Good morning, ladies and gentlemen, and welcome to Companhia Paranaense de Energia, Copel's video conference call to discuss the earnings of the Q4 of 2022. This video conference is being recorded and the replay may be accessed at the company's IR website, ri.copel.com. The presentation is also available for download. We inform you that all participants will be only watching the video conference during the presentation, and we will later begin the questions and answer session when further instructions will be provided. Before proceeding, we inform that forward-looking statements are based on beliefs and assumptions of Copel's management and on information currently available to the company. They 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 understand that events related to the microeconomic environment, industry conditions, and other factors may lead to results that differ materially from those expressed in such forward-looking statements. This video conference is presented by Mr. Daniel Slaviero, CEO of Copel, and Mr. Adriano Rudek de Moura, Copel's CFO, as well as directors of the subsidiaries that will be available for the questions and answer session. I would like to now turn the floor to Mr. Daniel Slaviero, who will begin the presentation. Please, Daniel, you may begin.
Hello, good morning. I thank you all for participating on our video conference. To begin, I'd like to update you on the transformation process of Copel into a corporation. In a brief retrospect, in November last year, the state of Paraná announced the controller's intention to transform Copel into a dispersed capital company, dispersed ownership without a defined controller, a true corporation. In November, the legislative house of Paraná approved the law that authorized this transformation. One of the main benefits of this change in Copel's legal nature is the possibility to renew our three main plants, in particular, the largest one, Foz do Areia, with the concession maturing in the next few months. With that, in December of last year, the company began studies for the full renewal, not only of Foz do Areia, but also Caxias and Segredo, which correspond to 60% of our generation capacity. In December still, the controller requested that Copel hired advisors, considering that the joint running of a possible secondary and primary offer brings savings and benefits to the process.
Moving to the month of January of this year, the company announced hiring the main advisors responsible to assist this process, who have already started working and has also approved its new collective work agreement considering this new reality. For this month of March, at the latest the beginning of April, we expect the definition of the grant bonus from the Ministry of Mines and Energy. The next steps are the conclusion of the valuation calculation and the due diligence work being carried out by independent companies, which will be evaluated and assessed by Paraná's Court of Accounts. Our expectation is to run the offer in the second half of the year with the numbers of the Q2 . Even considering we have a threshold date for the renewable Foz do Areia, which is December of 2023.
The company is focused on this process, following all of its governance rights as the controller has been following their own procedures. Of course, we will maintain the market informed of any material fact in this journey. I reinforce our conviction that Copel's transformation into a corporation will be very beneficial for the company, its employees, customers, and society in general. Starting to talk specifically about our earnings, we closed the quarter with an adjusted EBITDA that is consistent, exceeding BRL 1.4 billion. In the total of 2022, the amount is of BRL 5.5 billion, representing an increase of more than 10% compared to the previous year. In addition, there is also a strong cash generation of nearly BRL 1 billion in the quarter, closing with a leverage of 2 times EBITDA, which is very comfortable for the company.
This is a result of a disciplined management and capital allocation. The great results of the quarter were partially affected by non-recurring events, such as the impairment of UEGA and the provision for the arbitration procedures that began in 2015 and run under secrecy. Before moving to the next slide, there's another relevant accomplishment referring to the commitments that we formed in our strategic plan. The renewal of Compagas concession for another 30 years until 2054. Signing the concession contract and payment of the grant bonus were made in the last days of last year. This was a significant step in our strategy of focusing on the core business of electricity, and we intend to begin the divestment process in this asset as soon as the corporation process progresses a little. Now on the next slide. I also pointed some advances of the last quarter.
Conclusion and beginning of operation of 100% of Jandaíra wind complex, adding an additional 900 MW in our wind power generation park. Since the beginning, I've said that one of the priorities of this management is the impeccable execution of a business plan. This asset was entirely conceived, planned, and executed in our tenure. Since the auction in October 18, 2019 until delivery, more than two years ahead of schedule compared to our business plan, considering the auction and strictly according to our business plan, this asset becomes a reference, a landmark of execution, including when we compare to private players who operate in the region. I'd like to pay my compliments to the directors of new business and Copel Geração e Transmissão for the brilliant work.
