**Exhibit 1**

 

**COMPANHIAENERGÉTICA DE MINAS GERAIS — CEMIG**

 

**This version** of Cemig’s Bylaws is a consolidation of the Bylaws approved by theGeneral Meeting that constituted the Company on May 22, 1952 — the minutesof which were filed with the Minas Gerais Commercial Board (Jucemg) on May 27,1952, under number 57,386 — and all changes made by General Meetings ofStockholders up to and including the Ordinary and Extraordinary GeneralMeetings of Stockholders held, concurrently, on April 29, 2010.

 

**B Y L A W S**

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**CHAPTERI**

**Name, constitution, objects, headoffice and duration**

 

Clause 1: Companhia Energética de Minas Gerais —Cemig, constituted on May 22, 1952 as a corporation with mixed private andpublic sector stockholdings, is governed by these Bylaws and by the applicablelegislation, and its objects are: to build, operate and commercially operatesystems of generation, transmission, distribution and sale of electricity, andrelated services; to operate in the various fields of energy, from whateversource, with a view to economic and commercial operation; to provideconsultancy services within its field of operation to companies in and outsideBrazil; and to carry out activities directly or indirectly related to itsobjects, including the development and commercial operation oftelecommunications and information systems.

 

§1         Theactivities specified in this Clause may be exercised directly by Cemig or, asintermediary, by companies constituted by it or in which it may hold a majorityor minority stockholding interest, upon decision by the Board of Directors,under State Laws 828 of December 14, 1951, 8655 of September 18,1984, 15290 of August 4, 2004 and 18695 of January 5, 2010.

 

§2         Nosubsidiary of or company controlled by Cemig may take any action which mightaffect the condition of the State of Minas Gerais as controlling stockholder ofthe Company, in the terms of the Constitution of the State of Minas Gerais andthe legislation from time to time in force.

 

Clause 2: The Company shall have its head office andmanagement in Belo Horizonte, capital city of the state of Minas Gerais,Brazil, and may open offices, representations or any other establishments in oroutside Brazil, upon authorization by the Executive Board.

 

Clause 3: The Company shall have indeterminateduration.

 

**CHAPTER II**

**Capital and shares**

 

Clause 4:             Thecompany’s registered capital is R$ 3,412,072,910.00 (three billion, fourhundred twelve million, seventy two thousand, nine hundred and ten Reais),represented by:

 

a)          298,269,668(two hundred ninety eight million two hundred sixty nine thousand six hundredsixty eight ) nominal common shares each with nominal value of R$ 5.00 (fiveReais);

 

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b)      384,144,914(three hundred eight four million one hundred forty four thousand nine hundredand fourteen) nominal preferred shares each with nominal value of R$ 5.00.

 

§ 1 The right to vote shall be reserved exclusivelyfor the common shares, and each common share shall have the right to one votein decisions of the General Meeting of Stockholders.

 

Clause 5: The preferred shares shall have right ofpreference in the event of reimbursement of shares and shall have the right toa minimum annual dividend of the greater of the following amounts:

 

a)      10% (ten percent) of their nominal value;

 

b)      3% (three percent) of the value of the stockholders’ equitycorresponding to the shares.

 

Clause 6: The common shares and the preferredshares shall have equal rights to distribution of bonuses and stock dividends.

 

§ 1 Capitalization of monetary adjustment to thevalue of the registered capital shall require a decision by the General Meetingof Stockholders, but shall be obligatory when the limit specified in Article 297of Law 6404 of 15 December 1976 has been reached.

 

Clause 7: In the business years in which the Companydoes not obtain sufficient profit to pay dividends to its stockholders, theState of Minas Gerais shall guarantee to the shares issued by the Company up toAugust 5, 2004 and held by individual persons a minimum dividend of 6%(six percent) per year, in accordance with Clause 9 of State Law 828 of December 14,1951, and State Law 15290 of August 4, 2004.

 

Clause 8: The State of Minas Gerais shall at alltimes obligatorily be the owner of the majority of the shares carrying theright to vote, and the capital subscribed by it shall be paid in in accordancewith the legislation from time to time in force. The capital subscribed byother parties, whether individuals or legal entities, shall be paid in asspecified by the General Meeting of Stockholders which decides on the subject.

 

§ 1 The Executive Board may, in order to obey adecision by a General Meeting of Stockholders, suspend the services of transferand registry of shares, subject to the legislation from time to time in force.

 

§ 2 The stockholders shall have the right ofpreference in subscription of increases of capital and in the issue of theCompany’s securities, in accordance with the applicable legislation. Thereshall, however, be no right of preference when the increase in the registeredcapital is paid with funds arising from tax incentive systems, subject to theterms of the sole sub-paragraph of Article 172 of Law 6404 of December 15,1976.

 

**CHAPTERIII**

**The General Meeting ofStockholders**

 

Clause 9: The General Meeting of Stockholders shallbe held, ordinarily, within the first 4 (four) months of the year, for thepurposes specified by law, and extraordinarily whenever necessary, and shall becalled with minimum advance notice of 15 (fifteen) days, and the relevantprovisions of law shall be obeyed in its convocation, opening and decisions.

 

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§ 1 Thestockholder may be represented in General Meetings of Stockholders in themanner specified in Article 126 of Law 6404, as amended, by showing at thetime of the meeting, or by previously depositing at the Company’s head office,proof of ownership of the shares, issued by the depositary financialinstitution, accompanied by the proxy’s identity document and a power ofattorney with specific powers.

 

Clause 10: The ordinary or extraordinary GeneralMeeting of Stockholders shall be chaired by a stockholder elected by theGeneral Meeting from among those present, who shall choose one or moresecretaries.

 

**CHAPTERIV**

**Management of the Company**

 

Clause 11: Management of the Company shall beexercised by a Board of Directors and an Executive Board.

