Good morning, ladies and gentlemen. Welcome to the video conference of Companhia Paranaense de Energia, Copel, to discuss the results of the third quarter of 2023. This video conference is being recorded, and its replay is available at the company's website, ir.copel.com. The presentation is also available for download. We would like to inform you that all participants will be only watching the video conference during the presentation, and at the end, we will initiate the Q&A session, when further instructions will be provided. Before proceeding, I would like to emphasize that forward-looking statements are based on beliefs and assumptions of Copel's management, as well as information currently available. These forward-looking statements may involve risks, uncertainties, and assumptions because they relate to future events, and therefore depend on circumstances that may or may not occur.
Investors, analysts, and journalists should understand that macroeconomic events, industry conditions, and other operating factors may lead to results that differ substantially from those expressed in such forward-looking statements. Here to present this video conference are Mr. Daniel Slaviero, CEO of Copel, Mr. Adriano Rudek de Moura, CFO of the company, as well as officers from the subsidiaries who will be available during the Q&A session. I will now turn the floor to Mr. Daniel, who will initiate the presentation. Mr. Slaviero, you may proceed, please.
Good morning. Thank you all very much for joining us in our video conference. We had another quarter with solid results, BRL 1.4 billion of adjusted EBITDA, which is equivalent to a 27% growth vis-à-vis the same period of last year. Moura will go into more details, giving you a few more numbers of our third quarter.
But I would like to focus on presenting the status of the execution of our strategy, and also, I will talk about what we promised to the market during our offering. In our last call, I presented the pillars of this new Copel, which involves people, the review of the holding role, operating efficiency, and discipline and capital allocation. Therefore, I would like to briefly present the evolution of each of these pillars for the last 90 days. Our priority is people. We have completed the certification phase of the voluntary redundancy program, or PDV, with 1,437 people having signed up at a total estimated severance cost of BRL 610 million.
The annual estimated savings is BRL 428 million from the layoffs, which will take place during a transition period until August of 2024, barring exceptions that will be assessed by the company in order to guarantee the organization's knowledge management, rendering of services to our customers related to the transaction. The selection criteria for endorsing the sign-ups was based on a descending ranking of the sum of age and length of time with the company until the financial and operating limit was reached. This whole process, including the assessment of the level of replacement needed, is being carried out by the company's management area, with close monitoring by the board of directors, especially through its people committee.
Moreover, we already have two internationally renowned consulting companies, one that will help us build a long-term incentives plan aligned with Copel's value generation, and the other that will do a broad assessment work to create a personal development plan for the talents in the company. In terms of our long-term incentive plan, this process will be presented at the General Assembly in April of 2024. In parallel, we are working on enhancing our organizational culture with the aim of developing a new way of being at Copel. This involves identifying which behaviors we want to keep, others that we want to incorporate, and which behaviors should be discontinued in this new phase of the company. We believe that what differentiates companies that generate long-term value is the way they allocate capital.
The current market situation does not show, in our view, great opportunities in the sector, given the low prices of energy. That's why our focus will continue to be on increasing the regulatory remuneration base of the distribution company. Next week, we will approve the investment plan for 2024, which will be detailed during our Copel Day. Certainly, our investment plan involves recurring investments to enhance and improve our assets, but the major priority remains the investment at the base of the Distribuidora, even because we have only the year of 2024 and 2025 to conclude this next tariff cycle.
As for the divestment plan, I think that we are being very agile, and the two processes that are already on the market in relation to UEGA, we are already at the stage of binding proposals with the number of companies that moved to this phase, which is even higher than we initially anticipated. In terms of Compagas, the non-binding proposals will be presented yet in December of this year. We intend to complete both processes by the end of the first quarter of 2024.
