|
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| Financial investments with immediate liquidity |
|
|
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|
|
|
|||||||
These comprise cash on hand, deposits with banks and short-term highly liquid investments, which can be redeemed in cash within 90 days from the investment date. Temporary short-term investments are recorded at cost at the reporting date, plus income net of income tax earnings accrued. Cash and cash equivalents are subject to an insignificant risk of change in value.
Financial investments refer to Bank Deposit Certificates (“CDB”) and Repurchase Agreements which, depending on the incidence of IOF and the liquidity period negotiated at the time of contracting, are remunerated at between
92.0
% and
102.5
% of the variation rate of the Interbank Deposit Certificate (“CDI”).
F-29
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
6. Bonds and Securities
| Category | Index | 12.31.2024 | 12.31.2023 | ||||||||
|
Units in Funds
(a)
|
|
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|
||||||||
| Bank Deposit Certificates – CDB |
|
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|
||||||||
| Committed Operation |
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|
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| Current |
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| Noncurrent |
|
|
|||||||||
Interbank Deposit Certificate – CDI
(a) Most of these are reserve accounts intended to fulfill loan, financing and debentures contracts with BNDES.
The Company and its subsidiaries hold securities that yield variable interest rates. The term of these securities ranges from 1 to 56 months from the end of the period, however, most of the balance is recorded in noncurrent assets as they refer to funds tied to the financial guarantee of long-term contracts.
7. Trade Accounts Receivable
| Balances | Overdue | Overdue for more | Total | Total | |||||||||||||
| falling due | up to 90 days | than 90 days | 12.31.2024 | 12.31.2023 | |||||||||||||
| Electricity sales to final customers and Charges for use of the system - Copel DIS (a) |
|
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|
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| Unbilled electricity sales to final customers and Charges for use of the system - Copel DIS |
|
— | — |
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| Electricity sales to final customers |
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| Other consumers receivables |
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| Energy supply - Concessionaires, permission holder and trading companies |
|
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|
||||||||||||
| CCEE (7.2) |
|
— |
|
|
|
||||||||||||
| Charges for use of the transmission system |
|
|
|
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|
||||||||||||
| (-) Expected credit losses (7.3) |
(
|
(
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(
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(
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(
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| Current |
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| Noncurrent |
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(a) Includes the balance of debt installments of Copel DIS (Note 7.1).
7.1. Debt installments
| 12.31.2024 | 12.31.2023 | |||||||
| Residential |
|
|
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| Industrial |
|
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| Commercial |
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| Rural |
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| Public Entities |
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| Public lighting |
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| Public service |
|
|
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| (-) Adjustment to present value |
(
|
(
|
||||||
|
|
|
|||||||
At Copel DIS, the installment payment of overdue debts may be granted at the consumer's request based on criteria and conditions, which include the minimum down payment percentage, the number of installments, and guarantee requirements, depending on the amount of the debt.
The balances of debt installments, as of December 31, 2024, are at present value, and take into account the amount to be discounted, the due dates of the installments and the weighted average discount rate of
1.28
% p.m. (
1.22
% p.m. as of December 31, 2023).
F-30
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
7.2. Electricity Trading Chamber - CCEE
Balance receivable deriving from the positive position in the monthly settlement of the spot market centralized by CCEE. Amounts are received in the second month following the recognition of revenue or offset against future settlements when the result is negative for the subsidiary.
The overdue balance of R$
119,665
refers to the controversial portion resulting from the effects of the injunction for exclusion of responsibility of HPP Colíder, for which expected credit losses were recorded in the same amount, as outlined in Note 7.3. As a result of unforeseeable circumstances and force majeure, the power plant had its commercial start-up delayed, which was initially scheduled for January 2015. The Company is contesting in court, filing a request for exclusion of liability so that the mandatory supply of energy contracted by the plant, in the period in delay, could be postponed.
In May 2023, a ruling was issued by the competent Federal Court, partially recognized the requests. Copel GeT filed an appeal with the TRF1 defending the extension of the recognition of the exclusions for the entire period and renewed the request for appellate relief to maintain the suspension of the sanctioning and contractual effects of Aneel's deliberations, until the judgment of the appeal, which was again granted in August 2023 by the Reporting Judge. The appeal is awaiting processing and judgment.
7.3. Expected credit losses
| Balance as of | Additions | Write offs |
Reclassification
(a)
|
Balance as of | Additions | Write offs | Reclassification (a) | Balance as of | |||||||||||||||||||||
| January 1, 2023 | December 31, 2023 | December 31, 2024 | |||||||||||||||||||||||||||
| Electricity sales to f inal customers, Charges for use of the system and and other consumers receivables - Copel DIS |
|
|
(
|
|
|
|
(
|
|
|
||||||||||||||||||||
| Electricity sales to final customers and other consumers receivables - Copel COM |
|
|
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|
(
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|
||||||||||||||||||||
| Energy supply - Concessionaires, permission holder and trading companies |
|
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(
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(
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||||||||||||||||||||
| CCEE (7.2) |
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| Gas distribution |
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(
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(
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(
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(
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(
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(
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(
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(a) Reclassification to Assets classified as held for sale (Note 37).
8. Net Sectorial Financial Assets and Liabilities
The Sectorial Financial Assets and Liabilities comprise the differences calculated between the balances considered in the tariff coverage to cover energy costs, charges and other financial components, and the actual costs incurred, resulting in a balance to be received by the distributor or to be refunded to consumers. The current balance consists of amounts approved by Aneel in the last tariff adjustment and amounts that will be ratified in the next tariff events.
F-31
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Balance as of | Operating revenues | Financial results | Tariff flags | Statement of Financial Position | Balance as of | ||||||||||||||||||
| January 1, 2024 | Constitution | Amortization | Updating | Constitution | December 31, 2024 | ||||||||||||||||||
| Portion A | |||||||||||||||||||||||
| Electricity purchased for resale – Itaipu |
|
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(
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||||||||||||||||
| Electricity purchased for resale – CVA Energ |
(
|
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(
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(
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(
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||||||||||||||||
| Transport of energy using the transmission system – basic grid |
|
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(
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||||||||||||||||
| Transport of energy purchased from Itaipu |
|
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(
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||||||||||||||||
| ESS |
|
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(
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(
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||||||||||||||||
| CDE |
|
(
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(
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(
|
||||||||||||||||
| Proinfa |
(
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(
|
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(
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(
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||||||||||||||||
| Other financial components | |||||||||||||||||||||||
| Refunds of Pis and Cofins (Note 12.3.1) |
(
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(
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(
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||||||||||||||||
| Neutrality |
(
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(
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(
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(
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| Hydrological risk |
(
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(
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(
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(
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| Tariff refunds |
(
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(
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(
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(
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||||||||||||||||
| Overcontracting |
|
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(
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(
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| Itaipu Bonus |
(
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(
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| CDE Eletrobras |
(
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(
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(
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(
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||||||||||||||||
| Tariff mitigation mechanism |
|
(
|
— |
(
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— | — |
(
|
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| Other |
(
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(
|
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(
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(
|
||||||||||||||||
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(
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(
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(
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(
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(
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|||||||||||||||||
| Current assets |
|
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| Noncurrent assets |
|
|
|||||||||||||||||||||
| Current liabilities |
(
|
(
|
|||||||||||||||||||||
| Noncurrent liabilities |
(
|
(
|
|||||||||||||||||||||
| Balance as of | Operating revenues | Financial results | Tariff flags | Statement of Financial Position | Balance as of | ||||||||||||||||||
| January 1, 2023 | Constitution | Amortization | Updating | Constitution | December 31, 2023 | ||||||||||||||||||
| Portion A | |||||||||||||||||||||||
| Electricity purchased for resale - Itaipu |
|
(
|
(
|
|
— | — |
|
||||||||||||||||
| Electricity purchased for resale - CVA Energ |
(
|
(
|
|
(
|
|
— |
(
|
||||||||||||||||
| Transport of energy using the transmission system - basic grid |
|
|
(
|
|
— | — |
|
||||||||||||||||
| Transport of energy purchased from Itaipu |
|
|
(
|
|
— | — |
|
||||||||||||||||
| ESS |
|
|
(
|
|
(
|
— |
|
||||||||||||||||
| CDE |
|
(
|
(
|
|
— | — |
|
||||||||||||||||
| Proinfa |
|
(
|
(
|
(
|
— | — |
(
|
||||||||||||||||
| Other financial components | |||||||||||||||||||||||
| Refunds of Pis and Cofins |
(
|
— |
|
— | — |
(
|
(
|
||||||||||||||||
| Neutrality |
|
(
|
(
|
|
— | — |
(
|
||||||||||||||||
| Offset of bilateral contracts under CCEAR |
(
|
— |
|
— | — | — |
|
||||||||||||||||
| Hydrological risk |
(
|
(
|
|
(
|
— | — |
(
|
||||||||||||||||
| Tariff refunds |
(
|
(
|
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(
|
— | — |
(
|
||||||||||||||||
| Overcontracting |
|
|
(
|
|
(
|
— |
|
||||||||||||||||
| Itaipu Bonus |
|
(
|
(
|
(
|
— |
|
(
|
||||||||||||||||
| Water shortage account |
(
|
— |
|
— | — | — |
|
||||||||||||||||
| CDE Eletrobras |
(
|
|
|
(
|
— |
(
|
(
|
||||||||||||||||
| Other |
|
(
|
(
|
(
|
— | — |
(
|
||||||||||||||||
|
(
|
|
|
|
(
|
(
|
(
|
|||||||||||||||||
| Current assets |
|
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| Noncurrent assets |
|
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|||||||||||||||||||||
| Current liabilities |
(
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(
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| Noncurrent liabilities |
(
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(
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F-32
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
9. Accounts Receivables - Concessions
| 12.31.2024 | 12.31.2023 | |||||||
| Power distribution service concession (9.1) |
|
|
||||||
| Bonus from the grant of concession agreements under the quota system (9.2) |
|
|
||||||
| Generation concession agreements (9.3) |
|
|
||||||
|
|
|
|||||||
| Current |
|
|
||||||
| Noncurrent |
|
|
||||||
9.1. Power distribution service concession
| Balance as of January 1, 2023 |
|
||||
| Transfers from contract assets (Note 10.1) |
|
||||
| Transfers to other receivables (assets held for disposal) |
(
|
||||
| Fair value recognition |
|
||||
| Write-offs |
(
|
||||
| Balance as of December 31, 2023 |
|
||||
| Transfers from contract assets (Note 10.1) |
|
||||
| Transfers to other receivables (assets held for disposal) |
(
|
||||
| Fair value recognition |
|
||||
| Write-offs |
(
|
||||
| Balance as of December 31, 2024 |
|
||||
Balance corresponding to the estimated portion of investments made in the public service infrastructure whose useful life exceeds the concession period and which, according to the contractual provision, will be indemnified by the Granting Authority at the end of the concession.
9.2. Bonus from the grant of concession agreements under the quota system
| Balance as of January 1, 2023 |
|
||||
| Transfers to electricity grid use charges - customers |
(
|
||||
| Interest (Note 28.1) |
|
||||
| Balance as of December 31, 2023 |
|
||||
| Transfers to electricity grid use charges - customers |
(
|
||||
| Interest (Note 28.1) |
|
||||
| Balance as of December 31, 2024 |
|
||||
Balance relating to the bonus for the grant of the GPS HPP concession contract, paid to the Granting Authority, restated by the IPCA and interest, in accordance with the concession contract signed on January 5, 2016.
9.3. Power generation concessions agreements
| Balance as of January 1, 2023 |
|
||||
| Fair value adjustment |
|
||||
| Balance as of December 31, 2023 |
|
||||
| Fair value adjustment |
|
||||
| Balance as of December 31, 2024 |
|
||||
F-33
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
Residual balance of the electricity generation assets of HPP GPS and HPP Mourão I. Copel GeT depreciated the plants until 2015, the expiration date of the concessions, and the remaining balance was reclassified to accounts receivable related to the concession and subsequently measured at the best estimate of fair value. In 2015, Copel GeT expressed to Aneel its interest in receiving the indemnifiable amount, with proof of the realization of the respective investments. In August 2022, Copel submitted to Aneel the appraisal reports related to the residual values, with a base date of July 2015, which, since January 2023, have been under review by the regulatory agency (Note 32.2.1 - e).
10. Contract assets
| 12.31.2024 | 12.31.2023 | |||||||
| Power distribution service concession (10.1) |
|
|
||||||
| Power transmission concession (10.2) |
|
|
||||||
|
|
|
|||||||
| Current |
|
|
||||||
| Noncurrent |
|
|
||||||
10.1. Power distribution service concession contract
| Assets | Special liabilities | Total | |||||||||
| Balance as of January 1, 2023 |
|
(
|
|
||||||||
| Acquisitions |
|
|
|
||||||||
| Customers contributions |
|
(
|
(
|
||||||||
| Transfers to intangible assets (Note 16.1) |
(
|
|
(
|
||||||||
| Transfers to accounts receivable - concessions (Note 9.1) |
(
|
|
(
|
||||||||
| Other transfers |
(
|
|
(
|
||||||||
| Write-offs or disposal |
(
|
|
(
|
||||||||
| Balance as of December 31, 2023 |
|
(
|
|
||||||||
| Acquisitions |
|
|
|
||||||||
| Customers contributions |
|
(
|
(
|
||||||||
| Transfers to intangible assets (Note 16.1) |
(
|
|
(
|
||||||||
| Transfers to accounts receivable – concessions (Note 9.1) |
(
|
|
(
|
||||||||
| Other transfers |
(
|
|
(
|
||||||||
| Write-offs or disposal |
(
|
|
(
|
||||||||
| Balance as of December 31, 2024 |
|
(
|
|
||||||||
The balance consists of work in progress mainly related to the construction and expansion of substations, distribution lines and networks, and metering equipment, measured at historical cost, net of special liabilities, and which are transferred to the Accounts receivable related to the concessions and Intangible assets as these works are completed.
The capitalized costs of loans, financing, and debentures during the construction phase amounted to R$
19,187
in 2024, at an average rate of
0.25
% p.a. (R$
19,041
at an average rate of
0.32
% p.a. in 2023).
F-34
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
10.2. Transmission service concession contract
| Concession assets | RBSE assets | Total | |||||||||
| Balance as of January 1, 2023 |
|
|
|
||||||||
| Realization of fair value adjustments recognized in the business combination |
|
|
|
||||||||
| Transfers to electricity grid use charges - customers |
(
|
(
|
(
|
||||||||
| Transfers to property, plant and equipment |
(
|
|
(
|
||||||||
| Transfers from litigations |
(
|
|
(
|
||||||||
| Remuneration |
|
|
|
||||||||
| Construction revenue (Note 28.1) |
|
|
|
||||||||
| Construction income (Note 28.1) |
|
|
|
||||||||
| Gain from efficiency (Note 28.1) |
|
|
|
||||||||
| Balance as of December 31, 2023 |
|
|
|
||||||||
| Realization of fair value adjustments recognized in the business combination |
|
|
|
||||||||
| Transfers to electricity grid use charges – customers |
(
|
(
|
(
|
||||||||
| Transfers to property, plant and equipment |
(
|
|
(
|
||||||||
| Transfers from litigations |
(
|
|
(
|
||||||||
| Remuneration |
|
|
|
||||||||
| Construction revenue (Note 28.1) |
|
|
|
||||||||
| Construction income (Note 28.1) |
|
|
|
||||||||
| Gain from efficiency (Note 28.1) |
|
|
|
||||||||
| Balance as of December 31, 2024 |
|
|
|
||||||||
In the construction and operation of transmission infrastructure, there may be delays in the works, environmental issues, easements and land negotiations, variations in the cost of materials, as well as the result of the revision/adjustment of the Annual Permitted Revenue (“RAP”), among others that may have an impact on the profitability of the business. During the construction phase, these occurrences may cause changes to the original project, and the amounts, positive or negative, are recognized directly in the income statement during their execution. In the assets operation and maintenance phase, the part of the RAP related to performance (variable portion) is recognized as the services are performed.
In July 2024, Aneel approved the tariff review of part of Copel GeT transmission concession contracts, with a negative impact of R$
44,402
, mainly due to the assessment of the New Replacement Value (“VNR”) of the assets, partially offset by the increase in the RAP for reinforcements and improvements carried out in the last cycle. Copel submitted an administrative appeal to Aneel requesting a review of the amounts. In 2023, the tariff review of some Copel GeT contracts resulted in a gain of R$
4,014
.
In June 2022, Technical Note No. 85/2022-SGT/Aneel was issued, which dealt with the analysis of the requests for reconsideration on the payment of the financial component and reprofiling of the RBSE Assets. Aneel has not yet deliberated on these requests, so the amounts approved by Aneel Resolution No.2,847 of April 22, 2021, are still in effect and appropriate for accounting purposes.
The table below presents the assumptions utilized to calculate the assets and contracts:
| 12.31.2024 | 12.31.2023 | |||||||||||||||||||
|
Concession
assets |
RBSE assets |
Concession
assets |
RBSE assets | |||||||||||||||||
| Financial | Economic | Financial | Economic | |||||||||||||||||
| Construction margin |
|
N/A | N/A |
|
N/A | N/A | ||||||||||||||
| Operating and maintenance margin |
|
N/A | N/A |
|
N/A | N/A | ||||||||||||||
| Remuneration rate (a) |
|
|
|
|
|
|
||||||||||||||
| Contract correction index |
|
|
|
|
|
|
||||||||||||||
| Annual RAP, according to Ratifying Resolution (c) |
|
|
|
|
|
|
||||||||||||||
(a) Average rate of contracts
(b) Contract 075/2001 – LT 230 kV Bateias – Jaguariaíva, from Copel GET, and contract 002/2005 – LT 525 kV Ivaiporã – Londrina, from Uirapuru, are adjusted by the IGPM.
(c) Increase in the RAP financial portion of RBSE assets, due to the re-profiling defined by Aneel Homologatory Resolution No. 2,847/2021.
F-35
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
11. Other Receivables
| 12.31.2024 | 12.31.2023 | |||||||
| Investment disposal (a) |
|
|
||||||
| CDE Transfer (b) |
|
|
||||||
| Assets and rights disposal (c) |
|
|
||||||
|
Services in progress (d)
|
|
|
||||||
| Contractual advances to suppliers |
|
|
||||||
| Disposals and decommissioning in progress |
|
|
||||||
| Advance payments to employees |
|
|
||||||
| Materials and supplies for pow er electricity (e) |
|
|
||||||
| Other receivables |
|
|
||||||
|
|
|
|||||||
| Current |
|
|
||||||
| Noncurrent |
|
|
||||||
(a) Balance resulting from the conclusion of the divestment of Compagas, described in Note 37.
(b) Balance receivable from the Energy Development Account - CDE to cover tariff discounts (Law No. 10,438/2002 and Order No. 7,891/2013), with the monthly quota stipulated in the Annual Tariff Adjustment/Review. On a monthly basis, the Company estimates the differences to be offset in the next tariff adjustment.
(c) Includes the balance arising from the sale of assets described in Note 29.6.1.
(d) Services in progress refer, for the most part, to expenses related to RD and PEE projects in progress which, during execution, are recorded as assets against cash. Once completed and homologated by Aneel, the assets is written off against the respective liability, which was initially recorded against income, as a deduction from revenue (Note 22).
(e) The balance was reclassified to Assets classified as held for sale (Note 37).
12. Taxes
12.1. Deferred income tax and social contribution
| Balance as of January 1, 2023 | Recognized in income |
Others (a)
|
Reclassification (a)
|
Recognized comprehensive income | Balance as of December 31, 2023 | Recognized in income | Recognized comprehensive income | Balance as of December 31, 2024 | ||||||||||||||||||||||||
| Continued operations | Discontinued operations | |||||||||||||||||||||||||||||||
| Noncurrent assets | ||||||||||||||||||||||||||||||||
| Provision for allocation of PIS and Cofins credits |
|
|
— | — |
|
(
|
— |
|
|
|||||||||||||||||||||||
| Post-employment benefits |
|
|
— |
(
|
|
|
|
— |
(
|
|
||||||||||||||||||||||
| Provisions for legal claims |
|
(
|
|
(
|
— |
|
(
|
— |
|
|
||||||||||||||||||||||
| Tax losses and negative tax basis |
|
(
|
(
|
(
|
— |
|
|
(
|
|
|
||||||||||||||||||||||
| Impairment of assets |
|
(
|
— |
(
|
— |
|
|
— |
|
|
||||||||||||||||||||||
| Fair value in the purchase and sale of power |
|
|
— | — | — |
|
(
|
— | — |
|
||||||||||||||||||||||
| Expected credit losses |
|
|
— |
(
|
— |
|
(
|
— |
|
|
||||||||||||||||||||||
| Lease liability |
|
(
|
— | — | — |
|
(
|
— | — |
|
||||||||||||||||||||||
| Provisions for performance and profit sharing |
|
|
— | — | — |
|
|
— |
|
|
||||||||||||||||||||||
| Amortization – concession |
|
|
— | — | — |
|
|
(
|
|
|
||||||||||||||||||||||
| Voluntary retirement program |
|
|
— | — | — |
|
(
|
— |
|
|
||||||||||||||||||||||
| Research and development and energy efficiency programs |
|
(
|
— | — | — |
|
(
|
— |
|
|
||||||||||||||||||||||
| Concession contracts |
|
(
|
— | — | — |
|
(
|
— |
|
|
||||||||||||||||||||||
| Taxes with suspended liability |
|
|
— | — | — |
|
(
|
— |
|
|
||||||||||||||||||||||
| Others |
|
|
— | — | — |
|
|
— |
|
|
||||||||||||||||||||||
|
|
|
|
(
|
|
|
(
|
(
|
(
|
|
|||||||||||||||||||||||
| (-) Noncurrent liabilities | ||||||||||||||||||||||||||||||||
| Concession contracts |
|
|
|
(
|
— |
|
|
— | — |
|
||||||||||||||||||||||
| Deemed cost of property, plant and equipment |
|
(
|
— | — | — |
|
(
|
— | — |
|
||||||||||||||||||||||
| Fair value in the purchase and sale of power |
|
|
— | — | — |
|
(
|
— | — |
|
||||||||||||||||||||||
| Accelerated depreciation |
|
|
— | — | — |
|
|
— | — |
|
||||||||||||||||||||||
| Right-of-use asset |
|
(
|
— | — |
|
(
|
— | — |
|
|||||||||||||||||||||||
| Escrow deposits monetary variation |
|
|
— | — | — |
|
(
|
— | — |
|
||||||||||||||||||||||
| Transaction cost on loans and financing and debentures |
|
|
— | — | — |
|
|
— | — |
|
||||||||||||||||||||||
| Others |
|
|
— |
(
|
(
|
|
|
— |
(
|
|
||||||||||||||||||||||
|
|
|
|
(
|
(
|
|
(
|
— |
(
|
|
|||||||||||||||||||||||
| Net |
|
|
(
|
|
|
|
(
|
(
|
(
|
(
|
||||||||||||||||||||||
| Assets presented in the Statement of Financial Position |
|
|
|
|||||||||||||||||||||||||||||
| Liabilities presented in the Statement of Financial Position |
(
|
(
|
(
|
|||||||||||||||||||||||||||||
(a) Effects mainly of business combinations occurring in 2023.
F-36
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
12.1.1. Projection for realization of deferred income tax and social contribution:
The projection of deferred tax credits realization recorded in noncurrent assets and liabilities is based on the realization period of each item of deferred assets and liabilities and tax losses, according to future results projections.
The criteria used for the realization of each item are related to the predictability of realization of the main value that gave rise to the temporary difference. When the expectation of realization of the item is difficult to predict, mainly because it is not under the control of the Company, such as provisions for legal claims, the Company adopts history of realization to project its future realization.
Following are the items that were the basis for the setup of the main credits of the company, as well as their form of realization:
•
Provision for allocation of PIS and Cofins credits: will be carried out as the amounts are passed on in the tariff review and readjustment processes approved by the regulatory body, if any, or by the reversal of the respective provision;
•
Provisions for post-employment benefits: realized as the payments are made to the Copel Foundation or reversed according to new actuarial estimates;
•
Provisions for legal claims: realized according to court decisions or by the reversal when the possible risk of the shares is reviewed;
•
Impairment of assets: realized through the amortization and/or depreciation of the impaired asset;
•
Deemed cost: realized to the extent that the amortization, depreciation, write-off or disposal of the valued asset occurs;
•
Amounts related to the concession agreement: realized over the term of the agreement;
•
Amounts related to tax losses and negative tax basis: recovered by offsetting against future taxable income, considering the limit established in the legislation; and
•
Other amounts: realized when they meet the deductibility criteria provided for in tax legislation, or upon reversal of the recorded amounts.
The projected realization of the deferred taxes is shown below:
| Assets | Liabilities | |||||||
| 2025 |
|
(
|
||||||
| 2026 |
|
(
|
||||||
| 2027 |
|
(
|
||||||
| 2028 |
|
(
|
||||||
| 2029 |
|
(
|
||||||
| 2030 to 2032 |
|
(
|
||||||
| After 2032 |
|
(
|
||||||
|
|
(
|
|||||||
12.1.2. Unrecognized tax credits
In addition to the deferred income tax and social contribution credits recorded in assets, on December 31, 2024, the Company did not recognize income tax and social contribution credits on income tax and social contribution tax losses in the amount of R$
105,311
(R$
87,410
, as of December 31, 2023) for not having reasonable assurance of generation of future taxable profits sufficient to allow the utilization of these tax credits, mainly at Cutia Empreendimentos Eólicos S.A. (subsidiary of Copel GeT).
F-37
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
12.2. Other taxes recoverable and other tax obligations
| 12.31.2024 | 12.31.2023 | |||||||
| Current assets | ||||||||
| Recoverable ICMS (VAT) |
|
|
||||||
|
Recoverable PIS/Pasep and Cofins taxes (a)
|
|
|
||||||
| Other recoverable taxes |
|
|
||||||
|
|
|
|||||||
| Noncurrent assets | ||||||||
| Recoverable ICMS (VAT) |
|
|
||||||
| Recoverable PIS/Pasep and Cofins taxes (a) |
|
|
||||||
| Other recoverable taxes |
|
|
||||||
|
|
|
|||||||
| Current liabilities | ||||||||
| ICMS (VAT) payable |
|
|
||||||
| ICMS installment payment (b) |
|
|
||||||
| PIS/Pasep and Cofins payable |
|
|
||||||
| IRRF on interest on capital |
|
|
||||||
| Special Tax Regularization Program – Pert |
|
|
||||||
| Other taxes |
|
|
||||||
|
|
|
|||||||
| Noncurrent liabilities | ||||||||
| Social security contributions – injunction on judicial deposit (c) |
|
|
||||||
| ICMS (VAT) payable |
|
|
||||||
| ICMS installment payment (b) |
|
|
||||||
| Special Tax Regularization Program – Pert |
|
|
||||||
|
|
|
|||||||
Asset and liability balances presented on a net basis, considering the Company's right and intention to realize the asset and liability on a net basis.
