VII Meeting with Investors

1. © CPFL Energia 2009. Todos os direitos reservados.
Overview and Outlook
Wilson Ferreira Jr
CEO of CPFL Energia

2. Benefits of the IPO
Injection of
funds
Access to
capital
markets
Efficiency
Innovation
and process
improvement
Improved
governance
“Novo Mercado”
+
Implementation
of controls
(SOX)
Creation of
Value
Company Growth
Comparability
Benchmarking
process
How has the IPO contributed to CPFL Energia?
2

3. IPO - Sep/2004 Sep/2014 Var. CAGR (% p.a.)
Companies (CNPJs) 11 125 + 114 +27.5%
Power sold in
concession area
(GWh/year)1,2
36,679 59,640 + 62.6% +5.0%
Installed capacity 812 MW 3,127 MW3 + 285.1% +14.4%
Number of free
clients
42 289 +247 +21.3%
Market cap (R$
billion)4 8.3 18.1 + 118.1% +8.1%
EBITDA (R$
million)2,5 2,648 3,956 + 49.4% +4.1%
CPFL Energia – Overview
1) In the concession area; 2) Sales and EBITDA refer to the 12 months ended September; 3) Including Desa assets; 4) IPO quote: R$ 17.22/common share and
Dec 2, 2014: R$ 18.79/common share; 5) Amounts in constant currency of Sep/14.
3

4. Privatization
1998 2002 200420001997 2001 2003
IPO
2004 20062005 2007
IPO
2008 20102009 2011 2012 2013 2014
Since 1997, CPFL Energia has maintained an aggressive
growth and diversification strategy
History of expansion
After the IPO
 Construction of 6 Hydros
 Incorporation of the
holding company
 Creation of CPFL Brasil
 Acquisition of 5 distributors
 Entry in renewable energy segment
 Association with Ersa -> Creation of CPFL Renováveis
 Association of CPFL Renováveis with Desa
4
(*) Considers the date of startup of the plants, except Semesa.

5. CPFL Energia in the last 10 years
Sustainability
Differentiated Corporate
Governance
Financial Discipline and
Value CreationSynergic Growth and
Operating Efficiency
Generation and
Commercialization
Segments
Distribution
Services and Telecom

6. CPFL Energia in the last 10 years
Sustainability
Differentiated Corporate
Governance
Financial Discipline and
Value CreationSynergic Growth and
Operating Efficiency
Generation and
Commercialization
Segments
Distribution
Services and Telecom

7. Generation &
Commercialization

8. 20052003 2007 2008 20102004
IPO
Commercial
Expertise
Clear growth strategy in the Generation and Commercialization segment
IPO proceeds: drive the expansion
of the Generation Segment
 Expansion of free market
 Building customer loyalty
 Acquisition of customers outside the
distributors’ area
8

9. 20052003 2007 2008 20102004
IPO
Commercial
Expertise
Clear growth strategy in the Generation and Commercialization segment
IPO proceeds: drive the expansion
of the Generation Segment
 Expansion of free market
 Building customer loyalty
 Acquisition of customers outside the
distributors' area
9
Increased project risk
Auctions of structuring projects:
Project return < CPFL return

10. 20052003 2007 2008 20102004
IPO
Commercial
Expertise
Clear growth strategy in the Generation and Commercialization segment
IPO proceeds: drive the expansion
of the Generation Segment
New focus: renewable energy
 Investment in alternative sources:
biomass and wind
 Acquisition of existing assets
 Creation of CPFL Renováveis
 Energy auctions and free market
 Long-term PPAs
protected/indexed to inflation
(term of 20-30 years)
Between 2010 and 2011
 Expansion of free market
 Building customer loyalty
 Acquisition of customers outside the
distributors' area
10
Increased project risk
Auctions of structuring projects:
Project return < CPFL return