To conclude this topic related to investments, we continue with our ongoing innovation agenda, our corporate venture capital, CVC, with a gradual investment of BRL 150 million through our open innovation program, which is called Copel Volt, and also through finding new companies that can be added to our ecosystem, adding more knowledge in terms of our modernization, innovation and digital transformation agenda. We are very excited, even though the amounts are much lower than Copel's reality. But I think this, you know, brings new air into the company, and we should be announcing some good news soon with the first investment from the fund. And finally, another strategic move initiated by the company's management after the transformation into a corporation, is, just like I said, the review of the role of the holding company and the opportunities for maximizing operating efficiency.
The aim is for us to have a very lean holding company that defines strategies, sets policies, and controls the business. As a consequence, this, the business will generate wealth, but with great accountability and responsibility in each of our business units. In regards to operating efficiency, we have concluded the first list of actions to optimize costs, then we have started the first phase of zero-based budget. We will present a summary of these initiatives and the main results already projected for the cycle between one to three years during our Copel Day. In regards to improving the commercialization strategy, we are progressively evolving and increasingly focusing on opening up the market where we can capture better prices than the current PLD or spot price. I can assure you that this phase has been one of a lot of hard work for all of us here at Copel.
Finally, I would like to inform you that all the topics I have briefly covered in this call and the company's other priorities, will be presented in further details at our Copel Day on November 22nd, just two weeks from now. Therefore, I would like to invite everyone to take part, either through the online broadcast or even in person here in Curitiba, starting at 9:00 A.M. on November 22nd. But I would like to conclude this first part of the presentation by saying that we are experiencing a very unique moment in the company, and we are firmly convinced that, that Copel, with this new phase of Copel, represents a unique opportunity so that the company can move on and become a major reference in the power sector in the coming years.
Now, I turn the floor over to Adriano de Moura, who will talk about the results of the third quarter. Thank you.
Good morning, everyone. Thank you, Daniel, and thank you, everyone. I would like to thank each one of you for joining us this morning. Can you please move to the next slide? But before I get into the details of the figures and talking about the highlights of the quarter, it's important to highlight this important growth of BRL 300 million in adjusted EBITDA, when compared to the same quarter of last year. In nine months, this represents a 2.2 growth, which reverses what we had last year. This is very robust growth, and this result also includes the provision of BRL 611 million of the voluntary redundancy program.
This affected EBITDA, and considering the effect from taxes, the net income was affected in the amount of BRL 400 million. The cash effect will only take effect after the departure of the employees in August 2024. Still talking about the figures, it's important to say that both divestments of UEGA and Compagas are being reclassified as like assets that have been discontinued. In the case of UEGA, this is a reduction in cost in a comparison base. In the case of Compagas, we are reducing EBITDA of BRL 160 million. That was Compagas numbers nine months to date, so this is a reduction when compared to previous years. The other highlight is the reduction in leverage, net debt, net debt to EBITDA, from 2.5x in the last quarter to 2.3x.
Basically, due to the primary share offering, which exceeded BRL 2 billion, and this amount remains in our cash. The proceeds will be used to pay the grant in the amount of BRL 3.7 billion for the renewal of the plants, which will only be made in 2024. We are still waiting for the government officials to set the date for signing the new contracts, and as a final amount to be paid 20 days after signing, will be updated by the Selic rate as of January 1st, 2024. Also, we have the distribution of interest on capital in the amount of BRL 958 million. The first payment to be made on November 30th, and the remainder by the end of June 2024, with a resolution of the general shareholders meeting.
Before I get into more details, I have another important comment. Copel's Distribuição's regulatory efficiency reached almost 20% in the last 12 months, adjusted to the last quarter, which was 12.4. That means that we had a significant improvement in EBITDA of more than 11%, you know, in that comparison. Moving on, here we have the financial KPIs, EBITDA and adjusted net income and cash generation. Here, for the sake of comparability, we are keeping the results of the operations that were discontinued due to the divestment process I've already mentioned, meaning that they include the results of Compagas and UEGA. This EBITDA growth of BRL 300 million that exceeded BRL 1.4 billion comes mainly from GeT, GeT, an improvement of almost 50% in relation to the third quarter of 2022.
