Good morning, ladies and gentlemen. Welcome to Companhia Paranaense de Energia - Copel's video conference to discuss the earnings for the third quarter of 2024. This video conference is being recorded and will be available on the company's website, ri.copel.com. The presentation is also available for download. Please be advised that our participants will be watching the video conference during the presentation, and later we will begin the questions and answers session when further instructions will be provided. Before proceeding, I would like to note that the forward-looking statements are based on the beliefs and assumptions of Copel's management and on the information currently available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur.
Investors, analysts, and journalists should consider that events related to the macroeconomic environment, industry, and other factors could lead results to differ materially from those expressed in such forward-looking statements. This video conference will be presented by Mr. Daniel Slaviero, CEO of Copel, Mr. Felipe Gutterres, CFO, as well as directors of the subsidiaries who will be available for the Q&A session. I would now like to turn the floor to Copel's CEO, who will start the presentation. Please, Daniel, you may proceed.
Hello, good morning. I thank you all for participating in our video conference. I'd like to greet my colleagues, the directors of Copel, who are here. In addition to another quarter with sound operating results, I'm happy to share with you relevant deliveries that occurred during this third quarter. In year-to-date at Copel, our Adjusted EBITDA exceeded BRL 1.2 billion.
Reported net income also broke the same barrier of 1.2 billion BRL, driven by the results of our business, but also positively impacted by some extraordinary events, which together reach approximately 645 million BRL. The first is the closing of the divestment at Compagas and UEG Araucária, with the recognition of 170 million BRL in the period. Both divestitures are in line with our matrix decarbonization strategy and our focus on the electricity core. Second, the conclusion of the sale of Copel G&T's real estate in the amount of 286 million, adding approximately 175 million to the net income. Those properties were comprised of several plots of land scattered throughout the state of Paraná, including residential villages at the plants, which did not contribute to energy generation and cost nearly 5 million BRL annually in maintenance costs.
So these two moves represent yet another example of the flawless execution of our strategic plan that we presented to our investors in our follow-on in mid-2023. I'd also like to highlight that in line with our practices and our dividend policy, we declared dividends of 485 million BRL to be paid on November 29, equivalent to 50% of the payouts, considering the results of the first half of this year. Another hallmark of our management is the consistency in deliveries. This quarter, in addition to completing the exit of 1,258 employees on August 14, we made this move by ensuring the quality of service to our customers. This was only possible due to an extensive mapping of critical processes and activities, combined with a detailed plan for knowledge transfer, mobility, and internal promotions.
All of this work developed over the last few months has enabled a safe transition and the maintenance of the quality levels of our services. The reduction in personnel costs, isolating the inflationary effect and placing it on a comparable basis, was a drop of 11.2%. Felipe will bring more details of the PMSO numbers during this quarter. Within the people aspect, one of the things that has brought me the most joy in this new phase at Copel is the ability to retain and attract the best talent from the market to our company. We have been joined in recent weeks and months the following vice presidents: Márcia Baena, People and Management, Diogo McCord, Strategy, New Business, and Digital Transformation, this week, Yuri Ledra, Legal and Compliance, and Marco Antonio Villela at Copel Distribution, who's here with us at this call.
All of these professionals, with a long background, having been through renowned companies, but mainly with the skills required for this moment of transformation at our company, and they came to join the more than 4,500 Copelians who constitute the main asset of our Copel, which on October 26th celebrated 70 years. To conclude, I'd like to address an extremely relevant topic for the sector: the commercialization or trading of energy, especially from the Copel G&T portfolio. We execute our energy sales strategy with excellence this quarter. Since the end of last year, we have made several sales in a staggered manner and small amounts and medium-sized amounts to reduce the risk of disengagement and seek the optimal PMIX. We reached the third quarter, and the prices have improved considerably.
We've intensified our sales, resulting in a significant margin increase, and we closed the quarter with a sum higher than the volume of the previous two quarters or the first two quarters of the year, more than 537 average megawatts contracts for the period between 2025 and 2028, so this approach not only optimizes our financial results, but it also positions us as an agile player who's attentive to market opportunities and responsive to price volatility. With that, we can see in the charts that the contracting levels of Copel G&T's portfolio for 2025 and 2026 are practically closed and in line, considering the hedge of around 15%. That's what we normally have, with additional room, especially for 2026. Another point I'd like to address is the credit risk in the market, with rumors that another trader of a reasonable size would be facing financial difficulties.
