BRIEF HISTORY

In March 1998, CPFL Energia (previously known as “Draft II”) was established by VBC, 521 Participações and Bonaire, which was created to obtain financing for CPFL Paulista, in order to consolidate the interests of investors in electricity generation and distribution companies.

In August 2002, the controlling shareholders of CPFL Energia decided to transfer their direct interest in CPFL Paulista and CPFL Geração to CPFL Energia. This capitalization was aimed at consolidating the electricity generation and distribution assets and simplifying their operating and corporate structures. With this restructuring, CPFL Energia became a holding company that holds control in order to promote synergy among the group companies.

In October 2004, the Company carried its Initial Public Offering by issuing new shares while the controlling shareholders simultaneously sold their shares. This Offering was carried out in both Brazil and abroad, with shares of the Brazilian Offering listed on the BM&FBOVESPA, while the International Offering, involving the issue of American Depositary Receipts (ADS), was listed on the New York Stock Exchange (NYSE).

CPFL Energia either acquired or established the following companies: (i) set up CPFL Brasil in August 2002; (ii) acquired CPFL Santa Cruz in October 2006 through Nova 4 Participações; (iii) acquired CMS Energy Brasil S.A. (“CMS”) in April 2007 through Perácio Participações S.A. (“Perácio”); (iv) set up CPFL Atende in August 2008; (v) set up NECT Serviços in the 3rd quarter of 2010; and (vi) acquired CPFL Renováveis in July 2011 through CPFL Brasil and CPFL Geração; (vii) set up CPFL Centrais Geradoras in July 2013.

CPFL Energia absorbed all the shares held by non-controlling shareholders of the following companies (i) CPFL Geração in June 2005, (ii) CPFL Paulista and CPFL Piratininga in November 2005, (iii) RGE in December 2007, and (iv) CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista, CPFL Mococa, CPFL Jaguari de Geração, CPFL Serviços and CPFL Santa Cruz (earlier held by CPFL Jaguariúna) in April 2010.

CPFL Eficiência Energética S.A. (“CPFL ESCO”), earlier known as CPFL Participações S.A, was set up to provide especially consulting and management services in energy efficiency, in addition to renting assets for power generation units, participating in energy trading markets, research and development projects related to energy programs, and holding interest in other companies.

On October 31, 2014, the company carried out corporate restructuring, with the spin-off of the assets of CPFL Serviços, related to the services of rentals, maintenance and operation of diesel-based power generation plants, signed with free consumers, called “self-production”.

These assets were transferred from CPFL Serviços to CPFL ESCO.

The foundation of the CPFL Energia group dates back to the establishment of CPFL Paulista in 1912, resulting from the merger of four domestically-held private energy companies. In 1964, its control came under Eletrobrás, belonging to the federal government, and remained so until 1975 when it was transferred to the Companhia Energética de São Paulo (“Cesp”), belonging to the São Paulo State Government.

In November 1997, the auction for the privatization of CPFL Paulista was held on the BM&FBOVESPA. Controlling interest in it was acquired by DOC 4 Participações S.A. (“DOC 4”), controlled by the shareholders VBC Energia S.A. (“VBC”), 521 Participações S.A. (“521 Participações”) and Bonaire Participações S.A. (“Bonaire”).

In December 1999, DOC 4 was merged with CPFL Energia. Consequently, DOC4 was liquidated and its shareholders directly held interest in CPFL Paulista.

More information about the history of CPFL Paulista is available in its Reference Form.

In September 1998, the São Paulo State Government, through a public auction of privatization, transferred the controlling interest in Empresa Bandeirante de Energia – EBE (“Bandeirante”) to the groups Energia Paulista Ltda – ENERPAULO and Draft I Participações S.A. – (“Draft I Participações”), a wholly-owned subsidiary of CPFL Paulista.

