The Brazilian electricity regulator, ANEEL, approved today a 12.17% annual tariff readjustment index for Escelsa, for the period from August 2008 to July 2009.

Considering the financial adjustments included in the last period's tariffs (non-recurring items), which are associated to the recovery of tariff differences incurred in the past, the current tariff readjustment results in an effective average tariff increase of 7.13% to be applied to Escelsa's tariffs as from August 2008.

Within the annual tariff readjustment process, ANEEL recognizes in the tariffs of the distribution companies the pass-through of some cost components incurred in the previous twelve months, namely i) the annual change in non-controllable costs ("Parcela A") and ii) the adjustment of the controllable costs ("Parcela B") to inflation (IGP-M) corrected by an X Factor. In addition, the regulator also recognizes financial adjustments, which usually correspond to the recovery, for a twelve months period, of the non-controllable costs incurred in the past that were not covered through the tariffs.

This annual tariff readjustment process considers the impacts from changes in tariff revision process, occurred in August 2007, which result in an improvement of "Changes on Parcela A and Parcela B" index from -6.92% to -4.90% as well as the revision of X Factor from 1.45% to 2.03%. Overall, the result of tariff revision, occurred in August 2007, is still on a preliminary basis.

EDP - Energias de Portugal, S.A.