As for Copel Distribuição, we closed another year with efficiency above double digits in the regulatory EBITDA and excellent operating performance. We're making progress in our transformation plan. The board has approved the investment plan for 2023 in the amount of BRL 2.2 billion. Copel DIS will have approximately BRL 1.8 billion. All of these investments within our policy have the objective, very clearly, three objectives actually, to improve services provided to our customers, reducing costs, and to increase our base of regulatory assets. As for UEGA, as was already mentioned, we began the non-binding step of the proposal to divest in this asset. The current model is of a joint sale with Petrobras that is a sale of 100%, and Copel holds just above 82% of the total.
At this time, we're waiting for a formal positioning from Petrobras regarding the request of the ministry, who asked, as everyone knows, the suspension for 90 days of all of its sales processes. If Petrobras decides not to divest, which does not seem likely, we will continue with the sale of our share as our decarbonization plan for the power matrix. Finally, it's with great pleasure that for another year, we remain on the ISE portfolio and ICO2 portfolio of B3, reflecting our permanent commitment to the ESG area. In addition, this week, we made another important step for improving our index for investors with this MSCI ESG, where we went from a BBB classification to an A rating. This is something that gives us great satisfaction. Now I turn the floor to Moura, who will talk about more details of our earnings, and we will be, of course, open and available for any doubts and questions. Thank you.
Good morning, Daniel. Good morning, everyone. I thank you all for attending as well. I'd like to begin by highlighting the details of the main financial indicators of the Q4 with significant increase of EBITDA, adjusted EBITDA, compared to the Q4 of 2021 of more than 37%. Basically supported by the improvement in the hydrological scenario with an average GSF that's more favorable in 2022, almost 10 percentage points more than 2021, close to 78%. Only this factor already had a contribution of more than BRL 300 million to the earnings of the quarter in the purchase and sale of electricity.
We also had a significant reduction in our costs with personnel in the quarter in the same comparison basis. Here, excluding the effects of the indemnity of the voluntary redundancy program at the end of 2021. That's approximately BRL 126 million. Part of it resulted in the reduction of almost 508 employees in this period. A little later, I'll talk more about the PMSO. Year-to-date, EBITDA, adjusted EBITDA exceeded BRL 5.5 billion, an increase of 10% compared to 2021. Very expressive growth considering all of the challenges that we faced in 2022. Adjusted net income has more than doubled, exceeding for the first time the mark of BRL 1 billion in a quarter. In addition to the improvement in EBITDA, there's a positive effect of the tax benefit of approximately BRL 330 million of the interest on equity.
In the year, adjusted net income of BRL 2.8 billion is in line with the previous year. Despite EBITDA improvement and the positive tax impact of the interest on equity, the financial result was negatively affected by the increase on interest rates and inflation, but in the bottom line, the values ended up offsetting each other. Operating cash generation has also increased despite the reduction of TS consumption and including the increase of MMGD of BRL 930 million, a 10% increase compared to last year. In the year, cash generation already exceeded BRL 5.3 billion, 17% higher than 2021.
This level of cash generation is a result of the combination of multiple factors, but one of the main components is the improvement in the national hydrological scenario with a lower need for energy purchase, as I said, in addition, of course to other positive impacts, such as the tariff adjustment at this reduction of PMSO that we'll see in detail a little later. With that, we ended the year with a consolidated cash balance of BRL 2.7 billion, noting that in November we made a payment of part of the interest on equity of BRL 600 million. We remain with a sound financial position. Next page here, we see the consolidation of adjusted EBITDA versus reported EBITDA with the non-recurring items recorded in this quarter and in the year.
For the year, the highlight is the provision for PIS and COFINS of BRL 110 million as a result of Federal Law 14,385/2022. This provision was recognized in the Q2 of 2022. In this quarter we had two non-recurring adjustments. The largest one refers to the arbitration that Daniel mentioned that began in 2015. It's a civil arbitration. Due to the evolution of the procedures and the beginning of the set interpretation phase, based on the opinions of specialized advisors, both external and internal, we made a complement to the provision of BRL 453 million. This arbitration litigation was already part of our expectations in the financial statements of previous years as a contingent liability. There are no more details as we have the protection of secrecy and confidentiality.