 

§ 1 The structure and composition of the Board ofDirectors and the Executive Board of the Company shall be identical in thewholly-owned subsidiaries Cemig Distribuição S.A and Cemig Geração eTransmissão S.A., with the exception that only the wholly-owned subsidiaryCemig Distribuição S.A. shall have a Chief Distribution and Sales Officer, andonly the wholly-owned subsidiary Cemig Geração e Transmissão S.A. shall have aChief Generation and Transmission Officer.

 

§ 2 In the management of the Company, and of thewholly-owned subsidiaries Cemig Distribuição S.A. and Cemig Geração eTransmissão S.A., and of the other wholly-owned or other subsidiaries, oraffiliated companies or in the consortia in which they have direct or indirectinterests, the Board of Directors and the Executive Board shall obey theprovisions of the Company’s Long-Term Strategic Plan, in particular thedividend policy therein contained, as approved by the Board of Directors.

 

§ 3 The Long-Term Strategic Plan shall contain thelong-term strategic planning, fundamentals, targets, objectives and results tobe pursued and attained by the Company and its dividend policy, and shall obeythe commitments and requirements specified in § 5 below.

 

§ 4 The Long-Term Strategic Plan shall be revisedannually by the Executive Board and approved by the Board of Directors andshall be reflected in all the plans, forecasts, activities, strategies, capitalexpenditure and expenses of the Company and its wholly-owned and othersubsidiaries, and affiliated companies, and in the consortia in which itdirectly or indirectly participates, including the Company’s Multi-yearStrategic Implementation Plan and Annual Budget, which shall be approved by theBoard of Directors.

 

§ 5 In the administration of the Company and in theexercise of the right to vote in wholly-owned and other subsidiaries,affiliated companies and consortia, the Board of Directors and the ExecutiveBoard shall faithfully obey and comply with the following targets:

 

a)      to keep the Company’s consolidated indebtedness less than orequal to 2 (two) times the Company’s Ebitda (earnings before interest, taxes,depreciation and amortization);

 

b)      to keep the consolidated ratio {Net debt / (Net debt + Stockholders’equity) less than or equal to 40% (forty per cent);

 

c)      to limit the consolidated balance of funds recognized inCurrent assets, for the purposes of Clause 30 of these Bylaws and otherwise, tothe equivalent of a maximum of 5% 

 

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(five per cent) of the Company’s Ebitda (Earningsbefore interest, taxes, depreciation and amortization);

 

d)      to limit the consolidated amount of funds destined to capitalexpenditure and to the acquisition of any assets, in each business year, to theequivalent of a maximum of 40% (forty per cent) of the Company’s Ebitda(Earnings before interest, taxes, depreciation and amortization);

 

e)      to invest in distribution, generation and transmission projectsonly when they offer real minimum internal rates of return equal to or morethan those specified in the Company’s Long-Term Strategic Plan, subject to thelegal obligations;

 

f)       to limit the expenses of the wholly-owned subsidiary CemigDistribuição S.A. and of any subsidiary which operates in distribution toamounts not greater than the amounts recognized in the tariff adjustments andreviews;

 

g)      to keep the revenues of the wholly-owned subsidiary CemigDistribuição S.A. and of any subsidiary which operates in distribution at theamounts recognized in the tariff adjustments and reviews.

 

§ 6 — The targets specified in § 5 above shall bedetermined on the consolidated basis, defined as taking into account theCompany and its permanent investments in the wholly-owned subsidiaries CemigDistribuição S.A. and Cemig Geração e Transmissão S.A., subsidiaries,affiliated companies and consortia.

 

§ 7: The targets established in sub-clauses “a”, “b”,“c” and “d” of § 5 above may be exceeded for reasons related to temporarilyprevailing conditions, upon justification by grounds and prior specificapproval by the Board of Directors, up to the following limits:

 

a)      the Company’s consolidated indebtedness to be less than orequal to 2.5 (two point five) times the Company’s Ebitda (Earnings beforeinterest, taxes, depreciation and amortization);

 

b)      the consolidated ratio {Net debt / (Net debt + Stockholders’equity)} to be limited to 50% (fifty per cent);

 

c)      the consolidated balance of the funds recognized in Currentassets, for the purposes of Clause 30 of these Bylaws and otherwise, to be theequivalent of a maximum of 10% (ten per cent) of the Company’s Ebitda (Earningsbefore interest, taxes, depreciation and amortization); and

 

d)      the consolidated amount of the funds allocated to capitalexpenditure and to the acquisition of any assets, only in the business years of2006 and 2007, to be limited to maximum values of 65% (sixty-five per cent) and55% (fifty-five per cent), respectively, of the Company’s Ebitda (Earningsbefore interest, taxes, depreciation and amortization).

 

**Article I**

**The Board of Directors**

 

Clause 12: The Company’s Board of Directors shallbe made up of 14 (fourteen) members and an equal number of substitute members.One of the members shall be its Chairman and another its Vice-Chairman, and allshall be elected and able to be dismissed at any time by the General Meeting ofStockholders, for a period of office of 3 (three) years, and may be reelected.

 

§ 1 The substitute members shall substitute therespective members of the Board if the latter are absent or impeded from exercisingtheir functions and, in the event of a vacancy, shall do so until a new memberis elected.

 

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§ 2 The global or individual amount of theremuneration of the Board of Directors shall be fixed by the General Meeting ofStockholders, in accordance with the legislation from time to time in force.

 

§ 3 The minority holdersof common shares, and the holders of preferred shares, each have the right toelect 1 (one) member of the Board of Directors, in a separate vote, inaccordance with the law.

 

§ 4 The Boards ofDirectors of the wholly-owned subsidiaries Cemig Distribuição S.A. and CemigGeração e Transmissão S.A. shall, obligatorily, be made up of the members andsubstitute members elected to the Board of Directors of the Company.

 

Clause 13: In the eventof a vacancy on the Board of Directors, the first subsequent General Meeting ofStockholders shall elect a new member, for the period of office which wasremaining to the previous member.

 

§ 1 In this event, if the previous Board member waselected by a minority, the new member shall be elected by the same minority.

