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<SEC-DOCUMENT>0001104659-07-086318.txt : 20080222
<SEC-HEADER>0001104659-07-086318.hdr.sgml : 20080222
<ACCEPTANCE-DATETIME>20071130155234
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001104659-07-086318
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20071130

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ENERGY CO OF MINAS GERAIS
		CENTRAL INDEX KEY:			0001157557
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		AVENIDA BARBACENA 1200
		STREET 2:		30190 131 BELO HORIZONTE
		CITY:			MINAS GERAIS BRAZIL
		STATE:			D5
		BUSINESS PHONE:		2128395300

	MAIL ADDRESS:	
		STREET 1:		C/O SIDLEY AUSTIN BROWN & WOOD LLP
		STREET 2:		ONE WORLD TRADE CENTER
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10048-0557
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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<body lang="EN-US" style="text-justify-trim: punctuation">

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">MILBANK, TWEED, HADLEY &amp; M</font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">c</font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">CLOY LLP</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1 Chase Manhattan Plaza</font></b></p>

<p align="center" style="margin:0in 0in 24.0pt;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">New York, NY 10005-1413</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="right" style="margin:12.0pt 0in 24.0pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">November
30, 2007</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr. William Thompson</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Branch Chief</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Division of Corporation Finance</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Securities and Exchange Commission</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">100 F Street, NE</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Washington, D.C. 20549</font></p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.82%;"><a name="TableHead"></a>
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.9%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Re:</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0in .7pt 0in .7pt;width:85.28%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Companhia Energ&#233;tica de Minas Gerais - CEMIG</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.82%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.9%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0in .7pt 0in .7pt;width:85.28%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form
  20-F for the Fiscal Year Ended December 31, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.82%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.9%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0in .7pt 0in .7pt;width:85.28%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Filed
  July 23, 2007</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.82%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.9%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0in .7pt 0in .7pt;width:85.28%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">File No. 1-15224</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt 1.0in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dear Mr. Thompson:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On behalf of our client, Companhia Energ&#233;tica de
Minas Gerais &#151; CEMIG (&#147;CEMIG&#148;), we submit this response to your letter dated
September 25, 2007 relating to CEMIG&#146;s Form 20-F for the year ended December
31, 2006 (the &#147;Form 20-F&#148;).&#160; To assist in
the Staff&#146;s review of the responses, we precede each response with the text (in
bold type) of the comment as stated in your letter.&#160; CEMIG believes that it has replied to your
comments in full.&#160; As requested, this
letter is being filed on EDGAR as correspondence and a copy is being faxed to
your attention.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Capitalized terms used in the responses set
forth below and not otherwise defined herein have the meanings set forth in the
Form 20-F.</font></p>

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<p align="center" style="margin:0in 0in 12.0pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Form 20-F
for Fiscal Year Ended December 31, 2006</font></u></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 15.
Controls and Procedures, page 119</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">You state that your certifying officers concluded that your disclosure controls
and procedures were effective &#147;for providing reasonable assurance that [your]
financial information and that of [your] consolidated subsidiaries was
recorded, processed, summarized and disclosed in accordance with the rules and
regulations provided by the Commission.&#148; In future filings, please revise your
conclusion to include the full definition of disclosure controls and procedures
as outlined in Exchange Act Rule 13a-15(e) rather than the summarized
definition you include now.&#160; In this
regard, please revise to state, if true, whether the same officers concluded
the controls and procedures were effective to &#147;ensure that information required
to be disclosed by [you] in the reports that [you] file or submit under the Act
is accumulated and communicated to [your] management, including [your]
principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.&#148; Additionally, please confirm to us that your conclusion regarding
effectiveness would not change had this statement been included in the filing.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
response to the Staff&#146;s comment, CEMIG will include in its future filings on
Form 20-F the full definition of disclosure controls and procedures as outlined
in Exchange Act Rule 13a-15(e).&#160;
Consequently, item 15(a) of CEMIG&#146;s Form 20-F will state that CEMIG&#146;s
disclosure controls and procedures were effective to ensure that information
required to be disclosed in CEMIG&#146;s filings and submissions under the Exchange
Act is (i) recorded, processed, summarized and reported within the time periods
specified in the Commission&#146;s rules and forms and (ii) accumulated and
communicated to CEMIG&#146;s management, including its CEO and CFO, as appropriate
to allow timely decisions regarding required disclosure.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
confirms to the Staff that its conclusion regarding the effectiveness of its
disclosure controls and procedures would not change had the full definition of
disclosure controls and procedures been included in its Form 20-F for the year
ended December 31, 2006.</font></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">You state that you concluded your &#147;system of internal controls <u>related
to the consolidated financial statements</u> is effective.&#148; Please revise to
state whether you concluded your internal control over financial reporting, as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f), is effective.&#160; Any language that qualifies or limits your
conclusion, such as your current reference to internal controls &#147;related to the
consolidated financial statements&#148; is not permitted.&#160; Refer to Item 308(a)(3) of Regulation S-K.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
confirms to the Staff that its management concluded that, as of the year ended
December 31, 2006, its internal control over financial reporting, as defined in
Rules 13a-15(f) and 15d-15(f), is effective.&#160;
In response to the Staff&#146;s comment, CEMIG will revise its future filings
on Form 20-F accordingly.</font></p>

