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Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2021
Schedule of fair value of financial instruments

 

             
        12.31.2021   12.31.2020
  Note Level Book value Fair value Book value Fair value
Financial assets            
Fair value through profit or loss            
Cash and cash equivalents (a) 5 1 3,472,845 3,472,845 3,222,768 3,222,768
Bonds and securities (b) 6 1  14,571  14,571 751 751
Bonds and securities (b) 6 2   346,487   346,487   299,779   299,779
Accounts receivable - distribution concession (c) 10.1 and 10.2 3 1,433,734 1,433,734 1,149,934 1,149,934
Accounts receivable - generation concession (d) 10.4 3   102,220   102,220  81,202  81,202
Derivatives fair value - forward contracts (e) 12 3 2,907 2,907  23,308  23,308
Fair value in the purchase and sale of power (e) 12 3   855,775   855,775   689,531   689,531
Other temporary investments (f)   1  14,072  14,072  14,910  14,910
Other temporary investments (f)   2 5,913 5,913 7,475 7,475
      6,248,524 6,248,524 5,489,658 5,489,658
Amortized cost            
Collaterals and escrow accounts (a)     182 182 197 197
Collateral and escrow deposits - STN (g) 22.1     142,764   115,643   133,521   113,477
Trade accounts receivable (a) 7   4,515,426 4,515,426 3,819,680 3,819,680
CRC Transferred to the Paraná State Government (h) 8    -  - 1,392,624 1,496,016
Sectorial financial assets (a) 9     767,480   767,480   346,930   346,930
Accounts receivable - concessions - bonus from             
  the grant (i) 10.3     730,851   828,673   671,204   763,070
      6,156,703 6,227,404 6,364,156 6,539,370
Total financial assets      12,405,227  12,475,928  11,853,814  12,029,028
Financial liabilities            
Fair value through profit or loss            
Fair value in the purchase and sale of power (e) 29 3   545,468   545,468   343,406   343,406
        545,468   545,468   343,406   343,406
Amortized cost            
Sectorial financial liabilities (a) 9     293,179   293,179   188,709   188,709
Special Tax Regularization Program - Pert (g)  13.2     421,694   361,080   459,303   377,375
PIS and Cofins to be refunded to consumers (a) 13.2.1   3,326,795 3,326,795 3,927,823 3,927,823
Accounts payable to suppliers (a) 21   2,710,984 2,710,984 2,436,452 2,436,452
Loans and financing (g) 22   3,738,269 3,313,645 3,214,249 2,956,696
Debentures (j) 23   8,240,769 8,240,769 6,837,819 6,837,819
Accounts payable related to concession (k) 27     903,959 1,009,867   731,864   811,329
       19,635,649  19,256,319  17,796,219  17,536,203
Total financial liabilities      20,181,117  19,801,787  18,139,625  17,879,609
Different levels are defined as follows:
Level 1: Obtained from quoted prices (not adjusted) in active markets for identical assets and liabilities;
Level 2: obtained through other variables in addition to quoted prices included in Level 1, which are observable for the assets or liabilities;
Level 3: obtained through assessment techniques which include variables for the assets or liabilities, which however are not based on observable market data. 

Determining fair values

a)Equivalent to their respective carrying values due to their nature and terms of realization.
b)Fair value is calculated based on information made available by the financial agents and the market values of the bonds issued by the Brazilian government
c)The criteria are disclosed in Note 4.4 to these financial statements.
d)The fair values of generation assets approximate their carrying amounts, according to Note 4.4 to these financial statements.
e)The fair values of assets and liabilities are equivalent to their carrying amounts according to Note 4.15 to these financial statements.
f)Investments in other companies, stated at fair value, which is calculated according to the price quotations published in an active market, for assets classified as level 1 and determined in view of the comparative assessment model for assets classified as level 2.
g)The cost of the last issue of Copel’s debentures, CDI + 1.38%, is used as a basic assumption for discount of the expected payment flows.
h)The Company based its calculation on the comparison with a long-term and post-fixed National Treasury Bond (NTN-B) maturing on August 15, 2026, which yields approximately 3.87% p.a. plus the IPCA inflation index.
i)Receivables related to the concession agreement for providing electricity generation services under quota arrangements, having their fair value calculated by expected cash inflows, discounted at the rate established by ANEEL auction notice 12/2015 (9.04%).
j)Calculated from the Unit Price quotation (PU) for December 31, 2021, obtained from the Brazilian Association of Financial and Capital Markets (ANBIMA), net of unamortized financial cost.
k)Actual net discount rate of 8.75% p.a., in line with the Company’s estimated rate for long-term projects.
Credit risk is the risk of the Company incurring losses due to a customer or counterparty in a financial instrument, resulting from failure in complying with their contractual obligations.