If you're curious, this note 28.2 brings more detail due to the movement of this litigation. The other adjustment pertains to the impairment of BRL 144 million at UEGA, considering the scenario of low likelihood of this fact, partially offset by the reversion of other generation assets. To summarize, the sum of non-recurring items adjusted in EBITDA in the Q4 is of BRL 0.5 billion, and in the year it's around BRL 1.3 billion, including the provision of PIS and COFINS. I think it's important to mention that in the case of PIS COFINS, this adjustment of BRL 110 million in EBITDA turns into BRL 1.2 billion on net income, considering the financial component.
On net income, the impact of non-recurring items gets close to BRL 1.6 billion, reducing adjusted net income of almost BRL 2.8 billion, as we see in the previous page, to BRL 1.2 billion in the reported amount. Next page, we have a bridge with the contribution of each business. Q4 of 2021 versus Q4 of 2022. It is visually clearer to see the impact of the better scenario for purchase and sale of energy at GeT. As I mentioned, there was also an increase of BRL 60 million in equity equivalents due to the periodical tariff review applied to transmission contracts and also monetary correction on contract assets, and a significant reduction in PMSO of BRL 60 million. Another factor that also contributed to the good result at GeT was the entry of the Vilas wind hub in the generation portfolio.
This asset was acquired in November of 2021, as well as the beginning of operation at the Jandaíra wind hub that was already mentioned by Daniel. This result clearly reflects our strategy of continuous improvement of efficiency that, in addition to the cost reduction plan, includes the conclusion of works and new acquisitions, which already start to contribute to results and will be increased with the acquisition of wind hubs Aventura and Santa Rosa & Mundo Novo as of January 30th of 2023. At this, we saw an increase of 10% getting to an adjusted EBITDA in the quarter of BRL 442 million, a robust result even considering the drop in the grid market in this quarter, including the impact of MMGD, especially in November and December.
This decrease was completely offset by the cost reduction or the reduction in manageable costs, especially in personnel, with the reductions of the voluntary redundancy program at the end of 2021. There was also the increase of 16% at TUSD since June of last year. In the accumulated year, this reached BRL 1.7 billion of adjusted EBITDA, a historical landmark for the company. With that, regulatory efficiency remains at a double-digit rate at around 12%. To conclude this part, Copel Mercado Livre remains at the top of the largest traders in Brazil with a strategic importance that is increasingly relevant in the purchase and sale of energy at the Copel group, with a strong potential for sustainable growth, with the capture of opportunities, especially in the free market, with the opening of the free market.
In terms of results, EBITDA was close to BRL 25 million, a little bit below the Q4 of 2021 due to the lower margins. Getting into PMSO. The red column here, the main impact was the complement for the arbitration litigation provision. Excluding this impact and all known recurring items, the reduction is close to 24% of BRL 981 to BRL 747. The cost with personnel and administrators had a significant reduction, including the reduction of the number of employees that I mentioned, 508 at the end of 2021, due to the reduction of reported results. There was a relevant impact here in the award for performance and profit sharing. There was a reduction of these values that you can see in the chart.
Even without these effects, you still see a reduction of almost 11% or above 11% quarter-on-quarter. Considering an accumulated inflation measured by INPC of close to 6% between those two quarters, there was a reduction in real terms of almost 16% in the cost of personnel and administration. Quickly about the investment program, BRL 2.3 billion in 2022. More than BRL 600 million in the last quarter, especially at DIS, focusing on the continuity of the transformation program, contemplating Paraná Trifásico and Smart Grid. We're making great progress in the execution of these two initiatives, and we already start to see results. At GeT, the focus was the conclusion of Jandaíra Wind Hub, where the entry of operation was advanced in two years. For 2023, we already had the approval of a budget for investments over BRL 2.2 billion.
