3Q08 Results

2

Highlights

3Q08

– Total consumption in 3Q08 was 4.9% higher than 3Q07, totaling 10,508.8 GWh

– Adjusted EBITDA of R$ 493.4 million, 12.1% below 3Q07

– Net income of R$ 148.3 million, 24.9% lower than 3Q07 (R$ 197.5 million)

– On July 1st, ANEEL authorized an average tariff readjustment index of +8.01% to Eletropaulo, applicable to the tariff as from July 4th, 2008

– Extension of the Adjustment of Mathematical Reserve’s contract maturity with Fundação Cesp from 2022 to 2028

Subsequent Events:

– Provision of R$ 71.5 million penalty, related to the COFINS rate increase process

– Awarded Eletropaulo as PNQ (National Quality Award) finalist as world reference in business excellence among top 5 in the country

3

6.8%6.8%

5.9%5.9%

0.2%0.2%

4.9%4.9%

(*) ANEEL Resolution 247/07 – ANEEL (Conventional Sources)(**) Charts do not consider own consumption

5.7%5.7%4.9%4.9%

5.0%5.0%1,870

636

2,4061,655

3,455

10,020

8,150

668

8,635

1,874

3,691

1,7352,542

10,509

Residential Industrial Commercial Public Sector andOthers

Free Clients Captive Market Total Market

3Q07 3Q08

MarketConsumption (GWh) and Average Tariff

% Total Market – 3Q08 Average Tariff of Sold Energy R$/ MWh

3Q07 3Q08 V %

Residential 280.1 275.3 -1.7%,

Industrial 246.0 254.5 3.5%

Commercial 275.3 275.5 0.1%

Others 223.6 221.2 -1.1%

TOTAL 267.3 267.0 -0.1%

Consumption Evolution (GWh)**

80.9% 17.8%

1.3%

Captive Consumers

Free Clients

Potentially Free Clients*

4

98.199.599.199.0 97.4

2005 2006 2007 2Q08 3Q08

6.5

6.4 5.5 5.0 5.2 5.1

6.56.56.56.5

11.512.012.9

11.7 11.6

2005 2006 2007 2Q08 3Q08

Technical Losses* Commercial Losses

Operating Highlights

Collection Rate (3Q08)

– Public Sector: 99.7%

– Private Sector: 97.2%

Cuts and Reconnection – Monthly Average (3Q08)

– Cuts: 34,000

– Reconnection: 33,000

Fraud and Illegal Connections (3Q08)

– 305,600 inspections and 15,700 frauds detected

– 49,300 illegal connections regularized

Collection Rate (% over Gross Revenue) Loss Reduction (%)

+ 50 b.p.+ 50 b.p.

-- 140 b.p.140 b.p.

-- 70 b.p.70 b.p.-- 10 b.p.10 b.p.

(*) Current Technical Losses used retroactively as reference.

5

354.8 300.8364.3 411.6

48.8 69.2403.6 377.7

433.5478.9

269.6

76.835.7

67.3305.3

2005 2006 2007 2008 (e) 9M08

Capex Self - Financed

Investments

9M08

Investments (R$ Million)

19%

12%

5%11% 5%

48%

Customer Service andSystem Expansion

Maintenance

Self- Financed

Information Technology

Loss Recovery

Others

9M08: R$ 305.3 million

3Q08: R$ 124.9 million

– Customer Service and System Expansion: R$ 64.1 million

• New Clients Connection: R$ 21.4 million

• Expansion of transmission lines: R$ 23.7 million

• Resolution 250: R$ 12.2 million

– Maintenance: R$ 21.6 million

– Loss Recovery: R$ 16.7 million

– Information Technology: R$ 2.2 million

6

Tariff Evolution

On July 1st, 2008, Aneel conceived to Eletropaulo a tariff adjustment of 8.01%

2007 Tariff Reset still preliminary. Changed items:• X Factor was altered from 2.42% to 2.05%• Unrecoverable Expenses: Altered from 0.5% of Gross Revenue to 0.6%• Regulatory Depreciation Rate: Altered from 4.31% to 4.32%

2.1%

18.6%

11.7%

-8.4%

11.5%

(*) Final values without financial impacts, concluded in 2005

Tariff Evolution

Tariff Adjustment

8.0%

3.8% 1.7% 4.8% 1.6%

7.9%

-6.2%-2.2%

3.7%16.9% 1.6% 4.3%9.9%

-4.3%

2003* 2004 2005 2006 2007 2008

PIS/COFINS

Part A

Part B

IGPM

7

Results

3Q07 x 3Q08

– +8.01% Tariff Readjustment, applied since 07/04/2008, partially offset by the variation of PIS/

COFINS charged from consumers

– Growth on the captive market, 5.9%

– R$ 133.2 million growth in Other Revenues, mostly because of the end of amortization of

Extraordinary Tariff Reset (RTE) and the Free Energy in October 2007

5,360.6 5,540.0

1,757.0 1,960.9

3,102.8

997.5 1,103.8

8,463.4 8,629.1

2,754.5 3,064.7

3,089.1

9M07 9M08 3Q07 3Q08

Net Revenue Deduction of Gross Revenue

11.6%11.6%

Gross Revenue (R$ million)

3.4%3.4%

2.0%2.0%

11.3%11.3%

8

3,078.03,479.1

826.9

901.1

4,380.2

3,904.9

9M07 9M08 3Q07 3Q08

1,239.9

1,297.9

1,579.7

1,059.4

339.8

238.5

Results

Costs and Operational Expenses* (R$ million)

