Centrais Electricas Brasileiras S.A.- Eletrobras
Annual Report 2013

Plain-text annual report

2013 Annual and Sustainability Report Iguaçu Falls, Foz do Iguaçu, Paraná. Eletrobras Annual and Sustainability Report 2013 Present in your daily life Have you ever thought about a world without the advantages of electricity? Today, that is almost impossible. On a daily basis, Eletrobras generates and transmits energy to almost half of Brazil and distributes energy directly to 3.8 million customers. Hence, since it works with one of the cleanest matrices in the The 2013 Annual and Sustainability world, Eletrobras is ready to generate Report of the Eletrobras companies energy for a new age! results from the collaborative work of hundreds of people and reflects a process of continuous improvement and a strengthening of sustainability practices. It also demonstrates how trans- FO R E WO R D Fulfilling its commitment to transparency are important in maintaining the trust of ASR 2013 was assured by the auditing parency and accountability to society The data provided in the Eletrobras and to the best practices in corporate management, Eletrobras once again publishes its Annual and Sustainability Report (Eletrobras ASR 2013), pursuant to the Global Reporting Initiative (GRI) guidelines. On the following pages, you will have access to relevant information that covers all operations, practices, and stakeholder relationships and to data pertaining to our economic, social, and environmental performance, according to the ten principles of the Global Compact and to the model for Social Accounting of the Brazilian Institute of Social and Economic Analyses (IBASE) for 2013. There are no specific limitations pertaining to the scope or boundary of this report. (GRI 4.12, GRI 3.7) 2 stakeholders. Thus, all comments, reviews, company KPMG Brasil, as shown in the and suggestions are valuable and should be sent to sustentabilidade@eletrobras. com. (GRI 3.4) According to the GRI indicators version 3.1, this publication meets application level B+. In this report, we also present the letter of assurance published on page 185, and consolidates the operations of Eletrobras in Brazil for the period of January 1 to December 31, 2013, replacing the same report published in July 2013. (GRI 3.1, GRI 3.2, GRI 3.3, GRI 3.6, GRI 3.8, GRI 3.13) methods used to manage the material All data reported in the printed sustainability aspects and their perfor- mance through indicators identified as material for the organization, its stakeholders, and the electric utilities sector. On page 176, you will find the table containing the responses to GRI profile indicators, perfomance and electric version of this report are also available for download and viewing at: www. eletrobras.com/elb/data/Pages/ LUMIS79AE3C27PTBRIE.htm. Eletrobras website> Sustentabilidade > Relatórios de Sustentabilidade (> Sustainability > Sustainability Reports) utilities sector indicators. (GRI 3.12) Enjoy your reading! 3 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasEletrobras 2013 34% Responsible for 34% of power generation in Brazil. 89% Of the company’s power generation, 89% comes from clean sources, with low greenhouse-gas emissions. 50% Eletrobras owns 50% of the transmission lines in the country. 3,8 million Eletrobras’s distribution companies serve over 3.8 million customers. Record investment of R$11.2 billion. 659 MW of installed capacity were added to the energy matrix. 1,898 km of new transmission lines. An additional 152,000 customers. 3,748 products have received the Eletrobras Procel Seal, which informs consumers about energy efficient appliances. The Eletrobras Procel program contributed to savings of over 9,744 million megawatts-hours – which is equivalent to the annual consumption of approximately five million households. Procel also contributed to preventing the emission of 935,000 tCO2eq, which corresponds to the annual emissions of 321,000 vehicles. The Luz Para Todos (Light for All) program achieved 98% of the goal set for 2013. A total of 87,300 new connections were installed, benefitting over 15 million people in the Brazilian rural area. $ R$60,8 billion Planned investments of R$60.8 billion between 2014 and 2018. 4 4 Eletrobras Eletrobras RELATÓRIO ANUAL E DE SUSTENTABILIDADE 2013 RELATÓRIO ANUAL E DE SUSTENTABILIDADE 2013 5 5 Energy for a new age M E S S AG E The sun rises every day, for everyone. It represents new cycles, new journeys, and great changes and a reshaping of models, plans, and actions. The winds of change management model. In the coming years, notably the first stage of the transmission we will continue to move forward at an system of the power plants located on the even faster pace toward competitiveness, Madeira River. The Eletrobras distribution integration, efficiency, and sustain- companies obtained an additional 152,000 ability, systematically reaffirming our new customers, as well as a reduction in commitment to the principles of the commercial losses and consumer default. Global Compact, to which we have been Eletrobras has started its effective signatories since 2006. operational activities abroad, becoming a The Plan brings changes to Eletrobras partner of the Administración Nacional and, at the same time, the opportunity de Usinas y Transmisiones Eléctricas for a new cycle. To meet these objec- (UTE), through the acquisition of 50% of tives, in 2013 we “tightened our belt,” the shares of the Uruguayan company adopting even more rigorous control of Rouar S/A, responsible for deploying the our spending and curtailing our budget Artilleros wind farms (65 MW), located in for materials, services, and other expen- the department of Colonia, Uruguay, that ditures. We implemented the employee will start its operations in 2014. Voluntary Resignation Incentive Program The company worked proactively in (PID), which was very successful, with obtaining the remaining value of the the participation of 4,448 individuals, a number that could reach 5,000 in 2014 compensation of the generation and transmission assets that had concession and which will deliver R$1.3 billion/year in extended under Law No. 12.783/2013, savings, with return on investment in two which values are being discussed with years. Aneel. Furthermore, it has begun the In our 2013 balance sheet, which restructuring the Business Model and already reflects the full effects of Law Management, which is being developed 12,783, we posted a significant loss of with support of the consultant Roland R$6.3 billion, mainly resulting from nonre- Berger and should be completed in the curring factors such as expenditures for first half of 2014. PID, legal contingencies, and the recording As you can see, we seek a new sun. of impairments, which allows us to To this end, we will always preserve our project promising perspectives concerning most valuable asset: a solid corporate the recovery of results. culture, which brings together extremely Despite having tightened its belt, qualified teams that have a public spirit Eletrobras did not alter its expansion and are useful to customers and commu- program, making investments of R$11.2 nities, always maintaining the conviction billion, a record in the history of the that people are the origin, essence, company. Our goal is to invest R$60.8 and meaning of everything Eletrobras billion between 2014 and 2018, of which undertakes. In 2013, Eletrobras added 659 MW of installed capacity to its energy matrix. blew strongly in 2013 for Eletrobras, marking R$34.4 billion is in projects already In 2014, a new reality will dawn on the the beginning of a decisive process which, with the energy of our employees, takes into account the perpetuity of our assets, underway and R$26.4 billion is for new Eletrobras companies. And the sun of this projects. new age will inspire us to do more than In 2013, Eletrobras added 659 MW of fulfill our mission, but to also captivate products, and services, which are critical for installed capacity to its energy matrix. clients, investors, suppliers, employees the progress of the country. The implementation of the Business and Management Master Plan (PDNG) Some examples are the Santo Antonio, and all those who, along with us, follow Jirau, and Simplício hydroelectric power plants and the Chuí, Livramento, Casa the path to building a better future for Brazilians and for the world. 2013-2017 has put into practice a strategic Nova, Pedra Branca, and Sete Gameleiras realignment, supported by three basic pillars: operational efficiency, sustained expansion, and a new governance and wind farms. Moreover, Eletrobras, whether JOSÉ DA COSTA CARVALHO NETO independently or in partnerships, built over 1,898 km of transmission lines, CEO of Eletrobras (GRI 1.1, GRI 2.9) 6 7 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasReliable and secure power generation M E S S AG E F ROM T H E C H A I R M A N O F T H E B OA R D O F D I R EC TO R S The year 2013 was marked by the federal government’s effort to reduce the cost of energy for consumers in Brazil, in a structural manner, through the promul- gation of Law No. 12.783 of January 11, 2013, which allowed for the extension of the concession term for the generation and transmission of electricity for Eletrobras. In this new scenario, Eletrobras had to adapt to the new conditions created by the new legal framework; in other words, the concessions for the generation and transmission of electricity, covered by article 19 and § 5 of article 17 of Law No. 9,074, of July 7, 1995, were included in the activities regulated by the National Eletrobras reaffirms its commitment to generate, to transmit and to distribute clean and renewable energy. Electricity Agency (Agência Nacional de Consequently, the company’s 51-year Energia Elétrica - ANEEL), thereby bearing history represents the trust and confi- tariffs that include, among other things, dence that, once again, the company will the regulatory costs for operation, mainte- manage to turn challenges into new nance, and administration. Consequently, business opportunities, thereby it became imperative for Eletrobras to maximizing the return to both society and restructure itself by repositioning its role shareholders. as a holding as well as strengthening its autonomy. This certainty is based on the dedication and capacity to work of its I would like to point out that, despite employees, who share company values. the restructuring, Eletrobras continues to This translates into behavior with invest heavily in new projects in the areas integrity, the continuous search for of power generation and transmission excellence, and consistently performing through participation in specific purpose its role to provide the best for society. partnerships. In the area of power gener- Thus, Eletrobras will improve its capacity ation, Eletrobras is participating in the to respond to these new scenarios and implementation of 26,800 MW of energy, challenges. most notably through the hydroelectric Finally, I wish to highlight that given plants of Belo Monte, Santo Antônio, the new conditions set forth by Law No. and Jirau. In the area of transmission, 12,783 of 2013, only the most efficient Eletrobras is responsible for 57,290 km companies will persist. In this sense, of transmission lines of the National I’m certain that Eletrobras will become Interconnected System (SIN), with a increasingly stronger, reinforcing its highlight being the Tucuruí-Manaus management and leadership capacity transmission line. within the electric energy sector. Additionally, there are expanding investments in wind farms, thereby retaining the share of renewable energy MÁRCIO PEREIRA ZIMMERMANN sources in our energy matrix, in addition Chairman of the Board of Directors of to the construction of the Angra 3 nuclear power plant, which will add 1,405 MW to Eletrobras (GRI 1.2) the Brazilian Energy System. Through these investments, Eletrobras reestablishes its commitment to generate, transmit, and distribute clean and renewable energy, guided by its principles of reliability, safety, and quality, thereby providing important gains for the country. 8 9 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasCOMMITMENTS (GRI 1.2) Evolution of our commitments for 2013 GOAL/COMMITMENT PERFORMANCE COMMENTS GOAL/COMMITMENT PERFORMANCE COMMENTS GOVERNANCE Contract on Corporate Performance Goals (CMDE): To establish the new goals for the 2013-2017 cycle, pursuant to the new rules established by Law 12,783 (pertaining to the Provisory Measure MP 579).   ATTAINED ECONOMIC The new goals for CMDE for the 2013-2017 cycle and the respective indicator dashboard were established and approved by the Board of Directors and Board of Executive Officers The indicator dashboard was expanded and now has 13 indicators for the generation and transmission companies, 16 for its distribution companies, and 12 for the Eletrobras holding. The results of the CDME indicators were monitored throughout the year. For 2013, expenditures planned for investment and expansion programs are approximately R$13.7 billion. PARTIALLY ATTAINED Eletrobras has not changed its investment plan, making 83.5% of the investments planned in the budget, totaling the record amount of R$13.4 billion for 2013. SOCIAL Voluntary Resignation Incentive Program ATTAINED 3rd Climate Survey in the Eletrobras companies. ATTAINED In 2012, we concluded the 1st Unified Cycle of the Performance Management System (SGD), which supported the development of the careers of 87.72% of the employees of the Eletrobras companies who are members of the program. ATTAINED Of a total of 9,903 eligible employees, 4,448 participated. In 2013, there were 4,221 resignations through PID, and others dismissals are expected to occur in 2014. At Eletrobras Eletronuclear, this process will begin in 2014 and is expected to be completed in 2015. Eletrobras conducted its 3rd Unified Organizational Climate Survey in 2013, with the participation of 14,550 employees. Based on the results of this survey, we are planning for the preparation of the 2nd Corporate Action Plan to improve the organizational climate, in 2014. The 2nd Unified Cycle of the Performance Management System (SGD), supporting career development and in line with the strategic objectives of the companies was initiated. Employee evaluations, to assess competencies and team goals, and the preparation of the Individual Development Plan (PDI) of each employee are scheduled for the beginning of 2014. The results obtained through the SGD will support meritocracy, and high performers may be promoted either horizontally (merit) or vertically (change in level of complexity). BUSINESS Implementation of over 13,730 km of transmission lines, which represents an additional 13,885 MVA in transformation capacity. Interconnection of the Stand-alone Systems of Manaus-AM and Macapá-AP to the SIN, to incorporate them into the power generation complex of the Eletrobras companies, according to the Monthly Operation Program (PMO) developed by the ONS (National System Operator). The Belo Monte power plant will be the only project to be expanded by the Eletrobras companies after 2016; its main powerhouse will enter into operation between 2016 and 2019. Of Eletrobras’s installed capacity expected to become operational after 2013, a total of 11,975 MW (a capacity proportional to its ownership interest) are provided by power plants under construction. PARTIALLY ATTAINED PARTIALLY ATTAINED In 2013, a total of 3,552 km of transmission lines entered into operation with the participation of Eletrobras. Of this total, 1,595 kilometers refer to the proportional share of Eletrobras companies in the SPE and 303 km, to its own performance, totaling 1,898 kilometers of new lines built by Eletrobras, itself or through partnerships. We highlight the completion of the first phase of the Madeira power plants, in direct current, and the Lechuga Substation, which is responsible for connecting Manaus to the Integrated System (SIN) through the Tucuruí Transmission Line. Over 19.2 km of transmission lines will be incorporated into the SIN by 2018. In 2013, the Eletrobras companies, whether through direct participation or SPE, added 659 MW of installed capacity to its energy matrix. Some power plants developed through partnerships, such as the Santo Antonio Hydroelectric Plant, have seven turbines in operation, totaling 1,128 MW. We also highlight the beginning of operations at the first 75-MW generating unit at the Jirau Hydroelectric Plant and at the Simplicio and Batalha Power Plants; the latter two are wholly owned by Eletrobras Furnas. Commencement of the construction work for the transmission line to interconnect Brazil and Uruguay (390 km) and the associated substation (SE), in partnership. After the public hearing held in August 2011, an incompatibility in the layout of the transmission lines was detected, which caused NOT ATTAINED Substation Candiota to be relocated, the layout of the lines to be changed, and the development to be rescheduled, with commercial operations expected to start in the first half of 2014. ENVIRONMENTAL Formal approval of the Environmental Policy ATTAINED approved (page 107, in Environmental Performance - Energy for In May 2013, the new version of the Environmental Policy was continued growth). 10 11 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras                    Summary Highlights_4 Message_6 Energy for a new age_6 Message from the Chairman of the Board of Directors_8 4 HIGHLIGHTS 2013 FOREWORD 2 Eletrobras’s energy in your life_2 More energy for a new age—26 Establishing materiality—27 25 ABOUT THE REPORT CORPORATE PROFILE 15 Building the future—16 Shareholding structure—18 Investor relations—19 Organizational structure—20 Commitments—21 Participations and representations—22 GOVERNANCE AND MANAGEMENT 33 Sustainability in our business strategies—34 Improving management for business sustainability—35 Selection of leaders—40 Code of Ethics—42 Responsible communication—42 Conflict of interest—44 Risk management—46 Fostering dialogue and best practices—88 Employees—89 Professional development—100 Customers—106 Suppliers—111 Community—115 Measures to prevent and reduce damage—120 Resettlement—124 Projects and programs—125 Government and public policies—127 Human Rights—134 87 SOCIAL PERFORMANCE Power to generate, transmit, and distribute energy—50 Generation—51 Transmission—60 Distribution—64 Demand management—68 Research, development, and innovation—69 Eletrobras Cepel—70 49 BUSINESS PERFORMANCE ECONOMIC AND FINANCIAL PERFORMANCE 73 On the path to new achievements—74 Results—75 Value-Added —76 Statement15 Economic subsidies—79 Indirect economic impacts—81 Awards and Recognition—170 Complementary GRI Content—171 Glossary—189 Talk to Us—195 Credits—197 Illustrations—199 169 ATTACHMENTS ENVIRONMENTAL PERFORMANCE 137 Energy for continued growth—138 Environmental Management System—138 Energy—140 Energy efficiency—142 Water and wastewater—145 Biodiversity—148 Climate change—153 Emissions—154 Waste—160 Spills—162 Environmental Investments and spending—164 Projects and programs—165 12 13 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasPonte dos Ingleses, Fortaleza, Ceará. CORPORATE PROFILE BUILDING THE FUTURE_16 SHAREHOLDING STRUCTURE_18 INVESTOR RELATIONS_19 ORGANIZATIONAL STRUCTURE_20 COMMITMENTS_21 PARTICIPATIONS AND REPRESENTATIONS_22 14 15 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasBuilding the future Eletrobras is a quasi-public and publicly services pertaining to energy efficiency, traded corporation and the holding the advocacy of corporate sustainability, company of energy generation, trans- the pursuit of alternative energy sources, mission, and distribution companies. and the creation of new businesses. The federal government is its majority Hence, it has partnerships with Special shareholder, with 54.46% of the common Purpose Entities (SPE) and, since 2008, it shares; currently, the company is the has been authorized to operate abroad major agent in the generation and trans- mission of energy in Brazil, playing a (Law 11,651). major role in the distribution and trading Presently, Eletrobras develops activities that value the Latin-American energy interconnection in countries such as Uruguay (TL 500 kV), from Candiota-RS to San Carlos, in the Department of Maldonado, totaling 500 km, of which 60 km are located in Brazilian territory, Argentina (Garabi-Panambi Binational Complex – 2,100 MW), and Nicaragua (Tumarín Hydroelectric Plant – 253 MW). of this commodity. Learn more about the companies on the Eletrobras website: www.eletrobras.com Created in 1962, Centrais Elétricas Brasileiras S.A. (Eletrobras) is a large enter- prise, which holds one of the cleanest energy matrices in the world. Every day, the company generates and transmits energy to almost half of Brazil and distributes energy directly to 3.8 million customers. The Eletrobras companies1 operate and manage 180 power plants, including 45 hydroelectric plants, 125 thermoelectric plants, eight wind farms, and two nuclear power plants. These power plants account for 34% (42,987 MW) of the nation’s total generation, of which 89% comes from low greenhouse-gas emitting sources. Eletrobras is also respon- sible for 50% of the transmission lines in Brazil (57,300 km of transmission lines that are part of the National Interconnected System - SIN), and it is the only company on the planet with national coverage in high and extra-high voltage. With its headquarters in Brasília and its main office in Rio de Janeiro, Eletrobras also conducts research and provides 16 1. Generation and transmission: Eletrobras Chesf, Furnas, Eletrosul, Eletronorte, CGTEE, and Eletronuclear. Distribution: Eletrobras Amazonas Energia, Distribuição Acre, Distribuição Roraima, Distribuição Rondônia, Distribuição Piauí, and Distribuição Alagoas. Eletrobras Amazonas Energia is a generation and distribu- tion company; thus, it is considered in both business lines. SUSTAINABLE FOCUS At the Eletrobras companies, sustain- ability concepts and practices are incorporated into the organizational management and are supported by their vision, mission, and values, in addition to the management and governance instruments and the Code of Ethics of the Eletrobras companies. Mission To operate in energy markets in an integrated, profitable, and sustainable manner. Vision To become the largest global clean energy Eletrobras’s corporate policies, strategies, and challenges View the policies and learn more about the Eletrobras corporate drivers, attributes, and challenges in the Eletrobras System Strategic Plan 2010-2020 of the Eletrobras companies at www.eletrobras.com > Página principal > Sustentabilidade > Governança Corporativa > Instrumentos de Gestão e Políticas (> Home > Sustainability > Corporate Governance > Management Tools and Policies). ENERGY IN NUMBERS 42,987 MW of installed capacity corporate system by 2020, with profit- 186,000 GWh of energy generated in own plants ability in line with the major companies 45 hydroelectric plants in the electric utilities sector. Values Results-oriented 125 thermoelectric plants 2 nuclear plants 8 wind farms Entrepreneurship and innovation 57,300 km of transmission lines Appreciation of and commitment to 248,400 km of distribution lines people Ethics and transparency 23,969 employees on its permanent staff 17 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras Shareholding structure Eletrobras shares are traded in three stock On December 31, 2013, Eletrobras closed markets: the São Paulo Stock Exchange the period with 29,376 shareholders, of – BM&FBOVESPA (ELET3 and ELET6), in which 97% (28,494) reside in Brazil and which it is listed as Corporate Governance 3% (882) in 31 countries. The capital stock Level 1; the Madrid Stock Exchange (XELTO totaled R$31,305 billion, represented by and XELTB), through the LATIBEX Program; 1,352,634,100 shares, of which 1,087,050,297 and the New York Stock Exchange – NYSE was in common shares (ON) and (EBR and EBR-B), in which it trades Level 2 265,583,803 was in preferred shares (OP). American Depositary Receipts (ADRs). The business practices of the company Eletrobras’s capital stock structure. The are in line with the trends indicated by Federal Government, whether directly or In 2013, no changes were made to 2. Free float is the percentage of shares that are freely negotiated in the market. the Dow Jones Sustainability Indexes (DJSI) and by the Corporate Sustainability Index of the São Paulo Stock Exchange (ISE indirectly, owns 67% of the company’s capital stock and the free float2 totals 32.8%. At the close of the year, the BM&FBOVESPA), the portfolios in which company’s market cap reached R$9,020 the company participates, among others billion. market and sustainability benchmarks. To learn more, shareholders and investors can call (55 21) 2514-6333, e-mail invest@eletrobras.com, or contact the Fale com RI (Talk to IR) at the Eletrobras Investor Relations website www.eletrobras.com.br/elb/ri. Investor relations Pursuant to its policy governing the provision of information to the market and to the rules of Corporate Governance Level 1, established by BM&FBOVESPA, Eletrobras holds semiannual meetings of the Association of Capital Market Analysts and Investment Professionals (APIMECS) in each of the regional offices of RJ, SP, MG, DF, South, and Northeast, totaling 14 annual meetings. Given its regular participation in the APIMECS meetings for 18 consecutive years in RJ and SP, for 11 years in the Northeast and DF, and for ten years in Minas Gerais and in the South of Brazil, Eletrobras has received attendance certifications in all the aforementioned locations. The Finance and the Investor Relations Departments also hold semiannual meetings in Europe and in the United States, through road shows, which aim to present the company to foreign investors. Annually, the company also holds Eletrobras Day in New York and the LATIBEX Forum in Madrid. Finally, Eletrobras often takes part in the dozens of events and seminars organized by international banks, in Brazil and abroad, with the presence of the main analysts and investors from the Equity and Debt areas. 18 19 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras BOA VISTA ELETROBRAS DISTRIBUIÇÃO RORAIMA DISTRIBUTION MANAUS ELETROBRAS AMAZONAS ENERGIA DISTRIBUTION RIO BRANCO ELETROBRAS DISTRIBUIÇÃO ACRE DISTRIBUTION PORTO VELHO ELETROBRAS DISTRIBUIÇÃO RONDÔNIA DISTRIBUTION TERESINA ELETROBRAS DISTRIBUIÇÃO PIAUÍ DISTRIBUTION RECIFE CHESF GENERATION AND TRANSMISSION MACEIÓ ELETROBRAS DISTRIBUIÇÃO ALAGOAS DISTRIBUTION DISTRITO FEDERAL ELETROBRAS HOLDING - HEADQUARTERS ELETRONORTE GENERATION AND TRANSMISSION Organizational structure FOZ DO IGUAÇU ITAIPU BINACIONAL GENERATION FLORIANÓPOLIS ELETROSUL GENERATION AND TRANSMISSION PORTO ALEGRE CGTEE GENERATION RIO DE JANEIRO ELETROBRAS CENTRAL OFFICE ELETROBRAS FURNAS GENERATION AND TRANSMISSION ELETRONUCLEAR GENERATION CEPEL HEADQUARTERS ELETROPAR EQUITY INTERESTS Commitments Generation and Transmission Generation Binational Generation Distribution Shareholdings (100,00%) (99,91%) (50,00%) (100,00%) (83,71%) (99,99%) Eólica Mangue Seco 2 Geradora e Comercializadora de Energia Elétrica S.A. (94,26%) (49,00%) Norte Energia S.A. (Belo Monte) In addition to codes and policies, the A number of Eletrobras companies actions implemented by Eletrobras are are signatories to individual commit- conducted pursuant to a number of ments, such as Empresa Amiga da commitments disseminated among Criança, the GHG Protocol, the Programa employees and stakeholders, such as the Na Mão Certa, the U.S.-Brazil Joint adoption of codes and participation in Action Plan to Eliminate Racial and volunteer programs. Ethnic Discrimination and Promote Since 2005, the Eletrobras companies Equality, Tri-National Plan to Prevent have been in line with the Millennium Violence - Regional Strategy to Fight the Development Goals, and since 2006, they Trafficking of Children and Adolescents have committed to the Global Compact, [PAIR-Mercosur], and the Letter of Intent in addition to the commitment to the with the Ministry of Social Development Universal Declaration of Human Rights of the United Nations (UN). The companies have also proceeded with other previ- and Fight Against Hunger. Learn more at www.eletrobras.com > Home > Sustainability > Social Responsibility > (99,47%) (99,58%) (99,56%) (99,88%) SPES G T ∑ 6 10 16 SPES G 44 7 T 51 ∑ SPES G 58 18 T 76 ∑ SPES G 10 8 T 18 ∑ ELETROBRAS SEGMENT OS BUSINESS Generation Transmission Total SPEs** 111 39 150 ** The amount of SPEs was adjusted, since there are Purpose Entities which participate in more than one company Eletrobras. (100,00%) (15,00%) ously established commitments, such Business Citizenship as the UN Women’s Empowerment Principles (subscribed to in 2010) and the 5th Edition of the Pro-Gender and Race Equality Program (subscribed to in 2013). Additionally, Eletrobras is a signatory to the Corporate Commitment for the Protection of Children and Adolescents against Sexual Exploitation, and the National Pact to Eradicate Forced Labor, in Brazil. (100,00%) (100,00%) (100,00%) MINORITIES SHAREHOLDINGS* 26 G, T e D * The complete list of minority ishareholdings of Eletrobras is in note 15 of the financial statements of the company. Shareholdings Abroad Centrales Hidroeléctricas de Centroamérica - CHC Centrales Hidroeléctricas de Nicaragua - CHN (Nicarágua) (50,00%) Rouar S.A. (Uruguai) (50,00%) Inambari Geração de Energia S.A. - Igesa (Peru) (29,40%) 20 21 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras Participations and representations ELETROBRAS AND THE ISO 50000 SERIES OF STANDARDS Eletrobras is part of the ABNT study committee for the preparation of the ISO 50000 series of standards - Energy Management System - and it also collaborates in the preparation of five new The Eletrobras companies also took part in the discussion of major themes and in the development of policies, since it is a member of a number of entities that are directly or indirectly related to the business. Agência Internacional de Energia Atômica (AIEA) Associação Brasileira das Companhias Abertas (Abrasca) Associação Brasileira das Empresas Geradoras de Energia Elétrica (Abrage) Associação Brasileira da Indústria Elétrica e Eletrônica (Abinee) Associação Brasileira das Instituições de Pesquisa Tecnológica (Abipti) Associação Brasileira de Energia Nuclear (ABEN) Associação Brasileira dos Geradores Térmicos (Abraget) Câmara de Comercialização de Energia Elétrica (CCEE) Câmara de Comércio Americana (Amcham) Centro para Inovação e Competitividade (CIC) Comissão de Integração Elétrica Regional (Bracier) Comissão de Integração Energética Regional (CIER) Comissão de Proteção ao Programa Nuclear Brasileiro (Copron) Comitê Brasileiro de Barragens (CBDB) Comitê Brasileiro de Eletricidade (ABNT/Cobe) Comitê Brasileiro do Conselho Mundial de Energia (CME) Comitê Brasileiro do Pacto Global (CBPG) Comitê de Entidades no Combate à Fome e pela Vida (COEP) Comitê Nacional Brasileiro de Produção e Transmissão de Energia Elétrica (Cigre) Comitê Permanente para Questões de Gênero do MME e Empresas Vinculadas Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável (CEBDS) Conselho Mundial da Água (CMA) Fórum Nacional de Ética das Empresas Estatais Fórum de Meio Ambiente do Setor Elétrico Brasileiro (FMASE) Fundação Nacional da Qualidade (FNQ) Instituto Ethos de Empresas e Responsabilidade Social Instituto Nacional de Investidores (INI) Instituto Nacional de Pesquisa e Desenvolvimento de Empresas Inovadoras (Anpei) Instituto para o Desenvolvimento de Energias Alternativas da América Latina (Ideal) International Energy Agency (IEA) International Hydropower Association (IHA) Operador Nacional do Sistema (ONS) Organização das Nações Unidas para o Desenvolvimento Industrial (Onudi) Rede Latino-Americana e do Caribe para Eficiência Energética Section of the Latin American Nuclear Society (LAS) Sustainable Energy for All World Association of Nuclear Operators (WANO) World Nuclear Association (WNA) (GRI 4.13, GRI SO5) ISO 50.002 energy audits ISO 50.003 requirements for auditing bodies and certification of energy management systems ISO 50.004 guidance for the implementation, maintenance, and improvement of an energy management system ISO 50.006 baseline and energy performance indicators ISO 50.015 measurement and verification of energy performance of organizations. In addition to being part of the national delegation in international plenary sessions, representatives of Eletrobras coordinate the work group responsible for the preparation of the implemen- tation guide and the standard governing the audits and auditors of the energy management system. In 2013, there were seven national meetings with the purpose of analyzing and providing input for the text of the five standards being prepared. (GRI 4.13) 22 23 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasPão de Açúcar, Rio de Janeiro, Rio de Janeiro. ABOUT THE REPORT MORE ENERGY FOR A NEW AGE_26 ESTABLISHING MATERIALITY_27 24 25 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasMore energy for a new age One of the most important points in the The content of the Integrated preparation of a sustainability report is Communication Plan of the Eletrobras the assessment of stakeholders and the companies is in line with our business development of the materiality matrix, strategies and guides everything from a methodology that helps in the organi- the establishment of key messages to zation of the topics and aspects that are its identified audiences through the key for conducting the business from preparation of action plans. In 2013, the the standpoint of the company and of Integrated Communication Policy of the stakeholders. Eletrobras companies was revised and For Eletrobras, the relationship with updated. eight categories of audiences is a priority (GRI 4.15) (see table). This rating contributes to assessing relationships and to guiding The stakeholder engagement process the efforts of each Eletrobras company, in the Eletrobras companies is in full according to the individual needs of compliance with the business strategy these stakeholders. This direct contact of the Eletrobras holding. The topic is with these stakeholders is critical for addressed in the 2010-2020 Strategic Plan of the Eletrobras System, which establishes the parameters of sustainable action focused on the appreciation of employees; support for community-based education and professional training projects; the creation of employment opportunities and income, health, social inclusion and local development; and service to the populations and locations in the vicinity of the Eletrobras operations. Learn more about the 2010-2020 Strategic Plan of the Eletrobras System at: www.eletrobras.com > Home > Sustainability > Corporate Governance > Management Tools and Policies. Eletrobras’s management strategy. (GRI 4.15) PRIORITY STAKEHOLDERS FOR ELETROBRAS • Employees/Family members • Investors/Shareholders/Market analysts • Communities • Society • Press/Opinion makers • Partners/Sponsors/Suppliers • Government/Legislators/Regulatory agencies • Clients/Consumers/Distribution companies (GRI 4.14) 26 INTERNAL ENGAGEMENT CHANNELS The creation of a close and transparent relationship with the internal audience is an action of great importance for the Eletrobras strategy. Fale com o Presidente: a direct channel between senior management and employees that receives suggestions, inquiries, and criticism related to any subject. Organizational Climate Survey: a strategic management tool that identifies and analyzes the extent of employee satis- faction and motivation and is conducted every two years. In 2013, the third round of surveys was conducted, which enabled the implementation of actions that aim to contribute to the growth and development of individuals and, especially, to increase productivity and quality. Almost 15,000 employees of the companies were engaged in this round. Meeting with Managers: Eletrobras holds weekly meetings to stimulate direct communication between senior managers and managers. In the meetings held in 2013, Eletrobras’s operational and financial results were discussed. Visit www.eletrobras.com and discover which communication channels are being developed and which are already used by Eletrobras on a daily basis in the relationship with each stakeholder. The materiality helps to provide transparency and better meet the needs of the stakeholders. Establishing materiality Materiality helps provide transparency and better serve the needs of stakeholders. It represents a constant evolution in the development of company reporting. In 2013, a total of 230 individuals took part in the process to develop the materiality; they were involved in activities ranging from presentations about concepts and the context of sustainability in the global and national market to a reflection on the electric utilities sector and the role played by Eletrobras. Two panel discussions were held: one with the participation of the suppliers of various products and services and another with the CEO and executive officers of the Eletrobras holding and managers of all Eletrobras companies, responsible for the 27 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasInput Opinion of suppliers, reinforced with opinion of employees l s r e d o h e k a t S o t e c n a t r o p m I Class 1 Class 2 following segments: environmental, social responsibility, risks, governance, energy efficiency, investor relations, suppliers, conduct and ombudsman, customers, and others. The group of managers of Eletrobras took part in a survey conducted for the identification of priority topics for the companies as a whole and, pursuant to the corporate strategy, related to Corporate Governance, Ethics, Generation, Climate Change, Energy Transmission and Distribution, Stakeholder Engagement, Public Policies, Environmental Management, and Biodiversity. After that, a joint discussion about the results of this survey was conducted with the process leaders of all companies, aiming to prior- itize the topics pertaining to the activities of the company and of the electric utilities sector. (GRI 3.5, GRI 4.16) The opinions of these four groups established a Materiality Map, composed of axes that consider the relevance for the business (axis X) and the relevance for stakeholders (axis Y), which enabled the perceptions about each topic to be rated as “very high,” “high,” “average,” and “low”. After the consolidation and ranking of priority topics for each axis, two groups of topics were prioritized: Class 1: material topics for both the business and stakeholders. Class 2: material topics for business or for stakeholders. Importance to the Business Input Opinion of the Board, reinforced with opinion of the Leadership MOST RELEVANT TOPICS, ACCORDING TO THE PERCEPTION OF THE STAKEHOLDERS SURVEYED (GRI 4.17) CLASS 1 Materials topics with level of importance (standard deviation): • Internal and external communication strategy with a focus on sustainability • Sustainability in business strategies • Transparency Material topics that are extremely important to business and stakeholders: • Response/positioning for emergencies and calamities • Compliance with legislation (consumer/client) • Customer satisfaction • Planning and response to emergencies and calamities • Risk and crisis management • Training and education (multifunctional qualification) • Reliability and availability Extremely important materials topics to one of the drivers (stakeholders or business) provided they are important to both: • Risks and opportunities in climate change • Code of conduct and anti-corruption policies • Engagement processes with stakeholders • Legal compliance • Nuclear waste CLASS 2: Extremely important topics to stakeholders OR to business • Impact of the Law 12,783 (about concessions for generation, transmission and distribution of electricity, on the reduction of regulatory charges on the low tariff) • Social programs and projects in the surrounding community • Rational and safe use of electricity • Relationship strategies and methods of dialogue with local communities • Relationship with indigenous communities and quilombolas • Population displacement • Management of impacts on local communities • Demand-side management • Environmental Policies and management system • Responsibility over the use of natural resources • Local pollution (thermoelectric power plants) • Compliance with laws • Program of employees attraction, retention and career planning • Stikes and Union relastion • Diversity, iguality and opportunities • Expansion, Diversification and business competiviness • Tariff Composition • Volumne and water consumption • Consumption management • Law 8,666 - Developments towards sustainability • Human Rights Policy and measures taken in case of violations of this rights (discrimination, slavor and children labor) • Emission Reduction Program RESULTS OF STAKEHOLDER’S SURVEY 15% relationship between employees and the governance 15% customer satisfaction 17% energy 34% economic performance 19% rational and safe use of electricity CONTINUOUS IMPROVEMENT Together with the assessment conducted in 2013, the results of the 2012 Stakeholders Survey continue to be developed. At the time, the survey showed that “economic performance” was the most relevant topic to 32% of employees and 34% of the remaining audiences. With the same relevance, Eletrobras is continuing actions aimed at improving and / or implementation of the themes identified by the Panel of Experts, also conducted in 2012, such as impacts on communities; eco-efficiency; Relationship with employees; Fostering public policies; Renewable Energy and Health and Safety. 29 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras Where our energy comes to where it goes (GRI 2.2) Sustainability After driving the turbines, the water is returned to the riverbed, without any type of degeneration. Thus, hydroelectric power is considered a clean and renewable source. Transformers Equipment used to step up or step down voltage levels. 3,8 Million customers are served directly by the Eletrobras companies Rain The water used by hydroelectric plants is always renewed through the hydrologic cycle and can be reused. Its quality is preserved. Rivers In Brazil, electricity is produced mainly by hydroelectric plants, which use the power of rivers. Hydroelectric Plant Transforms the potential energy of water into electricity. Energy Water drives the turbines coupled to generators, which produce electricity. Step-up Substation Electricity generated by the power plant is sent to a step-up substation, where the voltage level is increased to reduce energy loss in transmission Transmission Lines System composed of towers and cables used to transmit energy from power plants to consumer centers. Step-down Substation Located near consumer centers, these substations reduce voltage levels to enable the distribution process. 85% 85% of Eletrobras's energy is generated by hydroelectric plants. 36,3 GW is Eletrobras's installed capacity from hydropower Distribution Network System composed of poles, cables, and transformers, which are used to distribute energy to households, businesses, companies, and industries. Light and energy in use Electricity is the main source of light, heat, and power used in the modern world. Residential Consumers Simple activities, such as watching TV or browsing the web, are possible because of the electricity available at your home. Hospitals and various other establishments, such as schools, factories, and supermarkets, require energy to operate. Industry Most of the technological advances we have achieved were made possible thanks to electricity. Eletrobras is the main company responsible for the Brazilian energy matrix being considered the second cleanest and most renewable in the world. Source www.eletrobras.com/trilhadaenergia 30 31 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasNossa Senhora Aparecida’s Metropolitan Cathedral, Brasília, DF.  