The continuity of focus of investments at DIS, prudent investments at DIS, noting that this phase of RAD should go to the end of 2025. Noting that the acquisition of the hubs Aventura and Santa Rosa Mundo Novo concluded in January is not included in these BRL 2.2 billion that were approved, nor the potential payments of brand bonus linked to the renewals of the FDA Caxias and Segredo concessions. Moving towards the end of my presentation. Leverage, as Daniel mentioned, is 2 times adjusted by the effect of the provision for PIS/COFINS according to the clauses. We'll continue focusing on improving a more balanced capital structure with the levers for dividend policy and investment policies. We're making good progress in this journey. As you can see, there's no exposure to foreign exchange in our debt, and the main indicators remain DI and IPCA.
In terms of maturities, 2023 and 2024, we have very low values, quite reasonable, with a greater concentration for 2025, but completely within the company's cash generation capacity and the indebtedness levels. Finally, I highlight once again the discussions in the shareholders meeting in November of last year of the interest on equity payment of BRL 970 million equals to a yield of more than 5% in the year, maintaining a good level of competitiveness in terms of dividend made payment. With this level of interest on equity, there's no expected additional payment to be made based on the results of 2022. This proposal considered maximizing tax benefits of this modality of payment, with results above BRL 330 million, which already are reflecting in the earning results of the Q4. Tera X 2022, November 2022, with a total of BRL 970 million. BRL 600 million have already been paid at the end of November, and the balance of BRL 370 million will be paid by June 2023, in a date to be defined by the general meeting that will be held in April. That's it. Thank you once again for your participation, and we can now move on to the question and answer session.
Thank you. We will now begin the questions and answer sessions for investors and analysts. If you want to ask a question, please type your name and company in the Q&A field. Please wait while we collect the questions. Our first question in writing from Daniel Travitzky from Banco Safra.
Do you consider to participate in the transmission auctions at the middle of the year? Should we expect movement of investments as what happened in Jandaíra before the process to conclude the transformation of the company into a corporation? Second question about the provisioning of BRL 453 million. How much would you have to recognize that in this process from 2015? Thank you.
Good morning, Daniel. Thank you. First, to split this question in investment at the transmission auctions and the market opportunities that we have today. Newspapers today in Brazil have a large story about assets that are in the market for business opportunities. Our priority here, to Daniel and everyone, is the corporation process. Any other plan at this time or throughout this year is outside of our primary preliminary strategy. We do not intend to participate in this auction in the first half of the year.
In the second half, we are evaluating one lot or another, it's also a secondary priority. Our focus at the company is the corporation process, as we already said. We have the threshold, the limit cut-off date of Foz do Areia. That's the main asset of the company, one-third of the generation, and its process must be concluded by December. As we said, we're fully focused, and we're not looking at greenfields or brownfields opportunities for 2023. About the complement of the provision of the arbitration litigation, it's already in the liquidation phase, as Moura mentioned. With the opinion of our advisors, it is the best estimate we have today, and we don't foresee any additional value in this process. We continue to follow this with our internal and external attorneys, and since it runs protected by confidentiality, this is the limit that we have in terms of information to provide to you at this time.
Once again, if you have a question, simply type your name and company on the Q&A field. Next question, Marcellini Pellison.
Good morning. For 2023, is there any expectation of share buyback due to the reduction in the price of the asset? Thank you.
Hello, Marcellini. We do not have any plan of share buyback at this time. As Moura mentioned, we understand that we have two major tools to have an increasingly better capital structure adhering to the sector, which is the investment policy and the dividend policy. In our view, we have been doing that, as we have been saying since 2019, 2020, balancing this and reorganizing the capital structure in a balanced and conservative way, always watching a structure and dividend yields compared to the average of the industry. In this context here, Marcellini, it is not part of our schedule to have any share buyback program. As was said, I think the company's priority is to know the exact amount of the grant bonus, which will be an expressive figure considering the three plans. We'll be prepared. We have to be prepared to make this payment and renew for another 30 years 60% of the company's capacity. This is the priority.
Just linking it to the previous question from Daniel's question, my namesake, we'll probably not have a business opportunity any better than this, which is to maintain the assets that we know that we are operating. Foz do Areia specifically, we had a recent retrofit made, we don't have plants of this size above 1 giga, 1.3, 1.4, 1.6. As Foz do Areia, that's the best investment plan that we can have. Also, of course, with all the other benefit that the corporation process will bring to the company, to its employees, to customers, and as I said, to the society in general.