Partial spin-off of Bandeirante was approved in October 2001. The spun-off portion of Bandeirante was absorbed by CPFL Piratininga and Draft I swapped its interest in the voting capital in Bandeirante for the interest held by ENERPAULO in the voting capital of Piratininga. Subsequently, Draft I held interest in CPFL Piratininga. In August 2004, the parent company Draft I Participações was merged with CPFL Piratininga, after which CPFL Paulista held direct interest in CPFL Piratininga.

More information about the history of CPFL Piratininga is available in its Reference Form.

In September 2000, the shareholders of CPFL Paulista voted to segregate its electricity generation and distribution operations, which are since being carried out by different companies. Thus, the corporate purpose of CPFL Paulista became mainly the provision of public electricity distribution and trading services.

The spun-off portion, corresponding to the electricity generation operation, was absorbed by CPFL Geração, whose shares were distributed to the shareholders of CPFL Paulista in proportion to their interest in it.

In December 2001, CPFL Geração underwent corporate restructuring, after which it ceased to be a public utility concessionaire and became a holding company of electricity generation companies. For this, VBC capitalized its interest in Semesa in CPFL Geração, which now held controlling interest in Semesa. The other shareholders, 521 Participações and Bonaire injected capital in CPFL Geração.

In March 2007, approval was given to the merger of CPFL Centrais Elétricas and Semesa with CPFL Geração, which ceased to be a holding company and started operating as an electricity generation utility once again.

CPFL Geração either acquired or established the following companies: (i) acquired in November 2000 a portion of the capital of CERAN – Companhia Energética Rio das Antas; (ii) acquired in March 2002 a portion of the capital of Foz do Chapecó Energia S.A. and a portion of the capital of Campos Novos Energia S.A. from VBC and a portion of capital of Barra Grande Energia S.A. (“BEGESA”) from VBC Participações S.A., which was merged with CPFL Geração in April 2004, consequent to which CPFL Geração held direct interest in BAESA; (iii) acquired in December 2006, the interest held by Companhia Estadual de Energia Elétrica - CEEE in Foz do Chapecó, taking its interest in Foz do Chapecó to 85%, which is equivalent to 51% indirect interest in Consórcio Energético Foz do Chapecó; (iv) established in 2008 CPFL Bioenergia, which was transferred to a CPFL Renováveis in July 2011; (v) acquired in September 2009, Santa Clara I – Energias Renováveis Ltda., Santa Clara II Energias Renováveis Ltda., Santa Clara III Energias Renováveis Ltda., Santa Clara IV Energias Renováveis Ltda., Santa Clara V Energias Renováveis Ltda., Santa Clara VI Energias Renováveis Ltda., and Eurus VI Energias Renováveis Ltda., all limited liability companies, so that they can invest and operate as independent generators of electricity from alternative sources, mainly wind, which were transferred to CPFL Renováveis in July 2011; (vi) acquired in September 2009, Centrais Elétricas da Paraíba S.A., a privately held company that develops, implements, operates and explores two (2) thermal power plants - TPP Termoparaíba and TPP Termonordeste – both powered by fuel oil; (vii) acquired on July 16, 2010, Campos dos Ventos I, II, III, IV, V and Eurus V, which are privately held companies, to operate as independent generators of electricity from alternative sources, mainly wind, which were transferred to CPFL Renováveis in July 2011; (viii) established in December 2012, CPFL Transmissão.

On April 19, 2011, CPFL Geração, together with CPFL Brasil and ERSA – Energias Renováveis S.A. (“ERSA”), signed an Association Agreement by which they decided to integrate the renewable energy assets and projects held by CPFL and ERSA in Brazil, which include wind farms, small hydropower plants (SHP) and biomass-fired thermal power plants. More information is available in the item “CPFL Renováveis”.

More information about the history of CPFL Geração is available in its Reference Form.

In July 2001, CPFL Paulista acquired from VBC and 521 Participações, the controlling interest in Rio Grande Energia S.A. (“RGE”).