Reaching an EBITDA of BRL 850 million in the third quarter of this year. This also had an important growth of 7% in the quarter, surpassing BRL 560 million in operating results. We will go into more detail about these improvements in a moment, but before we go further, I would like to comment on adjusted net income, which almost doubled in relation to the third quarter of 2022, an increase of more than BRL 400 million. Part of this improvement comes from the BRL 300 million EBITDA, and another significant part comes from impact of interest on equity in relation to income tax and social contribution, which last year was only recognized in the last quarter or the fourth quarter of 2022. This impact was approximately BRL 250 million.
This more than offsets the small increase in net financial expenses, which rose by around BRL 100 million when compared to the second quarter of 2022, reaching close to BRL 320 million in the third quarter of this year. Finally, in terms of adjusted net income, it was BRL 829 million, which consider the impact of, you know, the voluntary redundancy program of BRL 611 million, which I have already mentioned, which the effect of deferred tax, we reported net income of BRL 441 million. Cash generation was BRL 1.2 billion in the quarter, basically in line with the same quarter of 2022. Year to date, we are close to BRL 3.8 million. And when compared to nine months of 2022, there was a reduction that is basically represented by two impacts.
First, the indemnity of BRL 140 million paid in January 2023 as part of the labor collective bargaining agreement to eliminate 1/3 vacation of all Copel employees, and this ended in January 2023 with the payment of that indemnification. The second impact relates to the tariff ceiling that remained until April 2022, that injected a relevant additional cash, mainly in the first quarter of 2022, which did not affect the result by CVA, but affected this comparability of the cash. Apart from these two effects, there was an improvement in cash generation when compared to 2022. Now, moving on, here... I mean, the next slide, please. Here we see non-recurring items. We already talked about the voluntary redundancy of BRL 610 million.
We also have BRL 16 million related essentially to the reversal of the impairment, impairment of UEGA TPP due to the completion of the modernization work. We also have ACT of BRL 138 million. Moving on, by business, I've already pointed out, GeT's made the biggest contribution this quarter. This comparability between the third quarter of 2022 and the third quarter of 2023, I mean, EBITDA, adjusted by business. A large part of this improvement comes from the result of the purchase and sale of energy, more than BRL 200 million, with a greater volume sold, mainly on the regulated market, with the effect of the validity of the 400 MW average contract, which was extended by the renegotiation of the GSF at a very interesting price, above BRL 250 BRL per MWh.
And also due to the improvement in the hydrological scenario, with an average GSF of 80.5%, which is much better when compared to last year, which had low energy prices. And also, we now see the impact of the acquisition of the Aventura and Santa Rosa and Mundo Novo wind farms, you know, in terms of generation and transmission. We also had a tariff review of the transmission contracts. They were adjusted by a higher IPCA when compared to the third quarter of 2022, because, in fact, back then there was deflation. But which adjusted for IFRS 15, the increase was 16%, reaching a regulatory revenue of approximately BRL 270 million in the third quarter. Seven, so we are accumulating, you know, more than, than, seven hundred and twenty-seven in the period.
On the negative side, in this quarter, we recognized a regulatory dispute involving the methodology for calculating the surplus and deficit compensation mechanism, MCSD, which we are questioning administratively before ANEEL. The probable risk is approximately BRL 70 million . And also, there was an impact caused by the restrictions imposed by ONS on the wind farms in the Northeast, which affected GeT's revenue in the amount of approximately BRL 20 million . At this, we had a tariff adjustment of approximately 6.32 in TUSD and 1% growth in the grid market, already eliminating the impact of MMGD, as well as an increase of more than BRL 40 million in other operating revenues from leases and rentals of equipment and structures and pole sharing. That was an investment of an increment of over 40%.
And finally, there is also a contribution of BRL 31 million due to the improvement in UEGA's cost compared to third quarter of 2020. In 2022, UEGA needed additional maintenance after some dispatches that were made in previous quarters, and as this did not occur this year, the maintenance cost last year was slightly higher. That's why we show an improvement in costs once we run that comparison. Now, moving on to PMSO. In terms of P, we already talked about the BRL 610 million represented in this column that you see on the slide. We had a small impact from the recognition of the profit-sharing program and performance bonus for the higher result in 2023.