11. Increased project risk
20052003 2007 2008 2010 2013
IPO
20112004
IPO
Commercial
Expertise
Clear growth strategy in the Generation and Commercialization segment
IPO proceeds: drive the expansion
of the Generation Segment
Renewable Energy:
new growth driver
New focus: renewable energy
 Investment in alternative sources:
biomass and wind
 Acquisition of existing assets
 Creation of CPFL Renováveis
 Energy auctions and free market
 Long-term PPAs
protected/indexed to inflation
(term of 20-30 years)
 Expansion of free market
 Building customer loyalty
 Acquisition of customers outside the
distributors' area
 Guarantee of energy from renewable
sources
 Focus on special consumers
 New sources: Solar etc.
Synergy with
CPFL Brasil
Auctions of structuring projects:
Project return < CPFL return
Between 2010 and 2011
11

12. Generation Segment| Strong growth since the IPO
1) Proportional consolidation of projects
12
Installed Capacity1 (MW)

13. Conventional Sources | 18 plants in operation 8 Hydros and 2 TPPs
Installed Capacity1 (MW)
13
1) Proportional consolidation of projects

14. August 2011 July 2013 November 2014 2016 2018 Total contracted 2018
652
1,153
1,773
284 51
2,108
Contracted portfolio (MW) – CPFL Renováveis (100%)
+
Renewable Sources | Creation of CPFL Renováveis and Association with DESA
14
1) Proportional consolidation of projects
Installed Capacity1 (MW)

15. Net Revenue (R$ million)* EBITDA (% of CPFL Energia)*
EBITDA (R$ million)* Net Income (R$ million)*
Sources (Conventional + Renewable) | Economic and financial performance
2004 LTM3Q14
493
2,967501.7%
2004 LTM3Q14
444
1,724
288.1%
2004 LTM3Q14
112
406
263.0%
2004 LTM3Q14
16%
44%
(*) Constant currency: September/14. Restated by IGP-M inflation index.
15

16. Despite the decline in the volume of energy sold, the
Commercialization segment maintained its revenue and
margin levels
Margem Bruta
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
369
443
527
399
428
395
290
267
53
208
Gross income
Commercialization | Consistent results since the IPO
Evolution of revenue and energy sold Gross income
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2,219
2,781
2,646
2,626
2,587
2,287
2,030
2,272
2,115
2,199
1,901
2,351
2,102
1,870
1,883
1,822
1,593
1,712
1,554
1,344
Gross revenue [R$ Mn] Energy sold [Average MW]
Constant currency: September/14. Restated by IGP-M inflation index.
16

17. Commercialization | … despite increased competition
35 41 47 44 48 55 70 93 113
147 151
57 65 87 116 118
159
197
290
343
477
578
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Energy Retailers
Generators
# of competitors in Free Market
Source: CCEE
 Fiercer competition | increase in number of market players
 Growth in share of generators in commercialization
 Increase in number of consulting firms in the market
17

18. Commercialization | Evolution in free customers – Focus on special
consumers
2008 2009 2010 2011 2012 2013 2014
7 12
47 47
169
213 220
+181%
+521%
1,8361,8051,5871,101940666653
1,2051,182992587455221194
+261%
+3,047%
Brazil
Brazil
Free customers - Conventional + Special
Free customers - Special
2008 2009 2010 2011 2012 2013 2014
80 74
129 141
231
284 289
18

19. Net Revenue (R$ million)* EBITDA (% da CPFL Energia)*
EBITDA (R$ million)* Net Income (R$ million)*
Commercialization | Economic and financial performance
2004 LTM3Q14
1,233
1,94457.6%
2004 LTM3Q14
239
212
-11.3%
2004 LTM3Q14
161
138
-13.9%
2004 LTM3Q14
9% 6%
(*) Constant currency: September/14. Restated by IGP-M inflation index.
19

20. CPFL Energia in the last 10 years
Sustainability
Differentiated Corporate
Governance
Financial Discipline and
Value CreationSynergic Growth and
Operating Efficiency
Generation and
Commercialization
Segments
Distribution
Services and Telecom

21. Distribution segment continues to be CPFL Energia’s flagship operation
1) Acquisition of 67.3%; 2) Acquisition of the remaining 32.7%.
Integration
CPFL Piratininga
1
Acquisition
CPFL Santa Cruz
Acquisition RGE
2
IPO
Acquisition
CPFL Jaguariúna
200820062004200220011997
 Growth of client base and electricity assets
 Significant market expansion
 Operating efficiency
 Synergy and economies of scale
 Investments in expansion and modernization of grid (smart grid)
Growth of CPFL’s Distribution business
21