(a) The balance contains amounts referring Pis and Cofins credit on ICMS (Notes 12.3)
(b) Installment of ICMS tax credits from the State of Paraná, with payment deadline until September 2027.
(c) In March 2024, after the disputes were concluded, the balances were written off against the judicial deposit balance recorded in assets (Note 13)
12.3. Pis and Cofins credit on ICMS - Copel Distribuição
Balance resulting from the final and unappealable decision in June 2020 regarding the lawsuit filed by Copel DIS in 2009, which recognized the right to exclude from the PIS and Cofins tax base the full amount of ICMS included in the energy supply and distribution invoices and recognized that the limitation period, in this case, is of five years and that, therefore, Copel DIS has the right to recover the amounts that have been paid during the five years preceding the filing of the writ of mandamus until the date of the final unappealable decision, therefore from August 2004 to June 2020.
The updated tax credit in assets, after the credits were enabled by the Brazilian Federal Revenue Service, has been recovered through compensation with taxes payable since June 2021, for the Cofins credit and since January 2024 for PIS credit.
The following table shows the movement of the asset:
| Balance as of January 1, 2023 |
|
|||||||
| Monetary variation |
|
|||||||
| Offsetting with taxes payable |
(
|
|||||||
| Balance as of December 31, 2023 |
|
|||||||
| Monetary variation |
|
|||||||
| Offsetting with taxes payable |
(
|
|||||||
| Balance as of December 31, 2024 |
|
|||||||
| Current |
|
|||||||
| Noncurrent |
|
|||||||
The asset will continue to be offset against future federal tax debts, respecting the deadlines and limits established by current tax legislation.
F-38
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
12.3.1. Pis and Cofins to be refunded to consumers and Provision for allocation of PIS and Cofins credits
In June 2020, Copel DIS recorded PIS and Cofins liability to be refunded to consumers related to the recovery of tax credits for the last
10
years, counting from the date of the final and unappealable decision of the lawsuit filed by the Company, considering the current legislation, the statute of limitations period defined in the civil code and the jurisprudence of the courts.
In June 2022, arising from the effects of Federal Law No. 14,385/2022, Copel DIS, listening to the opinion of its external legal advisors and based on the risk assessment, recognized a provision for the allocation of PIS and Cofins credits referring to the period between the 11th and the 16th year from the date of the final and unappealable decision of the lawsuit, therefore from 2004 to 2010.
The amounts have been refunded to consumers, through the tariff process, as the tax credits in the assets are offset. On June 24, 2024, Aneel Homologation Resolution 3,336/2024 determined the refund to the consumer of the amount of R$
1,182,915
, with a reducing effect on the tariff during the 2024-2025 tariff cycle. Thus, the remaining balance of the liability was used to refund consumers and the difference was written off from the provision for allocation of PIS and Cofins credits.
The table below illustrates the changes in liabilities and provisions:
| Liabilities to be refunded to consumers | Provision for allocation of PIS and Cofins credits | Total | |||||||||
| Balance as of January 1, 2023 |
|
|
|
||||||||
| Monetary variation |
|
|
|
||||||||
| (-) Transfer to sectorial financial liabilities |
(
|
– |
(
|
||||||||
| Balance as of December 31, 2023 |
|
|
|
||||||||
| Monetary variation |
|
|
|
||||||||
| (-) Transfer to sectorial financial liabilities |
(
|
(
|
(
|
||||||||
| Balance as of December 31, 2024 |
|
|
|
||||||||
| Current |
|
|
|
||||||||
| Noncurrent |
|
|
|
||||||||
Regarding the provision for the controversial period, the Company is evaluating the appropriate measures to be taken, including legal measures, considering the shelter given to unappealable decisions and applicable limitation periods.
Concomitantly, on December 12, 2022, the Brazilian Association of Electric Energy Distributors - Abradee filed a Direct Action of Unconstitutionality - “ADI” with the Federal Supreme Court - “STF”, questioning Law No. 14,385/2022. On September 4, 2024, the ministers formed a majority in favor of the constitutionality of the law. However, regarding the limitation period for the collection of amounts from consumers, so far five ministers voted for the application of the ten-year term (
10
years), in line with the understanding of Copel Management, and two ministers voted for the application of the five-year term (
5
years). The judgment is suspended due to the request for review by Minister Luis Roberto Barroso. The Company is awaiting the judgment's finalization.
F-39
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
12.4. Reconciliation of provision for income tax (IRPJ) and social contribution (CSLL)
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Income before IRPJ and CSLL |
|
|
|
||||||||
| (-) Result of equity investments |
(
|
(
|
(
|
||||||||
|
|
|
|
|||||||||
| IRPJ and CSLL (34%) |
(
|
(
|
(
|
||||||||
| Tax effects on: | |||||||||||
| Interest on equity (JSCP) |
|
|
|
||||||||
| Dividends |
|
|
|
||||||||
| Non deductible expenses |
(
|
(
|
(
|
||||||||
| Tax incentives |
|
|
|
||||||||
| Unrecognized tax loss and negative basis of CSLL |
(
|
(
|
(
|
||||||||
| Difference between tax bases of deemed profit and taxable profit |
(
|
|
|
||||||||
| Effect of non taxable monetary variation (Selic) on undue tax payments |
|
|
|
||||||||
| Others |
|
(
|
|
||||||||
| INCOME TAX AND SOCIAL CONTRIBUTION |
(
|
(
|
|
||||||||
| Effective rate - % |
|
% |
|
% |
(
|
% | |||||
12.5. Consumption tax reform
In December 2023, Constitutional Amendment No. 132 was enacted, establishing the Tax Reform in the field of consumption.The new model adopts a split Value Added Tax system ("dual VAT") with two competencies: a federal one (Contribution on Goods and Services - “CBS”) which will replace PIS and Cofins, and a sub-national one (Tax on Goods and Services - “IBS”) which will replace ICMS and ISS. Additionally, a federal Selective Tax (“IS”) was created, which will be applied to the production, extraction, sale or import of goods and services that are detrimental to health and the environment, as defined by the complementary legislation.
On January 16, 2025, Complementary Law - LC No. 214 was sanctioned, regulating part of the tax reform. The Federal Senate is still analyzing Complementary Bill No. 108/2024, which will finalize the regulations.
The Reform establishes a transition period from 2026 to 2032 during which the current and new tax systems will coexist.
In the electricity sector, LC No. 214 stipulates the deferral of taxation of CBS and IBS throughout the production chain, ensuring that taxation will only occur in the operation with the final consumer. This measure should significantly reduce the impact of the reform on the sector.
In addition, given the express provisions in the law and in the concession contracts regarding financial economic rebalancing for public service concessions, the company anticipates that the impacts of the reform will be reduced for its business.
Regarding IS, given the company's renewable energy matrix, no significant impacts are expected.
However, the full effects of the tax reform on the calculation of the aforementioned taxes will only be known once the pending issues have been regulated by complementary law and the reference rate has been defined. Therefore, there is no impact of the tax reform on the financial statements as of December 31, 2024.
F-40
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
13. Judicial deposits
| 12.31.2024 | 12.31.2023 | |||||||
| Taxes claims (a) |
|
|
||||||
| Labor claims |
|
|
||||||
| Civil claims |
|
|
||||||
| Easements |
|
|
||||||
| Customers |
|
|
||||||
| Others |
|
|
||||||
|
|
|
|||||||
(a) In March 2024, part of the balance was written off as a counterpart to the INSS liability to be collected (Note 12.2).
14. Investments
14.1. Changes in investments
| Balance as of | Equity in earnings | Capital decrease | Dividends and JSCP | Other (a) | Balance as of | |||||||||||||||
| January 1, 2024 | December 31, 2024 | |||||||||||||||||||
| Joint Ventures (14.3) | ||||||||||||||||||||
| Voltalia São Miguel do Gostoso I |
|
(
|
|
|
|
|
||||||||||||||
| Voltalia São Miguel do Gostoso – authorization rights |
|
|
|
|
(
|
|
||||||||||||||
| Caiuá |
|
|
|
(
|
|
|
||||||||||||||
| Integração Maranhense |
|
|
|
(
|
|
|
||||||||||||||
| Matrinchã |
|
|
|
(
|
|
|
||||||||||||||
| Guaraciaba |
|
|
|
(
|
|
|
||||||||||||||
| Paranaíba |
|
|
|
(
|
|
|
||||||||||||||
| Mata de Santa Genebra |
|
|
(
|
(
|
|
|
||||||||||||||
| Cantareira |
|
|
|
(
|
|
|
||||||||||||||
| Solar Paraná |
|
|
|
(
|
|
|
||||||||||||||
|
|
|
(
|
(
|
(
|
|
|||||||||||||||
| Associates | ||||||||||||||||||||
| Dona Francisca Energética (14.4) |
|
|
|
(
|
|
|
||||||||||||||
| Foz do Chopim Energética (14.4) |
|
|
|
(
|
|
|
||||||||||||||
| Carbocampel |
|
(
|
|
|
(
|
|
||||||||||||||
|
|
|
|
(
|
(
|
|
|||||||||||||||
| Investment property |
|
|
|
|
(
|
|
||||||||||||||
|
|
|
(
|
(
|
(
|
|
|||||||||||||||
(a) Amortization of the right of authorization and disposal of Carbocampel.
AFAC – Advance for future capital increase
JSCP – Interest on equity
F-41
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Balance as of January 1, 2023 | Equity in earnings | Investment/ AFAC | Amortization | Dividends and JSCP | Other (a) | Balance as of December 31, 2023 | |||||||||||||||||
| Joint Ventures (14.3) | |||||||||||||||||||||||
| Voltalia São Miguel do Gostoso I |
|
|
|
|
|
|
|
||||||||||||||||
| Voltalia São Miguel do Gostoso - authorization rights |
|
|
|
(
|
|
|
|
||||||||||||||||
| Caiuá |
|
|
|
|
(
|
|
|
||||||||||||||||
| Integração Maranhense |
|
|
|
|
(
|
|
|
||||||||||||||||
| Matrinchã |
|
|
|
|
(
|
|
|
||||||||||||||||
| Guaraciaba |
|
|
|
|
(
|
|
|
||||||||||||||||
| Paranaíba |
|
|
|
|
(
|
|
|
||||||||||||||||
| Mata de Santa Genebra |
|
|
|
|
(
|
|
|
||||||||||||||||
| Cantareira |
|
|
|
|
(
|
|
|
||||||||||||||||
| Solar Paraná |
|
|
|
|
(
|
|
|
||||||||||||||||
|
|
|
|
(
|
(
|
|
|
|||||||||||||||||
| Associates | |||||||||||||||||||||||
| Dona Fancisca Energética (14.4) |
|
|
|
|
(
|
|
|
||||||||||||||||
| Foz do Chopim Energética (14.4) |
|
|
|
|
(
|
|
|
||||||||||||||||
| Other |
|
(
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
(
|
|
|
|||||||||||||||||
| Investment property |
|
|
|
(
|
|
(
|
|
||||||||||||||||
|
|
|
|
(
|
(
|
(
|
|
|||||||||||||||||
(a) Transfers to Contract Assets, Intangibles and Other Credits (assets held for disposal).
AFAC - Advance for future capital increase
JSCP - Interest on equity
14.2. Subsidiaries with non-controlling interests
14.2.1. Summarized financial information
| Elejor | ||||||||
| 12.31.2024 | 12.31.2023 | |||||||
| ASSETS |
|
|
||||||
| Current assets |
|
|
||||||
| Noncurrent assets |
|
|
||||||
| LIABILITIES |
|
|
||||||
| Current liabilities |
|
|
||||||
| Noncurrent liabilities |
|
|
||||||
| Equity |
(
|
(
|
||||||
F-42
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Elejor | |||||||||||
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| STATEMENT OF INCOME | |||||||||||
| Net operating revenue |
|
|
|
||||||||
| Operating costs and expenses |
(
|
(
|
(
|
||||||||
| Financial results |
(
|
(
|
(
|
||||||||
| Income tax and social contribution |
|
(
|
|
||||||||
| Net income (loss) |
(
|
|
(
|
||||||||
| Other comprehensive income |
(
|
(
|
|
||||||||
| Total comprehensive income |
(
|
(
|
(
|
||||||||
| STATEMENTS OF CASH FLOWS | |||||||||||
| Cash flows from operating activities |
(
|
(
|
|
||||||||
| Cash flows from investing activities |
(
|
(
|
(
|
||||||||
| Cash flows from financing activities |
|
|
|
||||||||
| TOTAL EFFECTS ON CASH AND CASH EQUIVALENTS |
(
|
(
|
|
||||||||
| Cash and cash equivalents at the beginning of the year |
|
|
|
||||||||
| Cash and cash equivalents at the end of the year |
|
|
|
||||||||
| CHANGE IN CASH AND CASH EQUIVALENTS |
(
|
(
|
|
||||||||
The balances shown in the above table reflect the company's values before the elimination of intercompany balances. Elejor's negative result is attributed to the decline in energy prices and the impact of the IGPM's monetary restatement on the balance of accounts payable related to the concession.
14.2.2. Changes in equity attributable to non-controlling shareholders
| Participation in capital stock |
Compagas
49% |
Elejor
30% |
UEG Araucária 18.8% | Total | ||||||||||
| Balance as of January 1, 2023 |
|
(
|
|
|
||||||||||
| Net income (loss) |
|
|
|
|
||||||||||
| Other comprehensive income |
|
(
|
|
(
|
||||||||||
| Dividends |
(
|
|
|
(
|
||||||||||
| Distribution of dividends with retained earnings |
(
|
|
|
(
|
||||||||||
| Balance as of December 31, 2023 |
|
(
|
|
|
||||||||||
| Net income (loss) |
|
(
|
(
|
(
|
||||||||||
| Other comprehensive income |
|
(
|
|
(
|
||||||||||
| Dividends |
(
|
|
|
(
|
||||||||||
| Investment disposal (Note 37) |
(
|
|
(
|
(
|
||||||||||
| Balance as of December 31, 2024 |
|
(
|
|
(
|
||||||||||
F-43
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
14.3. Summarized information on the main joint ventures
| Balance as of December 31, 2024 | Voltalia | Caiuá | Integração Maranhense | Matrinchã | Guaraciaba | Paranaíba | Mata de Santa Genebra | Cantareira | ||||||||||||||||||
| ASSETS |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Current assets |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Cash and cash equivalents |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Other current assets |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Noncurrent assets |
|
|
|
|
|
|
|
|
||||||||||||||||||
| LIABILITIES |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Current liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Financial liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Other current liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Noncurrent liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Financial liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Other noncurrent liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Equity |
|
|
|
|
|
|
|
|
||||||||||||||||||
| STATEMENT OF INCOME | ||||||||||||||||||||||||||
| Net operating revenue |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Operating costs and expenses |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||||
| Interest expenses |
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||||
| Financial income and other financial expenses |
|
|
|
|
|
|
(
|
|
||||||||||||||||||
| Equity in earnings of investees |
(
|
|
|
|
|
|
|
|
||||||||||||||||||
| Income tax and social contribution |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||||
| Net income (loss) |
(
|
|
|
|
|
|
|
|
||||||||||||||||||
| Other comprehensive income |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Total comprehensive income |
(
|
|
|
|
|
|
|
|
||||||||||||||||||
| Investment interest – % |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Investment book value (a) |
|
|
|
|
|
|
|
|
||||||||||||||||||
As of December 31, 2024, Copel's participation in the commitments assumed by its Joint ventures amounted to R$
194,900
, while contingent liabilities classified as a possible loss amounted to R$
265,270
(R$
374,774
on December 31, 2023).
F-44
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Balance as of December 31, 2023 | Voltaria | Caiuá | Integração Maranhense | Matrinchã | Guaraciaba | Paranaíba | Mata de Santa Genebra | Cantareira | ||||||||||||||||||
| ASSETS |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Current assets |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Cash and cash equivalents |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Other current assets |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Noncurrent assets |
|
|
|
|
|
|
|
|
||||||||||||||||||
| LIABILITIES |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Current liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Financial liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Other current liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Noncurrent liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Financial liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Other noncurrent liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Equity |
|
|
|
|
|
|
|
|
||||||||||||||||||
| STATEMENT OF INCOME | ||||||||||||||||||||||||||
| Net operating revenue |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Operating costs and expenses |
(
|
(
|
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||||
| Interest expenses |
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||||
| Financial income and other financial expenses |
|
|
|
|
|
|
(
|
|
||||||||||||||||||
| Equity in earnings of investees |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Income tax and social contribution |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||||
| Net income (loss) |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Other comprehensive income |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Total comprehensive income |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Investment interest - % |
|
% |
|
% |
|
% |
|
% |
|
% |
|
% |
|
% |
|
% | ||||||||||
| Investment book value |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Balance as of December 31, 2022 | Voltalia | Caiuá | Integração Maranhense | Matrinchã | Guaraciaba | Paranaíba | Mata de Santa Genebra | Cantareira | ||||||||||||||||||
| STATEMENT OF INCOME | ||||||||||||||||||||||||||
| Net operating revenue |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Operating costs and expenses |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||||
| Interest expenses |
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||||
| Financial income and other financial expenses |
|
|
|
|
|
|
(
|
|
||||||||||||||||||
| Equity in earnings of investees |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Income tax and social contribution |
(
|
(
|
(
|
(
|
(
|
|
(
|
(
|
||||||||||||||||||
| Net income |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Other comprehensive income |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Total comprehensive income |
|
|
|
|
|
|
|
|
||||||||||||||||||
F-45
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
14.4. Summarized information of the main associates
| Dona Francisca | Foz do Chopim | |||||||||||||
| 12.31.2024 | 12.31.2023 | 12.31.2024 | 12.31.2023 | |||||||||||
| ASSETS |
|
|
|
|
||||||||||
| Current assets |
|
|
|
|
||||||||||
| Noncurrent assets |
|
|
|
|
||||||||||
| LIABILITIES |
|
|
|
|
||||||||||
| Current liabilities |
|
|
|
|
||||||||||
| Noncurrent liabilities |
|
|
|
|
||||||||||
| Equity |
|
|
|
|
||||||||||
| Investment interest – % |
|
|
|
|
||||||||||
| Investment book value |
|
|
|
|
||||||||||
| Dona Francisca | Foz do Chopim | |||||||||||||||||||
| 12.31.2024 | 12.31.2023 | 12.31.2022 | 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||||||||
| STATEMENT OF INCOME | ||||||||||||||||||||
| Net operating revenue |
|
|
|
|
|
|
||||||||||||||
| Depreciation and amortization |
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||
| Other operating costs and expenses |
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||
| Financial results |
(
|
(
|
(
|
|
|
|
||||||||||||||
| Income tax and social contribution |
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||
| Net income |
|
|
|
|
|
|
||||||||||||||
| Other comprehensive income |
|
|
|
|
|
|
||||||||||||||
| Total comprehensive income |
|
|
|
|
|
|
||||||||||||||
On December 31, 2024, Copel's share in the contingent liabilities of its Associates amounted to R$
7,465
(R$
2,947
on December 31, 2023).
15. Property, Plant and Equipment
15.1. Property, plant and equipment by asset class
| Cost | Accumulated depreciation | 12.31.2024 | Cost | Accumulated depreciation | 12.31.2023 | |||||||||||||||
| In service | ||||||||||||||||||||
| Reservoirs, dams and aqueducts |
|
(
|
|
|
(
|
|
||||||||||||||
| Machinery and equipment |
|
(
|
|
|
(
|
|
||||||||||||||
| Buildings |
|
(
|
|
|
(
|
|
||||||||||||||
| Land |
|
(
|
|
|
(
|
|
||||||||||||||
| Vehicles |
|
(
|
|
|
(
|
|
||||||||||||||
| Furniture and fixtures |
|
(
|
|
|
(
|
|
||||||||||||||
| (-) Impairment (15.4) |
|
|
|
(
|
|
(
|
||||||||||||||
| (-) Special Obligations |
(
|
|
(
|
(
|
|
(
|
||||||||||||||
|
|
(
|
|
|
(
|
|
|||||||||||||||
| In progress | ||||||||||||||||||||
| Cost |
|
|
|
|
|
|
||||||||||||||
| (-) Impairment (15.4) |
(
|
|
(
|
(
|
|
(
|
||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
|
|
(
|
|
|
(
|
|
|||||||||||||||
F-46
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
15.2. Changes in property, plant and equipment
| Balance as of January 1, 2024 | Additions / Impairment | Depreciation | Write-offs or disposal | Transfers | Reclassification (a) | Balance as of December 31, 2024 | |||||||||||||||||
| In service | |||||||||||||||||||||||
| Reservoirs, dams and aqueducts |
|
|
(
|
(
|
|
(
|
|
||||||||||||||||
| Machinery and equipment |
|
|
(
|
(
|
|
(
|
|
||||||||||||||||
| Buildings |
|
|
(
|
(
|
|
(
|
|
||||||||||||||||
| Land |
|
|
(
|
(
|
|
(
|
|
||||||||||||||||
| Vehicles |
|
|
(
|
(
|
|
(
|
|
||||||||||||||||
| Furniture and fixtures |
|
|
(
|
(
|
|
(
|
|
||||||||||||||||
| (-) Impairment (15.4) |
(
|
(
|
|
|
|
|
|
||||||||||||||||
| (-) Special Obligations |
(
|
|
|
|
(
|
|
(
|
||||||||||||||||
|
|
|
(
|
(
|
|
(
|
|
|||||||||||||||||
| In progress | |||||||||||||||||||||||
| Cost |
|
|
|
(
|
(
|
(
|
|
||||||||||||||||
| (-) Impairment (15.4) |
(
|
|
|
|
|
|
(
|
||||||||||||||||
|
|
|
|
(
|
(
|
(
|
|
|||||||||||||||||
|
|
|
(
|
(
|
|
(
|
|
|||||||||||||||||
(a) Reclassification to Assets classified as held for sale (Note 37).
| Balance as of January 1, 2023 |
Additions /
Impairment |
Depreciation | Write-offs or disposal | Transfers | Business combination effects | Reclassification (a) | Balance as of December 31, 2023 | |||||||||||||||||||
| In service | ||||||||||||||||||||||||||
| Reservoirs, dams and aqueducts |
|
|
(
|
(
|
|
|
|
|
||||||||||||||||||
| Machinery and equipment |
|
|
(
|
(
|
|
|
(
|
|
||||||||||||||||||
| Buildings |
|
|
(
|
(
|
|
|
(
|
|
||||||||||||||||||
| Land |
|
|
(
|
(
|
|
|
(
|
|
||||||||||||||||||
| Vehicles |
|
|
(
|
(
|
|
|
|
|
||||||||||||||||||
| Furniture and fixtures |
|
|
(
|
(
|
|
|
(
|
|
||||||||||||||||||
| (-) Impairment (15.4) |
(
|
|
|
|
(
|
|
|
(
|
||||||||||||||||||
| (-) Special Obligations |
(
|
|
|
|
(
|
|
|
(
|
||||||||||||||||||
|
|
|
(
|
(
|
|
|
(
|
|
|||||||||||||||||||
| In progress | ||||||||||||||||||||||||||
| Cost |
|
|
|
(
|
(
|
|
(
|
|
||||||||||||||||||
| (-) Impairment (15.4) |
(
|
|
|
|
|
|
|
(
|
||||||||||||||||||
|
|
|
|
(
|
(
|
|
(
|
|
|||||||||||||||||||
|
|
|
(
|
(
|
(
|
|
(
|
|
|||||||||||||||||||
(a) Reclassification to Assets classified as held for sale (Note 37)
During the construction phase, loans, financing and debentures costs are capitalized. In 2024, these costs totaled R$
2,820
, at an average rate of
0.049
% p.a. (R$
2,355
, at an average rate of
0.051
% p.a., in 2023) at Copel GeT, and R$
1,373
at an average rate of
1.97
% p.a. at Copel SER (started in 2024).
F-47
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
15.3. Joint operations - consortiums
The amounts recorded under property, plant and equipment referring to the share of interest of Copel GeT in consortiums are shown below:
| Joint operations | Share Copel GeT (%) | Annual average depreciation rate (%) | 12.31.2024 | 12.31.2023 | ||||||||||
| HPP Gov. Jayme Canet Júnior (Mauá) |
|
% | ||||||||||||
| In service |
|
|
||||||||||||
| (-) Accumulated depreciation |
|
% |
(
|
(
|
||||||||||
| In progress |
|
|
||||||||||||
|
|
|
|||||||||||||
| HPP Baixo Iguaçu |
|
% | ||||||||||||
| In service |
|
|
||||||||||||
| (-) Accumulated depreciation |
|
% |
(
|
(
|
||||||||||
| In progress |
|
|
||||||||||||
|
|
|
|||||||||||||
|
|
|
|||||||||||||
15.4. Impairment of generation segment assets
The cash-generating units in the electricity generation segment are tested based on the analysis of impairment indicators, assumptions representing the best estimates of the Company's Management, the methodology provided for in IAS 36 and the measurement of value in use. The Company treats each of its generation projects as an independent cash-generating unit.
The calculation of the value in use is based on discounted operating cash flows discounted over the duration of concessions, while maintaining the Company's current commercial conditions. The rate used to discount the cash flows is defined and updated considering the WACC (Weighted Average Cost of Capital) and CAPM (Capital Asset Pricing Model) methodologies, by font type, for the generation segment, considering usual market parameters.
Internal references such as the budget approved by the Company, historical or past data, and the updating of the timeframe for work and the amount of investments for projects in progress support the design of assumptions by Company Management. In the same framework, external references such as level of consumption of electric power and the availability of water resources support the key information about estimated cash flows.
Several assumptions used by Company Management when determining future cash flows can be affected by uncertain events, which, in turn, may give rise to variation in results. Changes in the political and economic model, for example, may lead to upward trend when projecting country risk-rating, increasing the discount rates used in tests.
In general, the tests considered the following assumptions:
•
Growth compatible with historical data and perspective for the Brazilian economy growth;
•
Tax discount rates specific for each type of source tested, obtained through the methodology usually applied by the market, taking into consideration the weighted average cost of capital;
•
Projected revenue in accordance with the agreements in force and future market expectations, without any expectation for renewal of concession/authorization;
•
Expenses broken into cash generating units, projected in view of the budget approved by the Company; and
•
Updating of regulatory charges.