GOVERNANCE AND MANAGEMENT SUSTAINABILITY IN OUR BUSINESS STRATEGIES_34 IMPROVING MANAGEMENT FOR BUSINESS SUSTAINABILITY_35 SELECTION OF LEADERS_40 CODE OF ETHICS_42 RESPONSIBLE COMMUNICATION_42 CONFLICT OF INTEREST_44 RISK MANAGEMENT_46 32 33 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasSustainability in our business strategies Provisional Measure 579 of September 11, 2012, converted into Law 12,783 of January 11, 2013, had a profound impact on the operational strategy of the Eletrobras System due to the adjustments put into practice by the Federal Government concerning the dynamics of the operation, maintenance, and expansion of the Brazilian electric utilities sector. The Eletrobras System’s management 1. The preparation of an operational action plan for the projects and initiatives included in the business plan; 2. Contract on the business goals between the company and the Eletrobras holding in the Goals and Corporate Performance Contract (CMDE) platform; 3. The preparation of the Consolidated Business Plan of the Eletrobras System. planning process was geared toward The PDNG 2014-2018, approved in addressing the new conditions through March 2014 by the Board of Directors, which the expiring concessions were governs the process of resuming this pace, extended, considering that a series of considering a diagnosis of the organiza- assumptions adopted in terms of cash tion’s current status, which includes the generation, financing, funding, and main results of the PDNG 2013-2017 and, expansion strategies were affected by the for this five-year period, the strategic provisions set forth in the aforementioned positioning with the goals established, the Provisional Measure. economic and financial projections, and An immediate positioning was required the portfolio with the main projects that for strategic realignment with this new must be implemented in order to achieve reality. Eletrobras sought to define short- the expected results. and medium-term guidelines, which Eletrobras’s expansion strategy resulted in the preparation of the 2013-2017 continues to prioritize in its portfolio Business and Management Master Plan of energy generation and transmission of the Eletrobras System (PDNG), which assets those projects deemed essential was approved by the Board of Directors of and that are strictly in line with the Eletrobras on March 27, 2013 and communi- National Energy Plan (currently, PNE cated to the market on the following day. 2030) and its developments in the It became imperative to resume the Decennial Energy Plans (currently, PDE planning and management pace of 2022), the Ministry of Mines and Energy’s most important instruments in planning for the industry sector. (GRI 1.2) the Eletrobras System, focusing on the development of the business plan for each Eletrobras company, involving a compre- hensive process of negotiations with the Eletrobras holding. This served as input for three actions: 34 PLANNING AND MANAGEMENT PROCESS OF THE ELETROBRAS SYSTEM Strategic Plan of the Eletrobras System Review at Each Cycle Business and Management Master Plan Annual Review Negotiation process of the holding with its companies Holding and its guidelines Development of the Business Plan in the companies Adjustments CMDE Definition Mechanisms for Variable Compensation (PLR) CMDE between Holding and its Companies Business Plan for Each Company (final version) Adjustments Business Plan PDG / PPA Operational Action Plan of Each Company / CMDE Cascading Consolidated business plan of the Eletrobras system Result Execution Corporate Performance Management Improving management for business sustainability Guided by ethics and transparency, adopted specifically strengthens the Eletrobras’s governance values the fair permanent dialogue with communities treatment of all stakeholders, account- and organizations of the society, thereby ability, and corporate responsibility, which facilitating analysis by investors. includes safeguarding the longevity and Pursuant to this line of operation, sustainability of the company according Eletrobras has been modernizing its to the social and environmental aspects management tools; for example, the of its operations. New transparency adoption of practices to assess its standards for the disclosure of infor- mation are continuously implemented, Board of Executive Officers and its Board of Directors and other mecha- which implies a commitment to consid- nisms that contribute to developing a ering the interests of its stakeholders direct dialogue with shareholders. For in the decisions made by the company Eletrobras, corporate governance is one of management. The transparency level the pillars of sustainability. 35 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasGeneral Assembly Board of Directors Audit Committee Internal Audit Remuneration and People Management Committee Sustainability Committee Audit and Risk Committee Presidency Generation Department Transmission Department Distribution Department Department of Finance and Investor Relations Administration Department MANAGEMENT AND GOVERNANCE INSTRUMENTS • Bylaws • CAE’s Internal Regulations • CF’s Internal Regulations • Internal Regulations of the Committees • Code on Eletrobras’s Corporate Governance Practices • Code of Ethics • Antitrust Guidelines • Guide on the Disclosure and Use of Relevant Information and Policy on the Trading of Securities Issued by Eletrobras • Strategic Plan of the Eletrobras Companies • Policies of the Eletrobras Companies • Guidelines for Board Members In 2013, the company continued to Eletrobras’s Board of Directors is implement several actions, such as the responsible for defining corporate standardization of the Bylaws of the strategies. The Internal Audit, the distribution companies, the approval Sustainability Committee, the Audit and of the Guide for the Participation in Risks Committee, and the Remuneration Shareholders’ Meetings, the preparation and People Management Committee of Guidelines for Board Members, the report directly to the CAE. implementation of the Information The Board of Executive Officers is Management System for Eletrobras’s responsible for managing Eletrobras’s senior management, and the Course businesses, according to the strategic for Board Members representatives guidelines established by the CAE. of employees on the boards of all the The Internal Audit is responsible for companies of the system. Eletrobras’s corporate governance checking the appropriateness, efficiency, and effectiveness of the internal control model is provided below; roles and systems; compliance with laws and internal responsibilities are defined in its Bylaws: (GRI 4.1) and external normative rulings; and compliance with plans, goals, objectives, and policies established by the company. ANNUAL GENERAL MEETING Shareholders’ Meetings The Ordinary Shareholders’ Meetings (AGO) is held within the first four months following the end of the fiscal year; in 2013, it approved: • The financial statements for the 2012 fiscal year. • The destination of the results of the fiscal period and the remuneration of shareholders. • The election of the members of the Board of Directors and Fiscal Council. • The remuneration of the members of the Board of Directors, Audit Committee, and Board of Executive Officers. Extraordinarily, the Shareholders’ Meetings convenes in those cases foreseen by law and whenever deemed appropriate by the Board of Directors. BOARD OF EXECUTIVE OFFICERS Six members, including the CEO, who are elected by the Board of Directors. • Terms of up to three years, with a possibility for reelection. • Weekly meeting. In 2013, 50 meetings were held. BOARD OF DIRECTORS Up to ten members, seven of whom are appointed by the majority share- holder; one by minority shareholders holding common shares; one by minority shareholders holding preferred shares, and one representing the employees. Of the nine positions filled, two are independent members and one is an executive member. (GRI 4.3) FISCAL COUNCIL Five members and their respective alternates, three of whom are appointed by the majority shareholder; one by minority shareholders holding common shares; and one by minority share- holders holding preferred shares. These members include one financial specialist, pursuant to the requirements of the SEC. • One-year term, with a possibility for reelection. • One-year term, with a • Shareholders’ Meetings possibility for reelection. are held on a monthly • Shareholders’ Meetings basis and extraordinary are held on a monthly meetings are convened basis and extraordinary whenever necessary. meetings are convened whenever necessary. In 2013, 18 meetings were held. In 2013, 13 meetings were held. 36 RELATÓRIO ANUAL E DE SUSTENTABILIDADE 2013 37 EletrobrasCOMMITTEES The committees that support the Board of Directors were created to aid in specific matters. The CEO of Eletrobras participates only in the Sustainability Committee, since he is involved in the management of the company and should not be associated with the Audit and Risks Committee and with the Compesation and People Management Committee, to All roles and requirements are set forth avoid conflicts of interest. in the company’s Bylaws and Internal Among the committees that report to Regulations; they comply with the laws the CAE, the Sustainability Committee in effect and there is no discrimination is responsible for management and it on the basis of gender or other aspects of is involved in the implementation of internationally recognized sustainability processes and tools and in the monitoring and in the assessment of results. (GRI 4.9) diversity. (GRI LA13) Annually, board members and executive officers of Eletrobras undergo a performance assessment process, pursuant to the methodology established in the Performance Assessment Manual of the Board of Directors (CAE) and the Board of Executive Officers (DE), to ensure they perform their roles in compliance with the strategy of the company, contrib- uting to the diversity of experiences and knowledge. The Eletrobras holding standardized this methodology and disseminated these guidelines for their application in all Eletrobras companies. Executive officers and board members conduct their self-evaluation and assess their respective areas. Board members also evaluate the Board of Executive Officers as a body. (GRI 4.10) DIVERSITY OF THE GROUPS RESPONSIBLE FOR GOVERNANCE OF THE ELETROBRAS COMPANIES (GRI LA13) 14% Female 86% Male DIVERSITY WITHIN THE GROUPS RESPONSIBLE FOR THE GOVERNANCE OF THE ELETROBRAS COMPANIES (GRI LA13) Under 30 years old 30-50 years old Over 50 years old Total 2013 2012 2011 1 49 105 155 0 47 104 151 0 41 96 137 The groups responsible for the governance of the Eletrobras companies are the Board of Directors, the Fiscal Council, and the Board of Executive Officers. SUSTAINABILITY COMMITTEE Composed of three members, this committee develops and coordinates integrated actions in all Eletrobras companies in order to allow for consistent progress in the management and implementation of corporate sustainability in the monitoring of indicators for the preparation of tools that foster sustainable development. AUDIT AND RISKS COMMITTEE This committee analyzes topics pertaining to accounting practices, risks and internal controls, independent auditing, processes, and pending issues with regulatory agencies (Office of the Comptroller General and Federal Court of Accounts). The president is an independent member and a repre- sentative of minority shareholders. The committee is composed of three members, one of whom is a repre- sentative of the employees. COMPENSATION AND PEOPLE MANAGEMENT COMMITTEE This committee advises the Board of Directors on decisions pertaining to policies on compen- sation, people management, and the development of the competencies of the Eletrobras professionals. It is composed of three members, one of whom is independent. There is no involvement of executive members or board members employed by the company. 38 39 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras    Selection of leaders TOTAL COMPENSATION OF MEMBERS OF ELETROBRAS’S GOVERNANCE BODIES (R$) BODY Board of Directors Fiscal Council 2013* 2012 2011 532,822.86 498,655.87 303,960.11 333,014.29 294,453.81 196,316.80 Board of Executive Officers 6,149,902.65 5,657,570.87 5,810,641.16 Amounts based on the CVM´ Reference Form 2013. BOARD MEMBERS AND EXECUTIVE OFFICERS Eletrobras is managed by the Board of Eletrobras values the qualifications of its governance agents and annually analyses the viability of scheduling Board members do not receive any Mechanisms for participation additional compensation for their In order to facilitate and promote share- participation in advisory committees holder participation in meetings convened Directors and by the Board of Executive training courses for the members of the and/or commissions providing support by the company and to present contribu- Officers. These positions are exclusively Board of Directors of its companies. In to the Board. Compensation of the Board tions to the understanding of the matters held by Brazilian citizens. The executive 2013, Eletrobras provided training for the of Directors, Fiscal Council and of the proposed, the company also provides officers must reside in Brazil. Board members are elected in the Shareholders’ Meetings and executive officers are appointed by the Board of Directors. The minutes of the election of the board members and executive officers of the company should contain the qualifications of each member elected and their term of office. Whenever the law imposes requirements for a given admin- istrative position at Eletrobras, individuals may only be elected and take office upon the provision of the supporting documents. The requirements for the selection of the members of the highest corporate governance body at Eletrobras involve knowledge of the electric utilities sector, of public administration, and of financial and capital markets, as well as moral integrity. The ineligibility criteria set forth in the laws in effect and in the Bylaws must also be observed. board members elected by employees. (GRI 4.7) COMPENSATION Remuneration of board members and executive officers aligns the interests of administrators and shareholders, since it is based on parameters such as the responsibility required by the position, expertise, competency, and professional reputation, as well as the market practices in effect in similarly sized companies. Compensation of board members and fiscal council members is fixed and corre- sponds to 10% of the average monthly compensation received by executive officers, less the amounts pertaining to direct and indirect benefits offered to executive officers (Law 9,2923); they do not receive any performance-related pay. Executive officers receive a fixed compen- sation amount and a variable portion, which is associated with profit sharing in the company. (GRI 4.5) 3. Law 9,292 of July 12, 1996 provides on the remuneration of Board members and Fiscal Council members of government- owned companies and mixed capital corporation, as well as of other entities directly or indirectly controlled by the Federal Government. Board of Executive Officers is disclosed, on its website the Eletrobras Guide for in a consolidated manner, in the annual Participation in Shareholders’ Meetings. Administration Report and in item 13.2 Through a link in this guide, shareholders of the Reference Form, submitted to the can find detailed information about the Securities and Exchange Commission matters discussed in these meetings. of Brazil (CVM). In addition to the Since 2012, one of the members of the Administration Report, the compensation Board of Directors has been a represen- of the Board of Directors and of the Fiscal tative of the workers, chosen among Council is broken down individually in active employees through direct vote in the Management and Accountability an election organized by the company, Report, submitted to the Federal Court of together with the trade unions that Accounts (TCU). represent these employees. Employees do not take part in Board meetings when their deliberations constitute a conflict of interest (Law 12,3534). Representatives elected held periodic meetings with employees in 2013, maintaining a communication channel by e-mail. (GRI 4.4) 4. Law 12,353 of December 28, 2010 provides on the participation of employees on the Boards of Directors of government-owned companies and mixed capital corporation, their companies, subsidiaries, and other companies in which the federal government, whether directly or indirectly, owns the majority of the capital stock with voting rights. 40 41 To learn more about Eletrobras’s corporate governance policies and practices, visit: Eletrobras website > Página principal> Sustentabilidade > Governança Corporativa > Instrumentos de Gestão e Políticas (> Home > Sustainability > Corporate Governance > Management Tools and Policies). To view the qualifications of the members of the highest governance body of the companies, visit the www.eletrobras.com > About Us > Boards and Councils ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasCode of Ethics The Eletrobras companies have a unified Code of Ethics that guides their internal relationship and interaction with the other segments of society. To ensure compliance with the concepts described in the Code of Ethics of the company and of the Public Ethics Committee, Eletrobras has put in place a management system that is coordinated by the Ethics Committees formally established in each of its companies. (GRI 4.8) Among the principles that underpin these relationships, Eletrobras prioritizes the dignity of and respect for people, lawfulness, sustainability, profession- alism, transparency, impartiality, and integrity. All employees, service providers, interns, and young apprentices receive the Code of Ethics of the Eletrobras companies upon their first contact with the company. The company also makes accessible versions of the Code available to everyone: in Braille format for the visually impaired; in audiobook format; and in comic-book format, using accessible and educational language. Responsible communication As provided in the guidelines described in the Sustainability Policy, in the Integrated Communication Policy, in the Environmental Policy, and in the Code of Ethics of the Eletrobras Companies, among other regulations that govern the commitment made by the companies to transparency and to the improvement of best practices in their relationship with stakeholders, the Eletrobras companies provide several communication and dialogue channels to address any type of subject. The main channels are the Ombudsman Office, the Fale Conosco channel (Talk to Us), and contact by phone and Internet (page 162). Therefore, not only in communication, but also in the relationship with stakeholders, Eletrobras fosters dialogue as early as the planning phase of projects and establishes processes to provide information and clarification to the public about electricity, energy efficiency, and the environmental actions involving the activities of the Eletrobras companies. VOLUNTARY COMMUNICATION PRACTICES The Eletrobras companies adopt voluntary communication practices, such as with Itaipu Binacional which gives preference for recycled or low-impact materials in projects for trade fair booths (flooring made of recycled tires, OSB walls made with highly sustainable plastic lumber, and furniture made of recyclable cardboard) andfor the hiring of services with the Forest Stewardship Council (FSC) certification for the printing of newsletters and books. Eletrobras on the Internet Eletrobras is also on Facebook, YouTube, and Twitter, and it strongly desires to engage and interact with its various external stakeholders. In 2013, a total of 246 posts were published on Facebook on subjects such as power generation, social responsibility, and energy efficiency, which are among the subjects that were liked and shared the most by the approximately 43,000 fans of the profile. On Twitter, Eletrobras’s profile ended the year with 221 tweets and over 16,000 followers. The Eletrobras channel on YouTube ended the year with a total of over 98,600 views. EXTERNAL RELATIONSHIP CHANNELS The relationship channels with the external audience are monitored of the respective areas. The Ombudsman Office: Eletrobras seeks to offer mechanisms that contribute to the strengthening of its relationship with external and internal audiences. The Ombudsman Office is an important channel for this communication; it works in partnership with the Ombudsman Offices of other companies in the electric utilities sector, pursuing transparency in negotiation processes. In 2013, the Ombudsman Office of the Eletrobras holding received 2,551 reports, of which 2,431 (96%) were resolved and 109 (4%) were ongoing as of December 2013. Serviço de Informação ao Cidadão (Citizen Information Service - SIC): monitored by the Ombudsman Office, it handles the requests and inquiries falling under the Access to Public Information Act. In managing the requirements of Law 12.5275, f61 inquiries were received through the SIC. Of a total of 160 inquiries addressed in 2013, 11 requesting parties filed appeals. Advertising is evaluated and approved by the Department for Social Communication of the Presidency (SECOM), which analyzes each media plan and the content of all campaigns, based on the general interest. Marketing or advertising communications comply with the relevant laws, pursuant to the provisions established by SECOM and by the Brazilian Advertising Self-Regulation Council (Conar). (GRI PR6) 5. Law 12,527/2011 establishes terms and procedures for the disclosure of public information and the procedures for information requests; additionally, it offers citizens a uniform access standard to facilitate finding and gathering information and to become, in the eyes of these citizens, a benchmark in public transparency. 42 43 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasConflict of interest Eletrobras’s Bylaws provide for situations 7. Please see note 4. involving conflicts of interest, in which board members must abstain from the constitute conflicts of interest, provided for in paragraph 3, of Law 12.3537, of December 28, 2010. discussion and from voting when such Executive officers must present a conflict is identified. These abstentions are registered in the minutes of the respective Confidential Information Statement (DCI) to the Public Ethics Committee, listing the meetings, and board members have assets owned by the executive officers guaranteed access to the minutes and and the CEO; disclosing situations or documents related to the deliberations in ownership interests that may constitute up to 30 days. a conflict of interest; and describing the In order to avoid possible conflicts of measures taken by the executive officers interest and the use of confidential and and the CEO to mitigate such situations. strategic information, the CEO and In order to receive formal inquiries executive officers cannot hold any from other employees with respect to executive, managing, or consulting situations that may involve conflicts positions in privately held companies, of interest, pursuant to Law 12,813, electric utilities companies, or private law Eletrobras has structured an inquiry firms that are associated in any way with system that integrates the actions of the the electric utilities sector, other than the people management area and the Ethics Committee of the company; this system can be accessed at: conflitodeinteresses@ eletrobras.com (GRI 4.6) 6. Please see note 3. subsidiaries, affiliates, Special Purpose Entities (SPE), or concessionaires controlled by the states in which Eletrobras holds ownership interest. In these cases, these professionals may hold positions in the Boards of Directors and Fiscal Council, pursuant to the provisions of Law 9.2926 concerning compensation. The board member elected by employees does not take part in discus- sions and deliberations about subjects involving union relations, compensation, benefits, and advantages, including matters pertaining to complementary pension funds and assistance; these cases ANTI-CORRUPTION PRACTICES Published in August 2013, Law 12,846 holds companies accountable and punishes them for incidents of corruption against national or foreign public authorities. This law applies to corporations and companies, regardless of the organization or corporate ownership model adopted. According to this new law, companies involved in fraud will be subject to civil and administrative procedures upon evidence of the wrongful act. Penalties can be applied in the administrative or legal sphere, such as fines, forfeiture of assets, suspension of activities, and incarceration (in the case of criminal conviction). Since Eletrobras shares are traded in the New York Stock Exchange (NYSE), the company is subject to the American laws and regulations applicable to companies whose shares are listed in the aforementioned stock exchange. In this sense, in addition to Law 12,846/2013, we highlight the need to comply with the U.S. Foreign Corrupt Practices Act (FCPA) of 1977 and with its subsequent amend- ments. This law prohibits companies from offering, promising, making, or authorizing payments or benefits of any kind or value to government agents, whether directly or indirectly, with the purpose of influencing or compensating such agents. The FCPA also requires that companies maintain their accounting books and records properly, as well as have an internal accounting control system that records their payment activities accurately. Any violations to the FCPA may lead to civil and criminal penalties. Eletrobras has and adopts institutional tools to report incidents of corruption: the Canal Denúncia (Reporting Channel), which is specific to tax-related concerns and the Ombudsman channel, which collects and handles concerns of any nature. These reports can be made by e-mail, letter, phone, or in person. In 2013, there were 12 incidents of corruption recorded, of which only 3 were substantiated. They resulted in the suspension of three employees and in the termi- nation for cause of another. INCIDENTS OF CORRUPTION (GRI SO4) Total number of incidents of corruption recorded Substantiated Unsubstantiated 2013 2012 2011 12 3 9 20 5 6 9 9 0 In 2012, the remaining incidents were pending and there is no additional information. The Eletrobras companies address the risk of unethical behavior and corruption in their risk matrix. With the creation of Law 12,843/2013, the Board of Executive Officers approved a resolution for the implementation of a program that adapts the practices in place at the Eletrobras companies for anti-corruption laws, which is ongoing. (GRI SO2) 44 RELATÓRIO ANUAL E DE SUSTENTABILIDADE 2013 45 Eletrobras   Risk management The Eletrobras companies consider In addition to this committee, the Audit Integrated Risk Management to be an and Risks Committee is one of the three important tool for the improvement committees that advise Eletrobras’s Board of its efficiency, through strategic and of Directors. Based on the information accurate data to support the administra- presented by the Risk and Internal Control tion’s decision-making process in matters Management Department, by the internal concerning the preservation and creation audit area, and by the independent of value and the provision of transparent auditors, this committee recommends information to the market and to its mitigative actions to the Board of shareholders. Directors and to the Board of Executive At Eletrobras, the risk management Officers. The implementation of this process is coordinated by the Eletrobras committee reinforces the commitment holding to ensure a systemic view of of the administration to the monitoring results and its standardization across all of its main risks and to the integrity of its companies. internal control environment. The activities at the companies are Eletrobras identifies and consolidates governed by a single Risk Management all possible threats to its strategic objec- Policy, and they are conducted by the tives into a single risk matrix. This matrix Risk and Internal Control Management covers strategic, operational, financial, and Department and by the Risk Committees compliance risks, which are subdivided of each of them. General guidance is into categories, one of which is specifically provided by the Risk Committee of dedicated to risks related to environ- the Eletrobras holding, which has the mental and social issues. The prioritized following main responsibilities: 1. Monitoring and validation of the risk analyses results; risks are continuously monitored, whether by qualitative or quantitative modeling, which is also applied to acculturation 2. Prioritization of risks with higher impact actions in the group. and vulnerability; 3. Guidance and integration of the operation of the other Eletrobras companies. 8. This law establishes the creation of reliable audit and security mechanisms at the companies listed in the Stock Exchanges of the U.S., including rules for the creation of the committees responsible for overseeing activities and operations, in order to reduce the risks to the businesses, to avoid fraud, or to ensure the means to identify their occurrence, enabling transparency to corporate management. To ensure the effectiveness of the risk management process, to comply with the requirements of the Sarbanes-Oxley Act8 and to maintain the rating of its American Depositary Receipts (ADRs) in the New York Stock Exchange, Eletrobras also seeks the constant improvement of its internal control environment, reducing its material deficiencies and showing its engagement with best management practices. PREVENTIVE MEASURES After the accident at the Fukushima plant in Japan, Eletrobras Eletronuclear’s Board of Executive Officers immediately established a Fukushima Response Committee, which prepared a preliminary action plan with studies, assessments, and projects to incorporate the lessons learned from the accident into the Brazilian nuclear power plant. This plan was submitted to CNEN and served as basis for preventive activities that are already in place at Eletronuclear. The actions planned in this plan include the stages of reassessment of threats and risks associated with the possibility of occurrence of natural disasters in the area of the plant, in addition to making improvements in the structures, systems and equipment which compose it, aiming at increasing the project´s safety margins against the possibility of occurrence of extreme events. To improve the infrastructure of the plant for the management of emergency situations is also part of the stages of the planned actions, which have together an estimated development cost of R$300 million, to be achieved by 2018. About this amount, R$30 million were already carried out. (GRI EN30) PRECAUTIONARY PRINCIPLE Eletrobras is exposed to a number of risks that are directly related to the performance of its core business activities (energy generation, transmission, and distribution). By applying the precautionary principle, the company seeks to avoid irreversible damages and costly contingency, remedi- ation, and/or compensation measures. This is illustrated by the actions taken by some of its companies, to prevent possible environmental and/or social accidents. Given the relevance of the impacts on assets and on the operating and financial results of the companies, a number of practical examples of the application of this principle can be mentioned. Eletrobras Eletronuclear has not detected any evidence of deterioration; however, to avoid costly inspections of and emergency repairs to the Angra 1 reactor, the company has decided to replace one of its safety components, thereby elevating the long-term reliability level of the power plant and extending its lifecycle. The procedure for the replacement of this component occurred during a programmed shutdown of the plant that lasted 61 days. The total investment, which includes the acqui- sition, installation, and storage of the old component, was US$27 million. The company also invested in the preparation of a contingency plan for the event, which is ongoing, with actions planned until the end of 2016, aiming to avoid disasters similar to the one in Fukushima. The studies conducted were submitted for assessment, validation, and monitoring by the National Nuclear Energy Commission (CNEN). Another example of how the precau- tionary principle was applied occurred at Itaipu Binacional. The power plant, which is stabilized and whose sole irreversible environmental risk is the compromising of the physical security of its dam, devoted special attention to the security procedures concerning the dam in 2013. (GRI 4.11) 46 47 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasPajuçara Beach, Maceió, Alagoas. BUSINESS PERFOMANCE POWER TO GENERATE, TRANSMIT, AND DISTRIBUTE ENERGY_50 GENERATION_51 TRANSMISSION_60 DISTRIBUTION_64 DEMAND MANAGEMENT_68 RESEARCH, DEVELOPMENT, AND INNOVATION_69 ELETROBRAS CEPEL_70 48 49 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasPower to generate, transmit, and distribute energy Present across the country and serving consumers and clients with various profiles and needs, the Eletrobras companies have been increasingly involved in the supply of energy in Brazil. All of its 16 companies (7 energy generation companies, 6 distribution companies, 1 research center, 1 venture capital corporation, and the holding) operate in an integrated manner, with policies and guidelines prepared by the Superior Council of the Eletrobras System (CONSISE). (GRI 2.8) The market where the Eletrobras companies operate is increasing its demand for energy on a daily basis. Hence, the entry of new generation and transmission projects occurs through energy bids, with subsequent granting of concessions. Before the bidding, each project should undergo various phases, which are very well defined by the rules of the industry. (GRI EU6) 50 INCREASINGLY CLEANER By 2019, a full 96% of the energy provided by the projects in which Eletrobras is involved will come from clean sources. Generation Its positioning and the single strategic planning for all Eletrobras´companies EXPANSION Eletrobras continues to be the largest strengthen integration and the pursuit to clean energy generation company in become, by 2020, the largest global clean the country. The company invested energy corporate system. approximately R$6.5 billion in 2013. In this Currently, the Eletrobras companies period, the company had – individually or have been granted the concession to through SPE – projects under construction develop energy generation projects or ready to begin construction, which (whether individually or in partnerships) should be incorporated into the Brazilian that may enter operations starting in energy matrix by 2019. 2014, totaling approximately 25,540 MW The company continued to play of installed capacity. Of this total, approxi- a major role in energy bids and was mately 13,376 MW refer to Eletrobras’s awarded the concessions of the Sinop share in these projects; approximately power plant (400 MW), with the 2,895 MW relate to projects with direct participation of Eletrobras Chesf and concessions; and 10,481 MW correspond Eletronorte, in a bid that occurred on to ownership interest in projects through 08/29/13 and of the São Manoel power Special Purpose Entities (SPE). plant (700 MW), with the participation of Eletrobras Furnas, on 12/13/13. In addition to the power plants that have already been granted and authorized, Eletrobras develops studies on projects for hydroelectric power plants that amount to approximately 20,350 MW of 51 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobrasinstalled capacity for power generation. Of this total, approximately 11,400 MW NEW PROJECTS In partnership with another eight are indicative projects that are included companies (Eletrobras Eletronorte, in the expansion of the supply of the EDF, GDF SUEZ, Neoenergia, Camargo Decennial Energy Expansion Plan 2022 Corrêa, Endesa Brasil, Copel, and Cemig), (PDE 2022), prepared by the Ministry of Eletrobras coordinates the Tapajós Study Mines and Energy (MME), which amount Group, which currently conducts technical to 58% of the capacity of all hydroelectric and economic feasibility and environ- plants included in the Plan. Among these projects, we highlight the Belo Monte, mental studies on the hydroelectric potential of São Luiz do Tapajós and Santo Antônio, Jirau, Teles Pires, Sinop, and Jatobá, in the western region of the state São Manoel power plants and the projects of Pará. under study for the hydroelectric power plants located on the Tapajós River basin: São Luiz do Tapajós and Jatobá, Jamanxim, Cachoeira dos Patos, and Cachoeira do Caí. In the bids for wind farms, the company also played an important part: on 11/18/13, Eletrobras Chesf and Eletrosul negotiated 62.5% (550.5 MW, in 27 wind farms) of all energy offered. Investment in these wind farms will total R$2.2 billion and energy generation will commence in 2016. An additional R$2.2 billion will be added to these investments, to be allocated by Eletrobras Furnas and private partners to four wind farm complexes with a total capacity of 570 MW, located in the states of Rio Grande do Norte, Ceará, and Bahia. In the same bid, held on December 13, Eletrobras Chesf defined the expansion of three wind farm complexes in which it already holds ownership interest and sold 51.3 MW in Sento Sé, 24 MW in Pindaí, and 52 MW in Casa Nova. Learn more on the Tapajós Blog: http://www.usinasdotapajos.com.br/ Another important study that is being conducted involves Eletrobras and Argentine government-owned energy company EBISA, located on the border between the northwest region of the state of Rio Grande do Sul and the provinces of Corrientes and Misiones, in Argentina. This study involves the hydroelectric potential of Garabi and Panambi. The engineering and environmental studies and the Social Communication Plan began in 2013 and should take approximately two years to be concluded. Learn more about UnE Garabi-Panambi at the Eletrobras Website >Nosso Negócio > Geração > UnE Garabi-Panambi (>Our Business> Generation > UnE Garabi-Panambi) Generation in Eletrobras companies SENADOR ARNONAFONSO FARIAS DE MELLO (FLORESTA) BALBINA CIDADE NOVA SÃO JOSÉ FLORES MAUÁ 3 MAUÁ APARECIDA ELECTRON (TG) DISTRITO IRANDUBA RIO MADEIRA JIRAU SAMUEL SANTO ANTÔNIO RIO BRANCO I RIO BRANCO II RIO ACRE TELES PIRES DARDANELOS RIO VERMELHO COARACY NUNES SERRA DO NAVIO SANTANA CURUÁ-UNA BELO MONTE TUCURUÍ ARARAS MANGUE SECO 2 MIASSABA 3 REI DOS VENTOS 1 REI DOS VENTOS 3 BOA ESPERANÇA CUREMAS LUIZ GONZAGA (ITAPARICA) XINGÓ CASA NOVA PEDRA BRANCA SETE GAMELEIRAS SÃO PEDRO DO LAGO SOBRADINHO COMPLEXO PAULO AFONSO E MOXOTÓ PEIXE ANGICAL MANSO SERRA DA MESA CORUMBÁ I SÃO DOMINGOS ITUMBIARA PORTO COLÔMBIA MARIMBONDO MAUÁ ITAIPU JOÃO BORGES BARRA DO RIO CHAPÉU FOZ DO CHAPECÓ PASSO SÃO JOÃO CERRO CHATO I SÃO JERÔNIMO I NUTEPA CERRO CHATO II CERRO CHATO III CERRO DOS TRINDADE CERRO CHATO IV CERRO CHATO V CERRO CHATO VI IBIRAPUITÃ PRESIDENTE MÉDICI CANDIOTA III COMPLEXO GERIBATU (VERACE I-X)    CAMAÇARI PEDRA FUNIL BATALHA SERRA DO FACÃO LUIZ CARLOS BARRETO DE CARVALHO (ESTREITO) RETIRO BAIXO MASCARENHA DE MORAES (PEIXOTO) FURNAS FUNIL BAGUARI CAMPOS SIMPLÍCIO SANTA CRUZ ANGRA III ANGRA II ANGRA I KEY WIND FARMS ELETROBRAS COMPANIES WIND FARMS ELETROBRAS COMPANIES WITH SPECIAL PURPOSE ENTITIES (SPE) THERMAL POWER PLANT ELETROBRAS COMPANIES THERMAL POWER PLANT SPECIAL PURPOSE ENTITIES (SPE) HYDROELECTRIC PLANTS ELETROBRAS COMPANIES HYDROELECTRIC PLANTS SPECIAL PURPOSE ENTITIES (SPE) HYDROELECTRIC PLANTS SHARED OWNERSHIP NUCLEAR WIND FARMS ELETROBRAS COMPANIES – UNDER CONSTRUCTION WIND FARMS SPECIAL PURPOSE ENTITIES (SPE) – UNDER CONSTRUCTION THERMAL POWER PLANT ELETROBRAS COMPANIES – UNDER CONSTRUCTION HYDROELECTRIC PLANTS ELETROBRAS COMPANIES – UNDER CONSTRUCTION HYDROELECTRIC PLANTS SPECIAL PURPOSE ENTITIES (SPE) – UNDER CONSTRUCTION NUCLEAR UNDER CONSTRUCTION 52 53 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobrasthrough authorizations, bidding processes, and auctions. Of this total, approximately 9,457 MW correspond to hydroelectric power plants, 1,930 MW are associated with wind farms, and 1,405 MW represent nuclear sources. Projects are expected to be operational by 2019, when the share of clean sources in Eletrobras’s matrix should reach 91%. (GRI 2.8, GRI EU6) EXPANSION For the next five years, Eletrobras foresees an investment of R$31.9 billion in generation, from its own resources and from partnerships, and an additional R$3.5 billion in the maintenance of its current assets. Considering the installed capacity of the power plants in the Eletrobras Systems interconnected with the Eletrobras is the company mainly National Interconnected System (SIN), responsible for the fact that the Brazilian including the power plants that already energy matrix is considered to be the hold concession/authorization or that second cleanest and most renewable in are pending grants, whether directly or the world. In 2013, of the total installed in partnerships, and comparing it with capacity based on this type of energy the evolution of the planned installed source in Brazil, approximately 43% capacity, provided in the Decennial belongs to Eletrobras. (GRI EU1) Energy Expansion Plan 2022 –(PDE 2022) and prepared by the Ministry of Mines and Energy (MME), we have the following scenario: (GRI EU10) EVOLUTION OF THE INSTALLED CAPACITY IN THE SIN CAPACITY OF THE ELETROBRAS SYSTEM X TOTAL PLANNED CAPACITY (PDE 2022)  SOURCE Brazil - SIN 2013 Eletrobras System Share Brazil - SIN 2018 Eletrobras System Share Brazil - SIN 2022 Eletrobras System (MW) (MW) (%) (MW) (MW) (%) (MW) (MW) Hydroelectric 94,026 36,201 Oil Coal Natural gas Nuclear Wind Other TOTAL 4,938 3,205 11,218 2,007 3,898 10,160 2,017 816 1,019 1.990 150 0 39 41 25 9 100 4 0 112,895 45,351 4,534 3,205 13,065 3,412 13,063 11,106 1,123 670 1,609 3,395 2,076 1 129,452 42,193 33 161,280 54,225 40 25 21 12 100 16 0 34 125,918 45,655 4,534 3,205 14,065 3,412 17,463 14,456 1,123 670 1,609 3,395 2,076 1 183,053 54,531 Share (%) 36 25 21 11 100 12 0 30 INSTALLED CAPACITY (in MW), broken down by primary source of energy and by regulatory system (GRI EU1)  Installed capacity in: Increase in 2013 over 2012 Source 2013 2012 2011 Hydroelectric 36,280 35,668 35,001 Thermal (oil, coal, and natural gas) Nuclear Wind and Solar 4,567 1,990 150 4,567 1,990 103 4,535 1,990 94 Total 42,987 42,328 41,620 MW 612 0 0 47 659 % 1.7% 0% 0% 45.6% 1.5% INSTALLED CAPACITY The capacity of the Eletrobras system Of the total installed capacity of the Eletrobras companies, 46% is provided reached almost 43,000 MW of installed by projects that are wholly owned by capacity in 2013, which represents 34% the Eletrobras companies, 32% comes of the 126,384 MW installed in Brazil, an from concessions renewed pursuant to increase of 1.55% over 2012, which then Law 12,783/2013, 3% derives from projects had 42,328 MW. (GRI 2.8) developed in partnership with third- parties through SPE and 19% relates to projects with shared ownership, such In 2013, the Eletrobras companies, as Itaipu Binacional, in which Eletrobras whether through direct engagement or owns half (7,000 MW) of the installed through SPE, added 659 MW of installed capacity. capacity to its energy matrix. Some of the The growth in installed capacity repre- power plants developed in partnership, sented an increase from 89.2% in 2012 to such as the Santo Antonio hydroelectric 89.4% in 2013 in the share of clean sources plant, have seven turbines in operation, in Eletrobras’s matrix. The company totaling 1,128 MW. We also highlight the also has the concession/authorization beginning of operations at the first 75 MW to develop new projects amounting generating unit at the Jirau hydroelectric to approximately 13,376 MW, obtained plant and at the Simplício and Batalha power plants, which are wholly owned by Eletrobras Furnas. (GRI EU1) 54 55 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasOPERATION AND MAINTENANCE In 2013, the Eletrobras companies were responsible for the generation of 186,092 GWh, a decrease of 10.3% from 2012. Among the sources used for energy generation, there has been an increase in the use of natural gas and the beginning of the operation of wind farms. (GRI 2.8, GRI EU2) NET ENERGY PRODUCTION (GWh), broken down by primary source of energy (GRI EU2) PRIMARY ENERGY SOURCE 2013 % of the total 2012 % of the total 2011 % of the total Hydroelectric Oil Coal Natural gas Nuclear Wind Total 157,958 84.9% 180,773 87.2% 175,304 87.8% 5,524 2,836 3,468 15,829 477 186,092 3.0% 1.5% 1.9% 8.5% 0.3% 7,159 2,677 473 16,007 333 3.5% 1.3% 0.2% 7.7% 0.2% 8,135 1,620 192 14,351 0 4.1% 0.8% 0.1% 7.2% 0.0% 100% 207,422 100% 199,602 100% VARIATION IN THE SHARE OF THE PRIMARY SOURCE OF ENERGY IN THE NET ANNUAL ENERGY PRODUCTION GRI EU2 633% 43% Natural gas Wind 6% Coal Oil Hydroelectric Nuclear -23% -13% -1% Low rainfall in late 2012 and early 2013 decreased the possibility of gener- ating hydroelectric energy, significantly increasing generation of energy through primary thermal sources (natural gas, coal, and nuclear), which are required to maintain safe levels of energy. Although the net hydroelectric energy production had been affected by low rainfall from late 2012 to late 2013, the availability factor9 of wholly owned gas- and coal-fired power plants increased in 2013. 