22. Distribution
Municipalities served 561
Concession areas (‘000 km2
) 177
Inhabitants (millions) 18.0
Market Share (%) 13%
Customers (‘000) 7,551
Employees 6,061
Market (GWh)*
59,640
Base Sep/14.
(*) 12 months ended Sep/14

23. Electricity assets
CPFL
Paulista
CPFL
Piratininga
CPFL
Jaguariúna
CPFL
Santa Cruz
RGE Total
Transmission Lines
(km)
6,070 651 535 566 2,035 9,857
Substations 263 50 43 27 70 453
Distribution Grids
(km)
117,162 22,716 11,926 9,412 80,831 242,047
Distribution
Substation
220,429 47,793 22,432 16,327 107,747 414,728
Posts 1,908,583 468,335 174,228 158,406 1,043,230 3,752,782
23

24. 157.4
171.8
178.2
1989
202.6 205.4
214.5 210.5
235.5
239.8 242.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sep/14
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 12M
3Q14
Cativo
TUSD
# of customers (millions)
Grid extension ('000 Km)
Sales in the Concession Area (GWh)1
5.5 5.6 5.7
6.3
6.4 6.6 6.7 7.0
7.2
7.4 7.6
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sep/14
CAGR
5.1%
177 185
196
223 234
243 247
270
327
380
415
9,299
10,358 10,459
12,356 12,423 12,502 12,659
13,650 13,650
14,535
15,744
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sep/14
Transformers
Substations
Substations (MVA) and Transformers (‘000)
Growth has been significant in recent years…
CAGR
4.4%
CAGR
3.2%
CAGR
5.4%
CAGR
8.9%
24

25. … while the quality of services has remained unchanged
DEC | Average duration of interruptions (hours p.a.)
FEC | Average frequency of interruptions (interruptions p.a.)
25
Sep/14
Sep/14
Sep/14
Sep/14
Sep/14
Sep/14

26. CPFL is an industry benchmark for productivity
1) PMSO published in the financial statements, at 2013 prices. Excludes non-recurring effects of 2005, 2011, 2012 and 2013. 2) CSN, indicator which weights
km of grid (12%), customers (28%) and market (60%), used by OFGEM and proxy of the new ANEEL methodology
36.5
43.8
49.2
58.6
Disco 1 Disco 2 Disco 4Disco 3
Peers (data as of 2013)
PMSO1 by CSV2 – productivity gain of 5% p.a. since the acquisition of RGE in 2006
49.3
44.3
41.5 40.9
45.2
38.3
37.0 37.1 36.8
35.2
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
CPFL Energia (8 distributors)
40.8
32.9
5% p.a.
 Implementation of the operating model of CPFL Energia
 Acquisition and integration of RGE, Santa Cruz and
Jaguariúna
 Increasingly more automated and efficient operation
Economies of scale
Synergies
Productivity increase
26
Acquisition of
RGE

27. And has created value for shareholders by operating
with an actual PMSO below regulatory requirement
Small distributors
Large distributors
Actual PMSO / Regulatory PMSO *
(*) Average COR of the cycle, adjusted by Factor Xt of each company.
Large size: above 1 TWh; Small size: below 1 TWh. Source: ANEEL.
Avg.: 109.4%
Avg.: 106.8%
27

28. Peers
Indicator
AES
Eletropaulo
Elektro AES Sul CEMIG COELBA Avg.
DEC 7.1 7.4 17.4 8.0 8.5 14.1 12.5 22.5 18.31
FEC 4.7 4.6 9.0 4.4 5.0 7.4 6.3 8.9 10.51
Overall Losses (%) 7.9 5.8 9.6 9.9 9.5 11.0 11.2 14.0 14.01
Revenue Quality 0.88 1.10 0.75 1.5 2.7 0.9 7.2 8.3 8.51
Delinquency (%)
over 90 days overdue
0.20 0.56 0.91 0.53 0.59 1.69 5.58 4.91 3.911
CPFL is also a benchmark in quality and commercial indicators
Source: Abradee Award 2014 and ANEEL. 1) Brazil Average (63 companies). 2) Impact on EBITDA as from 2015
OperationalCommercial
28