Our next question, Andre Sampaio.
Good morning. How is the process to vote for approval of privatization process? Will the government be allowed to vote or only minority holders? Does BNDES also vote, correct?
Thank you. Hello, Andre. All shareholders can vote in this process according to their share, to their capital. We don't see and our advisors don't see any restriction for any of the shareholders in terms of voting within the share that they have in the company's capital.
Next question, Marcelo Ferrante.
Good morning, everyone. Congratulations on the excellent results. I would like to know how the company sees the transition process into corporation and the strengthening of corporate governance guaranteeing value generation to investors. Thank you.
A process of this magnitude, Marcelo, has a number of steps. The first step is the source and the decision. That is up to the controlling shareholders, not all shareholders in general. I think this step has already been completed. Second is the legislative approval in the state of Paraná, which is already behind us. After that, now I think it's the point where we're at, I don't want to repeat myself, it's the process to build or do the due diligence, at least two valuations. This is then submitted to the Court of Accounts of the State of Paraná, who is the body that has the prerogative to supervise this type of analysis done by the company. With this process concluded, with this operation concluded, the company will enter a new phase at a new level. We already have part of our time dedicated to think and look at this, and the collective work agreement already brings some of the lines and guidelines. For now, the next moment will only come after the current moment is executed well, transparently, with the approval of all agencies, that's what we're focused on.
Just to conclude the answer and address this, I believe the company already has at its origin and the ESG area a strong focus on the G, on governance. We already advanced from level one to level two, improved our bylaws, created committees to oversee statutes and bylaws. It's in a process moving forward of evolving in governance. We believe that this is a process that still has many steps to be taken. But I'd say this is the main legacy of the work of this administration, which is to have a stronger and stronger governance and more and more transparent governance.
Next question, Eduardo Granjeiro.
What should be the destination of capital coming from the divestments at UEGA and Compagas this year? Thank you.
Granjeiro, good morning. Our priority here is within that focus of divesting on assets that are not our core business and decarbonize the matrix. Our intention is to use the funds coming from that to continue with our focus on energy and Copel and Distribuição investment plan, and to continue looking actively at the best opportunities for M&A. Greenfield, at this time, we see adverse conditions right, Bertol, for any investment. I mean, wind and solar generation, I believe there are good opportunities in the transmission auctions, not only this year, even though the volume of 23 is quite relevant. 2024 will have more, and Bertol and Jed's team in new business are keeping an eye on all of these opportunities. In short, Granjeiro, everyone, the objective is for these funds to continue reinforcing our strategy and our priority to grow as an integrated company, strengthening all of our branches, but always focusing on electricity.
Next question, André Figueiredo .
Is there an expectation or plan to mitigate recurring judicial liabilities? Thank you.
Andre, this is a continuous work done by the company to work and monitor not only with our internal team but our external teams as well. Without a doubt, this civil lawsuit that is referring to 2015, so quite some time ago, without a doubt, was the largest lawsuit of the company in the civil or labor courts. Here we do very strong work in the management of the company's legal liabilities. Unfortunately, we had to do this. It's a process, a lawsuit that is already close to the liquidation phase. We do not expect any additional factor, at least considering the information we have available today.
Next question, Leopoldo Crippa.
Good morning. A provision of BRL 453 million with the arbitration litigation, does it have any immediate cash effect? Thank you.
Excellent question. I thank you, Leopoldo. The answer is no. It reflects our best estimates considering the stage where the arbitration lawsuit is. There's no cash effect at this time. We'll continue to monitor and discuss this, that it has the best possible outcome for the company. We know the relevance of this impact. To be able to mitigate it as much as possible to have the smallest cash effect possible over the coming months.
Next question, Pedro Marcucci.
Good morning. I'd like to know about the dividend payment for this year of 2023. Thank you.
Well, Pedro, good morning again. As I emphasized in my presentation, of the BRL 970 million for interest on equity last year approved at the shareholders meeting, BRL 600 million were paid in November, the idea is to pay the balance of BRL 370 million in June, or by June, actually. The specific date will be defined at the meeting in April. The idea is to maintain these, you know, payments with a maximum payment of 22.
Next question, Pedro Manfredini.
