Brazilian Utilities: RBSE update: overhang remains, but limited NPV impact for Axia / ISAE

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Brazilian Utilities: RBSE update: overhang remains, but limited NPV impact for Axia / ISAE

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Brazilian Utilities

RBSE update: overhang remains, but

limited NPV impact for Axia / ISAE

Government Regulations

RBSE ruling: ST noise with limited impact for AXIA/ISAE 28 May 2026

On May 26, a Brazilian Federal Court (TRF1 - 2nd level of court, out of 3) partially ruled Equity

in favor of 5 lawsuits (out of ~40) on RBSE-related transmission revenues (relevant for Brazil

AXIA/ISAE), determining: 1) the suspension of part of the receivables related to the Utilities

monetary adjustment of the receivables (Ke component in the “financial” category) from Gustavo Faria >>

the 2026/27 tariff cycle (details below), and 2) compensation for past monetary Research Analyst

adjustment amounts for end-consumers (clawback in tariffs). While the ruling introduces Merrill+55 11Lynch2188 (Brazil)4295

negative noise around a potential cut to AXIA/ISA’s RBSE revenues, we largely view this gustavo.faria@bofa.com

as legal/regulatory overhang rather than a fundamental impact, given its preliminary Andre Silveira >>

Research Analyst

nature (injunction level) and room for appeals at superior courts (e.g STJ/STF), with legal Merrill Lynch (Brazil)

discussions being a recurrent topic and already set in the past in favor for the +55 11 2188 4476

andre.silveira@bofa.com

companies. More importantly, sensitivities point to a limited NPV impact (-2% to -

4%) under stress scenarios – which does not affect the upside potential from

fundamentals in both cases. We maintain our Buy rating on Axia and ISAE.

RBSE recap: legal basis intact; Ke revision rejected

As a recap, RBSE refers to the compensation mechanism created for transmission