 

Clause 14: The Board of Directors shall meet,ordinarily, every 2 (two) months and, extraordinarily, on convocation by itsChairman, or its Vice-Chairman, or one-third of its members, or when requestedby the Executive Board, and decisions taken shall be valid when the majority ofits members are present.

 

§ 1 The meetings of the Board of Directors shall becalled by its Chairman or its Vice-Chairman, by written advice sent with 5(five) days’ notice, containing the agenda to be discussed. Meetings of theBoard of Directors called on the basis of urgency may be called by its Chairmanwithout being subject to the above-mentioned period provided that the othermembers of the Board are unequivocally aware of the convocation.

 

§ 2 Decisions of the Board of Directors shall betaken by the majority of the votes of the Board Members present, and in theevent of a tie the Chairman shall have the casting vote.

 

Clause 15: The Chairman of the Board of Directorshas the competency to grant leave to the Board’s members, and the other membersof the Board have the competency to grant leave to the Chairman.

 

Clause 16: The Chairman and Vice-Chairman of theBoard of Directors shall be chosen by their peers, at the first meeting of theBoard of Directors that takes place after the election of its members, and theVice-Chairman shall take the place of the Chairman when the Chairman is absentor impeded from exercising his functions.

 

Clause 17: The Board ofDirectors shall have the following attributions:

 

a) to fix the generalorientation of the Company’s business;

 

b) to elect or dismissthe Executive Officers of the Company, subject to these Bylaws;

 

c) to decide, prior tothe Company entering into them, on contracts between the Company and any of itsstockholders, or companies which are subsidiaries or jointly-controlledsubsidiaries of such stockholders;

 

d) to decide, uponproposal put forward by the Executive Board, on disposal or placement of acharge upon any of the Company’s property, plant or equipment, and on the 

 

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giving by the Company of any guarantee to any thirdparty of which the individual value is greater than or equal toR$ 14,000,000.00 (fourteen million Reais);

 

e)      to decide, upon proposal put forward by the Executive Board, onthe Company’s investment projects, signing of contracts and other legaltransactions, contracting of loans or financings, or the constitution of anyobligations in the name of the Company which, individually or jointly, havevalue of R$ 14,000,000.00 (fourteen million Reais) or more, includinginjections of capital into wholly-owned or other subsidiaries or affiliatedcompanies or the consortia in which the Company participates;

 

f) to call the GeneralMeeting of Stockholders;

 

g) to monitor and inspectthe management by the Executive Board: the Board of Directors may, at any time,examine the books and papers of the Company, and request information oncontracts entered into or in the process of being entered into, and on anyother administrative facts or acts which it deems to be of interest to it;

 

h)to give a prior opinion on the report of management and the accounts of theExecutive Board of the Company;

 

i)to choose and to dismiss the Company’s auditors, from among companies withinternational reputation authorized by the Securities Commission (CVM) to auditlisted companies;

 

j) to authorize, upon a proposal by the ExecutiveBoard, commencement of administrative tender proceedings, and proceedings fordispensation from or non-requirement of tender, and the correspondingcontracts, for amounts of R$ 14,000,000.00 (fourteen million Reais) ormore;

 

l) to authorize, upon a proposal put forward by theExecutive Board, filing of legal actions, or administrative proceedings, orentering into court or out-of-court settlements, for amounts ofR$ 14,000,000.00 (fourteen million Reais) or more;

 

m)to authorize the issue of securities, in the domestic or external markets, forthe raising of funding, in the form of debentures, promissory notes,medium-term notes and other instruments;

 

n)to approve the Company’s Long-Term Strategic Plan, the Multi-year StrategicImplementation Plan, and the Annual Budget and alterations and revisions tothem;

 

o)annually, to set the directives and establish the limits, including financiallimits, for spending on personnel, including concession of benefits andcollective work agreements, subject to the competency of the General Meeting ofStockholders and the Annual Budget approved;

 

p)to authorize the exercise of the right of preference in stockholders’agreements, or of the right to vote in wholly-owned or other subsidiaries,affiliated companies and the consortia in which the Company participates,except in the cases of the wholly-owned subsidiaries Cemig Distribuição S.A.and Cemig Geração e Transmissão S.A., for which the General Meeting ofStockholders has the competency for decision on these matters;

 

q)to approve the declarations of vote in the General Meetings of Stockholders andthe orientations for voting in the meetings of the boards of directors of thewholly-owned and other subsidiaries, affiliated companies and the consortia inwhich the Company participates, when participation in the capital of othercompanies or consortia is involved, and the decisions must, in any event andnot only in matters relating to participation in the capital of other companiesor consortia, obey the provisions of these Bylaws, the Long-term Strategic Planand the Multi-year Strategic Implementation Plan;

 

§1 The Board of Directors, by specific resolutions, may delegate to theExecutive Board the power to authorize agreement of contracts for sales ofelectricity or for provision of distribution or transmission services, inaccordance with the legislation.

 

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§ 2 The financial limits for decision by the Boardof Directors shall be adjusted, in January of each year, by the IGP-M(General Market Price) inflation index, published by the Getúlio VargasFoundation.

 

**Article II**

**TheExecutive Board**

 

Clause 18: The Executive Board shall be made up of9 (nine) Executive Officers, who may be stockholders, elected by the Board ofDirectors, namely: the Chief Executive Officer; the Deputy Chief ExecutiveOfficer; the Chief Officer for Finance, Investor Relations and Control ofHoldings; the Chief Corporate Management Officer; the Chief Distribution andSales Officer; the Chief Generation and Transmission Officer; the Chief TradingOfficer; the Chief New Business Development Officer; and the Chief Officer forthe Gas Division.

 

§ 1 The period of office of the Executive Officersshall be 3 (three) years, and re-election is permitted. The Executive Officersshall remain in their posts until their duly elected successors take office.

 

§2 The global or individual amount of the remuneration of the Executive Board,including benefits of any type, shall be fixed by the General Meeting ofStockholders, in accordance with the legislation from time to time in force.

