MME extends Neoenergia Pernambuco's concession contract until 2060

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MME extends Neoenergia Pernambuco's concession contract until 2060

The distribution company is the first in Brazil to have its concession contract extended ahead of schedule, which will allow it to bring forward billion-dollar investments planned until 2029

Over the last 25 years, the company has invested more than R$20 billion and improved quality indicators by more than 40% in the state, which was one of the first to be universalized

Neoenergia Pernambuco has just become the first electricity distributor in the country to obtain an early extension of its concession contract from the Ministry of Mines and Energy (MME). Five years in advance, the new contract guarantees the company the possibility of bringing forward investments of around R$6 billion until 2029, speeding up improvements to the electricity system and benefiting more than 4 million customers throughout the state. The ceremony formalizing the signing of the terms of the contract took place on Tuesday (23) in Brasília, with the presence of the Minister of Mines and Energy, Alexandre Silveira, Neoenergia's CEO, Eduardo Capelastegui, and the CEO of Neoenergia Pernambuco, Saulo Cabral.

"Bringing forward the extension of Neoenergia Pernambuco's contract recognizes our performance and responsible management.With stricter rules already in place, we are prepared and confident to invest even more and expand the direct benefits for Pernambucans, with a focus on service quality and customer satisfaction,"said Eduardo Capelastegui, CEO of Neoenergia. For the executive, the conclusion of the process represents a guarantee of compliance with the contracts signed and gives significant legal certainty to the national electricity sector.

Over the last 25 years, Neoenergia has invested more than R$20 billion in Pernambuco, promoting the modernization, digitalization and expansion of electricity networks. This commitment has resulted in significant advances in quality indicators: since 2015, the average interruption time (DEC) has fallen by 43%, and the average frequency (FEC) of occurrences has fallen by 42%, placing Pernambuco among the best historical levels.

Universal access to energy was achieved in 2009, guaranteeing electricity in all regions of the state. Since 2000, 54 new substations have been delivered and more than 77,000 km of transmission and distribution lines have been built, in line with the growth in the number of customers, which more than doubled in the period.

The contract extension reinforces Neoenergia Pernambuco's commitment to excellence in service, innovation and sustainability. The company will now follow even stricter performance rules, established by the National Electric Energy Agency (Aneel). The new concession contract aims to improve service provision, including by providing for greater resilience of the electricity networks to deal with severe weather events.

Neoenergia Pernambuco's process was approved by Aneel and the MME after careful assessment of the distributor's supply quality indicators and economic and financial health. The company proved continuity and reliability of service, as well as the capacity to sustain the investments required annually by the concession.

Innovation

In the two and a half decades that Neoenergia has been operating in Pernambuco, innovative initiatives and technological advances have been adopted with a focus on improving service provision and sustainability. While the electricity networks have been automated, enabling remote control and even automatic reconfigurations, commercial services have undergone digitization processes.

In both cases, the innovations represent greater quality and convenience for consumers. Investments in automation of the electricity system allow for flexibility and faster restoration of power in the event of incidents. With regard to commercial service, new digital relationship channels have been created, such as WhatsApp and smartphone apps. The 23 stores and 169 accredited points have also undergone a modernization process, making the customer experience more comfortable and humanized during face-to-face services.

Green Noronha

Encouraging the use of photovoltaic solar energy and the electrification of the economy are also part of Neoenergia Pernambuco's history. In 2014, the company installed the first solar plant in Fernando de Noronha, at the Aeronautics Command. The following year, a second photovoltaic plant was built on the island as a way of reducing dependence on fossil fuel energy generation. This year, Neoenergia is preparing to make further progress in the sustainability of the archipelago. Authorized by the MME, the company has committed itself to decarbonizing energy generation on the island through a photovoltaic system associated with battery storage. When the project is completed in 2027, Noronha will be the first inhabited oceanic island in Latin America to reach this milestone.

Social Commitment: Social Tariff and Energy Efficiency

Neoenergia's presence in Pernambuco goes beyond distributing energy to its more than 4 million customers. A significant portion of the population benefits from social actions and projects developed by the company. In this sense, one of the distributor's main concerns is to adapt the amount of the energy bill to the consumers' ability to pay, with a direct impact on quality of life.

In view of this, Neoenergia is concentrating its efforts on increasing the number of customers benefiting from the Social Electricity Tariff (TSEE), which under the current rule allows those who consume up to 80kWh per month to be exempt from payment. Currently, around 1.2 million customers are registered with the TSEE.

On another front, the company has historically prioritized the initiatives of the Energy Efficiency Program, regulated by Aneel, for the most vulnerable public. Over the last 25 years, thousands of families have benefited from projects that encourage the conscious use of energy and, consequently, a reduction in their bills. Energy efficiency actions are also aimed at caring for future generations and preserving the environment. Projects such as Vale Luz not only help to reduce energy bills through discounts in exchange for recyclable materials, but also promote the proper disposal of solid waste. In the last five years alone, more than 2,000 tons of waste have been disposed of in an environmentally correct manner.

In addition to the programs encouraged by the Federal Government, there are our own initiatives such as the Conta do Bem, which has already raised over R$146 million in donations from customers to charitable institutions, and the activities developed by the Neoenergia Institute, which focuses on training and research, biodiversity and climate change, art and culture, social action and institutional collaboration.