In May 2006, the Company signed an agreement with the PSEG Group to acquire the shares of Ipê Energia Ltda, PSEG Brasil Ltda and PSEG Trader S.A., which were later renamed CPFL Serra Ltda. (“CPFL Serra”), CPFL Missões Ltda. (“CPFL Missões”) and CPFL Comercialização Cone Sul S.A. (“CPFL Cone Sul”), respectively. The main asset held by CPFL Serra was its interest in RGE and in Sul Geradora Participações Ltda. (“Sul Geradora”). With the acquisition of these companies, CPFL Energia held the entire capital of RGE through CPFL Paulista and CPFL Serra, and of Sul Geradora through CPFL Brasil and CPFL Serra.

In March 2007, the interest held by CPFL Paulista in RGE was transferred to CPFL Energia. On the same date, the Company carried out a capital increase in CPFL Serra. As such, CPFL Energia held its interest in RGE through CPFL Serra.

In December 2007, CPFL Serra was merged with RGE. After the merger, CPFL Serra was dissolved and CPFL Energia directly held interest in RGE.

In May 2007, through a capital injection by CPFL Energia in CPFL Brasil, CPFL Cone Sul became a wholly-owned subsidiary of CPFL Brasil.

More information about the history of RGE is available in its Reference Form.

In August 2002, CPFL Comercialização Brasil – (“CPFL Brasil”) was established to supply electricity to the distribution subsidiaries of CPFL Energia, as well as to trade and manager energy in the free contracting environment.

CPFL Brasil acquired or established the following companies: (i) acquired in January 2005 CPFL Clion (“CPFL Meridinal”); (ii) established CPFL Bio Formosa in October 2009; (iii) established CPFL Bio Buriti, CPFL Bio Ipê and CPFL Bio Pedra in January 2010; (iv) established CPFL Bio Anicuns and CPFL Bio Itapaci in April 2010, which were transformed in 2012 to CPFL Total and CPFL Telecom, respectively, and became wholly-owned subsidiaries of CPFL Energia.

On April 19, 2011, CPFL Brasil, together with CPFL Geração and ERSA – Energias Renováveis S.A. (“ERSA”), signed an Association Agreement by which they decided to integrate the renewable energy assets and projects held by CPFL and ERSA in Brazil, which include wind farms, small hydropower plants (SHP) and biomass-fired thermal power plants. CPFL Bio Formosa, CPFL Bio Buriti, CPFL Bio Ipê and CPFL Bio Pedra were transferred to CPFL Renováveis in July 2011. More information is available in the item “CPFL Renováveis”.

In October 2006, Nova 4 Participações Ltda (“Nova 4”), a subsidiary of CPFL Energia, signed a share purchase agreement with Companhia Brasileira de Alumínio to acquire the capital stock of Companhia Luz e Força Santa Cruz (“Santa Cruz”). In October 2007, Nova 4 was merged with CPFL Santa Cruz and as a result CPFL Energia held direct interest in CPFL Santa Cruz.

In April 2007, Perácio Participações S.A. (“Perácio”), a subsidiary of CPFL Energia, signed a share purchase agreement with CMS Electric & Gas, L.L.C. by which it acquired shares in CMS Energy Brasil S.A. (“CMS”), whose name was changed to CPFL Jaguariúna S.A. CPFL Jaguariúna was a holding company that operated through its subsidiaries: CPFL Leste Paulista, CPFL Sul Paulista, CPFL Jaguari, CPFL Mococa, Paulista Lajeado Energia, CPFL Planalto, CPFL Serviços and CPFL Jaguari Geração in the electricity distribution, generation, trading and special services segments. In February 2009, approval was given to the merger of Perácio with CPFL Jaguariúna. After the merger Perácio was dissolved and CPFL Energia held direct interest in CPFL Jaguariúna. In March 2009, approval was given to corporate restructuring through the partial spin-off of CPFL Jaguariúna to the subsidiaries CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista, CPFL Mococa, CPFL Jaguari de Geração and CPFL Serviços and the transfer of investments and other related assets and liabilities to CPFL Energia. After said restructuring, CPFL Energia directly held all the investments that were earlier held by CPFL Jaguariúna.