 

§ 3 The Executive Officers shall exercise theirpositions as full-time occupations in exclusive dedication to the service ofthe Company. They may at the same time exercise non-remunerated positions inthe management of the Company’s wholly-owned or other subsidiaries oraffiliated companies, at the option of the Board of Directors. They shall,however, obligatorily hold and exercise the corresponding positions in thewholly-owned subsidiaries Cemig Distribuição S.A. and Cemig Geração eTransmissão S.A.

 

§ 4 Executive Officers who are not employees shallhave the right to an annual period of not more than 30 (thirty) days’remunerated leave. This leave may not be accumulated, and its remunerationshall be augmented by one-third of the monthly remuneration currently ineffect. This leave shall be granted to them by the Chief Executive Officer; theleave of the Chief Executive Officer shall be granted by the Board ofDirectors.

 

Clause 19: In the event of absence, leave,resignation or vacancy of the post of the Chief Executive Officer, this postshall be exercised by the Deputy Chief Executive Officer, for whatever periodthe absence or leave may last, and, in the case of the post being vacant, ofprevention of its exercise, or of resignation, until the post is filled by theBoard of Directors.

 

§ 1 In the event of absence, leave, resignation orvacancy of the post of any of the other members of the Executive Board, theExecutive Board may, by approval of a majority of its members, attribute theexercise of the respective functions to another Executive Officer, for as longas the period of absence or leave — or, in the event of vacancy, the impedimentor resignation — lasts, until the post is filled by the Board of Directors.

 

§ 2 The Chief Executive Officer or a member of theExecutive Board elected in the way described in this clause shall hold theposition for the time which remains of the period of office of the ExecutiveOfficer who is substituted.

 

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Clause 20: The Executive Board shall meet,ordinarily, at least 2 (two) times per month and, extraordinarily, whenever calledby the Chief Executive Officer or by 2 (two) Executive Officers with priornotice of at least 2 (two) days, but this notice shall not be necessary if allthe Executive Officers are present. Unless stated to the contrary in theBylaws, the decisions of the Executive Board shall be taken by a vote of themajority of its members, and in the event of a tie the Chief Executive Officershall have a casting vote and the Board of Directors must be advised that thecasting vote has been used.

 

Clause 21: The ExecutiveBoard is responsible for the current management of the Company’s business,subject to the Long-Term Strategic Plan, the Multi-year StrategicImplementation Plan and the Annual Budget, prepared and approved in accordancewith these Bylaws.

 

§ 1 The Company’sMulti-year Strategic Implementation Plan shall reflect the Company’s Long-TermStrategic Plan and contain the plans and projections for a period of 5 (five)business years, and must be updated at least once a year, and shall deal indetail with the following subjects, among others:

 

a) the Company’sstrategies and actions, including any project related to its objects;

 

b) new investments andbusiness opportunities, including those of the Company’s wholly-owned and othersubsidiaries, and affiliated companies and of the consortia in which itparticipates;

 

c) the amounts to beinvested or in any other way contributed from the Company’s own funds or fundsof third parties; and

 

d) the rates of returnand profits to be obtained or generated by the Company.

 

§ 2 The Company’s AnnualBudget shall reflect the Company’s Multi-year Strategic Implementation Planand, consequently, the Long-Term Strategic Plan, and must give details of theoperational revenue and expenses, the costs and capital expenditure, the cashflow, the amount to be allocated to the payment of dividends, investments ofcash from the Company’s own funds or funds of third parties, and any other datathat the Executive Board considers to be necessary.

 

§ 3 The Company’sMulti-year Strategic Implementation Plan and the Annual Budget shall beprepared and updated annually, by the end of each business year, to be ineffect in the following business year. Both shall be prepared in coordinationwith the Chief Officer for Finance, Investor Relations and Control ofHoldings and submitted to examination by the Executive Board, and,subsequently, for approval by the Board of Directors.

 

§4 The followingdecisions shall require a decision by the Executive Board:

 

a) approval of the planof organization of the Company and issuance of the corresponding rules andany changes to them;

 

b) examination, andsubmission to the Board of Directors, for approval, of the Company’s Multi-yearStrategic Implementation Plan, and revisions of it, including timetables,amount and allocation of the capital expenditure specified in it;

 

c) examination, andsubmission to the Board of Directors, for approval, of the Annual Budget, whichmust reflect the Multi-year Strategic Implementation Plan at the time in force,and revisions of it;

 

d) decision on re-managing of investments orexpenditure specified in the Annual Budget which amount, individually or inaggregate, in a single financial year, to less than R$ 14,000,000.00(fourteen million Reais), with consequent re-adaptation of the targetsapproved, obeying the multi-year Strategic Implementation Plan and the AnnualBudget;

 

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e) approval of disposal of or placement of a chargeupon any of the Company’s property, plant or equipment, and the giving ofguarantees to third parties, in amounts less than R$ 14,000,000.00(fourteen million Reais);

 

f) authorization of the Company’s capitalexpenditure projects, signing of agreements and legal transactions in general,contracting of loans and financings and the constitution of any obligation inthe name of the Company, based on the Annual Budget approved, whichindividually or in aggregate have values less than R$ 14,000,000.00(fourteen million Reais), including injection of capital into wholly-owned orother subsidiaries, affiliated companies, and the consortia in which theCompany participates, subject to the provisions of sub-clause ‘p’ of sub-itemIV of Clause 22;

 

g) approval, uponproposal by the Chief Executive Officer, jointly with the Chief Officer forFinance, Investor Relations and Control of Holdings, of the statements ofvote in the General Meetings of the wholly-owned and other subsidiaries,affiliated companies and in the consortia in which the Company participates,except in the case of the wholly-owned subsidiaries Cemig Distribuição S.A. andCemig Geração e Transmissão S.A., for which the competency to decide on thesematters shall be that of the General Meeting of Stockholders, and the decisionmust obey the provisions of these Bylaws, the decisions of the Board ofDirectors, the Long-term Strategic Plan and the multi-year Strategic ImplementPlan;