This was not the first, and it will not be the last time that this happens, even more so with this new market reality, with abrupt price variation, sub-market risk, modulation, among so many other aspects. What we've been doing is to increasingly seek a restrictive credit policy, maintaining long-term relationships only with large counterparties or end consumers or customers. This has made it possible for us to go through this period of turbulence with practically zero or very low impact for a company the size of Copel. Finally, I'd like to invite everyone to attend our Copel Day on November 26th here at the company's headquarters in Curitiba, for those who attend in person, as well as online, of course. I reinforce this invitation so that as many investors as possible can be here with us.
Our agenda will feature the presentation of the company's new C-level and panels with the main topics of our value generation strategy. Topics such as organizational transformation, people management and culture, efficiency, investments, innovation, trading, as we talked about, portfolio management, tariff review, and regulation will be addressed. At the end, there will be thematic rooms with our main executives. I'd like to emphasize that we're living a unique moment for the company, and we are convinced that Copel will be the great reference in the electricity sector in coming years. Now, I invite Felipe to give you more details on the company's earnings, and we will move to the Q&A session afterwards. Thank you.
Good morning, everyone. I'd like to start by reinforcing a fundamental point of our thesis. We are an integrated company with a diversified portfolio and long-term concessions.
In this sense, I highlight that in the coming weeks, we should sign the new concession contracts for our three largest hydroelectric plants, which correspond to 64% of Copel's installed capacity, and subsequently, we will pay the grant bonus in the updated amount of about BRL 4 billion. This is an important milestone for Copel because it further strengthens our position and ensures the continuity of our operations in a sustainable way. Our concessions are a fundamental pillar in this process, with long-term contracts that guarantee the stability and continuity of our operations. Now, moving to the analysis of the quarter, this is a challenging quarter at Copel G&T and COM, affected by the curtailment effect on wind assets and the decoupling of energy prices between sub-markets.
At times like this, our integrated company strategy and our diversified portfolio show their strength, and we're able to reduce risks and ensure good results even in an adverse scenario. This quarter, we delivered a robust Adjusted EBITDA of 1.2 billion BRL, with 52% from Copel G&T and Copel COM, and 48% coming from Copel Distribution. Adjusted EBITDA was 10.9% lower than the 1.4 billion BRL in the third quarter of 2023, mainly due to the reduction in the average energy price at Copel's G&T's portfolio to 176 BRL, compared to 204 BRL last year, as a result of the termination of a contract in the regulated market that occurred in September 2023 that had an average price of 253 BRL megawatt-hour.
There's also a drop in the results of wind farms, mainly impacted by the generation deviation, with an effect of 67 million BRL, mainly caused by the 23% curtailment in the period. On the other hand, our network business stood out with an increase in EBITDA of 8.7% at Copel DIS, reaching 607 million BRL. In the coming slides, I'll give you more color about the results of the business units, starting with distribution on the next slide. Copel Distribution, as I just mentioned, generated an EBITDA of 607 million in the third quarter of 2024, 8.77% better than the same period last year. This result was mainly driven by the 4.4% growth in billed consumption as a result of higher temperatures and greater economic activity in our concession area in Paraná.
The tariff adjustment of June 2024 also contributed to the results, with an average increase of 2.7% in the tariffs for the use and distribution system TUSD. Another highlight was the 32% reduction in provisions and reversals, with a drop of 27 million in expected credit losses. In the last 12 months, we've reached, actually year-to-date, the last nine months, we've reached BRL 2.4 billion in adjusted EBITDA, BRL 700 million above the regulatory level, equivalent to 41% better. Speaking now about generation and transmission, with an adjusted EBITDA of BRL 649 million, Copel G&T had a lower PMIX than last year during the third quarter, as we had a contract in the ACR of 478 average megawatts, with a sales price of around BRL 253 per megawatt-hour, which ended in September of 2023.