But I would like to recall that in 2022, the base result for PLR and PPD was affected by the reversal of fiscal fines of BRL 1.2 billion, and this was reversed in the second quarter of 2022. But excluding the effects of the provisions related to PDI, PPD, and PLR, the increase was just over BRL 2 , less than the inflation in the period and the salary readjustment of more than 7% at the end of last year, according to the labor agreement. We also had higher expenses with third-party services due to increase in expenses with maintenance of the power system. We also had expenses related to the process of transforming the company into a corporation, including the waiver fee for 21 million consents.
As we already mentioned, the recognition of regulatory litigation of approximately BRL 70 million due to ANEEL's questioning of the MCSD calculation methodology. To conclude, as Daniel has already pointed out, we are committed to reducing the PMSO. That means that efficiency is in the agenda, and we are making some very detailed work, and we will give you more information with all of the details. All of that will be incorporated in our budget, not only of 2024, as we usually do, but also for 2025 and 2026. It's the first time that we are putting together, drawing up a budget with a, you know, going, you know, forward a few more years. So we will give you more details about this work during our Copel Day on November 22nd.
Now, speaking about CapEx, the main message here is that we will continue to focus on prudent disinvestment, as Daniel has already mentioned, taking advantage of this final stretch of the tariff review that ends in 2025. It starts in June, but it starts on June 26th, but the investments will have to be unitized by December 25th. So we're doing everything we can right now. And as a reminder, we are not including the acquisitions of Ventura and Santa Rosa and Mundo Novo wind farms concluded in general. This is not contemplated in the BRL 2.2 billion plan for 2023. And next week, we will approve the CapEx for 2024, and we will present there in more details, talking about what we expect for 2024. Now, moving on to the final stretch of my presentation.
Here, I would just like to highlight leverage. As I mentioned, a reduction from 2.5 times in the last quarter to 2.3 times, mainly due to the excess cash from the BRL 2 billion primary offer, which will be available to partially pay the grant for the renewal scheduled for 2024. And finally, I would like to invite you all to join us on November 22, when we will give you more details about our evolution plan of the new company. So thank you very much. And now I'll turn the floor over to the operator to initiate the Q&A session.
Thank you. We will now initiate the Q&A session for investors and analysts. In case you have questions, please type your name and company name in the Q&A icon. Our first question comes from Mr. Fillipe Andrade from Itaú BBA.
Felipe, your microphone is on.
Good morning, and thank you for taking my question. I would like to hear your opinion about this volumetric debate. We've seen that the Congress has been trying to reverse that decision from the regulating agency of giving a heavier weight to the demand coming from the generating unit, and as a consequence, this could have a relevant impact in the concessions, the generating concessions that you have renewed. So what is your view about that debate? Do you have any kind of strategy already mapped out that could probably involve the review of the grant bonus that was paid, or whether you had some discussions with the government concerning that review, and whether you already mapped out what would be a possible NPV level in terms of what this could represent for the company?
We have a view close to BRL 600 million. We just want to know whether this is aligned with Copel's perception as well.
Hi, Fillipe. I would say that this is one of the most relevant points in the company. First of all, we have a very, very critical view in relation to this SPDL, both in terms of its essence and also in terms of its form. First of all, because this is an interference that we consider that to be not legitimate. This brings a lot of legal insecurity, and ANEEL, among one of the regulating agencies, is a reference. This is another factor that can generate instability in view of an already complex environment that Copel is experiencing. We have a very critical view. We believe that the work they did, it was a long involved, you know, a long-term, you know, public hearing.