29. Modernization enabled the reduction by 53% of
incidents in the modernized grids.
Modernizing the distribution grid
201320122011
Number of incidents (Paulista and Piratininga)
Modernization of Urban Grid
Company
Primary
Protected
Secondary
Insulated
Piratininga 26% 56%
Paulista 20% 33%
And invests in modernizing the distribution grid
Spacer Cable
Multiplex
From 2010 through Jun/14:
 Investments of over R$ 180 million
 Modernization of 5,291 Km of grid
Improvement in grid quality, optimizing maintenance
costs
12,963
16,857
Avg.2011/2012 = 14,910
-53%
7,056
29

30. Workforce management and installation of smart meters
Smart workforce management
MWM
emergency
incidents
Centralization
Operation Center
Sectorization
“Baixada” region
Dispatch
Center
MWM
commercial
orders
MWM
commercial
orders
MWM
emergency
incidents
FEB/13 SEP/13 APR/14 SEP/14 DEC/14 MAY/15
Increase in meters installed (‘000) – Group A
2013 Apr/14 Aug/14 Dec/14
13.0
17.2
21.9
24.2  Reduction in reading, inspection and billing costs
 Gains of R$5.6 million/year with reduction of reading
and billing costs as from 2015
 Gains with Energy Recovery
Smart Metering Center installed in Jul/14
Actual Planned
Sectoriza
tion
30
100%
clients
group A

31. Net Revenue (R$ million)* EBITDA (% CPFL Energia)*
EBITDA (R$ million)* Net Income (R$ million)*
Distribution | Economic and financial performance
2004 LTM3Q14
9,945
11,252
13.1%
2004 LTM3Q14
2,040 2,019
-1.0%
2004 LTM3Q14
509
855
68.0%
2004 LTM3Q14
75%
50%
(*) Constant currency - September/14. Restated by IGP-M inflation index. 2014 amounts adjusted for regulatory assets and liabilities and non-recurring effects.
31

32. CPFL Energia in the last 10 years
Sustainability
Differentiated Corporate
Governance
Financial Discipline and
Value CreationSynergic Growth and
Operating Efficiency
Generation and
Commercialization
Segments
Distribution
Services and Telecom

33. Services
& Telecom

34.  Incorporation: 2008
 Provision of customer relationship
services to utility companies:
 call center
 face-to-face service
 back office
 credit recovery
 ombudsman
 help desk and sales
 Foundation: 2006
 Offers a wide range of value-added services:
 engineering projects for transmission and distribution grids
 equipment maintenance and recovery
 self-generation grids
 collection of utilities’ bills through an established authorized
network
Service Segment
34

35. Focus: economically more attractive cities with a higher
concentration of grid users
CPFL concession area:
 7.3% of Brazil’s GDP
Telecom market estimated at
R$13 billion/year
Value Creation Processes
Objective: To be the provider of grid infrastructure and connectivity solutions to
telecommunication operators and service providers.
CPFL Telecom
Footprint
 17 cities
(780 km+
optic fiber)
Grid Operations Center
(COR) in Jundiaí
35

36. Net Revenue (R$ million)* EBITDA (% CPFL Energia)*
EBITDA (R$ million)* Net Income (R$ million)*
Services | Economic and financial performance
2004 LTM3Q14
267
2004 LTM3Q14
47
2004 LTM3Q14
33
LTM3Q14
9% 1%
(*) Constant currency: September/14. Amounts restated by IGP-M inflation index
Start of
activities in
2006
Start of
activities in
2006
Start of
activities in
2006
36

37. CPFL Energia in the last 10 years
Sustainability
Differentiated Corporate
Governance
Financial Discipline and
Value CreationSynergic Growth and
Operating Efficiency
Generation and
Commercialization
Segments
Distribution
Services and Telecom

38. Net Revenue (R$ million)* EBITDA (% consolidated)*
EBITDA (R$ million)* Net Income (R$ million)*
CPFL Energia | Economic and financial performance
2004 LTM3Q14
10,611
14,69738.5%
2004 LTM3Q14
2,648
3,956
2004 LTM3Q14
440
1,235
181.0%
2004 LTM3Q14
75%
50%
(*) Constant currency - September/14. Restated by IGP-M inflation index. 2014 amounts adjusted for regulatory assets and liabilities and non-recurring effects.
49.4%
9% 6%
16%
44%
C
G
D
C/S
G
D
38

39. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3Q14
3.8 3.7 4.4 5.1 5.7
6.7
7.6
10.0
12.6 12.2
13.0
Leverage1 | R$ billion
Adjusted Net Debt1
/Adjusted EBITDA2
1,681 2,120 2,789 3,345 2,808 3,453 3,151 3,665 4,377 3,399 3,896
Adj. nominal EBITDA1,2
R$ million
69%
3%
6%
21%
CDI
Fixed (PSI)
IGP
TJLP
Gross debt breakdown by
index | 3Q14 1,4
Gross debt service cost3,4 | LTM
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
1Q14
2Q14
3Q14
Nominal
Actual
1) Financial covenant criteria as of 2010; 2) LTM EBITDA3) IFRS criterion; 4) Financial debt (+) private pension entity (-) hedge.
CPFL Energia – Debt
39

40. Dividend Yield 1 (last 12 months) Declared dividends2 (R$ million) Average quote at close (R$/common share)3
2H04 1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14
140
401
498
612
722
842
719
602 606 572
655
774
486
748 758
640
456
363
568
422
8.9 9.43
11.67
15.02 14.13 15,87 17.99 18.05 16.69 15.77 16.51 18.44 20.18 22.05 21.95
26.30
22.95
21.11 19.80
18.35
3.7%
6.5%
9.1% 8.7%
9.6%
10.9%
9.7%
7.6% 7.3% 7.6% 7.9%
8.6%
6.9%
6.0%
7.1%
6.1%
4.6%
3.9%
4.8% 5.4%
CPFL Energia – Dividends
Since the IPO in Sep/14, CPFL has been paying dividends close to the entire net income, reaching R$11.6 billion
in nominal terms, or R$15.5 billion in real terms4
(1) Dividend yield in the last two six-month periods; (2) Refers to dividends declared. Payment in the subsequent six-month period; (3)
Considers the quote adjusted by stock split/reverse split on June 29, 2011 (not adjusted for earnings); (4) Adjusted by IGP-M (Jun/14).
40

41. CPFL Energia – Stock performance
Source: Economatica. 1) Quote adjusted by dividends 2) Through Sep. 30, 2014
CPFE3 IEE IBOV
333% 322%
133%
401%
148%
68%
CPL Dow Jones
Br20
Dow Jones
Index
Bovespa NYSE
Average daily volume on
BM&FBovespa + NYSE2 | R$ million
Average daily trading on BM&FBovespa2
ADR Performance
on NYSE | since the IPO1,2
Stock performance
on BM&FBovespa | since the IPO1,2
2004 2014
6.5
22.98.8
16.3
+155%
15.3
39.2
2004 2014
129
5,348
+4,050%
41

42. CPFL Energia in the last 10 years
Sustainability
Differentiated Corporate
Governance
Financial Discipline and
Value CreationSynergic Growth and
Operating Efficiency
Generation and
Commercialization
Segments
Distribution
Services and Telecom

43. Evolution in Corporate Governance
Securities
Trading Policy
Dividend Policy:
50% of net
income on a
semiannual basis
Creation of the
Succession Plan
Free-float
exceeds 25%
requirement of
Novo Mercado
Certified under
Section
404 of SOX
Change in
composition and
responsibilities of
the Board
Executive
Officers
Change in Board
of Directors and
Advisory
Committees
Revision of Code
of Ethics to
reflect SOX
requirements
Proxy Statement
for Shareholders’
Meetings
Adoption of
indicators of
version G4 of
GRI and
adhesion to the
Integrated
Report Pilot
Program
IPO: Sep/04 Aug/06 Dec/06 Apr/07 Apr/11
Dec/04 Sep/06 Dec/06 Apr/08 2013
Anticorruption
Policy
Apr/14
43

44. Active IR department, reporting on the CPFL Energia group
 Management engaged in creating value to the business
 Significant annual results since the IPO (Sep/04)
 Diversified business portfolio
 Healthy dividend yield (95% payout)
 Differentiated corporate governance
 Long-term concessions
 Leader in the distribution segment
 Largest generator of energy from renewable sources
 Important player in other operating segments
It reinforces the idea that, even in a scenario of uncertainties, the company has a
consistent investment thesis based on results and with adequate return
The IR department maintains a proactive approach to the market to ensure a
balance between information and the company’s reputation
44