In addition, the performance of the wind complexes was negatively affected by the generation deviation, mainly caused by the 23% curtailment, as mentioned, and on the other hand, there was a decrease of 34 million BRL in the revenue from the availability of the electricity network, mainly as a result of the periodic tariff review applied to transmission contracts. All of these effects were partially offset by the reduction of costs with the acquiring of electricity for resale by 33 million BRL. Year-to-date, Copel G&T recorded EBITDA of 2 billion BRL, a double-digit reduction compared to the same period of the previous year, basically due to the drop in energy PMIX and the curtailment effects already mentioned.
Moving to trading, we closed the quarter with an adjusted EBITDA of BRL 3.2 million, compared to almost BRL 20 million last year, reflecting mainly the difference between the hourly contract generation curve, compared to the consumption profile, and the difference of price between energy sub-markets, with an impact of approximately BRL 30 million. But I'd like to reinforce, as Danielle already mentioned at the beginning of the presentation, the excellent execution of our energy trading strategy, which resolved risks throughout the year, and now in the third quarter, intensified energy sales at a better time of market prices, generating value for the group. In addition, I also reiterate that we do not have a large exposure of our portfolio to modulation. That is, it's a limited exposure at a low level.
Note that despite the one-off impact on the trading company's results, when taken to the consolidated context, the amount was of little materiality. Zooming in on manageable costs, we have maintained strict control of manageable costs, but always with the care to preserve the quality and safety of our activities. The highlight of the quarter were the first positive post-voluntary severance program impacts. For better comparability, we've adjusted the PMSO lines, given that last year the personnel line was impacted by the recording of BRL 610 million in provision for the severance program. This quarter, in the line of other costs, there was a recognition of the sale of Copel G&T real estate in the amount of BRL 264 million, and an addition of the voluntary severance program of BRL 18 million.
On a comparable basis, neutralizing the effects of provisions related to compensations such as performance bonuses, profit sharing, long-term incentives, etc., there was a reduction of 7.7% as a result of the reduction of 1,293 employees in the comparison between the period, mostly related to the departure of employees on August 14. If we isolate inflation accumulated in the period, we would have a reduction of 11.3% or BRL 25 million in personnel costs, in line with the cost reduction reference that the company previously reported. In the fourth quarter is when we're actually going to see the full effect of the voluntary severance program. We see a partial impact of 45 days in the quarter. This reinforces our ability to execute and our consistency in delivery.
Looking at the other PMSO lines, we noticed a small growth of BRL 9 million in third-party services, essential to strengthen the prevention and maintenance operations of the distributor's network, especially aiming at ensuring quality and safety levels in our concession area. These activities include, for example, intensification of pruning and mowing in the vicinity of our distribution lines. We also see an increase of BRL 26 million in the other costs, not directly related to OPEX, but due to deactivation of equipment that we had residual values with the scope of the distribution's investment program. I reinforce that this effect represents less than 5% of Copel DIS investment in this quarter.
Concluding this topic, we also see a reduction of 73 million BRL with provisional reversals, an effect of a provision related to the MCSD methodology held in the third quarter of 2023, and the reduction of 27 million in ADA for the quarter. Now, on net income, we'll talk about recurring items, and their CGR exceeded 572 million in the quarter, 16% higher than the record in the second quarter. Quarter on quarter, the lower result was especially due to the effect on the high amount of IOC declared in September 2023, impacting the tax line. In the year-to-date, in the first nine months of September, recurring profit was already exceeding 1.6 billion.
Now, with the reported results, we have a profit of 1.2 billion BRL in the quarter, leveraged mainly by the result of the sale of Compagas and UEG Araucária and the properties of Copel G&T, a real estate, which together impacted the income by 644 BRL. As a result, we have a result year-to-date of 2.2 billion BRL, 61% above last year. Now, on investments, we had historic levels of CapEx, strongly driven by the distribution's investment plan focused on regulatory remuneration-based efficiency and quality of services. We've already paid 75% of CapEx forecast for the year, especially at Copel DIS, which accounts for 86% of the forecast. Progress of the investment is in line with the schedule.
Finally, talking about indebtedness, given the robustness of our cash due to the BRL 2 billion raised in the follow-on last year for the payment of the Grant Bonus for the plants and the renewal, we maintained a leverage of around 1.5 times in the net debt over EBITDA ratio. This scenario will change as soon as we make the payment of the Grant Bonus, which should happen in the coming weeks. I remind you that our covenant limit today is 3.5 times net debt over EBITDA. Our operating cash generation exceeded BRL 1 billion mark. Our average amortization period is four years, with BRL 6 billion maturing only after 2029. I end my presentation here by thanking each one of Copel's employees for their strong work, commitment, and continued dedication.