Credit risk is the risk of the Company incurring losses due to a customer or counterparty in a financial instrument, resulting from failure in complying with their contractual obligations.

     
Exposure to credit risk 12.31.2021 12.31.2020
Cash and cash equivalents (a) 3,472,845 3,222,768
Bonds and securities (a) 361,058 300,530
Pledges and restricted deposits linked (a) 142,946 133,718
Trade accounts receivable (b) 4,515,426 3,819,680
CRC Transferred to the Paraná State Government (c)   - 1,392,624
Sectorial financial assets (d) 767,480 346,930
Accounts receivable - distribution concession (e) 1,433,734 1,149,934
Accounts receivable - concessions - Bonus from the grant (f) 730,851 671,204
Accounts receivable - generation concessions (g) 102,220   81,202
Other temporary investments (h)   19,985   22,385
    11,546,545   11,140,975
a)The Company manages the credit risk of its assets in accordance with the Management’s policy of investing virtually all of its funds in federal banking institutions. As a result of legal and/or regulatory requirements, in exceptional circumstances the Company may invest funds in prime private banks.
b)The risk arises from the possibility that the Company might incur losses resulting from difficulties to receive its billings to customers. This risk is directly related to internal and external factors to Copel. To mitigate this type of risk, the Company manages its accounts receivable, detecting the classes of consumers most likely to default, implementing specific collection policies and suspending the supply and/or recording of energy and the provision of service, as established in contract and regulatory standards.
c)There is no risk considering that the balance was settled in 2021.
d)Management considers the risk of this credit to be reduced, since the agreements signed guarantee the unconditional right to receive cash at the end of the concession to be paid by the Concession Grantor, corresponding to the costs not recovered through the tariff.
e)Management considers the risk of this credit to be reduced, since the agreements signed guarantee the unconditional right to receive cash at the end of the concession to be paid by the Concession Grantor, referring to investments in infrastructure not recovered through the tariff.
f)Management considers the risk of such credit to be low, as the contract for the sale of energy by quotas guarantees the receipt of an Annual Generation Revenue - RAG, which includes the annual amortization of this amount during the concession term.
g)For the generation concession assets, ANEEL published Normative Resolution 596/2013, which deals with the definition of criteria for calculating the New replacement value (Valor novo de reposição – VNR), for the purposes of indemnification. In July 2021, Normative Resolution No. 942/2021 was published, regulating the calculation of these amounts through the presentation of appraisal reports to be prepared by accredited companies. Management’s expectation of indemnification for these assets supports recoverability of the balances recorded.
h)This risk arises from the possibility that the Company might incur losses resulting from the volatility on the stock market. This type of risk involves external factors and has been managed through periodic assessment of the variations occurred in the market.
Schedule of liquidity risk

 

               
               
    Less than 1 to 3 3 months 1 to 5 Over  
   Interest (a)   1 month    months   to 1 year    years   5 years   Total  
12.31.2021              
Loans and financing Note 22  37,039  97,025   729,794  2,047,981   2,234,468  5,146,307
Debentures Note 23  65,956  56,696   2,727,331  6,362,806   2,029,487   11,242,276
Accounts payable related  Rate of return +            
  to concession IGP-M and IPCA   8,948  17,904  82,977  500,875   2,431,666  3,042,370
Accounts payable to suppliers -   2,355,760   236,941  51,322   66,961 -  2,710,984
PIS and Cofins to be refunded              
  to consumers - -  - -  3,363,440 -  3,363,440
Special Tax Regularization Program - Pert  Selic   4,375 8,829  41,411  258,120   232,257  544,992
Sectorial financial liabilities Selic  11,736  23,760   112,857  182,395 -  330,748
Lease liability Note 28   5,444  10,919  48,886  119,212   207,099  391,560
      2,489,258   452,074   3,794,578   12,901,790   7,134,977   26,772,677
(a) Effective interest rate - weighted average.
Schedule of sensitivity analysis of foreign currency risk