 

h) authorization to commence administrative tenderproceedings and proceeding for exemption from or non-requirement for tender,and the corresponding contracts, in amounts greater than or equal toR$ 2,800,000.00 (two million eight hundred thousand Reais) and less thanR$ 14,000,000.00 (fourteen million Reais);

 

i) authorization to file legal actions andadministrative proceedings, and to enter into Court and out-of-courtsettlements, for amounts less than R$ 14,000,000.00 (fourteen millionReais);

 

j) authorization ofprovisions in the Company’s accounts, of any value, upon proposal from theChief Officer for Finance, Investor Relations and Control of Holdings;

 

l) approval of thenominations of employees to hold management posts in the Company, upon proposalby the Chief Officer concerned, subject to the provisions of sub-clause “h” ofsub-item I of Clause 22; and

 

m) authorization ofexpenditure on personnel expenses and collective work agreements, subject tothe competency of the General Meeting of Stockholders, the directives andlimits approved by the Board of Directors and the Annual Budget approved.

 

§ 5 Actions necessary forthe regular functioning of the Company, entering into contracts, and otherlegal transactions shall be carried out by the Chief Executive Officer, jointlywith one Executive Officer, or with a person holding a valid power of attorney.

 

§ 6 Powers of attorneymust be granted by the Chief Executive Officer, jointly with an ExecutiveOfficer, except for the power described in sub-clause “c” of Sub-item I ofClause 22, for which only the signature of the Chief Executive Officer isrequired.

 

§ 7        Thefinancial limits for decision by the Executive Board shall be adjusted, in January ofeach year, by the IGP-M (General Market Price) inflation index, published bythe Getúlio Vargas Foundation.

 

Clause 22: Subject to theprovisions of the previous clauses, the following are the functions and powersattributed to the members of the Executive Board:

 

I — To the ChiefExecutive Officer:

 

a)      to oversee and direct the work of the Company;

 

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b)      to supervise the preparation and implementation of theMulti-year Strategic Implementation Plan and to develop the strategies andactions approved;

 

c)      to represent the Company in the Courts, on the plaintiff ordefendant side;

 

d)      to sign, jointly with one Chief Officer, documents which bindthe Company;

 

e)      to present the annual report on the Company’s business to the Boardof Directors and to the Ordinary General Meeting of Stockholders;

 

f)       to hire and dismiss employees of the Company;

 

g)      to manage and direct the activities of internal audits,institutional relationships, legal, communication and representation activities,the Company’s Ombudsman’s department and the Corporate Secretariat Office;

 

h)      to propose to the Executive Board, for approval, jointly withthe Chief Officer to whom the employee is linked, nominations for managementpositions in the Company; and

 

i)       to propose appointments for the positions of management and onthe Audit Boards of the wholly-owned and other subsidiaries, and affiliatedcompanies, and also of *Fundação Forluminas deSeguridade Social*(Forluz) after hearing the opinion of the Chief Officerfor Finance, Investor Relations and Control of Holdings, except in thecase of the wholly-owned subsidiaries Cemig Distribuição S.A. and Cemig Geraçãoe Transmissão S.A., for which the provisions of Paragraph 4 of Clause 12 andParagraph 3 of Clause 18 of these Bylaws prevail.

 

II— To the Deputy Chief Executive Officer:

 

a)      to substitute the Chief Executive Officer if he is absent, onleave, temporarily impeded from exercising his functions, or has resigned orhis post is vacant;

 

b)      to promote improvement of the Company’s social responsibilityand sustainability policies;

 

c)      to set the policies and guidelines for the environment,technological development, alternative energy sources and technicalstandardization;

 

d)      to co-ordinate the Company’s strategy for operations inrelation to social responsibility, the environment, technological processes andstrategic management of technology;

 

e)      to coordinate the putting in place and maintenance of theCompany’s quality control systems;

 

f)       to promote the implementation of programs for the Company’stechnological development; and

 

g)      to monitor the management of the plans for compliance with theguidelines for the environment, technology and improvement of quality.

 

III — To the ChiefOfficer for Finance, Investor Relations and Control of Holdings:

 

a)      to make available the financial resources necessary for theoperation and expansion of the Company, in accordance with the Annual Budget,conducting the processes of contracting of loans and financing, and the relatedservices;

 

b)      to coordinate the preparation and consolidation, with theparticipation of all the Chief Officers, of the Company’s Multi-year StrategicImplementation Plan and Annual Budget;

 

c)      to arrange for economic and financial valuation of the Company’scapital expenditure investment projects, except those that are theresponsibility of the Chief New Business Development Officer;

 

d)      to accompany the performance of the execution of investmentprojects, according to targets and results approved by the Executive Board andthe Board of Directors;

 

e)      to carry out the accounting of, and to control, the Company’seconomic-financial transactions;

 

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f)       to determine the cost of the service and to establish a policyon insurance, as set out in the Company’s Multi-year Strategic ImplementationPlan;

 

g)      to prepare the short-, medium- and long-term financialprogramming in detail, as specified in the Company’s Multi-year StrategicImplementation Plan and Annual Budget;

 

h)      to control the Company’s registered capital, decide policy forits shares and corporate governance, and suggest dividend policy;

 

i)       to coordinate the preparation and negotiation of the tariffsfor supply and distribution of electricity, and the revenues from transmission,with the National Electricity Agency, Aneel;

 

j)       to be responsible for the provision of information to theinvesting public, to the Securities Commission (CVM) and to the Brazilian andinternational stock exchanges and over-the-counter markets, and thecorresponding regulation and inspection entities, and to keep the Company’sregistrations with these institutions updated;

 

l)       to represent the Company to the CVM , the stock exchanges andother entities of the capital markets;

 

m)     to arrange for the financial and corporate management of theCompany’s holdings in the wholly-owned and other subsidiaries, and affiliatedcompanies, within the criteria of good corporate governance and makingcontinual efforts for compliance with their business plans, subject to theprovisions of these Bylaws;

 

n)      to propose to the Executive Board, for approval or submissionto the Board of Directors or to the General Meeting of Stockholders, inaccordance with the competency defined in these Bylaws, injections of capital,exercise of the right of preference and the making of voting agreements in thewholly-owned and other subsidiaries, and affiliated companies and in theconsortia in which the Company participates;

 

o)      to take part in negotiations that involve the constitution oralteration of corporate documents of the holdings referred to in the previoussub-clause; and

 

p)      to coordinate the processes of sale of stockholdings owned bythe Company, or by its wholly-owned or other subsidiaries, or affiliatedcompanies, upon prior legislative authorization and approval by the Board ofDirectors.