We are confident that our long-term strategy and focus on efficiency, quality, and results will continue to help us move forward and deliver value to all of our stakeholders. I would also like to reinforce, as Daniel said, the invitation to Copel Day on November 26. Thank you again for your participation, and we will now move on to the Q&A session.
Thank you. We will now begin the questions and answers session. In order to ask your question, you can click on Raise Hand or send it via text on the Q&A session or icon. Our first question is from text by Reinaldo Francisco. Congratulations on the earnings. With the divestment, Copel will come strongly in the 2025-26 season in transmission auctions. Is there a possibility for Copel to invest in the free market? Hello, Reinaldo. Good morning.
We don't have any expected investments in transmission auctions, at least not for 2025. We participated in the last auction this year because it was here right next to our operations with a lot of synergies, but otherwise, it's not in our focus or priorities for 2025 or 2026. Why? Because we see some opportunities that we consider organic, even in the capacity auction here and on the last cycle of investments at Copel Distribution in 2025. Yesterday, we also announced CAPEX for 2025 of BRL 3.29 billion that the market may perceive as another commitment that is robust for investments in the improvement of our network, reduction of costs, and improving customer service. Copel G&T, at the same time, also has expressive values above 200 million BRL for improvements.
As for investments in the trading areas, I think Rodolfo is running it and restructuring the team.
Initially, we don't see any opportunities that may make sense to us. We are restructuring and improving and expanding our structure, our sales capacity, our strength with clients in the market, and we believe we can do this organically. Also because we have the most important asset for that, 2.4 gig of physical guarantee of average megawatts to sell in Copel G&T. Of course, if something that's very opportune comes up, if it makes sense to us, but we understand that we have here an organic opportunity with the structuring at our trading company, attracting new employees and strengthening our teams. And the earnings in the quarter in terms of sale already expresses some of our vision and efficiency that Rodolfo has been implementing with his arrival, as well as the new wave of professionals on Copel's team.
Next question from Bruno Amorim from Goldman Sachs.
Bruno, your microphone is enabled. Good morning.
Thank you for this opportunity. Even with the payment of the Grant Bonus, with the renewal of the concessions, your leverage will remain at a level that seems very comfortable, right? It's 1.5 times today, maybe 2.2 times after the payment of the Grant Bonus. So the question is whether you understand this as the right level or if there's room to leverage the company increasing the dividend payout. You just talked a little bit about the capital allocation strategy, so it seems that the company will be very disciplined, focusing on the current portfolio. So just to understand the trade-off of maybe having a deleveraged balance to make the most of opportunity vis-à-vis the possibility of the payout of more dividends from now on. Thank you.
Bruno, excellent point, especially considering the market scenario with the level of discounts and prices, how Copel is going to be positioned. So I'll break it down into two parts, okay? Talking a little bit about the current policy that already expects at this level of leverage that you mentioned in this range from 1.5-2.7, with a minimum payout of 50%, and extraordinary events as the sales, the sale of real estate, for example. We treated that in an extraordinary manner, and that's what we intend to submit to the board at the right time. As for the optimum capital structure, Felipe is running this work, so I'll ask him to give you more details. We'll give you a better view of times and movements at Copel Day. You'll see more.
But Felipe, if you can share what we see.
And noting that both ordinary and extraordinary payouts, such as the case that I mentioned, they will be addressed according to the materialized sales of assets and additional opportunities. They independent of an optimal structure discussion. And we have this, but already executing and seeking the optimum structure, considering the opportunity for the ordinary and extraordinary dividend payout. I think it's important to say that the company is not going to operate in a suboptimal point. This is very important to know. And another important point is that, of course, we're acting with a capital structure that is still a legacy, and we have to think and reflect on it. And this reflection will follow a few parameters.
One, to look at the optimum asset portfolio, the modeling of all of the cash-generating business units, the transversal variables that have to be considered in the modeling, so that with that, and especially with the price of energy, we'll define the minimum strategic cash that the company has to maintain, and then based on that, the optimum capital structure that gives us room to optimize the structure either through dividend payout, of course, and other capital allocations.
