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Provisions for Legal Claims and Contingent Liabilities | 12 Months Ended
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Dec. 31, 2022
Provisions For Legal Claims And Contingent Liabilities |
Provisions for Legal Claims and Contingent Liabilities |
28. | Provisions for Legal Claims and Contingent Liabilities
The Company is responsible for several legal and administrative proceedings before different courts. Based on assessments made by the Company's legal counsel, Management makes provisions for legal claims in which the losses are rated probable, when the criteria for recognition of provisioning, described in Note 4.11, are met. The Company's management believes it is impracticable to provide information regarding the timing of any cash outflows related to the lawsuits for which the Company is responsible on the date of preparation of the financial statements, in view of the unpredictability and dynamics of the Brazilian judicial, tax and regulatory systems, and that the final resolution depends on the conclusions of the lawsuits. For this reason, this information is not provided. On February 8, 2023, when analyzing and judging Topics 881 and 885 of general repercussion (generally binding decision), the STF understood that a final and unappealable decisions (the so-called “res judicata”) on taxes paid on ongoing basis loses its effects if the STF decides otherwise on a constitutionality-related action or an appeal for which it hands down a generally binding decision, since according to the legislation and case law, a decision, even if res judicata, should only produce effects whilst the factual and legal framework which justified it lasts. The Company has no lawsuits that meet the requirements defined by the STF. Therefore, there are no impacts on its financial statements.
| 28.1 | Change in provision for legal claims
Schedule of changes in provisions for litigation |  |  |  |  |  |  |  |
|  | Income |  |  |  |
|  | Provision | Construction |  |  |  | Balances as of
| Balances as of | for litigations | cost | Additions |  | Transfer/ | December 31,
| January 1, 2022 | Additions | Reversals | Additions (Rev.) | to assets | Settlements | Others | 2022
Tax |  |  |  |  |  |  |  |
Cofins | 110,059 | 15,109 | (1,604) | - | - | - | - | 123,564
Others | 71,056 | 23,705 | (820) | - | - | (9,764) | (5,991) | 78,186
| 181,115 | 38,814 | (2,424) | - | - | (9,764) | (5,991) | 201,750
Labors | 569,756 | 108,902 | (2,778) | - | - | (139,416) | - | 536,464
Employee benefits | 37,148 | 13,270 | (19,672) | - | - | (620) | - | 30,126
Civil |  |  |  |  |  |  |  |
Civil and administrative claims | 433,437 | 592,796 | (3,925) | - | - | (67,055) | 2,858 | 958,111
Easements | 138,069 | 3,594 | (90) | (722) | 627 | (2,754) | - | 138,724
Expropriations and property | 125,028 | 2,195 | (8,113) | 4,305 | 36,924 | (5,427) | - | 154,912
Customers | 3,755 | 2,113 | (630) | - | - | (1,488) | - | 3,750
Environmental | 5,902 | 497 | (1,130) | - | - | - | - | 5,269
| 706,191 | 601,195 | (13,888) | 3,583 | 37,551 | (76,724) | 2,858 | 1,260,766
Regulatory | 103,155 | 5,137 | (84,111) | - | - | (15,688) | - | 8,493
| 1,597,365 | 767,318 | (122,873) | 3,583 | 37,551 | (242,212) | (3,133) | 2,037,599
|  | Income |  |  |  |
|  | Provision | Construction |  |  | Transfer/ | Balances as of
| Balances as of | for litigations | cost | Additions |  | Others | December 31,
| January 1, 2021 | Additions | Reversals | Additions/(Rev.) | to assets | Settlements | (a) | 2021
Tax |  |  |  |  |  |  |  |
Cofins | 107,148 | 4,123 | (1,212) | - | - | - | - | 110,059
Others | 66,725 | 10,046 | (205) | - | - | (127) | (5,383) | 71,056
| 173,873 | 14,169 | (1,417) | - | - | (127) | (5,383) | 181,115
Labors | 596,248 | 94,845 | (21,647) | - | - | (105,777) | 6,087 | 569,756
Employee benefits | 52,401 | 4,685 | (19,623) | - | - | (761) | 446 | 37,148
Civil |  |  |  |  |  |  |  |
Civil and administrative claims | 387,895 | 129,730 | (9,218) | - | - | (74,989) | 19 | 433,437
Easements | 111,553 | 1,616 | - | 15,702 | 36,771 | (27,573) | - | 138,069
Expropriations and property | 133,888 | 680 | (15,031) | (7,268) | 12,943 | (184) | - | 125,028
Customers | 3,973 | 895 | (706) | - | - | (407) | - | 3,755
Environmental | 7,174 | 4,992 | (4,964) | - | - | - | (1,300) | 5,902
| 644,483 | 137,913 | (29,919) | 8,434 | 49,714 | (103,153) | (1,281) | 706,191
Regulatory | 88,699 | 20,694 | (5,971) | - | - | (267) | - | 103,155
| 1,555,704 | 272,306 | (78,577) | 8,434 | 49,714 | (210,085) | (131) | 1,597,365
(a) | Reclassification mainly to Liabilities associated with assets classified as held for sale (Note 39).