 

IV —    To the Chief Corporate Management Officer:

 

a)      to ensure the provision of appropriate personnel to theCompany;

 

b)      to decide the Company’s human resources policy and to orientand promote its application;

 

c)      to orient and conduct activities related to organizationalstudies and their documentation;

 

d)      to decide, conduct and supervise the Company’s telecommunicationsand information technology policy;

 

e)      to plan, put in place and maintain the Company’stelecommunications and information technology systems;

 

f)       to decide policies and rules on support services such astransport, administrative communication, security guards, and on provision ofadequate quality in the workplace for the Company’s personnel;

 

g)      to provide the Company with infrastructure and administrativesupport resources and services;

 

h)      to coordinate the policies, processes and means of propertysecurity, work safety and security guarding approved by the Company;

 

i)       to carry out the negotiations of collective work agreements,in accordance with the guidelines and limits approved by the Board ofDirectors, submitting the proposals negotiated for approval by the ExecutiveBoard;

 

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j)       to manage the process of contracting of works and services andof acquisition and disposal of materials and real estate property;

 

l)       to effect quality control of the material acquired and of thequalification of contracted service providers;

 

m)     to administer and control the stock of material, arrange for theseparation and recovery of used material, and to carry out sales of excess andunusable material, and scrap;

 

n)      to arrange for and implement programs to increase, develop,perfect and continually improve suppliers of materials and services of interestto the Company, alone or in cooperation with other Chief Officers’ Departmentsor development agencies and industry associations, in the ambit of the State ofMinas Gerais;

 

o)      to carry out corporate management programs and environmentalaction within the scope of this Chief Officer’s Department;

 

p)      to authorize initiation of administrative tender proceedingsand proceedings for exemption or non-requirement for tender, and thecorresponding contracts, in amounts up to R$ 2,800,000.00 (two millioneight hundred thousand Reais);

 

q)      to propose to the Chief Executive Officer, for submission tothe Executive Board for approval, from among the employees of the Company,Cemig Distribuição S.A. and Cemig Geração e Transmissão S.A., appointments forthe positions of sitting and substitute members of the Integrated Pro-HealthAdministration Committee;

 

r)       to propose to the Chief Executive Officer, for submission tothe Executive Board for approval, from among the employees of the Company andof the other companies involved in the negotiations, appointments of employeesto the Union Negotiation Committee, and also the appointment of itscoordinator; and

 

s)      to present to the Executive Board the assessments received froma leadership succession development program, put in place by the Company, forthe purpose of assisting the Executive Board in making its decisions onappointments of employees to management posts.

 

V —  To the Chief Distribution and Sales Officer:

 

a)      to make continuous efforts on behalf of the quality of supplyof energy to consumers that are directly linked to the Company’s distributionsystem;

 

b)      to prepare the planning of the Company’s distribution system;

 

c)      to manage the implementation of the distribution facilities,including preparation and execution of the plan, construction and assembly;

 

d)      to operate and maintain the electricity distribution system andthe associated systems of supervision and remote control;

 

e)      to manage the Company’s work safety policy in the ambit ofhis/her activities;

 

f)       to propose and implement the policies for service to consumersserved by this Chief Officer’s Department;

 

g)      to develop programs and actions with captive consumers withdemand lower than 500 kW, with a view to the most efficient use of electricity;

 

h)      to establish commercial relationships with and coordinate thesale of electricity and services to captive consumers with demand lower than500 kW;

 

i)       to carry out environmental programs and actions within thescope of this Chief Officer’s Department;

 

j)       to represent the Company in the Brazilian ElectricityDistributors’ Association (Abradee) and with other entities of the distributionsector;

 

l)       to establish policies and guidelines to ensure the physicalsecurity of the distribution facilities, and manage the asset security of thesefacilities; and

 

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m)     to seek continual improvement of the processes of operation andmaintenance, through the use of new technologies and methods, aiming to improvethe quality and reduce the cost of those activities.

 

VI —    To the Chief Generation and TransmissionOfficer:

 

a)      to make continuous efforts on behalf of the quality of supplyof electricity to consumers that are directly linked to the transmissionsystem;

 

b)      to prepare the planning of generation and transmission;

 

c)      to operate and maintain the generation and transmission systemsand the associated systems of supervision and remote control;

 

d)      to carry out environmental programs and actions within thescope of this Chief Officer’s Department;

 

e)      to develop and conduct such hydro-meteorological activities asare of interest to the Company;

 

f)       to manage the operations arising from interconnection of theCompany’s electricity transmission system with those of other companies, andthe connection of agents to the Company’s basic network;

 

g)      to represent the Company in relations with the National SystemOperator (ONS), the Brazilian Electricity Generators’ Association (Abrage) andother entities representing the electricity generation and transmission sector;

 

h)      to manage the Company’s central laboratories and workshops;

 

i)       to coordinate and put in place projects for refurbishment,modernization, improvement, reactivation and de-activation of the generationand transmission facilities;

 

j)       to propose and implement measures that aim to ensure theconnectivity of the various agents of the electricity sector, linked to theCompany’s transmission system;

 

l)       to propose and implement the policies and guidelines that aimto ensure the physical security of the generation and transmission facilities,and to manage the industrial safety of those facilities;

 

m)     to manage and promote the Company’s work safety policy within thescope of his/her activities;

 

n)      to manage and put in place the undertakings for expansion ofgeneration, transmission and co-generation, arranging for planning,construction and assembly, and ensuring the proper physical and financialperformance of those undertakings;

 

o)      to supply technical support to the negotiations for makingpossible the projects for expansion of generation, transmission andco-generation, and to take part in the negotiation of documents of theconsortia of entrepreneurs and special-purpose companies.