(*) Depreciation not included(**) Personnel, Material and Services

12.2%12.2% 21.7%21.7%

Energy Supply and Transmission Charges PMS and Others**

9.0%9.0%

13.0%13.0% 17.0%17.0%

42.5%42.5%

9

Costs Analysis

Accumulated 9 months (R$ million)

901.1826.9

13.4 (52.1)103.3 9.5

9M07 Personnel Provisions andContingencies

PDC and Write-Off Others* 9M08

339.8238.5

2.234.4

56.2 8.5

3Q07 Personnel Provisions andContingencies

PDC and Write-Off Others* 3Q08

9.0%9.0%

42.5%42.5%

Quarter (R$ million)

(*) Materials and Third Party Services, FCESP, Rents, Indemnifications, Losses, Bank Fees, etc

10

EBITDA

Adjusted EBITDA* (R$ Million)

3Q07 x 3Q08

– Net Revenue: increase due to tariff readjustment, market growth and greater volume of Other Revenues

– Energy Supply and Transmission Charges: increase in average price of contracts and energy purchased

– PMS and Other Expenses: positive effect of losses reversion in 3Q07 compared to an expense in 3Q08

(*) Adjusted EBITDA of 3Q07 and 9M07 = EBITDA + Pension Fund Expenses + RTE + RTE’s Provision – juducial deposits(*) Adjusted EBITDA of 3Q08 and 9M08 = EBITDA + Pension Fund Expenses + Part A

459.0 381.1

102.1112.3

561.1493.4

203.9 180.5

101.3

10.2

3Q07 Net Revenue Energy Supplyand Transmission

Charges

PMS and Others Adjustments 3Q08

Ebitda Adjustments

17.0%17.0%

12.1%12.1%

11

(66.6)

35.3

(37.8)

(101.6)

9M07 9M08 3Q07 3Q08

Results

Financial Results (R$ million)

495.8

702.8

197.5 148.2

9M07 9M08 3Q07 3Q08

24.9%24.9%

Net Income (R$ million)

29.5%29.5%

Adjust of Aneel Act # 2,877

– Reclassification of R$ 31.2 million in monetary and exchange rate variation expenses with effects also in other revenues

– Without effect over net income

76.1%76.1%

3Q07 x 3Q08

– Positive impact related to losses recovery in 3Q07 (R$

34.2 million), compared to losses expenses amounting

R$ 31.4 million in 3Q08

– Variation of PIS/ COFINS charged from consumers

partially compensating the tariff readjustment of 8.01%

12

R$ million 3Q07 4Q07 1Q08 2Q08 3Q08

Initial Cash 1,457 830 1,334 1,478 1,454

Operating Cash Flow 532 584 418 497 613

Investments (106) (112) (80) (60) (107)

Net Financial Expenses (133) (51) (101) (41) (107)

Net Amortizations (225) 197 (4) (30) (21)

CESP Foundation (49) (53) (57) (58) (32)

Income Tax (161) (61) (33) (114) (68)

Dividends (485) (0) (0) (218) (359)

Free Cash Flow (627) 504 144 (24) (81)

Final Cash 830 1,334 1,478 1,454 1,373

Managerial Cash Flow

Cash Availability of R$ 1,373 million (09/30/2008) – Average rates of 102.4% of the CDI– Daily liquidity for 97% of the investments

3Q07 x 3Q08:– Operating Cash Flow: Tariff Readjustment of +8.01% as of July 4th, 2008– Dividends: R$ 359 million distributed regarding 1H08 results

13

Financial Debt

523 358

3,582 3,890

2,790 3,276

4,164 4,105

Long Term Short TermNet Debt

Net Debt:

– 14.8% decrease (R$ 486.0 million)

Fundação CESP:

– Extension of the Adjustment of Mathematical Reserve’s contract maturity with Fundação Cesp from 2022 to 2028

99.3% of the Debt in local currency (R$)

Short Term X Long Term (R$ million) Debt Highlights – 3Q08

Average Cost and Average Term (Principal)

3Q07 3Q0812

0.9%

125.

3%

123.

3%

107.

8%

113.

0%

7.77.86.66.86.2

3Q07 4Q07 1Q08 2Q08 3Q08

% CDIAverage Term - Years

Net Debt/ EBITDA*

1.31.5

(*) Adjusted EBITDA

14

Financial Debt

Amortization Schedule – R$ Million (Principal)

25050 5003 9 524 250 250

121

217

121

62

121121

1,350

12111

4Q08 2009 2010 2011 2012 2013 2014 2015-28

R$ (w/out FCESP**) FCESP** US$*

23

* Exchange Rate 09/30/2008 – US$ 1.00 = R$ 1.9143** Pension fund

Pension Fund R$ 2,233 millionPrivate Creditors R$ 1,897 millionLibor R$ 34 millionTOTAL R$ 4,164 million

Gross Debt – 3Q08

96% hedgedCDI/Selic

33.3%

IGP-DI 53.6%

Libor 0.8%

Fixed rate 12.3%

3Q08 Results

The statements contained in this document with regard to the business prospects, projected operating and financial results, and growth potential are merely forecasts based on the expectations of the Company’s Management in relation to its future performance.Such estimates are highly dependent on market behavior and on the conditions affecting Brazil’s macroeconomic performance as well as the electric sector and international market, and they are therefore subject to changes.