INSTITUTIONAL PRESENTATION 2Q18

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1 INSTITUTIONAL PRESENTATION 2Q18

ELECTRICITY GENERATION World s Largest Producers (TWh) 2017 China EUA Índia Japão Rússia 1.541 1.101 1.090 4.251 6.

2 ELECTRICITY GENERATION World s Largest Producers (TWh) 2017 China EUA Índia Japão Rússia Canadá Alemanha Brasil Coreia do Sul França Arabia Saudita ReinoUnido th POSITION Source: Global Energy Statistical Yearbook

NATIONAL CONSUMPTION National Consumption by Class Acumulated (TWh) 2 T 18 2 T 17

2%) 22,4 21,8 19,3 19,1 Residential Industrial Commercial Others* Total Source: EPE

3 NATIONAL CONSUMPTION National Consumption by Class Acumulated (TWh) 2 T 18 2 T ,8 ( %) 115,4 33,9 (+ 3.5%) 32,8 42,2 ( + 1.1%) 41,7 ( + 2.5%) (+ 1.2%) 22,4 21,8 19,3 19,1 Residential Industrial Commercial Others* Total Source: EPE - Empresa de Pesquisa Energética Outros*= Consumption Rural; Public Service; Public Lighting 3

4 RESERVOIRS LEVEL Subsystem Southeast / Midwest (70% country storage ) ,8% Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez Source: ONS 4

5 ENERGY GENERATION 2017X 2018 HG Hydraulic Generation TG Thermal Generation MW average MW average J F M A M J J A S O N D HG_2017 HG_2018 TG_2017 TG_2018 Load_2017 Load_2018 Source: ONS 5

6 PHSICAL GUARANTEE X HYDRO GENERATION GW médio 100 Physical Guarantee Hydro Generation GSF 1,172 GSF 1, ,069 1,137 0,999 0,796 0,781 0,793 58,4 60,0 60,5 60,8 0,843 0,709 59,5 56,1 53,9 54,6 0,603 54,8 0,612 49,6 51,9 53,7 51,1 0,669 0,640 46,4 49,0 48,9 45,7 45,8 42,9 42,7 0,622 44,5 43,1 37,4 36,2 37,1 37,8 39,8 38,9 1,000 0,800 0,600 0,400 0,200 0,000 GSF Generation Scaling Factor Source: CCEE 6

7 AVERAGE PRICE PLD - R$/MWh Subsystem Southeast / Midwest Yearly Average Monthly/Quarter Average 688,88 263,07 287,20 324,17 303,75 302,93 166,69 94, T17 2T18 Source: CCEE 7

100% Hydro Generation 1,2 million customers 14.105 employees 22 plants 11.

of US$ 518 million Debt/EBITDA: 19 x 43 customers 468 employees 3 plants 1.

8 100% Hydro Generation 1,2 million customers employees 22 plants MW capacidade instalada US$ 9,8 billion in liabilities US$ 21,6 billion in assets EBITDA of US$ 518 million Debt/EBITDA: 19 x 43 customers 468 employees 3 plants 1.654,6 MW instaled /capacity US$ 85,1 million in liabilities US$ 2.7 billion in assets EBITDA (UDM): US$ 103 million Debt/EBITDA: 0,9 x 8

9 HISTORICAL SPLIT UP APRIL/ 01/99 Privatized 07/16/98 11/05/97 04/14/99 9

10 CESP has the grant of three hydro generations acting on price regime. Total installed capacity is 1,654.6 MW. 10

11 HPP Nº OF UNITS INSTALLED CAPACITY PHISICAL GARANTEE MW Average OPERATION START CONCESSION END PORTO PRIMAVERA PARAIBUNA JAGUARI , jan/23/99 jul/11/ , apr/20/78 mar/09/ , may/05/72 may/20/20 TOTAL , From December 22, 2016, the date of publication by MME - Ministry of Mines and Energy, of Ordinance No. 258, the physical guarantee of the Porto Primavera HPP was reduced from 1,017 to MW average, which added to the physical guarantees of the Paraibuna and Jaguari, totals 1,056.6 average MW. On May 3, 2017, the MME published Ordinance No. 178, reducing from 2018 the physical guarantee of the Porto Primavera HPP from to MW average, from the Paraibuna HPP from 50.0 to 47.5 MW average, and from Jaguari HPP from 14.0 to 13.3 average MW. With this, the physical guarantee marketable in 2018 will increase from the current 1,056.6 to 1,002.6 average MW. The Company has already filed a lawsuit against the Federal Government to reverse the effects of Administrative Rule 258/2016 and continues to make efforts to reverse the effects of these changes on its concession agreement. 11