Good morning. To what extent the process to transition process to corporation done by Eletrobras can be an example for Copel, both to overcome legal and political barriers as an example of corporate moves and simplification of structure, et cetera. Thank you.
Good morning, Pedro. Actually, Eletrobras process is the major leading case. We've been seeking or looking at what happened there to make the necessary adjustments, of course. It's a lot less complex. We don't have Angra, we don't have Itaipu, we don't have the size Eletrobras has. The backbone of what was done there is certainly a major reference for us to follow. I think this is one of the advantages that our process has, and that's why it's being a lot faster, a lot more agile when you compare it to Eletrobras and others-Announced in the same path. The model of the structure that the controller, controlling shareholder, the state of Paraná, also looked at what happened and included something that we consider very positive and healthy, which is the golden share for investments and distribution.
All of them with practices and references from the market, especially the determinations of ANEEL. We understand the differences and by their reference. In terms of the political environment, I believe that there are challenges. Eletrobras is addressing them, and we have ours. We believe that this process will progress. At the end of the day, this is a decision made by the controller, the state of Paraná, and they are acting very engaged in this for this process to move forward and as fast as possible, because they see it as a way to unlock a lot of value for the company and for all stakeholders in the process, as I mentioned earlier.
Next question, Marcus Scafuzzo.
Good morning. Congratulations on your results. I'd like to know if the controlling shareholder will sell the totality of their shares or what percentage they will sell for the company to become a company without a controlling shareholder. Is it only going to be a secondary offer? Will there be a capital increase through new issue of shares? Thank you.
I'll break down your question a little bit. It's a very important question, very compliant to the discussions we're holding. In terms of the controller, they publicly announced that they will not hold less than 15% of the total capital of the company. The state of Paraná today holds 31, and they will sell until they get a limit of 15%. The expectation is to be slightly above that. That's one point. The secondary offer. As for potential primary part, we understand that it may be very interesting for the company, especially considering the commitments we already mentioned with the payment of the grant bonus of the three plants that we don't know the value of yet, but it will certainly be in the billion rounds. It's a very significant commitment.
The company has the balance and there's room for it, but we're also looking at the moment and the structure and the cost, at whether they're worth it or if we should require part of a primary. That's the discussion at this time. As we have more advisors in the process, they will also help us or help the company reach a scenario or the ideal scenario that will be submitted to the governance bodies, in particular the board of administration, and then promptly will be informed to the market. I'm going around to say that the company's intention is to have a small share of primary as well in the process in order to face the commitments for grant bonus.
Next question, Marcus Faludi.
How is the company's privatization process? What are the next steps? Thank you.
Hello, Flody. I think overall, we detailed all the steps, the step by step. I don't want to repeat myself too much, I think the current moment is of working here to prepare the process to submit to the State's Court of Accounts. Based on the due diligence part of the valuations, and at the same time, we're waiting for these next weeks for the Ministry to define the calculation of the grant bonus for the 3 plant. I think this is the current step, the snapshot. Our expectation is to carry out this process in the second half, we'd say around October. That's our base scenario. We're going to work and try to get it ready as soon as possible. That's the reference, the plan that we have, the PMO. That's what we're working on.
Next question, Marcelo Sá.
Hello, everyone. When do you expect BNDES to make a position as for the offer? Do you see room to sell any share? Do you believe the market may become cautious if BNDES does not sell and ends up becoming the largest shareholder? I know there's a question of limitation of power vote, but there are investors that are worried that this will be turned down in the legal system.
Hello, Marcelo. Okay, so many points here in your question. First, about the BNDES indication, if they will do a share sale or not.
We don't have, at the moment, any information from them whether the previous vision of the prior administration would be held or not, as they had the intention of selling up to 50% of their share. This is a question where we don't have any indication or any information from BNDES currently about it. There's time still as well. There's some steps still to go, and they'll also mature their evaluation. That's the first point. The second point, if they end up not selling, what's the capital structure going to look like since the state said they want to hold a minimum of 15? We understand that there's a limitation of 10% that is approved by law that will be implemented in the bylaws.