F-48
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
The table below shows the changes in the impairment:
| Balance as of January 1, 2023 | Impairment / Reversal | Transfer | Balance as of December 31, 2023 | Impairment / Reversal | Reclassification | Balance as of December 31, 2024 | |||||||||||||||||
| In service | |||||||||||||||||||||||
| HPP Colíder |
(
|
|
|
(
|
|
|
|
||||||||||||||||
| UEGA |
(
|
|
|
|
|
|
|
||||||||||||||||
| Power plants in Paraná |
(
|
|
(
|
(
|
(
|
|
|
||||||||||||||||
|
(
|
|
(
|
(
|
(
|
|
|
|||||||||||||||||
| In progress | |||||||||||||||||||||||
| Consórcio Tapajós (a) |
(
|
|
|
(
|
|
|
(
|
||||||||||||||||
| Power plants in Paraná |
(
|
|
|
|
|
|
|
||||||||||||||||
|
(
|
|
|
(
|
|
|
(
|
|||||||||||||||||
|
(
|
|
|
(
|
(
|
|
(
|
|||||||||||||||||
| (a) Project under development | |||||||||||||||||||||||
In 2024, the only impairment and reclassification presented refers to the plants in the process of divestment, as detailed in Note 37.
In 2023, UEGA's impairment reversal was due to the divestment process (Note 37). For Copel's plants, no impairment indicators were found in 2023, with the exception of the Colíder HPP and the Paraná plants which, after a review of the assumptions at the time, mainly due to improved revenue estimates, lower operating costs, and a reduction in the discount rate, recorded a partial reversal of the impairment balance. On December 31, 2023, the recoverability tests considered the real and after-tax rates. The real and pre-tax discount rate ranged from
5.03
% p.a. to
15.54
% p.a..
Cash generating units that do not show reversal or provision for impairment
The plants that did not suffer impairment have a recoverable value greater than the book value of the property, plant and equipment assets. The following table presents the percentage in which the recoverable value (“RV”) exceeds the book value (“BV”) of the assets and demonstrates the sensitivity analysis by increasing the real discount rate after tax by
5
% and
10
% to assess the risk of impairment of each plant.
F-49
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Cash-generating units | Discount rate | RV/BV-1 |
RV/BV-1
(5% Variation) |
RV/BV-1
(10% Variation) |
Impairment Risk | ||||||||||||
| Wind power Assets | |||||||||||||||||
|
São Bento Complex (a)
|
|
% |
|
% |
|
% |
|
% |
|
||||||||
|
Brisa I Complex (b)
|
|
% |
|
% |
|
% |
|
% |
|
||||||||
|
Brisa II Complex (c)
|
|
% |
|
% |
|
% |
|
% |
|
||||||||
|
Bento Miguel Complex (d)
|
|
% |
|
% |
|
% |
|
% |
|
||||||||
|
Cutia Complex (e)
|
|
% |
|
% |
|
% |
|
% |
|
||||||||
|
Jandaíra Complex (f)
|
|
% |
|
% |
|
% |
|
% |
|
||||||||
|
Vilas Complex (g)
|
|
% |
|
% |
|
% |
|
% |
|
||||||||
|
Aventura Complex (h)
|
|
% |
|
% |
|
% |
|
% |
|
||||||||
|
Santa Rosa e Mundo Novo Complex (i)
|
|
% |
|
% |
|
% |
|
% |
|
||||||||
| Hydric Assets | |||||||||||||||||
| Foz do Areia |
|
% |
|
% |
|
% |
|
% |
|
||||||||
| Segredo |
|
% |
|
% |
|
% |
|
% |
|
||||||||
| Caxias |
|
% |
|
% |
|
% |
|
% |
|
||||||||
| Baixo Iguaçu |
|
% |
|
% |
|
% |
-
|
% |
|
||||||||
| Mauá |
|
% |
|
% |
|
% |
|
% |
|
||||||||
| Bela Vista |
|
% |
|
% |
|
% |
|
% |
|
||||||||
| Elejor |
|
% |
|
% |
|
% |
|
% |
|
||||||||
(a) GE Boa Vista, GE Farol, GE Olho D’Água e GE São Bento do Norte wind farms.
(b) Nova Asa Branca I, Nova Asa Branca II, Nova Asa Branca III e Nova Eurus IV wind farms.
(c) Santa Maria, Santa Helena e Ventos de Santo Uriel wind farms.
(d) São Bento do Norte I, São Bento do Norte II, São Bento do Norte III, São Miguel I, São Miguel II and GE São Miguel III wind farms.
(e) Cutia, Guajiru, Jangada, Maria Helena, Potiguar, Esperança e Paraíso dos Ventos wind farms.
(f) Jandaíra I, Jandaíra II, Jandaíra III e Jandaíra IV wind farms.
(g) Potiguar B61, Potiguar B141, Potiguar B142, Potiguar B143 e Ventos de Vila Paraíba IV wind farms.
(h) Aventura II, Aventura III, Aventura IV, Aventura V wind farms.
(i) Santa Rosa e Mundo Novo - SRMN: SRMN I, SRMN II, SRMN III, SRMN IV e SRMN V wind farms.
15.5. Depreciation rates
| Depreciation rates (%) | 12.31.2024 | 12.31.2023 | 12.31.2022 | ||||||||
| Average generation segment rates | |||||||||||
| General equipment |
|
|
|
||||||||
| Machinery and equipment |
|
|
|
||||||||
| Generations |
|
|
|
||||||||
| Reservoirs, dams and ducts |
|
|
|
||||||||
| Hydraulic turbines |
|
|
|
||||||||
| Wind power plant unit |
|
|
|
||||||||
| Buildings |
|
|
|
||||||||
| Average rates for central government assets | |||||||||||
| Buildings |
|
|
|
||||||||
| Machinery and office equipment |
|
|
|
||||||||
| Furniture and fixtures |
|
|
|
||||||||
| Vehicles |
|
|
|
||||||||
For all plants under the Independent Energy Production (“PIE”) exploration regime, all assets linked to hydroelectric and wind power generation plants are depreciated and/or amortized on a straight-line basis. This is done at the higher of the rate determined by the useful life of each asset or the rate calculated based on the concession term of each plant, no residual value at the end of the concession/authorization term. This practice does not apply only to the Derivação do Rio Jordão hydroelectric generation plant, since the concession contract guarantees the right to compensation at the end of the concession term.
F-50
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
In view of the renewal of the concessions detailed in Note 1, Management made a judgment regarding the regulatory aspects of the renewed contracts to conclude that the previously existing assets, in the amount of R$1,902,935, should remain recorded in Property, Plant and Equipment. In addition, it was necessary to reassess the estimated useful life of the existing assets of the Foz do Areia, Segredo and Salto Caxias plants. The change in accounting estimate was treated prospectively, and the impact on the result, compared to the depreciation that would be recorded if the concessions were not renewed, is an increase in total depreciation of R$
1,044
in 2024, approximately R$
17
million per year until 2028, R$
530,126
from 2029 to 2038 and R$
564,768
from 2039 to 2054.
16. Intangible assets
| 12.31.2024 | 12.31.2023 | |||||||
| Concession agreement – distribution of electricity (16.1) |
|
|
||||||
| Generation concession agreements/ authorization (16.2) |
|
|
||||||
| Others (16.3) |
|
|
||||||
|
|
|
|||||||
Management did not identify indicatives impairment of intangible assets.
16.1. Power distribution service concession
| Intangible asset in service | Special liabilities in service | Total | |||||||||
| Balance as of January 1, 2023 |
|
(
|
|
||||||||
| Transfers from contract assets (Note 10.1) |
|
(
|
|
||||||||
| Other transfers |
|
|
|
||||||||
| Amortization quotas - concession (a) |
(
|
|
(
|
||||||||
| Write-offs or disposal |
(
|
|
(
|
||||||||
| Balance as of December 31, 2023 |
|
(
|
|
||||||||
| Transfers from contract assets (Note 10.1) |
|
(
|
|
||||||||
| Transfers to other receivables |
|
|
|
||||||||
|
Amortization quotas – concession (a)
|
(
|
|
(
|
||||||||
| Write-offs or disposal |
(
|
|
(
|
||||||||
| Balance as of December 31, 2024 |
|
(
|
|
||||||||
| (a) Amortization during the concession period after the transfer to intangible assets in service of useful life of the assets, whichever the lower. | |||||||||||
The balance refers to the portion of infrastructure that will be used during concession, net of special liabilities. The special liabilities represent the resources related to the financial participation of consumers, the Federal, State and Municipal Governments, destined to investments in projects related to the concession, and are not onerous liabilities or shareholder credits.
F-51
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
16.2. Generation concession agreements
|
Concession contract (a)
|
Concession and authorization rights/goodwill | Total | ||||||||||||
| in service | in progress | |||||||||||||
| Balance as of January 1, 2023 |
|
|
|
|
||||||||||
| Effect of acquisition of control |
|
|
|
|
||||||||||
| Technical goodw ill arising from the business combination |
|
|
|
|
||||||||||
| ANEEL grant - use of public property |
|
|
|
|
||||||||||
| Amortization quotas - concession and authorization (a) |
(
|
|
(
|
(
|
||||||||||
| Capitalizations for intangible in service |
|
(
|
|
|
||||||||||
| Balance as of December 31, 2023 |
|
|
|
|
||||||||||
| Grant Bonus (Note 1) |
|
|
|
|
||||||||||
| ANEEL grant – use of public property (Note 1) |
|
|
|
|
||||||||||
|
Amortization quotas – concession and authorization (a)
|
(
|
|
(
|
(
|
||||||||||
| (-) Reclassification (b) |
(
|
|
|
(
|
||||||||||
| Balance as of December 31, 2024 |
|
|
|
|
||||||||||
| (a) Amortization during the concession/authorization as of the start of commercial operations of the enterprises. | ||||||||||||||
| (b) Reclassification to Assets classified as held for sale (Note 37). | ||||||||||||||
Considering the renewal of the concessions detailed in Note 1, the value of the grant bonus was recorded, which will be amortized over the term of the concessions, which is
30
years. In addition, for the assets of the 3 plants that were already recorded in intangible assets, it was necessary to reassess the estimated useful life. The change in estimate was treated prospectively and the impact on the result, compared to the amortization that would be recorded if the concessions were not renewed, is a reduction in total amortization of R$
19,068
in 2024, approximately R$
66
million per year until 2028, R$
239,179
from 2029 to 2033 and an increase of R$
522,557
from 2034 to 2054.
16.3. Other intangible assets
| In service | In progress | Total | |||||||||
| Balance as of January 1, 2023 |
|
|
|
||||||||
| Effect of business combination |
|
|
|
||||||||
| Acquisitions |
|
|
|
||||||||
| Transfers from property, plant and equipment |
|
|
|
||||||||
| Capitalizations for intangible in service |
|
(
|
|
||||||||
|
Amortization quotas (a)
|
(
|
|
(
|
||||||||
| Write-offs or disposal |
|
(
|
(
|
||||||||
| (-) Reclassification (b) |
(
|
|
(
|
||||||||
| Balance as of December 31, 2023 |
|
|
|
||||||||
| Acquisitions |
|
|
|
||||||||
| Transfers from property, plant and equipment |
|
(
|
(
|
||||||||
| Transfers from contract assets |
|
|
|
||||||||
| Capitalizations for intangible in service |
|
(
|
|
||||||||
|
Amortization quotas (a)
|
(
|
|
(
|
||||||||
| Write-offs or disposal |
|
(
|
(
|
||||||||
|
(-) Reclassification (b)
|
(
|
(
|
(
|
||||||||
| Balance as of December 31, 2024 |
|
|
|
||||||||
| (a) Annual amortization rate: 20%. | |||||||||||
| (b) Reclassification to Assets classified as held for sale (Note 37). | |||||||||||
Assets consisting of software purchased from third parties or generated internally, measured at total acquisition cost minus amortization expenses.
F-52
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
17. Payroll, Social Charges and Accruals
| 12.31.2024 | 12.31.2023 | |||||||
| Social security liabilities | ||||||||
| Taxes and social contribution |
|
|
||||||
| Social security charges |
|
|
||||||
|
|
|
|||||||
| Labor liabilities | ||||||||
| Payroll, net |
|
|
||||||
| Vacation |
|
|
||||||
| Provisions for performance and profit sharing |
|
|
||||||
| Voluntary dismissal program (Note 17.1) |
|
|
||||||
| Other liabilities |
|
|
||||||
|
|
|
|||||||
|
|
|
|||||||
| Current |
|
|
||||||
| Noncurrent |
|
|
||||||
17.1. Voluntary Dismissal Program - PDV
Of the total number of employees who joined the PDV instituted on August 24, 2023, 1,285 left the company by December 31, 2024, and the rest will leave the company until August 2025.
18. Accounts Payable to Suppliers
| 12.31.2024 | 12.31.2023 | |||||||
| Energy power |
|
|
||||||
| Materials and supplies |
|
|
||||||
| Charges for use of grid system |
|
|
||||||
|
|
|
|||||||
| Current |
|
|
||||||
| Noncurrent |
|
|
||||||
F-53
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
19. Loans and Financing
| Company | Contracts | Guarantees (b) | 12.31.2024 | 12.31.2023 | ||||||||||
| Copel GET | Itaú Unibanco S.A | Personal guarantee |
|
|
||||||||||
| Banco do Brasil - BNDES Transfer | Revenue from energy sales from the plant. |
|
|
|||||||||||
| BNDES | Revenue from energy sales from the plant; revenue from energy transmission services; assignment of receivables |
|
|
|||||||||||
|
|
|
|||||||||||||
| Copel DIS | Banco do Brasil (a) | Personal guarantee |
|
|
||||||||||
| Caixa Econômica Federal | Own revenue; issue of promissory notes and commercial duplicates. |
|
|
|||||||||||
| BNDES | Surety of Copel; assignment of revenues and indemnity rights under the concession. |
|
|
|||||||||||
|
|
|
|||||||||||||
| Jandaíra Wind Complex | Banco do Nordeste do Brasil | Bank guarantee |
|
|
||||||||||
| Vilas Wind Complex | Banco do Nordeste do Brasil | Bank guarantee |
|
|
||||||||||
| Aventura Wind Complex | Banco do Nordeste do Brasil | Bank guarantee |
|
|
||||||||||
| SRMN Wind Complex | Banco do Nordeste do Brasil | Bank guarantee |
|
|
||||||||||
| Brisa Wind Complex | BNDES | Surety of Copel; pledge of shares; assignment of receivables and revenues. |
|
|
||||||||||
| São Bento Wind Complex | BNDES | Pledge of shares; assignment of receivables from energy sales; assignment of machinery and equipment. |
|
|
||||||||||
| Cutia | BNDES | Assignment of receivables; 100% of pledged shares. |
|
|
||||||||||
| Costa Oeste | BNDES | Assignment of receivables; 100% of pledged shares. |
|
|
||||||||||
| Marumbi | BNDES | Assignment of receivables; 100% of pledged shares. |
|
|
||||||||||
| Gross debt |
|
|
||||||||||||
| (-) Transaction cost |
(
|
(
|
||||||||||||
| Net debt |
|
|
||||||||||||
| Current |
|
|
||||||||||||
| Noncurrent |
|
|
||||||||||||
(a) In December 2024, the addendum to the Bank Credit Note issued by Copel DIS in favor of Banco do Brasil was formalized, defining the remuneration rate at CDI + 1.08% p.a. and changing the final maturity date to June 2028.
(b) For all contracts, except for the Banco do Brasil loan from Copel DIS, there is a surety guarantee from Copel or Copel GET.
The average debt cost is disclosed in Note 32.3.
F-54
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
19.1. Maturity of noncurrent installments
| 12.31.2024 | Gross debt | (-) Transaction cost | Net debt | ||||||||
| 2026 |
|
(
|
|
||||||||
| 2027 |
|
(
|
|
||||||||
| 2028 |
|
(
|
|
||||||||
| 2029 |
|
(
|
|
||||||||
| 2030 |
|
(
|
|
||||||||
| After 2030 |
|
(
|
|
||||||||
|
|
(
|
|
|||||||||
19.2. Changes in loans and financing
| Total | |||||
| Balance as of January 1, 2023 |
|
||||
| Effect of acquisition of control of Vilas Complex |
|
||||
| Funding |
|
||||
| (-) Transaction costs (a) |
(
|
||||
| Charges |
|
||||
| Monetary and exchange variations |
|
||||
| Amortization – principal |
(
|
||||
| Payment – charges |
(
|
||||
| Balance as of December 31, 2023 |
|
||||
| Funding |
|
||||
| (-) Transaction costs |
(
|
||||
| Charges |
|
||||
| Monetary and exchange variations |
|
||||
| Amortization – principal |
(
|
||||
| Payment – charges |
(
|
||||
|
Reclassification (b)
|
(
|
||||
| Balance as of December 31, 2024 |
|
||||
(a) Balance refers to the financial consideration (waiver) paid as a result of the process of transforming Copel into a Corporation.
(b) The balance was reclassified to Liabilities classified as held for sale (Note 37).
19.3. Covenants
Loans and financing agreements contain clauses that require economic and financial ratios to be maintained within pre-determined parameters, requiring annual fulfillment and other conditions to be complied with, such as not changing the Company's interest in the capital stock of subsidiaries that would represent change of control without prior consent. The non-compliance with the contracted conditions may result in the need to comply with additional obligations, in fines or even in the declaration of the early maturity of debts.
On December 31, 2024, all the agreed contractual indicators and conditions were fully met. Under the Cutia Wind Complex financing agreement, the Company was granted authorisation by BNDES AEC/DEENE2 No. 49/2024 on December 23, 2024 to temporarily replace the current ICSD (Debt service coverage ratio) calculation procedure with the calculation of the ICSD and Leverage Index (Net debt / EBITDA) based on the consolidated financial statements of Companhia Paranaense de Energia - Copel, until 2029.
F-55
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
The financial covenants contained in the agreements are presented below:
| Company | Contractual Instrument | Annual financial ratios | Limit | ||||||||
| Copel GeT | BNDES Finem nº 820989.1 – Mauá |
|
|
||||||||
| Banco do Brasil nº 21/02000-0 – Mauá | |||||||||||
| Commercial paper |
Consolidated net debt / Consolidated EBITDA |
≤ 3,5 |
|||||||||
| Cutia | BNDES Finem nº 18204611 | ||||||||||
| Santa Maria | BNDES Finem nº 14212711 |
|
|
||||||||
| Santa Helena | BNDES Finem nº 14212721 | ||||||||||
| São Bento Energia, Investimento e Participações | BNDES Assignment Agreement |
|
|
||||||||
| GE Boa Vista S.A. | BNDES Finem nº 11211531 | ||||||||||
| GE Farol S.A. | BNDES Finem nº 11211521 | ||||||||||
| GE Olho D´Água S.A. | BNDES Finem nº 11211551 | ||||||||||
| GE São Bento do Norte S.A. | BNDES Finem nº 11211541 | ||||||||||
| Costa Oeste | BNDES Finem nº 13212221 |
|
|
||||||||
| Marumbi | BNDES Finem nº 14205851 |
|
|
||||||||
| Financing for businesses – Finem | |||||||||||
20. Debentures
| Issue | Guarantee (a) | 12.31.2024 | 12.31.2023 | |||||||||||
| Company | ||||||||||||||
| Copel GeT | 5ª | Personal guarantee |
|
|
||||||||||
| 6ª |
|
|
||||||||||||
| 7ª |
|
|
||||||||||||
| 8ª |
|
|
||||||||||||
| 9ª |
|
|
||||||||||||
|
|
|
|||||||||||||
| Copel DIS | 5ª | Personal guarantee |
|
|
||||||||||
| 6ª |
|
|
||||||||||||
| 7ª |
|
|
||||||||||||
| 8ª |
|
|
||||||||||||
| 9ª |
|
|
||||||||||||
|
|
|
|||||||||||||
| Complexo Brisa | 2ª | Real and personal guarantee and pledge of Copel GeT shares |
|
|
||||||||||
| Copel Serviços | 1ª | Personal guarantee |
|
|
||||||||||
| Cutia | 1ª | Real and personal guarantee and pledge of Copel GeT shares |
|
|
||||||||||
| Gross debt |
|
|
||||||||||||
| (-) Transaction cost |
(
|
(
|
||||||||||||
| Net debt |
|
|
||||||||||||
| Current |
|
|
||||||||||||
| Noncurrent |
|
|
||||||||||||
(a) Copel is the intervening guarantor of all emissions presented in the table.
The average debt cost is disclosed in Note 32.3.
On 5 May 2024, Copel Serviços issued its 1
st
simple debenture in a single series, non-convertible into shares, amounting to R$
70,000
, with Copel as intervening guarantor, intended for cash reinforcement, wicth a maturity date of 5 May 2031 and remunerated at CDI +
1.2
%.
F-56
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
On 15 May 2024, Copel DIS issued the 9
th
simple debentures, in two series, non-convertible into shares, amounting to R$
2,250,000
, with Copel as intervening guarantor. The 1
st
serie is intended to reinforce working capital, amortize the principal and/or redeem the 7
th
and 8
th
debenture issues, matures on 15 May 2031 and pays CDI +
0.6
%. The 2
nd
seris, intended for investments in expansion, renovation or improvement and/or reimbursement of costs of the electricity distribution network, matures on May 15, 2036 and bears interest at IPCA +
6.2831
%.
Copel GeT issued the 9
th
issue of simple debentures on October 15, 2024, non-convertible into shares, with Copel as intervening guarantor. These debentures are not convertible into shares and Copel is acting as guarantor, in three series, in the amounts of R$
800,000
, R$
500,000
and R$
300,000
. The remuneration corresponds to the accumulated variation of the DI plus
0.52
% p.a.,
0.65
% p.a. and
0.95
% p.a. and the maturity is
5
,
7
and
10
years in each series, respectively.
20.1. Maturity of noncurrent installments
| 12.31.2024 | Gross debt | (-) Transaction cost | Net debt | ||||||||
| 2026 |
|
(
|
|
||||||||
| 2027 |
|
(
|
|
||||||||
| 2028 |
|
(
|
|
||||||||
| 2029 |
|
(
|
|
||||||||
| 2030 |
|
(
|
|
||||||||
| After 2030 |
|
(
|
|
||||||||
|
|
(
|
|
|||||||||
20.2. Changes in debentures
| Total | |||||
| Balance as of January 1, 2023 |
|
||||
| Funding |
|
||||
| (-) Transaction costs (a) |
(
|
||||
| Charges and monetary variations |
|
||||
| Payment – principal |
(
|
||||
| Payment – charges |
(
|
||||
|
Reclassification (b)
|
(
|
||||
| Balance as of December 31, 2023 |
|
||||
| Funding |
|
||||
| (-) Transaction costs |
(
|
||||
| Charges and monetary variations |
|
||||
| Payment – principal |
(
|
||||
| Payment – charges |
(
|
||||
|
Reclassification (b)
|
|
||||
| Balance as of December 31, 2024 |
|
||||
(a) Balance refers to the financial consideration (waiver) paid as a result of the process of transforming Copel into a Corporation.
(b) Reclassification to Liabilities classified as held for sale (Note 37).
20.3. Covenants
The issued debentures contain clauses that require the maintenance of certain economic and financial ratios within pre-determined parameters, requiring annual fulfillment and other conditions to be complied with, such as not changing the Company's interest in the capital stock that would represent change of control without prior consent from the debenture holders; not paying out dividends or interest on capital if it is in arrears in relation to honoring any of its financial obligations or not maintaining the financial ratios as determined without prior written consent of the debenture holders. The non-compliance with the contracted conditions may imply the need to request consent from the debenture holders or to declaration of early maturity of the debts.
F-57
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
On December 31, 2024, all financial indicators measured annually were fully complied, with the exception of the subsidiaries Asa Branca I, Asa Branca II, Asa Branca III, Ventos de Santo Uriel and Nova Eurus IV, which were exempt from complying with the ICSD in 2024, in accordance with BNDES letter AEC/DEENE2 No. 51/2024. In the context of the 1
st
Issue of Debentures of the Cutia Wind Complex, the Company received authorization on December 23, 2024, in accordance with the Minutes of the General Meeting of Debenture Holders (“AGD”), to temporarily replace the current ICSD calculation procedure with a calculation based on the consolidated financial statements of Companhia Paranaense de Energia - Copel until 2029. After considering the above, all agreed indicators and conditions were met at December 31, 2024.
The financial covenants contained in the debenture agreements are presented as follows:
| Company | Contractual Instrument | Annual financial ratio | Limit | ||||||||
| Copel GeT | 5th issue of Debentures |
Debt service coverage ratio (a) |
≥ 1,5 |
||||||||
| 6th issue of Debentures | |||||||||||
| 7th issue of Debentures | |||||||||||
| 8th issue of Debentures | |||||||||||
| 9th issue of Debentures | |||||||||||
| Copel DIS | 5th issue of Debentures | ||||||||||
| 6th issue of Debentures | |||||||||||
| 7th issue of Debentures | |||||||||||
| 8th issue of Debentures | |||||||||||
| 9th issue of Debentures | |||||||||||
| Copel Serviços | 1th issue of Debentures | ||||||||||
| Cutia | 1th issue of Debentures |
|
|
||||||||
| Nova Asa Branca I | 2nd issue of Debentures |
|
|
||||||||
| Nova Asa Branca II | |||||||||||
| Nova Asa Branca III | |||||||||||
| Nova Eurus IV | |||||||||||
| Ventos de Santo Uriel | |||||||||||
(a) Indicator calculated with the values from Copel’s consolidated financial statement.
21. Post-employment Benefits
The company sponsors pension plans for supplementary retirement and pension benefits and a health and dental care plan for its active employees and their legal dependents. The lifetime sponsorship of the Assistance Plan for retirees, pensioners and legal dependents only applies to participants in the Prosaúde II Plan. Fundação Copel de Previdência e Assistência is the entity that administers these plans.
21.1. Pension plan and Assistance Plan
The Unified Plan is a Defined Benefit plan - BD in which the income is predetermined, according to each individual's salary. This plan is closed for new participants since 1998.
The Plan III is a Defined Contribution plan - CD in the contributory phase and, after retirement, it becomes a Defined Benefit plan - BD.