You know, it's been going on for over four years. I'm not going to to repeat myself. But having said that, what we've been doing, I mean, not only in terms of our movements, but this subject has been the sole topic of a COSUD meeting between governors from the South and Southeast, where the general manager of ANEEL presented the situation, and they all understood the companies that, in its majority, are present in these regions, will be harmed. And not only that, but that makes no sense, because this change increases the tariffs for consumers in the North and Northeast.
But anyway, you know, given this reality, and with so many contrary arguments, you know, people that are against this change, we've seen this moving from the infrastructure committee, even though due to the number of senators from these regions that would be allegedly benefited, this was probably an expected move. But not only that, this has to be discussed by CCJ. So if by any reason, whatever happens, this still has to be debated in the Congress, therefore, the chances that this will be approved are not very big. At least this is what we've depicted from different sources, you know, from the Senate or Congress.
But regardless, or considering an extreme scenario, or if this is eventually approved, I believe that the fact that this payment has been postponed by the request of the government in terms of the grant bonus, it has been postponed to 2024. I mean, this is good because we can... With that, we buy time. Our numbers, Fillipe, according to our preliminary calculations, and we've been leading that with Moura. This is precisely around the numbers that you mentioned, around BRL 600 million . And we, as a company, we do not want to make a payment considering that there is a lot of legal insecurity. So the more time we have, the better it is, because things may be clearer.
I mean, the ministry did not want to move forward with this debate because they're still working with the scenario where this is not approved, and this is the information that we are getting from the ministry and, and the regulatory agencies. But in what concerns the company, we will only make that payment once we see that there is better legal security, because we don't want to pay and then having to claim that money back, because I think this is very harmful to all of us. I don't know whether, you know, Daniel wants to add anything else.
Yes. Good morning. I would also like to reinstate that Copel has already voiced, has already talked to the Ministry of Mines and Energy, what the impact would be. We submitted a formal letter-...
Stating all of the impacts this will have for the calculation of the grant bonus, you know, assuming all of the assumptions that were used. As it was said, we are confident that it will not be approved, and the resolution from the regulatory agency will be maintained in terms of the vocational signal. As Daniel was saying, the payment has been postponed of that grant bonus, and we do not believe that this PDL will be approved. Daniel, I would also like to emphasize the great acceptance from the Ministry of Mines and Energy and the regulating agency. The assumption is that the resolution and the impact in the calculation of the grant bonus are very clear and well established.
To conclude, I mean, the calculation was contemplating a vocational cost, and if this cost is changed by any measure, it is just reasonable that if this happens, we should request a reassessment. We can't just accept it and just think that this is, you know, normal. Perfect. Yeah. Thank you. I just wanted to understand what was the company's view in relation to the approval or non-approval of this topic, and whether you have already envisioned what would be the day after, in terms of the company's protecting its interests. Just to conclude, there is an institutional thing on our side, because we look at it every week. But apparently, from everything we've seen and read through the press, it seems to us that the political debate has gone to a different level. Because we are seeing also...
I mean, as we see governors from here or there, through COSUD, are debating the subject, I think that even in, in the political sphere, this debate is gaining a different dimension.
Okay. Thank you. Thank you very much.
Our next question comes from Mr. Gustavo Faria from Bank of America. Your microphone is on. You may proceed.
Thank you for taking my question. I would just like to understand a bit more about that savings of about BRL 400 million of that voluntary redundancy program. And after all the, the layoffs, what do you expect in terms of outsourcing people or rehiring people? I just want to understand whether that BRL 400 million savings could be offset by hiring third parties.
That is an excellent point, Gustavo, because that BRL 428 million means total savings.
It will certainly be offset, I mean, a small portion, with a minimum number of hiring of people and some hiring of services. All the details will be presented during our Copel Day, and that's when we will have the opportunity to show you the percentages that we, we have in mind. But in general terms, there will be a small portion that will be reduced or offset from the total amount. But certainly, as the criteria was very clear, because it involved, you know, time of service in the company and the age, you are letting go the oldest employees with higher salaries, and even this small portion will be under different conditions.