 

VII — To the ChiefTrading Officer:

 

a)      to carry out research, studies and projections on the marketsof interest to the Company;

 

b)      to coordinate the planning and execution of the purchase ofelectricity to serve the Company’s market and the sale of energy from its owngeneration sources;

 

c)      to coordinate the purchase and sale of electricity in itsdifferent forms and modalities, including importation, exportation and holdingsin all the segments of markets specialized in energy;

 

d)      to coordinate the provision of services of intermediation ofbusiness transactions related to the sale of electricity to any authorizedagent;

 

e)      to represent the Company in the Electricity Trading Chamber(CCEE), taking responsibility for the transactions carried out in the ambit ofthat chamber, and to represent the Company in relations with the otherelectricity trading entities;

 

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f)       to coordinate the establishment of the prices for purchase andsale of electricity, and to propose them to the Executive Board for approval;

 

g)      to establish commercial relations with and coordinate the saleof electricity and services to individual consumers, or groups of consumers,served at voltages of 2.3kV or more and contracted demand of 500kW or more, andalso business groups;

 

h)      to identify, measure and manage the risks association with thetrading of electricity;

 

i)       to negotiate and manage the commercial transactions involvedin transport and connection of any party accessing the distribution system;

 

i)       to negotiate and manage the Contracts for Use of theTransmission System with the National System Operator (ONS) and for connectionto the Distribution System with transmission companies; and

 

l)       in coordination with the Chief New Business DevelopmentOfficer, to manage the commercialization of the Company’s carbon credits.

 

VIII — To the Chief New Business DevelopmentOfficer:

 

a)   to arrange for prospecting, analysis anddevelopment of new business of the Company in the areas of generation,transmission and distribution of electricity, oil and gas, and also in otheractivities directly or indirectly related with the Company’s objects;

 

b)   to arrange for technical, economic-financial,and environmental feasibility studies of new business for the Company, in coordinationwith the Chief Officers’ Departments related to those businesses;

 

c)   to coordinate the negotiations and implementthe partnerships, consortia, special-purpose companies and other forms ofassociation with public- or private-sector companies necessary for thedevelopment of new business, and also the negotiation of contracts andcorporate documents of those projects;

 

d)   to coordinate the participation of theCompany in tender proceedings for obtaining grant of concessions in all theareas of its operations;

 

e)   to prospect, coordinate, evaluate andstructure the opportunities for acquisition of new assets in the electricitysector and in the oil and gas sector;

 

f)    to coordinate the Company’s participation inthe auctions of new business opportunities held by the National ElectricityAgency (Aneel), and the National Oil, Natural Gas and Biofuels Agency (ANP);

 

g)   to arrange for prospecting and analysis,within the scope of the Company, of business opportunities related to the useof carbon credits;

 

h)   to consolidate planning of expansion of thegeneration, transmission and distribution systems;

 

i)    to consolidate the Company’s Program ofInvestments in generation, transmission and distribution;

 

j)    to represent the Company in relations withthe entities for planning of expansion of the electricity sector in his/herareas of operation;

 

l)    tocarry out environmental programs and actions within the scope of this ChiefOfficer’s Department; and

 

l)    toaccompany, within the Company, the energy planning of the State of MinasGerais.

 

IX — To the Chief Officer for the GasDivision:

 

a)   to coordinate, in the name of the Company andits wholly-owned and other subsidiaries, all the activities related toexploration, acquisition, storage, transport, distribution and sale of oil andgas or oil products and by-products, directly or through third parties;

 

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b)   to propose to the Executive Board guidelines,general rules and plans of operation, prospecting, exploration,acquisition, storage, transport, distribution and sale of activities of the oiland gas business;

 

c)   to carry out research, analyses and studiesof investments and new technologies related to oil and gas, jointly with theOffice of the Chief New Business Officer;

 

d)   to develop standardized rules forprojects in the field of oil and gas;

 

e)   to propose to the Executive Board amulti-year plan for investments and expenses of Gasmig;

 

f)    to propose to the Executive Board amulti-year plan for investments and expenses of other special-purpose companiesassociated with the activity of oil and gas;

 

g)   to consolidate the management of the worksafety policies of Gasmig and of other special-purpose companies, in the oiland gas activities, in accordance with the general guidelines laid down by theCompany, through the Office of the Chief Corporate Management Officer;

 

h)   to carry out research, studies, analyzes andmarket projections of interest to the Company within the scope of the oil andgas activities;

 

i)    to carry out environmental programs andactions within the scope of this Chief Officer’s Department; and

 

j)    to represent the Company in the variousentities that bring together the companies of the oil and gas sector.

 

§1     The competencies of representation before technical andadministrative bodies and associations granted to the Chief Officers under thisClause do not exclude the Chief Executive Officer’s competency ofrepresentation, nor the need for obedience to the provisions in these Bylaws inrelation to prior obtaining of authorizations from the management bodies tocontract obligations in the name of the Company.

 

§ 2    As well as the exercise of the attributionsset for them in these Bylaws, each Chief Officer’s Department has thecompetency to ensure the cooperation, assistance and support of the other ChiefOfficers’ Departments in the areas of their respective competencies, with theaim of success in the greater objectives and interests of the Company.

 

§ 3    The projects developed by the Company in thearea of the Chief New Business Development Officer’s Department, oncestructured and constituted, should be assumed by the respective Chief Officer’sDepartments responsible for their construction, execution, operation and sales,as defined in these Bylaws.