Give us assurance so that no investor will have a shareholder power above 10%, directly or indirectly. About the third part of your question that we saw on the movements made in the legal sphere about this process and the 10% issue, our assessment is that this is a lot more complex than Eletrobras even. You have a number of companies with these limitations. You have P3 and other companies that have this as a limit, as a threshold. If this is unfeasible, if it is declared unconstitutional or illegal, it has an impact in many companies and some of the largest companies of the country that have this 10% limitation. There is a threshold globally set forth and is the essence of a true corporation. Deep down, I mean, I'm not going to give you a lecture or anything, but deep down, this preserves and protects the company itself because it avoids or prevents any shareholder over time, 5, 10 years, some shareholders indirectly may buy small steps and take over control in the future. That's not the essence of a true corporation, and it's not the desire of our controller for the future of Copel.
Next question, Yuri Goulart.
Good morning. Could you talk a little bit more about the sales of energy in the Q4 of 22, sharing the price level that Copel's trader is reaching in the free market? Are you starting to see a more tangible price pressure for energy placement as of this quarter? Thank you.
This question, Yuri, thank you. I'll start answering and then I'll get Bertol in generation and transmission, and Felipe, if they have anything to add. We're experiencing a time of very low prices. Low prices. For the year of 2023, we're comfortable. Our contracting level is adequate considering the natural hedge that we have of around 15% for GSF. In the last quarter, due to competition reasons, didn't increase prices specifically, only the Pmix, the average Pmix. We are being cautious. We believe that we left the largest hydro crisis in 91 years in 2021 to the period of heaviest rains in 2023, with the reservoirs at their highest levels in over 11 years. I think that this movement requires some peace of mind and cool mind and caution for us not to start practicing a price that is too low. That's our expectation.
We believe that at some point, linked to the rains, forecasts, and the model that is being sought and perfected, and even the increase of load due to economic growth, the prices will go back to the levels we were used to. Including these low prices harm not only generators, but distributors and may cause a general problem. For the expansion of the system, which is a highly strategic relevant process for Brazil to have this expansion, especially of renewable energies done consistently. Bertol, anything to add?
Good morning. Daniel gave you an overview of the commercialization of energy at Copel, Jed, and Mercado Libre. For 2024, we're at a favorable condition. We have a high level of PMix for energy sale and a contracting level above 80%. For 2023, that. For 2024, we also have a comfortable contracting level, not the same level that 2023, but it's a good level. We're watching all changes and variations in the market. Daniel mentioned the hydro crisis in 2021. 2022 to 2023, the great abundance in the levels of storage of the reservoirs, which reflects on future prices. The strong, massive entry of distributed generation.
The load is not going in as expected with the country's economic growth, it was expected to be stronger, but we have a qualified strategy to check our on time sales strategy and the adequate contracting level looking at the GSF projections, and we have our hedge in line with our portfolio. It's an essential strategy that our purchase and sale proposal and evaluation considers the renewal of the three major plans integrating into this portfolio all of these plans' physical guarantees. Our portfolio considers that as well. It's a moment where prices are decreasing, but we still have periods with an expectation of economic growth for the country. New rainy periods at the end of this year and from October to February, things may bring better conditions and the prices will follow.
Thank you. We now close the questions and answers session. I'd like to turn the floor to Mr. Slaviero for his final remarks. Please, Mr. Slaviero, you may proceed, sir.
I'd like to thank all participants once again. I believe with the volume of people attending and the questions show us how Copel is a company that is being, well, followed and attractive to the market, to investors in the process we're leaving and the results, the assets, and that shows great opportunities. I don't want to be a mono-theme company, but we have two big things that we must do to take care of the operation very well with the excellence of our assets. Serve our customers very well, execute the investment plan that's already programmed, but with a full focus on the complete priority of the company, which is the transformation into a corporation. We're very dedicated, well advised for this to develop as fast as possible with seriousness and transparency with all of the governance rights, because this will unlock a lot of value for the company, for its employees, for the national electricity system, for the shareholders. The company will continue and will enter a new phase of development, growth and value generation to everyone who follow, invest and work and are affected by our Copel. Thank you all very much, and we'll remain here steady, strong and enthusiastic with our work.
Copel's video conference is now closed. We thank you all for your participation. Have an excellent day.