12 AVAILABLE ASSETS FOR REVERSAL June/30/2018 (R$ million) Occurrences / HPP Três Irmãos Ilha Solteira Jupiá Total Amount of Plants 3,529 2, ,337 Provision - Contingent Assets / Impairment - -1, Sub Total Dec 31, , ,342 Provision 4T15-1, Balance of Available Assets to Reversal 1, ,949 Amount on dispute in Court 6, ,252 Base Period Apr-13 Jun-15 Jun-15 12

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OPERATIONAL PERFORMANCE Energy Production X Physical Guarantee (GWh) 41.056 42.353 34.304 34.304 35.946 34.304 32.399 29.171 24.067 21.

14 OPERATIONAL PERFORMANCE Energy Production X Physical Guarantee (GWh) T18 Physical Guarantee: MW = GWh Annual ; H17 14

0,0101 0,0097 0,0160 0,0048 0,0165 0,0055 0,0057 2012 2013 2014 2015

15 OPERATIONAL SITUATION June/2018 0,898 0,925 0,925 0,931 0,920 0,939 0,938 0,938 Forced Unavailability Equivalent Rate TEIFa 0,0251 0,0095 0,0101 0,0097 0,0160 0,0048 0,0165 0,0055 0, ,898 0,0165 Source: ONS 15

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25 billion Jun/2007 To match its cash flow generation with its debt service, CESP has launched a comprehensive capital restructuring plan with the following main

17 Privatization of CTEEP R$ 1.2 billion Jul/2006 Public Offering of Preferred Class B Shares (PNB) R$ 2.0 billion Jul/2006 Bonds Operations US$220 million = R$ 488 million - Aug/2006 US$350 million = R$750 million - Jan/2007 FIDC III R$ 650 million Aug/2006 FIDC IV R$ 1.25 billion Jun/2007 To match its cash flow generation with its debt service, CESP has launched a comprehensive capital restructuring plan with the following main components: Funds Involved in the Restructuring - R$ 6.3 billion 1.2 C T E E P 2.0 P U B L I C O F F E R Capital Increase R$ 3.2 billions 1.2 B O N D S 0.65 FIDC III 1.25 F I D C IV Term: 10 years Grace Period: 5 years (for principal) 17

330 937 908 943 841 985 794 787 954 3.526 1.106 1.061 842 959 1.449 856 1.068 893 1.287 1.

18 GROSS REVENUE & PRICES Gross Revenue R$ million Average Prices R$/MWh 189,25 178,15 164,93 139,61 181,49 192, ,73 92, Invoiced Amount GWh

19 Net Revenue & EBITDA Evolution of Net Revenue EBITDA (R$ million) EBITDA Margin (%) 85,5 78,4 69,1 62,2 58,9 54, ,3 52,6 19

CONTRACTED ENERGY Customer Portfolio (MW average) 78% 832 78% 839 78% 824 78% 819 74% 646 59% 330 38% 140 22% 230

20 CONTRACTED ENERGY Customer Portfolio (MW average) 78% % % % % % % % % % % % % % Distribuidores Mercado Livre 20

21 CONTRACT PRICES Prices R$/MWh (june/2018) 182,09 186,06 186,21 187,02 200,25 178,45 142,25 229,74 235,15 235,82 235,81 235,81 235,81 235, Distribuidores Mercado Livre 21

1.771 Costs & Operational Expenses R$ million 2.223 1.868 1.694 1.701 1.330 1.283 1.038 Employees 922 802 568 466 468 2011 2012 2013 2014 2015 2016 2017 6M18 1.

22 1.771 Costs & Operational Expenses R$ million Employees M Personnel Expenses/Net Revenue(%) 10,6 9,3 8,5 7,6 6,9 6,3 5,1 4, M M18 22

23 Debt Charges + Monetary Variation (Excluding Exchanges Variation) R$ million M18 23

Capital Investment R$ million 129 86 75 32

24 Capital Investment R$ million M18 24

25 FINANCIAL HIGHLIGTHS R$ million Operational Revenue % Net Operational Revenue % Financial Results (43) (1.5) 2,809% EBITDA Adjusted % EBITDA Margin 26.2% 50.6% pp Net Income % 25

26 FINANCIAL HIGHLIGTHS R$ million Operational Revenue % Net Operational Revenue % Financial Results EBITDA Adjusted % EBITDA Margin 52.6% 58.7% -6.1 pp Net Income % 26

27 27

28 PROVISIONS FOR LEGAL RISKS (R$ million) Balance 1Q Monetary Correction and interest 100 Payments -8 Deposits in payments -25 Agreements with MS Estate -583 Provision and Reversal -394 Balance 2Q