I also think that there is a major advantage on our side, because, I mean, one of the benefits from this privatization is that now we can do what we call the transposition of career, or we can relocate people internally. Let's say you have a technician, a guy that is a technician today. Until we became a corporation, he could only be an engineer if they had applied for a job once again. But now we can do that transition or the relocation, and as any other company does. First of all, we will try to unify our processes, technologies, and we will gain efficiencies. What we can use internally as services, we can unify contracts, we can have gains of scale.
The third aspect is that once you can relocate people internally, because they are already here, they are already familiar with the culture of the company, they are prepared. So if you can do that, you won't need to replace too many people. Bearing some of the strategic things, we've been saying that despite the excellent work being done by Cleberson and Bertol, and by the entire team working in the commercialization area, we also see here great opportunities to improve our commercialization. And also, it's an opportunity for us to have a better structured sales force in other markets closer to customers, meaning that we can open new markets. Copel is amongst the three major, you know, commercial companies in terms of commercializing energy.
But again, in terms of commercialization, this relationship with the market and the fact that we can now have a better view of what the retail market needs, gives us great, great opportunities for the company in terms of energy planning, organization, and in terms of having this more integrated view. Today, with the teams that we have, we are well-served, and we are no doubt one of the major references in this industry.
Perfect. Thank you very much.
Our next question is from Giuliano Ajeje from UBS. Giuliano, your microphone is on.
Great, thanks. Good morning.
It's always a pleasure to talk to you. I have a few questions, and Daniel, I don't want it to jump the gun in terms of your Copel Day, but I have two questions. First of all, what do you think would be a leverage limit where you wouldn't have your grades, you know, downgraded? What would be the cap of this leverage? Could we work with a scenario where you would pay out more dividends? And my second question refers to something quite interesting since the last power outage, is the PLD intraday, which is reflecting into midterm prices. Are you feeling that increase in prices and that probably this could impact Distribuidora further on?
Okay, perfect. Well, certainly we will give you more details during our Copel Day.
But let me start with the second part of your question, which is: What happened here in August, September, and this volatility, be it due to the increase in temperature or be it through restrictions in distribution, this makes us remember something obvious. As low prices have been around for quite some time, people forget the energy prices are very volatile and prices will not remain low for many years to come. This is unthinkable, and this intraday volatility also shows that the intermittent forces, even though they are very important for the interconnected system, have some fragilities. And since we have a very strong base, you know, as it happens with other companies, and we do believe in this feature, we believe that this should be valued in the medium long range.
If your role is to generate power, provide power in a uniform way throughout the day, I mean, the TPPs also have that function, but it's cheaper. They will be recognized, and in our view, I mean, it's exactly what you said. Throughout the day, if you have self-consumption and high load at the end of the day, and there is no sunshine, that will be difficult. If the wind blows faster, you know, at dawn, these are all things that should have been happening since 2021, when we adhere to the hourly price. And I think we should have priced that better in a contract. But as there was a water crisis, the price hit the ceiling, and then there was a perfect storm of, you know, rainfall, load at the end of the subsidy, and it went to the floor.
Now, we are beginning to see the first signs of what is happening. Just to conclude, and I'll link that to your question, and then I'll turn the floor to you and Moura to talk about price variation, a PLD by price variation.
I mean, all that shows that there will be a lot of volatility. The trend is towards price volatility, not in the long run, but if you have this intraday. So having a safer leverage, leaving some room available, this has proven to be something quite interesting. What we've been saying to the market, I mean, that 2.5 times leverage is what we believe to be adequate to date.
I would say that even in the short run, maybe just the end of next year and early 2025, this is pretty much what we have seen in terms of our leverage, because our covenant, covenant is 3.5, but now we are a private company and with excellent execution, great efficiency and technical capacity and our capacity to generate cash, some eventual debates about what would be the ideal leverage, this is something for the mid-range. This involves a more complex debate that has to be discussed at length. And also, this would have to be negotiated according to the covenant limits, which today fall at 3.5. Regardless of this reality and the fact that it may not change in the short run, our dividend policy is very clear.