Plan IV, the only plan available to new participants, is a Defined Contribution plan - DC in which the entity's legal or constructive obligation is limited to the amount it agrees to contribute to the fund. Therefore, the amount of the post-employment benefit received by the employee must be determined by the amount of contributions paid by the sponsoring entity and also by the employee, together with the return on investments resulting from the contributions. Consequently, the actuarial risk (the risk that the benefits will be lower than expected) and the investment risk (the risk that the assets invested will be insufficient to cover the expected benefits) are the responsibility of the employee.
The Company allocate resources for the coverage of healthcare expenses incurred by their employees and their dependents, within rules, limits and conditions set in ProSaúde II and ProSaúde III Assistance plans regulations. Coverage includes periodic medical exams in both plans and is extended to all retirees and pensioners for life only in the ProSaúde II plan.
F-58
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
21.2. Statement of financial position and statement of income
Amounts recognized in liabilities, under post-employment benefits, are summarized below:
| 12.31.2024 | 12.31.2023 | |||||||
| Pension plans |
|
|
||||||
| Healthcare plans |
|
|
||||||
|
|
|
|||||||
| Current |
|
|
||||||
| Noncurrent |
|
|
||||||
Amounts recognized in the statement of income (Note 29) are shown below:
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Employees | |||||||||||
| Pension plans |
|
|
|
||||||||
| Healthcare plan – post employment |
|
|
|
||||||||
| Healthcare plan – active employees |
|
|
|
||||||||
|
|
|
|
|||||||||
| Management | |||||||||||
| Pension plans |
|
|
|
||||||||
| Healthcare plan |
|
|
|
||||||||
|
|
|
|
|||||||||
|
|
|
|
|||||||||
21.3. Changes in post-employment benefits
| Balance as of January 1, 2023 |
|
||||
| Appropriation of actuarial calculation |
|
||||
| Appropriation of pension and healthcare contributions |
|
||||
| Adjustment related to actuarial (gains) losses |
|
||||
| Amortizations |
(
|
||||
| Reclassification (a) |
(
|
||||
| Balance as of December 31, 2023 |
|
||||
| Appropriation of actuarial calculation |
|
||||
| Appropriation of pension and healthcare contributions |
|
||||
| Adjustment related to actuarial (gains) losses |
(
|
||||
| Amortizations |
(
|
||||
| Balance as of December 31, 2024 |
|
||||
(a) The balance was reclassified to Liabilities classified as held for sale (Note 37).
21.4. Actuarial valuation
21.4.1. Actuarial assumptions
The actuarial assumptions used to determine the amounts of liabilities and costs are shown below:
F-59
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Consolidated | 2024 | 2023 | ||||||||||||
| Real | Nominal | Real | Nominal | |||||||||||
| Economic | ||||||||||||||
| Inflation p.a. |
|
|
% |
|
|
% | ||||||||
| Expected rate of discount/return p.a. | ||||||||||||||
| Unified Plan - Defined Benefit |
|
% |
|
% |
|
% |
|
% | ||||||
| Unified Plan - Balance |
|
% |
|
% |
|
% |
|
% | ||||||
| Plan III |
|
% |
|
% |
|
% |
|
% | ||||||
| Assistance Plan |
|
% |
|
% |
|
% |
|
% | ||||||
| Salary growth/medical costs | ||||||||||||||
| Unified Plan p.a. |
|
% |
|
% |
|
% |
|
% | ||||||
| Plan III p.a. |
|
% |
|
% |
|
% |
|
% | ||||||
| Assistance Plan - Aging Factor |
|
% |
|
|
% |
|
||||||||
| Demographic | ||||||||||||||
| Mortality Table |
|
|
||||||||||||
| Mortality table of individuals with permanent disability |
|
|
||||||||||||
| Table of new disability benef it vested |
|
|
||||||||||||
21.4.2. Number of participants and beneficiaries
| Consolidated | Social Security Plans | |||||||||||||||||||
| Unified Plan | Plan III | Assistance Plan | ||||||||||||||||||
| 12.31.2024 | 12.31.2023 | 12.31.2024 | 12.31.2023 | 12.31.2024 | 12.31.2023 | |||||||||||||||
| Number of active participants |
|
|
|
|
|
|
||||||||||||||
| Number of Inactive participants |
|
|
|
|
|
|
||||||||||||||
| Number of dependent people |
|
|
|
|
|
|
||||||||||||||
| Total |
|
|
|
|
|
|
||||||||||||||
21.4.3. Life expectancy after the average age of participants - Annuity Table AT-2000 (in years)
| Consolidated | Unified Plan | Plan III | ||||||
| As of December 31, 2024 | ||||||||
| Retired participants |
|
|
||||||
| Pensioner participants |
|
|
||||||
| As of December 31, 2023 | ||||||||
| Retired participants |
|
|
||||||
| Pensioner participants |
|
|
||||||
The average age of inactive participants of the healthcare and pension plans is
68.01
and
68.33
years, respectively.
21.4.4. Actuarial evaluation
As of December 31, 2024, the Unified Plan and Plan III demonstrated a surplus. However, according to current legislation, the company is not permitted to record assets on its balance sheet.
| Unified Plan | Plan III | Assistance Plan | 12.31.2024 | 12.31.2023 | |||||||||||||
| Total liabilities or partially covered |
|
|
|
|
|
||||||||||||
| Fair value of the plan assets |
(
|
(
|
(
|
(
|
(
|
||||||||||||
| Plan coverage status |
(
|
(
|
|
(
|
|
||||||||||||
| Unrecognized asset |
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|||||||||||||
The adjustments to assistance plan liabilities, as outlined in the actuarial report, are presented in the Statement of Comprehensive Income.
F-60
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
21.4.5. Changes in actuarial liabilities
| Consolidated | Unified Plan | Plan III | Assistance Plan | ||||||||
| Present value of net actuarial obligations as of January 1, 2023 |
|
|
|
||||||||
| Cost of services |
|
|
|
||||||||
| Cost of interest |
|
|
|
||||||||
| Benefits paid |
(
|
(
|
(
|
||||||||
| Actuarial (gain) losses |
|
|
|
||||||||
| Discontinued Operations balance adjustments |
(
|
(
|
(
|
||||||||
| Present value of net actuarial obligations as of December 31, 2023 |
|
|
|
||||||||
| Cost of services |
(
|
|
|
||||||||
| Cost of interest |
|
|
|
||||||||
| Benefits paid |
(
|
(
|
(
|
||||||||
| Actuarial (gain) losses |
(
|
|
(
|
||||||||
| Present value of net actuarial obligations as of December 31, 2024 |
|
|
|
||||||||
21.4.6. Changes in actuarial assets
| Consolidated | Unified Plan | Plan III | Assistance Plan | ||||||||
| Fair value of the Plan's assets as of January 1, 2023 |
|
|
|
||||||||
| Return estimated for assets |
|
|
|
||||||||
| Contributions and distributions |
|
|
|
||||||||
| Benefits paid |
(
|
(
|
(
|
||||||||
| Actuarial gain (losses) |
|
|
(
|
||||||||
| Discontinued Operations balance adjustments |
(
|
(
|
|
||||||||
| Fair value of the Plan's assets as of December 31, 2023 |
|
|
|
||||||||
| Return estimated for assets |
|
|
|
||||||||
| Contributions and distributions |
|
|
|
||||||||
| Benefits paid |
(
|
(
|
(
|
||||||||
| Actuarial gain (losses) |
(
|
|
|
||||||||
| Fair value of the Plan's assets as of December 31, 2024 |
|
|
|
||||||||
21.4.7. Estimated costs
The estimated net periodic plan costs (income) for 2025 for each plan are shown below:
| Consolidated | Unified Plan | Plan III | Assistance Plan | ||||||||
| Cost of current service |
(
|
(
|
|
||||||||
| Estimated cost of interest |
|
|
|
||||||||
| Expected return on plan assets |
(
|
(
|
(
|
||||||||
| Costs (income or loss) |
(
|
(
|
|
||||||||
In view of the current surplus of pension plans, the Company will not record the estimated revenues and costs presented in the table above for the Unified Plan and Plan III, in accordance with legislation that does not allow for reductions in contributions or reimbursements to the Company.
21.4.8. Sensitivity analysis
The table below presents the balance of the obligations and service cost of the pension and assistance plans, along with the impact of changes in significant actuarial assumptions.
F-61
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Consolidated | Projected scenarios | |||||||
| Increase by 0.5% | Decrease in 0.5% | |||||||
| Sensitivity of long-term interest rate | ||||||||
| Impacts on the obligations of the pension |
|
|
||||||
| Impacts on the obligations of healthcare program |
|
|
||||||
| Sensitivity of growth rate of the medical costs | ||||||||
| Impacts on the obligations of healthcare program |
|
|
||||||
| Impact on cost of service for the following financial year of healthcare program |
|
|
||||||
| Sensitivity of the service cost | ||||||||
| Impacts on the obligations of the pension |
|
|
||||||
| Impacts on the obligations of healthcare program |
|
|
||||||
21.4.9. Benefits payable
The estimated benefits to be paid in subsequent fiscal years are shown below:
| Consolidated | Unified Plan | Plan III | Assistance Plan | Total | ||||||||||
| 2025 |
|
|
|
|
||||||||||
| 2026 |
|
|
|
|
||||||||||
| 2027 |
|
|
|
|
||||||||||
| 2028 |
|
|
|
|
||||||||||
| 2029 |
|
|
|
|
||||||||||
| 2030 a 2054 |
|
|
|
|
||||||||||
21.4.10. Asset allocation and investment strategy
The table below illustrates the asset allocation for the pension and assistance plans as of the end of this year and the target for next year.
| Consolidated | Goal for 2025 (a) | 2024 | ||||||
| Fixed income |
|
% |
|
% | ||||
| Variable income |
|
% |
|
% | ||||
| Loans |
|
% |
|
% | ||||
| Real estate |
|
% |
|
% | ||||
| Investment structuring |
|
% |
|
% | ||||
| Investments abroad |
|
% |
|
% | ||||
|
|
% |
|
% | |||||
(a) Target based on the total investment of each plan.
In addition, information on the allocation of assets of pension plans sponsored by the Company:
| Consolidated | Unified Plan | Plan III | ||||||||||||
| target for 2025 | minimum (%) | target for 2025 | minimum (%) | |||||||||||
| Fixed income |
|
% |
|
% |
|
% |
|
% | ||||||
| Variable income |
|
% |
|
% |
|
% |
|
% | ||||||
| Loans |
|
% |
|
% |
|
% |
|
% | ||||||
| Real estate |
|
% |
|
% |
|
% |
|
% | ||||||
| Investment structuring |
|
% |
|
% |
|
% |
|
% | ||||||
| Investments abroad |
|
% |
|
% |
|
% |
|
% | ||||||
Management of Fundação Copel decided to keep a more conservative approach investing in variable income in relation to the allowed legal limit, which is 70%.
21.4.11. Additional information
Contributions to Plan III (variable contribution plan) for all active employees totaled R$
64,825
in 2024 (R$
70,203
in 2023).
F-62
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
22. Research and Development and Energy Efficiency
| Disbursed and not completed | Balance to be collected | Balance to disburse | Balance as of | Balance as of | |||||||||||||
| 12.31.2024 | 12.31.2023 | ||||||||||||||||
| Research and Development – RD | |||||||||||||||||
| FNDCT |
|
|
|
|
|
||||||||||||
| MME |
|
|
|
|
|
||||||||||||
| RD |
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|||||||||||||
| Energy efficiency program – EEP | |||||||||||||||||
| Procel |
|
|
|
|
|
||||||||||||
| EEP |
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|||||||||||||
| Current |
|
|
|||||||||||||||
| Noncurrent |
|
|
|||||||||||||||
National Fund for Scientific and Technological Development – FNDCT
National Program of Electricity Conservation – Procel
In accordance with Law No. 9,991/2000 and supplementary regulations, concession operators and licensees of electric power generation and transmission are required to allocate annually the percentage of 1% of their net operating regulatory revenue to research and development of the electricity sector activities, and the electric power distribution concession operators must segregate this same percentage into the research and development and energy efficiency programs of the electricity sector.
22.1. Changes in RD and EEP balances
| FNDCT | MME | RD | Procel | EEP | Total | |||||||||||||||
| Balance as of January 1, 2023 |
|
|
|
|
|
|
||||||||||||||
| Additions |
|
|
|
|
|
|
||||||||||||||
| Performance agreement |
|
|
|
|
|
|
||||||||||||||
| Interest rate (Note 30) |
|
|
|
(
|
|
|
||||||||||||||
| Transfers (a) |
|
|
|
|
|
|
||||||||||||||
| Payments |
(
|
(
|
(
|
|
(
|
(
|
||||||||||||||
| Concluded projects |
|
|
(
|
|
(
|
(
|
||||||||||||||
| Reclassification (b) |
|
|
(
|
|
|
(
|
||||||||||||||
| Balance as of December 31, 2023 |
|
|
|
|
|
|
||||||||||||||
| Additions |
|
|
|
|
|
|
||||||||||||||
| Performance agreement |
|
|
|
|
|
|
||||||||||||||
| Interest rate (Note 30) |
|
|
|
|
|
|
||||||||||||||
| Transfers |
|
|
|
(
|
|
|
||||||||||||||
| Payments |
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||
| Concluded projects |
|
|
(
|
|
(
|
(
|
||||||||||||||
| Balance as of December 31, 2024 |
|
|
|
|
|
|
||||||||||||||
(a) Transfers to assets - Law No. 14,514/2023
(b) Reclassification to Liabilities classified as held for sale (Note 37).
F-63
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
23. Accounts Payable Related to Concessions
| Company | Grant | Signature | Closing | Discount rate | Annual Adjustment | 12.31.2024 | 12.31.2023 | |||||||||||||||||||
| HPP Mauá | Copel GeT |
|
|
|
|
|
|
|
||||||||||||||||||
| HPP Colider (a) | Copel GeT |
|
|
|
|
|
|
|
||||||||||||||||||
| HPP Baixo Iguaçu | Copel GeT |
|
|
|
|
|
|
|
||||||||||||||||||
| HPP Guaricana (a) | Copel GeT |
|
|
|
|
|
|
|
||||||||||||||||||
| HPP Fundão and HPP Santa Clara | Elejor |
|
|
|
|
|
|
|
||||||||||||||||||
| HPP Salto Caxias | Copel GeT |
|
|
|
|
|
|
|
||||||||||||||||||
| HPP Segredo | Copel GeT |
|
|
|
|
|
|
|
||||||||||||||||||
| HPP Foz do Areia | FDA |
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|||||||||||||||||||||||||
| Current |
|
|
||||||||||||||||||||||||
| Noncurrent |
|
|
||||||||||||||||||||||||
(a) Reclassification to Liabilities classified as held for sale (Note 37).
Discount rate applied to calculate present value: Real and net discount rate, compatible with the estimated long-term rate, not being linked to the expectation of return from the project.
Payment to the federal government: Monthly installments equivalent to 1/12 of the annual payment restated, as defined in the concession agreement.
The new concession contracts for the Foz do Areia (FDA), Segredo and Salto Caxias power plants, signed on November 19, 2024, were agreed under the Independent Energy Production (PIE) exploration regime and will have monthly payments for the Use of Public Property (UBP) for
five years
(Note 1). Therefore, at the time the concession contracts were signed, the obligation was recorded against intangible assets, corresponding to the present value of the cash flow of the estimated future payments.
23.1. Changes in accounts payable related to concession
| Balance as of January 1, 2023 |
|
||||
| Additions |
|
||||
| Adjust to present value |
(
|
||||
| Monetary variations |
|
||||
| Payments |
(
|
||||
| Balance as of December 31, 2023 |
|
||||
| Additions (Note 16.2) |
|
||||
| Adjustment to present value |
|
||||
| Monetary variations |
|
||||
| Payments |
(
|
||||
| Reclassification (a) |
(
|
||||
| Balance as of December 31, 2024 |
|
||||
(a) Reclassification to Liabilities classified as held for sale (Note 37).
23.2. Nominal value and present value of accounts payable related to concessions
| Nominal value | Present value | |||||||
| 2025 |
|
|
||||||
| 2026 |
|
|
||||||
| 2027 |
|
|
||||||
| 2028 |
|
|
||||||
| After 2028 |
|
|
||||||
|
|
|
|||||||
F-64
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
24. Right-of-use Asset and Lease Liability
24.1. Right-of-use asset
| Balance as of January 1, 2024 | Additions | Amortization | Write-offs | Reclassification (a) | Balance as of December 31, 2024 | |||||||||||||||
| Real estate |
|
|
(
|
(
|
(
|
|
||||||||||||||
| Vehicles |
|
|
(
|
(
|
(
|
|
||||||||||||||
| Equipment |
|
|
(
|
|
|
|
||||||||||||||
|
|
|
(
|
(
|
(
|
|
|||||||||||||||
(a) Reclassification to Assets classified as held for sale (Note 37)
| Balance as of January 1, 2023 | Additions | Amortization | Write-offs | Reclassification (a) | Balance as of December 31, 2023 | |||||||||||||||
| Real estate |
|
|
(
|
(
|
(
|
|
||||||||||||||
| Vehicles |
|
|
(
|
|
(
|
|
||||||||||||||
| Equipment |
|
|
(
|
(
|
(
|
|
||||||||||||||
|
|
|
(
|
(
|
(
|
|
|||||||||||||||
(a) Reclassification to Assets classified as held for sale (Note 37)
24.2. Lease liability
24.2.1. Changes in lease liability
| Balance as of January 1, 2023 |
|
||||
| Additions |
|
||||
| Charges |
|
||||
| Payment – principal |
(
|
||||
| Payment – charges |
(
|
||||
| Write-offs |
(
|
||||
| Reclassification (a) |
(
|
||||
| Balance as of December 31, 2023 |
|
||||
| Additions |
|
||||
| Charges |
|
||||
| Payment – principal |
(
|
||||
| Payment – charges |
(
|
||||
| Write-offs or disposal |
(
|
||||
|
Reclassification (a)
|
(
|
||||
| Balance as of December 31, 2024 |
|
||||
| Current |
|
||||
| Noncurrent |
|
||||
(a) Reclassification to Liabilities classified as held for sale (Note 37).
The Company defines the discount rate based on the nominal interest rate applied to the last fundraising, disregarding subsidized or incentivized funding. The interest rates applied range from
3.58
% to
15.55
% p.a.
24.2.2. Maturity of noncurrent installments
| 2026 |
|
||||
| 2027 |
|
||||
| 2028 |
|
||||
| 2029 |
|
||||
| 2030 |
|
||||
| After 2030 |
|
||||
| Undiscounted amounts |
|
||||
| Imputed interest |
(
|
||||
| Lease liabilities balance |
|
||||
F-65
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
24.2.3. Potential PIS/Cofins recoverable rights
The following is an indicative table of the potential PIS/Cofins right to recover embedded in the lease consideration according to the periods scheduled for payment.
| Cash Flows | Nominal value | Present value | ||||||
| Lease consideration |
|
|
||||||
| Potencial Pis/Cofins |
|
|
||||||
24.3. Impact of forecast inflation on discounted cash flows
| Balance in accordance with IFRS 16 | Inflation projected balance | % | |||||||||
| Lease liabilities |
|
|
|
% | |||||||
| Right to use assets |
|
|
|
% | |||||||
| Financial expense |
|
|
|
% | |||||||
| Amortization expense |
|
|
|
% | |||||||
In the measurement and remeasurement of lease liabilities and the right-of-use assets, the discounted cash flow technique is used without considering projected future inflation, in accordance with CPC 06 (R2) / IFRS 16. In view of the unpredictability of long-term interest rates in the Brazilian economic scenario, the Company presents in the table above the comparative balances between the amount recorded in accordance with the standard, and the amount that would be recorded if projected inflation were considered.
24.4. Commitments from leases and rentals
| Less than 1 year | 1 to 5 years | Over 5 years | 12.31.2024 | |||||||||||
| Commitments from leases and rentals |
|
|
|
|
||||||||||
For leases of low-value assets, such as computers, printers and furniture, short-term leases, as well as land lease contracts for the development of wind power generation projects, for which payment is made on the basis of variable remuneration, the amounts are recognized in the income statement as operating costs and/or expenses (Note 29.6).
24.5. Receivables from leases
| Less than | Over | Total | ||||||||||||
| 1 year | 1 to 5 years | 5 years | 12.31.2024 | |||||||||||
| Facilities sharing |
|
|
|
|
||||||||||
25. Other Accounts Payable
| 12.31.2024 | 12.31.2023 | |||||||
| Generation deviation – wind projects (Note 32.2.9) |
|
|
||||||
| Judicial settlement (a) |
|
|
||||||
| Payments/returns to consumers |
|
|
||||||
| Public lighting rate collected |
|
|
||||||
| Aneel Order No. 084/2017 provision |
|
|
||||||
| Pledges in guarantee |
|
|
||||||
| Financial offset for the use of water resources |
|
|
||||||
|
Other liabilities (b)
|
|
|
||||||
|
|
|
|||||||
| Current |
|
|
||||||
| Noncurrent |
|
|
||||||
(a) The balance includes the judicial agreement resulting from the arbitral process (Note 25.1).
(b) The balance for 2023 includes the advance received for the UEGA sale transaction, in the amount of R$
58,132
in the Consolidated (Note 37).
F-66
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
25.1. Closure of arbitral proceedings
On January 25, 2024, according to Material Fact 01/24, an agreement was reached involving an arbitration proceeding in which the authors claimed damages against the Company. The process began in 2015 as a result of a dispute related to a term of commitment signed between the authors and Copel in December 2012, which, in accordance with the law, was handled in confidence at the Brazil-Canada Arbitration and Mediation Center. After negotiations between the parties, a settlement was reached with the approval of the arbitral tribunal in the sense of a general and reciprocal discharge between all parties with the definitive closure of the claim.
Copel agreed to pay R$
672,000
in two installments. The balance that was recorded as Provision for legal claim was reclassified to Other accounts payable. The first installment in the amount of R$
336,000
was paid on January 31, 2024 and the second and final installment, updated by Selic rate, was paid on March 31, 2025. Throughout the arbitration procedure, the Company made its best efforts to refute the requests and mitigate the damages resulting from the decisions that followed until the arbitration award settlement phase and, finally, to reach the best possible agreement while preserving Copel’s interests.
F-67
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
26. Provisions for Legal Claims and Contingent Liabilities
The Company and its subsidiaries are responsible for several legal and administrative proceedings before different courts. Based on assessments made by the Company's legal counsel, Management makes provisions for legal claims in which the losses are rated probable when the criteria for recognition of provisioning described in Note 4.10 are met.
The Company's management believes it is impracticable to provide information regarding the timing of any cash outflows related to the lawsuits for which the Company and its subsidiaries are responsible on the date of preparation of the financial statements, in view of the unpredictability and dynamics of the Brazilian judicial, tax and regulatory systems, and that the final resolution depends on the conclusions of the lawsuits. For this reason, this information is not provided.
26.1. Change in provision for legal claims
| Income | |||||||||||||||||||||||||||||
| Balance as of January 1, 2024 | Provision for litigations | Construction cost | Monetary restatement | Additions (Reversals) to assets | Transfers/Others (a) | Balance as of December 31, 2024 | |||||||||||||||||||||||
| Additions | Reversals | Additions | Settlements | ||||||||||||||||||||||||||
| Tax | |||||||||||||||||||||||||||||
| Cofins |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
| Others |
|
|
(
|
|
|
|
(
|
|
|
||||||||||||||||||||
|
|
|
(
|
|
|
|
(
|
|
|
|||||||||||||||||||||
| Labors |
|
|
(
|
|
|
|
(
|
|
|
||||||||||||||||||||
| Employee benefits |
|
|
(
|
|
|
|
(
|
|
|
||||||||||||||||||||
| Civil | |||||||||||||||||||||||||||||
| Civil and administrative claims |
|
|
(
|
|
|
(
|
(
|
(
|
|
||||||||||||||||||||
| Easements |
|
|
(
|
(
|
|
|
(
|
|
|
||||||||||||||||||||
| Expropriations and property |
|
|
(
|
|
|
|
(
|
(
|
|
||||||||||||||||||||
| Customers |
|
|
(
|
|
(
|
|
(
|
|
|
||||||||||||||||||||
| Environmental |
|
|
(
|
|
(
|
|
|
|
|
||||||||||||||||||||
|
|
|
(
|
(
|
|
|
(
|
(
|
|
|||||||||||||||||||||
| Regulatory |
|
|
(
|
|
|
|
(
|
|
|
||||||||||||||||||||
|
|
|
(
|
(
|
|
|
(
|
(
|
|
|||||||||||||||||||||
| Current |
|
|
|||||||||||||||||||||||||||
| Noncurrent |
|
|
|||||||||||||||||||||||||||
(a) Reclassification mainly to Other accounts payable (Note 25).
F-68
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Balance as of January 1, 2023 | Income | Additions (Reversals) to assets | Settlements | Transfers/Others (a) | Balance as of December 31, 2023 | ||||||||||||||||||||||||
| Provision for litigations | Construction cost | Monetary restatement | |||||||||||||||||||||||||||
| Additions | Reversals | Additions | |||||||||||||||||||||||||||
| Tax | |||||||||||||||||||||||||||||
| Cofins |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
| Others |
|
|
(
|
|
(
|
|
(
|
|
|
||||||||||||||||||||
|
|
|
(
|
|
|
|
(
|
|
|
|||||||||||||||||||||
| Labors |
|
|
(
|
|
|
(
|
(
|
(
|
|
||||||||||||||||||||
| Employee benefits |
|
|
(
|
|
|
|
(
|
|
|
||||||||||||||||||||
| Civil | |||||||||||||||||||||||||||||
| Civil and administrative claims |
|
|
(
|
|
|
|
(
|
(
|
|
||||||||||||||||||||
| Easements |
|
|
|
(
|
|
|
(
|
|
|
||||||||||||||||||||
| Expropriations and property |
|
|
(
|
(
|
(
|
(
|
|
|
|
||||||||||||||||||||
| Customers |
|
|
(
|
|
|
|
|
|
|
||||||||||||||||||||
| Environmental |
|
|
(
|
|
(
|
|
(
|
|
|
||||||||||||||||||||
|
|
|
(
|
(
|
|
(
|
(
|
(
|
|
|||||||||||||||||||||
| Regulatory |
|
|
(
|
|
|
|
(
|
|
|
||||||||||||||||||||
|
|
|
(
|
(
|
|
(
|
(
|
(
|
|
|||||||||||||||||||||
| Current |
|
|
|||||||||||||||||||||||||||
| Noncurrent |
|
|
|||||||||||||||||||||||||||
(a) Reclassification mainly to Liabilities associated with assets classified as held for sale (Note 37) and recognition of loss in the business combination.