In addition, just a comment, Bruno. As Felipe said, the structure and our policy gives us flexibility already, even for us to analyze IOC. During the year, there have already been payments in this format, and as usual, we always reassess. So by the end of the year, we'll reassess whether there's room and opportunities to optimize using the IOC tool.
So, all of that moves along so that with the closing of the year, already with that increase of BRL 2.2 billion of the net income of the last nine months that would already correspond to 50%, plus the extraordinary that I mentioned, we'll be getting close or moving towards Copel's path as a mature company with assets and excellent cash generation can use this dividend payout as a way of correcting leverage. So, just noting, remember that on Copel's history, this has already been done.
In the first cycle here, in the cycle of 2019 to 2024, we had a very low leverage, below one time, and we said that the payment, the profit sharing was part of the strategy with the sale of Copel Telecom at other levels, other value dimensions, but that's something that over time, it's something we've done, and we've been using that very well, and we know that at this time, when the market is at a discount, this is one of the best possibilities of capital allocation for those resources that come from the company's operations.
Excellent. Thank you. Have a great day.
Next question in writing from Lilyanna Yang, HSBC.
Good morning. Could you please comment on the strategy for energy trading of energy that has not yet been contracted and the uncertainty of the hydrology impact in the short-term prices? Thank you.
Rodolfo, I'll give you this question to make some of the comments, and Bertol, if you want to talk as well about GSF or hydrology. So please, Rodolfo, share our strategy and how we've executed and making the most of the opportunities in terms of price volatility.
Good morning. So, okay. First, this recent price drop was expected. We had already simulated it, and therefore our strategy was to accelerate sales in 2025, 2026 forward a little bit this quarter in October before the wet season. So how can I say it? For 2025, our revenue is completely locked, and this price drop is good because it's an interesting time for us to run some operations to reduce risks, both in market risks and GSF. For 2026 onwards, considering the new structure of the system, we'll have increasing volatility, as Daniel said.
So even with the rains, we still don't see a relevant recovery of the reservoirs, and we understand that at the end of it, there will be good opportunities for us to lock energy for the sales in 2026, noting that it's an amount that responds to about 10% of our physical guarantees. And the same thing from 2027 onwards. So the idea was also to have the windows with a high price and low price. So we have to be fine-tuned commercially to make the most of the windows. If the price goes down, it's a good moment for us to reduce risk and lock the portfolio and run opportunities for results. If the price goes up, we'll lock the revenue, always at the credit limits with good liquidity, with the commercial sense adapted to the market reality.
Bertol, GSF. Good morning.
GSF is always a concern for energy traders, especially for generators in the hydroelectric plants. The wet season now with the rains is more favorable, but it came in late, right, Rodolfo? The level of reservoirs in the system and the storage index is lower than the same period of last year. Copel, with a very well-articulated strategy, has been leaving the hedge for this GSF exposure, and we expect here, and the way we put it, that it's very predictable compared to the expectation of GSF for next year in the short to medium term. The strategy is articulated and very efficient, represented by the great success that we've seen in trading this last third quarter of 2024.
Our next question, Eileen D'Souza.
Could you please comment about the company's expectation for the curtailment levels for the fourth quarter of 2024 and the beginning of 2025, considering the changes in the methodology and investment and the entry of lines, transmission lines in the Northeast? Eileen, that's an excellent point. The curtailment is something that's been very sensitive for the entire sector, but first, I'd like to put it into context. What is the size of these impacts in the Copel environment?
First, I know you keep track, and I think one of Copel's biggest strengths is being an integrated company where you have the distribution company with about 50% of our earnings in the quarter coming from distribution with an excellent performance from the Villela team. Then generation and transmission, we have a share of more than one billion BRL per year on the RAP of RAP that are immune.
When you go into the generation portfolio, we have 81% of our generation from a hydro source that gives stability to the system, and this will, in our view, have characteristics to be valued and priced in the best way possible in coming years. In this context, 19% in an area that responds to less than 20% of the company, we've been seeing complex situations. You can see that at Copel, curtailment represented about more than 20%. We have a very critical period for ONS, and has been very restricted, and there was a delay in some important lines and the flow of more than two GW. With the entry and the, it's already normalized, so the energy available now at this point is smaller, but it's an inherent issue that has to have the regulatory, technical, and even indemnity aspects for the different generators.
