The Long and Winding Road Rio Slums & the Electric Utility Jerson Kelman

1. The Long and Winding Road Rio Slums & the Electric Utility Jerson Kelman Harvard Brazil Studies Program

2. Electricity Tariffs Around The World Average Residential Tariff Index (without taxes) 2004-2008 (Brazil = 100) Brazil USA

3. Light´s Residential Tariff with Taxes

4. Per capita consumption in different countries (MWh/y) USA Brazil

5. Per Capita Income Per Capita Income Brazilianincome is only 23% ofthe USA income Source: UNDP

6. Rio de Janeiro´s AdditionalProblem - Slums Slum Population Source: IBGE HDI - Same Neighborhood 58% Source: IPP

7. The Slum Expansion Process in Rio de Janeiro Rural Exodus to Cities Source: IBGE Inefficient Transportation System Federal Government Transferred to Brasilia

8. TheSlumExpansionProcess in Rio de Janeiro Population Growth in Rio de Janeiro City 1991 - 2000 7% 4% 24% 91 96 00 91 96 00 91 96 00 Source: IBGE Populations in slums grew 6.5 times faster than in the rest of the city throughout the 1990s

9. TheSlumExpansionProcess in Rio de Janeiro Rocinha - 1950s Rocinha - 2009 Rocinha - 1970s

10. Slum Electrification in Rio

11. The Slum Expansion Process in Rio de Janeiro

12. TheSlumExpansionProcess in Rio de Janeiro

13. Recent Past – Narco War If this is how the Police were received and impeded from entering the slums, imagine what Light’s crews faced.

14. Effects of Narco War

15. The situation in risk areas

16. The situation in risk areas Stolenenergy/ local load 5 X 650 K households (potential consumers) 29% (190K) Payment Default 12 X 71% (460K) Only 21% of the energy delivered is effectively paid

17. The situation in risk areas Number of hours per year without energy supply

18. Reestablishing State Control in Risk Areas

19. The First Effect of Reestablishing Control - Conflict

20. Second Effect – Less Violence

21. Third Effect - Citizenship

22. Light’s Challenges

23. Commitment of Both Sides Light Customers • Improvement of service quality • Electric refurbishment of households and replacement of light bulbs and refrigerators • Helping the community to save energy • No illegal connections to the grid or metering fraud • Payment of electricity bills

24. Light’s Challenges - Electricity Grid Upgrade Grid shielding projects Control room • Technology used in regions in which conventional measures are not effective • Areas that present high levels of non-technical losses Current grid Shielded grid Medium voltage Centralized meter Medium voltage Low voltage Low voltage 9 m 3 m Analogic Meter Display Light aims to reduce losses through investments in new technologies, integration of operational activities, increase of public awareness and institutional partnerships with interested agents

25. Light’s Challenges - Electricity Grid Upgrade Electronic Meters and Displays

26. Electricity Grid Upgrade Before After • Developing specific projects to each area • Building a new and modern electric grid • Expanding the installed capacity of transformers • Reducing visual clutter

27. Light’s Challenges - Energy Efficiency Programs Repairing electrical installations in households and community institutions Both households and the distribution system require electrical refurbishment Correcting illegal connections - free service entrance installation

28. Light’s Challenges - Energy Efficiency Programs Replacing incandescent lamps with compact fluorescent lamps

29. Light’s Challenges - Energy Efficiency Programs Replacing old refrigerators with new, energy-efficient units

30. Light’s Challenges - Special Commercial Relationship • Interaction with local communities • Personalized services • Delivery of bills with efficiency tips • Help in obtaining social tariff benefits

31. Light’s Challenges - Special Commercial Relationship Scaled Payment - Regressive Discount

32. Light’s Challenges - Future Consumerunit If State Government peacekeeping efforts and Light’s community efforts are maintained, 50% of the slums will wave been serviced by the Efficient Community program by the 2016 Olympic Games

33. Light’s Community Innitiatives

34. Light’s Community Innitiatives

35. Santa Marta Community • 1,600 families benefited • R$ 3 Million invested • ~R$ 2 thousand per service entrance Before # Customers: 80 Only 3% of the energy delivered was effectively paid After # Customers: 1,600 95% of the energy delivered have been paid

36. Santa Marta Community • Grid shielding in numbers • Insulated MV lines 1.5 km • Armored LV lines 3.5 km • Tamper-proofed branch lines 32 km • Articulating poles (fiber) 68 • Electronic meters 1,400 • Other Initiatives • Customer Registration 1,400 families • Street Identification 150 nameplates • Lamp Replacement 6,880 lamps • Fridge Replacement 810 refrigerators • Internal Installation Repairs 500 locations

37. The Santa Marta Community Experience Return to Light’s Shareholders and Honest Consumers • Return on investments in the Santa Marta Community starts to be positive after the fourth year of sustainable control of theft • Honest consumers benefit because they pay 90% of the stolen energy cost • (US$ 280 million / y)

38. Light Recicla A sustainable program to exchange waste for bonus in energy bill Field experience shows us that despite the improvements implemented in the communities, the disposal of waste is still one of the biggest bottlenecks in these areas

39. Light Recicla – How does it work? 3-Collection station - recycled material (selected by weight) turns into bonus (access card) 2-Waste sorting – client brings the material to be recycled 1-Access card – client is allowed to participate 4-Third part – money goes from third part to Light 5-Light – money turns into bonus in the client's bill

40. Light Recicla - Results Main Indicators • Registered clients: 2,183 • Participation rate: 77% (1,680) • Benefits to clients (bonus): R$ 36,700 Energysaved! 703 MWh 189

41. Light Recicla - Results

42. A Brief History of Light

43. Thank you!