9. The availability factor is the average time a power plant remains available to generate energy. AVAILABILITY FACTOR OF WHOLLY OWNED POWER PLANTS, JOINTLY OWNED POWER PLANTS, AND ITAIPU BINACIONAL in % (GRI EU30) PRIMARY SOURCE OF ENERGY Hydroelectric Oil Coal Natural gas Uranium Wind* 2013 91.95 86.89 46.18 81.22 84.09 99.03 2012 92.3 99.8 43.7 66.1 94.4 N/Ap * Concerning wind power generation, only SPE power plants operated in 2012. N/Ap = Not appicable. AVAILABILITY FACTOR IN SPECIAL PURPOSE ENTITIES (SPE) in % (GRI EU30) PRIMARY SOURCE OF ENERGY Hydroelectric Oil* Wind 2013 93.7 99.6 95.5 2012 92.7 N/Ap  97.7 * In 2012, there were no SPE operations for this primary source (oil). N/Ap = Not appicable AVERAGE AVAILABILITY FACTOR  OF THE POWER PLANT broken down by source of energy and by regulatory system (GRI EU30) PRIMARY SOURCE OF ENERGY Hydroelectric Oil Coal Natural gas Uranium Wind 2013 92,1% 87.0% 46.2% 81.2% 84.1% 97.0% 2012 92.3% 99.8% 43.7% 66.1% 94.4% 97.7% 2011 91.9% 82.4% 38.0% 73.1% 96.3%  N/Ap Amounts obtained based on the weighted average of the availability factors of wholly owned and SPE power plants, considering the installed capacity. N/Ap: Not applicable, considering that there was no wind power generation in 2011. 56 57 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasEFFICIENCY IN GENERATION In 2013, the average efficiency of the power plant complex of the Eletrobras companies was 35.3% (compared with 32.5% registered for the previous year). This represents an increase of 8.5% in the period. This increase demonstrates that the power plants generated energy more efficiently and with fewer shutdowns for emergency or planned maintenance. (EU11) AVERAGE EFFICIENCY IN THE GENERATION OF THERMOELECTRIC POWER PLANTS BROKEN DOWN BY SOURCE OF ENERGY AND BY REGULATORY SYSTEM (GRI EU11) 37.5% 38.0% 40.3% 35.3% 31.1% 32.5% 33.4% 30.9% 31.0% 31.9% 35.0% 35.0% 35.5% 26.0% 20.9% Average annual efficiency in the generation of the power plant complex Oil Coal Natural Gas Uranium 2011 2012 2013 VARIATION IN THE AVERAGE EFFICIENCY IN THE GENERATION OF THERMOELECTRIC POWER PLANTS BROKEN DOWN BY SOURCE OF ENERGY AND BY REGULATORY SYSTEM 2012/2013 (GRI EU11) Variation in the average annual efficiency in the generation of the power plant complex, broken down by source of energy (%) Oil Coal Natural Gas Uranium 8.5% 6.1% 28.5% 2.9% 1.4% BELO MONTE WILL ADD AN AVERAGE 4,500 MEGAWATTS OF CLEAN ENERGY TO THE BRAZILIAN ENERGY MATRIX The project, located on the Xingu River in the state of Pará, will have an installed capacity of 11,233 megawatts, and it is expected that its first unit will enter into operation in 2015. The implementation of the Belo Monte Hydroelectric Power Plant will add an average 4,500 megawatts of energy to the Brazilian power grid, which is enough to supply energy for 40% of households across the country. The project is the backbone of the national policy for the expansion of energy generation and it is essential for the economic growth of Brazil. The project was conceived based on a sustainable development vision, without falling into the false dilemma between progress and conservation. After all, it is possible to combine both objectives, which are equally important for society at large. Belo Monte is a more economical alternative for energy generation when compared with other sources of energy, offering limited environ- mental impacts. The same amount of energy, obtained from other sources such as wind, solar, and thermo- electric plants, would cost twice as much annually. The project for the hydroelectric development of Belo Monte was reviewed in depth to restrict any impacts on the environment and on the population of the area. The pondage was reduced by 60% in relation to the initial project; that is, there will be no reservoir and it will be a run-of-the-river power plant. For comparison purposes, while the national average of flooded area is 0.49 km² per MW installed, at the Belo Monte power plant this ratio is only 0.04 km² per MW installed. Of the 516 km² of its pondage, approximately 228 km² (44%) correspond to the original riverbed. The project will not flood indigenous territories, which will remain untouched by the dam, construction sites, access roads, and other engineering structures required for the construction of the Belo Monte Power Plant. The development of other power plants upstream of Belo Monte was discontinued, since they would affect Indigenous territories; this decision was formally made by the National Council for Energy Policy10. No Indigenous communities will be resettled by the project, which reaffirms the commitment of the project to reducing impacts on the surrounding area. Moreover, the Environmental Impact Assessment of Belo Monte foresees the implementation of Conservation Units in two areas located on the right bank of the Xingu River, which enables the formation of a continuous block of forest. With an approximate area of 1.6 million hectares, located close to Indigenous territories, the protected area is almost three times the size of the Federal District. The Belo Monte Hydroelectric Power Plant will be provided with fish ladders, along with Itaipu and the power plants to be built in the Madeira, Santo Antônio, and Jirau rivers. Pondage will not interfere with the spawning season, thus preserving the balance of the aquatic ecosystem in the Xingu River. State-of-the-art fishway systems will be used, pursuant to agreements with environmental agencies. foto: Regina Santos/Norte Energia 10. RESOLUTION 6, ISSUED BY THE CNPE ON JULY 3, 2008, establishes that the hydroelectric potential to be explored is located on the Xingu River, between the urban area of the munici- pality of Altamira and the mouth of the river. Such deci- sion shall be operationalized in National Energy Planning Studies, coordinated and approved by the MME.p 58 59 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasTRANSMISSION LINES Transmission EXPANSION Whether individually or through SPE, Eletrobras has projects that are either contracted, under construction, or ready to begin construction, which will add another 19,200 km to the National Interconnected System (SIN) by 2019. In 2013, a total of 3,552 km of trans- mission lines (TL) entered into operation with the participation of Eletrobras. Of this total, 1,595 km refer to the proportionate share of Eletrobras companies in SPE and 303 km, to its own performance, totaling 1,898 kilometers of new lines built by Eletrobras, itself or through partnerships. We highlight the entry into operation of the SPE - Electrical Interconnection of Madeira – with 2,375 km long, which will drain the energy produced in the plants of the Madeira River in direct current. Furthermore, we had the beginning of the operation of the Lechuga substation, which is responsible for connecting Manaus to the SIN through the Tucuruí Transmission Line. Considering Eletrobras’s performance in the auctions, the amount of work in transmission lines should increase signifi- cantly. In 2013, the Eletrobras companies were awarded six lots in transmission auctions, totaling 1,979 km of TL and 2,446 MWA in substations. Between 2014 and 2018, investments, whether independently or in partner- ships, are expected to reach R$16.9 billion, of which R$12.9 billion will be geared toward expansion and R$4 billion toward maintenance. XINGU PA TO DF GO MG ESTREITO ELETROBRAS AND CHINESE PARTNERS WILL CONNECT BELO MONTE TO THE SOUTHEAST The IE Belo Monte consortium, composed of Eletrobras Furnas and Eletronorte (both holding 24.5% interest) and State Grid Brazil Holding S.A. (51%), won the auction of the project that will drain the energy produced by the Belo Monte Hydroelectric Power Plant, in Pará, to the Southeast Region. The group presented an annual remuneration proposal of R$434,647,038, which is 38% below the cap established by the government (approximately R$600 million). The project, which will establish a transmission lineis with 2,100 km in length, foresees the implementation of 28 transformers, 25,000 km of cables, and 4,500 towers, and the capacity to transmit 4,000 MW of energy by connecting the Xingu-PA and Estreito-MG substations, crossing the states of Pará (where the Belo Monte power plant is being constructed), Tocantins, Goiás, and Minas Gerais. This is one of the most important efforts in the electric sector and will require an investment of approximately R$5 billion. State Grid is a Chinese state-owned company, which has been in Brazil since 2010, when it acquired seven national energy transmission companies. Transmission in Eletrobras companies STA. ELENA BOA VISTA EQUADOR MACAPÁ ORIXIMINÁ BALBINA 22 S.MARIA 22 BELÉM V. CONDE 22 SILVES JORGE TEIXEIRA RURÓPOLIS ALTAMIRA SÃO LUÍS 22 ACARAÚ 22 22 22 LECHUGA MANAUS CRUZEIRO DO SUL FEIJÓ RIO BRANCO PORTO VELHO 22 22 22 ABUNÃ SAMUEL ARIQUEMES DARDANELOS TUCURUÍ 22 MARABÁ 22 MIRANDA 22 PERITORÓ P. DUTRA 22 IMPERATRIZ ITACAIÚNAS P. FRANCO 22 22 CARAJÁS B.ESPERANÇA BALSAS E. MARTINS C. NETO 22 SOBRAL 44 PIRIPIRI TERESINA BANABUIÚ TAUÁ 44 PICOS MILAGRES FORTALEZA MOSSORÓ AÇU JOÃO CÂMARA COREMAS 22 22 C.GRANDE NATAL 22 22 J. PESSOA COLINAS R. GONÇALVES S. J. PIAUÍ 44 JI-PARANÁ    P.BUENO JUÍNA VILHENA BRASNORTE SINOP SORRISO 22 JUBA NOBRES 22 JAURU 22 N. MUTUM MANSO CUIABÁ 22 22 RONDONÓPOLIS MIRACEMA SOBRADINHO 22 IRECÊ 22 66 5 22 22 22 BARREIRAS GURUPI S.MESA B. J. LAPA R.DAS ÉGUAS PINDAÍ M. DO CHAPÉU SAPEAÇU IBICOARA IGAPORÃ 33 22 BARRO ALTO    BRASÍLIA 22 GOIANIA 22 FUNIL BRUMADO 22 22 M. CLAROS IRAPÉ EUNÁPOLIS ITAPEBI PIRAPORA T. FREITAS RIBEIRÃOZINHO RIO VERDE NORTE 22 22 JATAÍ RIO VERDE 33 22 33 22 RECIFE 55 ANGELIM 33 MACEIÓ XINGÓ ARACAJU 22 22 33 SALVADOR CHAPADÃO 22 C. GRANDE 1 ARARAQUARA 4 3 44 22 22 33 44 DOURADOS ASSIS 2 GUAÍRA UMUARAMA 22 LONDRINA CASCAVEL / CASCAVEL OESTE 33 ITAIPU S.OSÓRIO/S.CAXIAS S. SANTIAGO 22 22 22 IVAIPORÃ F. AREIA 22 22 22 ITÁ C. NOVOS 22 33 FIGUEIRA 22 SÃO PAULO 22 22 22 CURITIBA BLUMENAU STO. ÂNGELO MAÇAMBARÁ / S. BORJA 22 22 22 LAJES 22 FLORIANÓPOLIS SIDERÓPOLIS URUGUAIANA 50 MW S.CRUZ LIVRAMENTO 70 MW CAMAQUÃ MÉDICI PELOTAS PORTO ALEGRE MELO 500 MW QUINTA STA. VITÓRIA DO PALMAR MESQUITA BELO HORIZONTE LINHARES MASCARENHAS VITÓRIA 22 J. FORA CAMPOS 33 22 RIO DE JANEIRO 22 44 C. PAULISTA LEGEND EXISTING FUTURE TRANSMISSION LINES ELETROBRAS COMPANIES TRANSMISSION LINES ELETROBRAS COMPANIES WITH PARTNERSHIP TRANSMISSION LINES OTHER COMPANIES PARANÁ RIVER COMPLEX PARANAPANEMA RIVER COMPLEX GRANDE RIVER COMPLEX PARANAÍBA RIVER COMPLEX PAULO AFONSO COMPLEX NUMBER OF CIRCUITS 1 2 3 4 5 # 60 61 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras OPERATION AND MAINTENANCE The Eletrobras companies are responsible LOSSES IN ENERGY TRANSMISSION The Brazilian regulatory framework does for 57,290 km of transmission lines, which not define a specific methodology for operate between 230 and 750 kV. Of this the calculation of losses in transmission. total, 53,706 km are owned by four trans- Therefore, in 2010, Eletrobras defined a mission companies – Eletrobras Chesf, unified methodology to monitor losses. Eletronorte, Eletrosul, and Furnas – and This methodology is based on electric 3,584 km were obtained through auctions, calculations and uses power-flow whether in partnerships with other companies or through SPE. (GRI 2.8, GRI EU4) simulations. (GRI EU6) Calculation of transmission losses of an In 2013, the Eletrobras companies energy company considers the difference presented 99.8% of availability in their between the sum of generation, imports, transmission lines, compared with 99.5% exports, and consumption in the points in the previous period. This indicator of delivery to distributors and local represents the percentage of hours within consumers. the year in which the lines remained Technical losses in transmission are available to the transmission system. being reduced year after year. From 2012 to 2013, Eletrobras was able to reduce losses in its transmission system by 8.2%. (GRI EU12) TECHNICAL LOSS ON TRANSMISSION (%) GRI EU12 2.23% 2.19% 2.01% 2011 2012 2013 Distribution EXPANSION The Eletrobras distribution companies, operating in two states in the Northeast and four in the North, currently serve over 3.8 million customers11. These companies have invested approximately R$900 million in the industry in the states of Amazonas, Acre, Alagoas, Piauí, and Rondônia and in the city of Boa Vista-RR. In 2013, seven new substations were built and 21,937 km were installed, totaling 248,375 km of networks. (GRI 2.8, EU4, GRI EU6) LENGTH OF LINES/ DISTRIBUTION NETWORK (GRI EU4) Eletrobras Amazonas Energia Eletrobras Distribuição Acre Eletrobras Distribuição Alagoas Eletrobras Distribuição Piauí Eletrobras Distribuição Rondônia Eletrobras Distribuição Roraima Total Km 44,381 17,733 40,761 86,273 55,760 3,467 248,375 11. For Eletrobras, a customer is each customer account registered with the company, and consumers are all those who consume energy in each customer account. In a household, for example, there is only one customer, but there may be various consumers. NEW CUSTOMERS The company registered approxi- mately 150,000 new customers, bringing the total to over 3.8 million. The largest increase relates to the number of new customers of Eletrobras Amazonas Energia, which grew by 6.6%. For the 2014-2018 period, the company expects to invest R$8.5 billion: R$5 billion in expansion, R$1.7 billion in maintenance, and R$1.8 billion in infrastructure. OPERATION AND MAINTENANCE The quality of the service provided to new and existing customers is gauged by two indices: Equivalent Power Outage Duration per Customer Account (DEC) and Equivalent Power Outage Frequency per Customer Account (FEC). The DEC refers to the number of hours that a power outage lasted for a given customer account. The average duration of power outages ranged from 38 to 40 hours between 2012 and 2013. 62 63 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasDistribution in Eletrobras companies RORAIMA NUMBER OF CONSUMERS 97.203 CONCESSION AREA (KM) 5.687 791 MARKET (GWh) AVERAGE DURATION OF POWER OUTAGES in hours (GRI EU29) 12 NUMBER OF CONSUMERS CONCESSION AREA (KM) MARKET (GWh) AMAZONAS 827.235 1.577.820 5.898 NUMBER OF CONSUMERS CONCESSION AREA (KM) MARKET (GWh) PIAUÍ 1.102.032 251.577 2.991 NUMBER OF CONSUMERS CONCESSION AREA (KM) MARKET (GWh) ACRE 231.144 164.123 841 NUMBER OF CONSUMERS CONCESSION AREA (KM) MARKET (GWh) RONDÔNIA 564.892 237.591 2.864 NUMBER OF CONSUMERS CONCESSION AREA (KM) MARKET (GWh) ALAGOAS 981.454 27.768 3.401 39 38 40 2011 2012 2013 FREQUENCY OF POWER OUTAGES (GRI EU28) 13 12. The DEC is calculated based on the weighted average of the Eletrobras companies (duration of power outage, in hours, over number of consumers). 13. The FEC is calculated based on the weighed average of the Eletrobras companies (number of outages, over number of consumers). In turn, the FEC, which determines the frequency of power outages in one year, dropped from 31.4 to 27.8 outages, particu- larly due to the performance achieved 31.5 31.4 27.8 by the following distribution companies: 2011 2012 2013 Eletrobras Amazonas Energia, Distribuição Alagoas, and Distribuição Roraima, which exceeded the goals established for this year. There was a drop of 11.5% in this rate between 2012 and 2013 in the Eletrobras Among the various actions taken by the companies. company to improve quality indices (DEC and FEC), we highlight: • The improvement of preventive mainte- nance services. • The expansion in the medium voltage / low voltage transformation capacity . • The construction of new substations, which reduced problems related to overload, such as in the state of Amazonas, where two new substations were delivered, and in the case of the Parnaíba II, Polo Industrial, and Caraúbas (Piauí) substations, which reinforce the distribution of energy to coastal municipalities of the state and to the industrial district of Teresina. 64 65 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras In 2013, we also hired consulting services from a bank to analyze the business model adopted for distribution by Eletrobras and to propose alternatives, due to the drop in revenues in the current scenario. This study should be concluded and presented to the Board of Directors in 2014. The budget forecast for the distribution sector totals R$1.8 billion, exclusively from the company’s own resources, and another R$280 million for the mainte- nance of assets. These new investments demonstrate the commitment made by Eletrobras to increasing reliability and availability of the services provided to consumers. (GRI EU6) Eletrobras’s total number of residential, industrial, institutional, and commercial customer accounts registered 3,803,960 connections. Since 2011, the number of customer accounts connected to the networks of the Eletrobras companies has been increasing. NUMBER OF RESIDENTIAL, INDUSTRIAL, INSTITUTIONAL, AND COMMERCIAL CUSTOMER ACCOUNTS (GRI EU3) . 0 6 9 3 0 8 3 . . 8 3 2 8 3 2 3 . . 2 6 0 3 0 1 3 . . 8 2 4 5 6 9 2 . . 9 0 6 3 5 6 3 . . 6 3 7 9 8 4 3 . 5 1 9 4 5 2 . 0 2 0 6 6 2 . 2 5 0 4 7 2 . 2 6 3 5 4 . 4 8 1 8 4 . 2 8 7 5 3 . 6 1 8 2 1 . 3 0 9 2 1 . 4 4 4 2 1 . 5 1 2 1 1 2 . 0 4 4 3 2 2 . 9 4 4 3 4 2 . Residential Commercial Institutional (public authorities and utilities) Industrial Other account types (rural, internal consumption, etc.) Total customer accounts, by account type 2011 2012 2013 Since 2008, the company has been Consequently, losses in distribution developing and implementing an in-depth are defined as the difference between the method to monitor the reduction of losses energy injected into the grid of the distri- in distribution. This monitoring allowed bution company and the total energy for an increased number of inspections, sold and delivered; they are composed of the regularization of illegal connections, the execution of planned improvements, technical losses and non-technical losses. (GRI EU12) and a reduction in the percentage in distribution losses. (GRI EU6) Since the implementation of these programs, which include actions to fight losses in energy, the global distribution loss rate has decreased by 17.5% since 2009. OVERALL LOSS ON DISTRIBUTION (%) TECHNICAL AND NON-TECHNICAL LOSS (GRI EU12) 36.0% 35.2% 34.3% 31.0% 30.7% 2009 2010 2011 2012 2013 For 2014, a reduction in losses is expected through energy gains due to the completion of projects initiated in the second half of 2013. This advance will be possible due to the continuation of the inspection and regularization services already hired and to the beginning of operations in important projects of the electric system, especially in the states of Amazonas and Piauí. Moreover, a set of actions will be implemented for the reduction of energy losses with the devel- opment of Projeto Energia +. 66 67 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras Demand management The Brazilian regulatory framework estab- lishes the characteristics of projects that involve the construction of transmission systems in the expansion planning phase. The best alternative that offers the lowest overall cost (costs with investments and losses) is chosen through technical and economic feasibility studies. Upon assurance of availability and reliability of the system, the concession of the project is done through a bidding process, and the transmission company that owns the concession is responsible for implementing the project, pursuant to the studies conducted. (GRI EU6) TOTAL AND PERCENTAGE OF THE POPULATION NOT SERVED IN AREAS WITH REGULATED DISTRIBUTION AND SERVICE 14 (GRI EU26) Total population that should be served Urban population not served in the company’s concession areas (in number of units) Rural population not served in the company’s concession areas (in number of units) Percentage of the population not served based on the ratio between total population and population not served 2013 3,959,893 72,012 5,105 1.95% 14. Regulated distribu- tion areas: regulated distribution areas contain networks that are owned/ explored by licensed operators that supply energy to customers and over which operators hold concession or monopoly. DEFAULT The default rate decreased throughout the year, dropping from 17.3% in January to 14.6% in December, due to the systematic prevention of commercial losses under- taken by all Eletrobras distribution companies. Improvement in this indicator is also in line with the behavior of Brazilian consumers, who sought to settle their outstanding debts over this period. Research, development, and innovation Innovative thinking and the pursuit of Since 2009, Eletrobras has followed the new solutions are constantly present guidelines established by the corporate in the operations of the Eletrobras Research, Development, and Innovation companies. In 2013 alone, over R$504.8 Policy (P&D+I) and addressing the topic as million was invested in research, a short-, medium-, and long-term corporate development, and innovation, which strategy. All this is in line and integrated represented an increase of 136% over 2012. with the strategic plan and the business Pursuant to Law 9,991/2000, the Eletrobras companies are required to invest plans to obtain results that can support growth and competitiveness and that in research and development and publish can serve as key elements to align the annual calls for proposals and projects sustainable growth of the business with to implement its scientific research and social and environmental responsibility. technological development programs. INVESTMENTS IN RESEARCH AND DEVELOPMENT in R$ millions (GRI EU8) TYPES OF PROJECT Transmission and distribution technologies Renewable energy technologies Advanced generation and technologies Innovative services related to sustainability Energy efficiency Distributed energy Total 2013 369.2 2012 126.0 2011 105.7 45.5 43.0 23.9 21.6 1.8 11.1 35.1 20.7 19.3 2.0 11.4 26.9 19.0 15.0 2.1 504.8 214.2 180.0 In 2012, data does not include Eletrobras Distribuição Acre, Distribuição Piauí, and Eletronuclear. 68 69 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras  Eletrobras Cepel Eletrobras Cepel (Center for Electric Energy The Center also has departments that Research) was created in 1974 through are dedicated to the research and appli- an initiative by Eletrobras holding cation of renewable energy technologies and the companies Eletrobras Chesf, (wind, photovoltaic solar generation, Eletronorte, Eletrosul, and Furnas. Since and solar-thermal generation), energy then, Eletrobras Cepel has contributed to efficiency, and distributed generation fostering the sustainable development (fuel cells and hydrogen power). In of the Eletrobras companies and to the addition, the Center conducts studies on development and maintenance of a state- hybrid systems for energy generation of-the-art scientific infrastructure and from renewable sources and the use of to advanced research in equipment and energy potential from municipal solid electric systems. waste, biogas, metallurgy, and materials, Today, Cepel is engaged in the devel- such as the assessment of the structural opment of a laboratory for experimental integrity of thermoelectric power plants research related to the smart grids and corrosion; superconductivity of concept and participates in a project ceramics with new formulas to obtain for the use of this concept in the city of block varistors; the characterization and Parintins (AM) and in the creation of a development of materials for fuel cells; benchmark model to be applied in the and nanotechnology, in unique facilities Eletrobras distribution companies. in the Southern Hemisphere. All research projects and the development of new technologies are conducted in close cooperation with universities and other research centers and companies in Brazil and abroad. Eletrobras Cepel also provides techno- logical support to important programs and projects developed by the Federal Government, such as Luz Para Todos (National Program for Universal Access to and Use of Electricity); the Alternative Energy Source Incentive Program (PROINFA), the National Program for the Conservation of Electricity (PROCEL); and the National Program for Efficient Public Lighting (ReLuz); it also takes part in the preparation of the National Energy Plan and of the Decennial Energy Expansion Plans. foto: Fernando Dart/Eletrobras Cepel SOLUTIONS IN THE SERVICE OF SUSTAINABILITY The Eletrobras companies are involved in cutting-edge studies and in the devel- opment of solutions for energy efficiency. Some of these are the following: DISTRIBUTED ENERGY Eletrobras Distribuição Alagoas has been developing a project involving the modeling of errors in electronic reactive power meters and the assessment of losses due to effects of harmonic distortions and unbalances. + INNOVATIVE SERVICES RELATED TO SUSTAINABILITY This partnership between the Federal University of Rio Grande (FURG) and the Foundation for the Support of the University of Rio Grande (FAURG) studies the operation of the unit for biofixation of carbon dioxide by microalgae, installed at the Presidente Médici Thermoelectric Power Plant at Eletrobras CGTEE. ADVANCED TECHNOLOGIES At Eletrobras Cepel, a robot helps in the inspection of power transmission cables. + ENERGY EFFICIENCY A partnership between Eletrobras holding and the Federal University of Mato Grosso do Sul (UFMS/ FAPEC) assisted in the development of computer applications to increase the efficiency of the sanitation systems of public buildings and in the training of sanitation industry professionals for the control of water supply systems. foto: Milton Maurente/ Eletrobras Cepel RENEWABLE ENERGY This strategic project is an initiative of Eletrobras Chesf; it is called “Central Fotovoltaica da Plataforma Solar de Petrolina” (Photovoltaic Center of the Solar Platform of Petrolina), and its main objective is the development of method- ologies for the integration of photovoltaic power plants into the Brazilian electric system: installation, commissioning, performance assessment, and technical and economic analysis. TRANSMISSION AND DISTRIBUTION TECHNOLOGIES Development of technologies for Ultra-High-Voltage (UHV) transmission lines, in partnership with Eletrobras Cepel, Eletronorte, and Furnas. One of its objectives is the construction and development of the first ultra-high voltage laboratory in Latin America, enabling research on ultra-high voltage (over 1,000 kV in alter- nating current and 800 kV in direct current). 70 71 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasCentral Public Market, Porto Alegre, Rio Grande do Sul. ECONOMIC AND FINANCIAL PERFORMANCE ON THE PATH TO NEW ACHIEVEMENTS_74 RESULTS_75 VALUE-ADDED STATEMENT_78 ECONOMIC SUBSIDIES_79 INDIRECT ECONOMIC IMPACTS_81 72 73 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasOn the path to new achievements The results posted by Eletrobras in 2013 reflected the new energy generation and transmission tariffs for the assets that had their concessions renewed, pursuant to Law 12,783/13, and were influenced by variables such as the impairment that totaled R$2,462 million, expenditures of R$1,726 million in the Voluntary Resignation Incentive Program (PID), and a provision for contingencies in the amount of R$1,399 million. The Eletrobras companies effec- tively took part in the public hearings and discussions about the regulation pertaining to the concession contracts for energy generation and transmission that were extended and their respective compensations. As a result, there was a reduction in operating revenue in the three business segments in which the company operates: generation, trans- mission, and distribution. THE IMPACT OF LAW 12.783 In the generation segment, revenue from the renewed assets now comes from the tariffs charged for the operation and maintenance (O&M) of power plants, as established by the Brazilian Electricity Regulatory Agency (ANEEL), a result of the shift from price to tariff, as defined by the regulatory agency. The tariff will be calculated based on operation and maintenance costs, with an additional rate of 10%. In other words, revenue from the energy sold by the renewed projects no longer belongs to the Eletrobras companies. Regarding the transmission segment, a similar reduction occurred in the tariffs received by the Eletrobras companies, where ANEEL will put into practice a tariff readjustment analogous to the one adopted for the generation segment. Revenue from generation dropped by 8.7%, from R$18,883 million in 2012 to R$17,240 million in 2013. This variation was influenced by a reduction of 10.6% in revenue from the sale of energy, dropping from R$18,381 million in 2012 to R$16,435 million in 2013 as a result of Law 12,783/2013. The short-term energy, especially concerning the operations in the Electric- Power Commercialization Chamber (CCEE), related to Eletrobras Chesf, Eletronorte, and Furnas, had a positive influence on these results, growing from R$1,640 million in 2012 to R$2,396 million in 2013. Regarding the volume of energy sold, the Eletrobras companies presented a slight decrease in 2013, when 258 TWh were sold, in comparison with the 261 TWh sold in 2012. Revenues from transmission decreased by 38.8%, from R$7,358 million in 2012 to R$4,505 million in 2013, influenced by the restatement account of the transmission Results return rates, which went from R$2,852 Learn more about the main variables million in 2012 to R$552 million in 2013, as a result of Law 12,783/2013. Revenue from that affected the economic and financial performance of Eletrobras in 2013 and the O&M went from R$2,545 million in 2012 main results recorded: to R$2,156 million in 2013. Revenue from construction has an equivalent value and is recorded as construction cost. (GRI 2.8) • Impairment in the amount of R$2,462 million. • Provision for contingencies in the amount of R$1,399 million. • Reversal of provisions for onerous contracts in the amount of Since these assets had not been fully R$1,925 million. depreciated or amortized when the concession was renewed, the Eletrobras companies were entitled to compen- sation. On 12/31/2013, the company had a credit balance of R$5,496,178,000, of which R$3,476,494,000 was recorded as current assets and R$2,019,684,000 as non-current assets. • Provision for the loss of financial assets in the amount of R$792 million. • Personnel, materials, and services (PMS): growth of 20.5% in 2013 over 2012, especially in relation to the personnel account, which increased by 30.1% due to the PID (the company expects to achieve savings of R$1.1 billion per year, with return on investment in two years). The materials account dropped by 2.2% and the services account grew by For the generation segment, comple- 1.9%. mentary information related to the investments which are not depreciated or amortized, improvements, and • Increased spending with energy purchased for resale, which totaled R$5,515 million in 2013 (an increase of 13.4% compared with 2012). modernizations, which require additional • Increased spending with fuel for power generation, which compensation, is being submitted to the regulatory agency. In the case of transmission, Eletrobras is responsible for informing ANEEL about the value of investments in assets acquired before the year 2000 (Existing Basic Network - RBSE), not depreciated or amortized, required for the calculation of complementary compensation. represented net expenditures that totaled R$1,492 million in 2013 (an increase of 115.1% over 2012). • Itaipu transfer: R$68 million, 86.5% below 2012. • Net income on exchange variation: R$539 million, an increase of 17.0% over 2012. • Write-off of tax credit in the amount of R$1,367 million in 2013. (GRI 2.8) 74 75 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras 83.6% In 2013, Eletrobras registered the record amount of R$11.2 billion in its investment program. It corresponds to 83.6% of the budget forecast for the year. CONSOLIDATED EBITDA In R$ millions EBITDA Earnings for the period + Provision for income tax and social security contribution + Financial result + Amortization and depreciation = EBITDA 2013 ADJUSTED EBITDA = EBITDA + Atypical events = ADJUSTED EBITDA 2013 -6,291 1,367 -266 1,501 -3,690 2012 -6,926 % -9% -491 -378% -1,684 1,689 -7,412 -84% -11% -50% In R$ millions -3,690 3,767 77 NET PROFIT In 2013, Eletrobras posted a net loss of R$6.287 billion. This result reflects the new generation and transmission tariffs of the assets whose concessions were renewed, pursuant to Law 12,783/13. ANALYSIS OF CONSOLIDATED RESULTS In R$ millions Net operating income (a) Personnel, materials, and services Energy purchased for resale Usage of the grid Construction Fuel for power generation Remuneration and reimbursement Depreciation and amortization Ownership interest Operating provisions Voluntary Resignation Incentive Program Other results Income from interest and financial investments Monetary restatement Exchange variation Debt burden Debt burden from shareholders’ resources Other financial results Effects of Law 12,783 Income tax and social security contribution Net profit for the period Participation of non-controlling shareholders Consolidated net profit 2013 23,836 -9,245 -5,515 -1,561 -3,548 -1,492 -406 -1,501 568 178 -3,258 -257 -2,422 -5,191 1,703 455 539 2012 28,014 -7,671 -4,863 -1,587 -3,306 -694 -668 -1,689 7,537 612 -4,971 0 -2,193 985 2,738 721 461 -2,031 -1,684 -190 -209 -4,925 -502 -49 2,669 0 -10,085 -1,367 -6,291 -5 491 -6,926 -47 -6,287 -6,879 Operating revenues from the power generation and transmission segments for G & T OPERATIONAL REVENUES In R$ millions 2012 and 2013. CONSOLIDATED A) GENERATION Supply Delivery CCEE Revenue from operation and maintenance - renewed lines Revenue from power plant construction Adjustment of rate of return - generation Transfer Itaipu B) TRANSMISSION Rates of return – transmission Revenue from operation and maintenance Revenue from construction Gross revenue from G&T 2013 2012 8,066.67 13,080.82 3,774.40 3,659.98 2,395.73 1,640.24 2,198.24 736.85 - - - - 67.96 502.07 552 2,156 1,797 2,852 2,545 1,960 21,745 26,240 76 77 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras            Value-Added Statement 15 CENTRAIS ELÉTRICAS BRASILEIRAS S.A. - ELETROBRAS VALUE-ADDED STATEMENT FOR THE PERIODS ENDING ON DECEMBER 31, 2013 AND 2012 (in R$ thousands) (GRI EC1) 1 - REVENUE (EXPENSES) Sale of goods, products, and services 2 - INPUT ACQUIRED FROM THIRD PARTIES Materials, services, and others Industry-specific taxes Energy purchased for resale Fuel for the generation of energy Operating provisions 15. DVA = Value-Added Statement Accounting report that provides a summarized account of the amounts that correspond to the wealth created by the company in a given period and its respective distribution to stakeholders. H OLD I NG CON SOL I DAT ED 2013 2012 2013 2012 Resubmitted 2,970,726 2,970,726 2,868,389 2,868,389 28,186,399 28,186,399 33,648,066 33,648,066 (488,074) - (2,875,951) - (5,011,829) (8,375,854) (761,923) - (2,406,812) - (764,387) (3,933,122) (10,455,551) (870,490) (5,515,206) (1,492,368) (3,258,205) (21,591,820) (20,010,401) (1,723,889) (4,863,288) (693,751) (4,971,221) (32,262,550) 3 - GROSS ADDED VALUE (5,405,128) (1,064,733) 6,594,579 1,385,516 4 - WITHHOLDINGS Depreciation, amortization, and depletion (6,547) (6,279) (1,500,540) (1,688,961) 5 - NET ADDED VALUE PRODUCED BY THE ENTITY (5,411,675) (1,071,012) 5,094,039 (303,445) 6 - ADDED VALUE RECEIVED IN TRANSFER Ownership interest Financial revenues (787,881) 3,799,447 3,011,566 (7,531,378) 4,829,062 (2,702,316) 177,768 3,712,311 3,890,079 612,202 4,658,821 5,271,023 7 - TOTAL ADDED VALUE FOR DISTRIBUTION (2,400,109) (3,773,328) 8,984,118 4,967,578 DISTRIBUTION OF ADDED VALUE PERSONNEL . Personnel, charges, and fees . Retirement and pension plan TAXES . Taxes, fees, and contributions THIRD PARTIES . Financial charges and rent . Donations and contributions SHAREHOLDERS . Dividends and interest on net equity . Participation of non-controlling shareholders . Retained earnings or losses for the year 444,239 38,188 482,427 326,533 28,292 354,825 6,404,531 245,623 6,650,154 4,825,974 294,669 5,120,643 1,443,609 1,443,609 792,862 792,862 4,846,943 4,846,943 3,419,239 3,419,239 1,681,679 278,839 1,960,518 1,667,947 289,954 1,957,901 3,446,365 332,031 3,778,396 2,974,346 379,002 3,353,348 433,962 - (6,720,625) (6,286,663) (2,400,109) 433,962 - (7,312,878) (6,878,916) (3,773,328) 433,962 (4,712) (6,720,625) (6,291,375) 8,984,118 433,962 (46,736) (7,312,878) (6,925,652) 4,967,578 Economic subsidies GOVERNMENT SUBSIDIES Government subsidies are not recognized ENERGY DEVELOPMENT ACCOUNT (CDE) In 2013, the Eletrobras companies until it is reasonably certain that the received a total of R$838.5 million. company will comply with the conditions The total released for the distribution established and that the subsidies will companies was R$177.4 million, of be received. These subsidies are recorded which R$14.7 million went to Eletrobras systematically in the results for the Distribuição Acre, R$11 million to periods in which the company recognizes, Eletrobras Distribuição Alagoas, R$74.2 as expenses, the corresponding costs that to Amazonas Energia, R$75.8 million to these subsidies should offset. Government Eletrobras Distribuição Piauí, and R$1.7 subsidies to be received as compensation million to Eletrobras Distribuição Roraima. for incurred expenses, with the purpose Concerning energy generation and trans- of offering immediate financial support mission companies, R$661.1 million was to the company with no corresponding earmarked for CGTEE. future costs, are recorded in the results that correspond to the period in which they were received and appropriated as profits reserve; therefore, not intended for FUEL CONSUMPTION ACCOUNT (CCC) In 2013, the Eletrobras companies distribution of dividends. received a total benefit of R$4.006 billion, of which R$2.972 billion went to Eletrobras Amazonas Energia, R$0.130 billion to Eletrobras Distribuição Acre, R$0.436 billion to Eletrobras Distribuição Rondônia, R$0.09 billion to Eletrobras Distribuição Roraima, and R$0.378 billion to Eletrobras Eletronorte. 78 79 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras          TAX INCENTIVES Provisional Measure 2,199-14, of August 24, ANTI-COMPETITIVE BEHAVIOR As a quasi-public corporation, Eletrobras 2001, amended by Law 11,196 of November seeks maximum compliance with 21, 2005, allows companies located in the corporate governance, pursuant to the regions where the Northeast Development strict legality and transparency of its acts. Superintendence (Superintendência do No legal actions for unfair competition, Desenvolvimento do Nordeste) (SUDENE) anti-competitive behavior, anti-trust, or and the Amazon Development Agency monopoly practices have been filed to the (SUDAM) operate and that have projects company in 2013. There was one pending in the infrastructure industry to reduce lawsuit from 2011, however, it resulted in the amount of the corporate income tax the exclusion of the company from the payable to be used in investments in installation, expansion, modernization, or lawsuit. (GRI SO7) diversification projects. The tax incentive for the reduction of income tax and non-refundable additional taxes determined are recorded in the results for the year, as a reduction in income tax. The portion of profit arising from these tax incentives must be recorded in the profit reserve account called Tax Incentive Reserve16. In this fiscal period, there was a reduction of R$99,938 thousand in income tax for Eletrobras Eletronorte. 16. Pursuant to Article 195-A of Law 6,404/1976, it may only be used to increase the capital stock or to absorb losses. 17. For the purposes of this report, “significant fines” are those equal to or greater than 1% of the ROL of the company in question. COMPLIANCE In 2013, the Eletrobras companies were assessed a significant fine17 in the amount of R$43.5 million. Eletrobras Furnas recorded this fine, which is part of the Tax Debt Refinancing Program launched by the Federal Government through Law 12,865/2013. (GRI SO8) Indirect economic impacts The activities developed by the Eletrobras companies cause indirect economic impacts for the sustainable development of the regions where they operate. These are additional consequences of the financial activity and of the flow of resources between Eletrobras and its stakeholders. Eletrobras has been seeking to implement initiatives for the economic development of areas with high incidence of poverty and for the improvement of social and environmental conditions, and for the increase of household income through projects pertaining to the reduction of energy consumption. The company also contributes to regional development, whether directly, through the implementation of projects and services, or indirectly, through the significant increase in tax collection, due to the execution of these actions based on the Service Tax (ISS) paid to these municipalities. These actions increase the municipal tax incidence, and, depending on the total value of the projects, these actions can be enhanced, leveraging the local economy and social development, since the collection of such taxes can be returned in the form of education, health, and sanitation, among others. (GRI 1.2, GRI EC8, GRI EC9) JOB GENERATION The social and environmental activities conducted by Eletrobras Eletronuclear comply with the ISO 26000 standard, which deals with social responsibility, and with the ISO 17025 standard, which deals with suppliers for the nuclear industry. It is estimated that the Angra power plants are responsible for the generation of three to four indirect jobs for each direct job created. Hence, the presence of Central Nuclear in the area boosts commercial and service activities, which were once incipient. The construction of the Angra 3 Nuclear Power Plant is creating new jobs in the Costa Verde area, on the coast of the state of Rio de Janeiro. The construction company in charge of the construction work already has a workforce of 2,139 employees to work in the construction of the plant, according to the survey conducted in December 2013. Eletrobras Furnas quantifies the number of jobs created in connection with its generation and transmission projects. The creation of jobs associated with the General Transmission Venture Plan (PGET) achieved, in 2013, a total of 3,392 direct jobs and 2,984 indirect jobs. The corporate projects by Furnas (100% ownership interest) created 2,862 jobs. The SPE created 29,669 jobs in the same period. 