Companhia Energetica Minas Gerais : Aneel decides tariff adjustment of Cemig D - Press Release

LISTED COMPANY - CNPJ: 17.155.730/0001-64 - NIRE 31300040127

Cemig (Companhia Energética de Minas Gerais)('the Company'), a listed corporation with securities traded on the stock exchanges of São Paulo, New York and Madrid, in accordance with CVM Instruction 358 of January 3, 2002, as amended, hereby publicly informs the Brazilian Securities Commission (CVM), the São Paulo Stock, Commodities and Futures Exchange (BM&F Bovespa S.A.) and the market in general as follows:

Today (Monday, April 7, 2014) the Brazilian electricity regulator Aneel decided the Annual Tariff Adjustment to be applied to the tariffs charged to consumers for supply of electricity by Cemig Distribuição S.A. ('Cemig D'), a wholly-owned subsidiary of Cemig.

Cemig is issuing the following public announcement:

"Today, Monday April 7, 2014, the Brazilian Electricity Regulator, Aneel, decided on the annual adjustment of the electricity rates charged to consumers by Cemig Distribuição S.A. ('Cemig D'), the group's distribution company: the new rates decided today increase the amount charged to the consumer for supply of electricity by an average (across all consumer categories) of 16.33%. The increases come into effect tomorrow, Tuesday, April 8.
For Residential consumers, the increase in the charge for electricity is 14.24%. For clients classified as captive consumers in the Industrial and Services categories, served at medium and high voltage, the adjustment has the effect of an average increase of 12.41%. For those served at low voltage, the increase is 15.78%.
Cemig's Tariffs Manager, Mr. Ronalde Xavier Moreira Júnior, says consumers will receive the full effect of the adjustment only in their May invoices. "This is because the dates of meter readings for electricity bills are spread over the month. So in April, consumers will pay for the part of their consumption that took place before April 8 at the previous rate, and the other part with the increase in the electricity supply rate included".

Av. Barbacena 1200 Santo Agostinho 30190-131 Belo Horizonte, MG Brazil Tel.: +55 31 3506-5024 Fax +55 31 3506-5025

Page 1 of 4

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

Calculating the electricity bill

Of the amount charged in the invoice, only 25.8% stays with Cemig D itself - remunerating its investment, and covering its depreciation and running costs as a concession holder. The other 74.2% is passed on by Cemig D to a range of operational and regulatory costs and expenses: the cost of electricity purchased (39.8%); electricity sector regulatory charges (4.9%); costs of transmission (3.5%); the ICMS value added tax charged by Minas Gerais State (21%); and the federal Pasep and Cofins taxes (an aggregate 5%) - all of these items are in fact passed on to the state or federal governments and to other agents of the electricity sector.

According to Mr. Xavier, the main increase in costs in 2014 was the expense on purchase of electricity - reflecting the use of supply generated by the thermoelectric plants during this last year: "The price of the electricity from these plants is practically double the costs of electricity generated by hydroelectric plants," he says. "This year, the cost of purchased electricity was R$ 679 million higher than in the previous year - this component alone is responsible for 7.80 percentage points of the overall increase."

Contributions made by the various components

to the 16.33% increase

Financial components

4.41%

Electricity purchased 7.80%

Distribution company 2.26%

Sector / Regulatory charges 1.02%
Transport of electricity 0.83%

Taxes and similar charges included in consumer electricity bills

Under Brazil's Constitution, Cemig is obliged to charge certain taxes directly on the consumer's electricity bill, and pass them on to the related authorities.
The PIS, Pasep and Cofins taxes are examples of taxes charged directly on the consumer's electricity bill that are destined for maintaining federal government social programs. The ICMS tax, charged by states, is also charged directly on the consumer's electricity bill, and is passed on in full to the government of the State.

Av. Barbacena 1200 Santo Agostinho 30190-131 Belo Horizonte, MG Brazil Tel.: +55 31 3506-5024 Fax +55 31 3506-5025

Page 2 of 4

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

In the case of Minas Gerais State, however, residential clients consuming less than
90kWh/month - a total of about 2.4 million families - are exempt from ICMS tax.
Another component charged on the consumer's electricity bill is the Contribution to Finance Public Illumination (Contribuição para Custeio do Serviço de Iluminação Pública, or CIP). The amounts of this charge are decided by individual municipal prefectures. Cemig collects the amount, and passes it on to the prefectures of individual cities and towns - which are the bodies responsible for planning, building, expansion, operation and maintenance of public illumination facilities.

Low-income consumers

In the 774 municipalities of Minas Gerais State where Cemig distributes electricity, more than 660,000 consumers are in the Rural category and about one million are classified as low-income consumers. These clients benefit from a subsidy, and pay less than cost for the electricity they consume.
For low-income consumers with consumption up to 30kWh/month, the benefit results in a discount of approximately 65%. For consumption between 31kWh and
100kWh/month, the discount is 40%, and for the range between 101 and
220kWh/month the discount is 10%.

Residential consumer electricity bills - examples

Examples of amounts of electricity bills, in R$, including the taxes.

Av. Barbacena 1200 Santo Agostinho 30190-131 Belo Horizonte, MG Brazil Tel.: +55 31 3506-5024 Fax +55 31 3506-5025

Page 3 of 4

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

Consumers' average electricity bills

In 2013, half of the consumers of Cemig D (Distribution) had electricity bills lower than R$ 60 - i.e. their daily expense on electricity was less than R$ 2 (equivalent to just under one US dollar). With the tariff adjustment, the monthly amount will on average increase to about R$ 68.
With today's adjustment fully in effect, the revenue of Cemig D will have the
following structure:

Cemig D - Components of revenue (excluding taxes)

Cost of electricity

52.8% Cost of transmission

4.4%

Sector / Regulatory charges

7.7%

Cost of distribution

35.1%

PROINFA

2.7%

CDE

2.0%

TFSEE & ONS

0.1%

ESS/EER

1.8%

R&D

1.0%

Belo Horizonte, April 7, 2014

Luiz Fernando Rolla

Chief Finance and Investor Relations Officer

Av. Barbacena 1200 Santo Agostinho 30190-131 Belo Horizonte, MG Brazil Tel.: +55 31 3506-5024 Fax +55 31 3506-5025

Page 4 of 4

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

distributed by