| 28.2 | Details of provisions for legal claims and contingent liabilities
The following table shows the details of the provisions for legal claims recorded and, in addition, the amounts of contingent liabilities, which are present obligations arising from past events, but without provisions recognized because it is not probable an outflow of resources that incorporate economic benefits to settle the obligation.
Schedule of details of provisions for legal claims and contingent liabilities |  |  |  |  |  |
|  | Provisions | Contingent liabilities
| Description | 12.31.2022 | 12.31.2021 | 12.31.2022 |  | 12.31.2021
Tax |  |  |  |  |  |
Cofins | Requirement of the Federal Revenue Service for the period from August 1995 to December 1996, due to the termination of a judicial decision that has recognized the Company's exemption from Cofins. | 123,564 | 110,059 | 9,550 |  | 7,914
INSS | Tax requirements related to the social security contribution. | 30,899 | 29,813 | 46,901 |  | 107,840
Federal taxes | Administrative requirements and questions from Receita Federal do Brasil (Federal Revenue Service). | 2,100 | 1,721 | 50,025 |  | 77,058
ICMS (VAT) | Administrative requirements and questions from the State regarding the payment of ICMS (VAT) on the Company's invoices. | 4,035 | - | 24,930 |  | 43,346
IPTU | Tax Requirement on Urban Territorial Property (IPTU) on properties affected by the public electricity service. | 9,332 | - | 152,113 |  | 118,981
ISS | City halls tax requirement as ISS on construction services provided by third parties. | 181 | 170 | 56,731 |  | 83,536
Other | Taxes, fees and other federal, state and municipal taxes in which the Company discusses the levy or not, as well as its bases and amounts for payment | 31,639 | 39,352 | 149,518 |  | 122,314
|  | 201,750 | 181,115 | 489,768 |  | 560,989
Labor | Charging of overtime, hazardous work, transfer surcharge, equalization / salary adjustment, among others, by employees and former employees of Copel; collection of indemnity installments and others, by ex-employees of contractors and outsourced companies (subsidiary responsibility). | 536,374 | 569,756 | 372,138 |  | 275,230
Employee benefits | Labor claims filed by former retired employees against Fundação Copel, which will consequently cause repercussions for the Company and its wholly-owned subsidiaries, to the extent that additional contributions are required. | 30,126 | 37,148 | 12,716 |  | 3,524
Regulatory |  |  |  |  |  |
Aneel Order nº 288/2002 | Legal actions against Aneel Dispatch No. 288/2002 involving the companies Companhia Estadual de Energia Elétrica - CEEE and Dona Francisca Energética S.A. | - | 82,670 | - |  | -
ESBR | ESBR filed Ordinary Lawsuit No. 10426-71.2013.4.01.4100 against ANEEL in the Federal Court of Rondônia, whose ruling: (i) acknowledged the exclusion of liability for the 535-day schedule overrun in the construction of the Jirau Hydropower Station; (ii) declares any obligations, penalties and costs imposed on ESBR as a result of the schedule overrun to be unenforceable, and (iii) annuls ANEEL Resolution 1,732/2013, which had recognized a schedule overrun of only 52 days. An appeal has been brought by ANEEL, pending judgment by the Federal Court of the 1st Region. The practical consequence of the ruling was, at the time it exempted ESBR, to expose the distributors with whom it entered into power trading contracts (CCEARs) to the Short-Term Market and to the high value of the Settlement Price of the Differences (Preço de Liquidação das Diferenças - PLD, in Portuguese) in the period, including Copel DIS. This occurred because the rules for the sale of electricity require that all energy consumed should have a corresponding contractual coverage. If the lawsuits are judged unfavorably against Copel, the amount will be classified as Sectorial Financial Asset to be recovered through tariff rates. | - | - | 1,130,845 |  | 1,066,486
Colíder exclusion of liability | Discussion on the value of the Tariff for use of the transmission system - TUST and monetary adjustment on energy values ​​referring to the exclusion of liability period. As a result of the court injunction that excluded the delay period for the Colíder HPP from being responsible for the delivery of energy contracted in the Regulated Contracting Environment - ACR, CCEE proceeded to credit, valued to PLD, the energy previously backed to comply with ACR. However, in the event of failure in the lawsuit, the Company must return the amounts credited, updated by the IGPM. | - | - | 320,044 |  | 295,931