We're talking about a reality of developments in Rio Grande do Norte and Ceará that are the most affected regions, had very relevant impacts. Even for Copel, one of the parks had a very significant process. So what we see looking forward for 2025 onwards is that this is a new reality that will remain through the curtailment tends to be an effect that's here to stay. What we think is that there will be maybe lower levels, not so significant, not so expressive. We also expect that the treatment of this by ONS is more balanced. We had an improvement already, decentralizing and reducing it for all the operators in the northeast region, especially, but this is a reality that needs to be addressed in structural terms by ANEEL and the ministry and ONS, and we intend to have an active discussion even with the relatively small impact.
Nobody likes to leave money on the table, especially money that was not expected in the operation reality, at least until mid-last year. Bertol, please go ahead. The effect of this curtailment hasn't affected the entire renewable generation results, especially in Rio Grande do Norte and Ceará. As you said, Daniel, this third quarter was the worst quarter for the restriction of generation. We saw smaller values last year, smaller figures the first quarter as well, but this third quarter expanded restriction of generation due to the limitations of transmission and generation and local generation in the Northeast. But with the entry of three transmission lines on October 16th, has allowed us to expand the energy transfer and this exchange between the Southeast and Northeast regions and the Northeast and North. So that's already improved, almost 1.6 gig to the Southeast and almost two gigs to the North.
And there's also the expected entry of an SVC network in the state of Bahia that will also expand this energy exchange that gives us a better expectation to reduce curtailment, especially regulatory and operational actions in the system that are required for the system reclassification. And we expect ANEEL to be sensitive to reclassify these losses based on the regulatory instrument.
Next question, Mr. Daniel Travitzky from Safra. Please, you may go ahead.
Good morning. Thank you for the opportunity. I'd like you to please talk a little bit more about the cost dynamic. We've seen a reduction in the personnel line in line with the voluntary severance program that you talked about, but we see an increase, especially in the third-party line when we look on the year-on-year comparison.
I'd like to understand a little bit more how you see this dynamic and what we can expect looking at 2025 onward. Thank you. Great. Thank you.
Felipe?
So we had a reduction, as you mentioned, and during the presentation, we saw a significant reduction due to the severance program. And we only not fully because we're still seeing it with an impact in the salary. But looking and zooming into the distribution, we have an effect on S, basically related to the quality of service, and Villela can talk about it. And we also had write-ups of equipment that have affected in more than BRL 20 million on the PMSO line that is related not necessarily to OPEX, but to our investment plan at the distribution company that will obviously have a counterpart at the basis in terms of remuneration.
Good morning, Daniel. Good morning, everyone.
Reinforcing what Felipe said, we had a quarter due to the atypical storms. We reinforced our operating teams to maintain the quality of supply to our clients, and that was the main reason for the increase in the service line, and adding to that, Danielle, we're going to give you more color and more detail on all of this and how we see the projection of cost and PMSO at our Copel days for the 2026 and 2025 and 2026 cycle. Remembering the last year, we already have that commitment to reduce by 17% with the LTM PMSO for 2023, and we are here very much in line. We are on track at this execution, as Felipe already mentioned, and we're starting to feel partially this quarter, but we'll see this more clearly in the fourth quarter, and especially in 2025.
On Copel Day, we'll show you the lines overall permeating the entire company with a very relevant reduction path, those BRL 5 million in maintenance cost because of the real estate, selling the real estate. So with the distribution company, there's another characteristic that not only with the climate events, but with the reinforcement and maintenance and preventive efforts as we've seen in different distributors around the country. We also have to consider that this is the last tariff cycle. There must be some points of attention where we're going to have the 2025-2026 cycle, hoping not only to reach the targets that we talked about on Copel Day 2023, but also bolder goals in that line.
It's not an end on itself, cutting costs, but reviewing and removing inefficiencies from the period of the company being state-owned, but also gaining competitiveness, moving hand in hand with the best reference companies. And the first quarter, we already have it in different areas, different segments and operation maintenance of wind generations is already a reference. And we're also seeking for a general line for the company as a whole.
Excellent. Thank you.
Next question, Marcelo Sá. Please, Mr. Marcelo, your microphone's been enabled.