80 81 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasCOLLECTION OF TAXES REVERSED INTO SERVICES Aware of the direct and indirect changes caused in the areas surrounding the Tucuruí Hydroelectric Plant, Eletrobras Eletronorte, through the Regional Insertion Program (PIRJUS), has been implementing actions that contribute to the improvement of the quality of life of the population, to the provision of municipal public services, to the municipal infrastructure, and to education, health, and family farming. These municipalities received, between 2011 and 2013, an amount equivalent to R$400,000, which refers only to the Service Tax (ISS), charged on the construction of eight schools in the region. Itaipu Binacional pays royalties for the use of the hydroelectric potential of the Paraná River. Calculations are based on energy generation, pursuant to Attachment “C” of the Itaipu Treaty. These amounts are transferred to the National Brazilian Treasury and to the Ministry of Finance of Paraguay. The National Treasury distributes these royalties to municipalities, states, and the Federal Government, based on the calculation by Aneel. Pursuant to the laws in effect, the share of each party is considered, and the portion for Brazil was distributed as follows: • US$25.9 million to the Federal Government, to be divided among the Ministry of the Environment, the Ministry of Mines and Energy, and the National Fund for Scientific and Technological Development; • The two states directly affected by the construction of the power plant, Paraná and Mato Grosso do Sul, received US$100.6 million, of which US$98.3 million went to the government of the state of Paraná; • US$99 million was received by the municipalities that were directly affected by the reservoir. Santa Helena received the largest benefit, with US$24.9 million; • US$33.4 million was paid to the states and municipalities affected by the reservoirs upstream from the Itaipu Power Plant and those that contribute to the increase in the energy it produces. After the needs or priorities of the region are identified, the Eletrobras companies direct their social investments to social, environmental, educational, and cultural actions that enable local development. These actions are developed to foster positive impacts on the quality of life of people, social inclusion, and the conservation of the environment; they are conducted through partnerships with suppliers, partners, government agencies, and NGOs. (GRI EC8, GRI EC9) AMONG THE MAIN INITIATIVES, WE HIGHLIGHT THE FOLLOWING: Community Centers of Production economic conditions of the farmers (CCP): while operating the Luz para benefited, which, in turn, stimulates Todos Program, Eletrobras noticed that the development of the rural energy the investments made in the power market. Therefore, electricity becomes lines that serve the inland regions of the an important vector for development, country could be more efficient if they becoming a production input capable offered additional conditions so that of generating income and growth in rural residents could add value to their production through processing activities that run on electricity. Therefore, the Community Centers of Production (CCPs) were created; consisting of small collective agro-industries where producers, whether in associations or cooperatives, share the electric equipment that processes the production of their properties, gener- ating income and work. Implemented in partnerships that may include rural devel- opment agencies, energy distribution companies, local governments, and other entities, the CCPs enable the production of processed goods that comply with health regulations, which allows their trading without restrictions and in accordance with the quality standards required by the market. Eletrobras supports the implemen- tation of the CCPs as a social responsibility action, fostering the productive use of energy and the commencement of a virtuous cycle of growth for small Brazilian rural areas. Sobradinho Reservoir Program: actions aimed at agricultural and livestock producers and fishermen living in the surroundings of the Sobradinho Dam (BA), with fields for technological learning and training in the areas of cultivation; handling of the caatinga; cattle, sheep, and goat breeding activities; milk production; fishing; and meliponine culture (stingless bees), among others. Trilha Jovem Project: maintained by Polo Iguassu, with the support of Itaipu, the Fundação Parque Tecnológico Itaipu (FPTI), Cataratas do Iguaçu S.A., and another 18 institutions. The project trains young adults in tourism and service, lodging, and food and beverage. Center for Integral Assistance for Adolescents - Centro de Atenção Integral ao Adolescente (CAIA): in partnership with Itaipu, it develops activities for producers. These initiatives enable underprivileged youths from the Porto effective improvement in the social and Meira district. Currently, 500 youths take part in activities involving education and professional training, in addition to receiving social and educational support. 82 Eletrobras 83 ANNUAL AND SUSTAINABILITY REPORT 2013 Community Entrepreneurship Centers - Centros de Empreendedorismo Comunitário: support for communities for the development of employment Fostering Citizenship Project - Projeto Semeando a Cidadania: conducted in partnership with the City Government of Candiota-RS, the project aims to provide DONATIONS Municipal Fund for the Rights of Children and Adolescents in Belo Horizonte (FMDCA/BH): the donation of R$100,000.00 to the Associação Mineira and income generation projects. In 2013, training to 200 youths and adults in de Reabilitação (AMR). a Patchwork Center was developed in the urban areas of the municipality of partnership with Dudalina, in Santa Candiota-RS. It offers 11 technical courses, Vitória do Palmar (RS), where the such as industrial mechanics, welding, women of the local community received and general electricity, among others, equipment and raw materials to start which aim to prepare these individuals production. Community Gardens Program - Programa Hortas Comunitárias: developed in the states of Paraná, Santa for the job market, enabling income generation, social inclusion, and improved quality of life, in addition to local and regional development. Catarina, and Mato Grosso do Sul, it aims to offer income alternatives to the Project Entrepreneurship for Banana Producers and Entrepreneurship for communities located in the vicinity of Pineapple Producers: in partnership the transmission lines and to enable the with SEBRAE, the Cooperative of Rural appropriate use and conservation of rights Producers of Taquara, Abunã, Pau of way, avoiding illegal occupations. Darco, and Penha (COOPERTAP) and the Training program in social technologies for the production of healthy food and alternative energies: project conducted in partnership with the National Association of People Affected by Dams (ANAB), with the purpose of building the capacity of 300 individuals affected by dams in Agro-sustainable Cooperative of União Bandeirantes (UNICOOP) benefitted from the installation of step-down substations and of a 45-kVA three-phase transformer, which allowed for the installation of a refrigerated chamber to preserve their banana production. four areas of Brazil. The project will be Telecenter: implementation of one executed for two years. telecenter in União Bandeirantes (in Work and Income Creation Project – Training of Electricians: in 2013, this project trained more than 20 electricians in a community in the state Acre. Those who completed the course expect to find opportunities in the job market and to consequently increase their income. partnership with SEBRAE). This project has not been concluded and is expected to continue in 2014, depending on one Internet access point. A total of R$161,000 was generated in income and 80 members and families were served directly. Endogenous regional development of the Alto Camaquã River basin: initiated in November 2011, the project fosters regional development in Alto Camaquã (RS) through the acknowledgement and appreciation of local businesses. It serves men and women involved in family farming and benefits 20,000 people, directly and indirectly. Fundação de Saúde Itaiguapy: in 2013, Itaipu continued to transfer the financial resources it has been donating to Fundação de Saúde Itaiguapy (in Foz do Iguaçu-PR) since 2002 and entered into a new Term Sheet, which will ensure the granting of the resources for the 2014-2017 period. The foundation benefits a population of approximately 450,000, in addition to Brazilians living in Paraguay, who seek services in Foz do Iguaçu. Municipality of Hulha Negra-RS: the donation of R$187,000.00 for the purchase of an ambulance for the municipality. Eletronuclear Agreements: 20 transfers, referring to 17 agreements. All actions developed by Eletrobras Eletronuclear with local communities refer to the Almirante Álvaro Alberto Nuclear Center, which is composed of two power plants that are operating and one that is under construction. Agreement for the construction of the Ponta Grossa and Vila Oratória Health Centers and renovation of the Trindade Health Center. Term Sheet executed between Eletrobras Eletronuclear and the municipality of Paraty-RJ. (GRI SO1, GRI EC8, GRI EC9) Learn more about these actions on the Eletrobras website. . 84 85 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasCapibaribe River, Recife, Pernambuco. SOCIAL PERFORMANCE FOSTERING DIALOGUE AND BEST PRACTICES_88 EMPLOYEES_89 PROFESSIONAL DEVELOPMENT_100 CUSTOMERS_106 SUPPLIERS_111 COMMUNITY_115 MEASURES TO PREVENT AND REDUCE DAMAGE_120 RESETTLEMENT_124 PROJECTS AND PROGRAMS_125 GOVERNMENT AND PUBLIC POLICIES_127 HUMAN RIGHTS_134 86 87 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras18. This number refers to professionals who work at the Eletrobras companies, Article 37 of the Federal Constitution, rehired and requested by the company. 19. Contractor workforce (MOC) 20. Does not include service providers in construction works at the projects. PROFILE OF THE WORKFORCE At the end of 2013, the Eletrobras companies had a team of 23,969 employees18 in their permanent staff (55%), 7,654 contractors under indefinite-term employment contract19 (17%), and 12,212 service providers engaged in non-core activities 20 (28%), totaling 43,835 workers in line with the mission and the corporate drivers. (GRI LA1, GRI 2.8) Fostering dialogue and best practices Employees The Eletrobras companies promote continuous actions that are based on business strategy, on management, and relationships, in line with the People Management Policy. This policy dissemi- nates guidelines that focus on solutions that create appropriate conditions for the development, appreciation, and retention of talents. Today, the Performance Management DIVERSITY Respect for diversity and equal oppor- System (SGD), the Career and tunity are stimulated at Eletrobras. The Remuneration Plan, the Corporate companies are engaged in initiatives University of the Eletrobras Companies such as voluntary subscription to the (UNISE), the Unified Organizational Pro-Gender and Race Equality Program Climate Survey, the Occupational Health and to the Women’s Empowerment and Safety Policy, and the standardization Principles and in support to campaigns One of the greatest challenges that results and the success that the company of people management and of the People for the eradication of any type of discrimi- the companies have been facing is the maintains with our customers, suppliers, Management Information System nation in society. need to reinvent themselves and to partners, and other stakeholders. are some of the solutions that ensure In 2013, a drop of 64.3% was registered grow and develop in a sustainable way, Expertise, quality of life, and productivity integration and unified management of in the total number of discrimination the companies. (GRI 3.9) for its business, the society, and the are greatly stimulated in our relationship environment. Consequently, today the with employees. term “sustainability” has become much All Eletrobras´ plans and practices are broader implying longevity, changes developed based on three pillars: social, in corporate culture, resiliency and the environmental, and economic. Therefore, ability to excel, and the capability to the company seeks to develop business transform itself in order to survive and models built on the constant and close evolve together with all stakeholders. relationship with stakeholders, fostering The relationships that the Eletrobras dialogue with society, meeting all legal companies maintain with people are at the core of all issues pertaining to requirements, controlling production phases, and reducing the use of inputs sustainable development. Eletrobras’s and technologies that damage the main asset is its workforce, which is environment. largely responsible for generating the 88 incidents compared with the previous year. Of the ten incidents registered, one resulted in the suspension of the employee considered responsible and the other nine involved other measures, pursuant to the internal regulations of the Ethics Committee. (GRI HR4) Considering the employees in the permanent staff, 81% are male and 19%, female. In relation to workdays, 96.3% are full-time employees, 3.6% work six-hour shifts, and 0.1% work four-hour shifts in the Eletrobras companies. 89 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasPERMANENT EMPLOYEES, BY COMPANY, GENDER, AND EMPLOYMENT TYPE (GRI LA1) Eletrobras Companies Full time 8h Female 4,429 Male 18,658 Total Female 23,087 120 6h Male 740 Female 8 Part time 4h Male 14 Total – 6 and 4 hours Total permanent employees 882 23,969 The Eletrobras companies have 3,458 (14.4%) employees on the permanent staff in the South region, 6,833 (28.5%) in the Southeast region, 4,863 (20.3%) in the North region, 6,988 (29.2%) in the Northeast region, 1,825 (7.6%) in the Midwest, and 2 (0.01%) abroad. (GRI 2.8) At Eletrobras, employees are hired through civil service exams and the company cannot have any type of bias during the selection process regarding gender, race, age group, place of birth, or place of residence of candidates. NUMBER OF EMPLOYEES BY REGION AND GENDER (GRI LA1) 5,661 5,442 4,089 2,823 1,327 1,393 1,391 PERMANENT EMPLOYEES AND CONTRACTORS (MOC), BY COMPANY AND GENDER (GRI LA1) a i g r e n E s a n o z a m A s a r b o r t e l E e r c A o ã ç i u b i r t s i D s a r b o r t e l E l e p e C s a r b o r t e l E E E T G C s a r b o r t e l E f s e h C s a r b o r t e l E Female 326 76 119 909 55 1,818 248 487 3,500 218 s a o g a l A o ã ç i u b i r t s i D s a r b o r t e l E í u a i P o ã ç i u b i r t s i D s a r b o r t e l E 146 912 232 945 a i n ô d n o R o ã ç i u b i r t s i D s a r b o r t e l E a m i a r o R o ã ç i u b i r t s i D s a r b o r t e l E r a e l c u n o r t e l E s a r b o r t e l E e t r o n o r t e l E s a r b o r t e l E l u s o r t e l E s a r b o r t e l E r a p o r t e l E s a r b o r t e l E s a n r u F s a r b o r t e l E g n i d l o h s a r b o r t e l E l a n o i c a n i B u p i a t I s a r b o r t e l E s a s e r p m E - l a t o T r e d n e g y b % Permanent employees Male Total 2,144 324 606 4,409 273 1,058 1,177 758 261 3,076 2,542 1,343 4 3,522 1,044 1,428 23,969 100% Female 85 MOC Male 1,655 Total 1,740 4 1 5 0 0 0 0 0 0 N/R N/R N/R N/R N/R N/R 67 22 810 194 237 162 458 991 1,629 877 216 399 0 0 0 0 0 0 0 0 447 892 0 1,339 0 0 0 0 862 19% 0 3,714 81% 0 7,654 100% In 2013, the percentage by gender for “MOC” category did not include data from the following companies: Eletrobras Distribuição Acre, Alagoas and Distribuição Piauí. N/Av = Not available. 150 73 582 472 236 2 544 359 278 4,559 19% 774 608 188 2,494 2,070 1,107 2 2,978 685 1,150 19,410 81% 432 635 North Northeast Mid-West Southeast South 0 2 Abroad Female Male 90 91 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras        PID AND RETIREMENT To adjust the size of its staff, in July 2013 the Eletrobras companies launched their Voluntary Resignation Incentive Program (PID) with the participation of 4,448 employees from a total of 9,903 eligible individuals. In this period, there were 4,221 resignations, and the remaining resignations should happen in 2014. The PID is one of the actions imple- mented by Eletrobras in the Business and Management Master Plan (PDNG 2013-2017). At Eletrobras Eletronuclear, this process will be launched in 2014 and is expected to be concluded in 2015. Due to the PID, the number of employees eligible for retirement has decreased. In 2013, the percentage of employees in managerial positions eligible for retirement within the next ten years was 23.9%. At the same time, 17.9% of employees in positions requiring higher education and 18.1% of employees in positions that do not require higher education were eligible for retirement within the next ten years. These percentages are higher for employees eligible for retirement in the next five years. In managerial positions, 37.1% are eligible for retirement within the next five years. For positions requiring higher education, 26.2% are eligible, and 30.2% of those employees holding positions that do not require higher education are eligible for retirement within the next five years.21. (GRI EU15) 21. In 2013, data does not include Eletrobras Distribuição Piauí. In 2013, we considered the total number of employees per company, in each employee category (managerial posi- tion requiring or not requiring higher education). PERCENTAGE OF EMPLOYEES ELIGIBLE FOR RETIREMENT WITHIN THE NEXT 10 AND 5 YEARS, BY REGION (GRI EU15)   Within the next 10 years Within the next 5 years 8.2 10.7 20.8 26.0 28.0 18.5 15.3 40.7 39.2 30.7 26.1 29.6 North Northeast Midwest Southeast South Total 92 Due to the PID, there was a significant increase in the number of terminations this year. As a consequence of this benefit, granted in 2013 and expected to end in 2015, the employee turnover rate spiked from 3.4% in 2012 to 18% in 2013. However, hiring rates remained approximately at the same levels. The increased employee turnover rate was more concentrated in the 41-50, 51-60, and over 60 age brackets. (GRI LA2) TOTAL NUMBER AND RATES OF NEW HIRES AND EMPLOYEE TURNOVER BY REGION (GRI LA2) North Northeast Midwest Southeast South Total Number of employees Employees who left the company New hires Turnover rate Hiring rate 2013 2012 2013 2013 3,437 6,652 N/Av 3,773 1,438 2012 5,165 7,575 2,337 8,034 3,741 330 1,950 N/Av 397 74 15,300 26,852 2,751 76 80 76 511 171 914 8 223 N/Av 47 93 371 2012 189 61 6 235 118 420 2013 9.6% 29.3% N/Av 10.5% 5.1% 18.0% 2012 2013 1.5% 1.1% 3.0% 6.0% 5.0% 3.0% 0.2% 3.4% N/Av 1.2% 6.5% 2.4% 2012 4% 0.8% 0.3% 3% 3% 2.0% For 2013, data does not include information on Eletrobras CGTEE, Eletropar, Eletronorte, Eletrosul, Furnas, and Itaipu Binacional. For 2012, data does not include information on Eletrobras Distribuição Acre and Distribuição Alagoas. N/Av = Not available. TOTAL NUMBER AND RATES OF NEW HIRES AND EMPLOYEE TURNOVER BY AGE GROUP, IN 2013 (GRI LA2) Employees who left the company New hires Turnover rate Hiring rate 2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011 5.0% 32.9% 16.8% 33.5% 7.5% 2.6% 0.8% 0.4% 0.7% 2.4% 8.0% 17.0% 3.4% 0.9% 0.6% 1.5% 2.3% 7.1% 2.0% 0.5% 1.1% 4.7% 18-25 years old 26-30 years old 31-40 years old 41-50 years old 17 59 62 97 51-60 years old 1,567 > 60 years old 949 30 94 84 37 471 198 37 107 92 34 592 244 104 104 110 28 18 7 80 170 211 58 56 34 247 411 404 132 43 19 5.4% 4.3% 1.5% 2.7% 33.5% 89.4% 6.3% 4.4% 1.4% 0.6% 4.9% 4.4% 1.6% 0.5% 6.3% 8.5% 13.8% Total 2,751 914 1,106 371 609 1,256 18.0% 3.4% 4.1% In 2013, data does not include the following companies: Eletrobras CGTEE, Eletropar, Eletronorte, Eletrosul, and Furnas. In 2012, data does not include the following companies: Eletrobras Distribuição Acre and Distribuição Alagoas. In 2011, data does not include the following companies: Eletrobras Distribuição Rondônia and holding. 93 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras      OPPORTUNITIES At Eletrobras, employees are hired The company gears at least 5% of job openings to people with disabilities, as through civil service exams, a process provided for by Brazilian law. Although that provides impartiality, pursuant to this legal percentage is ensured in its civil the Federal Constitution of 1988, and the service exams, Eletrobras still does not company cannot have any type of bias meet this minimum percentage. In 2013, a during the selection process regarding total 377 employees with disabilities were gender, race, age group, place of birth, or place of residence of candidates. working at the Eletrobras companies. (GRI LA13) PERMANENT EMPLOYEE BY FUNCTIONAL CATEGORY (GRI LA13) Managerial positions Positions requiring higher education Positions not requiring higher education 2013 2012 Gender Number % Number % Number Female Male Female Male Female 356 1,427 1,812 4,839 2,391 1.5% 6.0% 7.6% 20.2% 10.0% 364 1,526 2,008 5,601 2,860 1.3% 5.6% 7.4% 20.6% 10.5% 387 1,656 2,109 5,861 2,913 Male 13,144 54.8% 14,781 54.5% 15,618 Total 23,969 27,140 28,544 2011 % 1.4% 5.8% 7.4% 20.5% 10.2% 54.7% PERMANENT EMPLOYEE BY MINORITIES GROUP (GRI LA13) Over than 50 years old Indigenous blacks, browns and yellows Gender Female Male Female Male Number % Total 1,536 7,011 1,469 7,239 6.7% 30.6% 6.4% 31.6% 37.3% 38.0% The data do not include information about Eletrobras Distribuição Alagoas. For the calculation, the total number of employee used was 22,911. PERMANENT EMPLOYEE BY AGE GROUP (GRI LA13) Gender Number Less than 30 years old Between 30 and 50 years old Over 50 years old Total Female Male Female Male Female Male 412 1,554 2,597 10,568 1,545 7,293 23,969 94 % 1.7% 6.5% 10.8% 44.1% 6.4% 30.4% 100% TRAINING AND DEVELOPMENT At the Eletrobras companies, corporate education is provided by the Eletrobras Companies University (UNISE) and by the 15 corporate education units, which correspond to each company, including the Eletrobras holding. In 2013, proceeding with the development of the core compe- tencies of the Eletrobras companies, UNISE implemented 32 educational actions, totaling 83,534 hours of training. Among the actions executed, these are highlighted: the completion of the Leadership Program (aimed at the entire managerial staff) and the consolidation of the International Financial Reporting Standards Program (IFRS), aimed at technicians, managers, and administrators involved with international accounting standards. Additionally, each corporate education unit offered a number of educational actions to provide training and to build capacities, seeking the continuous development of its workforce. Hence, in 2013 Eletrobras provided approximately 1 million hours of training, with an average of 42.1 hours for women and 41.8 for men. Employees in managerial positions received an average of 74.2 hours of training. For positions requiring and not requiring higher education, employees received an average of 49.3 and 35 hours of training, respectively. (GRI LA10) AVERAGE HOURS OF TRAINING BY EMPLOYEE CATEGORY AND BY GENDER (GRI LA10) Managerial positions Positions requiring higher education Positions not requiring higher education Gender Female Male Female Male Female Male Average by gender and by position Average by position 74.2 49.3 35.0 77.1 73.4 48.9 49.5 31.7 35.6 95 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasEMPLOYEE REPRESENTATION IN HEALTH AND SAFETY COMMITTEES 100% of the employees of the Eletrobras companies are repre- sented by formal health and safety committees: in total, there are 142 Internal Accident Prevention Committees (CIPAs) and 35 formal health and safety committees (Regulatory Standard - NR-10). (GRI LA6) foto: Jorge Coelho/Arquivo Eletrobras In 201322, the Eletrobras companies reported 160 injuries (minor injuries, with OCCUPATIONAL HEALTH AND SAFETY Work conditions and the well-being of employees are included in the Sustainability Policy of the Eletrobras companies and are enforced through the Corporate Occupational Health and Safety Policy. According to the corporate guidelines, the Eletrobras companies manage data, identify opportunities for improvement, and implement formal health and safety procedures, in compliance with legal requirements and seeking to continuously improve management and to reduce accidents. Health and workplace safety training is set forth in the Annual Corporate Education Plan and is offered in order to comply with legal requirements, such as and without lost time); 131 of these the Regulatory Standards. For security contractors, Eletrobras requires proof of training and the use of personal protective equipment (PPE). (GRI EU16) accidents involved men and 29 involved women. The rate calculated23 for women is 0.90; for men, 0.98; and for the Eletrobras companies in general, 0.97. In 2013, we also registered the death of seven male employees. These fatalities Health and safety topics covered by occurred at Eletrobras Amazonas Energia formal agreements with unions are (one), Eletrobras Chesf (two), Eletrobras governed by the Collective Bargaining Distribuição Acre (one), Eletrobras Agreement (ACT) executed between Distribuição Piauí (one), and Eletrobras Furnas (two). (GRI LA7) the Eletrobras companies and the Labor Union. The items in this agreement are negotiated and, if necessary, amended on a yearly basis to ensure protection of worker rights in terms of health, quality of life, and workplace safety. (GRI LA9) 22. In 2013, data does not include the following compa- nies: Eletrobras Distribuição Acre, Distribuição Roraima, Distribuição Piauí, Eletropar, Eletronuclear, and Furnas. 23. To calculate the injury rate, the number of injuries is divided by the number of hours worked, multiplied by 200,000. TOTAL NUMBER AND RATE OF INJURIES BY GENDER AND BY REGION (GRI LA7) REGION GENDER Total by gender Rate by gender (%) Total by region Rate by region (%) North Northeast Midwest Southeast South Total Female Male Female Male Female Male Female Male Female Male Female Male 1 4 17 67 3 10 5 5 3 45 29 131 0,2 0,2 1,6 1,5 0,5 0,4 1,1 0,5 0,5 1,6 0,90 0,98 5 84 13 10 48 0,2 1,5 0,4 0,7 1,4 160 0,97 In 2013, data does not include the following companies: Eletrobras Distribuição Acre, Distribuição Roraima, Distribuição Piauí, Eletropar, Eletronuclear, and Furnas. TOTAL NUMBER AND RATE OF OCCUPATIONAL DISEASES BY GENDER AND BY REGION, IN 2013 (GRI LA7) REGION GENDER Total by gender Rate by gender (%) Total by region Rate by region (%) North Northeast Midwest Southeast South Total Female Male Female Male Female Male Female Male Female Male Female Male 1 0 2 2 0 0 0 0 1 0 4 2 0.21 0 0.18 0.04 0 0 0 0 0.15 0 0.12 0.02 1 4 0 0 1 6 0.03 0.07 0 0 0.03 0.04 In 2013, data does not include the following companies: Eletrobras Distribuição Acre, Distribuição Roraima, Distribuição Piauí, Eletropar, Eletronuclear, and Furnas. 96 97 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasPREVENTION, SAFETY, AND HEALTH Eletrobras invests in educational, training, counseling, prevention, and risk-control programs and provides assistance to employees, their families, or community members concerning serious diseases. Learn more about some of these initiatives: (GRI LA8) • Participation in the National Program for Occupational Accident Prevention. • Activities involving massage therapy, choir, amateur theater, gym membership reimbursement, and workplace exercises. • Energy and Movement (training for road running), Eletrobras Choir, and health-related preventive and educational campaigns. • • Periodic medical examinations for all employees. Lectures on preventive healthcare, quality of life, smoking, and alcoholism. • • • • • • • • • Participation in Pink October (breast cancer prevention campaign). Implementation of Blue November (campaign against prostate cancer). Annual survey for the Quality of Life and Workplace Stress Index (IQVE). Caretaker Program, which assists employees or their dependents requiring temporary caretaking. Retirement Preparation Program. Environmental Risk Prevention Program (PPRA). Program for respiratory protection against coal dust, ashes, and gases to prevent pneumoconiosis. Quality of Life Program, with GPR, choir, and hikes. Smoking Cessation Program, which remains available to provide assis- tance to employees who wish to quit smoking, offering medical and psychological support and medications. • Well-being Hotline Program, which offers on-site and phone assistance to employees and their family members in psychosocial, financial, and legal areas, through a contractor. • Traveler’s Program, which advises employees travelling on business about endemic diseases in the regions of destination. • Healthy Eletrobras Program, which provides advice, prevention, treatment, and education on health and quality of life. • Psycho-pedagogical Program, which provides support to employee dependants with physical and/or mental disabilities. • REVIVER Program, which promotes hikes; provides advice on the prevention and treatment of drug addition, on physical fitness, on financial literacy, and on workplace exercise; and offers cancer and diabetes support programs. Programs for the prevention of occupa- tional diseases, such as workplace exercise and massage therapy. Nutrition education, assistance for smoking cessation. • • Reimbursement of expenses for medication for chronic diseases for employees and their dependents. • • Rapid diagnostic tests for sexually transmitted diseases. Annual flu, diphtheria, tetanus, hepatitis, and H1N1 vaccination. MATERNITY AND PATERNITY LEAVE In 2013, a total of 669 male and female employees took parental leave. In addition to granting this right to 100% of its workforce, the Eletrobras companies offer an additional 60-day leave to women, which exceeds the period established by law. (GRI LA15) EMPLOYEES WHO RETURNED TO WORK AFTER PARENTAL LEAVE (GRI LA15) 2013 22012 Number % Number % Number Female Male 173 464 84% 100% 150 430 81% 100% 151 486 2011 % 80% 100% This calculation does not include 38 female employees who took maternity leave in 2013 and will not return to work until 2014. EMPLOYEES WHO RETURNED TO WORK AFTER PARENTAL LEAVE ENDED AND WERE STILL EMPLOYED TWELVE MONTHS AFTER RETURNING TO WORK (GRI LA15) 2013 2012 Number % Number % Number Female Male 210 441 84% 95% 150 429 100% 100% 149 438 2011 % 99% 90% This calculation does not include 38 female employees who took maternity leave in 2013 and will not return to work until 2014. Additionally, it does not include seven employees who returned from their leaves taken in 2012. EMPLOYEES ENTITLED TO PARENTAL LEAVE (GRI LA15) Female Male Total 2013 205 464 669 2012 188 435 623 In 2012, data does not include Eletrobras Distribuição Piauí. EMPLOYEES WHO TOOK PARENTAL LEAVE (GRI LA15) Female Male Total 2013 205 464 669 2012 186 430 616 In 2012, data does not include Eletrobras Distribuição Piauí. 2011 215 672 887 2011 189 486 675 98 Eletrobras 99 ANNUAL AND SUSTAINABILITY REPORT 2013  ORGANIZATIONAL CLIMATE SURVEY Eletrobras conducted its 3rd Unified Organizational Climate Survey in 2013, which was answered by 14,550 employees. The results of this survey will support the preparation of the 2nd Corporate Action Plan, to improve the organizational climate, in 2014. Professional development Effective since 2010, the Career and Additionally, 13,921 employees (58.1%) Remuneration Plan of the Eletrobras companies (PCR) unifies the guidelines and policies on positions, careers, and remuner- ation. In 2013, a total of 90% of permanent employees received performance reviews. received career development reviews. (GRI LA12) PERCENTAGE OF EMPLOYEES RECEIVING REGULAR PERFORMANCE REVIEW, BY GENDER NUMBER OF EMPLOYEES WHO RECEIVED CAREER DEVELOPMENT REVIEW, BY GENDER GRI LA12 GRI LA12 89.8% 90.9% 57.3% 61.4% male female male female TRAINING OF SPECIALIZED LABOR At the Eletrobras companies, training of Energy Generation; Dialogues of skilled workers is supported by 2013 - Implementing Organizational three solutions: mapping of critical Changes; Strategy Formulation; the knowledge required by the strategic Forum on the Environment of the objectives of the Eletrobras System; Electric Utilities Sector; Executive identification of specific knowledge MBA in Leadership and Management required for the achievement of the of State-owned Companies; MBA in objectives of each company, which are Economics and Energy Management, mapped by the respective corporate Metrology, and Measurement Techniques education unit and included in the Annual for High-voltage Testing; and the Corporate Education Plan (PEC); and Environmental Policy Workshop of the the Performance Management System Eletrobras companies. (SGD) which, through the Individual In order to attract and retain employees, Development Plan (PDI), identifies the the company offers graduate courses in a competency deficits in employees. number of areas and at renowned insti- In 2013, UNISE also conducted various educational actions for the Eletrobras System: the Online Extension Course on the Practices and Challenges tutions, language courses, and visits to events where best practices are shared. (GRI EU14) 100 101 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasMost of the Eletrobras companies offer grants for under- graduate courses, with variable reimbur- sement of up to 90% of tuition. We point out that the People Development and Training Plan of the Eletrobras companies, which serves as support and a guideline for the development and preparation of the educational actions offered at the Eletrobras companies, addresses the “Appreciation of Diversity and Promotion of Gender Equality.” Accordingly, UNISE and the corporate education units adopt the following guidelines: • To foster the appreciation of diversity and gender equality through educational programs; • To provide solutions to ensure the acces- sibility of educational actions to people with disabilities; • To use inclusive and gender-neutral visual and written language in all educational programs and actions. The distribution companies offer distance-learning courses through the corporate TV channel: technology that combines video lectures and the Internet, with a monthly schedule of self- development, corporate management, and public management courses. CIÊNCIA SEM FRONTEIRAS – SCIENCE WITHOUT BORDERS The Science Without Borders program establishes the use of four-year scholarships to foster exchange programs and to maintain contact with competitive educational systems concerning technology and innovation. This program is a joint effort of the Ministry of Science, Technology, and Innovation (MCTI) and the Ministry of Education (MEC), through their respective supporting institu- tions – CNPq and CAPES – and the Department of Higher Education and the Department of Professional and Technological Education of MEC. In order to support the Science Without Borders Program, Eletrobras will finance 2,500 scholarships for “sandwich” undergraduate courses, graduate courses, and research. Of this total, 2,200 are aimed at the general public – college students, science and technology institu- tions, and young and renowned scientists – and 300 are aimed at a specific audience – professionals of the Eletrobras companies – but also at employees working for entities involved in the direct or indirect federal administration, in connection with the electric utilities sector. These scholarships are selected based on topics of interest for the energy sector: generation, transmission, distribution, trading, planning and operation, equipment technology and management, facilities, energy efficiency, the environment, and materials technology. The table below breaks down the types of scholarships: TYPE OF SCHOLARSHIP - SCIENCE WITHOUT BORDERS Scholarships general public Scholarships specific audiences “Sandwich” undergraduate course “Sandwich” graduate course Post-doctoral research abroad Special visiting researcher Attraction of young talents Total 1,660 340 120 30 50 2,200 0 260 40 0 0 Total 1,660 600 160 30 50 300 2,500 Currently, approximately R$68 million has been invested, or almost 45% of the total agreed for donation, which has REMUNERATION AND BENEFITS At Eletrobras, salaries are based on a benefitted 1,120 recipients from various matrix for each position and comply regions of the country. By the end of the with the Career and Remuneration Plan program, which is planned for late 2015, (PCR). If any changes arise from collective Eletrobras will have invested approxi- bargaining, such matrices are adjusted, mately R$150 million, considering the pursuant to rates defined and approved in scholarships selected through Capes and the Collective Bargaining Agreement (ACT). CNPq. For 2014, it is expected that part Eletrobras’s Salary Policy is based on of these scholarships will be used by the gender equality. Eletrobras System. (GRI EU14) At Eletrobras, no salary is based on the National Minimum Wage rules. (GRI EC5, GRI LA14) 24. For the purposes of this report, important operating units are the headquarters of each company. 25. The ratio is calculated based on the average base salary of females divided by the average base salary of male. RATIOS OF STANDARD ENTRY LEVEL WAGE COMPARED WITH LOCAL MINIMUM WAGE AT IMPORTANT OPERATING UNITS (GRI EC5) 24 Ratios of standard entry-level wage compared with local minimum wage (%) Female 2013 Male 163.3% Female 2012 Male 165.9% Female 2011* Male 180.3% Eletrobras considers the national minimum wage as being the local minimum wage. This data refers to 12/31 of each cycle in their ASR. *There was a mistake in the ASR Eletrobras 2011 and the standard entry-level wage, broken down by gender, was published with a discrepancy of R$0.06 (R$982.42 instead of R$ 982.48). For this report, we considered the real value – R$982.48, for women and men alike. AVERAGE AND RATIO OF BASIC SALARY, BY GENDER AND EMPLOYEE CATEGORY in R$ (GRI LA14) Female Male Ratio25 Managerial positions 2013 12,982 14,140 92% 2012 11,922 13,135 91% 2011 9,976 12,514 80% Positions requiring higher education Positions not requiring higher education 2013 7,249 8,374 87% 2012 7,248 8,243 88% 2011 6,303 8,834 72% 2013 4,037 3,881 104% 2012 4,407 4,627 95% 2011 3,169 3,033 104% In 2013, data referring to positions that do not require higher education do not include Eletrobras Eletropar. In 2012, data does not include Eletrobras Distribuição Rondônia. 102 Eletrobras 103 ANNUAL AND SUSTAINABILITY REPORT 2013   FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING Freedom of association is established in the applicable legislation in the country and guaranteed through the Collective Bargaining Agreement. All the 23,969 employees (100%) of Eletrobras companies are represented by collective bargaining agreements. Eletrobras companies still have the Office of Labor Relations and Union, which seeks to guarantee the rights of all employees. In 2013, the Eletrobras companies entered into a national collective bargaining agreement with the repre- sentatives of the employees, which will be valid for two years, from 2013 to 2015. (GRI LA4) In 2013, were identified 30 significant suppliers in which the right to exercise freedom of association and collective bargaining may be at significant risk. Eletrobras, pursuant to the laws in effect, is not allowed to intervene in the negotiations between these suppliers (contractors) and their employees, regardless of their presence at the company’s facilities. However, the company may require compliance with the terms set forth in the agreements and conventions executed. (GRI HR5) Hence, hiring processes determine that collective bargaining agreements and conventions must be observed to ensure that the rights acquired through these bargaining agreements be preserved in the hiring processes at Eletrobras. These rights are investigated during the hiring process, upon registration of suppliers, and suppliers can be subject to disaccredi- tation if such rights are not considered in their commercial proposal. The Eletrobras companies offer a 26. Interns receive meal vouchers, public transporta- tion vouchers, and personal accident insurance. number of benefits to all employees26 and there is no differentiation between full time or part time employees (six hours). The values of these benefits are defined in National Collective Bargaining Agreements or in specific norms and include: (GRI LA3) • Additional pay for length of service • Health insurance • Dental insurance • Day care assistance • Funeral assistance • Eyeglass assistance • Assistance for child with special needs • Disability/invalidity coverage • Agreements with gyms • Retirement funds • Maternity leave • Paternity leave • Reimbursement of expenses for undergraduate courses • Reimbursement for preschool education • Pay for performance • Group life insurance • Food vouchers • Meal vouchers • Transportation voucher INNOVATION SYSTEM According to the various relationship management procedures, the internal audience is stimulated by managers through campaigns and incentive actions to use the Innovation System in order to pursue innovative solutions, in line with the corporate strategy, for cost reduction, increased revenue, new business development, process improvement, and energy efficiency. In 2013, a total of 309 ideas were registered, of which 7 were implemented. These proposals are analyzed and classified according to their possible outcome and strategic interests. A Managing Committee, composed of representatives from all departments, and an Innovative Idea Assessment Committee are responsible for evaluating, classi- fying, prioritizing, and implementing the ideas registered by employees in the database and for the governance of this system. 