26.2. Details of provisions for legal claims and contingent liabilities
The table below provides a detailed breakdown of the provisions for legal claims recorded, along with the amounts of contingent liabilities, which are present obligations arising from past events, but without provisions recognized because it is not probable an outflow of resources that incorporate economic benefits to settle the obligation.
F-69
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Provisions for legal claims | Contingent liabilities | ||||||||||||||||
| Description | 12.31.2024 | 12.31.2023 | 12.31.2024 | 12.31.2023 | |||||||||||||
| Tax | |||||||||||||||||
| Cofins |
|
|
|
|
|
||||||||||||
| INSS |
|
|
|
|
|
||||||||||||
| Federal taxes |
|
|
|
|
|
||||||||||||
| ICMS (VAT) |
|
|
|
|
|
||||||||||||
| IPTU |
|
|
|
|
|
||||||||||||
| ISS |
|
|
|
|
|
||||||||||||
| Other |
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||||
| Labor |
|
|
|
|
|
||||||||||||
| Employee benefits |
|
|
|
|
|
||||||||||||
| Regulatory | |||||||||||||||||
| ESBR |
|
|
|
|
|
||||||||||||
| Colíder exclusion of liability |
As a result of the judicial decision that excluded the period of delay in the Colíder HPP construction from the responsibility for the delivery of energy contracted in the Regulated Contracting Environment (ACR), the CCEE proceeded with the credit, valued at the PLD, of the energy previously backed to fulfill the ACR contracts. However, in the event of failure in the legal action, the Company must return the amounts credited, adjusted by the IGPM.
|
|
|
|
|
||||||||||||
| Other |
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||||
| (continued) | |||||||||||||||||
F-70
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Provisions for legal claims | Contingent liabilities | ||||||||||||||||
| Description | 12.31.2024 | 12.31.2023 | 12.31.2024 | 12.31.2023 | |||||||||||||
| Civil | |||||||||||||||||
| Tobacco growers |
|
|
|
|
|
||||||||||||
| Arbitration |
|
|
|
|
|
||||||||||||
| Civil and administrative law |
|
|
|
|
|
||||||||||||
| Indemnification to third parties (civil) |
|
|
|
|
|
||||||||||||
| Easements |
|
|
|
|
|
||||||||||||
| Expropriations and property |
|
|
|
|
|
||||||||||||
| Consumers |
|
|
|
|
|
||||||||||||
| Environmental |
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||||
|
|
|
|
|
||||||||||||||
F-71
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
27. Equity
27.1. Capital
The share capital is represented by ordinary shares, class "A" and "B" preferred shares and
1
special class preferred share held by the State of Paraná. At General Meetings, each ordinary share has the right to one vote, respecting the limitations established in Article 6 of the Bylaws, so that any shareholder or group of shareholders, Brazilian or foreign, public or private, is prohibited from exercising voting rights in excess of the equivalent of 10% of the total number of shares into which Copel's voting capital is divided, regardless of their stake in the share capital.
Class “A” and “B” preferred shares have restricted voting rights as per § 7, Article 5, of the Bylaws. According to Article 17 of Federal Law No. 6,404/1976, dividends paid to preferred shares must be at least 10% higher than those paid to common shares. Class “A” preferred shares have priority in the reimbursement of capital and in the distribution of minimum dividends of 10% p.a. (non-cumulative), calculated based on the capital represented by this class of shares. Class “B” preferred shares have priority in the reimbursement of capital and the right to the distribution of dividends, calculated as 25% of adjusted profit or loss for the year, pursuant to the corporate legislation and to the Company’s Bylaws, calculated proportionately to the capital represented by the shares of this class. Dividends for Class “B” have priority only over the common shares and are only paid out of the remaining profits payment of priority dividends of class “A” shares.
The special class preferred share was created under the terms of State Law No. 21,272/2022. As long as the State of Paraná holds shares representing at least 10% of the total shares issued by the Company, this share will grant veto power in General Meeting deliberations that authorize the administrators to approve and execute the Annual Investments by Copel DIS, aimed at changing the Company's name and headquarters, and amending the clauses of the bylaws related to the limitation so that no shareholder or group of shareholders will exercise votes corresponding to more than 10% of the total and the celebration of shareholder agreements for the exercise of voting rights.
The table below presents the composition of the share capital by shares (without nominal value):
| 12.31.2024 | Number of shares in units | |||||||||||||||||||||||||||||||
| Common shares | Preferred shares | Total | ||||||||||||||||||||||||||||||
| Class "A" | Class "B" | Special class | ||||||||||||||||||||||||||||||
| number of shares | % | number of shares | % | number of shares | % | number of shares | % | number of shares | % | |||||||||||||||||||||||
| State of Paraná |
|
|
– | – |
|
|
|
|
|
|
||||||||||||||||||||||
| BNDESPAR |
|
|
– | – |
|
|
– | – |
|
|
||||||||||||||||||||||
| Other shareholders |
|
|
|
|
|
|
– | – |
|
|
||||||||||||||||||||||
| Treasury |
|
|
— | — |
|
|
– | – |
|
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
F-72
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
27.2. Equity valuation adjustments
| Balance as of January 1, 2023 |
|
||||
| Actuarial liabilities | |||||
| Post employment benefits |
(
|
||||
| Taxes on adjustments |
|
||||
| Realization of equity evaluation adjustment | |||||
| Deemed cost of fixed assets |
(
|
||||
| Taxes on adjustments |
|
||||
| Other adjustments | |||||
| Adjustments on financial assets - subsidiaries |
(
|
||||
| Taxes on other adjustments |
|
||||
| Attributed to non-controlling interest |
|
||||
| Balance as of December 31, 2023 |
|
||||
| Actuarial liabilities | |||||
| Post employment benefits |
|
||||
| Taxes on adjustments |
(
|
||||
| Realization of equity evaluation adjustment | |||||
| Deemed cost of fixed assets |
(
|
||||
| Taxes on adjustments |
|
||||
| Actuarial gain – realization |
|
||||
| Other adjustments | |||||
| Gains on financial assets - subsidiaries |
(
|
||||
| Taxes on other adjustments |
|
||||
| Attributed to non-controlling interest |
|
||||
| Balance as of December 31, 2024 |
|
||||
(a) The balance as of December 31, 2023 includes R$
1,424
of adjustment to the equity valuation of the discontinued operation. The variation in the equity valuation adjustment of the discontinued operation in 2023 resulting from actuarial liability adjustments was R$
1,650
. In 2024, there was no change in the equity valuation adjustment of the discontinued operation until the date of completion of the divestment (Note 37).
Fair values of fixed assets - deemed costs - were recognized on the first-time adoption of IFRS. The line item “Equity value adjustments” was the balancing item of this adjustment, net of deferred income tax and social contribution. The realization of such adjustments is recorded in the retained earnings line item, to the extent of the depreciation or possible disposal of the measured fixed assets. Adjustments arising from the changes in fair value involving financial assets, as well as actuarial gains and losses, are also recorded in this line item.
27.3. Legal reserve and profit retention reserve
The legal reserve is constituted based on
5
% of the net income for the year, before any allocation, limited to
20
% of the share capital.
The profit retention reserve aims to cover the Company's investment program, pursuant to article 196 of Law 6,404/1976, and is constituted on the basis of the Capital Budget proposed by the Board of Directors for resolution by the General Meeting.
F-73
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
27.4. Proposed dividend distribution
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Calculation basis for dividends | |||||||||||
| Net income for the year |
|
|
|
||||||||
| Legal Reserve (5%) |
(
|
(
|
(
|
||||||||
| Realization of equity evaluation adjustment |
|
|
|
||||||||
|
|
|
|
|||||||||
| Proposed dividends | |||||||||||
| Interest on own capital – gross value |
|
|
|
||||||||
| Interim dividends |
|
|
|
||||||||
| Dividends – PNA shares |
|
|
|
||||||||
| Additional proposed dividends |
|
|
|
||||||||
| Gross value of dividends per class of shares: | |||||||||||
| Ordinary shares |
|
|
|
||||||||
| Class “A” preferred shares |
|
|
|
||||||||
| Class “B” preferred shares |
|
|
|
||||||||
| Gross value of dividends per share (a) | |||||||||||
| Ordinary shares |
|
|
|
||||||||
| Class “A” preferred shares |
|
|
|
||||||||
| Class “B” preferred shares |
|
|
|
||||||||
|
Gross value of dividends per share – Units (b)
|
|
|
|
||||||||
(a) Values calculated based on the composition of the share capital on 12.31.2024
(b) The Units program was discontinued in December/2023.
Pursuant to the legal and statutory provisions in force and management’s resolution, the basis for calculating dividends is obtained from the adjusted net income that corresponds to the net income for the year less the portion allocated to the legal reserve, plus the realization amount of equity adjustments for the year.
On September 11, 2024, Copel's Board of Directors authorized the distribution of interim earnings for the first half of 2024, amounting to R$
485,112
paid on November 29, 2024, of which R$
202,112
in dividends and R$
283,000
in the form of JSCP (Interest on equity). On November 25, 2024, Copel's Board of Directors approved the distribution of dividends in the amount of R$
600,000
, paid on December 23, 2024, in the form of JSCP. Of this amount, R$
485,112
was paid to the income statement for the year and R$
114,888
to retained earnings reserves from previous years.
These dividend and JSCP amounts, net of withholding taxes, were allocated to the mandatory dividend for 2024, in accordance with the criteria established in the Company's bylaws. The amount of R$
1,250,025
in additional dividends will be proposed at the Annual General Meeting, which will decide on the allocation of the 2024 result. Of this amount, of which R$
672,455
will be allocated to the result for the year and R$
577,570
to retained earnings reserves from previous years.
F-74
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
27.5. Earnings per share - basic and diluted
| Continuing operations |
Discontinued
operations |
12.31.2024 | Continuing operations | Discontinued operations | 12.31.2023 | Continuing operations | Discontinued operations | 12.31.2022 | |||||||||||||||||||||
| Basic and diluted numerator | |||||||||||||||||||||||||||||
| Basic and diluted earnings allocated by classes of shares, allocated to controlling shareholders: | |||||||||||||||||||||||||||||
| Common shares |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
| Class “A” preferred shares |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
| Class “B” preferred shares |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
(
|
|
|||||||||||||||||||||
| Basic and diluted denominator | |||||||||||||||||||||||||||||
| Weighted average of shares (in units): | |||||||||||||||||||||||||||||
| Common shares |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
| Class “A” preferred shares |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
| Class “B” preferred shares |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Basic earnings per share attributable to controlling shareholders | |||||||||||||||||||||||||||||
| Common shares |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
| Class “A” preferred shares |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
| Class “B” preferred shares |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
| Diluting effect ILP program | |||||||||||||||||||||||||||||
| Common shares |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
| Class “A” preferred shares |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
| Class “B” preferred shares |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Diluted earnings per share attributable to controlling shareholders (a) | |||||||||||||||||||||||||||||
| Common shares |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
| Class “A” preferred shares |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
| Class “B” preferred shares |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
(a) No instruments were excluded from diluted earnings per share on basis of being antidilutive.
27.6. Long-Term Incentive Plan - ILP
On April 22, 2024, the Extraordinary General Meeting approved the “Plan for the Granting of Restricted Shares and Performance Shares” whose objectives are: (i) aligning the compensation of the management and key positions with Copel's long-term objectives; (ii) link part of the compensation to the Company's value generation; (iii) foster a culture of meritocracy and high performance in the Company; and (iv) retain and attract talent that adds value to the Company.
The Plan is managed by the Board of Directors, with support from the People Committee. The members of the Board of Directors - CAD are eligible only to be granted restricted shares and the Directors and Employees are eligible to be granted both restricted shares and restricted shares for performance.
Granting of restricted shares
Within the scope of the Copel Plan, restricted shares may be granted in a number corresponding to up to 0.2% of the Company's share capital. The acquisition of rights occurs after 2 years from the date of granting, in compliance with the terms and conditions set forth in the plan, programs and specific contracts, except for the first grant signed in 2024 for members of the Board of Directors, which has a term equal to the remaining period of the current terms of office.
The shares received by participants are subject to a restriction period, starting from their delivery, for a period defined by the Board of Directors, with a minimum of 2 years for participants who are Board Members. During the restriction period, the participant will be entitled to the proceeds corresponding to the shares, and may also exercise the political rights of the share without any restriction.
As of December 31, 2024, only the restricted share grants detailed in the table below had been signed, and the expense recognized in the income statement for the year against Equity was R$
5,595
.
F-75
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Shares granted |
Fair value
R$ (*) |
CAD approval | Granting and start of vesting |
Acquisition of rights
(vesting date) |
Restriction until | Status | ||||||||||||||
|
|
|
|
|
05.01.2025 |
|
|
||||||||||||||
|
|
|
|
|
10.25.2025 |
|
|
||||||||||||||
|
|
|
|
|
10.25.2026 |
|
|
||||||||||||||
|
|
|
|
|
10.25.2027 |
|
|
||||||||||||||
| (*) Calculation method: Price of common shares on the date of grant, adjusted for expected dividends | ||||||||||||||||||||
27.7. Treasury shares
On November 25, 2024, in accordance with Material Fact 09/24, the Board of Directors approved the creation of the first Share Buyback Program for Common and Preferred Class B Shares, issued by the Company itself, with the aim of keeping them in treasury, canceling them or selling them, without reducing the Company's share capital, as well as complying with the Performance Shares plan.
In December 2024, the first repurchase of
5,698,400
own shares was made on the [B]³ S.A. - Brasil, Bolsa, Balcão at market price. The total amount paid for the shares was R$
50,044
, which is shown as a reduction in Equity. The Company has 18 months from the approval of the program to cancel, resell or comply with the share grant plan.
28. Net Operating Revenue
| Gross revenues | PIS/Pasep and Cofins | ICMS (VAT) | Sectorial charges | Service tax (ISSQN) | Net revenue | |||||||||||||||||||||
| 12.31.2024 | 12.31.2023 | 12.31.2022 | ||||||||||||||||||||||||
| Electricity sales to final customers |
|
(
|
(
|
(
|
|
|
|
|
||||||||||||||||||
| Electricity sales to distributors |
|
(
|
(
|
(
|
|
|
|
|
||||||||||||||||||
| Use of the main distribution and transmission grid |
|
(
|
(
|
(
|
|
|
|
|
||||||||||||||||||
| Construction income |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Fair value of assets from the indemnity for the concession |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Distribuição de gás canalizado |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Result of sectorial financial assets and liabilities |
|
(
|
|
|
|
|
|
|
||||||||||||||||||
| Other operating revenue |
|
(
|
(
|
|
(
|
|
|
|
||||||||||||||||||
|
|
(
|
(
|
(
|
(
|
|
|
|
|||||||||||||||||||
F-76
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
28.1. Revenue details
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Electricity sales to final customers |
|
|
|
||||||||
| Consumers - Power distribution |
|
|
|
||||||||
| Free consumers |
|
|
|
||||||||
| Donations and grants |
|
|
|
||||||||
| Electricity sales to distributors |
|
|
|
||||||||
| Bilateral contracts |
|
|
|
||||||||
| Regulated contracts |
|
|
|
||||||||
| Electric Energy Trade Chamber – CCEE |
|
|
|
||||||||
| Effective interest – grant bônus (Note 9.2) |
|
|
|
||||||||
| Use of the main distribution and transmission grid |
|
|
|
||||||||
| Consumers |
|
|
|
||||||||
| Concessionaires and generators |
|
|
|
||||||||
| Operating and maintenance income – OM and interest income |
|
|
|
||||||||
| Construction income |
|
|
|
||||||||
| Power distribution service concession |
|
|
|
||||||||
|
Power transmission concession
(a)
|
|
|
|
||||||||
| Fair value of assets from the indemnity for the concession |
|
|
|
||||||||
| Result of sectorial financial assets and liabilities |
|
|
|
||||||||
| Other operating revenue |
|
|
|
||||||||
| Leasing and rent |
|
|
|
||||||||
| Fair value in the purchase and sale of power |
|
|
|
||||||||
| Income from rendering of services |
|
|
|
||||||||
| Other income |
|
|
|
||||||||
| GROSS OPERATING REVENUE |
|
|
|
||||||||
| (-) Pis/Pasep and Cofins |
(
|
(
|
(
|
||||||||
| (-) ICMS (VAT) |
(
|
(
|
(
|
||||||||
| (-) Service tax (ISSQN) |
(
|
(
|
(
|
||||||||
| (-) Sectorial charges (28.2) |
(
|
(
|
(
|
||||||||
| NET OPERATING REVENUE |
|
|
|
||||||||
(a) The balance contains the amount of construction revenue, the construction margin and the efficiency gain or loss as detailed in Note 10.2.
The impact of the unbilled revenue from the Electricity sales to final customers and Use of the main distribution grid of Copel DIS, accounted for according to the practice presented in Note 4.11, was R$
80,296
in fiscal year 2024.
28.2. Regulatory charges
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Energy Development Account – "CDE " – Power distribution service concession (28.2.1) |
|
|
|
||||||||
| Other charges – rate flags (28.2.2) |
|
|
|
||||||||
| Research and development and energy efficiency – RD and EEP |
|
|
|
||||||||
| Global Reversion Reserve – RGR quota |
|
|
|
||||||||
| Energy Development Account – "CDE " – Power transmission concession |
|
|
|
||||||||
| Inspection fee |
|
|
|
||||||||
|
|
|
|
|||||||||
28.2.1. Energy Development Account - CDE - power distribution concession
CDE, created by Law No. 10438/2002, amended by Law No. 12783/2013, which aims to promote energy development in the national territory, in addition to subsidizing the social tariff, has as one of its fund sources the tariff charge attributed to end consumers in the tariff processes and periodically paid by the distributor. Annual charge amounts are defined by Aneel through approval resolutions and managed by CCEE.
F-77
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
The balance is made up as below:
| Resolutions | Period | 12.31.2024 | 12.31.2023 | 12.31.2022 | ||||||||||
| "CDE USO" |
|
|
|
|
||||||||||
|
|
|
|
|
|||||||||||
|
|
|
|
|
|||||||||||
|
|
|
(
|
|
|||||||||||
|
|
|
|
||||||||||||
| "CDE ENERGIA" |
|
|
|
|
||||||||||
|
|
|
|
|
|||||||||||
|
|
|
|
|
|||||||||||
|
|
|
|
||||||||||||
|
|
|
|
||||||||||||
(a) "CDE Uso": Resolution No. 3,305/2023 (from January/2024), Resolution No. 3,175/2023 (apr-dec/2023); Resolution No. 3,165/2022 (jan-mar/2023).
(b) "CDE Uso" e "CDE Energia" – Covid Account: Order No. 939/2021 (jun/2021-dec/2025). Order No. 689/2024 determined the value of the quota at R$17,419 for the 37
th
to 48
th
installment by determination of Aneel, Aneel Order 3,056 10/09/24, collection was interrupted from September/2024.
(c) "CDE Uso" and "CDE Energia" - Water shortage: Aneel Order No. 10,939/2022 and Aneel Resolution No. 1,008/2022. Its objective is to return the amount of R$145,844, received in 2022 to cover additional costs associated with the water crisis situation that affected the country throughout 2021, collected for a period of 4 years starting in June/2023. By determination of Aneel, Aneel Order 3,056 10/09/24, the collection was interrupted from September/2024.
(d) "CDE Energia" - Distributed Generation: Aneel Resolution No. 3,175/2023 (june-december/23) and Resolution No. 3,305/2023 (jun-may/2023). As of June 2023, Copel DIS began to collect the Distributed Generation CDE - GD, in the monthly amount of R$10,981 as of June/2024 (R$9,303 in June/2023). The subsidy arises from Law No. 14,300/2022, which established the Legal Framework for Micro and Mini Distributed Generation – MMGD.
(e) Preliminary injunctions: tariff differences, returned to consumers, in accordance with Aneel Order 3,225/2022.
28.2.2. Tariff flag
The tariff flag system, created by Aneel Regulatory Resolution No. 547/2013, effective from 2015, indicate whether an increase in the electric energy value to be passed on to end consumers would apply depending on the conditions for electricity generation. With the improvement in the country's hydric situation, the green flag prevailed from May/2022 to June/2024. Conditions changed in 2024 and, as of July, the additional tariffs returned, varying from the yellow flag to the red flag - level 2.
29. Operating Costs and Expenses
| Operational costs | Selling expenses | General and administrative expenses | Other operational expenses, net | 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||||||||||
| Non-manageable costs and expenses | |||||||||||||||||||||||
| Electricity purchased for resale (29.1) |
(
|
|
|
|
(
|
(
|
(
|
||||||||||||||||
| Charge of the main distribution and transmission grid |
(
|
|
|
|
(
|
(
|
(
|
||||||||||||||||
| Materials and supplies for power electricity |
(
|
|
|
|
(
|
(
|
(
|
||||||||||||||||
|
(
|
|
|
|
(
|
(
|
(
|
|||||||||||||||||
| Manageable costs and expenses | |||||||||||||||||||||||
| Personnel and management (29.2) |
(
|
|
(
|
|
(
|
(
|
(
|
||||||||||||||||
| Pension and healthcare plans (Note 21.2) |
(
|
|
(
|
|
(
|
(
|
(
|
||||||||||||||||
| Materials |
(
|
|
(
|
|
(
|
(
|
(
|
||||||||||||||||
| Third-party services (29.3) |
(
|
(
|
(
|
|
(
|
(
|
(
|
||||||||||||||||
| Credit losses, provisions and reversals (29.4) |
(
|
(
|
|
(
|
(
|
(
|
(
|
||||||||||||||||
| Other operational costs and expenses, net (29.6) |
(
|
(
|
(
|
|
(
|
(
|
(
|
||||||||||||||||
|
(
|
(
|
(
|
(
|
(
|
(
|
(
|
|||||||||||||||||
| Other | |||||||||||||||||||||||
| Depreciation and amortization |
(
|
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||
| Construction cost (29.5) |
(
|
|
|
|
(
|
(
|
(
|
||||||||||||||||
|
(
|
|
(
|
(
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(
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(
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(
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|||||||||||||||||
|
(
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(
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(
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(
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(
|
(
|
(
|
|||||||||||||||||
F-78
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
29.1. Electricity purchased for resale
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Purchase of Energy in the Regulated Environment – CCEAR |
|
|
|
||||||||
| Itaipu Binacional |
|
|
|
||||||||
| Electric Energy Trade Chamber – CCEE |
|
|
|
||||||||
| Bilateral contracts |
|
|
|
||||||||
| Program for incentive to alternative energy sources – Proinfa |
|
|
|
||||||||
| Micro and mini generators |
|
|
|
||||||||
| Fair value in the purchase and sale of power |
|
|
|
||||||||
| (-) PIS/Pasep/Cofins taxes on electricity purchased for resale |
(
|
(
|
(
|
||||||||
|
|
|
|
|||||||||
29.2. Personnel and management
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Personnel | |||||||||||
| Employee compensation |
|
|
|
||||||||
| Social charges on payroll |
|
|
|
||||||||
| Long-Term Incentive Plan - ILP (Note 27.6) |
|
|
|
||||||||
| Meal and education allowance |
|
|
|
||||||||
| Voluntary retirement program (Note 17.1) |
|
|
(
|
||||||||
|
|
|
|
|||||||||
| Management | |||||||||||
| Management fees |
|
|
|
||||||||
| Long-Term Incentive Plan - ILP (Note 27.6) |
|
|
|
||||||||
| Social charges on payroll |
|
|
|
||||||||
| Other expenses |
|
|
|
||||||||
|
|
|
|
|||||||||
| Provisions for performance and profit sharing of employees and administrators |
|
|
|
||||||||
|
|
|
|
|||||||||
29.3. Third party services
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Maintenance of electrical system |
|
|
|
||||||||
| Maintenance of facilities |
|
|
|
||||||||
| Communication, processing and transmission of data |
|
|
|
||||||||
| Consumer service / call center |
|
|
|
||||||||
| Consulting and audit |
|
|
|
||||||||
| Meter reading and bill delivery |
|
|
|
||||||||
| Other services |
|
|
|
||||||||
|
|
|
|
|||||||||
29.4. Credit losses, provisions and reversals
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Provision for legal claims (Note 26) |
|
|
|
||||||||
| Impairment of assets | |||||||||||
| Power generation concession contract (Note 9.3) |
(
|
(
|
|
||||||||
| Property, plant and equipment – generation segment (Note 15.4) |
|
(
|
(
|
||||||||
| Expected credit losses (Trade accounts and Other receivables) |
|
|
|
||||||||
| Tax credits estimated losses (reversal of losses) |
(
|
|
(
|
||||||||
|
|
|
|
|||||||||
F-79
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
29.5. Construction costs
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Materials |
|
|
|
||||||||
| Third party services |
|
|
|
||||||||
| Personnel |
|
|
|
||||||||
| Other |
|
|
|
||||||||
|
|
|
|
|||||||||
29.6. Other operating costs and expenses, net
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Financial offset for the use of water resources |
|
|
|
||||||||
| Insurance |
|
|
|
||||||||
| Advertising and publicity |
|
|
|
||||||||
| Collection charge |
|
|
|
||||||||
| Compensation |
|
|
|
||||||||
| Leasing and rent |
|
|
|
||||||||
| Taxes |
|
|
|
||||||||
| Aneel inspection fee |
|
|
|
||||||||
| Donations, contributions, grants, tax incentives |
|
|
|
||||||||
| Fair value of power generation concession assets |
|
|
|
||||||||
| Net losses (gains) in the decommissioning and disposal of assets (29.6.1) |
(
|
|
|
||||||||
| Other net income, costs and expenses |
|
|
|
||||||||
|
|
|
|
|||||||||
29.6.1. Net losses (gains) on decommissioning and disposal of assets
The total presented in the table includes the amount of R$
264,434
referring to the gain arising from the sale of unserviceable assets to the concessions of Copel GeT and FDA. The transaction, concluded in September 2024 with the signing of the purchase and sale agreements, was carried out in two blocks: the sale of land and buildings located in Curitiba and the sale of properties located near hydroelectric power plants in the interior of the State of Paraná.
The total value of the commercial operation to sell the assets was R$
286,000
, of which R$
11,440
was received in 2024 and the balance, plus interest and monetary restatement, will be received within 10 years, and may be paid in advance in view of the priority of the sellers in the generation of cash from the projects, as provided for in the contract.