Good morning. Thank you for the call. I have a question about the Capacity Reserve Auction. If you can give us more information, the invitation to bid should have been released already. We expected it to have happened this year, but now definitely only next year. And of course, there's also on the next weeks, a relevant change in the hydrology scenario.
I'd like to understand whether you think there may be any implication for the amount of capacity to be contracted. I understand, I think no, but I'd like to understand your view, what you understand in the capacity for this contracted energy. Finally, if you can talk about the volume that you sold in energy, especially from 2026 to 2028, an idea of price range, 150 BRL-160 BRL, considering the quarter was positive for trading.
Great. Hi, Marcelo. So for the capacity auction, the system has an urgent need, and we believe, and we continue to believe that this ordinance with the invitation to bid, with the conditions, the lines are coming in at any time. I don't believe I find it hard to believe that this will be delayed. They must do this by November. They must publish this invitation by November.
And then, as you said, it's going to be for the first quarter of next year, probably the end of the first quarter by the month of March. We don't have any information about the size of the segmentation of the products, but the expectation is that there will be a reasonable volume of hydro power plants. And we believe it will be. We expect it to be the biggest possible because they complement a lot in terms of the need for the safety of the system. So this is urgent for 2027, 2028, and also the end of 2026. In our view, this is something that should take days or maybe weeks for this to be released. And as we said, we are getting ready, and we're quite advanced in order to be able to participate very competitively.
Now, for the volumes, if you can give us a range or just highlights with some amplitude, not a lot, but not that little either, but for the strategy and confidentiality of this information. But anyway, okay, so in major terms, we can consider not in 2025, that's above the market price, but we shortened our strategy to 10-15 BRL above price today. So it's 2026 above 260, 2027 on 2050. So it's a macro number, 2025 above 275. So it's around that range. Respecting the credit limit, we have to be careful with the market oscillation that comes in. There's a lot of good proposals coming up, but they're not necessarily robust. So we have to be very cautious considering the market situation, being able to lock that and maintain the quality of the portf olio. Ex cellent.
Thank you.
Our next question, Guilherme Lima, Santander.
Please, Guilherme, you may go ahead. Good morning. Thank you for the question. You mentioned on the release the impact of approximately BRL 30 million resulting from the differences on our generation curve and the contracts and concessions, the price difference here between the sub-markets. If you can talk a little bit more about how you see this risk from now on, how it could impact the company and how you're positioning yourselves.
Great, Guilherme. I think you put it very well. Rodolfo, that would be in the trading topic that's very present in the market. Volatility is the new normal. It's already been mentioned, talking about the sale and now a little bit about prices. That's what you said as the minimum, Marcelo and everyone, with this new reality making the most of the opportunities.
Now, about sub-market and modulation, if you can give some color, I think we've had the most critical period was September, completely different from the rest of the year and everything that we've seen for October and November. So starting with that, from September, it was an atypical situation. October is already normalized. This ends in November. I believe it will be close to zero in December. But looking at Copel's portfolio, we have a very small percentage of contracts that bring us this type of exposure, either modulation of the solar power generation, solar generation, or but we've been managing this risk in different ways. The first is intrinsic to our business. The mix of sources that we have in our portfolio really helps us with that. When solar power is with a small result, we have the benefit of hydro plants or wind farms. That's the first point.
Still, we've been adopting some commercial strategy to further mitigate this. First, we had an intense analysis of which customers have the proper consumption that help us mitigate this type of problem. We're working heavily in this clients to improve the portfolio in terms of energy provision and supply as well, reducing that. And as I said on the previous question, when the prices drop during those windows, there's an opportunity for some financial hedges for that type of product, sub-markets or modulation. And we take this moment to lock these positions. The 25, if we take sub-market, it's almost 50% equated and 26 as well. So overall, that's the balance that we work on. As we're not selling, we make the most to lock and position ourselves for this risk. And this amount, Guilherme, half basically was sub-markets and half was about modulation.
And when you only have one or two months atypical, we need to look at it as a net product. And on a month or a quarter, we need to look at the risk calculation to see the value that should be or would be worth considering on the annual hedging. So we're getting to an optimum portfolio so that this exposure is the lower possible. Of course, with this consumption client, but also finding purchasing hedges when the market is at the good scenario, paying too much for that. Well, sometimes it's worth running a risk 10, 11 months in the year and having one month or another with a slightly higher impact.