45. CPFL Energia present in major indexes
1,454+ meetings
142 conferences
78 domestic and 64 international
7 Investor
Meetings
74 Public Meetings
with Analysts
45

46. CPFL Energia in the last 10 years
Sustainability
Differentiated Corporate
Governance
Financial Discipline and
Value CreationSynergic Growth and
Operating Efficiency
Generation and
Commercialization
Segments
Distribution
Services and Telecom

47. Evolution of Sustainability at CPFL Energia
Increasingly more comprehensive concept of responsibility
Welfare
Until 1999
Donations
External actions
in support of
community
Social
Responsibility
2000 to 2003
Process
management
(certification)
Pursuit of quality
processes
Introducing
the Concept
2004 to2006
Quality relations
Management of
relationship with
stakeholders
(long-term
relationship)
Pursuing a
Leading Role
As of 2006
Sharing
Mobilization and
benchmark
Transition to a
new economy
As of 2009
Innovation and
cultural change
Guidelines for
new
businesses
Corporate sustainability
StageFocusofactionApproach
Inclusion in
businesses
As of 2013
Strategic
approach to
sustainability
Sustainability
as
Value driver
From welfare to sustainable businesses
47

48. Sustainability Concept at CPFL Energia
Energy is essential for
the wellness of people
and the development
of society.
We believe that
generating and using
energy in a
sustainable manner
is vital for the future of
mankind.
Vision
To provide
sustainable energy
solutions with
excellence and
competitiveness,
operating in close
integration with the
community.
Mission
• Value Creation
• Commitment
• Safety/Quality of Life
• Austerity
• Sustainability
• Trust and Respect
• Overcoming
challenges
• Entrepreneurship
Principles
CPFL Energia is Brazil’s
largest private group in
the electricity sector,
offering sustainable
energy solutions
through innovative
strategies and talented
professionals.
Positioning
The consolidation of its growth strategy through the implementation of targets and indicators
for business units resulted in the inclusion of Sustainability as a driver of value in its strategic
plan.
Sustainability Platform
48

49. CPFL Energia
Model Company – Guia Exame de Sustentabilidade
We have been present in 11 of the 15 editions
2002|2003|2004|2006|2007|2008|2009|2010|2012|2013|2014
CPFL Energia
Época Empresa Verde Award: 2012 (among 20 best practices)
Época Mudanças Climáticas Award: 2012 (winner in the Services category)
ISE – 2015 portfolio
CPFL Energia included in the index for the 10th consecutive year. Company is one of the 13 groups
included in ISE since its creation in Dec/05.
Dow Jones Sustainability Index Emerging Markets (DJSI Emerging Markets)
For the 3rd time, we have been included in the index that evaluates the performance of leaders in
sustainability in emerging markets. The current portfolio includes 86 companies, 17 of which are
Brazilian.
Benchmark in Business Sustainability
Carbon Disclosure Project
Since 2006, CPFL Energia reports to the market, through CDP Investor and CDP Supply Chain, its
activities regarding greenhouse gas emissions, where it is considered a benchmark not only in the
electricity sector but also in Brazil.
“Respondent of the Brazilian
edition of the Climate Change
program 2014”
49

50. The future of CPFL Energia
Conventional
generation
Renewable generation
Commercialization
Distribution
Services & Telecom

51. The future of CPFL Energia
Conventional generation Renewable generation
Commercialization
Distribution
Services & Telecom

52. Rationale of creation of value of the Distribution business
Purchase of Energy  Costs transferred to the tariff
 Any time mismatches accounted for as CVA and
transferred in the following year adjustment
Parcela A
(76% da receita)
Parcel A
(76% of revenue)
Charges and Transport
 Focus on creating value from the business
 Regulation through incentive enables the creation of
value through efficient management and
investments in RAB
 Regulatory and institutional management are drivers of
value creation
Parcel B
(24% of revenue)
Operating efficiency
Investment in RAB
Discussions of the methodology for the 4CRTP do not change the value creation
rationale
Other Revenues
52