In August 2008, CPFL Energia paid the capital stock of CPFL Atende Centro de Contatos e Atendimento Ltda., which provides general telecalling services, especially customer services that must be provided through own call centers, including receiving and answering calls from customers using both human and electronic operators (URA).

In the 3rd quarter of 2010, the Bylaws of the subsidiary earlier known as “Chumpitaz Serviços S.A.” were amended to change its name to “Chumpitaz Serviços S.A.” and later to “NECT Serviços Administrativos”. The corporate purpose of the subsidiary changed to providing technical, administrative and commercial services, among others.

On April 7, 2011, CPFL Energia, through its subsidiary CPFL Brasil, signed a purchase agreement to acquire 100% of the shares of Jantus SL (“Jantus”) for R$ 823 million and/or the possible acquisition pf the entire capital of a company to be set up by the Sellers through an ownership restructuring at Jantus. On September 21, 2011, CPFL Energia assigned the purchase agreement to CPFL Renováveis. To conclude the acquisition, our subsidiary CPFL Brasil injected funds into CPFL Renováveis.

Jantus controlled SIIF Énergies do Brasil Ltda. and SIIF Desenvolvimento de Projetos de Energia Eólica Ltda. (jointly “SIIF”). On December 19, 2011, the acquisition was concluded, with CPFL Renováveis acquiring the entire capital of SIIF, which included: (i) four wind farms in operation in the state of Ceará; (ii) one wind park project in the state of Rio de Janeiro; and (iii) a portfolio of wind power projects in the states of Ceará and Piauí.

On April 19, 2011, CPFL Energia, together with CPFL Geração, CPFL Brasil and ERSA – Energias Renováveis S.A. (“ERSA”), signed an Association Agreement establishing the terms and conditions by which they decided to integrate the renewable energy assets and projects held by CPFL and ERSA in Brazil, which include wind farms, small hydropower plants (SHP) and biomass-fired thermal power plants.

In general terms, the association consisted of the following stages: (i) CPFL Geração undertook to segregate the SHP assets owned by it and which were operational, transferring them to specific companies under its direct control (the “SHP Companies”); (ii) CPFL Geração and CPFL Brasil, being the sole shareholders, joined a new holding company: Smita Empreendimentos e Participações S.A. (“SMITA”), to which they transferred all their renewable energy projects, including the SHP Companies; (iii) a ERSA absorbed SMITA such that CPFL Geração and CPFL Brasil joined the controlling block of ERSA as controlling shareholders, which was approved on August 23, 2011 by the board of directors and ratified by shareholders at the Extraordinary Shareholders Meeting held on December 19, 2011; and (iv) concurrently with the merger described above, ERSA’s name was changed to CPFL Energias Renováveis S.A. (“CPFL Renováveis”).

To simplify the ownership structure and centralize the power generation activities at CPFL Geração, the company carried out corporate restructuring involving the partial spin-off, from CPFL Brasil to CPFL Geração, of the assets and liabilities related to the investment until then held by CPFL Brasil in CPFL Renováveis.

Consequently, starting from January 1, 2013, the subsidiary CPFL Geração held full direct interest in the subsidiary CPFL Renováveis. More information is available in the financial statements of December 31, 2013, in note 12.2.

On August 19, 2013, an IPO was held of the common shares of CPFL Renováveis, at the unit price of R$ 12.51, for a total amount of R$ 914,686. The operation raised a gross amount of (i) R$ 364,687 in the primary and complementary offering and (ii) R$ 549,999 in the secondary offering. As a result, CPFL Geração’s interest in CPFL Renováveis was diluted from 63% to 58.84%.

