business plan for 2004 - EDP

It is also fair to say that the capacity to face change has been developed throughout previous mandates of the
corporate boards to whose members I would like to express, here, my recognition of their ongoing commitment
and positive contribution to the successive stages of restructuring that EDP undertook.
In the pursuit of its activity, 2003 was also a year of change for the EDP Group. Through our subsidiary
HidroCantábrico we acquired NaturCorp, a Spanish gas distribution company, within the scope of a privatisation
process undertaken by the authorities of the Basque Country. This transaction meant the entry of EDP into joint gas
and electricity operations. This could well be a factor of prime importance within the scope of the offer of energy
solutions to customers in the liberalised market of the Iberian Peninsula.
Significantly, on April 3, 2003, the Council of Ministers approved a resolution establishing a new political and
regulatory framework for the Portuguese Energy Sector, with a considerable impact on the organisation of the
activities of the EDP Group. The Board of Directors welcomed this overhaul of the sector, viewing the challenge as
yet another opportunity to create value for EDP Shareholders.
Indeed, once the necessary adaptations have been made, the combination of the gas and electricity businesses will
provide increasing flexibility and rationalisation to the performance of the Group companies. This is a
reorganisation of a sector of strategic importance to the country, which could lead to the satisfaction of the
legitimate interests of consumers, operators, shareholders, managers, employees and the community in general,
requiring of all their indispensable contribution. EDP can be proud of the fact that it has worked actively and
constructively to achieve these objectives.
The country will very shortly be integrated into the Iberian Electricity Market, yet another step towards the creation
of the Internal Market under way within the European Union.
The Iberian Electricity Market constitutes a new form of concept and organisation of the business that will
transform the Peninsula into the domestic market of all the Iberian companies in the sector, meaning significant
change for which EDP has also been preparing itself.
With regard to the domestic electricity business, the EDP Group continued to make considerable efforts to optimise
and restructure its generation and distribution activities. With respect to this, the Board of Directors has established
a policy of cost containment and rigour in making the necessary investments, as well as of preparation of the
human, organisational, technical and commercial structures ahead of the conclusion of the full liberalisation of
electricity supply in Portugal.
We have clearly invested in improving the quality of the service in various technical fields, infrastructures and
commercial systems in the energy distribution and sales area, as well as in increasing our generation capacity
through modernisation, meeting environmental requirements and making the best possible use of equipment, as
well as in the study and design of new undertakings.
We have built a new combined-cycle plant, the Ribatejo Thermoelectric Power plant, the first major electricity
generator to operate within the non-tied system, using natural gas.
The strategic option for this cleaner fuel is part of the implementation of an environmental policy plan in which we
are pioneers, pursuing best practices. Additionally, without waiting for regulatory impositions, EDP has already
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