29 COURT LAWSUITS Base: June/2018 ( R$ billion) Probability Quantity of Lawsuits Amount 06/2018 Relevant Lawsuits Amount 06/2018 PROBABLY 1,129 R$ R$ 1.5 POSSIBLE 1,639 R$ R$ 1.6 REMOTE 579 R$ R$ 6.6 TOTAL 3,347 R$ R$ 9.8 Of the amounts related to lawsuits filed against CESP (judicial liabilities), 85% of them refer to the UHE Porto Primavera and are concentrated in lawsuits, most of which are filed in courts affiliated to the Mato Grosso do Sul State. 29

75% 74% 51% 49% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2T18 2,8 2,2 2,1

30 FINANCIAL DEBT 5,3 Evolution by Currency (R$ billion) Local Currency Foreign Currency 35% 4,5 4,2 3,7-94% 37% 31% 34% 3,0 25% 2,8 26% 1,7 65% 63% 69% 66% 75% 74% 51% 49% T18 2,8 2,2 2,1 1,7 1,1 0,7 1,0 0,9 0,9 0,9 Debt / EBITDA ratio 0,8 0,4 68% 32% 0,3 97% 98% 3% 2% 30

FINANCIAL DEBT June 30/2018 R$ 337.4 million Debt in Foreign Currency US$ 85.1 million (R$ 328.

31 FINANCIAL DEBT June 30/2018 R$ million Debt in Foreign Currency US$ 85.1 million (R$ million) Eletrobrás R$ 7,3 2,2% Funcesp R$ 2,0 0,6% Others R$ 1,2 0,4% BNDES Brady R$ 326,9 96,8% 31

32 FINANCIAL DEBT PROFILE June, 30/2018 R$337.4 million Local Currency % 2% 98% 98% After % 64% 99% 32

33 Several factors enable CESP to generate strong operational cash flow. 1 - Low Operational Costs 2 - Low CAPEX Requirements 3 - Low Working Capital Requirements (less than 5% of net revenues) 4 - Tax Credits Reducing Future Tax Payments (R$ 2.4 billion) 33

34 34

35 TOTAL CAPITAL COMMON x PREFERRED Preferred (Class B); 64,4% Common (ON); 33,3% Preferred; 2/3 Common 1/3 Preferred (Class A); 2,3% 35

36 Common (ON) & Preferred (PNA + PNB) ON PNA + PNB SP State; 95% Market 87% SP State 13% Market; 5% 36

37 Main Shareholders June 2018 (%) CONTROL GROUP SHAREHOLDERS ON PNA PNB TOTAL FAZENDA DO ESTADO DE SÃO PAULO COMPANHIA PAULISTA DE PARCERIAS OUTHER SUBTOTAL FREE FLOAT ELETROBRÁS HSBC BANK PLC LONDON SQUADRA INVESTIMENTOS MORGAN STANLEY UBS AG LONDON WESTERN ASSET DTVM OUTHER SUBTOTAL TOTAL Source : ITAU 37

38 June 30/2018 R$ million , , , , ,066 38

39 39

40 CESP6 SHARES QUOTATION From Jan 1st/2018 to June 30th/ ,00 20,00 19,00 18,00 17,00 16,00 15,00 14,00 13,00 12,00 11,00 IEE Electric Energy Index IBOV Bovespa Index Source: AE Broadcast 40

41 CESP CORPORATE RATING From Jan/2003 July 2018 Investiment Grade Distinctly Speculative Predominantly Speculative Prime AAA AAA High Grade Upper Medium Grade AA+ AA AA- A+ A A- BBB+ Lower Medium Grade BBB bbb- BBB- BB+ Highly Speculative Insolvency Risk Substancial Risk Insolvency Probability Default BB- B+ B Speculative BB BB- B- CCC+ CCC CCC- CC C SD DDD DD D jan/03 jul/03 jan/04 jan/06 jul/06 jan/07 jul/07 jan/08 jul/08 jan/09 jul/09 jul/10 jan/11 jul/11 ago/12 abr/13 fev/14 mai/14 dez/15 fev/16 jun/16 mai/17 Jan/18 Jul/18 Ba2 S&P Local S&P Global S&P Stand Alone (SACP) Moody s Global 41

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Institutional Presentation 4T16

Institutional Presentation 4T16 ELECTRICITY GENERATION World s Largest Producers (TWh) 2015 Total 23.950 (100%) China 5.682 (23,7%) EUA 4.324 (18,1%) Índia 1.368 (5,7%) Rússia 1.062 (4,4%) Japão 995 (4,2%)