New 30-year cycle

GRI 1.2

In 2013, the Brazilian Federal Government sanctioned Law 12783, dated 01.11.2013, which arose from Provisional Measure 591/2012 and stipulates the extension of the concession agreements with electricity generation, distribution and transmission companies to bolster the Brazilian manufacturing industry's competitiveness and benefit the population by reducing electric power tariffs.

The new law allowed CTEEP to extend its Concession Agreement with ANEEL so that the Company will be operating as a transmission utility in Brazil for another 30 years.

As a result of the Law, CTEEP started being paid for the management, operation and maintenance services that it provides, which led to a 70% drop in the Company's revenues and impacted its economic and financial performance in 2013.

This new regulatory framework posed a challenged for the Company, which was forced to adapt to the new situation. On the other hand, it is also seen as a great opportunity to improve and grow. (GRI 1,2; 2,9)

Following these changes, CTEEP reviewed its short- and long-term strategy and restructured its strategic plans during 2013. This effort involved redesigning CTEEP's strategic plans, revising its Mission and Vision, restructuring its Set of Indicators and structuring its Strategic Projects, always in keeping with Grupo ISA's Strategic Planning. The current Strategic Map remains in line with our strategy and will be maintained in 2014.

Sustainable growth with an emphasis on profitability and consistent creation of value are the essential pillars of the Company's business strategy. To face up to its growth challenges, CTEEP is optimizing its existing assets through reinforcement and new connections; in addition, it constantly assesses acquisition opportunities by taking part in auctions of transmission lines.

In 2014, Risk Management will be integrated into Strategic Management as part of our corporate strategy to optimize our efforts both to mitigate risks and to achieve the Company's goals.