Note 31 - Purchase and Sale of Energy in the Short

NOTE 31 - PURCHASE AND SALE OF ENERGY IN THE SHORT-TERM MARKET
In 2002, the estimate of amounts determined by the MAE were adjusted, comprising the
period from September 2000 to December 2002, recorded in accounts receivable amounted to
R$ 967,482 thousand, corresponding to the electric power sold in the market. Electric power
purchased in the same period corresponded to an amount of R$ 577,834 thousand.
In December 2002 there was the first financial settlement corresponding to 50% of the
operations carried out through the MAE in the period from September 2000 to September 2002, in
the net amount of R$ 100,411 thousand, considering the deduction of the amounts arising from the
injunctions.
In January and February 2003, in order to continue the settlement of operations carried out
through the MAE, FURNAS paid R$ 60,158 thousand related to approximately 50% of the
operations carried out from October to December 2002. The remaining installment amounting to
R$ 61,627 thousand was settled in July, 2003.
In June 2003, after the disclosure of the new accounting provided by the SINERCON,
comprising the period from September 2000 to December 2002, R$ 1,036,336 thousand was
recorded in accounts receivable. The purchases were also adjusted to the amount of R$ 557,113
thousand.
In July 2003, after the completion of the audit work carried out in the MAE, the financial
settlement of the operations performed within the ambit of the MAE was carried out. Of the
amount recorded in accounts receivable, FURNAS realized R$ 667,467 thousand and paid MAE
for the purchase of electric power amounting to R$ 435,328 thousand.
After the second settlement in July 2003, related to operations carried out through the
MAE, in the period from September 2000 to September 2002, R$ 368,869 thousand recorded in
current assets was not received, as it is sub judice as a result of injunctions brought by resellers
from the South of Brazil against ANNEL and MAE, as they disagreed on MAE’s interpretation of
the application of certain accounting rules, in conformity with ANEEL Order No. 288, of May 16,
2002, preventing these resellers from selling electric power from ITAIPU in the spot market of the
Southeast of Brazil at rationing prices, pleading retroactive change of an approved market rule.
In addition to that, article 9 of ANEEL Resolution No. 552, of October 14, 2002 establishes
that the amounts determined as adjustments should be recorded in a special book and maintained
by the MAE on behalf of the resellers affected.
Subsection II of paragraph 4 of article 10 of the resolution above determines that the MAE
should cancel the records made in the special book maintained by the creditor agent affected by the
legal processes, should there be grounds for the assessment made by the authors of the lawsuit.
Particularly in relation to the determinations of article 10 of ANEEL Resolution No. 552/2002,
FURNAS is waiting for and following on the decision of the ongoing lawsuits to take the
appropriate measures, considering that under the current circumstances it is difficult to determine
the outcome of these lawsuits.
The purchases of the Company from the MAE in 2003 amounted to R$ 13,796 thousand
and these have been fully paid.
The sales of the Company to the MAE in 2003 amounted to R$ 50,287 thousand, of which
R$ 25,945 thousand have been received.
Income and expenses were recorded in the year as follows:
SALES
Spot market
Sub judice
Received up to December 2003
TOTAL
PURCHASE
Spot market/adjustments
Payments up to December 2003
TOTAL
NET RESULT
In thousands of reais
2003
163,702
56,391
(693,412)
(473,319)
2002
655,004
312,478
(100,411)
867,071
Total
818,706
368,869
(793,823)
393,752
(6,925)
(570,909)
(577,834)
577,834
577,834
570,909
(570,909)
-
104,515
289,237
393,752
JOSÉ PEDRO RODRIGUES DE OLIVEIRA
Director - President
JOSÉ ROBERTO CESARONI CURY
Director
FABIO MACHADO RESENDE
Director
DIMAS FABIANO TOLEDO
Director
RODRIGO BOTELHO CAMPOS
Director
MARCOS GUIMARÃES DE CERQUEIRA LIMA
Director
JOSÉ LUIZ OLIVEIRA DE AGUIAR
Superintendent of Accounts and Control
CRC - RJ 026.157/O-5 - Accountant
CPF - 330.737.757-49
ORLANDO OLIVEIRA SILVA
Head of the Accounts Department
CRC - RJ 024.410/O-6 - Accountant
CPF - 288.231.257-15