Centrais Eletricas Brasileiras : Market Announcement Official Letter CVM 276 2016.pdf

FAX PARA AS BOLSAS CENTRAIS ELETRICAS BRASILEIRAS S/A

CNPJ: 00.001.180/0001-26 COMPANHIA ABERTA

The Company hereby informs its shareholders and the market in general that received, on June 22, 2016, the Official Letter of the Comissão de Valores Mobiliários ("CVM") No. 276/2016/CVM/SEP/GEA-1 requesting clarification regarding the news released on the newspaper " O Estado de São Paulo", Economy and Finance section, under the title "Distribution Companies of Eletrobras will have financial suport of R$ 3.5 billion", as transcribed by the end Market Announcement.

In response to the Official Letters in question, the Company clarifies the following:

1. As Market Announcement of May 23, 2016, the Conversion Law Project No. 11/2016 of the Provisional Measure 706, 2015 ("PLC 11/2016"), which was partially sanctioned by the President of Brazil, on June 23, 2016, through the enactment of Law No. 13,299 of June 21, 2016, recognizes the peculiarity and adverse conditions of the distribution companies located in regions not connected to the National Interconnected System - SIN. As noted, the main goal is to create a regulatory framework able to make economically viable these public service concessions. The mentioned balance is necessary for that any investor has an interest in operating, maintaining and investing in these concessions;

2. Through the Management Proposal of 165th Extraordinary General Meeting of Eletrobras (the "Management Proposal"), disclosed to the market on June 21, 2016, the Company brings the scenarios of extension or non-renewal of the concessions of its distribution companies, including Boa Vista Energia SA ("Boa Vista") and Amazonas Distribuidora de Energia SA ("Amazonas Energia"), which are benefited companies by Law No. 13,299/2016, indicating how would be these scenarios with the full sanction of the presidential PLC 11/2016 or its full veto, since it had not yet been published Law No. 13,299 / 2016;

3. The full sanction of PLC 11/2016, as regards the amendments that were being proposed for items IX, X and XI of article 13 of Law 10,438/2002, was an important factor in the economic and financial concessions sustentability of Boa Vista and Amazonas Distribution Companies, as stated in the above mentioned Management Proposal;

4. Whereas, by virtue of Law No. 13,299/2016, there was a partial sanction of the PLC 11/2016, and the wording for item X of article 13 of Law No. 10,438, of April 26, 2002 was vetoed, the Company clarifies that this veto has the following effects on the Administration's Proposal values:

   • Amazonas Energia

     In the case of Amazonas Energia, the Management Proposal and its attachments, bring the information to the base-date of June 2016, the "reimbursement rights" of that distribution company, through the Energy Development Account ("CDE") was approximately R$ 6.1 billion against a fuel supplier liability of R$ 12.7 billion, resulting in the amount of R$ 6.6 billion that had no CDE reimbursement.

     According to the PLC 11/2016, the proposed amendment of item X of article 13 of Law No. 10,438, of April 26, 2002, that was vetoed by Law 13,299/2016, provided that the CDE would reimburse these fuel costs, whose debts had been made until December 31, 2015.

     On the other hand, the wording of item IX of Article 13 of Law No. 10,438, of April 26, 2002, approved by Law 13,299/2016, which authorizes the reimbursement by CDE of expenses with fuel, duly proven, and not reimbursed by demands for economic and energy efficiency, including monetary adjustment, contracted until April 30, 2016, which, in the case of Amazonas Energia, may increase the right to reimbursement in approximately R$ 1.7 billion, according to data provided by the Company's Distribution Department, but still subject to the approval of the Grantor.

     That said, the final effect of the Law 13,299/2016 to the Amazonas Energia, will be to maintain, liabilities forecast to June 2016, around R$ 4.9 billion of debts with fuel suppliers without CDE reimbursement, what impacts in the capital injections needs, through capital increase, in order to Amazonas Energia may be able to meet the goals required by Aneel, for renewal of its concession pursuant to the Management Proposal:

     In BRL Million

     Amazonas Energia 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total
     C apital C o ntributio n - with gas impact 4,043.10 3,830.90 1,835.70 1,639.40 1,281.30 1,436.80 1,569.70 1,540.00 1,522.80 1,676.10 20,375.70
     C apital C o ntributio n - no gas impact	3,283.80	3,447.90	1,330.40	1,170.00	608.9	497.6	575.6	502.4	446.7	0	11,863.20
     EB IT D A - with gas impact -1,725.10 -859.9 -232.2 -56 80.4 -268 -205.9 -202.2 -194.4 -860.5
     EB IT D A - no gas impact	-965.8	-476.9	273.1	413.5	752.7	671.2	792.5	858.6	925	934.8

     Source: Deloitte Touche Tohmatsu Consulting

     Moreover, in terms of NPV and winding up costs, the situation of Amazonas Energia, is the following:

     In BRL Million

     Distribution Company	NPV	Winding up Cost (*)
     Amazonas Energia (with Law 13,299/2016) - neutral gas contract ("1")	-3,983.20	-4,564.00
     Amazonas Energia (with Law 13,299/2016) - gas contract impact ("2")	-10,760.90	-11,341.70
     Difference in the results of the two scenarios of Amazonas ("2" - "1")	-6,777.70	-6,777.70

     Source: Deloitte Touche Tohmatsu Consulting

   • Boa Vista

   In the case of Boa Vista, the Management Proposal and its attachments, bring the information to the base-date of June 2016, the "reimbursement rights" of that distribution company, the Energy Development Account ("CDE") was approximately R$ 201.7 million against a fuel supplier liability of R$ 315 million, resulting in the amount of R$ 113.4 million that had no CDE refund.

   According to the PLC 11/2016, the proposed amendment of section X of article 13 of Law 10,438, of April 26, 2002, which was vetoed by Law 13,299/2016, provided that the CDE reimburse these fuel costs, whose debts had been made until December 31, 2015.

   On the other hand, the amendment to section IX of Article 13 of Law No. 10,438, of April 26, 2002, approved by Law 13,299/2016 authorizes the reimbursement by CDE of fuel expenditures proven and not reimbursed by demands for economic and energy efficiency, including monetary updates, contracted until April 30, 2016, which, in the case of Boa Vista, may increase the right of reimbursement approximately R$ 114.5 million, according to data provided by the Company's Distribution Department, but still subject to approval by Aneel.

   That said, the enactment of Law 13,299/2016 to Boa Vista Energia, indicates that the right to compensation will be increased by R$ 1.1 million of that fuel debt projected by June 2016.

   The capital injections needs, through capital increase, so that the Boa Vista to be able to meet the goals required by Aneel, for renewal of its concession, pursuant to the Management Proposal, shall be as follows:

   In BRL Million

   Boa Vista Energia 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total
   Capital Injection 59.9 39.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 99.7
   EBITDA	-21.0	-6.9	18.8	39.2	76.6	82.8	75.6	86.4	94.9	100.6

   Moreover, in terms of NPV and costs of winding up, the situation of Boa Vista, is the following:

   In BRL Million

   Distribution Company	NPV	Winding up Cost (*)
   Boa Vista Energia	86.8	-256.9

5. The Provisional Measure No. 735, published on June, 22, 2016, limits the payments referred in item IX of Article 13 of Law No. 10,438, of April 26, 2002, with the new wording approved by Law 13,299/2016 to R$ 3.5 billion. Thus, the right to reimbursement of Amazonas Energia and Boa Vista, by CDE, of the fuel expenses proven and not reimbursed by demands for economic and energy efficiency, including monetary update, contracted until April 30, 2016, the respective amounts of R$ 1.7 billion and R$ 114.5 million, as mentioned above, still depend on approval of the Granting Power. The amount of R$ 3.5 billion is not intended solely to these distribution subsidiaries of Eletrobras, but to all distributors in the northern region, whose state capitals were not yet connected to the National Interconnected System on December 9, 2009.

6. The Provisional Measure No. 735/2016 also included new wording for §1ª-A of Article 8 of Law 12,783/2013, establishing the possibility of disposal of distributors, subsidiaries of Eletrobras, which does not have an extension of their concessions approved associated with the new bid to be made by Granting Power, which is being evaluated by the Company;

7. It should be noted that the Administration Proposal, published before the enactment of Law 13,299/2016, presented the opinion of management with respect to scenarios related to the extension or not of concessions to the Eletrobras Distribution Companies: Companhia Energética do Piaui - CEPISA; Companhia Energética de Alagoas - CEAL; Companhia de Eletricidade do Acre

   - ELETROACRE; Centrais Elétricas de Rondônia S.A - CERON; Boa Vista Energia S.A; and Amazonas Distribuidora de Energia S.A, as indicated, at that time, the need, in 2016, of capital injections in these distribution companies, the minimum total amount of R$ 7 billion, so that these distributors could meet the targets set by ANEEL in the event of renewal of its concessions and also pay off their debts with Eletrobras. In this regard, the Board of Directors opined that such capital contributions are made by the Federal Government directly into the distribution companies, which have the extension of their concessions approved upon assignment of preemptive rights by Eletrobras, observed the Law 6,404/1976, December 15, 1976, as amended ("Law of Corporations") and the Decree 1,091/1994. However, such decision will be up to the shareholders in that 165th Extraordinary General Meeting of Eletrobras, to be held on July 22, 2016;

8. In view of all the above, it appears that all the information availablel to the Company had already been subject of prior disclosure to the market, including through the Administration Proposal which provided the risks and position of managers in that said the presidential sanction PLC 11/2016. However, the Company could not meet before its discloser, the content of Law No. 13,299/2016 and Provisional Measure No. 735/2016.

Rio de Janeiro, June 23 de 2016.

Armando Casado de Araujo CFO and Investor Relations Officer