Other | Aneel's notifications about possible breaches of regulatory standards | 8,493 | 20,485 | 45,718 |  | 38,099
|  | 8,493 | 103,155 | 1,496,607 |  | 1,400,516
(continued) |  |  |  |  |  |
|  | Provisions | Contingent liabilities
| Description | 12.31.2022 | 12.31.2021 | 12.31.2022 |  | 12.31.2021
Civil |  |  |  |  |  |
Tobacco growers | Actions whose main cause is the lack of electricity causing loss of production. | 73,366 | 79,092 | 71,237 |  | 68,104
Arbitration | Arbitration protected by secrecy and confidentiality, in the early stage of award settlement. | 629,056 | 165,158 | 338,779 | (a) | 670,704
PIS / Cofins credit | Contingent liability related to the allocation of PIS and Cofins tax credits recognized by the Company. With the enactment of Law No. 14,385/2022, the Management of Copel and its legal advisors reassessed the risk and Copel DIS recorded the provision, as detailed in Note 12.2.1. | - | - | - |  | 1,775,347
Civil and administrative law | Other actions involving billing, supposed irregular procedures, administrative contracts and contractual fines, indemnity for accidents with the electric power network and accident with vehicles. | 154,550 | 131,519 | 530,959 |  | 383,597
Indemnification to third parties (civil) | Actions for indemnity for resulting from damages caused during the construction of power plants. The execution of the sentence began without the previously determined accounting expertise. In the 1st degree, Copel challenged the execution and presented an insurance policy as a guarantee until a decision on the performance of an expert examination and excess of the value. As there was still no favorable position on the merits, the risk was reassessed with a change in the provisioned balance. | 101,076 | 57,663 | 98,940 |  | 29,592
Easements | Discussion between the amount determined by Copel for payment and the amount claimed by the property owner and/or when the owner's documentation supporting title to the property may not be registered (when probate proceedings are still in progress, properties have no registry number with the land registry, etc.), intervention in third-party adverse possession, either as a confronter, or in case of a property where there are areas of easement of passage, in order to preserve the limits and boundaries of expropriated areas. | 138,841 | 138,075 | 31,063 |  | 29,100
Expropriations and property | Discussion between the amount assessed by Copel for payment and the amount claimed by the owner, and / or when the owner's documentation does not present conditions for registration (inventories in progress, properties without registration, among others); actions for repossession of real estate owned by the concessionaire; intervention in the adverse possession of third parties, as a confrontant, in order to preserve the limits and confrontations of the expropriated areas. | 154,943 | 93,679 | 38,030 |  | 70,198
Indemnification to third parties (expropriations) | Expropriation lawsuit for construction of electric substation and expropriation of property flooded of power plant, settled in the second quarter of 2022. | - | 31,348 | - |  | -
Consumers | Lawsuits seeking compensation for damages caused in household appliances, industrial and commercial machines, lawsuits claiming damages for pain and suffering caused by service interruption and lawsuits filed by industrial consumers, challenging the lawfulness of the increase in electricity prices while Plano Cruzado (anti-inflation economic plan) was in effect and claiming reimbursement for the amounts paid by the Company. | 3,758 | 3,755 | 1,911 |  | 3,964
Environmental | Public civil and class actions whose purpose is to obstruct the progress of environmental licensing for new projects or to recover permanent preservation areas located around the hydroelectric power plant dams unlawfully used by private individuals. If the outcome of the lawsuits is unfavorable to the Company, Management estimates only the cost to prepare new environmental studies and to recover the areas owned by Copel GeT. They also include the Commitment Agreements (Termos de Ajuste de Conduta - TAC, in Portuguese), which refer to the commitments agreed-upon and approved between the Company and the relevant bodies, for noncompliance with any condition provided for by the Installation and Operating Licenses. | 5,266 | 5,902 | 226,608 |  | 206,647
|  | 1,260,856 | 706,191 | 1,337,527 |  | 3,237,253
|  | 2,037,599 | 1,597,365 | 3,708,756 |  | 5,477,512
(a) | refers to the estimate of possible loss of a total, monetarily restated, of R$2,966,787 of the plaintiff's claim.

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