53. Recognize the level of real losses for companies with low level
of technical and non-technical losses, establishing an “attainable”
base for Regulatory Losses of other distributors
Recognize as expense the amounts not accepted in the asset
base of distributors
Recognize a non-compensated Asset Management Fee
(avoiding exchange of asset). Existing alternatives result in a
range that is specific for each company, between 10%-20% of
regulatory WACC
Recognize revenues from Surplus Reactive Power and
Excess over Contracted Demand are part of the initial
balance of the concession agreement
Partial sharing of productivity in detriment to full capture
Maintenance of asset valuation
by VNR for key equipment.
Smaller components and additional
costs calculated with support from
constructive modules.
Revision of the need for
contractual amendment to
provide new ancillary activities
Maintenance of methodology
Revision: from 1.11% to 1.91%
Maintenance of methodology.
Restatement of the index of
social and economic complexity
Improvement of 3CRTP
benchmarking model
Defense of the maintenance of the concept of spread over
real PMSO for the most efficient companies
CPFL’s demand is for ANEEL to conduct an analysis of
the global consistency of results
RAB
COR
Other
revenues
X Factor
Losses
CPFL Energia ProposalAneel Proposal
53
CPFL is participating institutionally in discussions of the
4th Tariff Review Cycle (4CRTP)

54. WACC
CPFL is participating institutionally in discussions of the
4th Tariff Review Cycle
WACC recalculated every 3
years and methodology
revised every 6 years (with
movable windows)
Revision of WACC from 7.5%
to 7.33%
13.00%
11.26%
9.95%
7.50% 7.33%
 Higher profitability is only possible
through efficiency gains and
economies of scale
 Stimulus to consolidation in a still
highly fragmented sector (6
companies control 50% of the market)
Recognize the increase to recover attractiveness of Distribution
and align remuneration with the current economic scenario:
(i) improve the model to capture all Distribution risks through
exchange risk (1.02 p.p.) and regulatory risk (1.98
p.p.);
(ii) calculate the country risk using the average instead of
the median (1.60 p.p.)
WACC (real)
CPFL Energia ProposalAneel Proposal
54

55. Maturing in 2015
Maturing after 2015
 4 large distributors (CELESC, CEEE,
CEMIG and COPEL)
 35 small distributors – synergy
opportunities
Until Oct 15, 2012 – distribution
concessionaires filed their intention to
extend concession agreements
Conditions imposed for renewal have not
yet been defined, but requirements are
expected to be related to operating
indicators
Depending on the conditions imposed, there
is a possibility that some of the distributors
choose not to renew  new merger
opportunities
60%
40%
60% of the
distribution
concessions (39
companies) have
contracts expiring in
2015
Renewal of concessions in the distribution segment
Market share (%)
55

56. The future of CPFL Energia
Conventional sources Renewable sources
Commercialization
Distribution
Services & Telecom

57. Physical
Guarantee
Actual
generation
100
92
GSF calculation needs improvement
Characterization of the financial impact of GSF1 for hydroelectric generators (MWa)
-8 MW
Amount of
energy to be
acquired
Valuation of
GSF at market
price
PLD
Financial impact on
HPPs
 Lowering of ceiling PLD
from R$ 823/MWh to R$ 388/MWh
What should be corrected in the GSF calculation?
 Impact from generation of Reserve Energy:
should be valued at the cost of such generation
(instead of PLD)
 Impact of Out of Merit Dispatch: should be
removed from the cost of hydroelectric generator
57
1) Generation Scaling Factor

58. 16,0
18,7 18,8
22,4 23,7
27,2
21,1
CPFL Geração focuses on operating efficiency
Note: Amounts in currency Dec/14. PMSO excludes fuel cost at EPASA
PMSO /
Physical
Guarantee
(R$/MWh)
EBITDA /
Physical
Guarantee
(R$ MM/MWh)
Sector
Average
Sector
Average
117
136
101
89 89 79
102
-24%
+15%
58
Genco 1 Genco 2 Genco 3 Genco 4 Genco 5
Genco 1 Genco 2 Genco 3 Genco 4 Genco 5

59. The future of CPFL Energia
Conventional sources Renewable sources
Commercialization
Distribution
Services & Telecom

60. Largest player in renewable energy sector1
399
940
670
190
532 464
71 19 157
1,002
462
353 159 197 38
370
116
13
1.1
3
335
940
670 652
532
464
353
349
229
195
58 34
2,108
Under
construction
SHPP
Biomass
Solar
Wind
1,772
Market share > 8%
Consolidation
opportunities
CPFL Renováveis | Consolidation opportunities
60
(1) Installed capacity in operation (MW).