The balance receivable, recorded under the heading of other credits (Note 11), is guaranteed by the fiduciary alienation of the respective properties.
F-80
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
30. Financial Results
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Financial income | |||||||||||
| Return on financial investments |
|
|
|
||||||||
| Arrears charges on bills |
|
|
|
||||||||
| Interest on taxes to be of fset |
|
|
|
||||||||
| Other financial income |
|
|
|
||||||||
| Remuneration of net sectorial assets and liabilities (Note 8) |
|
|
|
||||||||
| Income and monetary restatement of judicial deposits |
|
|
|
||||||||
| Monetary variation and adjustment to present value of accounts payable related to the concession (Note 23.1) |
|
|
|
||||||||
| Monetary variation over the Itaipu power purchase |
|
|
|
||||||||
| (-) Pis/Pasep and Cofins taxes on financial income |
(
|
(
|
(
|
||||||||
|
|
|
|
|||||||||
| ( - ) Financial expenses | |||||||||||
| Monetary and exchange variation and debt charges |
|
|
|
||||||||
| Monetary variation and adjustment to present value of accounts payable related to the concession (Note 23.1) |
|
|
|
||||||||
| Monetary restatement on the provision (Note 26.1) |
|
|
|
||||||||
| PIS/Pasep/Cofins taxes on interest on capital |
|
|
|
||||||||
| Restatement of provision for allocation of PIS and Cofins credits (Note 12.3.1) |
|
|
|
||||||||
| Monetary variation over the Itaipu power purchase |
|
|
|
||||||||
| Remuneration of net sectorial assets and liabilities (Note 8) |
|
|
|
||||||||
| Interest on lease liabilities (Note 24.2) |
|
|
|
||||||||
| Interest on tax installments |
|
|
|
||||||||
| Interest on RD and EEP (Note 22.1) |
|
|
|
||||||||
| Other financial expenses |
|
|
|
||||||||
|
|
|
|
|||||||||
| (-) Update of provision for destination of PIS and Cofins credits (Note 12.2.1) |
|
|
|
||||||||
| Net |
(
|
(
|
(
|
||||||||
31. Operating Segments
Operating segments are business activities that generate revenues and incur expenses, whose operating results are regularly reviewed by the executive boards of the Company and by key strategic decision-makers responsible for allocating funds and assessing performance.
The Company operates in reportable segments identified by Management, through the chief officers of each business area, taking into consideration the regulatory environments, the strategic business units and the different products and services. These segments are managed separately, since each business and each company require different technologies and strategies.
Until December 31, 2024, all sales have been to customers within the Brazilian territory, in addition, all noncurrent assets are also located in the national territory. The Company and its subsidiaries did not identify any customer who individually accounts for more than 10% of their total net revenue until December 31, 2024.
The Company evaluates the performance of each segment, based on information derived from the accounting records. The accounting policies of the operating segments are the same as those described in Note 4.
31.1. Company’s reportable segments
Power generation and transmission (GET)
- its attribution is to produce electricity from hydraulic, wind, and thermal projects (GER) and to provide services of transmission and transformation of electric power, being responsible for the construction, operation and maintenance of substations, as well for the energy transmission lines (TRA). For managers, the assets and liabilities of the generation and transmission segments are shown on an aggregate basis while their result is presented separately;
F-81
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
Power distribution (DIS)
- its attribution is to provide public electricity distribution services, being responsible for the operation and maintenance of the distribution infrastructure, as well as providing related services;
GAS
- its attribution is to provide public service of piped natural gas distribution. The segment was discontinued after the completion of the Compagas divestment process (Note 37);
Power sale (COM)
- its attribution is to trade energy and related services;
Services (SER)
– its attribution is the provision of services, including rental of distributed generation infrastructure, and participation in open innovation investments. This segment has been shown separately since 2024, given that operating activities of Copel Serviços began in June 2024;
Holding
– its attribution is participation in other companies.
31.2. Assets by reportable segment
| ASSETS 12.31.2024 | Electric Energy | SER (b) | Holding | Intersegment operations / Others (a) | Total | ||||||||||||||||||
| GET | DIS | COM | |||||||||||||||||||||
| TOTAL ASSETS |
|
|
|
|
|
(
|
|
||||||||||||||||
| CURRENT ASSETS |
|
|
|
|
|
(
|
|
||||||||||||||||
| NONCURRENT ASSETS |
|
|
|
|
|
|
|
||||||||||||||||
| Long term assets |
|
|
|
|
|
(
|
|
||||||||||||||||
| Investments |
|
|
|
|
|
|
|
||||||||||||||||
| Property, plant and equipment |
|
|
|
|
|
|
|
||||||||||||||||
| Intangible assets |
|
|
|
|
|
|
|
||||||||||||||||
| Right-of-use asset |
|
|
|
|
|
|
|
||||||||||||||||
(a) Includes elimination amounts between segments and consolidation adjustments.
(b) Copel Serviços started operating activities as of June 2024, as disclosed in Note 31.1.
| ASSETS 12.31.2023 | Electric Energy | GAS | Holding and Services |
Reclassi-
fications (Note 37) |
Intersegment operations (a) | Total | ||||||||||||||||||||
| GET | DIS | COM | ||||||||||||||||||||||||
| TOTAL ASSETS |
|
|
|
|
|
|
(
|
|
||||||||||||||||||
| CURRENT ASSETS |
|
|
|
|
|
|
(
|
|
||||||||||||||||||
| NONCURRENT ASSETS |
|
|
|
|
|
|
(
|
|
||||||||||||||||||
| Long term assets |
|
|
|
|
|
|
(
|
|
||||||||||||||||||
| Investments |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Property, plant and equipment |
|
|
|
|
|
|
(
|
|
||||||||||||||||||
| Intangible assets |
|
|
|
|
|
|
|
|
||||||||||||||||||
| Right-of-use asset |
|
|
|
|
|
|
(
|
|
||||||||||||||||||
(a) Includes elimination amounts between segments and consolidation adjustments.
F-82
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
31.3. Statement of income by reportable segment
| STATEMENT OF INCOME 12.31.2024 | Energia Elétrica | GÁS | SER (a) | Holding |
Reclassi-
fications Note 37 |
Inter-
segment operations |
Total | |||||||||||||||||||||||||
| GET | DIS | COM | ||||||||||||||||||||||||||||||
| GER | TRA | |||||||||||||||||||||||||||||||
| CONTINUING OPERATIONS | ||||||||||||||||||||||||||||||||
| NET OPERATING REVENUE |
|
|
|
|
|
|
|
(
|
(
|
|
||||||||||||||||||||||
| Net operating revenue - third-parties |
|
|
|
|
|
|
|
(
|
|
|
||||||||||||||||||||||
| Net operating revenue - between segments |
|
|
|
|
|
|
|
(
|
(
|
|
||||||||||||||||||||||
| OPERATING COSTS AND EXPENSES |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||||
| Energy purchased for resale |
(
|
|
(
|
(
|
|
|
|
|
|
(
|
||||||||||||||||||||||
| Charges for use of the main transmission grid |
(
|
|
(
|
|
|
|
|
|
|
(
|
||||||||||||||||||||||
| Personnel and management |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||||
| Pension and healthcare plans |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||||
| Materials and supplies |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||||
| Raw materials and supplies for generation |
(
|
|
|
|
|
|
|
|
|
(
|
||||||||||||||||||||||
| Natural gas and supplies for gas business |
|
|
|
|
(
|
|
|
|
|
|
||||||||||||||||||||||
| Third party services |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||||
| Depreciation and amortization |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||||
| Provision (reversal) for litigations |
(
|
(
|
(
|
|
(
|
|
(
|
|
(
|
(
|
||||||||||||||||||||||
| Impairment of assets |
(
|
|
|
|
|
|
|
|
|
(
|
||||||||||||||||||||||
| Other estimated losses, provisions and reversals |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
|
(
|
||||||||||||||||||||||
| Construction cost |
|
(
|
(
|
|
(
|
|
|
|
|
(
|
||||||||||||||||||||||
| Other operating costs and expenses, net |
(
|
|
(
|
(
|
(
|
|
(
|
|
(
|
(
|
||||||||||||||||||||||
| EQUITY IN EARNINGS OF INVESTEES |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
| PROFIT (LOSS) BEFORE FINANCIAL INCOME AND TAX |
|
|
|
|
|
(
|
(
|
(
|
(
|
|
||||||||||||||||||||||
| Financial income |
|
|
|
|
|
|
|
(
|
(
|
|
||||||||||||||||||||||
| Financial expenses |
(
|
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||||
| OPERATING PROFIT (LOSS) |
|
|
|
|
|
(
|
(
|
(
|
(
|
|
||||||||||||||||||||||
| Income tax and social contribution |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
|
(
|
||||||||||||||||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
|
|
|
|
|
(
|
(
|
(
|
|
|
||||||||||||||||||||||
| Result of discontinued operations |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
| NET INCOME (LOSS) |
|
|
|
|
|
(
|
|
|
|
|
||||||||||||||||||||||
|
(a)
Copel Serviços started operating activities as of June 2024, as disclosed in Note 31.1.
|
||||||||||||||||||||||||||||||||
F-83
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| STATEMENT OF INCOME 12.31.2023 | Electric Energy | GAS | Holding and Services |
Reclassi-
fications Note 37 |
Inter-
segment operations |
Total | |||||||||||||||||||||||
| GET | DIS | COM | |||||||||||||||||||||||||||
| GER | TRA | ||||||||||||||||||||||||||||
| CONTINUING OPERATIONS | |||||||||||||||||||||||||||||
| NET OPERATING REVENUES |
|
|
|
|
|
|
(
|
(
|
|
||||||||||||||||||||
| Net operating revenue - third-parties |
|
|
|
|
|
|
(
|
|
|
||||||||||||||||||||
| Net operating revenue - between segments |
|
|
|
|
|
|
(
|
(
|
|
||||||||||||||||||||
| OPERATING COSTS AND EXPENSES |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Energy purchased for resale |
(
|
(
|
(
|
(
|
|
|
|
|
(
|
||||||||||||||||||||
| Charges for use of the main transmission grid |
(
|
|
(
|
|
|
|
|
|
(
|
||||||||||||||||||||
| Personnel and management |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Pension and healthcare plans |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Materials and supplies |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Raw materials and supplies for generation |
(
|
|
|
|
|
|
|
|
(
|
||||||||||||||||||||
| Natural gas and supplies for gas business |
|
|
|
|
(
|
|
|
|
|
||||||||||||||||||||
| Third party services |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Depreciation and amortization |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Provision (reversal) for litigations |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Impairment of assets |
|
|
|
|
|
|
(
|
|
|
||||||||||||||||||||
| Other estimated losses, provisions and reversals |
(
|
(
|
(
|
(
|
(
|
|
|
|
(
|
||||||||||||||||||||
| Construction cost |
|
(
|
(
|
|
(
|
|
|
|
(
|
||||||||||||||||||||
| Other operating costs and expenses, net |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| EQUITY IN EARNINGS OF INVESTEES |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
| PROFIT (LOSS) BEFORE FINANCIAL INCOME AND TAX |
|
|
|
|
|
(
|
(
|
|
|
||||||||||||||||||||
| Financial income |
|
|
|
|
|
|
(
|
(
|
|
||||||||||||||||||||
| Financial expenses |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| OPERATING PROFIT (LOSS) |
|
|
|
|
|
(
|
(
|
|
|
||||||||||||||||||||
| Income tax and social contribution |
(
|
|
(
|
(
|
(
|
|
|
|
(
|
||||||||||||||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
|
|
|
|
|
(
|
(
|
|
|
||||||||||||||||||||
| Result of discontinued operations |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
| NET INCOME (LOSS) |
|
|
|
|
|
(
|
|
|
|
||||||||||||||||||||
F-84
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| STATEMENT OF INCOME 12.31.2022 | Electric Energy | GAS |
Holding
and Services |
Reclassi-
fications Note 37 |
Inter-
segment operations |
Total | |||||||||||||||||||||||
| GET | DIS | COM | |||||||||||||||||||||||||||
| GER | TRA | ||||||||||||||||||||||||||||
| CONTINUING OPERATIONS | |||||||||||||||||||||||||||||
| NET OPERATING REVENUES |
|
|
|
|
|
|
(
|
(
|
|
||||||||||||||||||||
| Net operating revenue - third-parties |
|
|
|
|
|
|
(
|
|
|
||||||||||||||||||||
| Net operating revenue - between segments |
|
|
|
|
|
|
|
(
|
|
||||||||||||||||||||
| OPERATING COSTS AND EXPENSES |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Energy purchased for resale |
(
|
|
(
|
(
|
|
|
|
|
(
|
||||||||||||||||||||
| Charges for use of the main transmission grid |
(
|
|
(
|
|
|
|
|
|
(
|
||||||||||||||||||||
| Personnel and management |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Pension and healthcare plans |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Materials and supplies |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Raw materials and supplies for generation |
(
|
|
|
|
|
|
|
|
(
|
||||||||||||||||||||
| Natural gas and supplies for gas business |
|
|
|
|
(
|
|
|
|
|
||||||||||||||||||||
| Third party services |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Depreciation and amortization |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Provision (reversal) for litigations |
(
|
(
|
(
|
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Impairment of assets |
(
|
|
|
|
(
|
|
|
|
|
||||||||||||||||||||
| Other estimated losses, provisions and reversals |
(
|
|
(
|
(
|
(
|
|
|
|
(
|
||||||||||||||||||||
| Construction cost |
|
(
|
(
|
|
(
|
|
|
|
(
|
||||||||||||||||||||
| Provision for allocation of PIS and Cofins credits |
|
|
(
|
|
|
|
|
|
(
|
||||||||||||||||||||
| Other operating costs and expenses, net |
(
|
(
|
(
|
(
|
(
|
(
|
|
(
|
(
|
||||||||||||||||||||
| EQUITY IN EARNINGS OF INVESTEES |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
| PROFIT (LOSS) BEFORE FINANCIAL INCOME AND TAX |
|
|
|
|
|
(
|
|
|
|
||||||||||||||||||||
| Financial income |
|
|
|
|
|
|
(
|
(
|
|
||||||||||||||||||||
| Financial expenses |
(
|
(
|
(
|
(
|
(
|
(
|
|
|
(
|
||||||||||||||||||||
| Update of provision for allocation of PIS and Cofins credits |
|
|
(
|
|
|
|
|
|
(
|
||||||||||||||||||||
| OPERATING PROFIT (LOSS) |
|
|
(
|
|
|
(
|
(
|
|
|
||||||||||||||||||||
| Income tax and social contribution |
(
|
(
|
|
(
|
(
|
|
|
|
|
||||||||||||||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
|
|
(
|
|
|
(
|
|
|
|
||||||||||||||||||||
| Result of discontinued operations |
|
|
|
|
|
|
(
|
|
(
|
||||||||||||||||||||
| NET INCOME (LOSS) |
|
|
(
|
|
|
(
|
|
|
|
||||||||||||||||||||
31.4. Additions to noncurrent assets by reportable segment
| 12.31.2024 | Electric Energy | SER (a) | Holding | Total | ||||||||||||||||
| GET | DIS | COM | ||||||||||||||||||
| Contract assets |
|
|
|
|
|
|
||||||||||||||
| Property, plant and equipment |
|
|
|
|
|
|
||||||||||||||
| Intangible assets |
|
|
|
|
|
|
||||||||||||||
| Right-of-use asset |
|
|
|
|
|
|
||||||||||||||
|
(a)
Copel Serviços started operating activities as of June 2024, as disclosed in Note 31.1.
|
||||||||||||||||||||
| 12.31.2023 | Electric Energy | GAS | Holding and Services | Total | ||||||||||||||||
| GET | DIS | COM | ||||||||||||||||||
| Contract assets |
|
|
|
|
|
|
||||||||||||||
| Property, plant and equipment |
|
|
|
|
|
|
||||||||||||||
| Intangible assets |
|
|
|
|
|
|
||||||||||||||
| Right-of-use asset |
|
|
|
(
|
|
|
||||||||||||||
The table above includes R$
118,002
of additions to property, plant and equipment in the power generation segment, that refer to UEGA, in addition to the Compagas additions shown in the gas segment column. According to Note 37, the divestment of these two subsidiaries was completed in 2024.
F-85
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
32. Financial Instruments
32.1. Categories and determination of fair value of financial instruments
| Note | Level | 12.31.2024 | 12.31.2023 | |||||||||||||||||
| Book value | Fair value | Book value | Fair value | |||||||||||||||||
| Financial assets | ||||||||||||||||||||
| Fair value through profit or loss | ||||||||||||||||||||
| Cash and cash equivalents (a) | 5 | 2 |
|
|
|
|
||||||||||||||
| Bonds and securities (b) | 6 | 2 |
|
|
|
|
||||||||||||||
| Accounts receivable - distribution concession (c) | 9.1 | 3 |
|
|
|
|
||||||||||||||
| Accounts receivable - generation concession (c) | 9.3 | 3 |
|
|
|
|
||||||||||||||
| Fair value in the purchase and sale of power (d) | 32.2.10 | 3 |
|
|
|
|
||||||||||||||
| Other temporary investments (e) | 1 |
|
|
|
|
|||||||||||||||
| Other temporary investments (e) | 2 |
|
|
|
|
|||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Amortized cost | ||||||||||||||||||||
| Collaterals and escrow accounts (a) |
|
|
|
|
||||||||||||||||
| Trade accounts receivable (a) | 7 |
|
|
|
|
|||||||||||||||
| Sectorial financial assets (a) | 8 |
|
|
|
|
|||||||||||||||
| Accounts receivable - concessions - bonus from the grant (f) | 9.2 |
|
|
|
|
|||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Fair value through other comprehensive income | ||||||||||||||||||||
| Certified Emission Reductions - CERs (g) | 2 |
|
|
|
|
|||||||||||||||
| Other temporary investments (h) | 3 |
|
|
|
|
|||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total financial assets |
|
|
|
|
||||||||||||||||
| Financial liabilities | ||||||||||||||||||||
| Fair value through profit or loss | ||||||||||||||||||||
| Fair value in the purchase and sale of power (d) | 32.2.10 | 3 |
|
|
|
|
||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Amortized cost | ||||||||||||||||||||
| Sectorial financial liabilities (a) | 8 |
|
|
|
|
|||||||||||||||
| ICMS installment payment (i) | 12.2 |
|
|
|
|
|||||||||||||||
| Special Tax Regularization Program - Pert (i) | 12.2 |
|
|
|
|
|||||||||||||||
| PIS and Cofins to be refunded to consumers (a) | 12.3.1 |
|
|
|
|
|||||||||||||||
| Accounts payable to suppliers (a) | 18 |
|
|
|
|
|||||||||||||||
|
Loans and financing
1
(i)
|
19 |
|
|
|
|
|||||||||||||||
| Debentures (j) | 20 |
|
|
|
|
|||||||||||||||
|
Accounts payable related to concession
1
(k)
|
23 |
|
|
|
|
|||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total financial liabilities |
|
|
|
|
||||||||||||||||
¹The balance includes loans and accounts payable linked to the concession that were reclassified to Liabilities classified as held for sale (Note 37).
Different levels are defined as follows:
Level 1: obtained from quoted prices (not adjusted) in active markets for identical assets and liabilities;
Level 2: obtained through other variables in addition to quoted prices included in Level 1, which are observable for the assets or liabilities;
Level 3: obtained through assessment techniques which include variables for the assets or liabilities, which however are not based on observable market data.
Determining fair values
a)
Equivalent to their respective book values due to their nature and terms of realization.
b)
Fair value is calculated based on information made available by the financial agents and the market values of the bonds issued by the Brazilian government.
c)
Financial assets with fair values similar to book values (Note 4.4).
d)
The fair values of assets and liabilities are equivalent to their book values (Note 4.12).
F-86
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
e)
Investments in other companies stated at fair value, which is calculated according to the price quotations published in an active market, for assets classified as level 1, and determined in view of the comparative assessment model for assets classified as level 2.
f)
Receivables related to the concession agreement for providing electricity generation services under quota arrangements, having their fair value calculated by expected cash inflows, discounted at the rate established by Aneel auction notice 12/2015 (9.04%).
g)
Financial assets with fair values similar to book values (Note 4.2).
h)
Calculated according to FIP Copel Ventures I fair value pricing metrics, using unobservable data due to the early stage of the startups invested in.
i)
The cost of the last funding carried out by the Company, CDI + spread of 1.12%, is used as a basic assumption for the discount of the expected payment flows, except for contracts with Banco do Nordeste do Brasil - BNB that have the fair value similar to the book value, in view of the contractual characteristics for the construction of specific infrastructure.
j)
Calculated according to the quotation of the last trade in the secondary market through the average price of the Unit Price - PU on December 31, 2024, obtained from the Brazilian Association of Financial and Capital Market Entities - Anbima.
k)
The actual pre-tax discount rate of 8.23% p.a. was used, compatible with the rate estimated by the Company for long-term projects.
32.2. Financial risk management
The Company's business activities are exposed to the following risks arising from financial instruments:
32.2.1. Credit risk
Credit risk is the risk of the Company incurring losses due to a customer or counterparty in a financial instrument, resulting from failure in complying with their contractual obligations.
| Exposure to credit risk | 12.31.2024 | 12.31.2023 | ||||||
| Cash and cash equivalents (a) |
|
|
||||||
| Bonds and securities(a) |
|
|
||||||
| Pledges and restricted deposits linked (a) |
|
|
||||||
| Trade accounts receivable (b) |
|
|
||||||
| Sectorial financial assets (c) |
|
|
||||||
| Accounts receivable – distribution concession (c) |
|
|
||||||
| Accounts receivable – concessions – bonus from the grant (d) |
|
|
||||||
| Accounts receivable – generation concessions (e) |
|
|
||||||
| Other temporary investments (f) |
|
|
||||||
|
|
|
|||||||
a)
The Company manages the credit risk of its assets in accordance with its policy of investing financial resources in federal banking institutions or in private banks with low credit risk, according to the local rating of the main rating agencies.
b)
Risk of losses resulting from difficulties to receive amounts billed to customers related to internal and external factors. To mitigate this type of risk, the Company manages its accounts receivable, detecting customers most likely to default, implementing specific collection policies and suspending the supply and/or recording of energy and the provision of service, as established in contract and regulatory standards.
c)
Management considers the risk of this credit to be low, since the contracts signed ensure the unconditional right to receive cash at the end of the concession to be paid by the Granting Authority, corresponding to the costs linked to the sector's financial assets and liabilities and investments in infrastructure, not recovered through the distribution electricity tariff.
d)
Management considers the risk of such credit to be low, as the contract for the sale of energy by quotas guarantees the receipt of an Annual Generation Revenue - RAG, which includes the annual amortization of this amount during the concession term.
e)
For the generation concession assets, Aneel published Normative Resolution 596/2013, which deals with the definition of criteria for calculating the New replacement value (VNR), for the purposes of indemnification. In July 2021, Normative Resolution No. 942/2021 was published, later covered by Normative Resolution No. 1027/2022, which regulated the calculation of these values through the presentation of appraisal reports to be prepared by accredited companies. In 2022, Copel submitted to Aneel the appraisal reports detailing the residual values for the Governador Parigot de Souza - GPS and Mourão - MOU HPPs, which are being inspected by Aneel, as outlined in Note 9.3. Management's expectation that these assets will be indemnified indicates that the recorded balances are recoverable.
f)
Risk arising from the possibility of the Company incurring losses as a result of the volatility of the stock market, which is being managed through periodic monitoring of variations in the market, and the risks inherent in investing in startups, monitored through assessment of technological and market risks, and management of growth expectations.
F-87
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
32.2.2. Liquidity risk
The liquidity risk of the Company consists of the possibility of having insufficient funds, cash or other financial assets, to settle obligations on their scheduled maturity dates. The Company manages this risk with a set of methodologies, procedures and instruments applied to secure ongoing control over financial processes to ensure proper management of risks.
Investments are financed by incurring medium and long-term debt with financial institutions and capital markets. Short, medium and long-term business projections are made and submitted to Management bodies for evaluation. The short-term projection considers daily periods covering the next 90 days, while the medium and long-term ones cover monthly periods covering the next five years. The budget for the next fiscal year is annually approved.
The Company permanently monitors the volume of funds to be settled by controlling cash flows to reduce funding costs, the risk involved in the renewal of loan agreements and compliance with the financial investment policy, while concurrently keeping minimum cash levels.
The following table shows the expected undiscounted settlement amounts in each time range. Projections were based on financial indicators linked to the related financial instruments and forecast according to average market expectations as disclosed in the Central Bank of Brazil Focus Report, which provides the average expectations of market analysts for these indicators for the current year and for the next 3 years. From 2029 on, the 2028 indicators are repeated throughout the forecast period.
| Interest (a) | Less than 1 month | 1 to 3 months | 3 months to 1 year | 1 to 5 years | Over 5 years | Total | |||||||||||||||||
| 12.31.2024 | |||||||||||||||||||||||
| Loans and financing | Note 19 |
|
|
|
|
|
|
||||||||||||||||
| Debentures | Note 20 |
|
|
|
|
|
|
||||||||||||||||
| Accounts payable related to concession | Rate of return +IGP-M and IPCA |
|
|
|
|
|
|
||||||||||||||||
| Accounts payable to suppliers | — |
|
|
|
|
|
|
||||||||||||||||
| Special Tax Regularization Program - Pert | Selic |
|
|
|
|
|
|
||||||||||||||||
| ICMS installment payment | Selic |
|
|
|
|
|
|
||||||||||||||||
| Sectorial financial liabilities | Selic |
|
|
|
|
|
|
||||||||||||||||
| Lease liability | Note 24 |
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
(a) Effective interest rate - weighted average.
As disclosed in Notes 19.3 and 20.3, the Company and its subsidiaries have loans and financing agreements and debentures with covenants that if breached may have their payment accelerated.
32.2.3. Market risk
Market risk is the risk that the fair value or the future cash flows of a financial instrument shall oscillate due to changes in market prices, such as currency rates, interest rates and stock price. The purpose of managing this risk is to control exposures within acceptable limits, while optimizing return.
a)
Foreign currency risk (US Dollar)
This risk comprises the possibility of losses due to fluctuations in foreign exchange rates, which may reduce assets or increase liabilities denominated in foreign currencies.
The impact of exchange rate fluctuations resulting from the Itaipu power purchase agreement will be reflected in the subsequent Copel DIS tariff adjustment.
F-88
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
Sensitivity analysis of foreign currency risk - Dollar
The Company has developed a sensitivity analysis to measure the impact of the variation of the US dollar on its financial liabilities subject to currency risk.
