business plan for 2004 - EDP

The tariff adjustment was applied differently across
the various voltage categories, involving a realignment
designed to reduce the cross subsidies existing
between the various supply voltages.
c) Efficiency and productivity: the Executive Committee
implemented an organisational structure in March
2003 providing greater control over work processes
and methods and ensured multiplication of knowledge
and productivity gains through in-house synergies.
The staff numbered 1309 at the end of 2003 and the
customers per employee ratio stood at 740.
• Enersul
a) Activity: in 2003 Enersul sold a total of 2 816 GWh of
electricity, serving 614 000 customers.
To meet its needs of 3 449 GWh Enersul itself
generated 208 GWh, or 6.0%, and bought in 3 241 GWh
from other producers in the interconnected system.
Sales
Enersul GWh
Other
Commercial
Industrial
Residential
b) Tariffs: during 2003, as provided for in the concession
contract, Enersul underwent its first periodic tariff
revision, including the repositioning of its electricity
supply tariffs, the realignment and determination of
"Factor X".
ANEEL fixed the Enersul tariff repositioning at 42.26%,
to be applied to the electricity supply tariffs. However,
by determination of the regulator, this repositioning
percentage will be implemented in stages, 32.59% in
the first year. The difference of 9.67% will be split and
added to the next four annual tariff readjustments,
generating an increase of revenue of 55 million reals
each year, at April 2003 prices. ANEEL also
provisionally fixed "Factor X" at 2.35%.
To dilute the crossed subsidies that exist in the tariff
system, ANEEL, at the time of this repositioning,
applied tariff realignment.
2003 - Annual Report - EDP
c) Efficiency and productivity: the Executive Committee
implemented an organisational structure in March
2003 providing greater control over the work process
and methods and ensured multiplication of knowledge
and productivity gains through in-house synergies.
The staff numbered 944 at the end of 2003, 1.7% more
than in 2002. Despite the number taken on, the
company’s customers per employee ratio improved to
650.
• Efficiency Programme
A start was made during 2003 to the implementation
of the Efficiency Programme in Brazil. This EDP Group
programme, began in 2002, is designed to implement
throughout the group a permanent goal of
rationalising expenditure and cutting costs.
The areas involved in this work are very diversified,
covering human resources, materials and services
procurement, and optimisation of technical and
commercial operations.
The work has led to the inclusion in the business plan
of a number of horizontal initiatives, which will have a
forecast impact of about 11 million reals in 2004, in
addition to those impacts stemming from the
modernisation efforts underway within the companies,
providing savings of more than 40 million reals.
Supply Activity
As mentioned earlier, the electricity supply market was
marked in 2003 by expectations as to the definition of the
new model for the Brazilian electricity sector. As in 2002,
influenced by the end of rationing and by the elections,
2003 was influenced by considerable uncertainty in view of
the lack of definition of a transparent, stable regulatory
framework. The result as far as supply was concerned was
the postponement by major free customers of decisions
regarding contracting electricity for longer periods, leading
to a restricted market with greater competition between
operators.
During 2003, Enertrade sought to optimise its resources
with a view to reducing and mitigating the risk of the
electricity assets of the EDP Group. At the same time, it
pursued maximisation of profits through supply electricity
to major industrial consumers of energy. This allowed
Enertrade to consolidate its position as the most active
supply company on the Brazilian market.
The reduction of the EDP Group’s exposure to the market
risk was mainly due to the sale of electricity by Lajeado not
under contract in the long term. This electricity was placed
on the free-customer market through several structured
products that received a good welcome since they allow the
wholesale market price risk to be shared between the seller
and the end customer through maximum and minimum
attendance price mechanisms.