We have always focused on a payout aiming at 50%, but if there is no investment perspective, if there is nothing that comes along, we could also have a higher payout. We had last year, 80% payout. As you know, this is something that we will have to discuss at length during the next cycle. That was a long answer, but let me see if anyone has another additional comment. Well, that was fine. This has to do with the hourly PLD. I mean, before 2021, we had a ceiling of PLD, and after, we had ACD. And after the fourth quarter of 2021, the PLD, clearly, we wouldn't feel that much of a difference, I mean, intraday.
But in terms of oscillations due to frequency, load, localized demand, a strong localized demand, and the need of this generation that provides power to the system in parallel with renewable energies, which are not yet centralized, I mean, we already felt a positive effect. The difference or the surplus we have was so that, I mean, the prices went up and the impact was higher in relation to what we have now. So we hope that early next year, in view of load estimates and climate and temperature, so in the beginning of the first quarter of next year, there will be oscillations, so PLD prices should increase, and this reflects the sale of the surplus that we have in the period. I would just like to add a little bit. That level of 2.5 is an evolving process.
Some years ago, we had 1x leverage. We said that our plan was to reach 2x-2.5x. Considering the investment level and dividend, we were very competitive. We paid good dividends in that period, and now we reached a level that we believe to be reasonable for now. But obviously, we are flexible enough to review that further on, considering the scenarios to be evaluated by 2025... 2024 and 2025. But we will certainly inform the market as soon as we have something different. And just to add, this small variation from 2.5x to 2.3x in terms of our quarter leverage, by no means this is something that we want to pursue, right?
This or even something below that number, for us, is almost like an inadequate leverage, given our capital structure, because it's important that we have ROE and our ROIC metrics that are important. What brought us this far was this, but from now on, we have new possibilities. Just to conclude, I have something important to say. For us here, being triple-A, it is really significant. We are an infrastructure capital investment company, and having a low cost of capital is one of the critical success factors. Then we see private companies operating at a higher leverage level, but at the same time, they maintain a triple-A. That means that we see some room for further improvements, meaning that there will not be any limitation in terms of that 2.5, to have a triple-A rating.
As Daniel was saying, there is some flexibility.
That is very good. Thank you very much.
Our next question is from Mr. Antonio Junqueira from Citi. Antonio, your microphone is on.
Good morning. My question is more related to quality. The company is going through a redimensioning process involving its people and employees. I mean, now you're a private company, so I'm not referring to people now, I'm talking about internal restructuring in terms of responsibilities and functions in the company. Do you, Daniel, see the need to restructure the functions of the company? Do you believe that the company should review its size? And the second question is, I understand that you will also adjust the compensation of the officers. How is that moving along, and when do you intend to present that plan? I understand that this will also include stock options, right? So these are my questions.
Well, Antonio, those are very interesting points.
First of all, with this PDV program or voluntary redundancy, we are saying that 23% of the people will leave the company, and this percent will naturally change things. I mean, to operate with 23% of our capacity, you need to unify, you have to improve your processes, you have to improve the structure of the company, you have to make some investments in technology. Things that we've been doing. We are talking about 23% of a company. I mean, at this, there is a 20% regulatory efficiency. So we've been doing our homework for quite some time. So this initial challenge, and that's why I've given that one year time frame, because we want to do everything, you know, very comfortably.
Where we have to mind customer service, we have to be mindful of several things so that the transaction occurs in a very smooth way. We are very confident because we are seeing many opportunities. Some of the things were duplicated. There are things that could be discontinued. I mean, our relationship with the controlling agents and the bidding processes. There were things that we needed to do before, but they are totally inefficient in a private world. Having said that, I mean, also during our Copel Day, this review of the role of the holding does not only contemplate our structure and size, there are things that we need to do.