The valuation of the financial instruments considers the possible effects on profit and loss and equity of the risks evaluated by the Company's Management on the reporting date for the financial instruments, as recommended by CPC 40 (R1) / IFRS 7 - Financial Instruments: Disclosure. Based on the equity position and the notional value of the financial instruments outstanding at the date of these financial statements, it is estimated that these effects will approximate the amounts stated in the above table in the column for the forecast probable scenario, since the assumptions used by the Company are similar to those previously described.
For the baseline scenario, the accounting balances recorded on the date of these financial statements were considered and for the probable scenario, the Company considers the balance updated with the exchange rate variation - prevailing at the end of the period (R$/US$6.00) based on the median market expectation for 2025 according to the Central Bank of Brazil Focus Report. Additionally, the Company continues to monitor scenarios “1” and “2”, which consider a deterioration of 25% and 50%, respectively, in the main risk factor of the financial instrument in relation to the level used in the probable scenario, because of extraordinary events that may affect the economic scenario.
| Foreign exchange risk | Risk | Baseline 12.31.2024 | Projected scenarios | ||||||||||||||
| Probable | Scenario 1 | Scenario 2 | |||||||||||||||
| Financial liabilities | |||||||||||||||||
| Suppliers | |||||||||||||||||
| Itaipu |
|
(
|
|
(
|
(
|
||||||||||||
|
(
|
|
(
|
(
|
||||||||||||||
b)
Interest rate and monetary variation risk
This risk comprises the possibility of losses due to fluctuations in interest rates or other indicators, which may reduce financial income or increase financial expenses related to the assets and liabilities raised in the market. The Company has not entered derivative contracts to cover this risk but has been continuously monitoring interest rates and market indexes to observe any need for contracting.
Sensitivity analysis of interest rate and monetary variation risk
The Company has developed a sensitivity analysis to measure the impact of variable interest rates and monetary variations on its financial assets and liabilities subject to these risks.
The valuation of the financial instruments considers the possible effects on profit and loss and equity of the risks evaluated by the Company's Management on the reporting date for the financial instruments, as recommended by CPC 40 (R1) / IFRS 7 - Financial Instruments: Disclosure. Based on the equity position and the notional value of the financial instruments outstanding at the date of these financial statements, it is estimated that these effects will approximate the amounts stated in the above table in the column for the forecast probable scenario, since the assumptions used by the Company are similar to those previously described.
For the baseline scenario, the accounting balances recorded on the date of these financial statements were considered and for the probable scenario, the Company considers the balances updated with the variation of the indicators (CDI/Selic - 15.00%, IPCA - 5.50%, IGP-M - 5.00%), estimated as market average projections for 2025 according to the Central Bank of Brazil Focus Report, and TJLP of 8.79% calculated by the Company's internal projection. Additionally, the Company continues to monitor scenarios “1” and “2”, which consider a deterioration of 25% and 50%, respectively, in the main risk factor of the financial instrument in relation to the level used in the probable scenario, because of extraordinary events that may affect the economic scenario.
F-89
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Interest rate risk and monetary variation | Risk | Baseline 12.31.2024 | Projected scenarios | ||||||||||||||
| Probable | Scenario 1 | Scenario 2 | |||||||||||||||
| Financial assets | |||||||||||||||||
| Bonds and securities | Low CDI/SELIC |
|
|
|
|
||||||||||||
| Collaterals and escrow accounts | Low CDI/SELIC |
|
|
|
|
||||||||||||
| Accounts receivable – concessions | Low IPCA |
|
|
|
|
||||||||||||
| Accounts receivable – generation concessions | Low IPCA |
|
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|
|
|
|
|
||||||||||||||
| Financial liabilities | |||||||||||||||||
| Loans and financing | |||||||||||||||||
| Banco do Brasil | High CDI |
(
|
(
|
(
|
(
|
||||||||||||
| Banco Itaú | High CDI |
(
|
(
|
(
|
(
|
||||||||||||
| BNDES | High TJLP |
(
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(
|
(
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(
|
||||||||||||
| BNDES | High IPCA |
(
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(
|
(
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(
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||||||||||||
| Banco do Nordeste | High IPCA |
(
|
(
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(
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(
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||||||||||||
| Banco do Brasil – BNDES Transfer | High TJLP |
(
|
(
|
(
|
(
|
||||||||||||
| Other | No risk |
(
|
— | — | — | ||||||||||||
| Debentures | High CDI/SELIC |
(
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(
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(
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(
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||||||||||||
| Debentures | High IPCA |
(
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(
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(
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(
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| Debentures | High TJLP |
(
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(
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(
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(
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||||||||||||
| Sectorial financial liabilities | High Selic |
(
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(
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(
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(
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||||||||||||
| ICMS installment payment | High Selic |
(
|
(
|
(
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(
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||||||||||||
| Special Tax Regularization Program – Pert | High Selic |
(
|
(
|
(
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(
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| Accounts payable related to concession | High IGP-M |
(
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(
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(
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(
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| Accounts payable related to concession | High IPCA |
(
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(
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(
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(
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||||||||||||
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(
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(
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(
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(
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32.2.4. Electricity shortage risk
Most of the installed capacity in Brazil currently comes from hydroelectric generation, which makes Brazil and the geographic region in which we operate subject to unpredictable hydrological conditions, due to non-cyclical deviations of mean precipitation. Unsatisfactory hydrological conditions may cause, among other things, the implementation of comprehensive programs of electricity savings, such as rationalization or even a mandatory reduction of consumption, which is the case of rationing.
Considering the strong wind generation in the Northeast, biomass generation in the Southeast and the rainy season with affluent natural energies that raised the reservoirs to comfortable values, it is estimated that the risk of energy shortages in 2025 is minimized.
The energy supply guarantee criteria are currently established by the National Energy Policy Council – “CNPE”. With reason, the responsible bodies keep the energy deficit risk indicators within the safety margin in all subsystems.
32.2.5. Risk of Generation Scaling Factor - GSF impacts
The Energy Reallocation Mechanism (“MRE”) is a system of redistribution of electric power generated, characteristic of the Brazilian electric sector, which has its existence by the understanding, at the time, that there is a need for a centralized operation associated with a centrally calculated optimal price known as PLD. Since generators have no control over their production, each plant receives a certain amount of virtual energy which can be compromised through contracts. This value, which enables the registration of bilateral contracts, is known as assured energy (“GF”) and is calculated centrally. Unlike the Settlement price for differences (PLD), which is calculated on a weekly basis, GF, as required by Law, is recalculated every five years, with a limit of increase or decrease, restricted to 5% by revision or 10% in the concession period.
The contracts need to have guarantee. This is done, especially, through the allocation of power generated received from the MRE or purchase. The GSF is the ratio of the entire hydroelectric generation of the MRE participants to the GF sum of all the MRE plants. Basically, the GSF is used to calculate how much each plant will receive from generation to back up its GF. Thus, knowing the GSF of a given month the company will be able to know if it will need to back up its contracts through purchases.
F-90
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
Whenever GSF multiplied by GF is less than the sum of contracts, the company will need to buy the difference in the spot market. However, whenever GSF multiplied by GF is greater than the total contracts, the company will receive the difference to the PLD.
For plants with contracts in the Free Contracting Environment (“ACL”), the main way to manage the low GSF risk is not to compromise the entire GF with contracts, as well as the timely repurchase of intra-annual energy approaches currently adopted by the Company.
For the contracts in the Regulated Contracting Environment (“ACR”), Law 13,203/2015 allowed the generators to contract insurance, by means of payment of a risk premium. Copel adopted this approach to protect contracts related to energy generated by the HPP Mauá, HPP Baixo Iguaçu, HPP Colíder and SHP Cavernoso II.
For the distribution segment, the effects of the GSF are perceived in the costs associated with quotas of Itaipu, of Angra, of the plants whose concessions were renewed in accordance with Law 12,783/2013 and the plants that renegotiated the hydrological risk in the ACR, in accordance with Law 13,203/2015. This is a financial risk since there is guarantee of neutrality of expenses with energy purchases through a tariff transfer.
32.2.6. Risk of non-renewal of concessions - generation and transmission
The extension of energy generation and transmission concessions, achieved by Law No. 9,074/1995, is regulated by Law No. 12,783/2013, amended by Law No. 14,052/2020.
Concessions for hydroelectric power generation and electric power transmission may be extended, at the discretion of the Granting Authority, only once, for a period of up to 30 years. Thermoelectric power generation concessions have an extension term limited to 20 years.
According to the mentioned law, the concession operator should request extension of concession at least 36 months before the end date of the contract or act of granting for hydroelectric power plants and electric power transmission enterprises, and 24 months before the end date of the contract or act of granting for thermoelectric plants. The Granting Authority may advance effects of extension by up to 60 months counted as of contract or grant date and may also define initial tariff or revenue, which includes the definition of the tariff or initial revenues for the generation ventures (RAG - Annual Generation Revenue) and transmission ventures (RAP - Permitted Annual Revenue).
In 2018, Decree No. 9,271/2018 was published, amended by Decrees No. 10,135/2019, No. 10,893/2021 and No. 11,307/2022, which regulated the granting of a new concession contracts in the electricity sector associated with the privatization of a concessionaire under the direct or indirect control of the Federal Government, State, Federal District or Municipality.
On November 19, 2024, the Granting Authority signed new Concession Contracts 01/2024 and 02/2024 for the Governador Bento Munhoz da Rocha Netto - GBM (“Foz do Areia”), Governador Ney Braga - GNB (“Segredo”) and Governador José Richa - GJR (“Salto Caxias”) Hydroelectric Plants for a period of 30 years, as a result of the process of transforming Copel into a “Corporation” (Note 1).
The generation and transmission concessions due to expire in the next ten years are those related to the Derivação do Rio Jordão HPP, Arturo Andreoli SHP and Bateias-Jaguariaíva 230 kV Transmission Line (Note 2).
Additionally, regarding the extension of transmission concession contracts, on December 29, 2022 Decree No. 11,314 was published, determining that the extension of transmission concessions may be carried out only when the bidding process is unfeasible or results in damage to the public interest and will be carried out without the advance indemnity of the assets linked to the provision of the service, conditioned to the acceptance by the concessionaire in relation to the revenue and other conditions of the amendment to be prepared by Aneel. Currently, the regulation of the Decree is under discussion, through Subsidy Calls made available to society by Aneel.
F-91
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
32.2.7. Risk of non-renewal of concessions - distributions of electricity
The fifth amendment to Copel DIS concession contract No. 46/1999 imposes economic and financial efficiency covenants and quality indicators that, if not complied with, may result in the termination of the concession, in accordance with the provisions of the contract, particularly the right to full defense and adversary system. The Aneel approved Normative Resolution No. 896/2020, consolidated by Normative Resolution No. 948/2021, which establishes the indicators and procedures for monitoring efficiency in relation to the continuity of supply and the economic-financial management of public electricity distribution service concessions from the year 2021.
Indicators and penalties
| Year | Indicator | Criteria | Penalties | ||||||||
| From 2021 |
|
|
|
||||||||
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|
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|
the previous 5 calendar years
|
|
||||||||||
|
|
|
||||||||||
(a) Within 180 days from the end of each fiscal year, in the totality of the insufficiency that occurs to reach the Minimum Economic and Financial Sustainability Parameter.
Targets set for Copel Distribuição
| Quality - limits | Quality - performed | |||||||||||||||||||
| Year | Economic and Financial Management | Realized | DECi | FECi | DECi | FECi | ||||||||||||||
| 2023 |
|
Achieved |
|
|
|
|
||||||||||||||
| 2024 |
|
— |
|
|
|
|
||||||||||||||
Net Debt: Gross Debt deducted from Financial Assets, with the exception of Financial Assets and Financial Liabilities in administrative or judicial discussion. The accounts that make up the Gross Debt and Financial Assets are defined in the attachment VIII to Aneel Resolution No 948/2021.
QRR: Regulatory Reinstatement Share or Regulatory Depreciation Expense. This value will be the one defined in the last Periodic Tariff Review, updated by the variation of the Regulatory Portion B and calculated on a pro rata basis.
Recurring EBITDA: Earnings Before Interest (Financial Result), Taxes (Income Taxes), Depreciation and Amortization.
Quality indicators: For the years 2022 to 2026, the annual limits are set out in Authorising Resolution No. 10,231/2021.
The calculation of results occurs at the end of each calendar year, when the annual disclosure of results in the Regulatory Financial Statements (“DCR”).
32.2.8. Risk of overcontracting and undercontracting of electricity
In the process of purchase of energy, Copel Distribuição ended the year with a contracting level of 102.5%.
The verification of the coverage of the entire market takes into account the period of the calendar year, with the difference between the costs remunerated by the tariff and those actually incurred in the purchase of energy being passed on in full to the captive consumers, provided that the distributor has a contracting level between 100% and 105% of its market, plus the amounts of involuntary over-contracting recognized by the regulator.
Given that the Company ended the year within the regulatory limits, there is no risk of a penalty for overcontracting this year.
32.2.9. Risk of non-performance of wind farms
Contracts for the purchase and sale of energy from wind sources, sold through regulated auctions, have generation performance clauses, which establish a minimum amount of energy delivery, on an annual and/or four-year basis. The developments are subject to climatic factors associated with uncertainties in wind speed, which may result in energy production lower than the minimum amount of contracted energy. Such breach of contract may compromise the Company's future revenues.
F-92
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
The balance recorded in liabilities referring to the non-performance is shown in Note 27. The increase in liabilities is due to the fact that the amounts payable were suspended until December 31, 2024 due to discussions in the sector regarding the restriction of generation of wind farms (constrained-off). Furthermore, after a disturbance that occurred in the National Interconnected System - “SIN” on August 15, 2023, the ONS, in a preventive manner, increased the frequency of restrictions, which increased the restriction on generation of wind farms located in the Northeast region. These events of reduced or curtailed generation, particularly from wind and solar power plants, occur when production exceeds the consumption or transmission capacity of the electricity system. The problem is known in the electricity industry as curtailment.
In December 2023, the Federal Tribunal of the 1
st
Region (TRF1) accepted the arguments of ABEEólica - the Brazilian Wind Energy Association - and ABSOLAR - the Brazilian Solar Photovoltaic Energy Association - and ordered the CCEE to make compensation payments to the generators in the subsequent spot market settlement. This measure was not complied with, as CCEE stated that it was waiting for Aneel to define the rules. In July, before any regulations were issued, Aneel succeeded in having the decision suspended, arguing that there was no urgency to justify the injunction.
In December 2024, the Federal Regional Court of the 1
st
Region (TRF1) ruled that generators are entitled to compensation for the energy not produced as a result of ONS determinations (curtailment), reinstating the previous injunction but without retroactivity to the moment when it was previously suspended. This decision provides that wind and solar generators will again be compensated for curtailment events with future effect.
Aneel appealed the decision and on January 22, 2025, the Superior Court of Justice (STJ) upheld the petition and suspended the injunction again. In its decision, the STJ argued that the losses resulting from the curtailment could not be passed on to consumers without a more thorough examination of the thesis regarding the inherent risks of the business. As the injunction was lifted before the first financial settlement (which was due to take place in early February), the generators have not been reimbursed for the curtailments that have taken place since then. The case is awaiting a decision on the merits.
32.2.10. Risk related to price of power purchase and sale transactions
The table below shows the notional values of the electricity commercialization contracts on the date of these financial statements:
| Purchase | Sale | |||||||
| 2025 |
|
|
||||||
| 2026 |
|
|
||||||
| 2027 |
|
|
||||||
| 2028 |
|
|
||||||
| 2029 |
|
|
||||||
| 2030 to 2040 |
|
|
||||||
|
|
|
|||||||
The weighted average (duration) of the contracts is 127 months for energy purchases and 124 months for energy sales.
The activity of selling electricity exposes the Company to the risk of future price volatility, so that part of the future purchase and sale transactions are designated and classified as derivative financial instruments and recognized in the financial statements at fair value through profit or loss based on the difference between the contracted price and the market price of the transactions. The following table shows the fair value balances of the Company's contracts recorded on the date of these financial statements:
| Assets | Liabilities | Net | |||||||||
| Current |
|
(
|
|
||||||||
| Noncurrent |
|
(
|
|
||||||||
|
|
(
|
|
|||||||||
The fair value was estimated using the prices defined internally by the Company, which represented the best estimate of the future market price. The discount rate used is based on the NTN-B rate of return disclosed by Anbima on December 31, 2024, without inflation and adjusted for credit risk.
F-93
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
The table below presents a sensitivity analysis which, for the base and probable scenarios, considered the accounting balances recorded on the date of these financial statements. Additionally, the Company continues to monitor scenarios “1” and “2”, which consider 25% and 50% increase or decrease.
| Price variation | Baseline 12.31.2024 | Projected scenarios | |||||||||||||||
| Probable | Scenario 1 | Scenario 2 | |||||||||||||||
| Unrealized gains (losses) on energy purchase and sale operations | Increase |
|
|
|
|
||||||||||||
| Decrease |
|
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|
|||||||||||||
32.2.11. Counterparty risk in the energy market
The free energy market does not yet have a counterparty to guarantee all contracts (clearing house), so the risk of default is bilateral. As a result, the Company is exposed to the risk of the seller not registering the energy contracted with the CCEE and/or the risk of not receiving payment for the energy sold. In the event of non-registration or non-receipt, the Company is obliged to acquire/sell energy at the spot market price and may also incur regulatory penalties and even the loss of the amount paid.
The Company has a policy that sets limits on possible transactions with each counterparty after analyzing their financial capacity, maturity and history.
Although our policies are more restrictive and our counterparties are in good financial condition, the Company is exposed to systemic events in which the failure of one counterparty to meet its financial obligations triggers events at other trading firms, which may affect the Company's counterparties.
32.3. Capital management
The Company seeks to keep a strong capital base to maintain the trust of investors, creditors and market and ensure the future development of the business. Management also strives to maintain a balance between the highest possible returns with more adequate levels of borrowings and the advantages and the assurance afforded by a healthy capital position. Thus, it maximizes the return for all stakeholders in its operations, optimizing the balance of debts and equity.
The Company monitors capital by using an index represented by adjusted consolidated net debt divided by adjusted consolidated EBITDA (Earnings before interest, taxes, depreciation and amortization) for the last twelve months. The corporate limit established in the debt deeds provides for the annual maintenance of the index below 3.5, and the eventual expectation of non-compliance of that indicator gives rise to actions by the Management to correct the course of the calculations until the end of each year. On December 31, 2024, the index was achieved in accordance with the assumptions defined in the contracts.
In addition, the company monitors debt in relation to equity, as shown below.
| Indebtedness | 12.31.2024 | 12.31.2023 | ||||||
| Loans and financing (a) | 5,126,470 | 5,343,217 | ||||||
| Debentures | 12,627,365 | 9,619,106 | ||||||
| (-) Cash and cash equivalents | (4,161,939) | (5,634,623) | ||||||
| (-) Bonds and securities - debt contract guarantees | (434,474) | (405,342) | ||||||
| Net debt | 13,157,422 | 8,922,358 | ||||||
| Equity | 25,636,935 | 24,191,667 | ||||||
| Debt to equity ratio | 0.51 | 0.37 | ||||||
(a) Includes loans and financing that were reclassified to Liabilities classified as held for sale (Note 37).
F-94
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
33. Related Party Transactions
The following table shows the balances resulting from the relevant transactions with related parties carried out by the Company, except for transactions involving operations in a regulated environment, recorded in accordance with the criteria and definitions established by the regulatory agents.
| Assets | Liabilities | Revenue | Cost / Expense | |||||||||||||||||||||||||||||
| Related parties / Nature of operation | 12.31.2024 | 12.31.2023 | 12.31.2024 | 12.31.2023 | 12.31.2024 | 12.31.2023 | 12.31.2022 | 12.31.2024 | 12.31.2023 | 12.31.2022 | ||||||||||||||||||||||
| Entities with significant influence | ||||||||||||||||||||||||||||||||
| State of Paraná | ||||||||||||||||||||||||||||||||
| Dividends |
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| Solidarity Energy Program (a) |
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| Programa Tarifa Rural Noturna (a) |
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| Employees transferred (b) |
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| BNDES and BNDESPAR | ||||||||||||||||||||||||||||||||
| Dividends (c) |
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| Financing (Note 19) |
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(
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(
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(
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| Debentures – wind power (Note 20) |
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(
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(
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(
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| Joint ventures | ||||||||||||||||||||||||||||||||
| Caiuá Transmissora de Energia (d) |
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| Dividends |
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Integração Maranhense Transmissora - dividends
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Matrinchã Transmissora de Energia - dividends
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Guaraciaba Transmissora de Energia - dividends
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Paranaíba Transmissora de Energia - dividends
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Cantareira Transmissora de Energia - dividends
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| Mata de Santa Genebra Transmissão (e) |
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| Dividends |
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| Associates | ||||||||||||||||||||||||||||||||
| Dona Francisca Energética S.A. (f) |
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(
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(
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(
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| Dividends |
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| Foz do Chopim Energética Ltda. (g) |
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| Key management staff | ||||||||||||||||||||||||||||||||
| Fees and social security charges (Note 29.2) |
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(
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(
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(
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| Pension and healthcare plans (Note 21) |
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(
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(
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(
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| Other related parties | ||||||||||||||||||||||||||||||||
| Fundação Copel | ||||||||||||||||||||||||||||||||
| Administrative property rental |
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(
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(
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(
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| Pension and healthcare plans (Note 21) |
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Lactec (h)
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(
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(
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(
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| Sanepar (i) |
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|
Sistema Meteorológico do Paraná – Simepar (j)
|
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(
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(
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(
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Tecpar (k)
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Celepar (k)
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(
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(
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(
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Assembleia Legislativa do Paraná (k)
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Portos do Paraná (k)
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a)
Energia Solidária Program, created by state law No. 20.943/2021, replacing the Luz Fraterna Program, establishes the payment of electricity consumption to benefit low-income families, residing in the State of Paraná, whose properties - consumer units - are used exclusively for residential purposes, whether in urban or rural areas, and fulfill the requirements established in articles 2 and 3 of this law.
F-95
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
In March 2018, the amount of R$
159,274
was settled. The principal interest, fine and monetary restatement totaled R$
158,849
. For the collection of these charges on electricity bills for the period of September 2010 to June 2015, monitory action No. 0006254-29.2018.8.16.0004 was filed in November 2018 against the State of Paraná, which is responsible for paying the invoices under the terms of State Law No. 14.087/2003. We highlight that despite the negotiations maintained by Management, seeking to settle the debt, uncertainties still exist regarding the realization of this asset and, therefore, this asset was not recognized, in compliance with the current accounting standards. For the tax treatment, as determined by the Brazilian Federal Revenue Office in the Normative Instruction No. 1,753/2017, the Company has taxed this revenue. The lawsuit between Copel and the State of Paraná is currently before the Paraná Court of Justice, where the parties are seeking a review of the decision that recognized part of the claim. The appeal was heard in October 2023 and the judgment has not yet been published. In April 2023, Copel filed a second lawsuit under No. 0000873-24.2023.8.16.0179 to recover the balance of R$
25,936
. The Management reinforces that it is making all necessary efforts and taking all appropriate measures to preserve the Company's interests.
b)
Reimbursement of wages and social charges for employees transferred to the Paraná State Government. Balances presented are net of expected credit loss.
c)
BNDES is the controller of BNDES Participações S.A. - BNDESPAR, which holds shares in Copel (Note 27.1). BNDES and BNDESPAR acquired all the debentures issued by the subsidiaries Nova Asa Branca I, Nova Asa Branca II, Nova Asa Branca III, Nova Eurus IV and Ventos de Santo Uriel.
d)
Contract for operation and maintenance services provided by Copel GeT, expiring on May 10, 2026.
e)
Contracts signed by Copel GeT: operation and maintenance, expiring on January 31, 2028, and facility sharing, expiring on January 1, 2043.
f)
Energy purchase and sale contract signed by Copel GeT, maturing on March 31, 2025.
g)
Operation and maintenance contracts signed by Copel GeT, maturing on May 31, 2024.
h)
The Institute of Technology for Development (Lactec) is a Public Interest Civil Society Organization (Oscip) of which Copel is an associate. Lactec has service and research and development contracts with Copel GeT, FDA and Copel DIS, subject to prior or subsequent control, with the approval of Aneel. Copel COM provides services and sells energy to the Institute.
i)
Energy sales contract signed by Copel COM.
j)
The Sistema Meteorológico do Paraná - Simepar is a supplementary unit of the Independent Social Service Paraná Technology, linked to the State Department of Science, Technology and Higher Education. Simepar has contracts with Copel for services of weather forecast, meteorological reports, ampacity analysis, mapping and analyses of winds and atmospheric discharges.
k)
Energy sales contract signed between Copel COM and the Instituto de Tecnologia do Paraná - Tecpar (a public company of the State Government that supports innovation and economic and social development in Paraná and Brazil), Information Technology Company of Paraná - Celepar (mixed capital company that is part of the indirect administration of the Paraná State Government), Portos do Paraná (port complex that operates as a public company of the State Government, subordinated to the Infrastructure and Logistics Secretary of State) and Assembleia Legislativa do Paraná (legislative assembly of the State).
Copel's direct and indirect subsidiaries have short and long-term energy purchase and sale agreements entered with each other, carried out in accordance with the criteria and definitions of the regulated environment. Both the balances of existing transactions and the balances of commitments are eliminated from each other when preparing the Company's consolidated financial statements.
In addition, as of December 31, 2024, Copel GeT has energy purchase commitments with Dona Francisca amounting to R$
15,964
(R$
31,971
as of December 31, 2023) and Copel COM has energy sales commitments signed with agencies and / or entities connected to the Paraná State Government, including Sanepar, amounting to R$
201,272
(R$
216,029
as of December 31, 2023).
F-96
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
For key management personnel, in addition to the short-term benefits shown in the table above, the Long-Term Incentive Plan (ILP) described in Note 27.6 has been established.
33.1. Guarantees awarded to related parties
Sureties and guarantees granted by Copel to its subsidiaries for financing and debentures are informed in Notes 19 and 20 of these financial statements.
The total amount of financial guarantees provided by Copel as of December 31, 2024, in the form of corporate guarantee letter, for power purchase and transport agreements made by Copel GeT and its subsidiaries, is R$
4,261
(R$
4,492
as of December 31, 2023) and by Copel COM (Copel Mercado Livre) is R$
495,653
(R$
602,520
as of December 31, 2023).