104 105 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras APPROPRIATE USE OF ENERGY The websites of the Eletrobras companies provide various services, such as the download of duplicate bills and tips on the appropriate use of energy. The companies have an accessible portal, which enables the navigation of individuals with hearing and visual impairment and complies with the international principles defined by the Web Accessibility Initiative (WAI). (GRI EU24) Customers Eletrobras serves all types of individual and institutional profiles: from trans- mission and distribution companies – which purchase the energy generated at power plants and transmitted by the power lines of the Eletrobras companies – to direct customers, who consume the energy provided by the companies that operate in the distribution segment. We have approximately 3.8 million residential and commercial customers, which represent a vital audience for the Eletrobras companies. Thus, our relationship with them is governed by The companies use electric bills to the principles set forth in the Code of disseminate information on the risks Ethics of the Eletrobras companies and related to electricity, regulatory infor- in mechanisms that identify the needs mation, customer rights, duration and and expectations of this segment, as well frequency of power outages, payment as the protection and privacy of regis- options and locations, pricing tiers, unpaid tration data and of information obtained balances, and other information that in connection with the commercial allows the various consumer profiles relationship. to have appropriate access to energy In order to handle potential barriers related to language, culture, lack of services. (GRI PR3) education, and special needs, which could limit access to customer service and to the safe use of energy, the Eletrobras distributors have the following channels to serve consumers: • Physical service branches • Virtual service branches – websites • Helpline, with an exclusive channel for the hearing impaired PRODUCT RESPONSIBILITY Distribution companies use a single electric bill model, and customers receive a detailed account of their consumption, including prices based on tiered rates, scheduled meter readings (current, previous, and next), taxes, charges, voltage level, type of connection, meter, quality of delivery indicators (such as the DEC and the FEC), customer service channels, and others. Eletrobras seeks to innovate and to offer differentiated public utility services. Therefore, the company provides important additional information, such as advertising campaigns related to the rational and safe use of energy, social tariff for electric energy (Tarifa Social de Energia Elétrica - TSEE), customer service hotlines, consumer rights, clear safety tips, and other citizenship awareness campaigns in 100% of the bills issued to customers. (GRI PR3) BEYOND THE BILL Users have other channels to obtain information about energy, products, services, and customer service provided by Eletrobras. They include the service branches of the distribution companies and their websites, which provide infor- mation about energy network safety; accident response procedures; guidance for reporting billing issues, damaged equipment, and customer service; and guidance on issues related to energy delivery. EDUCATION Through the implementation of educa- tional projects, Eletrobras also seeks to strengthen its relationship with commu- nities in order to provide knowledge about the appropriate and safe use of energy and consumer rights and duties. (GRI EU24) GUIDANCE AGAINST WASTE Raising awareness of new generations concerning the need to prevent energy waste and to preserve natural resources is one of the goals of Eletrobras Distribuição Alagoas. The Luz do Saber (Light of Knowledge) project uses a truck that visits public schools to provide guidance to students, teachers, and the surrounding community about the safe use of electricity and about energy efficiency in a very informal manner, using 3D videos, stage lighting, soundboards, and many energy experiments. The project also trains teachers on how to approach “electricity and eco-efficiency” in the classroom and provides services related to duplicate bills, change of account holder, negotiations, and enrollment in the Social Tariff Program, which offers discounts of up to 65% to consumers on their electric bills, among other services. In 2013, Luz do Saber benefitted approximately 11,837 students, 338 teachers, and 43 public schools, in three municipalities. foto: Arquivo Eletrobras Distribuição Alagoas 106 RELATÓRIO ANUAL E DE SUSTENTABILIDADE 2013 107 EletrobrasCUSTOMER SATISFACTION The six distribution companies owned by Eletrobras gauge the satisfaction of their customers and consumers through surveys conducted by ANEEL – the ANEEL Customer Satisfaction Index (IASC), and by the Brazilian Association of Electricity Distributors (ABRADEE) – the Perceived Quality Satisfaction Index (ISQP). In 201327, the distribution companies of Eletrobras registered a slight improvement in rates in relation to satis- faction with customer service and service delivery. The satisfaction of the organi- zation as a whole fell by four percentage points. 27. In 2013, the results have been recorded in a considered manner, considering the levels of satisfaction with the number of customers of each company, which resulted in a more repre- sentative percentage of corporate reality. CUSTOMER SATISFACTION (%) - DISTRIBUTION GRI PR5 65.5% 63.0% 59.9% 68.3% 67.8% 68.4% 38.3% 34.6% 35.4% Organization as a whole Customer Service Supply of Electricity 2011 2012 2013 Customers are sensitive to variations Eletrobras Distribuição Acre was affected in the quality of services and demon- by the interconnection work, which caused strate less satisfaction when this quality frequent and lengthy power outages, decreases. These cases can lead consumers which were necessary to implement the to become more critical in their assess- future improvement of the network. ments, thereby affecting the results of the survey in all scores, and not simply those The Eletrobras distribution companies have agreed upon goals that aim to that specifically assess the quality of the increase the level of customer satisfaction. service. In 2013, for example, delivery of Until 2018 the expected goal is 64.04%. IASC ANEEL (%) Goals PDNG 2014 - 2018 60.50% 61.65% 59.17% 62.83% 64.04% 2014 2015 2016 2017 2018 In the transmission segment, Eletrobras Chesf, Eletronorte and Eletrosul companies promote monitoring customer satisfaction by applying satisfaction survey. Also, hold regular meetings with clients, technical visits, technical exchanges and provide channels of communication and expression (letter, email, phone, web portal and social networking). The satisfaction index with the Eletrobras companies and the quality of electricity supply improved compared to 2012, reaching respectively 86.5% and 97.6%. The level of satisfaction with the service of the companies remained stable. The satisfaction surveys for transmission performed by the Eletrobras companies take into account the energy trading (buying and selling) and products and services. 108 109 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasCUSTOMER SATISFACTION (%) - TRANSMISSION GRI PR5 86.6% 86.5% 80.3% 98.7% 98.6% 98.5% 96.1% 97.6% 89.2% Organization as a whole Customer Service Supply of Electricity Consolidated data for Eletrobras CGTEE, Eletrobras Chesf, Eletrobras Eletronorte, and Eletrobras Furnas. 2011 2012 2013 Eletrobras Cepel also conducts customer satisfaction surveys to evaluate the services provided by test and calibration laboratories and by the Certification Activity (CERT). In 2013, the level of customer satisfaction reached 92% for the services provided by laboratories and 86% for the services provided by the Certification Activity. The average was 89%, a slight increase over the previous year, which was 88%. (GRI PR5) Eletrobras CGTEE, Eletronuclear, Furnas, and Itaipu Binacional do not conduct surveys; however, in 2013 they created a joint work group with Eletrobras Chesf, Eletronorte, and Eletrosul to implement a unified survey to assess the generation and transmission businesses that can demonstrate the consolidated level of satisfaction of the customers of the Eletrobras companies. Suppliers The Eletrobras companies do business Eletrobras also monitors the fulfillment with an extensive network of suppliers, of contractual obligations imposed on its with which they maintain contracts suppliers (including any social and labor considering the ethical, social, and obligations to the employees allocated to environmental aspects established Eletrobras) through specific documents in the Code of Ethics of the Eletrobras that must be presented throughout the companies. term of the contract, as set forth in such Contracts with significant suppliers and instrument. This practice minimizes the their management ensure the existence possibility of Eletrobras being affected by of legal requirements, including provi- poor work practices of suppliers, by actions sions that enforce compliance with labor, that are illegal or contrary to its policies, or safety, hygiene, and health regulations at by damages caused to people, facilities, or work and environmental protection. Thus, the environment in connection with the sustainability risks are mitigated and if a services provided by suppliers. breach of any of the clauses is established, All actions are grounded on principles of suppliers will be subject to the penalties human and environmental rights, which set forth in the contract. recommend sustainability parameters in With the purpose of maintaining a good the production of goods or provision of relationship with suppliers, whenever services; in addition, they forbid the direct possible the companies hold meetings with contractors and any other areas or indirect engagement of young workers under 18 years old on night shifts and involved in the process to fulfill the hazardous or unhealthy work and of young obligations agreed upon and to solve any workers under 16 years old in any type of problems arising during the term of the activity, except as young apprentices when contract. they are over 14 years old. 110 111 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasPOWER TO THE LOCALS In their procurement practices, Eletrobras distribution companies apply Law 123/2006, giving a margin of preference to small enterprises, and Decree 7,174/2010, giving margins of preference in hiring for Information Technology (goods and services based on national technology and produced pursuant to the Basic Production Process). In its procurement processes, Eletrobras Distribuição Alagoas favors the geographic location of suppliers, which can expedite hiring and reduce costs. Hence, the companies with the best cost-benefit ratio are selected. These practices favor local suppliers. FORCED OR CHILD LABOR We recorded 27 incidents involving significant operations and suppliers identified as having material risk for incidents of child and forced labor. However, there were no incidents involving operations identified as having risk of young workers exposed to hazardous work. Aiming to reinforce the intrinsic nature of ethical issues related to human rights and contractors, Eletrobras holding holds annual meetings with its suppliers. In 2013, the company conducted a lecture on “Ethics: the Core Element in Hiring Processes.” Eletrobras Eletronorte conducted, in São Luis (MA), the Seminar for the Eradication of Forced Labor with the companies in the region joining the National Pact for the Eradication of Forced Labor. Eletrobras Eletronorte also supported, in Maranhão, a workshop for the Mandala Project, which takes practical measures pertaining to forced labor and is aimed at the low-income population. (GRI HR6, GRI HR7) The Code of Ethics also forbids the engagement of employees working under degrading or forced labor and any discrimination on the basis of religion, race, skin color, gender, political affiliation, social class, or national origin; moreover, it seeks to safeguard the good physical and mental conditions of the employees who provide services to the Eletrobras companies. In the case of non-compliance with human rights clauses or with the terms set forth in these contracts, the supplier is granted a period to present its defense and, if applicable, to make the necessary adjustments. If these actions are not taken, the Eletrobras companies have the right to take appropriate measures, such as fines or the termination of the agreement. In the case of repeated infringement, the contract will be termi- nated unilaterally. The Eletrobras companies disseminate their Code of Ethics to ensure that suppliers and contractors comply with the guidelines set forth therein and to enforce that all entities that do or wish to do business with Eletrobras are aware of the Code and act accordingly. Therefore, the values and principles that guide the actions of the company are extended to the entire production chain. Eletrobras has developed a new definition of critical supplier (or significant supplier), based on a study conducted by the Sustainability Committee, in conjunction with the Procurement area, considering not only the needs associated with the economic aspects, but also those associated with the social and environ- mental aspects. PROCUREMENT PROCESSES Pursuant to the laws in force governing public procurement and hiring processes, namely Law 8,666/93, which instituted the norms for bidding processes and agreements, Eletrobras is not autho- rized to establish a policy to favor local suppliers, considering that it is not possible to define preferences in the hiring of suppliers based on their place of business or domicile. In direct procurement processes, the Eletrobras companies take into account geographic location and cost of hiring. This type of selection favors local suppliers28. In 2013, direct purchases totaled R$154.5 million. Of this total, R$65.9 million (or 42.7%) was invested in purchases from local suppliers. In 2013, the Eletrobras companies spent a total of approximately R$5 billion on procurement. (GRI EC6) 42.7% 28. Local suppliers are defined as those whose place of business is located in the same geographic region as the procurement unit of the Eletrobras companies. 29. Data does not include information from the following companies: Eletrobras Eletronuclear, Eletrosul, and Itaipu Binacional. Percentage of direct purchases from local suppliers29 112 Eletrobras 113 ANNUAL AND SUSTAINABILITY REPORT 2013 SECURITY PRACTICES All security personnel undergo a training process and take refresher courses every two years; in addition, they are assessed and the procedures of their job positions are adapted accordingly. Training and assessment cover human rights, environ- mental, and sustainability concepts. These procedures are established in Ordinance 3233/12, which provides on the regula- tions associated with private security activities and which entered into force in March 2013. In its contracts, Eletrobras provides for the periodic training of these individuals by contractors and requires proof of this training from their management. (GRI HR8) 30. The quantitative information contained in the table of indicator HR8 refers only to directly employed security personnel. NUMBER AND PERCENTAGE OF SECURITY PERSONNEL TRAINED IN THE ORGANIZATION’S POLICIES OR PROCEDURES CONCERNING ASPECTS OF HUMAN RIGHTS THAT ARE RELEVANT TO OPERATIONS (GRI HR8)30 Number of security personnel directly employed by the reporting organization Number of security personnel who have received formal training in the organization’s policies or specific proce- dures associated with human rights issues and their application on security Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations In 2013, data includes all Eletrobras companies, except Eletropar. In 2012, data includes the following companies: Eletrobras Chesf, Furnas, and Itaipu Binacional. In 2011, this indicator was not reported. 2013 224 142 2012 239 111 63% 46% TRAINING OF SECURITY PERSONNEL The security personnel directly employed by Itaipu Binacional receive refresher courses and annual lectures on human rights. From 2012 to 2013, the level of attendance at the specific lectures on human rights provided to direct security personnel increased from 65.6% to 71%. The company also organized a course geared toward security agents on defensive techniques and progressive use of force. Outsourced security personnel also take mandatory refresher courses for their positions and are instructed during the onboarding seminar, which is mandatory for all service providers. (GRI HR8) Community Eletrobras is a company that fosters Project, Installation License, and Operating sustainable development in Brazil, License) and from in-depth contact with whether through investments in culture, local social groups that benefit from social education, health, children’s rights, responsibility programs and integrated employment and income generation, the improvement actions related to housing, environment, professional qualification, sanitation infrastructure, and urban and first job opportunity and citizenship, mobility. or through actions that seek to reduce Social and environmental impacts social and environmental impacts in the caused by projects implemented by licensing processes. Eletrobras relate to the generation of All projects undertaken by Eletrobras expectations and to changes in housing, result from various studies that employment, and local environmental identify the compensation, mitigation, conditions, especially for the population or remediation actions established in in the vicinity, organized civil society, and the environmental licensing processes municipal authorities. For projects such (Environmental Impact Assessments, as hydroelectric plants, we conduct an Preliminary License, Basic Environmental Environmental Impact Study (EIS) and an 114 115 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras  Environmental Impact Assessment (EIA); During the establishment of the project, they provide a diagnosis of the current we develop a number of programs that situation of the local community and its seek to benefit the community, reduce infrastructure, income, literacy, and health eventual damages, and improve the quality conditions; it also surveys the social and of life of the population. These programs environmental perception of the projects. are conducted independently by Eletrobras Analysis of the social and environ- or in conjunction with city governments mental impacts of the project is done through the identification, estimation and municipal departments, public agencies and entities, trade associations, of intensity, and interpretation of the and official credit institutions, pursuant to importance of these impacts, determining the laws and regulations in effect. positive and negative, direct and indirect, During the development of the short-, medium-, and long-term, and feasibility studies of projects whose temporary and permanent aspects, as well construction/operation could affect as their level of reversibility, cumulative Indigenous communities, Eletrobras and synergetic properties, and the distri- conducts a study on the Indigenous bution of the social burdens and benefits. Population, which is an integral part of During the implementation of projects, the Environmental Impact Study required we conduct social communication actions, by the environmental agency. The studies which include the establishment of local are conducted pursuant to the terms of offices, the dissemination of commu- reference issued by the National Indian nication materials, and meetings with Foundation (FUNAI), which is respon- various groups to foster social interaction. sible for assessing and approving the We also conduct opinion surveys in the studies. As a result, a set of compensation areas of the projects to identify, among programs is presented as part of the other aspects, the expectations of the environmental licensing of the projects. population. (GRI SO1, GRI SO9, GRI SO10, GRI 4.16) The development of compensation programs, however, is not restricted to the requirements of the environmental licensing process. (GRI HR9) SOCIAL, ECONOMIC, AND SUSTAINABLE DEVELOPMENT The actions developed by Itaipu Binacional in the Guarani Tekoha Ocoy community, located in the municipality of São Miguel do Iguaçu (PR) and in the Tekoha Añetete and Itamarã communities, located in Diamante D’Oeste (PR), benefit 280 Indigenous families in an area of 2,217 hectares and foster the social, economic, and sustainable development of their way of life by improving infrastructure, increasing agricultural and livestock production, strengthening cultural diversity, stimu- lating partnerships, and offering nutritional safety. In 2013, a total of 106,239 kg of cassava and 57,440.60 kg of corn were produced and sold, and 1,404 food staple baskets were distributed at Ocoy. The Añetete and Itamarã communities were served by the Food Purchase Program (PAA) and Itaipu Binacional transported the food donated by SESC (PR) and the PNAE. In total, Añetete received 11,792.50 kg of food and Itamarã received 7,125 kg. Learn more at: http://www.itaipu.gov.br/meioambiente/comunidades-indigenas At Eletronorte, the programs to compensate the Waimiri- Atroari and Parakanã groups for the impacts from the operation of the hydroelectric plants have been in place for over two decades and are nationally and internationally renowned for the restoration of lifestyle in these communities and the cultural and nutritional stability. foto: Jorge Coelho/Arquivo Eletrobras Learn more at: http://www.eln.gov.br/opencms/opencms/pilares/meioAmbiente/ programasIndigenas/ 116 117 Eletrobras SUPPORT AND ASSISTANCE FOR THE KAYAPÓ COMMUNITIES In 2012/2013, Eletrobras supported two projects that aimed to strengthen the production infrastructure and autonomy of Kayapó Indigenous communities in southern Pará, which were carried out with resources by Instituto Kabu (Kabu Institute) and the Associação Floresta Protegida (Protected Forest Association). These entities represent approximately 30 Kayapó villages located on the west and east banks of the Xingu River, with an estimated population of 6,000 Indians. In 2013, a specialized consulting company was hired for the preparation of a long-term project involving the Kayapó communities on the west bank of the Xingu River. Thus, in September 2013, Eletrobras, the Kabu Institute (Instituto Kabu), and the National Indian Foundation (FUNAI), supported by the SPE Norte Energia S/A, which is the concessionaire responsible for the AHE Belo Monte (in which the companies of the Eletrobras System have 49.98% interest) coordinated the Project for Support and Assistance related to institutional reinforcement, sustainable income generation activities, protection and surveillance, security and environ- mental management, and cultural programs. It was designed to strengthen nine Kayapó communities on the west bank of the Xingu River, with the assistance of FUNAI, in Novo Progresso(PA), for a period of three years with an annual budget of R$1.5 million, managed by Eletrobras. A similar long-term project is presently being negociated and elaborated with the Kayapó from the east bank of the Xingu river, their representants, Funai, Norte Energia S/A and a specialized consulting company. PRESENCE IN THE COMMUNITIES The projects – hydroelectric and thermo- The number of people involved in electric plants and transmission and accidents involving company assets and distribution systems – developed by the number of fatalities increased over Eletrobras can produce a greater or lesser 2012. This increase occurred because the degree of social impact, depending on the data provided in this report has broader characteristics of the region where they coverage. In 2013, the data was reported are implemented. by 12 companies, compared with 06 in the The identification of the social groups previous year. 31. The data disposed in this table do not consider the employees of Eletrobras companies. NUMBER OF INJURIES AND FATALITIES OF USERS INVOLVING COMPANY ASSETS (GRI EU25)31 and the changes in land use, landscape, Number of fatalities Number of individuals involved in accidents 2013 2012 2011 96 30 48 19 124 1 affected starts at the beginning of the planning process and, as the project advances, specific studies are conducted in order to understand the expectations of the population, their way of life, their basic economic activities, and their organization. Issues such as the increase of the migrant population, the impacts on infrastructure, social structures, and local culture, among others, are included in the scope of the surveys to be conducted for the environ- mental studies; they aim to propose measures for the mitigation of negative impacts and for leveraging positive ones. (GRI EC8, GRI EC9, GRI SO9, GRI SO10) During the operation, there may be impacts on territorial organization; changes in the social, economic, and cultural organization; and interference in the organization of commercial and In 2013, data does not include Eletrobras holding, Furnas, Itaipu, and Eletropar. In 2012, data included the following companies: Eletrobras Distribuição Acre, Distri- buição Rondônia, Distribuição Roraima, Amazonas Energia, Eletronorte, Eletrosul, and Eletrobras holding. NUMBER OF LEGAL ACTIONS, PENDING AND RESOLVED, RELATED TO THE HEALTH AND SAFETY OF THE USERS OF THE SERVICES (GRI EU25) industrial activities, such as the increased Resolved legal actions related to health and safety Pending legal actions related to health and safety 201 2012 2011 20 6 21 2 29 2 foto: Doto Takak-ire/Instituto Kabu consumption of water, potential spills, soil contamination, and higher risk of accidents (electric shocks, fires, and others). (GRI 1.2, GRI SO9) In 2013, data does not include the Eletrobras companies, Eletrobras holding, Furnas, Itaipu, and Eletropar. In 2012, data included the following companies: Eletrobras Distribuição Acre, Distribuição Rondônia, Distribuição Roraima, Amazonas Energia, Eletronorte, Eletrosul, and holding. 118 119 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasMeasures to prevent and reduce damage Eletrobras has several contingency measures, contingency plans, and At Eletrobras Eletronuclear, it is mandatory to report near-miss accidents, contingency plans. Emergency plans are Eletrobras Chesf monitored and assessed in relation to At substations, Eletrobras Chesf has the their effectiveness and are periodically Fire Safety Plan (PSCI), which encom- reviewed by the Internal Control and Risk passes the procedures to be adopted in Management Committee, along with case of fire, in addition to the Emergency representatives of the departments. Response Plan , which addresses In 2011, Eletrobras CGTEE signed assistance to victims (at power plants, a ‘Conduct Adjustment Agreement’ (TAC, in Portuguese) with the Brazilian the contingency manual also focuses on the Evacuation Plan – PAA). Drills recovery plans in all its companies. Each which are investigated and examined Environmental Agency (Ibama), the are conducted annually at the power company – whether in generation or in by national and international agencies. Ministry of Environment, the Ministry plants with the participation of the local transmission and distribution – is respon- The security system provides for the of Mines and Energy and the Federal fire department. Moreover, Chesf has sible for assessing all potential scenarios immediate mobilization of hundreds of Attorney’s Office, making a series of Contingency Plans for the power plants concerning emergency situations and for professionals in the three government commitments aimed at the environmental which establish the actions to be taken in proposing training and solutions to reduce levels and in less than one hour in the suitability of one of its main production case of floods, fires, and invasions (social damage. (GRI SO10, GRI EU21) Eletrobras Eletronuclear To reduce potential damage, Eletrobras Eletronuclear has implemented the Eletrobras Eletronuclear Foundation case of radioactive accidents. This plan is tested periodically through drills in the presence of the National Nuclear Energy Commission (CNEN) and of international organizations, such as the International Atomic Energy Agency (AIEA). for Medical Assistance (FEAM), which Eletrobras CGTEE manages the Praia Brava Hospital and Eletrobras CGTEE has implemented five other medical centers (the Radio- contingency plans that address natural epidemiology Information Center, disasters, environmental impacts, fires, the Mambucaba Medical Center, the strikes, and image crises that involve Mambucaba Park Medical Center, the internal and external audiences and the Itaorna Outpatient Clinic, and the consider communities, areas of influence, Ionizing Radiation Medical Center), which safety and rescue agencies, fire depart- are responsible for serving employees ments, and civil defense, as well as actions and the community. In 2013, the FEAM related to fire fighting, specifically the performed 2,127 surgeries, 3,295 hospi- fire brigade. The community, authorities, talizations, 190,639 laboratory tests, and industrial customers are part of and 42,073 radiology tests, and provided the external audience included in the 15,503 non-emergency services and 65,911 emergency services. units, Phase B of the coal-fired Presidente issues) in its facilities. Water Resource Médici thermal power plant. Eletrobras Management prepares an Annual Flood holding has a supervisor role in this Prevention Plan, which is approved by the agreement. ANA and the ANEEL and reviewed and Amended in 2013, the TAC aims at the updated on an annual basis. The company environmental adequacy of Phase B, which also has manuals for the control of floods the main objective is the implementation, in the basins where it operates its main until December, 2016, of a desulphurization reservoirs. system and abatement of particulate Throughout 2013, the projects under material to adjust the concentration construction adopted actions for commu- of sulphur dioxide (SO2) to the pattern nication and environmental education advocated in its operation license. It will in the communities and for health and enable a reduction of 79% in emissions safety for construction workers. of SO2. The investment is estimated in R$218,149,000.00. Due to the mentioned investment, CGTEE, from 2017 on, will generate an annual revenue around R$300 million. 120 121 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasItaipu Binacional Eletrobras Eletrosul company’s operating units generates an Eletrobras Distribuição Alagoas Itaipu Binacional has a group that With the purpose of providing emergency Incident Notification Bulletin (BAO) that For major incidents involving high- manages the Emergency Action Plans, service to remedy equipment failures, describes, analyzes, and communicates voltage systems, substations and which is responsible for preparing and each Eletrobras Eletrosul facility has its the event to the other units. lines, there are maneuver plans, with updating action plans for the contin- own Contingency Plan, in addition to In the case of any incident at which the operations area is familiar, gencies identified and for coordinating an app on Serv Notes Eletrosul, which substations or power plants, there are to restore power through grid and drills and training procedures for these publishes the Reports and Contingency operation teams permanently on call equipment automation. The community plans. The community is engaged in the Plans of its facilities. Concerning power that can provide first aid and perform is informed through communication plans that concern them, such as flood generation, all operation and maintenance repairs in the shortest time possible. For channels and industrial customers control, which involves the Civil Defense activities performed by Eletrosul are incidents occurring outside its facilities, through the Operations Center. For all and the Port Authority, etc. governed by internal regulations. the company has a service plan to be other customers who may contact the Eletrobras Eletronorte Eletrobras Furnas A UHE Balbina possui sistema para The Prevention and mitigation measures are Balbina Hydroelectric Plant has a system systematically planned and conducted in for restoring energy production through all generation and transmission projects emergency generators in case of power under the responsibility of Eletrobras outages. This type of installation is Furnas. The implementation of Social foreseen in the National Operator of the Communication Programs (PCS) and of Electric System’s standards and procedures Environmental Education Programs (PEA) for the network, which conducts annual in the areas enables the maintenance of practical restoration tests, pursuant to continuous communication channels with the regulations of each company. If there society and the assessment of impacts. is a risk of incidents, communities are Eletrobras Furnas is implementing informed according to their area of occur- Emergency Response Plans at its rence (flood area) at least 20 days prior to operating units in order to define the date of the expected opening of the responsibilities and effective procedures spillway. The main contingency measure to be conducted in emergency situa- in the community is the opening of flood- tions or to minimize harm to people, the gates, which is conducted according to environment, and assets. Each operating the climate influence and to operational unit has its own Fire Brigade, which works dispatch, with various means of communi- as first responder in case of accidents and cation to inform residents about the water contacts public authorities, if necessary level while floodgates are open. Authorities (fire departments, environmental are notified about this plan and the possi- agencies, etc.). These brigades are periodi- bility of the opening of floodgates and cally trained and their members are about the measures taken to inform the volunteer company employees. community. At the end of each event, all situations and the steps taken to prevent The Response Plan for Emergencies Involving Transmission Lines defines the its recurrence are assessed, with the partic- nearest hospitals where victims should ipation of the entire group involved. be taken. Every incident registered at the implemented after the area is analyzed. company, the call center is prepared to Eletrobras Furnas has been developing communicate the expected reestab- various awareness actions to inform the lishment of power. Eletrobras Distribuição Acre Eletrobras Distribuição Acre has a contingency plan in place for the floods on the Acre River, which is the most significant risk in the concession area. When power outages are caused by floods, the company is supported by law enforcement agencies to enable service continuity. The flooded areas are analyzed and, supported by this analysis, actions to restore services are carried out based on the inspection of the entire network of cables, meters, insulators, etc. public about hazards involving electrical appliances, to provide clarification about activities that should not be developed in the rights of way of the transmission lines, and to indicate the areas of the reservoir where fishing is prohibited. Since the transmission system is constantly expanding, the Contingency Plans are constantly evolving. Agreements with local city govern- ments enable the expansion of health and education services, the improvement of sanitation systems, the provision of water and energy, and the increase of public security. Social and environ- mental education lectures inform Furnas employees and outsourced construction workers about methods to minimize impacts on the way of life of the communities. Specific programs conduct archeological surveys in the areas where there is direct intervention of the projects and foster the appreciation and rescue of local culture. 122 123 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasResettlement The studies conducted in the initial The Environment Committee of planning and implementation phases of the Eletrobras companies (see item projects may uncover conflicts and issues, Environmental Management System) has such as the need to resettle populations. active work groups, whose members are These issues may cause the layout of the representatives of all companies and seek project to be reviewed. to share experiences, hold discussions, and The “Relationship with Society” advance in the update of the guidelines principle, contained in the Eletrobras Environmental Policy, determines that pertaining to the resettlement of the populations affected, to Indigenous issues, dialogue with the various social agents and to environmental communication should occur from the very beginning and education. of project planning, identifying expecta- The Social Communication Plan tions and needs. It also establishes that establishes actions that include the imple- communication processes should be mentation of local offices, enabling access implemented using language that is to data and exchange of information appropriate for the audience to which with communities to occur before the it is intended and that there should be public hearings provided for by law. In continuous communication and clari- order to provide information about the fication of issues pertaining to energy projects, local communication channels and to social and environmental actions. are used, such as newspapers and radio Among the studies most commonly stations, as well as meetings with the conducted, we highlight the Social and community and company websites. Economic Registry, which identifies and The Environmental Impact Assessment qualifies the population affected by the is made available to the general public projects. (GRI EU24) in easily accessible locations, such as municipal libraries and city halls. Eletrobras answers questions about its projects through the Fale Conosco (Contact us) channel, among others. (GRI EU19) Generally, the population living in the areas of the reservoirs of hydroelectric plants are relocated more frequently, and Eletrobras provides all the support required, from the registration of the properties located along the river where the dam will be built to the social and economic documentation of the popula- tions affected. The amounts paid for compensation for lands, crops, buildings, and others are based on surveys that study values and asking prices in the Projects and programs area of the project. More than merely a utility service Wind farms do not require popula- provider, the Eletrobras companies tions to be resettled, since wind turbines recognize that they are also responsible and the other infrastructure associated for improving the standard of living in with the operation of the project can be the communities where their projects are installed while individuals remain at located. This commitment is formalized their locations. (GRI EU20) in the Eletrobras’s Social Responsibility Guidelines. The company develops and supports a number of social and cultural In 2013, a total of 353 individuals were projects and actions, including donations resettled, 325 economically and 28 physi- and public health campaigns. In 2013, the cally. This resettlement occurred due to Eletrobras companies donated a total of the implementation of five transmission R$136,360,961.73 in products, services, and lines and new power plants. In the same period, Eletrobras Eletrosul, Furnas, and in kind. (GRI SO1) holding) compensated 770 people and Eletrobras Eletronorte compensated 46832. All of the cases were in connection with the use of rights of way. (GRI EU22) 32. Eletrobras Eletronorte registered only compensa- tion paid to 117 properties in this period. For calculation purposes, we considered an average of four individuals per property.z Learn more about some of the social and cultural projects and programs developed by the Eletrobras companies: Rede Proteger Itaipu Binacional and 40 other social entities located in Foz do Iguaçu are the Brazilian counterparts of Rede Proteger (Protect Network), which promotes and protects the rights of children and adolescents, especially in terms of abuse and sexual exploitation. Ciudad del Este (Paraguay) and Puerto Iguazú (Argentina) also participate. 124 125 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasTrinational Campaign to Prevent the Exploitation of Children and Adolescents O Mundo da Luz Multimedia kit The efficient and safe use of energy respectively, and extended and revised in 2011. In 2014 new versions are being Government and public policies This initiative brings together Itaipu and its impacts on lives, society, the developed in order to submit proposals for One of the principles of Eletrobras is to Binacional, municipal departments of social services and tourism, Rede Proteger, and representatives of the governments of environment, and citizenship are the topics of this kit, which has been the next three years. operate in line with government authorities The purpose is to benefit approximately and branches, as a public utility, to support developed in several schools and events 270 households, equivalent to 1080 people. public policies that foster economic devel- Ciudad del Este (Paraguay) and of Puerto in the community since 2007. The digital Iguazú (Argentina). TV show host Xuxa material includes educational soap The planned investment for the period was R$80,000 per year, per community, opment and social well-being. (GRI SO5) Meneghel was selected by the tri-national operas that depict the daily activities of totaling R$ 480,000. work group to be the face of the campaign, a family and the role of electricity in the In the reviewed and expanded action The Eletrobras companies support and she will allow her image rights to be used in the production of advertising lives of these characters; it also includes children’s games, Electropedia, and comic plan have been identified in Araçatiba five demands focusing on health, education, important initiatives of the Federal Government and manage programs and materials such as billboards, bus doors, books. Eletrobras Distribuidora Rondônia infrastructure, youth, culture, local identity sector funds that serve various areas of videos, and others. It also includes training introduced this kit to over 15,000 people and community organization community, the electric utilities sector. These programs courses for tourism professionals. The in a number of actions and fairs, events, generating 29 initiatives. Retreat in four seek to provide universal access to action will be conducted on a permanent and public buildings. The kit was also focused demands on health, infrastructure, electricity and to energy efficiency and to basis in the three cities. distributed to the individuals who visited generation of employment and income, foster the sustainable development of the Eletrobras’s booth at the international community empowerment, identity and country, namely the National Program for Citizenship Promotion Campaign – Power up Rio+20 Conference. Eletrobras Distribuição Acre provided Regional Development Program culture, generated 27 initiatives. (GRI SO1) services to the community, replacing light Since its creation, Eletrobras Furnas has Eletrosul Open House Program bulbs, offering tips on safety and efficient already implemented 14 Integration energy consumption, enrolling customers in the Social Tariff program performing rapid blood tests and blood pressure tests, and monitoring for the Bolsa Família (Family Allowance) Program. Rádio Se Liga Aí program In 2013, Eletrobras Distribuição Rondônia ran an advertising campaign called Se Liga Aí, composed of 26 one-minute spots about various topics on the main radio stations in the state, offering information on the safe and efficient use of electricity. Center projects in various communities, such as quilombolas, rural settlements, and dumps in the states of Rio de Janeiro, Espírito Santo, Minas Gerais, Mato Grosso, and Goiás. Moreover, ten projects were funded, 14 participatory social diagnoses were developed, and ten community development action plans were consoli- dated. Finally, seven community forums were created to function as privileged spaces for the discussion and planning of the actions to be implemented in the region. In total, over 29,000 people benefit from the actions developed by this program. In 2005 and 2006 were drawn up the plans of action of Quilombola Communities Retiro and Araçatiba, the Conservation of Electricity (PROCEL), the National Program for Universal Access to and Use of Electricity (Luz para Todos), and the Alternative Energy Source Incentive Program (PROINFA), among others. (GRI EC8, GRI EC9, GRI EU7, GRI EU23) Developed by Eletrobras Eletrosul, this project develops an educational program aimed at children between 10 and 11 years old and is conducted on the company’s premises, with the purpose of informing National Program for the and discussing social, economic, ecologic, Conservation of Electricity (PROCEL) and energy saving aspects, approaching The PROCEL fosters the efficient use of the benefits and risks of electricity. In 2013, energy and the prevention of its waste. a total of 204 schools and 11,838 children Coordinated by the Ministry of Mines and participated in the program in the states Energy, Eletrobras offers technical and of Santa Catarina, Paraná, Mato Grosso do financial support to these actions. Since Sul, and Rio Grande do Sul. its implementation in 1985, the results obtained have enabled the postponement of investments in the electric utilities sector, a decrease in the emissions of carbon dioxide equivalent, and incentives for the technological development of energy-efficient equipment. (GRI EC9, GRI EU7) 126 127 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobrasfoto: Jorge Coelho/Arquivo Eletrobras In 2013, Eletrobras PROCEL contributed to saving over 9.744 million megawatts- hour (MWh), which represents R$1,052.23 million and which is equivalent to the annual consumption of approximately five million households. Additionally, it prevented the emission of 935,000 tCO2eq, which corresponds to the annual emissions of 321,000 vehicles. PROCEL was shortlisted in the Green Project Awards Brazil in the Mobilization Initiative and Product or Service categories. The National Program for the Conservation of Electricity (PROCEL) operates in various fronts: • Municipal Energy Management Program (PROCEL GEM) • Program for Energy Efficiency in Public Lighting and Traffic Lights (PROCEL Reluz) • Program for Energy Efficiency in Environmental Sanitation (PROCEL Sanear) • Program for Energy Efficiency in Buildings (PROCEL Edifica) • Program for Energy Efficiency in Public Buildings (PROCEL EPP) • Program for Energy Efficiency in Industries (PROCEL Indústria) • PROCEL Education • National Center for Energy Efficiency Information (PROCEL Info) • PROCEL Eletrobras Seal • Eletrobras PROCEL Solar Network Learn more about the PROCEL at: www.eletrobras.com/procel www.procelinfo.com.br • The PROCEL Eletrobras Seal informs consumers about the most energy efficient equipment. In 2013, the seal was awarded to 36 models of equipment, including 187 manufac- turers, and 3,748 products. • In 2013, PROCEL Reluz replaced 62,000 inefficient points of public lighting in six municipalities, which enabled energy savings and a reduction in demand of 23,654.04 MWh and 5,400 kW, respectively. • The PROCEL Edifica offers technical support to the National Building Labeling Program, conducted in partnership with INMETRO; in 2013, it awarded 987 National Energy Conservation Labels, of which 24 were given to buildings. Furthermore, it launched the free software called Domus Eletrobras, with innovative aspects that enable the hygro-thermal-energy simulation of commercial, service, and public buildings. ORGANIZATION OF THE 8TH INTERNATIONAL CONFERENCE ON ENERGY EFFICIENCY IN MOTOR DRIVEN SYSTEMS – EEMODS The EEMODS is the largest international conference on energy efficiency in electric motor systems and in motor driven systems. This event brings together the foremost global experts on the subject, in connection with manufac- turers, associations, academia, industries, research centers, governments, and public-policy entities. The conference addresses technical, economic, market, environmental, governmental, and regulatory issues. foto: Pedro Ferreira/Eletrobras Cepel The 8th Conference, held in October 2013 in Rio de Janeiro, was organized by Eletrobras and by the Electric Energy Research Center (Cepel) and received the technical and scientific support of the European Commission DG Joint Research Centre. The event lasted three days, hosted 242 participants, and held 24 technical sessions, two plenary sessions, three special sessions, and two concurrent events. Luz Para Todos The National Program for Universal Access To and Use Of Electricity – Luz Para Todos (LPT – Light for All), institutionalized in 2003, aims to provide, by 2014, electricity to the Brazilian rural population who still does not have access to this utility. LPT offers solutions for the use of energy as a tool for the social and economic development of low-income communities, contributing to reducing poverty and increasing family income, in addition to helping retain families in rural areas by improving the quality of life. (GRI EU23, GRI EC9) Access to electricity facilitates the integration of health, education, water supply, and sanitation services and acts as a driver of the social programs of the Federal Government. The program also provides for the free installation of up to three ceiling light boxes (one per room), two power outlets, conduits, light bulbs, and other materials necessary. The initiatives of this program are prior- itized to serve the communities assisted by the Citizenship Territory Program or the Brazil Without Extreme Poverty Plan; rural settlements; Indigenous settlements and quilombolas; communities located within extractive reserves; communities located within the area of influence of energy generation or transmission devel- opments, for which the company is not responsible; schools; health centers; and community water wells. 