61. Potential growth in renewable energy market
86
117
11
12
11
2017
47
Renováveis
Outros
Gás Natural
Hidro
2023 estimated2013 actual
Increase in Brazil’s installed capacity by
source | GW
4.6% p.a.
196
125
CAGR
0.9%
10.5%
6.5%
3.1%2
Renewable energies in Brazil should grow
10.5% p.a., from 17 GW in 2013 to 47 GW in
2023
1%Wind
 Potential: 350GW
 Installed capacity: 3.8GW
29%SHPP
 Potential: 17.5GW
 Installed capacity: 5.0GW
54%Biomass
 Potential: 17.2GW
 Installed capacity: 9.3GW
Potential to be explored in Brazil2
Actual
61
(1) Potential: PDE 2022; installed capacity: BIG - ANEEL August/2014; (2) Includes estimated import from Itaipu HPP not consumed by Paraguay
Renewables
Other
Natural Gas
Hydro²

62. Sustainability &
Safety
Operating
efficiency
Growth
Strategic guidelines for CPFL Renováveis
 High operating performance and efficacy in management, supported
by controls, processes, systems, organizational structure and institutional
presence.
 To be the benchmark in sustainability, contributing to the development
of the communities where we operate, while striving for safety, the
environment and reduction of greenhouse gas emissions.
 Maintain business growth with value creation (returns above cost of
capital).
 Excellence in implementation of generation, M&A and innovation
projects.
62

63. The future of CPFL Energia
Conventional sources Renewable sources
Commercialization
Distribution
Services & Telecom

64. 64
 Reservoirs’ lower levels
 Lack of liquidity due to the
perception of the risk of
shortage
 High price volatility
Potential free market:
Alternative source: 6.6 GW average
Competitive source: 1.3 GW average
 Focus on special consumers
 Sign of captive market prices
encourages migration to free
market
 Scenario of uncertainties
encourages long-term
contracts
 Synergy with CPFL
Renováveis
Strategic Guidelines for CPFL Brasil
Risks Opportunities

65. The future of CPFL Energia
Conventional sources Renewable sources
Commercialization
Distribution
Services & Telecom

66.  Market enjoying
accelerated growth,
especially in broadband,
requires investment
 Growth of sales and revenue
generation in the 17 cities
where the project has
been implemented
 Geographic expansion
on demand, according to
client requirements and
profitability of projects
CPFL Telecom
Opportunities for CPFL Serviços and CPFL Telecom
CPFL Serviços
 Development of
qualified manpower and
suppliers, improving the
quality of services
 Use of technology to
improve productivity and
quality
 Financial capacity to
invest in new technologies
66

67. GENERATION
• To act on both institutional and
regulatory fronts to mitigate
business risks
• To be efficient in managing
energy contracts
• Maintain the leadership in
operating efficiency across the
sector
Strategic guidelines of the current businesses of CPFL Energia
COMMERCIALIZATION
• To maximize value in the free
market by operating within the risk
thresholds
• To operate with the focus on
special clients
• To explore synergies through
strategic operations: ESCO and
Retail Commercialization
DISTRIBUTION
• To be the leader in operating
efficiency by investing in
technology, automation and
innovation
• To act on both institutional
and regulatory fronts to
ensure sustainability of the
sector
SERVICES
• To operate with the focus on
Technical Services, with
technology and productivity
• To mitigate service risk by
hiring qualified manpower
and suppliers
RENEWABLES
• Growth while creating
value through acquisitions
and greenfield projects
• To be the leader in
operating efficiency in the
Renewables segment
TELECOM
• Sales growth in the 17 cities
where the project has been
implemented
• Geographic expansion on
demand according to client
requirements and profitability
of projects
67