One of them, and I, I will just give you a spoiler, is that the regulatory aspect of the company that, that was more related to the particular businesses, that there was some logic in there. But now we are seeing lots of advantages, be it because the benchmark of the sector is operating like that, but also because with this, in this new phase of the company, we want to be protagonists in regulatory debates. Moreover, now that Copel wants to have a, a capacity auction to improve the results at Foz do Iguaçu, there will be a cycle, and by the end of the cycle in 2026, the condition will be totally different than what we experienced in the past, because we were operating at a deficit, but then everything that was invested had to be incorporated in the base.
It's been 10 years that this has been the case. So in regulatory terms, we are 3.0. I like this topic, and I think this is part of the evolution process of the company. And to conclude, this review, this compensation review process, we already have an international consulting company to help us with that. Nobody is here to reinvent the wheel. There are several good examples in the market, and we will present the results of that consultancy in our Copel Day or in April of next year, because we want to be ready to deploy this plan to the main executives and the leadership. Our advantage is that our reference base is very clear. It's 8.25, and that was on August 8.
The value generated is 825, so the value generated from that is shared with people by means of long-term incentives. But what I would like to say, just to conclude my thoughts, is that even without that, we are already doing everything we need to do and everything we were committed to do and everything that will generate further value. This just shows our mindset and our commitment and our engagement level, the engagement level of everyone involved. We are fully committed to do what is best for the company, even without having any particular benefit, because we are just following the market practices, and this is something that will happen naturally. The important thing here is to generate value, to deliver results, to take care of our people, and to deliver excellent services to the domestic power system.
Great. Excellent. Thank you.
Our next question came in writing by Mr. Daniel Travassos from Safra Bank. He says, "Good morning. Could you comment on the dynamics of energy sales? We've seen contracts being concluded at average price of BRL 175 per MWh Could you comment on the details of the contracts and how could that evolve going forward?"
Hello, Daniel. I think... I mean, I cannot give you a lot of details about that strategy because it involves some relevant commercial aspects, and this is a very sensitive market. I think our macro challenge, and then, I mean, if my colleagues have some more details, they can go ahead. Our challenge, I would say, is having decontracted energy when prices go up again. And on the other, and on the other side, we don't want to leave everything for PLD, for the spot price.
So it's hard to find a good balance. But in 2024, there is a small surplus of about 5%-6%. In 2026, I mean, removing GSF, right? In 2026, it will be around 10-11. Oh, 2025, I'm sorry. And from 2026 onwards, we would have a bit more. Therefore, I would say that our view... In our view, we would probably have additional surpluses.... We have three wet periods and two dry periods, and there is a whole debate about the attributes. I mean, there's still a lot to happen. A lot of things will happen. So maybe it's too soon now to block all of that energy because it's the level is relatively low or very low. So that's all. Any additional comments?
No, perfect. 2024, 2023 is well in place, and with good results.
2024 is already contracted, but it's only after 2026 that we will decommission things. And looking at our sales strategy going forward, you know, load and the offers, I think that the prices will increase, and we want to experience this moment so that we can bring better results to the company. Our—in terms of energy planning and commercialization, these two areas are very closely monitoring all of the moves. The important thing is to do the sale at an adequate timing and mindful of the current prices at the level of energy that Copel has. We have good expectations, and we believe that prices will start to go up after the end of the wet season, and once the system is back to normal.
The Q&A session is now concluded. We would now like to turn the floor to Mr. Daniel Slaviero for his final remarks.
Once again, thank you so much for joining us today. We are experiencing a unique moment of our history. This is a very challenging moment, and this will require the best of each one of us here at Copel. So rest assured that throughout this Q&A session, excellent questions that refer to the main topics of the company. But I think also, we had the opportunity to express our mindset and our commitment level, the commitment of all of the leaders of the company and the company in general. It has to do with me, you know, the officers and everyone involved in the everyday run of the company. Our employees and managers are quite unique.
Having said that, I would just like to once again invite you to join us during our Copel Day, and thank you once again for your interest, for your enthusiasm with our company. Thank you and have a very good day.
Copel's video conference is now concluded. Thank you so much for participating, and have a great day.