Volkswagen (VLKAY)

NOTE 5 - ELECTRICITY CONSUMERS AND RESELLERS

I - The amounts receivable from electricity consumers and resellers are shown at their probable value of realization as detailed in Exhibit I of these notes and include the Regulatory Asset described in Note 10.

II - Electricity trading - ITAIPU Binacional

The Law 10438 of April 26, 2002, attributed to ELETROBRÁS the responsibility for the acquisition of all electricity generated by ITAIPU to be consumed in Brazil, and for the trading of this electricity.

Therefore, in the second quarter of 2009, the equivalent to 17,744 GWh was sold, the energy supply tariff (purchase) practiced by ITAIPU was US$22.60/kW and the sale tariff was US$25.03/kW.

The results from the trading of ITAIPU's electricity, in accordance with Decree 4550 of December 27, 2002, observing the amendments introduced by Decree 6265 of November 22, 2007, are destined as follows (see Note 10):

a) if positive, it will be allocated, by means of prorating to the individual consumer, through a bonus credit in the consumers' electricity bills of the Brazilian Interconnected Electric System, for the residential and rural classes with monthly consumption lower than 350 kWh.

b) if negative, it is incorporated by ANEEL in the calculation of the sale tariff of electricity contracted in the year subsequent to the formation of the result.

In the second quarter of 2009, the activity had a surplus of R$33,972 thousand in the year, and the resulting obligation is included in the item "Reimbursement Obligations".

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III - Electricity trading - PROINFA

The electricity trading within the scope of PROINFA (Brazilian Renewable Energy Incentive Program) generated a positive net result in the second quarter of 2009 of R$187,559 thousand (March 31, 2009 - R$219,697 thousand), not causing any impact on the loss for the period of ELETROBRÁS. This amount was included under the item "Reimbursement Obligations".

IV - Operations at the Electricity Trading Chamber - CCEE

The amounts related to the operations practiced within the scope of CCEE are recorded based on information made available by the Chamber.

V - Allowance for doubtful accounts

The Company establishes and maintains allowances, in compliance with ANEEL rules, based on the analysis of amounts included in the overdue accounts receivable and the history of losses, the amount of which is deemed by the Company's Management as sufficient to cover losses on the realization of these assets. The balance on June 30, 2009 is R$1,354,321 thousand (March 31, 2009 - R$1,594,016 thousand), as follows:

For tax purposes, the surplus provision established in relation to the provisions of Law 9430/1996 has been added to the taxable income for the purposes of Income Tax - IRPJ and also the calculation basis of Social Contribution on Net Income - CSLL.

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