128 129 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras The resources required are provided In 2013, a total of 87,300 new customer Eletrobras has entered into 18 contracts by the Federal Government through the accounts were connected to the grid, Energy Development Account (CDE), the totaling 3.1 million connections since Global Reversal Reserve (RGR), or Caixa 2004 and corresponding to the benefit Econômica Federal; by the state govern- of 15 million people in the Brazilian rural ments involved; and by the Enabling area. Considering the commitments Agents (concessionaires, licensed made between the Enabling Agents, distribution companies, and rural electri- fication cooperatives). Eletrobras, and the state governments, 98% of the goal established for the end of In various cases, the provision of 2013 was achieved. service is subject to the execution of Considering only the commitments related to Special Projects with the Enabling Agents, using resources from the CDE, in the amount of R$7.61 million, and aiming at serving 377 customer accounts via decentralized energy generation, using renewable energy sources and the construction of small sections of distribution lines (mini-grids). Of this total, at the end of 2013, the connection of 328 customer accounts to the grid was projects that require specific conditions, made between the Enabling Agents and attested by physical inspections. The Ministry of Mines and Energy estimates that the National Program for Universal Access To and Use Of Electricity will generate over 460,000 direct and indirect jobs. since the locations to be served are far Eletrobras, 10,542 projects of the National from existing energy distribution lines, Program for Universal Access To and Use are geographically isolated, and are Of Electricity were registered in the Project generally in areas with low population Management System, totaling 490,368 density. Preliminary estimates predict a projects since 2004. This total has resulted demand for approximately 250,000 proce- in 2.6 million new connections, which dures under these conditions. correspond to 90% of the connections Thus, to complement the Work Programs contracted between the Enabling Agents that predominantly use traditional distri- and Eletrobras, as well as in the following: bution networks, the so-called Special Projects were created in 2009 focusing on • The connection of customer accounts to sustainably providing service to geographi- the grid in the rural area, in 5,427 munici- cally isolated populations and prioritizing palities in Brazil the use of renewable energy sources. • The construction of 671,904 km of high- The investments forecast for the imple- and low-voltage networks mentation of the National Program for • The implementation of 6.97 million poles Universal Access To and Use Of Electricity, • The installation of 1,001,893 transformers by the end of 2013, totaled R$21.9 billion, of • The installation of 2,108 photovoltaic which R$15.8 billion (72%) refers to sector- systems specific resources managed by Eletrobras (CDE) and RGR). Since 2004, a total of R$12.6 billion (funded by CDE and RGR) was released, from a total contracted amount of R$15.8 billion; that is, 80% of the total resources contracted. SECTOR-SPECIFIC RESOURCES, BY REGION, BY DECEMBER 31, 2013 (in R$ millions) REGION North Northeast Midwest Southeast South Brazil CDE* 3,793.3 6,501.7 788.4 858.1 340.6 Contracted RGR** CDE+RGR 318.3 942.2 589.8 1,174.5 511.9 4,111.6 7,443.9 1,378.1 2,032.6 852.5 CDE 2,748.2 5,201.2 690.8 728.3 268.5 Released RGR CDE+RGR 284.3 837.4 527.0 943.0 387.3 3,032.5 6,038.6 1,217.8 1,671.3 655.8 12,282.1 3,536.7 15,818.8 9,637.0 2,978.9 12,615.9 *Energy Development Account **Global Reversal Reserve 130 131 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasNumber of connections as of December 31, 2013 Eletrobras Agreements Registry LPT System + Special Projects Inspected BRAZIL 2.614.041 CONNECTIONS NORTH 475.346 CONNECTIONS NORTHEAST 1.348.112 CONNECTIONS INTERNATIONAL TECHNICAL COOPERATION AGREEMENT TO ASSIST REMOTE REGIONS In order to support distribution companies in the provision of services to remote areas with systems that use renewable energy sources and to foster the social inclusion of the rural population of Brazil, Eletrobras maintains a technical cooperation project with the Inter-American Institute for Cooperation on Agriculture (IICA). Through this cooper- ation project, computer tools are developed to manage rural electrification projects, training is offered at the concessionaires, and studies about management models of energy provision contracts are conducted, thus joining efforts to develop and integrate actions to plan, develop, and evaluate projects for decentralized energy generation systems for universal access to electricity. (GRI EU23) MIDWEST 189.208 CONNECTIONS KEY CONNECTIONS IN THE STATE up to 25,000 25,001 < 50,000e 50,001 < 75,000 75,001 < 100,000 100,001 < 200,000 over 200,000 SOUTH 181.111 CONNECTIONS 132 SOUTHEAST 420.264 CONNECTIONS foto: Jorge Coelho/Arquivo Eletrobras 133 Eletrobras Human Rights The Eletrobras companies address human training in the organization’s policies rights topics in the studies conducted and procedures on the topic, whether for the implementation of new develop- at UNISE or through various lectures. In ments and take measures to prevent their these companies, 15.9% of the employees violation in the locations where they were trained in human rights policies and operate. procedures, totaling 27,614 hours. All companies raise awareness among At Eletrobras Chesf, in 2013, the number their employees and other stakeholders of training hours on human rights grew through campaigns and events. In order by 300%, training 2,071 employees, an to reinforce these issues, employees of the Eletrobras companies receive formal increase of 191.7% in relation to 2012. (GRI HR3) TOTAL NUMBER OF HOURS OF EMPLOYEE TRAINING ON POLICIES AND PROCEDURES CONCERNING ASPECTS OF HUMAN RIGHTS THAT ARE RELEVANT TO OPERATIONS, INCLUDING THE PERCENTAGE OF EMPLOYEES TRAINED (GRI HR3) Number of employees who have received formal training in the organization’s policies and procedures on human rights issues 2013 3,820 Total number of hours of employee training on policies and procedures concerning aspects of human rights 109,442 Percentage of employees trained in human rights 15.9% In 2013, data includes all companies, except Eletropar. In 2012, data includes Eletrobras Distribuição Acre, Chesf, Eletronorte, Eletrobras holding, and Itaipu Binacional. This indicator was not reported in 2011. 2012 1,372 27,614 11.0% CLAUSES In 2013, all contracts (100%) included human rights clauses. However, Eletrobras still does not have a formal mechanism for monitoring these contract clauses. (GRI HR1) CUTTING-EDGE SUPPLIER HIRING METHOD Eletrobras understands that all suppliers involved in labor-intensive contracts are critical in relation to sustainability factors, considering that they are at significant risk for incidents of child, forced, or forced labor and for incidents of other human rights or labor violations. Hence, of the 127 significant suppliers of Eletrobras holding, 100% included human rights clauses in their contracts. (GRI HR2) REMEDIATION In 2013, a total of 126 grievances related to human rights and discrimination were filed, of which 116 were resolved, and 10 were pending. Of these grievances, 59 (46.8%) were filed by external stake- holders. Of the 116 grievances resolved, only 14 were upheld, of which 12 related to discrimination and 2 to human rights. (GRI HR11) 134 135 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras  ENVIRON- MENTAL PERFORMANCE ENERGY FOR CONTINUED GROWTH_138 ENVIRONMENTAL MANAGEMENT SYSTEM_138 ENERGY_140 ENERGY EFFICIENCY_142 WATER AND WASTEWATER_145 BIODIVERSITY_148 CLIMATE CHANGE_153 EMISSIONS_154 WASTE_160 SPILLS_162 ENVIRONMENTAL INVESTMENTS AND SPENDING_164 PROJECTS AND PROGRAMS_165 Serra da Mesa Lake, Uruaçu, Goiás. 136 137 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasEnergy for continued growth To responsibly generate, transmit, and distribute energy, causing minimum interference on the environment and on the surrounding areas where it operates: this is Eletrobras’s environmental strategy. It implies an organic interaction with the multiple aspects of its businesses and with the method with which it interacts with the environment and puts into practice sustainable development. Environmental issues are present in all the company’s corporate policies, whether Environmental, Sustainability, Energy Efficiency, Water Resources, Risk or Research Management, or Development and Innovation, in addition to being part of the Code of Ethics of the Eletrobras Environmental Management System companies. Eletrobras’s Environmental Management In order to leverage synergy between System enables the monitoring of corporate sustainability practices and the environmental actions in all companies management, business, and relationship of the system and is based on three core strategy, Eletrobras’s Environmental Policy elements: the Environmental Policy, the is enforced in all companies in order to Environment Committee, and the System reduce the possibility of risks, taking into of Indicators for Corporate Sustainability account the legislation and the corporate decision-making process. Management (IGS System). (GRI 3.9) All the aforementioned corporate policies can be viewed and downloaded at www.eletrobras.com/elb/data/ Pages/LUMISD76CB1BBPTBRIE.htm ENVIRONMENTAL POLICY Eletrobras’s Environmental Policy addresses diversity in its business ENVIRONMENT COMMITTEE (SCMA) The technical and institutional body that segments – generation, transmission, discusses practices and defines common and distribution – and in its generation guidelines for addressing the social and sources – water, nuclear, thermal, and environmental issues of the Eletrobras wind power. In May 2013, the new version companies, the SCMA is a joint committee of this policy was approved and its major composed of the managers of the innovation was the incorporation of environmental areas of the companies. five guidelines, which seek to provide It convenes at least three times a year. the operational dimension required for It also includes 11 work groups and the companies’ daily environmental three temporary committees, which are management practices. composed of experts from the technical These guidelines refer to biodiverisity, teams of the companies. to environmental communication, to environmental education, to the social, environmental, and asset management of reservoirs, and to climate change; the latter derives from the Statement of Commitment approved in 2012, which aims to meet strategic corporate objectives. SYSTEM OF INDICATORS FOR CORPORATE SUSTAINABILITY MANAGEMENT (IGS SYSTEM) Since 2010, this important strategic management tool has been monitoring environmental sustainability indicators based on the analysis of variables collected from various areas of the Eletrobras companies. Currently, the system is being expanded to cover the social, economic, and financial dimensions as well. In the environmental dimension, the IGS System monitors topics such as water, energy, waste, biodiversity, voluntary actions, and legal compliance in 173 performance indicators33. 33. All these indicators have coverage of more than 75% of net operating revenues, with the exception of waste that have coverage between 50 and 60%. However, for nuclear waste, the coverage is 100%. The coverage of these indicators is reported publicly on the Eletrobras site, available at: http://www.eletrobras. com/elb/data/Pages/ LUMISA3F7EF0EPTBRIE.htm 138 139 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasEnergy Eletrobras is committed to the mainte- nance of the environment and to the sustainability of the business; therefore, it develops conservation and efficiency improvement actions and projects, whether internally or in the communities where it operates. DIRECT ENERGY CONSUMPTION Consumption of direct renewable INDIRECT ENERGY CONSUMPTION Indirect energy refers to energy consumed energy (ethanol and biodiesel) and through intermediate sources; that is, non-renewable energy (gasoline, natural energy consumed as electricity. In 2013, gas, liquefied petroleum gas, diesel fuel, a total of 2.2 million MWh of energy (7.9 etc.) occurs through the use of equipment million GJ) were consumed in the admin- and machinery, the operation of thermo- istrative and production processes of the electric power plants, the use of the fleet Eletrobras companies. of vehicles, and other operations. This Consumption of energy in adminis- consumption is monitored by the IGS trative activities increased in 2013 because System, which allows for the identifi- of the improved data coverage, which now cation of variations and the establishment considers two new variables: stand-alone of actions to control them. systems and self-generation. Moreover, the In 2013, direct energy consumption total energy consumed in the reporting totaled approximately 250 million period rose by approximately 24% due to gigajoules (GJ), an increase compared with the inclusion of the electricity consumed the previous year (217.6 million GJ) due to at the substations of Eletrobras Amazonas the increased use of thermoelectric power Energia, Chesf, Eletronorte, and Eletrosul, plants by the National Operator of the Electric System (ONS). which was not reported in previous years. (GRI EN4) Regarding consumption of uranium, Eletrobras Eletronuclear registered a drop of 8.3% in 2013, particularly due to a scheduled shutdown to replace the lid of the reactor at Angra 1, which caused a longer shutdown at the plant. Consumption of gasoline decreased by 42.2%. This reduction was caused by the initiatives implemented by Eletrobras to comply with the guidelines established for decreasing greenhouse gas emissions (GEE) (GRI EN3) FUEL CONSUMPTION in GJ (GRI EN3) 34 34. Unlike previous years, in 2013, data from EN3 were calculated based on the Greenhouse Gases Inventory. Administrative activities Thermoelectric generation TYPE OF FUEL Renewable Biodiesel Ethanol added to gasoline* 2013 12,632.1 14,712.6 2012 N/Av N/Av 2011 2013 N/Av 1,939,776.7 N/Av N/Ap N/Ap 2012 N/Av N/Ap N/Ap 2011 N/Av N/Ap N/Ap Automotive Ethanol** 27,478.2 28,369.4 26,568.7 Non- renewable Natural gas Coal Gasoline Aviation gasoline LPG CNG Two-stroke oil Fuel oil Diesel oil Aviation kerosene Uranium*** 305.4 N/Ap 481.9 N/Ap 126.0 58,761,920.0 12,536,482.2 1,796,037.8 N/Ap 35,499,283.1 33,824,311.9 26,083,998.3 69,673.3 120,648.8 28,743.4 1.9 5,491.3 21.4 134.9 N/Ap N/Av 5,526.4 300.2 355.9 N/Ap N/Av 878.8 242.9 18.0 N/Ap N/Ap N/Ap 314.6 N/Ap N/Ap N/Ap N/Ap N/Av N/Ap N/Ap N/Ap N/Ap N/Av N/Ap N/Ap 8,532,257.6 12,696,182.7 1,242,762.0 239,803.9 354,754.3 128,718.0 38,193,016.3 41,575,866.6 8,250,547.7 7,059.9 N/Ap 4,927.0 N/Ap 7,100.0 N/Ap N/Ap N/Ap N/Ap 106,807,516.3 116,468,740.9 111,922,556.9 Total 377,315.0 515,364.0 192,395.7 249,734,084.7 217,101,584.3 149,295,902.7 * Ethanol added to gasoline - anhydrous ethyl alcohol ** Automotive ethanol - hydrous ethyl alcohol (used directly in vehicles running on ethanol or flex-fuel) *** Source: IGS System N/Ap: not applicable N/Av: data not available ENERGY CONSUMPTION (GRI EN4)35 35. Unlike previous years, in 2013, data were calculated based on the Greenhouse Gases Inventory. Moreover, the “Substations” category was added to the scope of electricity consumption. Administrative activities Hydroelectric generation* Thermoelectric generation Substations Total 2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011 MWh GJ 672,355.6 151,110.7 105,423.0 257,039.0 279,444.6 162,373.0 1,210,476.6 1,351,748.3 924,139.2 61,770.3 2,201,641.5 1,782,303.5 1,191,935.3 N/Av N/Av 2,420,480.2 543,998.4 379,522.9 925,340.4 1,017,144.2 584,542.8 4,357,715.7 4,488,621.4 3,326,901.2 222,373.2 7,925,909.5 6,049,764.0 4,290,967.0 Contrary to previous years, in 2013 data was calculated based on the Greenhouse Gas Inventory. *In 2013, data does not include Eletrobras Eletrosul. N/Av = Not available. 140 141 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras   Energy efficiency The Integrated Energy Efficiency Committee of the Eletrobras System The CIEESE, in conjunction with the (CIEESE) is coordinated by the Eletrobras reduction goals established, stimulated holding and formed by representatives companies to develop specific actions and of the companies, who hold periodic projects to decrease energy consumption. meetings for the improvement of processes and the preparation and Itaipu Binacional, for example, upgraded its refrigeration equipment, installed monitoring of action plans, pursuant thermal insulation in buildings, and to the competencies developed by each replaced the light bulbs in the offices of company. the power plant with more cost-effective The CIEESE was responsible for ones. Eletrobras Furnas also retrofitted its preparing the new energy efficiency HVAC and lighting systems. policy, published in December 2012. In In the distribution segment, we 2013, CIEESE discussed with companies highlight the Conscious Consumption their respective projects, the actions of the Project, which provides information Internal Energy Conservation Committees about the importance of the rational use (CICEs), in addition to energy efficiency of energy to employees. The campaign indicators, and the implementation of stimulates employees to turn off the ISO 50001 standard in the Eletrobras equipment and lights during their breaks companies. and when they are away from their At Eletrobras holding, the CICE imple- mented a number of actions to reduce workstations. (GRI EN5) energy consumption, such as the planning for the energizing and de-energizing of loads, the standardization of the purchase of energy-efficient equipment, the imple- mentation of programs to raise awareness of employees and contractors, and the creation of a space for CICE on the intranet. By the end of 2013, there was a reduction of 6.77% in the consumption of energy in relation to 2012, which is equivalent to an energy savings of 414,007 kWh and exceeds the goal of 5%. (GRI EN5) ENERGY EFFICIENCY IN THE LIGHTING OF THE TIJUCO PRETO SUBSTATION The studies conducted for the optimization of the lighting at the yard of the Tijuco Preto substation, at Eletrobras Furnas, through the use of a light flow control system reduced energy consumption and light flow by 28% and 32%, respectively, enabling annual savings in energy consumption and maintenance, increasing the life cycle of bulbs. The reduced light flow does not interfere with the regular activities and it is not perceptible to operators. The study is highly replicable, considering that the Eletrobras companies have 257 substations in their transmission system. Its imple- mentation in this complex would enable a reduction of 20,261.9 MWh in annual energy consumption. This study, however, does not consider the substations of the distribution system or the step-up substations of power plants. (GRI EN5) Eletrobras also strives to reduce its indirect energy consumption. Hence, it invests in mobility solutions, such as the use of videoconferencing to decrease the need for business trips. Furthermore, the Eletrobras companies have implemented various initiatives, such as Eletrobras Distribuição Rondônia and Eletrobras Eletrosul, which improved logistics in their administrative headquarters. (GRI EN7) ENERGY SAVED (GRI EN5) Conversion and retrofitting of equipment Changes in employee habits Total MWh GJ 22,753.9 81,914.1 7,698.2 27,713.6 30,452.1 109,627.7 In 2013, data does not include the following companies: Eletrobras CGTEE, Distribuição Acre, Distribuição Alagoas, Distribuição Piauí and Eletronuclear / In 2013, no energy was saved due to process redesign. 142 143 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasEFFICIENT CONSUMPTION AT ELETROBRAS ELETROSUL The unit of the Maintenance Sector of Campos Novos (SC) was projected to comply with energy efficiency and rational water consumption concepts, among others. It is estimated that it will reduce its energy consumption by 50% in relation to traditional construction methods. The building was awarded the National Energy Conservation Seal (ENCE), with the highest energy efficiency rating, according to the Inspecting Organization for Energy Efficiency in Buildings, of the CERTI Foundation. Among its differentials, we highlight the use of split inverter air conditioners, efficient lighting based on tubular lamps, natural light and rainwater harvesting, solar water heaters, and the treatment of wastewater through a wetland septic system. The consumption measurements conducted between November 2012 and August 2013 resulted in an average monthly consumption of 1,136 kWh/month. Hence, we expect energy savings on the order of 13.6 MWh/year. foto: Hermínio Nunes/Eletrobras Eletrosul 36. The project is called “Eletrobras Agent” at Eletrobras Amazonas Energia, Distribuição Alagoas, Distribuição Piauí, and Distribuição Roraima. At Eletrobras Distribuição Acre, it is called “Eletrobras in the Community” and at Distribuição Rondônia, “Efficient Community.” Among the initiatives for the provision of efficient products and services, we highlight the projects of the Eletrobras Agent. In 2013, these projects enabled: • 168,660 visits of the Eletrobras Agent 36 • The replacement of 207,621 bulbs • The replacement of 18,179 refrigerators Energy savings achieved by these projects represented approximately 27,000 MWh/year. (GRI EC8, GRI EN6, GRI EU7) We also highlight the educational projects developed by Eletrobras Distribuição Alagoas, Distribuição Piauí, and Distribuição Rondônia. They are developed pursuant to the “PROCEL in Schools” methodology and their main objective is the training of teachers and students in the safe and efficient use of energy. In 2013, the projects visited 272 schools and raised awareness for 113,197 students. Water and wastewaters Total water consumption of the Eletrobras companies is broken down into admin- istrative use (consumption of employees in company facilities) and production use (such as the cooling of equipment used in thermoelectric plants), both of which are measured by the IGS System. Their total volume, in 2013, was 13,902,072.2 m³; that is, approximately 4.4 million m³ and 9.5 million m³, respectively. (GRI EN8) WATER WITHDRAWAL FOR ADMINISTRATIVE USE by source, in m3 (GRI EN8) Surface water* Groundwater** 2013 2012 3,621,391.5 4,166,361.7 199,109.3 129,779.137 2011 N/Av N/Av Supply network*** 581,610.1 517,274.338 1,000,738.2 Total 4,402,110.9 4,813,415.1 1,000,738.2 * In 2012, data includes Eletrobras Distribuição Rondônia, Eletronorte, Furnas, and Itaipu Binacional. *In 2013, data includes Eletrobras Amazonas Energia, Eletronorte, Eletrosul, Furnas, and Itaipu Binacional. **In 2012, data includes Eletrobras Distribuição Piauí, Eletronorte, Eletrobras Furnas, and Itaipu Binacional. **In 2013, data includes Eletrobras Amazonas Energia, Eletronorte, Eletrosul, Furnas and Itaipu Binacional. ***In 2012, data does not include Eletrobras Amazonas Energia and Distribuição Roraima. ***In 2013, data includes all companies. N/Av: data not available. WATER WITHDRAWAL FOR THERMOELECTRIC PRODUCTION by source, in m3 (GRI EN8) Surface water* Groundwater** Supply network*** Total 2013 2012 2011 9,495,785.2 9,048,822.0 978,372.0 4,176.0 N/Av N/Av 0.0 2,293.0 57,901.1 9,499,961.2 9,051,115.0 1,036,273.1 *In 2012, data includes Eletrobras CGTEE, Eletronorte, Eletronuclear, and Furnas. *In 2013, data includes Eletrobras Amazonas Energia, CGTEE, Eletronorte, Eletronuclear, and Furnas. **In 2013, data includes Eletrobras Eletronorte. ***In 2012, data includes Eletrobras Eletronorte. N/Av: data not available. 37. Data for groundwater in 2012 was reviewed and updated from 743,939.12 m³ to 129,779.12 m³. 38. Data for the supply network in 2012 was reviewed and updated from 932.814.32 m³ to 517,274.32 m³. 144 145 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras    WATER CONSUMPTION The Eletrobras companies achieved savings of approximately 2% of the total volume of water withdrawn. This drop occurred mainly in administrative processes, due to recycling, conscious consumption campaigns for employees, and the periodic maintenance of distri- bution networks to avoid leakages. Water used by hydroelectric power plants in the generation of electricity is excluded from the consumption because it is returned to the bodies of water from which it is withdrawn; thus, it is not included in this value. Likewise, seawater used by Eletrobras Eletronuclear (approximately 3,186 million m³) to cool the secondary system of the Angra 1 and 2 nuclear power plants is not consumed; that is, it is fully returned to the sea at Saco Piraquara de Fora, with a slight rise in its temperature, which is constantly monitored to comply with the standards established by law and to avoid any impact on the aquatic wildlife. (GRI EN8) The Eletrobras companies are members of basin councils and committees, reaffirming their commitment to water resource management. PARTICIPATION IN BASIN COUNCILS AND COMMITTEES (GRI 4.13) COMPANY PARTICIPATION Eletrobras CGTEE Member of the Jacuí River Basins Committee. Eletrobras Eletronorte Has one representative in the State Water Resource Council, in Amapá. Full member of the Committee of the Watershed of the Ilha Grande Bay: CBH-BIG in the “Users” segment and member of the Collegiate Board Full member of the State Water Resource Council of Rio de Janeiro: CERHI-RJ, in the “Users” segment Eletrobras Eletronuclear Full member of the Technical Chamber for the Integration of Management of Watersheds, Estuarine Systems, and Coastal Zone: CTCOST – of the National Water Resource Council – CNRH, representing the segment of Concessionaires and Companies Authorized to Generate Electricity Participates in the Thematic Chamber of Water: CTÁgua - of the Brazilian Business Council for Sustainable Development - CEDBS Eletrobras Furnas Representatives in the Basin Committees of the Guandu, Grande, Paranaíba, Paraíba do Sul, Ceivap, Entorno Furnas, Médio Grande, Baixo Grande, Alto Paranaíba, and Preto/Paraibuna rivers. Itaipu Binacional The company participates in Micro-basin Management Committees, in 29 municipalities in the region, in connection with the Good Water Cultivation program. REUSE In 2013, approximately 530,000 m³ of water39 were reused, most from rainwater harvesting, which represented 3.8% of WASTEWATER Wastewater generated by the production process is treated pursuant to the quality standards required by law before being the total volume of water used by the discharged into bodies of water. According Eletrobras companies. Of this total, 92.6% to the information registered into the IGS was used in administrative processes, System by the companies, in 2013 this such as the washing of vehicles, irrigation, programmed discharge totaled approxi- and the cleaning of administrative spaces, mately 5.7 million m³. Of this total, 41.4% sidewalks, parts, and machinery. (GRI EN10) was derived from the production process of the Eletrobras companies40. Discharge from administrative processes41 totaled 3,493,264.97 m³, of which 100% was treated. (GRI EN21) 39. This value includes Eletrobras Eletronorte, Eletronuclear, Eletrosul, Furnas, and Itaipu Binacional. 40. Note that the water discharged by Eletrobras is not used by another organization. 41. The volume of discharge from administrative processes was calculated based on the NBR 7229 standard, which considers that 80% of the water for human consumption is discharged. TOTAL WATER DISCHARGE IN THE PRODUCTION PROCESS BY DESTINATION, IN 2013 (GRI EN21) DESTINATION Rivers Sea Lakes Total Volume in m3 2,211,257 257,756 2,500 2,471,513 In 2013, data includes Eletrobras CGTEE, Eletronorte, Eletronuclear, and Furnas. TOTAL WATER DISCHARGE IN THE PRODUCTION PROCESS BY QUALITY, IN 2013 (GRI EN21) TREATMENT Treated wastewater Wastewater not requiring treatment Uncategorized wastewater Total Volume in m3 2,269,085 202,428 0 2,471,513 In 2013, data includes Eletrobras CGTEE, Eletronorte, Eletronuclear, and Furnas. 146 147 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasBiodiversity In 2013, Eletrobras’s Environmental Policy incorporated specific biodiversity guidelines. The IGS System has been continuously expanding the indicators and variables aimed at biodiversity management. In 2013, a specific module for managing protected areas was imple- mented with the support of the Eletrobras companies. (GRI EN14) NATUREZA DOCE PROJECT The stingless bee project is a voluntary initiative implemented by Eletrobras Furnas to compensate the operation of eleven transmission lines that cross the Pedra Branca State Park (PEPB), a protected area of 12,500 hectares, which is considered the largest urban forest in the world. Support provided by the company enabled the conservation of bees native to the Atlantic Rainforest, a key species for the protection of the local ecosystem. (GRI EN14) CARE AND NEW LIFE Eletrobras Amazonas Energia maintained birds, mammals, reptiles, and fish in especially adapted enclosures for their recovery. When they are at the perfect weight and health condition, they are released back into the areas where they live and reproduce. In 2013, a total of 108 birds and 67 mammals were reintegrated into their natural habitats. In addition, approximately 24,000 turtle hatchlings were released into the Uatumã River, upstream of the Balbina dam, in the Uatumã Sustainable Development Reservation (AM). (GRI EN14) foto: Jorge Coelho/Arquivo Eletrobras BIODIVERSITY MANAGEMENT The most significant impacts on biodi- versity during the implementation and operation of the developments are the loss of diversity in flora and wildlife, loss of plant coverage and of natural habitats, and alterations in ecosystems. For each impact, we identify the respective mitigation, control, or compensation measures that enable the use of the best techniques in environmental control and monitoring, pursuant to the environmental laws in effect and to the principles and guidelines of the Eletrobras Environmental Policy. (GRI 1.2, GRI EN12) In all its projects, the Eletrobras companies identify and monitor the impacts of the activities on biodiversity according to magnitude, relevance, extent, and reversibility. The studies are conducted with the purpose of examining the areas intended for the projects, of identifying potential damage from the installation and operation of the developments, and of proposing mitigation and compensation actions. Bodies of water and vegetation in the areas of the developments are monitored in order to determine their environ- mental quality and the recovery of the affected areas. (GRI EN14) The studies use as reference the state and national lists of endangered species, such as the Brazilian Red Book of Endangered Wildlife and the Brazilian Red List of Endangered Plant Species, made available by the Ministry of the Environment, the international list issued by the International Union for Conservation of Nature (IUCN), and the Convention on International Trade in Endangered Species of Wild Fauna (CITES). Endangered species identified are included in specific programs. Below, we describe some of the potential impacts on biodiversity, broken down by activity and type of project, the actions/programs, and the respective actions proposed and implemented by the Eletrobras companies. 148 149 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasENVIRONMENTAL IMPACTS PER PROJECT (GRI EN12) Possible direct impacts Possible indirect impacts Activity Type of project Changes in water quality Impact on wildlife and flora Generation Hydroelectric power plants Thermonuclear power plants Loss of plant coverage Fragmentation and edge effects Impact on wildlife Generation Trans- mission Hydroelectric power plants Wind farms Transmission and distribution lines Examples of actions/programs Limnological and water quality monitoring Program Examples of actions/programs developed by the Eletrobras companies Limnological and water quality monitoring Program – Eletrobras Furnas Seawater temperature monitoring program – Eletrobras Eletronuclear Reforestation program – Itaipu Binacional Programs for the recovery of degraded areas Program for the recovery of degraded areas – Eletrobras Eletronorte Changes to habitats Changes in wildlife and flora communities Generation Trans- mission Hydroelectric power plants Support for protected areas and environmental compensation Production of seedlings for reforestation actions – Eletrobras Furnas Marine wildlife and flora monitoring program – Eletrobras Eletronuclear Thermoelectric power plants Biodiversity conservation program Wildlife study program – Eletrobras Furnas Transmission lines Wildlife and flora monitoring program Biodiversity corridor – Itaipu Binacional Impact on wildlife and flora Changes in ecologic processes Generation Trans- mission Hydroelectric power plants Thermoelectric power plants Programs for the recovery of degraded areas Biodiversity conservation program Wind farms Transmission lines Wildlife and flora monitoring program Impact on the migration routes of aquatic wildlife Interference in migration routes and collisions with birds Reduced populations Reduced genetic biodiversity Reduced populations Reduced genetic biodiversity Generation Hydroelectric power plants Fishway mechanisms Ichthyofauna monitoring program Generation Trans- mission Distribution Wind farms Transmission and distribution lines Installation of signaling equipment to prevent collisions Elevation of towers to prevent this impact – Eletrobras Chesf Maintenance of biological reserves and refuges – Itaipu Binacional Nosso Patrimônio Biodiversity Program – Itaipu Binacional Chelonians of Uatumã Program – Eletrobras Amazonas Energia Germplasm Bank Revitalization Program – Eletrobras Eletronorte Program for monitoring ichthyofauna and professional fishing – Eletrobras Furnas Fishing and ichthyofauna program of the Tucuruí Hydroelectric Power Plant – Eletrobras Eletronorte In 2013, Eletrobras joined efforts with Eletrobras Cepel in the preparation of the Protected Area Module of the IGS System PROTECTION AND MONITORING The Eletrobras companies maintain to create an environment in which the environmental control, monitoring, and Eletrobras companies can organize infor- recovery programs that aim to mitigate mation about the actions and resources the impacts related to the implemen- related to impacts or voluntary actions in tation and operation of its projects. In 2013 42. FIFA standard soccer field dimensions (L x W): 120m environmental protection areas.. (GRI EN13) ZERO IMPACT Eletrobras Eletronuclear maintains a special team of biolo- gists, physicists, and chemists that conducts permanent monitoring and environmental audit programs. The company collects samples of seawater, rainwater, surface water, beach sand, algae, fish, milk, pasture, and air, which are then compared with the data obtained before the Angra 1 and Angra 2 power plants started operating. These studies allow for comparison to assess whether the operation of the units has been producing any significant impact on the environment. foto: Divulgação Eletrobras Eletronuclear The results obtained are disclosed in monthly, biannual, and annual reports. These reports are sent to the inspection and licensing agencies (INEA, IBAMA, and CNEN), which analyze whether the values meet the regulatory criteria. The results do not indicate significant impacts on the environment and, in over 25 years of operation, the power plants have not posed any threat or contributed to the extinction of any animal or plant species. (GRI EN14) alone, the company recovered an area of 1,160.22 km², the equivalent of approxi- mately 108 soccer fields42, and voluntarily planted 204,148 tree seedlings of various species. Furthermore, the company also voluntarily recovered approximately 5,000 km² of degraded areas. In the same period, ten new wildlife monitoring programs submitted to environmental agencies by the Eletrobras companies were approved, totaling 12 developments with programs in place. Furthermore, special techniques to protect biodiversity were implemented in 2,986.59 km of transmission and distribution lines, such as the elevation of transmission towers to cause less impact on the vegetation and the installation of signaling equipment to guide migratory birds. (GRI EN13) In 2013, the Eletrobras companies had a total of 55 Voluntary Programs for the Protection of Biodiversity. As of this year, Eletrobras supported 162 protected areas, which total approximately 190,108 km², among conservation units, Indigenous territories, and archaeological sites. Additionally, R$10 million was invested in these protected areas in the same period. The company allocated R$1.7 million to voluntary actions, including riparian reforestation and environmental education projects. 