 

§ 4    It is the competency of each Chief Officer,within the area of his/her operation, to arrange for the actions necessary forcompliance with and effective implementation of the work safety policiesapproved by the Company.

 

§ 5        Thefinancial limit set by sub-clause “p” of Item IV of this Clause shall beadjusted, in January of each year, by the IGP-M (General Market Price)inflation index, produced by the Getúlio Vargas Foundation.

 

**CHAPTER V**

**TheAudit Board**

 

Clause 23: The Company’s Audit Board shall functionpermanently and shall be made up of between 3 (three) and 5 (five) members andtheir respective substitute members, 

 

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who shall be elected annually, on the occasion ofthe Annual General Meeting, and may be re-elected.

 

§ 1 The Audit Board shall elect its Chairman fromamong its members, and the Chairman shall call and chair the meetings.

 

Clause 24: In the event of resignation of theposition, death or impediment, a member of the Audit Board shall be replaced byhis respective substitute, until the new member is elected, and such member shallbe chosen by the same party that appointed the substitute.

 

Clause 25: The responsibilities and powers of theAudit Board are those set by the Corporate Law, and also, to the extent thatthey do not conflict with Brazilian legislation, those required by the laws ofthe country in which the Company’s shares are listed and traded, in accordancewith its Regulations.

 

Clause 26: The remuneration of the members of theAudit Board shall be fixed by the General Meeting of Stockholders which electsit, in accordance with the legislation from time to time in force.

 

**CHAPTER VI**

**The business year**

 

Clause 27: The business year shall coincide withthe calendar year, closing on 31 December of each year, when the FinancialStatements shall be prepared, in accordance with the relevant legislation.Financial statements for periods of six months or interim statements forshorter periods may be prepared.

 

Clause 28: Before any profit share, retainedlosses, the provision for income tax, the Social Contribution on Net Profitand, successively, the profit shares of the employees and the managers, shallbe deducted from the result for the business year.

 

§ 1 The net profit ascertained in each businessyear shall be allocated as follows:

 

a)      5% (five percent) to the legal reserve, up to the limitspecified by law;

 

b)      50% (fifty percent) distributed as obligatory dividends to thestockholders of the Company, subject to the other terms of these Bylaws and theapplicable legislation; and

 

c)      the balance, after the retention specified in a capitalexpenditure and/or investment budget prepared by the Company’s management, incompliance with the Company’s Long-Term Strategic Plan and the dividend policycontained therein and duly approved, shall be applied in the constitution of aprofit reserve for the purpose of distribution of extraordinary dividends, inaccordance with Clause 30 of these Bylaws, up to the maximum limit specified byClause 199 of the Corporate Law.

 

Clause 29: The dividendsshall be distributed in the following order:

 

a)      the minimum annual dividend guaranteed to the preferred shares;

 

b)      the dividend for the common shares, up to a percentage equal tothat guaranteed to the preferred shares.

 

§ 1 Once the dividends specified in sub-clauses “a”and “b” of the head paragraph of this clause have been distributed, thepreferred shares shall have equality of rights with the common shares in anydistribution of additional dividends.

 

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§ 2 The Board of Directors may declare interimdividends, in the form of interest on equity, to be paid from retainedearnings, profit reserves or profits ascertained in six-monthly or interimfinancial statements.

 

§ 3 The amounts paid or credited as Interest onEquity, in accordance with the relevant legislation, shall be imputed to the amountsof the obligatory dividend or of the dividend payable under the Bylaws to thepreferred shares, being for all purposes of law a part of the amount of thedividends distributed by the Company.

 

Clause 30: Without prejudice to the obligatorydividend, every two years, starting from the business year of 2005, or morefrequently if the Company’s availability of cash so permits, the Company shalluse the profit reserve specified in sub-clause “c” of Clause 28 of these Bylawsfor the distribution of extraordinary dividends, up to the limit of cashavailable, as determined by the Board of Directors, in obedience to the Company’sLong-Term Strategic Plan and the Dividend Policy contained therein.

 

Clause 31: The dividends declared, obligatory orextraordinary, shall be paid in 2 (two) equal installments, the first by June 30and the second by December 30 of each year, and the Executive Board shalldecide the location and processes of payment, subject to these periods.

 

§ 1 Dividends not claimed within a period of 3(three) years from the date on which they are placed at the disposal of thestockholder shall revert to the benefit of the Company.

 

Clause 32: The employees have the right to a sharein the profits or results of the Company, upon criteria authorized by theExecutive Board based on the guidelines approved by the Board of Directors andlimits established by the General Meeting of Stockholders, in accordance withthe specific legislation.

 

Clause 33: It is the competency of the GeneralMeeting of Stockholders to set, annually, the limits to sharing by the managersin the profits of the Company, subject to the provisions of the solesub-paragraph of Article 190 of Law 6404 of December 15, 1976.

 

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**CHAPTER VII**

**Responsibilities of the management officers**

 

Clause 34: The management officers are responsibleto the Company and to third parties for the actions which they take in theexercise of their functions, as specified by the law and by these Bylaws.

 

Clause 35: The Company guarantees defense ofmembers of the Board of Directors, the Audit Board and the Executive Board inCourt and/or administrative proceedings, on the plaintiff or defendant side,during or after their periods of office, occasioned by events or acts relatedto the exercise of their specific functions which do not violate legalprovisions or the provisions of these Bylaws.

 

§ 1        Theguarantee given in the head paragraph of this clause extends to employees wholegally carry out actions by delegation from the Company’s management officers.

 

§ 2        TheCompany may contract third-party liability insurance to cover the expenses ofproceedings, fees of counsel and indemnities arising from the legal oradministrative proceedings referred to in the head paragraph of this Clause,upon decision by the Board of Directors.

 

§ 3        Anymember of the Board of Directors or the Audit Board, or any Executive Officeror employee against whom a Court judgment subject to no further appeal is givenmust reimburse the Company all the costs, expenses and losses caused to it.

 

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