 

           
           
.   Baseline  Projected scenarios
Foreign exchange risk Risk 12.31.2021 Probable   Scenario 1 Scenario 2
.          
Financial assets          
Collaterals and escrow accounts - STN USD depreciation 142,764 (14,967)  (a)   (a) 
.   142,764 (14,967)    
Financial liabilities          
Loans and financing - STN USD appreciation   (150,572)  13,425  (a)   (a) 
Suppliers          
Eletrobras (Itaipu) USD appreciation   (304,215) 4,388  (70,568)   (145,525)
Acquisition of gas USD appreciation  (60,121) 867  (13,946)  (28,759)
           
      (514,908)  18,680  (84,514)   (174,284)

(a) Projected scenarios not evaluated. Probable value reflects the settlement value of the transaction, which took place on March 10, 2022.
Schedule of gains (losses) on operations with derivative financial instruments

 

           
  Exchange Baseline  Projected scenarios
   rate variation 12.31.2021 Probable   Scenario 1 Scenario 2
           
Gains (losses) on operations with derivative financial instruments  Increase   2,907 996  (a)   (a) 
         
    Decrease   2,907 996  (a)   (a) 
(a) Projected scenarios not evaluated. Probable value reflects the settlement value of the transaction, which took place on March 10, 2022.
Schedule of sensitivity analysis of interest rate and monetary variation risk

 

           
.   Baseline  Projected scenarios
Interest rate risk and monetary variation Risk 12.31.2021 Probable   Scenario 1 Scenario 2
.          
Financial assets          
Bonds and securities Low CDI/SELIC   361,058  41,522  31,159  20,760
Collaterals and escrow accounts Low CDI/SELIC   182   21   15   11
Sectorial financial assets Low Selic   767,480  94,016  70,512  47,008
Accounts receivable - concessions Low IPCA   2,164,585 120,351  90,263  60,175
Accounts receivable - generation concessions Undefined (a)   102,220  -  -  -
      3,395,525 255,910 191,949 127,954
Financial liabilities          
Loans and financing          
  Banco do Brasil High CDI  (641,207) (78,548) (98,185)   (117,822)
  BNDES High TJLP  (1,864,177)   (122,023)   (152,529)   (183,035)
  BNDES High IPCA  (348,305) (19,366) (24,207) (29,049)
  Banco do Nordeste High IPCA  (626,043) (76,690) (95,863)   (115,035)
  Banco do Brasil - BNDES Transfer High TJLP   (72,109)   (4,720)   (5,900)   (7,080)
  Other No risk   (35,856)  -  -  -
Debentures High CDI/SELIC  (5,627,350)   (689,350)   (861,688)   (1,034,026)
Debentures High IPCA  (2,513,179)   (139,733)   (174,666)   (209,599)
Debentures High TJLP  (100,240)   (6,561)   (8,202)   (9,842)
Sectorial financial liabilities High Selic  (293,179) (35,914) (44,893) (53,872)
Special Tax Regularization Program - Pert  High Selic  (421,694) (51,658) (64,572) (77,486)
Accounts payable related to concession High IGP-M  (844,599) (68,581) (85,727)   (102,872)
Accounts payable related to concession High IPCA   (59,360)   (3,300)   (4,125)   (4,951)
.     (13,447,298)   (1,296,444)   (1,620,557)   (1,944,669)
(a) Risk assessment still requires ruling by the Concession grantor.
Indicators and penalties

Indicators and penalties

       
       
Year Indicator Criteria Penalties
Until 2020 Economic - financial efficiency and quality 2 consecutive years or at the end of the 5-year period (2020) Concession termination
Quality Indicators 2 consecutive years or 3 times in 5 years Limitation of dividend and interest on equity distribution
Economic - financial efficiency in the base year Capital Increase (a)
Limitation of dividend and interest on equity distribution
Restrictive regime for contracts with related parties
From the 6th year of (2021) Economic - financial efficiency 2 consecutive years Concession termination
Quality Indicators 3 consecutive years
(a) Within 180 days from the end of each fiscal year, in the totality of the insufficiency that occurs to reach the Minimum Economic and Financial Sustainability Parameter.
Schedule of targets set

Targets for Copel Distribuição in 2021

 

The criterion of efficiency in relation to economic-financial management will not be complied when what is determined in the table below is not achieved, or even when the EBITDA is lower than the QRR. The calculation of results occurs at the end of each year, when the results are disclosed in the Regulatory Financial Statements.