150 151 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasBiome AMAZÔNIA PROTECTED AREAS 22 INDIGENOUS LANDS 4 TOTAL AREA (KM2) 98.242 ECÓTONOS CAATINGA-AMAZÔNIA PROTECTED AREAS 1 TOTAL AREA (KM2) 63 CAATINGA PROTECTED AREAS INDIGENOUS LANDS TOTAL AREA (KM2) 9 3 14.211 ECÓTONOS CERRADO-CAATINGA PROTECTED AREAS TOTAL AREA (KM2) 1 5.261 COSTEIRO PROTECTED AREAS TOTAL AREA (KM2) 11 4.775 ECÓTONOS CERRADO-AMAZÔNIA 1 16.780 PROTECTED AREAS TOTAL AREA (KM2) CERRADO PROTECTED AREAS 34 INDIGENOUS LANDS 3 TOTAL AREA (KM2) 36.210 MATA ATLÂNTICA PROTECTED AREAS 56 INDIGENOUS LANDS 13 TOTAL AREA (KM2) 13.356 CAMPOS SULINOS PROTECTED AREAS 4 TOTAL AREA (KM2) 1.207 TOTAL NUMBER OD AREAS SUPPORTED 162 AREAS UNDER DIRECT MANAGEMENT OF ELETROBRAS 11 KEY AMAZÔNIA CAATINGA CAMPOS SULINOS CERRADO COSTEIRO ECÓTONOS CAATINGA-AMAZÔNIA ECÓTONOS CERRADO-AMAZÔNIA ECÓTONOS CERRADO-CAATINGA MATA ATLÂNTICA PANTANAL A CORRIDOR CHANGING THE LANDSCAPE The Private Natural Heritage Reserve (RPPN) of Santa Maria is a 242-hectare area located in Santa Terezinha de Itaipu (PR) that integrates the Biodiversity Corridor, a project that seeks to connect natural, governmental, and private areas isolated through deforestation in border areas shared by Brazil, Paraguay, and Argentina. In order to address this problem, Itaipu Binacional, in partnership with public and private institutions, has been creating biodiversity corridors that enable the free circulation of animals and the dispersion of the genetic material of plants and animals. This project has already built a green connection between the buffer strip of the reservoir of Itaipu Binacional and the National Iguaçu Park in the municipalities of Santa Terezinha de Itaipu and São Miguel do Iguaçu. Commitment to the consolidation of the Santa Maria Biodiversity Corridor, which corresponds to approxi- mately 80 ha of forest in the municipalities of Santa Terezinha de Itaipu and São Miguel do Iguaçu, is the main goal of the project, which is part of a broader effort: the creation of the Tri-national Atlantic Forest Biodiversity Corridor of Alto Paraná, launched in 2003. Learn more at: www.itaipu.gov.br/meioambiente/corredor-de-biodiversidade Climate change In order to face the challenges posed by greenhouse gas emissions (GHG), such climate change, the Eletrobras companies as the prioritization of renewable energy seek to develop actions that demonstrate sources in the company’s project portfolio their commitment to the improvement and the promotion of studies to identify of the tools used in the management of and understand risks and opportunities in greenhouse gas emissions (GHG). To this the Brazilian electric utilities sector. end, they prepare their annual Corporate In 2013, Eletrobras holding conducted GHG Emission Inventory with the partici- a case study about the impacts on pation of 15 companies, which has been revenue of the Candiota III Thermoelectric assured by external independent auditors Plant (Eletrobras CGTEE) of the possible since 2012. (GRI 3.9) regulation of taxation on GHG emissions in Brazil. This study indicated that if applied, it could represent an increase Eletrobras has been developing risk of approximately 10% in expenses and analyses aimed at the future carbon operating costs of this coal-fired power market, and it has entered partnerships plant. The Eletrobras companies intend to with research institutes to foster studies include this type of study in the processes and to investigate the understanding related to their strategic planning, seeking about its vulnerability to climate change. to incorporate regulatory risks into Eletrobras’s Statement of Commitment the decision-making process. Another on Climate Change, approved by the initiative that aims to adapt Eletrobras to company’s senior management, reinforces any regulatory change related to climate the incorporation of the topic into the change is its participation in government segments in which the company operates. To reaffirm this commitment, the Board forums, such as the Brazilian Forum on Climate Change, which seeks to assist of Executive Officers has committed to the government in the incorporation of the pursuit of a unified strategy that will climate change issues into the various enable all companies to adopt practices that can either reduce or compensate for stages of public policies. (GRI EC2) 152 153 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras Emissions Since 2009, Eletrobras has prepared Panel on Climate Change (IPCC) and the its annual Greenhouse Gas Emission GHG Protocol. The result is the recording Inventory, in accordance with the of emissions by source, which is methodology of the Intergovernmental a strategic corporate tool for GHG management. GREENHOUSE GASES EMISSIONS tCO2e (GRI EN16, GRI EN17) GHG INVENTORY Fixed Own Thermo- electric Plants Gene- rators Scope 1 Mobile Fugitivas Scope 2 Scope 3 Other HighwaysWaterways Airways SF6 Refrigerant Waste- water Treatment Stations Fire Extin- guishers Consumption of Electricit Loss in Distribution Loss in Transmission Transporta- tion of Fuel Independent Energy Producers (PIE’s) Transpor- tation of Non-Energy Products Eletrobras Amazonas Energia 4,006,629.0 N/Av N/Ap 1,163.3 N/Av N/Av 0.0 14.3 N/Av Eletrobras Cepel N/Ap Eletrobras CGTEE 3,486,316.2 Eletrobras Chesf 816,110.0 1.8 N/Ap 66.0 35.5 0.5 20.1 39.7 269.8 4,099.3 N/Ap N/Ap N/Ap N/Ap N/Ap 417.2 N/Ap N/Ap 0.0 0.0 6.9 N/Ap N/Ap 552.1 N/Ap Eletrobras Distribuição Acre Eletrobras Distribuição Alagoas Eletrobras Distribuição Piaui Eletrobras Distribuição Rondônia Eletrobras Distribuição Roraima N/Ap N/Ap 0.7 261.3 N/Av N/Ap 456.0 N/Ap N/Ap N/Ap 0.7 N/Ap 1,709.8 N/Ap N/Ap N/Av N/Av N/Ap N/Ap 4.1 N/Ap 1,759.6 N/Ap N/Ap 1,837.7 N/Av N/Ap N/Ap 6.0 23.4 1,141.2 N/Ap N/Ap 0.0 N/Av N/Ap N/Ap N/Ap 0.9 250.4 N/Ap N/Ap N/Av N/Ap N/Ap Eletrobras holding N/Ap Eletrobras Eletronorte 446,717.5 N/Ap 97.4 N/Ap 88.1 11.4 2,543.8 N/Ap 111.4 N/Ap 12.2 N/Ap 0.0 N/Ap N/Ap 58.5 8,456.2 Eletrobras Eletronuclear N/Ap 2,406.3 7.7 1,075.2 14.6 N/Ap N/Ap 94.6 157.2 Eletrobras Eletrosul N/Ap Eletrobras Furnas 1,439,570.3 63.2 78.7 9.4 70.0 1,435.3 4,138.0 Eletrobras Itaipu Binacional N/Ap 37.6 233.9 473.2 7.4 5.8 N/Ap 80.1 15,956.4 0.0 N/Ap 13,356.7 2,688.7 N/Ap 91.8 N/Ap 6,840.0 145.9 N/Av 16.4 1.9 1.6 15.5 0.2 0.5 2.6 1.6 0.1 0.6 17.8 7.9 2.9 0.4 8.8 5.4 333,929.1 628.3 26,592.3 746.5 N/Ap N/Ap N/Ap N/Ap N/Ap N/Ap 194,070.9 N/Av 1,406,130.3 N/Ap N/Av N/Ap N/Ap N/Ap N/Ap 101.9 25,787.3 N/Ap N/Av 127,975.4 N/Av N/Ap 5,481.1 N/Ap N/Av Air Travel 680.2 205.8 91.1 Employee Trans- portation SUBTOTAL BY COMPANY N/Av 5,748,568.0 537.1 1,450.0 613.1 3,519,924.6 1,839.6 N/Ap 1,017,385.1 219.3 N/Ap 154,802.3 359.8 116,143.2 N/Ap N/Ap N/Ap N/Ap 177.0 N/Av 118,390.9 386.9 122,661.4 N/Ap N/Ap N/Ap N/Ap 142.0 N/Ap 126,794.3 348.8 86,890.2 N/Ap N/Av 197,890.3 N/Av 342.3 N/Av 286,643.8 N/Ap 10,510.4 551.2 661.6 2,616.9 641.7 3,284.6 201.4 N/Ap N/Ap N/Ap N/Ap N/Ap N/Ap N/Ap N/Ap 125,278.8 N/Ap 177,552.7 541,828.1 N/Ap N/Av 72,455.4 N/Ap N/Ap 17.0 N/Ap N/Av N/Ap N/Ap 631.9 N/Ap N/Ap N/Ap N/Ap N/Av N/Ap 13.9 N/Av N/Ap 83,217.2 1,723.5 2,152.3 N/Ap 292.3 2,286.7 587,133.6 545.4 443.5 2,264.0 9,650.4 1.0 N/Av 27.3 864.5 2,180.8 332.5 196,939.6 31.0 2,007,326.5 818.5 966.6 9,759.0 Subtotal Sources 10,195,342.9 2,761.8 490.2 20,371.3 139.2 509.4 38,446.7 3,009.0 9,257.3 78.7 37,127.3 695,921.5 1,038,730.6 17.0 1,805,083.3 6,068.8 11,880.5 5,036.5 TOTAL Subtotal - Type of sources Subtotal Scopes 10,198,594.9 21,020.0 50,791.8 37,127.3 695,921.5 1,038,730.6 17.0 1,805,083.3 6,068.8 11,880.5 5,036.5 (tCO2e) 10,270,406.6 1,771,779.4 1,828,086.1 13,870,272.1 Emissions from thermoelectric generation from Independent Producers of Energy (PIEs) whose energy is acquired by the concessionaires Eletrobras Amazonas Energia, Eletronorte, Distribuição Rondônia, Distribuição Acre and Distribuição Roraima and resold to end consumers, are quantified in Scope 3 and therefore separated from emissions relating to the Eletrobras companies’ own thermoelectric plants. Two new scopes were included in 2013: Fuel transportation and transportation of non-energy products. N/Ap: Not applicable. N/Av: Data is not available. 154 155 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasIn 2013, emissions amounted to 13.8 million tCO2e and were calculated with the inclusion of refrigerants and emissions from wastewater treatment plants (ETEs), considering 15 of the Eletrobras companies: Amazonas Energia, Cepel, CGTEE, Chesf, Distribuição Acre, Distribuição Alagoas, Distribuição Piauí, Distribuição Rondônia, Distribuição Roraima, Eletronorte, Eletronuclear, Eletrosul, Furnas, holding, and Itaipu Binacional. GHG INVENTORY tCO2e (GRI EN16, GRI EN17) Scope 1 Scope 2 Scope 3 Total 2013 2012 10,270,406.6 8,169,468.0 1,771,779.4 1,654,495.0 1,828,086.1 1,948,184.0 13,870,272.1 11,772,147.0 2011 5,772,344.1 575,080.0 3,020,151.0 9,367,575.1 In addition to the results observed in the previous table, the indirect emissions (scope 3) regarding the consumption of electricity by end consumers (residential, industrial and commercial) based on the emission factor of brazilian grid43. were 1,544,846.69 tons of CO2 for 16,092,153 GOALS FOR REDUCING THE GHG EMISSIONS As one of the commitments assumed by Eletrobras to face climate change44, goals for the reduction of greenhouse gas emissions were adopted in 2013. A joint effort of the Eletrobras companies resulted in the establishment of these MWh sold by Eletrobras utilities. goals, which seek to reduce consumption The intensity of the scope 1 emissions of fossil fuels in their vehicle fleets (scope (direct emissions) of Eletrobras in 2013 1) and of energy (scope 2) in 2015, based on base year was 0.055 tCO2e/MWh that is the baseline consumption of these considered low compared to other organi- resources in 2012. Each Eletrobras zations in the electric sector and with an company has defined its own goals, equivalent size in the world. This is due considering its peculiarities and potential to the majority share of low-intensity for reducing consumption. sources of GHG emissions in the gener- This year, the performance of the goals ation matrix of Eletrobras, reaching 94% proposed is being evaluated for the first of its total net generation. time, with the purpose of ratifying or 43. Annual average emission factor of brazilian electrical sector (tCO2/MWh): YEAR 2012: 0.0653; YEAR 2013: 0.0960 (source: Ministry of Science, Technology and Innovation - MCTI) 44. AVisit the Eletrobras Statement of Commitment on Climate Change http:// www.eletrobras.com/ELB/ main.asp?View={564CE0B4- 00B6-45E1-BBA3-9F34FF0 A5F71}&BrowserType=IE&La ngID=pt-br In relation to Scope 1, fuel consumed by the vehicle fleet declined by 9.96% compared with the previous year, resulting in a drop of 8.31% in greenhouse gas emissions. VARIATION IN GHG EMISSIONS FROM FOSSIL FUELS Consumption of fossil fuels by vehicles in 2012 (l) Consumption of fossil fuels by vehicles in 2013 (l) Variation in the consumption of fossil fuels by vehicles between 2012 and 2013 Emissions in 2012 (tCO2e) Emissions in 2013 (tCO2e) Variation % in GHG emissions from fossil fuels between 2012 and 2013 SCOPE 1 Eletrobras Companies 5,246,139 4,723,556 -9.96% 13,729 12,589 - 8.31% To reduce these emissions, the following can be highlighted: the gradual replacement of gasoline or diesel vehicles by flex-fuel vehicles, the increase in the use of electric vehicles, and a reduction in driving to the same location in different vehicles. Regarding electricity, the Eletrobras companies managed to reduce consumption by 4% compared with 2012. Since Brazil had an increased production of thermoelectric energy in 2013, strongly affecting the emission factor of the National Interconnected System (46%) provided by the MCTI, the greenhouse gas emissions that correspond to energy consumption increased by 41% in the same period. (GRI EN18) VARIATION IN GHG EMISSIONS FROM ELECTRICITY Energy consumption in 2012 (kWh) Energy consumption in 2013 (kWh) Variation in energy consumption between 2012 and 2013 Emissions in 2012 (tCO2e) Emissions in 2013 (tCO2e) Variation % in GHG emissions from fossil fuels between 2012 and 2013 redirecting the actions underway so they can be achieved by 2015. SCOPE 2 Eletrobras Companies 79,550,303 76,016,655 -  4.0% 5,181 7,330 41.5% 156 157 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasAmong the initiatives to reduce scope 2 greenhouse gas emissions, we can highlight the retrofitting of HVAC and lighting systems, the development of conscious consumption programs to motivate employees to reduce consumption of electricity and other resources; the establishment of specific operating hours for lighting and air condi- tioners, and the adjustment of metering and billing systems through the instal- lation of individual consumption meters. (GRI EN18) To reduce scope 1 greenhouse gas emissions, we can highlight the gradual replacement of gasoline or diesel vehicles by flex-fuel vehicles, the increase in the use of electric vehicles, and a reduction in driving to the same location in different vehicles. Moreover, the Eletrobras companies have invested in actions to avoid the release of SF6 (sulfur hexaflu- oride) into the atmosphere. The initiatives contributed to a significant reduction in these emissions, with a drop from 277,819 tCO2 in 2012 to 38,447 tCO2 in 2013, which represented a reduction of 86%. (GRI EN18) MONTREAL PROTOCOL Given the fact that chlorine-based refrigerants harm the ozone layer and that Brazil is a signatory to the Montreal Protocol, two units of Eletrobras Furnas, namely the Marimbondo Hydroelectric Plant and Campinas Substation (SE), have started replacing the R-22 refrigerant, the main substance used by the company, with chlorine-free refrigerants such as R-410, among others. (GRI EN26) NOX AND SOX EMISSIONS The NOx (nitrogen oxides) and SOx (sulfur oxides) emissions from the activities conducted by the Eletrobras companies are primarily related to the energy gener- ation processes of thermoelectric plants and to the consumption of fuels by mobile sources, as shown below: NOX AND SOX EMISSIONS in tons (GRI EN20) GOLD SEAL WINNER As a signatory to the Brazil GHG Protocol Program, Eletrobras Furnas was awarded the Gold Seal, in 2013, for its 2012 GHG Emissions Inventory. This shows the progress in the measurements conducted, considering as since 2009, the company received the Bronze Seal. COMPANY Eletrobras Distribuição Acre* Eletrobras Amazonas Energia Eletrobras CGTEE Eletrobras Chesf Eletrobras Eletronorte Eletrobras Furnas Total NOx emissions NOx emissions 2013 N/Ap 9,145 2012 N/Ap 8,892 11,318 10,767 1,459 1,134 2,282 9 1,635 522 2011 0.9 6,103 9,886 16 1,592 225 2013 N/Ap 17,959 29,852 1,130 2,899 10 2012 N/Ap 20,396 28,371 3 4,178 88 2011 0.4 13,527 62,248 1 666 39 25,338 21,825 17,822 51,850 53,036 76,481 * Eletrobras Distribuição Acre has not had any source of thermoelectric generation of its own since 2012. N/Ap: Not Applicable The volume of SOx emissions from Eletronorte has declined due to the decreased consumption of fuel oil and diesel in the company operations. At Eletrobras Chesf, the increased emission of NOx and SOx occurred due to the growth in the use of natural gas and diesel. In turn, the increase in NOx emissions recorded at Eletrobras Furnas can be explained by the greater consumption of natural gas as a result of the larger energy production from this source. Eletrobras Amazonas Energia has replaced the fuel oil used in the operation of four thermoelectric power plants located in the state with natural gas. Eletrobras Furnas has also replaced the fuel used in thermoelectric power plants. The two power plants that the company operates have already replaced fuel oil and are currently powered by natural gas. These initiatives will represent a significant reduction in the emission of pollutants and greenhouse gases. (GRI EN18, GRI EN26) 158 159 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasUNDERGROUND STORAGE In December 2013, Eletrobras Cepel launched the implementation of its Underground Storage System for Solid Waste in its units. This system is objective evidence of the continuous improvement of the waste management process, since it enables storage in a safe, segre- gated, and clean manner, improving collection and final disposal of company waste. photo: Pedro Ferreira/Eletrobras Cepel Waste At the Eletrobras companies, treatment of solid waste complies with the laws in effect. Hazardous waste is collected, sorted, and stored at its source according to its main characteristic (oily waste and solvent-contaminated waste, etc.) and then shipped to companies that specialize in its transportation, treatment, and disposal. The waste sorting program (Programa da Coleta Seletiva Solidária), underway TOTAL WEIGHT OF WASTE BY TYPE in tons at the Eletrobras companies, establishes (GRI EN22) agreements with waste picker coopera- tives and associations, fostering the creation of employment opportunities and income for these workers and reducing the disposal of solid waste in TYPE OF WASTE Hazardous waste, class I Non-hazardous waste, class II-A Non-hazardous waste, class II-B landfills and dumps. In 2013, Eletrobras Biomedical waste companies sent 25,575.57 tons of recyclable Total 2013 15,599 Total 2012 10,769 1,275,327 1,317,234 1,279 47 2,640 113 1,292,252 1,330,756 materials to cooperatives. In the same period, the Eletrobras companies generated 1,292,252 tons of waste, which represents a slight difference in relation to 2012. TOTAL WEIGHT OF WASTE, BY DISPOSAL METHOD in tons (GRI EN22) DISPOSAL METHOD On-site storage Industrial landfill Municipal waste collection Composting Co-processing Incineration Recycling Reuse Total 2013 6,598 696,461 6,130 1,891 543 2,964 1,649 593,290 Total 2012 784,778 4,067 2,126 123,687 492 118 1,970 477,036 1,309,526 1,394,274 In relation to storage and final disposal of biomedical waste, all Eletrobras companies comply with the Anvisa standards 45. At Eletrobras Eletronuclear, 122 m³ of low- and medium-level radioactive waste were generated. The disposal method of these types of waste was selected pursuant to the ABNT NBR 10004:2004 standard46. The company has eight pieces of equipment that use PCB at the Angra 1 plant. The procurement agreement for the purchase of new transformers to replace them is in effect, and this equipment should be delivered by July 2014. Replacement and disposal should occur during the scheduled shutdown of the Angra 1 plant in 2015. The company expects to replace all transformers by 2016. At Eletrobras Furnas, only the Santa Cruz Thermoelectric Plant and the Angra substation operate equipment that uses PCB47 The company prepares an inventory and monitors these substances and expects to eliminate them completely by 2016. In 2013, Eletrobras Chesf discarded 99.3 tons of PCB. The equipment and waste contaminated with this oil were stored on-site and then incinerated, pursuant to NBR 8371/200548. (GRI EN22) 45. National Health Surveillance Agency. 46. Classifies solid waste according to its health hazard, considering potential risks to the environment and public health for their appro- priate management. 47. Chlorinated aromatic compounds, whose family is composed of approximately 709 different compounds. 48. This standard describes the types of PCBs used in transformers and capacitors, their characteristics and risks and establishes guidelines for their handling, packing, labeling, storage, trans- portation, procedures for equipment in operation, and final disposal. 160 161 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasHAZARDOUS WASTE TRANSPORTATION Hazardous waste is transported by specialized companies, which must provide proof of compliance with all legal requirements involving this type of activity, such as Hazardous Waste Manifests and Certificates of Disposal. In 2013, the Eletrobras companies did not transport (import or export) hazardous waste internationally. (GRI EN24) TOTAL WEIGHT OF HAZARDOUS WASTE TRANSPORTED in tons (GRI EN24) CATEGORIES Transported from the organization Transported to the organization Treated waste 2013 12,040.7 0 193.9 2012 1,333.7 462.25 162.3 In 2013, data includes the following companies: Eletrobras CGTEE, Chesf, Distribuição Rondônia, Eletronorte, Eletronuclear, Eletrosul, and Furnas. The increase in this period was caused mainly by the entry of Eletrobras Eletrosul data in the IGS System. In 2012, data includes the following companies: Eletrobras CGTEE, Chesf, Eletronuclear, and Furnas. In 2013, four spills were identified with a total volume of 16.28 m³, a decrease of 47% in relation to 2012. (GRI EN23) Spills The Eletrobras companies have local Risk management processes and contingency plans and conduct drills preventive management assist in the that enable the companies to prevent identification of threats and enable accidents related to spills and other types reduced environmental impacts, ensuring of incidents that could lead to evacu- the provision of appropriate care and ation of their facilities. Furthermore, the preparation to avoid leakages and spills. companies built tanking dikes and use However, if an accident does occur, materials such as sawdust, absorbent processes are immediately reviewed mats, and containment berms. The and errors are assimilated to avoid their companies also conduct environmental recurrence. audits to inspect the effectiveness of the containment methods used in the prevention of this type of accident. SPILLS IN 2013 (GRI EN23) Segment Volume (m3) Type of Substance Impacts Actions taken Distribution 1.00 Dielectric insulating oil Part of the soil was contaminated with oil The contaminated soil was mechanically scraped off, the waste was disposed of, and the area was recovered. Transmission 13.35 0.93 1.00 Mineral insulating oil There was no significant spillage to the soil, since the oil was contained by the berm surrounding the equipment. Part of the oil was burned during the fire. The remaining volume leaked into the containment basin. Subsequently, the oil was collected from the separation boxes and sent for appropriate final disposal. There was no significant spill to the soil, since the oil was contained by the gravel. Leakage was contained by the gravel, with no contamination of the soil. The contaminated gravel was properly disposed of and replaced. The contamination affected only a small section of a road near the transformer. There was no significant impact to the environment. Oil Gator was applied to absorb the oil at two different points: for the initial absorption of most of the oil and then to complete its full absorption. Subsequently, the waste was removed. In addition, containment berms were installed at the end of this road to avoid soil contamination in the case of rain. 162 163 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasEnvironmental Investments and spendings Projects and programs In 2013, Eletrobras invested over R$506 million in environmental investments. The Eletrobras Eletronuclear alone invested about R$173.6 million mostly The Eletrobras companies propose to their on billboards, posters, brochures, caps, stakeholders investments in environ- and bags to be used in grocery stores. mental actions and practices through This material was distributed to rural programs intended for the environmental landowners, trade unions, city govern- in environmental management (R$102.3 education of communities, the preser- ments, and other entities involved with The Eletrobras companies invested approximately R$506 million in environmental actions, an increase of 156% in relation to 2012, of which R$181 million was allocated to environmental management. 49. Spending of R$86 million in the treatment of atmospheric emissions refers to the purchase of lime for the desul- phurization of the flue gas generated in the combus- tion of coal. This growth results from the increased use of thermoelectric power plants, which causes a higher consumption of lime to maintain emissions standards. million) and remediation of contami- nates sites (R$59 million). Moreover, Eletrobras allocated more than R$35 million towards biodiversity preservation, more than R$7 million in the recovery of degraded areas and more than R$45 million in research and development. The companies also engage in the devel- opment of clean technologies, in energy efficiency programs, in environmental compensation, and in the preparation of inventories and plans for environmental control for permitting purposes. ENVIRONMENTAL INVESTMENTS in R$ (GRI EN30) PREVENTION AND ENVIRONMENTAL MANAGEMENT COSTS 2013 2012 2011 Environmental management (environmental consulting) R$ 7,947,112.8 R$ 61,855,119.9 R$ 34,937,619.1 Environmental management (internal staff and costs related to the environmental area) Research and development Biodiversity preservation Subtotal Mitigation/compensation costs R$ 181,727,535.1 R$ 48,617,429.6 R$ 3,538,868.1 R$ 45,656,838.9 R$ 13,126,556.2 R$ 1,372,339.0 R$ 35,773,513.6 R$ 18,444,488.8 R$ 13,061,726.6 R$ 271,105,000.4 R$ 142,043,594.6 R$ 52,910,552.8 Waste collection, treatment, and disposal R$ 2,320,418.6 R$ 1,532,319.6 R$ 10,125,319.6 Restoration of degraded areas and protection of areas R$ 7,081,495.0 R$ 13,005,656.5 R$ 2,712,166.6 Remediation of contaminated areas Wastewater treatment Treatment of atmospheric emissions Subtotal Other Grand total R$ 59,024,000.0 R$ 754,357.6 R$ 747,928.3 R$ 4,750,562.1 R$ 684,481.4 R$ 821,080.6 R$ 86,741,456.049 R$ 27,295,782.9 R$ 30,770,052.0 R$ 159,917,931.7 R$ 43,272,598.0 R$ 45,176,547.0 R$ 74,958,541.7 R$ 12,040,150.7 R$ 18,525,634.9 R$ 505,981,473.8 R$ 197,356,343.3 R$ 116,612,734.6 In 2013, data does not include the following companies: Eletrobras Distribuição Acre, and Distribuição Alagoas. Field “Other” considers expenditures for the recovery of archaeological, historic, cultural, and scenic heritage and for commitments made through Con- duct Adjustment Agreements, among others. vation of biodiversity, and monitoring of environmental conditions. Each company the target audience. (GRI EN26) develops its own actions, which are guided by the Eletrobras Environmental Policy. Environmental Education Program of Itaipu: seen as a benchmark in the Program to Reduce Pre-Harvest Slash- training of environmental educators), it and-Burn: eunderway in the states has already organized over 90 learning where Eletrobras Chesf operates (Bahia, communities. In 2013, this initiative Sergipe, Alagoas, Pernambuco, Paraíba, continued to provide training to leaders Rio Grande do Norte, Ceará, and Piauí) for the social and environmental to reduce the risks and impacts of fires management of municipalities, to provide in fragmented forests, especially near courses to community communicators, transmission lines, contributing to a and to empower teachers through decrease in the number of line shutdowns eco-pedagogical projects. and informing the community about best practices in soil management. Eletrobras Eletrosul also has actions to reduce slash-and-burn. Since 1995, the company has been developing this preventive/educational campaign, which seeks to inform rural landowners located near transmission lines and substations, and the population at large, about the risks of this practice in the areas surrounding these places. As in previous years, in 2013 this campaign was composed of a 60-second ad jingle, broadcast on AM radio stations, especially in the countryside, and shown Native Tree Project: the project was launched by Eletrobras CGTEE in 2012 and continued in 2013, aiming at the refores- tation of degraded areas on the drainage basins of the Jaguarão River and Arroio Candiota-RS. 400 hectares were planted, with the participation of the families of the farmers who live in the settlements created from land reform. Quintais Project (Backyard): since 2004, Eletrobras CGTEE has been implementing technologies for the establishment of organic orchards in rural and urban areas of the state of Rio Grande do Sul, 164 165 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras participatory in all its stages, from planning to the performance and assessment of the activities. Among the various results and social, economic, and/ or environmental impacts of the project, we highlight: the enhanced standard of living of waste pickers, the sustainability of Indigenous communities, the emanci- pation of resettlers, the social inclusion of low-income youths, the creation of job and income opportunities in small rural properties, environmental management georeferencing by rural property and micro-basin, raising of the awareness of 200,000 inhabitants in relation to issues pertaining to water, care ethics, adaptation of environmental liabilities, and regional sustainable development, and the creation of a broad network of partnerships to foster sustainable devel- opment through the signing of 29 water pact charters with over 1,247 partners involving 29 legally established municipal management committees and ten action managers. (GRI EN26) contributing to nutrition, quality of life, Environmental Communication and income generation. Each backyard Programs: included the participation has five plants of at least 12 species of of approximately 20,000 people from fruit selected based on their nutritional the communities located in the areas characteristics, medicinal properties, of influence of the Eletrobras Furnas. and adaptability to local soil and to the The audience received information temperate climate of the region. By 2013, through lectures, plays, and direct the company implemented a total of contact as part of the impact mitigation 1,353 backyards in 135 municipalities, activities provided in the environmental amounting to 236,775 trees planted. licensing of the following projects: TL Environmental Monitoring Network: it involves the monitoring of air and rain quality and of the meteorological condi- tions in the area of influence of the power plants in Candiota-RS. Environmental Bio-monitoring Program: formed by the Programs for Monitoring Aquatic Environments (surface water, sediments, phytoplankton, zooplankton, benthic macrofauna and ichthyofauna) and Terrestrial Environments (flora, avifauna, herpetofauna, air quality bio-indicators, and livestock raising activ- ities), implemented by Eletrobras CGTEE. It aims to assess impacts and to propose mitigation actions. Environmental Education Program of AHE Simplício (Single Head): program implemented by Eletrobras Furnas, which offered educational workshops to 40 people in Além Paraíba. Environmental Education Programs (PEA) for Transmission Lines: in 2013, the Eletrobras Furnas programs served 314 people in the community in three projects. The company also offered Environmental Education Programs for Workers (PEAT) in four other projects, which trained 1,481 employees. Anta-Simplício-Rocha Leão, TL Batalha- Paracatu, TL Bom Despacho 3-Ouro Preto 2, TL Itapeti-Nordeste, Substation Zona Oeste, AHE Simplício, and the Hydroelectric Plants Batalha, Funil, and Marimbondo. Environmental Education Primers: in 2013, Eletrobras Furnas prepared and distributed 500 primers to the Departments of Education of the municipalities of Serra da Moeda, area of influence of the Bom Despacho 3-Ouro Preto 2 transmission line containing information about the location, historical occupation, geology and speleology, biomes, plants and wildlife, hydrography, conservation units and heritage listing, archaeology, and cultural and environ- mental preservation in Serra da Moeda. Another action was the voluntary contri- butions to Arcas das Letras Project, in partnership with the Ministry of Agrarian Development. Cultivando Água Boa Program: Cultivando Água Boa (Cultivating Good Water) Program develops cultural, research and development, natural resource, local economy, social inclusion, and energy efficiency actions. This program, of Itaipu Binacional, is foto: Acervo Eletrobras Chesf/IEH AWARDED ENVIRONMENTAL EDUCATION Launched in 2008 at the Paulo Afonso Complex, the Social and Environmental Action Plan (PAS) was awarded by IBAMA for the excellence of its operation, which is considered a reference in the sector. The technical team of IBAMA’s social and economic area considered the PAS as a model plan for environmental education for hydroelectric develop- ments. The program has five lines of action: social and environmental education and communication; environmental education and health, conservation of natural resources and recovery of degraded areas, institutional strengthening and education, and art, culture, and the environment. 166 167 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasMonumento às Bandeiras, São Paulo, São Paulo.  ATTACHMENTS AWARDS AND RECOGNITION_170 COMPLEMENTARY GRI CONTENT_171 GLOSSARY_189 TALK TO US_195 CREDITS_197 ILLUSTRATIONS_199 168 169 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasAWARDS AND RECOGNITION Eletrobras fosters actions and relationships based on social interests, best practices in management and governance, sustainable development, and inclusion. This approach was recognized by society, partners, competitors, and the media through awards. Among the awards received in 2013, we highlight: (GRI 2.10) Dow Jones Sustainability Emerging 2013 Aberje Award: the business case Markets Index: the company was featured “50 Years of Eletrobras” won the regional in the new sustainability index created for phase, in the Responsibility to History and emerging markets, with data that refers Corporate Memory category. to its performance in 2012. In the second half of the year, Eletrobras was once again featured in the index, this time for its performance in 2013, with an improvement of 10% in its general score. 2013 Human Being Award: the business case “Unification of Policies and Career and Remuneration Policies and Practices in the Eletrobras Companies” was the winner in the State-owned Company ISE-BM&FBOVESPA: in 2013, for the category. seventh consecutive year, Eletrobras was listed in ISE-BM&FBOVESPA’s portfolio, the Corporate Sustainability Index of the São Paulo Stock Exchange (ISE), which analyzes the companies listed based on their economic efficiency, environmental balance, social justice, and corporate governance. 2013 List of Top Companies by Dinheiro Magazine (Performance of State-owned Companies): ranked 12th among the top 1,000 companies in Brazil and 4th in the Performance of State-owned Companies category. Valor 1.000: 9th largest company in the country in 2012 and largest company in the electric utilities sector. Eletrobras Distribuição Piauí, Distribuição Rondônia, and Amazonas Energia: the companies ranked 1st, 2nd, and 3rd, respectively, for the ABRACONEE award, offered by the Brazilian Association of Accountants in the electric utilities sector, for the best practices in the disclosure of balance sheet information. Eletrobras Eletronorte: the company received, for the fourth time, the Most Innovative Company award, a partnership between Época Negócios magazine and international accounting company AT Kearney. Eletrobras Eletronuclear: the company received, for the eighth consecutive year, the national “Empresa Cidadã” certificate, Gender and Race Equality Seal awarded for the quality of its Social (4th edition): awarded by the Brazilian Accounting, in 2012. President’s Office for Policies for Women. Of the 57 companies that received this seal, 11 are part of the Eletrobras companies. Eletrobras Furnas: for the fourth time, the company received the Transparency Trophy, offered by the National “Best Communication with Journalists” Association of Executives in Finance, Award: for the third consecutive year, in Administration and Accounting (ANEFAC), the Electricity category, organized by the Negócios da Comunicação magazine recognizing the quality of the information provided in its financial statements. Itaipu Binacional: featured, for the fourth time, among the 30 companies with the best social and environmental practices in the country, selected by the bench- 170 marking ranking. Complementary GRI Content ECONOMIC AND FINANCIAL Ratio of senior management (CEOs and executive officers) hired from the local community (Brazilian geographic region) in significant operating units. (GRI EC7) NUMBER OF MEMBERS OF SENIOR MANAGEMENT HIRED FROM THE LOCAL COMMUNITY (GRI EC7) Total number of employees in senior management positions Total number of employees in senior management positions hired from local communities Percentage of members in senior management positions hired from the local community 2013 2012 2011 54 21 59 28 44 20 38,9% 47,5% 45,5% In 2013, data does not include Eletrobras Eletronuclear and Eletropar. SOCIAL In order to act collectively and interact strategically with the market, the Eletrobras companies support or take part in various trade associations and entities. The full list can be found at www.eletrobras.com.br (GRI 4.12, GRI 4.13, GRI SO5) 171 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasENVIRONMENTAL TOTAL WEIGHT OF WASTE BY TYPE in tons (GRI EN22) Administrative activities Hydroelectric generation Thermoelectric generation Transmission TYPE OF WASTE 2013 2012 2013 2012 2013 2012 2013 2012 2013 Total 2012 105 129 8,788 1,832 6,663 8,700 44 108 15,599 10,769 5,280 4,863 214 143 1,269,423 1,310,945 411 1,283 1,275,327 1,317,234 1,139 47 968 113 36 555 58 54 47 1,063 1,279 2,640 N/Ap 9,037 N/Ap  N/Ap N/Ap N/Ap N/Ap 47 113 2,530 1,276,143 1,319,698 501 2,454 1,292,252 1,330,756 Total 6,570 6,073 TOTAL WEIGHT OF WASTE, BY DISPOSAL METHOD in tons Administrative activities Hydroelectric generation Thermoelectric generation Transmission Distribution 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 5,572 1,119 1,389 1,808 26 2,221 1,824 7 233 863 4 4 600 26 106 693 46 65 466 9 253 135 26 54 48 0 111 91 269 500 284 966 168 15 675,508 505 18,871 1,287 22 2,771 16 0 15 101 2 112 1,190 778,507 2,849 3,728 286 364 260 930 593,139 476,468 15 170 12 136 171 42 0 0 0 0 56 0 0 0 0 0 121,797 0 0 0 0 0 11,932 8,231 1,772 1,100 1,273,563 1,257,652 22,202 5,495 56 121,797 On-site storage 2,037 2,431 Hazardous waste, Class I Non-hazardous waste, Class II-A Non-hazardous waste, Class II-B Healthcare waste (GRI EN22) DISPOSAL METHOD Municipal waste collection Industrial landfill Composting Incineration Co-processing Recycling Reuse Total PERCENTAGE OF EMPLOYEES ELIGIBLE FOR RETIREMENT WITHIN THE NEXT 10 AND 5 YEARS BY REGION (GRI EU15)* NORTH REGION Eletrobras Amazonas Energia Eletrobras Distribuição Acre Eletrobras Distribuição Piauí Eletrobras Distribuição Rondônia Eletrobras Distribuição Roraima Eletrobras Eletronorte Eletrobras Eletrosul Eletrobras Furnas NORTHEAST REGION Eletrobras Chesf Eletrobras Distribuição Alagoas Eletrobras Eletronorte MIDWEST REGION Eletrobras Eletronorte Eletrobras Eletronuclear Eletrobras Eletrosul Eletrobras Furnas Eletrobras holding Itaipu Binacional SOUTHEAST REGION Eletrobras Cepel Eletrobras Eletronorte Eletrobras Eletronuclear Eletrobras Furnas Eletrobras holding Itaipu Binacional SOUTH REGION Eletrobras CGTEE Eletrobras Eletrosul Eletrobras Furnas Itaipu Binacional Within the next 10 years Within the next 5 years 2013 2012 2011 2013 2012 2011 0.6 16.8 N/R 13.5 20.3 12.6 17.4 23.8 12.9 24.0 N/R 23.4 18.1 47.4 1.0 56.1 16.9 21.7 29.0 0.0 2.2 18.0 0.2 50.0 0.3 18.3 N/R 5.1 15.3 42.9 43.5 19.0 8.2 43.0 N/R 6.1 8.0 44.7 0.7 43.9 Within the next 10 years Within the next 5 years 2013 13.6 11.8 9.2 2012 13.0 42.9 7.6 Within the next 10 years 2013 9.8 20.0 16.0 56.1 8.8 66.7 2012 44.9 0.0 2.0 58.8 0.0 33.3 2011 45.5 0.19 24.9 2011 16.7 0.3 1.2 59.3 0.0 25.0 2013 50.1 2.6 59.5 2012 58.0 14.6 13.1 Within the next 5 years 2013 40.3 60.0 26.0 40.1 2.9 0.0 2012 42.0 0.3 1.0 46.6 0.0 0.0 6.0 28.7 12.0 0.0 0.0 23.6 0.1 42.2 2011 31.4 0.0 33.2 2011 22.0 0.3 0.5 47.9 1.4 25.0 Within the next 10 years Within the next 5 years 2013 23.1 11.4 7.8 48.5 23.4 100.0 2012 72.7 0.1 100.0 59.2 26.1 0.0 2011 2013 2012 2011 66.0 60.0 99.8 63.8 9.3 40.4 25.7 34.8 37.9 15.3 50.3 0.1 99.7 51.2 21.7 47.0 0.0 99.7 56.7 28.8 100.0 100.0 100.0 100.0 Within the next 10 years Within the next 5 years 2013 2012 2011 2013 2012 2011 12.9 16.0 64.6 41.0 45.2 38.3 70.2 43.3 45.2 20.1 72.9 44.0 33.7 22.3 60.1 22.5 11.6 25.5 66.0 22.9 10.2 9.7 68.1 21.9 2011 80% 72% 104% RATIO OF BASIC SALARY BETWEEN MEN AND WOMEN (GRI LA14) Managerial positions Positions requiring higher education Positions not requiring higher education 2013 91% 87% 104% 2012 91% 88% 95% 172 173 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras          SOCIAL ACCOUNTING (IBASE TABLE) R$ thousands I – HUMAN RESOURCES 1.1 REMUNERATION Gross payroll Employees Administrators Ratio of highest to lowest remuneration Employees Administrators 1.2 BENEFITS PROVIDED Payroll taxes Food Transportation Private pension plan Health Occupational health and safety Daycare or daycare assistance Culture Training and professional development Other Profit sharing plan TOTAL 1.3 BREAKDOWN OF WORKFORCE Number of employees at the end of the fiscal period Number of hires Number of terminations Number of interns at the end of the fiscal period Number of employees with disabilities at the end of the fiscal period Number of contractors at the end of the fiscal period Number of employees, by gender: Male Female Number of employees, by age group: Under 18 18-35 36-60 Over 60 Number of employees, by education level: Illiterate Elementary and middle school High school Technical school Undergraduate school Graduate school Percentage of employees in managerial positions, by gender: Male Female HOLDING 2013 CONSOLIDATED  2012 2013 2012 163,781 213,695 5,196,963 4,130,877 148,375 183,517 5,161,050 4,082,327 3,268 4,161 23,775 22,533 13.49 1.05 16.65 1.42 68,335 16,817 757 38,188 23,058 5,482 2,349 0 2,768 0 42,000 199,754 54,988 16,099 855 28,292 19,312 5,342 2,396 0 5,249 0 40,000 172,533 1,352,261 314,417 28,740 304,737 445,486 34,436 79,793 963 50,767 467,228 268,592 3,347,420 1,206,117 302,255 24,123 222,617 370,780 36,112 60,744 426 65,320 415,476 290,299 2,994,269 22,498 342 4,287 1,688 321 10,127 18,222 4,276 0 5,482 15,469 1,547 1 2,221 4,662 5,629 7,319 2,666 26,493 598 859 1,937 364 12,022 21,433 5,060 0 6,111 18,118 2,264 1 3,028 4,912 6,882 8,635 3,035 988 13 206 211 5 680 653 335 0 304 617 67 0 42 139 0 438 369 0.76 0.24 1,182 4 32 220 10 801 773 409 0 368 718 96 0 55 189 0 515 423 0.75 0.25 1.4 CONTINGENCIES AND LABOR LIABILITIES Number of labor lawsuits filed against the entity Number of labor lawsuits upheld  Number of labor lawsuits dismissed Total amount of indemnifications and fines paid, pursuant to court ruling 137 2 34 20,980 456 28 32 1,974 6,121 932 1,095 118,404 7,097 915 408 80,675 SOCIAL ACCOUNTING (IBASE TABLE) R$ thousands II INTERACTION OF THE ENTITY WITH THE EXTERNAL ENVIRONMENT HOLDING 2013 CONSOLIDATED  2012 2013 2012 2.1 RELATIONSHIP WITH THE COMMUNITY   Total investments in: Education Culture Health and infrastructure Sports and leisure Food Creation of job and income opportunities Resettlement of families Other Total investments Taxes (excluding payroll taxes) Financial compensation for the use of water resources Total Relationship with the community 2.2 INTERACTION WITH SUPPLIERS  Social responsibility criteria used to select suppliers III INTERACTION WITH THE ENVIRONMENT  Investments in and spending on the maintenance of operational processes to improve the environment Investments in and spending on the preservation and/or recovery of degraded areas Investments in and spending on environmental education for employees, contractors, self-employed professionals, and administrators of the entity Investments in and spending on environmental education for the community Investments in and spending on other environmental projects Number of environmental, administrative, and legal proceedings filed against the entity Value of fines and indemnifications related to environmental matters, deter- mined by administrative and/or legal proceedings Environmental liabilities and contingencies Total Interaction with the environment 1,204 15,514 0 8,509 0 0 0 0 25,227 30,988 0 56,215 189 0 0 0 885 0 0 0 1.074 1,460 57,110 0 29,829 0 2,417 0 0 90,816 214,405 0 305,221 41,404 32,901 75,882 18,474 2,506 34,384 0 109,545 315,096 2,853,593 405,809 3,574,499 16,344 87,902 88,599 32,758 3,663 19,891 0 132,284 381,441 2,691,677 667,923 3,741,041 0 0 0 0 0 0 0 0 0 196,891 154,223 75,642 87,783 16,743 12,126 3,134 107,879 2,456 95,575 15 10 10,995 2,000 11,790 423.089 3,500 357.673 IV OTHER INFORMATION  Net revenue Operating income 2,658,088 -6,485,579 2,719,441 24,995,825 30,328,161 -8,908,009 -11,853,654 -1,864,739 Note: Eventual discrepancies between the numbers presented in the IBASE Table and in the ASR may result from different calculation methods. 174 175 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras                                                                                                                    TABLE OF CONTENTS Indicator Description 1. STRATEGY AND ANALYSIS 1.1 1.2 Message from the CEO. Description of key impacts, risks, and opportunities. 2. ORGANIZATIONAL PROFILE 2.1 2.2 2.3 2.4 2.5 2.6 2.7 Name of the organization. Primary brands, products, and/or services. Operational structure of the organization, including main divisions, operating units, subsidiaries, and joint ventures. Location of organization’s headquarters. Countries where the organization operates and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. Nature of ownership and legal form. Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries). 2.8 Scale of the reporting organization. 2.9 Significant changes during the reporting period regarding size, structure, or ownership. 2.10 Awards received in the reporting period. 3. REPORT PARAMETERS Reporting period for information provided. Date of most recent previous report. Reporting cycle. Pages / Online PDF Notes 06 e 07 08-11, 34, 80, 119 e 149 16 16 e 30 16 e 18 16 16 16 16 16 a 18 50, 54-56, 60, 62, 63, 74-75, 88, 91 06 e 07 170 03 03 03 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 Contact point for questions regarding the report or its contents. 