CPFL Renováveis acquired the following companies: (i) on December 29, 2011, all the shares of Santa Luzia Energética S.A. (“Santa Luzia”), representing 100% of its capital, through the assumption of debt to BNDES. As a result, we hold the small hydroelectric plant Santa Luzia; (ii) on January 13, 2012, it signed a share purchase agreement with Cobra Instalaciones Y Servicios S.A. to acquire all the shares of Atlântica I Parque Eólico S.A., Atlântica II Parque Eólico S.A., Atlântica IV Parque Eólico S.A. and Atlântica V Parque Eólico S.A. (“Atlântica Complex”), which holds the authorization to generate electricity from wind power under the independent production regime; (iii) in March 2012, the company signed an agreement to acquire the shares of SPE Lacenas Participações, a subsidiary of the mill Ester which holds authorization from ANEEL to explore biomass energy; (iv) on June 19, 2012, it signed an agreement to acquire the shares of BVP S.A., which holds 100% of the shares of Bons Ventos; (v) on June 18, 2013, it signed an agreement to acquire 100% of the assets of the Canoa Quebrada and Lagoa do Mato wind farms; (vi) on February 27, 2014, it concluded the acquisition of Rosa dos Ventos.

On February 17, 2014, CPFL Renováveis and Dobrevê Energia S.A. (“DESA”) signed an association agreement through the merger into CPFL Renováveis of WF2 Holding S.A. (“WF2”), which will be the owner of all the shares issued by DESA on the date of its merger.

As a result of the merger, the net equity of CPFL Renováveis will be increased through the issue of new shares of the subsidiary, though CPFL Geração will remain the controlling shareholder, holding more than 50% of its common shares. In addition, the association depends on the favorable findings from the legal, accounting and financial, engineering and environmental audits to be carried out both by CPFL Renováveis, in relation to DESA’s operations, and by DESA in relation to CPFL Renováveis’ operations.

More information about the history of CPFL Renováveis is available in its Reference Form.

Established solely for operating the concession of ANEEL Transmission Auction 007/2012 in December 2012, which entails the construction and operation of an approximately 6.5 km long transmission line and a 440 KV substation in the city of Piracicaba in the state of São Paulo.

The line will be connected to the network of one of the distributors of the CPFL Energia group and the work will be carried out by CPFL Serviços.

In July 2013, to comply with Decree 7,805/12 and Law 12,783/13 on the deverticalization of generators contained in electricity distributors, the company carried out corporate restructuring with the spin-off of the generation assets of the distributors CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista, and CPFL Mococa which owned the plants Rio do Peixe I, Rio do Peixe II, Santa Alice, Macaco Branco, Lavrinha, São José, Turvinho, Pinheirinho and São Sebastião. These assets were invested in CPFL Centrais Geradoras and CPFL Energia became the owner of 100% of the capital stock of CPFL Centrais Geradoras.

In July 2016, CPFL Jaguariúna acquired from AES Guaíba II Empreendimentos Ltda., the controlling interest in AES Sul Distribuidora Gaúcha de Energia S.A. (later renamed “RGE Sul”).

The acquisition process was completed after the fulfillment of precedent conditions, including National Agency of Electrical Energy (Aneel) and Administrative Council of Economic Defense ( CADE ) approvals and also the creditors and Company's indirect controlling shareholder consent, as described below:

Through the decision number 204/2016/CGAA5/SGA1/SG the Administrative Council of Economic Defense ( CADE ) approved, without restrictions, the acquisition act between AES Sul Distribuidora Gaúcha de Energia S.A. and CPFL Energia S.A;

The acquisition was approved by CPFL Energia S.A´s shareholders during a Extraordinary General Meeting in August 9th;

In September 6th the National Agency of Electrical Energy (Aneel) has agreed to the transfer of control to CPFL Jaguariúna Participações Ltda. through the Authorizing Resolution number 6.016/2016; and

In October 31st 2016 was approved the change in the corporate name of the Company from AES Sul Distribuidora Gaúcha de Energia S.A. to RGE Sul Distribuidora de Energia S.A. through at an Extraordinary General Meeting.

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