Sureties and guarantees granted by Copel and Copel GeT for financing, and debentures of joint ventures are reported below:
| Company | Operation | Final maturity | Amount approved | Balance (a) | Interest % | |||||||||||||||
| (1) | Caiuá Transmissora |
|
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|
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|
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| (2) | Cantareira Transmissora |
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| (3) |
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| (4) | Guaraciaba Transmissora |
|
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| (5) |
|
|
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| (6) | Matrinchã Transmissora (b) |
|
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| (7) |
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| (8) |
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|
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| (9) | IMTE Transmissora |
|
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|
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| (10) | Mata de Santa Genebra |
|
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|
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| (11) |
|
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|
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| (12) | Paranaíba Transmissora |
|
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| (13) |
|
|
|
|
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(a) Gross debt balance, discounted from restricted cash that is already guaranteed by the companies themselves.
(b) The guarantees to be provided in the 3rd issue will only be presented after the maturity of the Debentures of the 2nd issue and the Financing with BNDES.
Operation guarantee: pledge of shares held by Copel Get in the ventures.
34. Commitments
The main commitments related to long-term contracts not yet incurred, and therefore not recognized in these financial statements, are as follows:
| 12.31.2024 | 12.31.2023 | |||||||
| Energy purchase and transportation contracts |
|
|
||||||
| Acquisition of assets for electricity distribution |
|
|
||||||
| Improvements in transmission facilities |
|
|
||||||
| Modernization of GPS UHE |
|
|
||||||
| Acquisition of fixed assets and improvements in wind farms |
|
|
||||||
F-97
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
35. Insurance
The specification by risk modality and effective date of the main insurance policies can be seen below:
| Policy | End of term | Insured amount | ||||||
| Operational risks - HPP Baixo Iguaçu |
|
|
||||||
| Operational risks - HPP Governador Jayme Canet Junior |
|
|
||||||
| Operational risks - Cutia and Bento Miguel |
|
|
||||||
| Named Risks |
|
|
||||||
| Operational risks - HPP Colíder |
|
|
||||||
| Operational risks - Aventura e SRMN |
|
|
||||||
| Operational risks - Brisa Potiguar |
|
|
||||||
| Operational risks - Ventos de Serra do Mel II e IV |
|
|
||||||
| Operational risks - Elejor |
|
|
||||||
| Fire - owned and rented facilities |
|
|
||||||
In addition to the insurance policies listed above, the company and its subsidiaries take out other insurance policies with smaller amounts, such as: DO insurance, general civil liability, judicial and payment guarantee, miscellaneous risks, life insurance and vehicle insurance. The company also has an indemnity contract in addition to the DO insurance.
The guarantee insurances taken out by the subsidiaries, joint ventures and associates have Copel and/or Copel GeT as a guarantor, within the limits of their share of interest in each project.
36. Additional information to the Statement of Cash Flows
36.1. Transactions not involving cash
| 12.31.2024 | 12.31.2023 | |||||||
| Additions of contract assets (a) |
|
|
||||||
| Acquisitions of fixed assets (a) |
|
|
||||||
| Additions to the Right-of-use asset (b) |
|
|
||||||
|
|
|
|||||||
(a) Correspond to the amount of purchases made in installments and not yet paid off by the end of the period.
(b) Recognition was offset by the lease liability item (Note 24).
The mentioned transactions did not involve cash and, for this reason, are not being presented in the statement of cash flows.
37. Assets held for sale and Discontinued operations
In compliance with the guidelines of Copel Strategic Business Planning - Vision 2030 regarding the decarbonization of its asset portfolio, the prioritization of investments, actions directly related to its core business (electricity), the concentration on larger assets and the improvement of operational efficiency, Copel has evaluated the divestment and recycling of assets and participations, as below.
UEG Araucária S.A. (UEGA)
On December 14, 2023, Copel and Copel GeT signed the Share Purchase and Sale Agreement (“CCVA”) for the equity interest in UEGA with Âmbar Energia S.A., as described in Material Fact 20/23, and the value of the transaction on the base date of September 30, 2023, corresponding to the equity value related to Copel's
81.2
% participation, was R$
290,662
.
On July 1, 2024, after all the conditions of the CCVA had been met, the divestment of all the shares of Copel (
20.3
%) and Copel GET (
60.9
%) in UEGA to Âmbar Energia S.A. was completed for the total amount of R$
261,355
, of which R$
58,132
had already been received as an advance on December 14, 2023. The gain recorded in the Company's income, net of transaction costs and taxes, amounted to R$
14,504
and is presented in discontinued operations line. With the completion of the process, Copel ceased to control UEGA, transferring its assets and liabilities and the management of its business to the acquirers.
F-98
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
Companhia Paranaense de Gás – Compagas
On July 10, 2024, Copel entered into the Control Block Purchase and Sale Agreement (“CCVBC”) with Compass Dois Ltda., a subsidiary of Compass Gás e Energia S.A., regarding the sale of all shares representing
51
% of Compagas and on September 16, 2024, after all conditions set forth in the “CCVBC” were met, the divestment was completed. The Company received
40
% of the equity value of R$
906,000
, adjusted as provided for in the contract considering the base date of December 31, 2023.The payment of the updated remaining balance will occur in stages, with
30
% by September 16, 2025 and
30
% by September 16, 2026. The gain recorded in the Company's income, net of transaction costs and taxes, was R$
455,842
and is presented in the discontinued operations line. Copel's control in Compagas was transferred at the conclusion of the divestment, with the management of its business passing to the acquirers.
Small Generation Assets
On May 8, 2024, the Board of Directors approved the beginning of the non-binding proposals stage for the divestment of 13 small generation assets of the wholly-owned subsidiary Copel GeT, totaling 118.7 MW of installed capacity, as outlined in the table below:
| Granted Power | Assured Energy | |||||||
| (MW) | (MW average) | |||||||
| HGP Pitangui |
|
|
||||||
| HGP Chopim I |
|
|
||||||
| HGP Marumbi |
|
|
||||||
| HGP Melissa |
|
|
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| HGP Salto do Vau |
|
|
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| Palmas Winds |
|
|
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| SHP Apucaraninha |
|
|
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| SHP Cavernoso |
|
|
||||||
| SHP Cavernoso II |
|
|
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| SHP Chaminé |
|
|
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| SHP São Jorge |
|
|
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| HPP Guaricana |
|
|
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| TPP Figueira |
|
|
||||||
|
|
|
|||||||
On 25 November 2024, a share purchase agreement (“CCVA”) was signed with Electra Hydra/Intrepid for a total amount of R$
450,492
, representing the equity value of the 13 assets. This amount will be adjusted in accordance with the contract. An advance payment of R$
45,000
was received on December 16, 2024. On March 31, 2025, the divestment was partially completed, as disclosed in note 38.2. The assets will be transferred as and when the transactions are closed, which are subject to verification of the usual conditions for this type of transaction, including approval by the competent authorities.
Asset Swap
On December 12, 2024, according to Material Fact 12/24, Copel GeT entered into the Agreement for the Transfer of Establishment, Purchase and Sale of Equity Interest, Assignment of Equity Interest in Consortium with Purchase and Sale of Assets and Other Covenants with Eletrobras and its wholly-owned subsidiary Eletrobras CGT Eletrosul, through which they agreed the following:
•
Copel GeT will receive (i) Eletrobras' entire
49
% stake in the Mauá Hydroelectric Power Plant and (ii) Eletrobras' entire
49.9
% stake in the Mata de Santa Genebra S.A. (MSG) transmission company, with Copel GeT now holding a full stake in the respective assets;
•
Copel GeT will transfer the Colíder Hydroelectric Power Plant to Eletrobras;
•
In addition, Copel GeT will pay R$
365,000
to Eletrobras through cash resources at the closing of the transaction, subject to usual market price adjustment mechanisms.
The contract was signed considering the values on the base date of December 31, 2023, which includes the cash transfer and the financing of the three assets.
F-99
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
The Assets swap is pending satisfaction of the usual conditions precedent for operations of this nature, including approval and consent from competent authorities such as Aneel and BNDES. CADE's approval was granted in January 2025.
The Colíder HPP assets do not represent a separate line of business or a distinct geographical area of operations, nor do they constitute a subsidiary acquired exclusively for resale and are therefore not disclosed as discontinued operations. The company maintains its operations in the power generation sector.
Balances classified as held for sale
The breakdown of assets and liabilities classified as held for sale is as follows:
| HPP Colíder | Small generation assets | 12.31.2024 | Compagas | UEGA | 12.31.2023 | |||||||||||||||
| Assets classified as held for sale | ||||||||||||||||||||
| Cash and cash equivalents |
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| Trade accounts receivable |
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| Inventories |
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| Current recoverable taxes and deferred taxes |
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| Judicial deposits |
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| Other receivables |
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| Contract assets |
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| Property, plant and equipment |
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| Intangible assets |
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| Right-of-use asset |
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| Liabilities associated with assets classified as held for sale | ||||||||||||||||||||
| Payroll, social charges and accruals |
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| Accounts payable to suppliers |
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| Taxes due |
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| Loans and financing |
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| Debentures |
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| Dividend payable |
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| Accounts payable related to concession |
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| Post-employment benefits |
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| Lease liability |
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| Provisions for legal claims |
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| Other accounts payable |
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As of December 31, 2024, the balances include the book values of the assets and liabilities of the 13 small generation projects and the Colíder HPP. These balances have already been adjusted for the cessation of depreciation and amortization. The balances of UEGA and Compagas as of December 31, 2023 were settled with the closing of the operations on July 1, 2024 and September 16, 2024, respectively.
Discontinued Operations
The revenues, costs, expenses, and cash flow movements resulting from UEGA and Compagas, disclosed as discontinued operations, are detailed in the following tables.
F-100
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| Statements of Income from discontinued operations | 12.31.2024 | 12.31.2023 | 12.31.2022 | ||||||||
| Net operating revenue |
|
|
|
||||||||
| Operating costs |
(
|
(
|
(
|
||||||||
| Gross profit |
|
|
|
||||||||
| Selling expenses |
(
|
(
|
(
|
||||||||
| General and administrative expenses |
(
|
(
|
(
|
||||||||
| Other operational income (expenses) |
(
|
(
|
(
|
||||||||
|
(
|
(
|
(
|
|||||||||
| Profit (loss) before financial results and taxes |
|
|
(
|
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| Financial results |
(
|
|
|
||||||||
| Operating profit (loss) |
|
|
|
||||||||
| Income tax and social contribution |
(
|
(
|
(
|
||||||||
| Net income (loss) |
|
|
(
|
||||||||
| Gain on the share sales operation |
|
|
|
||||||||
| Income tax on sales gains |
(
|
|
|
||||||||
| Net income (loss) from discontinued operations |
|
|
(
|
||||||||
| Other comprehensive income from discontinued operations |
|
|
|
||||||||
| Comprehensive income from discontinued operations |
|
|
(
|
||||||||
The table below presents a reconciliation of the results from discontinued operations. The amounts of eliminations of intercompany costs and expenses refer mainly to UEGA's operation and maintenance services provided by Copel GET, and to the monetary restatement of dividends from Compagas and UEGA.
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Result of discontinued operations attributed to shareholders of the parent company |
|
|
(
|
||||||||
| Result of discontinued operations attributed to non-controlling shareholders |
|
|
|
||||||||
|
|
|
(
|
|||||||||
| ( + ) Elimination of intercompany costs/expenses |
|
|
|
||||||||
| Consolidated results of discontinued operations |
|
|
(
|
||||||||
| Statements of Cash Flows from discontinued operations | 12.31.2024 | 12.31.2023 | 12.31.2022 | ||||||||
| Net income (loss) |
|
|
(
|
||||||||
| Adjustments to reconcile net income |
|
(
|
|
||||||||
| Dividends and interest on equity received |
|
|
|
||||||||
| Changes in assets and liabilities |
(
|
|
(
|
||||||||
| Debentures - interest due and paid |
(
|
(
|
|
||||||||
| Loan charges granted to related parties |
|
|
|
||||||||
| Taxes and charges paid |
(
|
(
|
(
|
||||||||
| Cash flows from operational activities |
|
|
|
||||||||
| Financial investments |
(
|
(
|
|
||||||||
| Receipt of loans granted |
|
|
|
||||||||
| Additions to contract assets, property, plant and equipment and intangible assets |
(
|
(
|
(
|
||||||||
| Receipt for alienation |
|
|
|
||||||||
| Cash flows from investment activities |
|
(
|
(
|
||||||||
| Issue of Debentures |
|
|
|
||||||||
| Issue of loans and financing |
|
|
|
||||||||
| Payments of principal - debentures |
(
|
(
|
|
||||||||
| Amortization of lease liabilities |
(
|
(
|
(
|
||||||||
| Dividends and interest on own capital paid |
(
|
(
|
|
||||||||
| Cash flows from financing activities |
(
|
|
(
|
||||||||
| Changes in cash and cash equivalents |
|
|
(
|
||||||||
F-101
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
38. Subsequent events
38.1. Divestment of Baixo Iguaçu Consortiums
On February 21, 2025, according to Material Fact 01/25, Copel GeT has exercised its right of first refusal to acquire all shares of Geração Céu Azul S.A. (“Céu Azul”), currently owned by Neoenergia S.A., which holds a
70
% stake in the Consórcio Empreendedor Baixo Iguaçu (“CEBI”), responsible for operating the Baixo Iguaçu Hydroelectric Power Plant, for an equity value of R$
984
million. The acquisition commitment was formalized through adherence to the Share Purchase and Sale Agreement and Other Covenants (“CCVA 1”), which had already been negotiated between Neoenergia and the original potential buyer of this stake.
After exercising the right of first refusal, Copel GeT entered into a Share Purchase and Sale Agreement and Other Covenants with DK Holding Investments, S.R.O. (“CCVA 2”), through which Copel GeT committed to selling: (i) the entirety of the aforementioned equity interest in Céu Azul, which it will hold upon the closing of the transaction provided for in CCVA 1, and (ii) its
30
% minority stake in CEBI, for an equity value of R$
570
million, so that the buyer will become the indirect owner of
100
% of the Baixo Iguaçu HPP. The total transaction amounts to R$
1,554
million in equity value.
The transaction capitalizes on a business opportunity that creates value for Copel and optimizes its operational and administrative structure. Copel GeT received an upfront payment equivalent to
10
% of the total equity value, with the remaining balance to be paid by the closing date, subject to customary adjustments for this type of transaction. The closing of transactions under CCVA 1 and CCVA 2 is conditional on the fulfillment of certain conditions precedent, which are characteristic of this type of operation.
38.2 Partial closing of the divestment in small generation assets
On March 31, 2025, according to Notice to market 06/25, the Company partially concluded the divestment in small generation assets, in the amount of R$
219.5
million (
49.0
% of the total transaction), after fulfilling all precedent conditions related to the assets involved in this closing. As of December 31, 2024, the assets and liabilities associated with these small generation assets are recorded as assets and liabilities held for sale (Note 37). The divestment amount for the remaining assets will be received upon compliance with the usual precedent conditions established in the Share Purchase and Sale Agreement (CCVA).
38.3. Debentures issuance
On March 11, 2025, Copel GeT settled the 10
th
issuance of simple debentures, non-convertible into shares, with additional personal guarantee, in three series, in the amounts of R$
500,000
, R$
500,000
and R$
1,000,000
. The remuneration corresponds to the accumulated variation of the DI plus a spread of
0.59
% per year and
0.79
% per year for the first two series and
7.4820
% per year for the third series, with maturity terms of
4.7
and
12
years, in each series, respectively.
39. Condensed individual financial information of Companhia Paranaense de Energia - Copel
In order to attend Rule 12-04 of Regulation S-X of the Securities and Exchange Commission (the “SEC”), Management has incorporated the condensed individual financial information of Companhia Paranaense de Energia - Copel in these financial statements, as part of the Form 20-F.
This information were prepared considering the same accounting policies as described in Note 3 and 4 to Company’s consolidated financial statements. Investments in subsidiaries are recognized in the individual financial statements based on the equity method. Initially recorded at cost, their carrying amount is increased or decreased by the recognition of the investor's interest in profit, loss and other comprehensive income generated by subsidiaries after acquisition. When required, for the calculation of equity in earnings of investees, the subsidiaries financial statements are adjusted to align their policies with the Parent Company's accounting policies.
F-102
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
39.1. Condensed statements of financial position
| ASSETS | 12.31.2024 | 12.31.2023 | ||||||
| Current assets | ||||||||
| Cash and cash equivalents |
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| Bonds and securities |
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| Dividends receivables (39.5.3) |
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| Other current receivables |
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| Income tax and social contribution |
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| Prepaid expenses |
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| Receivable from related parties (39.5.1) |
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| Assets held for sale |
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| Noncurrent assets | ||||||||
| Other temporary investments |
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| Judicial deposits |
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| Other current receivables |
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| Income tax and social contribution |
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| Deferred tax assets |
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| Other noncurrent recoverable taxes |
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| Receivables from related parties (39.5.1) |
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| Investments (39.5.2) |
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| Property, Plant and Equipment, net |
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| Intangible Assets |
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| Right-of-use asset |
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| Total assets |
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F-103
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
| LIABILITIES | 12.31.2024 | 12.31.2023 | ||||||
| Current liabilities | ||||||||
| Payroll, social charges and accruals |
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| Related parties (39.5.1) |
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| Suppliers (39.5.6) |
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| Income tax and social contribution |
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| Other taxes payable |
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| Dividends payable |
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| Post employment benefits |
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| Lease liability |
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| Other accounts payable |
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| Provisions for legal claims |
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| Noncurrent liabilities | ||||||||
| Payroll, social charges and accruals |
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| Related parties (39.5.1) |
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| Other taxes due |
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| Post employment benefits |
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| Lease liability |
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| Other accounts payable |
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| Provisions for legal claims (39.5.4) |
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| Equity | ||||||||
| Share capital |
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| Capital reserve |
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| Equity valuation adjustments |
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| Treasury shares |
(
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| Legal reserves |
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| Retained earnings |
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| Additional dividends proposed |
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| Total liabilities and equity |
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F-104
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
39.2. Condensed statements of income
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Operating revenues (expenses) | |||||||||||
| General and administrative expenses |
(
|
(
|
(
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||||||||
| Other revenues (expenses), net |
(
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(
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(
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| Result of equity in investees |
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| Operating income before financial results |
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| Financial income (expenses) | |||||||||||
| Financial revenues |
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| Financial expenses |
(
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(
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(
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(
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| Operating income |
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| Income tax and social contribution | |||||||||||
| Income tax and social contribution |
|
(
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| Deferred income tax and social contribution |
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| Net income from continuing operations |
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| Discontinued operations | |||||||||||
| Net income (loss) from discontinued operations |
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(
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| Net income |
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||||||||
| BASIC EARNING PER SHARE ATTRIBUTED TO CONTROLLING SHAREHOLDERS – Expressed in Brazilian Reais | |||||||||||
| Common shares |
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| Class A preferred shares |
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| Class B preferred shares |
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| DILUTED EARNING PER SHARE ATTRIBUTED TO CONTROLLING SHAREHOLDERS – Expressed in Brazilian Reais | |||||||||||
| Common shares |
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| Class A preferred shares |
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| Class B preferred shares |
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39.3. Condensed statement of comprehensive income
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| NET INCOME |
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| Other comprehensive income | |||||||||||
| Items that will never be reclassified to profit or loss | |||||||||||
| Adjustments related to actuarial liabilities | |||||||||||
| Post employment benefits |
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(
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(
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| Post employment benefits - equity |
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(
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| Taxes on other comprehensive income |
(
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| Items that may be reclassified to profit or loss | |||||||||||
| Adjustments related to financial assets - equity |
(
|
(
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| Total comprehensive income, net of taxes |
|
(
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| TOTAL COMPREHENSIVE INCOME |
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F-105
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
39.4. Condensed statements of cash flows
| 12.31.2024 | 12.31.2023 | 12.31.2022 | |||||||||
| Net cash generated from operating activities |
(
|
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||||||||
| Cash flow from investing activities | |||||||||||
| Financial investments |
|
(
|
(
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||||||||
| Loans and financing granted to related parties |
(
|
(
|
(
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||||||||
| Receipt of loans and financing granted to related parties |
|
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| Investment disposal |
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||||||||
| Additions in investments |
(
|
(
|
(
|
||||||||
| Additions to property, plant and equipment |
(
|
(
|
(
|
||||||||
| Additions to intangible assets |
(
|
(
|
(
|
||||||||
| Net cash used in investing activities from continuing operations |
(
|
(
|
(
|
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| Net cash generated by investment activities from discontinued operations |
|
(
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| Net cash used from investing activities |
(
|
(
|
(
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||||||||
| Cash flow from financing activities | |||||||||||
| Amortization of principal - loans and financing |
|
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(
|
||||||||
| Amortization of principal - debentures |
|
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(
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||||||||
| Payments of principal of lease liabilities |
(
|
(
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(
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||||||||
| Capital increase |
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| Transaction costs in capital increase |
|
(
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||||||||
| Share buyback |
(
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| Dividends and interest on own capital paid |
(
|
(
|
(
|
||||||||
| Net cash used in financing activities |
(
|
|
(
|
||||||||
| Total effects on cash and cash equivalents |
(
|
|
(
|
||||||||
| Cash and cash equivalents at the beginning of the period |
|
|
|
||||||||
| Cash and cash equivalents at the end of the period |
|
|
|
||||||||
| Change in cash and cash equivalents |
(
|
|
(
|
||||||||
39.5. Additional individual information related to Companhia Paranaense de Energia - Copel
39.5.1. Related Parties
| 12.31.2024 | 12.31.2023 | |||||||
| Assets | ||||||||
|
Structure sharing (a)
|
|
|
||||||
| UEGA - loan agreement (b) |
|
|
||||||
|
|
|
|||||||
| Liabilities | ||||||||
|
Structure sharing (a)
|
|
|
||||||
| Elejor advance |
|
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||||||
|
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|||||||
a) Structure sharing
Balances mainly refer to contracts for sharing personnel and management expenses entered between Copel and its direct and indirect subsidiaries.
b) Loan Agreement - UEG Araucária
On July 4, 2023, a loan agreement was signed between Copel and UEG Araucária, with the approval of limits plus IOF and interest of CDI +
1.40
% p.a., to provide resources for financing the company activities and business. The contract was settled on July 1, 2024.
F-106
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
39.5.2. Investments
| 12.31.2024 | 12.31.2023 | |||||||
| Copel Geração e Transmissão |
|
|
||||||
| Copel Distribuição |
|
|
||||||
| Copel Serviços |
|
|
||||||
| Copel Comercialização |
|
|
||||||
| Elejor |
|
|
||||||
|
Other investments (a)
|
|
|
||||||
|
|
|
|||||||
(a) The information regarding joint ventures, associates and other investments are presented in Note 14.
39.5.3. Dividends receivable
| 12.31.2024 | 12.31.2023 | |||||||
| Subsidiaries | ||||||||
| Copel Geração e Transmissão |
|
|
||||||
| Copel Distribuição |
|
|
||||||
| Copel Comercialização |
|
|
||||||
| Compagas |
|
|
||||||
| UEG Araucária |
|
|
||||||
| Joint ventures and Associates | ||||||||
| Dona Francisca |
|
|
||||||
| Other investments |
|
|
||||||
|
|
|
|||||||
39.5.4. Provisions for legal claims
| 12.31.2024 | 12.31.2023 | |||||||
| Tax Claim |
|
|
||||||
| Labor |
|
|
||||||
| Employee benefits |
|
|
||||||
| Civil |
|
|
||||||
|
|
|
|||||||
F-107
| COMPANHIA PARANAENSE DE ENERGIA – COPEL and Subsidiaries | |||||
| Notes to the Consolidated Financial Statements | |||||
| For the year ended December 31, 2024 | |||||
| All amounts expressed in thousands of Brazilian reais, unless otherwise stated | |||||
39.5.5. Restriction of transfer of funds from subsidiaries
The subsidiaries described below qualify as either concessionaires of public services or independent power producers. As such, any transfer of funds to the respective Parent Company, in the form of loans or advances, requires approval by the regulator. This regulatory restriction does not apply to cash dividends determined in accordance with the Brazilian Corporate Law. Total restricted subsidiaries net assets are composed as follows:
| 12.31.2024 | 12.31.2023 | |||||||
| Copel Geração e Transmissão |
|
|
||||||
| Copel Distribuição |
|
|
||||||
| Compagas |
|
|
||||||
| UEG Araucária |
|
|
||||||
|
|
|
|||||||
39.5.6. Liquidity
The following table shows the expected undiscounted settlement values of the Copel liabilities, in each time range:
| Interest (a) |
Less than
1 month |
1 to 3 months | 3 months to 1 year | 1 to 5 years |
Over
5 years |
Total | |||||||||||||||||
| 12.31.2024 | |||||||||||||||||||||||
| Suppliers | — |
|
|
|
|
|
|
||||||||||||||||
| Lease liability |
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
(a) Effective interest rate - weighted average.
F-108
TABLE OF CONTENTS
Item 17 Item 18Item 1. Identity Of Directors, Senior Management and AdvisersItem 2. Offer Statistics and Expected TimetableItem 3. Key InformationItem 4. Information on The CompanyItem 4A. Unresolved Staff CommentsItem 5. Operating and Financial Review and ProspectsItem 6. Directors, Senior Management and EmployeesItem 7. Major Shareholders and Related Party TransactionsItem 8. Financial InformationItem 9. The Offer and ListingItem 10. Additional InformationItem 11. Quantitative and Qualitative Disclosures About Market RiskItem 12. Description Of Securities Other Than Equity SecuritiesItem 12A. Debt SecuritiesItem 12B. Warrants and RightsItem 12C. Other SecuritiesItem 12D. American Depositary SharesItem 13. Defaults, Dividend Arrearages and DelinquenciesItem 14. Material Modifications To The Rights Of Security Holders and Use Of ProceedsItem 15. Control and ProceduresItem 16A. Audit Committee Financial ExpertItem 16B. Code Of EthicsItem 16C. Principal Accountant Fees and ServicesItem 16D. Exemption From The Listing Standards For Audit CommitteesItem 16E. Purchases Of Equity Securities By The Issuer and Affiliated PurchasersItem 16F. Changes in Registrant S Certifying AccountantItem 16G. Corporate GovernanceItem 16H. Mine Safety DisclosureItem 16I. Disclosure Regarding Foreign Jurisdictions That Prevent InspectionsItem 16J. Insider Trading PoliciesItem 16K. CybersecurityItem 17. Financial StatementsItem 18. Financial StatementsItem 19. Exhibits