03 e 195 Process for defining report content. Boundary of the report. State any specific limitations on the scope or boundary of the report. Basis for the development of the report. 28 03 02 03 Data measurement techniques and bases of calculations. 89, 138 e 153   Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statements. Significant changes from previous reporting periods in the scope, bound- aries, or measurement methods applied in the report. - - Data pertaining to this indica- tor is presented throughout this report. There have been no sig- nificant changes in the scope, boundaries, or measurement methods applied to this item. Table identifying the location of the standard disclosures in the report. 3, 176 This content index.  Policy and current practice with regard to seeking external assurance for the report. 03 e 185-187   Indicator Description 4 GOVERNANCE, COMMITMENTS, AND ENGAGEMENT Pages / Online PDF Notes The Chairmain and the CEO positions are held different individuals. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 Governance structure of the organization, including committees under the highest governance body. Indicate whether the Chair of the highest governance body is also an executive officer. For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members. Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. Communication channels with the Board Linkage between compensation for members of the highest governance body, senior managers, and executives, and the organization’s performance. Processes in place for the highest governance body to ensure conflicts of interest are avoided. Process for determining the composition, qualifications, and expertise of the members of the highest governance body and of its committees, including in terms of gender and other diversity indicators. Statements of mission or values, codes of conduct, and internal principles relevant to economic, environmental, and social performance and the status of their implementation. Procedures of the highest governance body for overseeing the organiza- tion’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles. Processes for evaluating the highest governance body’s own perfor- mance, particularly with respect to economic, environmental, and social performance. Explanation of whether and how the precautionary principle is addressed by the organization. Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. 36 - 37 41 40 44 40 17 e 42 38 38 47 02, 21 e 171 Memberships in associations (such as industry associations) and/or national/ international advocacy organizations. 22, 23, 146 e 171 List of stakeholder groups engaged by the organization. Basis for identification and selection of stakeholders with whom to engage. Organization’s process for defining its stakeholder groups, and for determining the groups with which to engage and not to engage. Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group. Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to them. 26 26 28 e 116 26 176 177 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras                                                                        Indicator Description ECONOMIC PERFORMANCE DMA Economic Performance Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. Financial implications and other risks and opportunities for the organiza- tion’s activities due to climate change. Coverage of the organization´s defined benefit plan obligations. Significant financial assistamce received from government. EC1 EC2 EC3 EC4 Pages / Online PDF Notes 78, 153 78 153 — — Not Reported. Not Reported. DMA Market presence 103, 113 e 171 EC5 EC6 EC7 Range of ratios of standard entry-level wage, broken down by gender, compared to local minimum wage at significant locations of operation. Policy, practices, and proportion of spending on locally based suppliers at significant locations of operation. 103 113 Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation. 171 Eletrobras has consolidated data about the proportion of senior management that are from local communities, de- spite having no specific policy for hiring senior management in these communities, please check the information on page 137.  DMA Indirect economic impacts EC8 EC9 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement. Understanding and describing significant indirect economic impacts, including the extent of impacts. ENVIRONMENTAL PERFORMANCE 81, 82, 85, 119, 127, 129 e 144 81, 82, 85, 119, 127 e 144 81, 82, 85, 119, 127 e 129 DMA EN1 EN2 DMA EN3 EN4 EN5 EN6 EN7 DMA EN8 EN9 EN10 Materials Materials used by weight or volume. Percentage of materials used that are recycled input materials. Energy Direct energy consumption by primary energy source. Indirect energy consumption by primary source. Energy saved due to conservation and efficiency improvements. Not reported. Not reported. — — — 106 a110 140 e 141 140 e 141 142 e 143 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives. Initiatives to reduce indirect energy consumption and reductions achieved. 144 143 Water Total water withdrawal by source. Water sources significantly affected by withdrawal of water. Percentage and total volume of water recycled and reused. 110 a112 145 e 146 — 147 Not reported. EN16 EN17 EN18 EN19 EN20 EN21 EN22 EN23 EN24 EN25 Indicator Description DMA Biodiversity EN11 EN12 EN13 EN14 EN15 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas. Habitats protected or restored. Strategies, current actions, and future plans for managing impacts on biodiversity. Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk. DMA Emissions, effluents, and waste Total direct greenhouse gas emissions by weight. Relevant indirect greenhouse gas emissions by weight. Initiatives to reduce greenhouse gas emissions and reductions achieved. Pages / Online PDF Notes 148 a 151 — Not reported. 149 e 150 151 148, 149 e 151   — Not reported. 147, 154 a 163 e 173 154 a 156 154 a 156 157 e 158 Emissions of ozone-depleting substances by weight. NOx, SOx, and other significant air emissions by type and weight. Total water discharge by quality and destination. — 159 147 Not reported. Total weight of waste by type and disposal method. 160, 161 e 173   Total number and volume of significant spills. Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally. Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff. 163 162 - In 2013, the Eletrobras compa- nies did not identify any bodies of water significantly affected by water discharges. DMA Products and Services EN26 EN27 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. Percentage of products sold and their packaging materials that are reclaimed by category. 158, 165-167 158, 165-167   — Not reported. DMA Compliance EN28 Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations. — DMA Transport EN29 DMA EN30 Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and trans- porting members of the workforce. Overall Total environmental protection expenditures and investments by type. — 47 e 164 47 e 164 In 2013, the Eletrobras compa- nies did not register any legal actions that resulted in signifi- cant fines and non-monetary sanctions for noncompliance with environmental laws and regulations. Eletrobras Amazonas Energia is not included in this indica- tor, since the Net Operating Income had not been dis- closed before the analysis of data for this report had been completed. Not reported. 178 179 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras                                        Indicator Description SOCIAL PERFORMANCE - LABOR PRACTICES DMA Employment LA1 LA2 LA3 LA15 DMA LA4 LA5 Total workforce by employment type, employment contract, and region, broken down by gender. Total number and rate of new employee hires and employee turnover by age group, gender, and region. Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations in significant locations. Return to work and retention rates after parental leave, by gender. Labor relations Percentage of employees covered by collective bargaining agreements. Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements. DMA Occupational health and safety Percentage of total workforce represented in formal joint management– worker health and safety committees that help monitor and advice on occupational health and safety programs. Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region and by gender. Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases. Health and safety topics covered in formal agreements with trade unions. Training and education Pages / Online PDF Notes 88, 90, 91, 93, 99 e 104 88, 90, 91 Not reported. 93 104 99 — — 96 a 98 96 96 e 97 98 96 95 e 100 Average hours of training per year per employee by gender and employee category. Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. Percentage of employees receiving regular performance and career devel- opment reviews, by gender. 95 — 100 Not reported. LA6 LA7 LA8 LA9 DMA LA10 LA11 LA12 DMA Diversity and equal opportunity LA13 DMA LA14 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity. Equal remuneration for women and men Ratio of basic salary and remuneration of women to men by employee category and by locations of significant operation. 36 a 39, 94 36 a 39, 94 103 e 172 103 e 172 SOCIAL PERFORMANCE - HUMAN RIGHTS DMA Investment and procurement practices 134 e 135 HR1 HR2 HR3 DMA HR4 Percentage and total number of significant investment agreements and contracts that include human rights clauses or that have undergone human rights screening. Percentage of significant contractors, suppliers, and other business partners that have undergone screening on human rights and actions taken. Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained. Non-discrimination Total number of incidents of discrimination and corrective actions taken. 135 135 134 89 89 Indicator Description Pages / Online PDF Notes DMA Freedom of association and collective bargaining HR5 DMA HR6 Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights. Child labor Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective elimination of child labor. DMA Forced or compulsory labor HR7 DMA HR8 Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor. Security practices Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations. DMA Indigenous rights HR9 Total number of incidents of violations involving rights of indigenous people and actions taken DMA Assessment HR10 Percentage and total number of operations that have been subject human rights reviews and/or impact assessment DMA Remediation HR11 Number of grievances related to human rights filed, addressed, and resolved through formal grievance mechanisms. 105 105 112 112 112 112 114 e 115 114 e 115 116 116 135 — 135 135 The Eletrobras companies did not register any incidents involving violation of rights of Indigenous peoples in 2013. Not reported. SOCIAL PERFORMANCE – SOCIETY DMA Local communities SO1 SO9 SO10 Percentage of operations with implemented local community engagement, impact assessments, and development programs. Operations with significant potential or actual negative impacts on local communities. Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities. DMA Corruption Percentage and total number of business units analyzed for risks related to corruption. Percentage of employees trained in organization´s anti-corruption policies and procedures. Actions taken in response to incidents of corruption. 85, 115, 116, 119, 120, 125-127 85, 115, 116, 119, 120, 125-127 115, 116 e 119   115, 116, 119 e 120 45 45 — 45 Not Reported. Public policies Public policy positions and participation in public policy development and lobbying. 22, 127, 171 22, 127, 171 SO2 SO3 SO4 DMA SO5 SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country. — Pursuant to the law, the Eletrobras companies do not support or make contributions to political parties or political campaigns of candidates for elective offices. This guideline is ratified in the Code of Ethics of the Eletrobras companies. 180 181 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras                                                      — Nor Reported. DMA Demand-side management Pages / Online PDF Notes 80 80 80 80 — — — 106 a 108, 110 106 e 107 Not Reported. Indicator Description DMA Anti-competitive behavior SO7 Total number of legal actions for anticompetitive behavior, anti-trust, and monopoly practices and their outcomes. DMA Compliance SO8 Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with laws and regulations. SOCIAL PERFORMANCE - PRODUCT RESPONSIBILITY DMA PR1 PR2 Customer health and safety Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures. Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes. DMA Product and service labeling PR3 PR4 PR5 Type of product and service information required by labeling procedures, and percentage of products and services subject to such requirements. Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes. Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. DMA Marketing communications PR6 PR7 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship. Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes. DMA Customer privacy PR8 Total number of substantiated complaints regarding breaches of privacy and losses of customer data. DMA Compliance 108 e 110 43 43 — 82 — — PR9 Monetary value of (significant) fines for noncompliance with laws and regulations concerning the provision and use of products and services. — No incidents of non-com- pliance with regulations and voluntary codes concerning marketing communications, including advertising, promo- tion, and sponsorship were registered. The company did not record any complaints received or substantiated, complaints from regulatory agencies, or leakage, theft, or loss of customer data in 2013. In 2013, the Eletrobras compa- nies did not receive any signifi- cant fines for noncompliance with laws and regulations concerning the provision and use of products and services. Eletrobras understands “sig- nificant fines” as those whose individual value is equal to or greater than 1% of the Net Op- erating Income (ROL). Eletrobras Amazonas Energia is not included in this indica- tor, since the Net Operating Income had not been dis- closed before the analysis of data for this report had been completed. Indicator Description SECTOR-SPECIFIC - ELECTRIC UTILITIES Pages / Online PDF Notes EU1 EU2 EU3 EU4 EU5 Installed capacity, broken down by primary energy source and by regulatory regime. Net energy output broken down by primary energy source and by regulatory regime. Number of residential, industrial, institutional and commercial customer accounts. 16, 54 e 55 56 66 Length of above and underground transmission and distribution lines by regulatory regime. 62 e 63 Allocation of CO2e emissions allowances or equivalent, broken down by carbon trading framework — There is no data available in relation to the item: “Con- sumer that are producers” and “Total number of accounts by connection point”. Eletrobras does not specify in its report the part of the lines that are underground and overhead, just only by category of voltage. The information is not avail- able. DMA Availability and Reliability EU6 Management approach to ensure short and long-term electricity availability and reliability. 50, 54, 55, 62, 63, 66 a 68 50, 54, 55, 62, 63, 66 a 68 127, 143 e 144 127, 143 e 144 69 69 EU7 Demand-side management programs including residential, commercial, institutional and industrial programs. DMA System efficiency / Research and Development Research and development activities and expenditures aimed at providing reliable electricity and promoting sustainable development. EU8 DMA EU9 EU10 EU11 EU12 EU13 Plant Decommissioning 55, 58, 62 e 67 Not reported. Provisions for decommissioning of nuclear power sites Planned capacity against projected electricity demand over the long term, broken down by energy source and regulatory regime. Average generation efficiency of thermal plants by energy source and by regulatory regime. — 55 58 Transmission and distribution losses as a percentage of total energy. 62, 67 Biodiversity of offset habitats compared to biodiversity of the affected areas — Not reported. DMA Employment EU14 EU15 EU16 EU17 EU18 Programs and processes to ensure the availability of a skilled workforce. Percentage of employees eligible to retire in the next 5 and 10 years broken down by job category and by region. Policies and requirements regarding health and safety of employees and employees of contractors and subcontractors. Days worked by contractor and subcontractor employees involved in construction, operation & maintenance activities Percentage of contractor and subcontractor employees that have undergone relevant health and safety training 92, 96, 101, 103 e 172 101 e 103 92 e 172 96 — — Not reported. Not reported. 182 183 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras          Pages / Online PDF Notes 124 e 125 124 125 LIMITED ASSURANCE REPORT AND STATEMENT GRI APPLICATION LEVEL CHECK (GRI 3.13) Indicator Description DMA Local communities EU19 EU20 DMA EU21 EU22 Stakeholder participation in the decision making process related to energy planning and infrastructure development. Approach to managing the impacts of displacement. Disaster / Emergency Planning and Response 120 a 123, 125 Contingency planning measures, disaster/emergency management plan and training programs, and recovery/restoration plans. Number of people physically or economically displaced and compensation, broken down by type of project. DMA Access EU23 Programs, including those in partnership with government, to improve or maintain access to electricity and customer support services. DMA Provision of Information EU24 EU25 Practices to address language, cultural, low literacy, and disability related barriers to accessing and safely using electricity and customer support services. Number of injuries and fatalities to the public involving company assets, including legal judgments, settlements, and pending legal cases of diseases. 120 a 123 125 127 a 129 127 a 129 57, 65, 68, 106, 107, 119 e 124 106, 107 e 124 119 EU26 Percentage of population unserved in licensed distribution or service areas. 68 EU27 EU28 EU29 EU30 Number of residential disconnections for non payment, broken down by duration of disconnection and by regulatory regime Power outage frequency. Average power outage duration. Average plant availability factor by energy source and by regulatory regime. — 65 65 57 Not reported. KPMG Risk Advisory Services Ltda. R. Dr. Renato Paes de Barros, 33 04530-904 - São Paulo, SP - Brasil Caixa Postal 2467 01060-970 - São Paulo, SP - Brasil Central Tel Fax Nacional Internacional Internet 55 (11) 2183-3000 55 (11) 2183-3001 55 (11) 2183-3034 www.kpmg.com.br LIMITED ASSURANCE REPORT ISSUED BY INDEPENDENT AUDITORS To the Board of Directors and Shareholders of Centrais Elétricas Brasileiras S.A - Eletrobras Rio de Janeiro - RJ Introduction We have been engaged by Centrais Elétricas Brasileiras S.A - Eletrobras (“Eletrobras” or ”Company”) to apply limited assurance procedures on the sustainability information disclosed in the Annual and Sustainability Report 2013 of Eletrobras, related to the year ended on December 31st, 2013. Responsibilities of Eletrobras Management The management of Eletrobras is responsible for preparing and adequately presenting the information in the 2013 Annual and Sustainability Report in accordance with the Guidelines for Sustainability Reports of the Global Reporting Initiative - GRI (GRI-G3.1) and the “Electric Utilities Sector Supplement - RG Version 3.0/EUSS Final Version”, as well as the internal controls determined necessary to ensure this information is free from material misstatement, resulting from fraud or error. Independent auditors’ responsibility Our responsibility is to express a conclusion about the information disclosed in the 2013 Annual and Sustainability Report based on the limited assurance engagement conducted in accordance with Technical Communication (TC) 07/2012 approved by the Federal Accounting Council and prepared in accordance with NBC TO 3000 (Assurance Engagements Other Than Audits and Reviews), issued by the Brazilian Federal Accounting Council - CFC, which is the equivalent to international standard ISAE 3000 issued by the International Federation of Accountants applicable to Non-Financial Historical Information. These standards require compliance with ethical requirements, including independence ones and also that the engagement is conducted to provide limited assurance that the information in the 2013 Annual and Sustainability Report, taken as a whole, is free from material misstatement. A limited assurance engagement conducted in accordance with NBC TO 3000 (ISAE 3000) consists mainly in questions and interviews with the management of Eletrobras and other professionals of the Company involved in the preparation of the information disclosed in the 2013 Annual and Sustainability Report and applying analytical procedures to obtain evidence that allows us to make a limited assurance conclusion about the sustainability information taken as a whole. A limited assurance engagement also requires additional procedures when the independent auditor acknowledges of issues which lead them to believe that the information 184 185 KPMG Risk Advisory Services Ltda., uma sociedade simples brasileira, de responsabilidade limitada, e firma-membro da rede KPMG de firmas- membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça. KPMG Risk Advisory Services Ltda., a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras disclosed in the Annual and Sustainability Report 2013 taken as a whole could present material misstatement. The selected procedures were based on our understanding of the issues related to the compilation, materiality and presentation of the information disclosed in the 2013 Annual and Sustainability Report, other engagement circumstances and considerations regarding areas and procedures associated with the material sustainability information disclosed and also where material misstatement could exist. The procedures consisted of: (a) planning: consideration of the material aspects of Eletrobras activities, relevance of the information disclosed, amount of quantitative and qualitative information and operational systems and internal controls that served as a basis for preparation of the information in the Annual and Sustainability Report 2013; (b) understanding of the calculation methodology and procedures for the compilation of indicators through interviews with management responsible for information disclosure; (c) understanding of the reporting processes and management of material aspects and performance indicators; (d) application of analytical procedures on data and interviews on the qualitative information and their correlation with indicators disclosed in the 2013 Annual and Sustainability Report; (e) analysis of evidence supporting the quantitative and qualitative information disclosed in the 2013 Annual and Sustainability Report; (f) comparison of financial indicators with the financial statements and/or accounting records. (g) Evaluation of reasons for possible omissions of performance indicators associated with topics and aspects identified as material through the Company’s materiality assessment; We believe that the information, evidence and results we have obtained are sufficient and appropriate to provide a basis for our limited assurance conclusion. Scope and limitations The procedures applied in a limited assurance engagement are substantially less extensive than those applied in a reasonable assurance engagement. Therefore, we cannot ensure we are aware of all the issues that would have been identified in a reasonable assurance engagement, which aims to issue an opinion. If we had conducted a reasonable assurance engagement, we may have identified other issues and possible misstatements within the information presented in the Annual and Sustainability Report 2013. Nonfinancial data is subject to more inherent limitations than financial data, due to the nature and diversity of the methods used to determine, calculate or estimate this data. Qualitative interpretations of the data's materiality and accuracy are subject to individual presumptions and judgments. Additionally, we did not examine data regarding prior periods to assess the adequacy of policies, practices and sustainability performance, nor future projections. Conclusion Based on the procedures carried out, described in this report, we have not identified any relevant information that leads us to believe that the information in Annual and Sustainability Report 2013 of Centrais Elétricas Brasileiras S.A - Eletrobras is not fairly stated in all material respects in accordance with the Global Reporting Initiative Sustainability Reporting Guidelines (GRI-G3.1), and with the “Electric Utilities Sector Supplement - RG Version 3.0/EUSS Final Version”, as well as its source records and files. São Paulo, May 9th, 2014 KPMG Risk Advisory Services Ltda. CRC 2SP023233/O-4 Eduardo V. Cipullo Contador CRC 1SP135597/O-6 2 3 186 187 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras    Glossary A B ABRADEE Associação Brasileira de Benthic macrofauna Aquatic species Distribuidores de Energia Elétrica with sizes that are equal to or greater than (Brazilian Association of Electricity 5 mm and may be visible to the naked Distributors) – a non-profit civil entity eye that inhabit the sea floor and are in dedicated to the development of the contact with the substrate and do not energy distribution industry in Brazil. have full swimming capacity. The ABRADEE gathers 41 state-owned and privately owned electric utilities that operate across the country and which, C together, are responsible for serving 98% Chelonians Group represented by of Brazilian consumers. seawater and freshwater turtles and ANEEL Created in 1996 through Law 9,427, tortoises. the Agência Nacional de Energia Elétrica Clean Source Any energy source that does (Brazilian Electricity Regulatory Agency) not release, throughout its production or is an administratively and financially consumption, any waste or contaminant independent regulatory body that reports gases that contribute to the greenhouse to the Ministry of Mines and Energy and effect and global warming, such as solar, that has the purpose of regulating and hydroelectric, wind, and tidal power. inspecting the production, transmission, Energy sources that release very low and trading of electricity, pursuant to volumes of these gases or waste are also the policies and guidelines of the federal considered clean energy sources. government. CNEN Comissão Nacional de Energia ANVISA Agência Nacional de Vigilância Nuclear (National Nuclear Energy Sanitária (National Health Surveillance Agency) Commission). CNEN is a federal agency is a regulatory body that reports to the Brazilian created in October 10, 1956 and under Ministry of Health. Legally established as an the Ministry of Science and technology. administratively and financially independent As a top planning agency, guidance, regulatory body, it inspects the health conditions supervision and inspection, standards of all products and services (whether national and regulations on radiation protection or imported) submitted to public health surveil- and licenses, it supervises and controls lance, such as medication, food, cosmetics, the nuclear activity in Brazil. Moreover, disinfectants, tobacco products, medical conducts research on the use of nuclear products, blood, blood products, and healthcare. techniques for the benefit of society. Assurance Action or effect of assuring, Commodity A word that is used to refer providing guarantee and security. A to goods, and sometimes services, for process that demonstrates the authen- which there is a demand and which do ticity of data and information presented not have a perceivable quality differential in a corporate report. in the markets and among the various Avifauna Bird population of a given region. suppliers or brands. 188 189 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasCONAR Conselho Nacional de Discrimination The prejudicial treatment Autorregulamentação Publicitária of individuals by their peers, who impose (National Self-Regulatory Advertising excessive tasks or deny them benefits Council) is a civil society organization instead of ensuring fair treatment, and that establishes and enforces the pursuant to their professional experience regulations of the Brazilian Advertising and individual merit. Discrimination also Self-Regulation Code, approved in 1978 by includes humiliation; embarrassment; the III Brazilian Advertizing Conference. bullying; coercion; verbal, non-verbal, or Critical supplier (Significant) The Eletrobras companies understand critical suppliers as those that provide inputs or services that are essential for the activities performed by the Eletrobras companies and that have a direct impact on the quality of the services, on the environment, and on the health and safety of employees and whose activities could cause significant social risks. This physical violence; and moral, political, religious, and sexual harassment. It is generally defined as a series of actions, comments, or undesirable actions that are known to be undesired by the person for whom they are intended. Specifically for the case of moral harassment, it implies occurrences repeated over time and that tend to isolate the subject of this harassment in the work environment. definition includes all suppliers that have Downstream it is a reference point on a signed labor-intensive service contracts. river from an observer’s point of view. It is At Eletrobras holding, the identification the direction toward which the river runs. of critical suppliers is associated with That is why we say that the mouth of a the product or service hired. Eletrobras river is its furthest point downstream for understands that all suppliers involved a river (see Upstream). in labor-intensive service contracts are critical in relation to sustainability factors, since they are at risk for incidents of child, forced, or forced labor and for incidents of other human rights or labor violations. D E EBITDA Earnings before interest, taxes, depreciation and amortization. EIA (Environmental Impact Assessment) A document that analyzes the environ- DEC Duração Equivalente de Interrupção mental impact generated by the por Unidade Consumidora (Equivalent execution of any medium or large project. Outage Duration per Customer Account). Desulphurization Catalytic chemical process used to remove sulfur through the addition of hydrogen to improve by-products of petroleum and natural gas, such as gasoline, naphtha, kerosene, diesel, and fuel oils. F FEC Frequência Equivalente de Interrupção por Unidade Consumidora (Equivalent Outage Frequency per Customer Account). G I GHG (Greenhouse Gas) Protocol Methodology used to conduct greenhouse gas inventories. GRI (Global Reporting Initiative) International non-governmental organi- zation whose mission is the global development and dissemination of guide- lines for the preparation of sustainability reports voluntarily adopted by companies across the globe. Global Compact An initiative developed by the former secretary-general of the UN, Kofi Annan, with the purpose of mobilizing the international corporate community to adopt, in their business practices, fundamental and inter- nationally accepted values in terms of human rights, labor relations, the environment, and anti-corruption procedures, which are expressed in 10 principles. GRI (Global Reporting Initiative) An international non-governmental organization whose mission is to develop and disseminate globally guidelines for the preparation of sustainability reports used voluntarily by companies worldwide. H Herpetofauna Reptiles and amphibians of a given region. Holding Type of company created with the purpose of managing a group of companies (conglomerate). A holding IBAMA Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (Brazilian Institute for the Environment and Renewable Natural Resources) - created through Law 7,735, of February 22, 1989, it is a federal admin- istratively and financially independent regulatory body that reports to the Ministry of the Environment (MMA). It is the  executive body  respon- sible for enforcing the  National Policy for the Environment  (PNMA), established through  Law 6,938, of August 31, 1981 that develops a number of activities for the  preser- vation  and  conservation  of  the natural heritage, controlling and inspecting  the use of  natural resources  (water,  plants, wildlife,  soil, etc). It is also respon- sible for granting environmental licenses to developments under its sphere of competence. IBASE Instituto Brasileiro de Análises Sociais e Econômicas (Brazilian Institute of Social and Economic Analyses) - non-profit organization with no religious or political purposes created in 1981 by sociologist Herbert de Souza, (1935 – 1997) to strengthen democracy and active citizenship, according to principles of equality, freedom, citizen participation, diversity, and solidarity. The social accounting model organized by this entity was the first in Brazil and is used for the voluntary disclosure of the report. Ichthyofauna Fish species of a given region. company manages and is the majority IGS System System of Indicators for shareholder or quota-holder of the Corporate Sustainability Management. A companies in a given group. This type of proprietary system to Eletrobras’s. company is often used by medium and large companies, and it normally either seeks to improve the capital structure or is used as part of a partnership with other companies or job markets. 190 191 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasINEA Instituto Nacional do Ambiente (State Environment Institute) -  it is P an agency of the  government of the PCB Tradename for resulting oil state of Rio de Janeiro, which reports derived from a mixture of petroleum to the State Environment Department, hydrocarbons containing 124 Alocloro, created in  2008 with the purpose of a polychlorinated biphenyl (PCB). It is a protecting, conserving, and recovering the persistent toxic substance whose use environment and fostering sustainable should be abolished under the Stockholm development. L Convention, due to the damage it can cause to human life and the environment. The ascarel is used as an insulator in electrical equipment, especially Limnology Science  that studies  inland transformers waters, regardless of their origin, verifying their dimensions and the concentration of  minerals in relation to the flow of matter and energy and their biotic  communities. Luz Para Todos (National Program for Universal Access to and Use of Electricity) – Program by the Brazilian Federal Government intended to bring free electricity to rural populations, regardless of their financial resources. M MOC Mão de Obra Contratada (Contractor Workforce) This term is used by the Eletrobras companies to determine all professionals who were not hired through civil service exams. N Non-technical Loss Represents all other losses associated with the distribution of electricity, such as energy thefts, meter misreading, billing errors, unmetered connections, etc. Phytoplankton Set of floating micro- scopic aquatic organisms that realize photosynthesis and are dispersed in the water column. Project Energia+ Created in order to improve the operational and financial performance and the corporate gover- nance of the six distribution companies of Eletrobras (Eletrobras Amazonas Energia, , Distribuição Acre, Distribuição Alagoas Distribuição Piauí, Distribuição Rondônia, and Distribuição Roraima). The project provides for the implementation of a set of actions for the reduction of energy losses, the increase of collection rates, and the improvement of the quality of service provided to electricity consumers. R Retrofitting Term used, especially in engineering, to describe the process of upgrading equipment that is outdated or that does not comply with specific standards. S V SPE (Special Purpose Entities) Corporate Varistors Resistors used in high, medium, society whose activity is restricted and and low voltages. Varistor ceramics in some cases has a predetermined are used in the components of surge life span, normally used to isolate the protection devices, both in residential financial risk of the activity performed. and industrial electronics, such as energy Traditionally, SPEs are used for major distribution and transmission lines. engineering projects, with or without the participation of the government, such as the construction of hydroelectric plants, w transmission networks, or Public-private Wastewater Liquid or gas streams Partnership projects (PPPs), which are still of products of industries or urban domestic sewage that are released into the environment. It may be treated or untreated. z Zooplankton The aquatic non-photo- synthetic  organisms  (heterotrophs) that inhabit the water column with little mobility (generally, they are dragged by sea or river currents). new to Brazil. Stingless bee It is beekeeping using a species of stingless bees. T TAC Termo de Ajuste de Conduta (Conduct Adjustment Agreement) – Document used by public authorities, especially by Public Prosecutor’s Offices, to adjust conduct that is contrary to the law. Technical loss Percentage of loss in distribution, inherent to transportation, the transformation of voltage, and the metering of energy at the grid of the electric utility company. U Upstream It is a reference point on a river from an observer’s point of view. It is the side on which the river spring is located. That is why we say that the spring is the furthest upstream point of a given river. This reference point could be a city located on the bank of a river, a dam, a waterfall, a tributary, a bridge, etc. (see Downstream). 192 193 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasElevador Lacerda, Salvador, Bahia. FALE CONOSCO (TALK TO US) Eletrobras – Centrais Elétricas Brasileiras S.A. – offers various communication channels to its audiences. HEADQUARTERS 409, Presidente Vargas Avenue - 13rd floor Centro - Rio de Janeiro/RJ - CEP 20071-003 Brazil Phone: (21) 2514-5151 • Talk to Us www.eletrobras.com > Contact • Website www.eletrobras.com • Facebook www.facebook.com/Eletrobras • YouTube www.youtube.com/user/SistemaEletrobras • Twitter – @Eletrobras BRANCHES Eletrobras maintains multinational offices: Central America and Caribbean (Panama City – Panama) Edificio Torres de las Américas, piso 5, torre B, oficina 506 - Punta Pacífica Southern Cone (Montevideo – Uruguay) Av. Luis Alberto de Herrera 1.248 - Torre 2, oficina 311, CP - 11.300 Andina (Lima – Peru) Calle Basadre 310 Oficina 601 B - San Isidro Ombudsman’s Office51 409, Presidente Vargas Avenue - 15th floor Centro - Rio de Janeiro/RJ - CEP 20071-003 Brazil Phone: (21) 2514-4526 Fax: (21) 2514-6447 ouvidoria@eletrobras.com INVESTOR RELATIONS (IR) Phone: (21)2514-6331 or (21)2514-6333 Fax: (21)2514-5964 Website: www.eletrobras.com.br/elb/ri Fale com o RI: invest@eletrobras.com 50. Contact by letter, phone, fax, e-mail, or in person Canal Denúncia (Reporting Hotline)52 www.eletrobras.com/canaldenuncia/ denuncia@eletrobras.com Custodian and Administrator of Eletrobras’s Portfolio Banco Bradesco S.A.53 Share and Custody Department Phone: (11)3684-9441 Fax: (11)3684-3811 The survey about this report is available at the Eletrobras website. INDUSTRY-SPECIFIC PROGRAMS Agente Eletrobras (Eletrobras Agent): www.agenteeletrobras.com.br COMMENTS, SUGGESTIONS, AND INFORMATION ABOUT THIS REPORT sustentabilidade@eletrobras.com (GRI 3.4) 51. Channel to receive reports and information about possible irregulari- ties or inappropriateness in accounting records. Any person who identifies or suspects any irregularity in Eletrobras or in the Eletrobras companies should report the incident directly to the company’s Ombudsman’s Office. 52. Customer service in all branches of the bank 194 195 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasVer-o-Peso Market, Belém, Pará. CORPORATE INFORMATION COMPOSITION OF THE BOARD OF DIRECTORS Márcio Pereira Zimmermann Beto Ferreira Martins Vasconcelos (until April) João Antônio Lian José Antonio Corrêa Coimbra José da Costa Carvalho Neto Lindemberg de Lima Bezerra Marcelo Gasparino da Silva Maurício Muniz Barretto de Carvalho Thadeu Figueiredo Rocha Wagner Bittencourt de Oliveira COMPOSITION OF THE FISCAL COUNCIL Danilo de Jesus Vieira Furtado Charles Carvalho Guedes Jarbas Raimundo de Aldano Matos Manuel Jeremias Leite Caldas Robert Juenemann COMPOSITION OF THE BOARD OF EXECUTIVE OFFICERS Chief Executive Officer (CEO) José da Costa Carvalho Neto Chief Generation Officer Valter Luiz Cardeal de Souza Chief Transmission Officer José Antonio Muniz Lopes Chief Distribution Officer Marcos Aurélio Madureira da Silva (until October) Luís Hiroshi Sakamoto (Interim) Chief Administration Officer Miguel Colasuonno (until September) Manoel Aguinaldo Guimarães (Interim) Chief Financial and Investor Relations Officer Armando Casado de Araujo 196 197 ANNUAL AND SUSTAINABILITY REPORT 2013Eletrobras CREDITS This Annual and Sustainability Report is a result of the efforts of the Eletrobras team. We thank you all for your participation and commitment. Editing and general coordination Executive Sustainability Committee of the Eletrobras Companies Executive coordination Planning, Strategic Management, and Sustainability Superintendence Press Office and Press Relations Coordination and collection of GRI indicators and texts Keyassociados Graphic project, layout, and infographics Tabaruba Translation Gotcha Idiomas! Illustrations Renato Luiz Campos Aroeira Photo credit Eletrobras’s archive Print run 150 in Portuguese 25 in English 25 in Spanish Platforms This report can be downloaded at www.eletrobras.com Ponte Estaiada Mestre João Isidoro França, Rio Poty, Teresina, Piauí. 198 199 ANNUAL AND SUSTAINABILITY REPORT 2013EletrobrasILLUSTRATIONS Sun, n. We spin around it every day, hitching a ride on planet Earth. An object of veneration, it originated, in some languages, from the word “Sunday” – and what other weekday could it be?! A sunny day has the look and feel of Brazil. It is present in our national anthem, with its “brilliant beams,” which are translated into freedom. It is also present in our postcards. The warm nature of Brazilians could very well have been inspired by the sun. It is not only its color, energy, or light. Sunrise moves us in some way. It makes us think about the future. It reminds us that it is always time to renew ourselves, that every new dawn brings a new opportunity – to do things differently, to be better. When we watch the sun rise, we feel an uncontrollable will to be happy! More than that: we believe anything is possible. It is because of how it makes people feel that it is represented here, in some of its endless and beautiful versions, according to Aroeira’s* interpretation. After all, everything we do is inspired by and dedicated to people. Every sunrise inspires us to do our job: to generate more light and energy, to make more and more people happy. * Renato Luiz Campos Aroeira is a cartoonist, artist, illustrator, and musician. He started showing his drawings to the world at the age of 12, producing illustrations for textbooks. He has worked at the main news organizations in the country (Jornal de Minas, Diário da Tarde, Estado de Minas, Jornal o Sul, O Globo, Jornal do Brasil, Estado de São Paulo, Isto É, Veja, Carta Capital, Caros Amigos, Pasquim, Pasquim XXI); currently, he works as a cartoonist for Jornal O Dia, Jornal O Sul, and Brasil Econômico. He has designed covers and artwork for the main publishing houses in Brazil. Ponte Hercílio Luz, Florianópolis, Santa Catarina. Eletrobras 2013 Annual and Sustainability Report 

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