             
      Quality - limits Quality (Performed)
Year Economic and Financial Management Realized DECi FECi  DECi  FECi 
2021 {Net Debt / [EBITDA (-) QRR ≥ 0]} ≤ 1 / (1,11 * Selic)  -   9.29   6.84   7.20   4.76
Targets for Copel Distribui??o from 2016 to 2020

Targets for Copel Distribuição from 2016 to 2020

             
             
      Quality - limits (a) Quality (Performed)
Year Economic and Financial Management Realized DECi (b)  FECi (b)  DECi  FECi 
             
2016       13.61 9.24   10.80   7.14
2017  EBTIDA ≥ 0 (c)    661,391   12.54 8.74   10.41   6.79
2018  EBTIDA (-) QRR ≥ 0 (d)    550,675   11.23 8.24   10.29   6.20
2019  {Net Debt / [EBTIDA (-) QRR]} ≤ 1 / (0.8 * SELIC) (d)    822,386   10.12 7.74 9.10   6.00
2020  {Net Debt / [EBTIDA (-) QRR]} ≤ 1 / (1.11 * SELIC) (e)    1,624,821 9.83 7.24 7.81   5.55
(a) According to Aneel’s Technical Note No. 0335/2015.
(b) DECi - Equivalent Time of Interruption Caused by Internal Source per Consumer Unit; and FECi - Equivalent Frequency of Interruption Caused by Internal Source per Consumer Unit.
(c) Regulatory EBTIDA adjusted for non-recurring events (Voluntary retirement program, post-employment benefit, provisions and reversals) according to sub-clause six, of the Fifth Amendment to the Concession Agreement.
(d) QRR: Regulatory Reintegration Quota or Regulatory Depreciation Expense. This is the value defined in the most recent Periodical Tariff Review (RTP), plus General Market Price Index (IGPM) variation between the month preceding the RTP and the month preceding the twelve-month period of the economic and financial sustainability measurement.
(e) Selic: limited to 12.87% p.a.
Schedule of deadline for manifestation

The balances referring to these outstanding transactions at the date of these financial statements are stated below.

 

       
       
  Assets  Liabilities Net
Current   112,057   (106,889) 5,168
Noncurrent   743,718   (438,579)   305,139
    855,775   (545,468)   310,307
Schedule of sensitivity analysis on the power purchase and sale transactions in the active market

 

           
  Price Baseline  Projected scenarios
  variation 12.31.2021 Probable   Scenario 1 Scenario 2
           
Unrealized gains (losses) on purchase and sale of energy  Increase  310,307 299,404 347,905 396,407
         
    Decrease  310,307 299,404 250,900 202,398
Schedule of capital monitored by index

As of December 31, 2021 and 2020, the ratio attained is shown below:

 

     
     
  12.31.2021 12.31.2020
Loans and financing 3,678,444 3,188,531
Debentures  8,147,617 6,757,481
(-) Cash and cash equivalents   (3,472,845)   (3,222,768)
(-) Bonds and securities (current) (16,121)   (1,465)
(-) Bonds and securities (noncurrent) - debt contract guarantees   (237,183)   (175,901)
(-) Collaterals and escrow accounts STN   (142,764)   (133,521)
Adjusted net debt 7,957,148 6,412,357
Net income from continuing operations 3,859,045 3,834,172
Equity in earnings of investees   (366,314)   (193,547)
Deferred IRPJ and CSLL 790,406  24,896
Provision for IRPJ and CSLL 469,226 1,260,469
Financial expenses (income), net 327,361   (866,271)
Depreciation and amortization 1,082,539 1,009,913
Ebitda from discontinued operations 1,872,381 259,560
Adjusted ebitda 8,034,644 5,329,192
Adjusted net debt/Adjusted ebitda   0.99   1.20
Debt to equity ratio:

 

36.3.1Debt to equity ratio:
     
Indebtedness 12.31.2021 12.31.2020
Loans and financing  3,738,269  3,168,710
Debentures  8,240,769  8,540,366
(-) Cash and cash equivalents  3,472,845  3,222,768
(-) Bonds and securities  361,058  300,530
Net debt  8,145,135  8,185,778
Equity 22,175,235 20,250,518
Debt to equity ratio 0.37 0.40