Great. Thank you.
Our next question, Antonio Junqueira, BTG Pactual. Antonio, your microphone's enabled.
Good morning.
It's great to see the company in this past months being reinforced with a lot of heavyweight people to help Daniel, you and your team on the day-to-day, so the last announcements have been very good, and I'd like to ask a question about this specifically. Just about a month ago, you brought Diogo in. He's highly respected with a very interesting career, and he was brought in to run strategy and new business, and naturally, it made me very happy, made a lot of people very happy, of course, because he's highly qualified in his career and his intellect, and there's also a question. I mean, someone so capable to run new business, so I'd like to hear from you what you think, of course, about him in the company and new businesses as well.
I don't know if the company is thinking about things outside of the box, maybe that we haven't identified. First, really, congratulations. It's a very great hire. But I'd like to understand a little bit more of how you see the strategy for new business by bringing him in.
Well, thank you, Antonio. First, Diogo, very similar to you, actually. He's coming back to his origins. He's coming home. I mean, he's been through Copel not as an employee, but working at the beginning of the first tariff reviews. You're also having a great new challenge here at your new home. Diogo lived in Curitiba for a long time. He graduated here, and then he followed his brilliant career, as you mentioned. People already knew him, and he knew us. What brought him here, first of all, is a long-term vision and a belief.
I mean, he was doing very well as well as the other executives that we brought in. They were all very well positioned in their previous places of work. But it's a belief, a real belief in Copel's case and the possibility for growth. But it's a belief and a growth potential in the long term. So what's his mandate? First, he has a chair. Now he's a VP that is very much stronger than it was in the past because we included strategy, new business, M&As, IT, innovation, and digital transformation. So it's a seat that is very adequate to his level, to his experience. So here, this year, this month, since his arrival, and at least for the coming year, there's a lot of processes and internal visions for digital transformation.
And in running this digitalization shock that we're running to provide support to the exits of so many people, the restructuring of the organization, so the work being done from the door in is very relevant, and we'll give you more details during our Copel Day. And we also have a strategic discussion point, the strategic objectives for the long term, the year of 2030 or even further, so we need to build this in the coming months. And this will be presented to the market probably at Copel Day 2026. So I'd say his mandate is first to organize and house and provide support and the views of the organic growth opportunities. So to place his knowledge in regulation, for example, he'll help André, that's the Regulation Market Vice President, in tariff review or the definition with Villela of the new investment cycle for 2026-2031.
So there's a lot of opportunities for internal improvement, structuring improvements in-house so that later, when the company already has the efficiency and a clear view, to be able to make opportunistic moves in the future. But always, and that's a lot of how Diogo is and Felipe and the entire team here with a lot of discipline. I think we've shown this in other opportunities, right, Antonio? We showed this in the transmission bid where we went to that as a class with a lot of discipline. And we have here the regulatory institutional view for the infrastructure of the business. We're reviewing all of our processes and frameworks, working together with Felipe of the way that the investments are analyzed, the capital structures for investments and divestments.
We're very pleased, and I appreciate. I thank you for your recognition, yours and a lot of the market with Diogo's arrival to add to this team of great talents who came now and the talents who have already been at the company and brought the company to the present moment.
Excellent. Thank you.
At this time, we close the questions and answers session, and I will turn the floor to Daniel for his closing remarks.
Once again, I'd like to thank you all for attending our conference call. The number of attendees and questions show us how the market is very interested in Copel's case.
Since this quarter here with my colleagues and the board of directors and the C-suite and all of the workers at Copel, we made or we concluded another quarter of deliveries with a consistent execution of our strategic plan of what's already contracted and of other opportunities that may arise for the company, be it in terms of reorganization, structuring, efficiency gains, organic growth, and at the right time in the future, other opportunities that may come up for the company. I would like to conclude by really showing and reinforcing that we are going through this unique moment with the arrival of this new C-level that we talked about, all of the deliveries that we've already mentioned, but mostly our commitment of all of us at the board, the C-suite, the people with a long-term vision.
We are convinced that Copel will be the major reference of the electrical industry in coming years. Thank you all very much. Have a great day.
Copel's conference call is now closed. We thank you all for your presence. Have a great.