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<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;page-break-after:avoid;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Consolidated
Balance Sheets, page F-3</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;page-break-after:avoid;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">In light of your disclosures on page 99 regarding the redemption rights
associated with your common and preferred shares, please tell us how you
considered the guidance in Rule 5-02.28 of Regulation S-X and EITF Topic D-98
in determining to classify your common and preferred shares as permanent
equity.&#160; We note that the possibility
that any triggering event that is not solely within your control could occur,
without regard to probability, would require the shares to be classified
outside of permanent equity.&#160; Thus,
please ensure you address how the events that trigger the right to redemption
are solely within your control.&#160; We may
have further comment.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that on page 99 of the Form 20-F, it described the redemption
rights provided by Article 137 of the Brazilian Corporate Law, which is similar
to appraisal rights under Section 262 of the Delaware General Corporation Law
and the laws of other U.S. states. We understand that this is not a redemption
right as that term is generally understood in the United States or as
contemplated by Rule 5-02.28 of Regulation S-X, and CEMIG believes that a permanent
equity classification is appropriate under the provisions of EITF D-98.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
understand that under Brazilian Corporate Law, a shareholder is entitled to
withdraw from a corporation if a shareholders&#146; meeting approves any of
specified fundamental changes and such shareholder either has voted against the
change (if entitled to vote) or is adversely affected (if not entitled to
vote). If the shareholders&#146; vote were to opt for redemption, they would receive
an amount equal to book value of their proportionate share of shareholders&#146;
equity based on total outstanding shares at the time of redemption.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
considered the provisions of EITF D-98, paragraphs 10 and 11. Before any of the
specified fundamental changes are submitted for shareholders&#146; approval, first
the Board of Directors has to approve such changes. CEMIG&#146;s Board of Directors
is elected by its common shareholders, in which the State of Minas Gerais has
controlling voting rights, and the preferred shares cannot control the voting
of the Board of Directors. Therefore, CEMIG concluded that the events that
trigger redemption rights are solely within the control of CEMIG and the equity
of the company is appropriately classified as permanent.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
addition, CEMIG advises the Staff that as appraisal rights, all triggering
events depend on the vote of the majority of the outstanding shares of the
company, accordingly they are all within CEMIG&#146;s control.&#160; In response to the Staff&#146;s comment, CEMIG
will use the term &#147;Right of Withdrawal&#148; in future filings on Form 20-F.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Notes to
the Consolidated Financial Statements, page F-9</font></u></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Note 2.
Summary of Significant Accounting Policies, page F-12</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">4.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">We understand that the concession arrangements through which you provide
energy generation, transmission and distribution services to customers have
finite (albeit renewable) terms.&#160; We also
understand that when your concessions expire unrenewed, all assets, rights and
privileges related to the rendering of the electricity services revert to the
Brazilian government.&#160; Please tell us and
disclose how these </font></b></p>

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<p align="center" style="margin:0in 0in 12.0pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.9pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">terms in your concession arrangements affect your accounting
for property, plant and equipment.&#160; For
example, explain how you consider the concession term in determining
depreciation periods.&#160; Also explain your
consideration of the applicability of SFAS 13 to infrastructure assets that
revert to the government at the expiration of your concession agreement.&#160; Tell us your perception of the likelihood
that you would not be adequately compensated by the government for your net investment
in expropriated assets and how this impacts your accounting.&#160; We may have further comment.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that under the accounting practices adopted in Brazil (&#147;Brazilian
GAAP&#148;), property, plant and equipment are recorded at construction cost or
purchase price and are depreciated over their useful lives. When concessions
expire unrenewed, the property, plant and equipment reverts to the Brazilian
government and under Brazilian legislation, CEMIG is entitled to be reimbursed
by the Brazilian government for at least the book value amounts of such assets
at that time under Brazilian GAAP.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Under
U.S. GAAP, the individual property, plant and equipment accounting balances may
be more or less than the balances under Brazilian GAAP due to U.S. GAAP
adjustments relating to supplementary accounting for inflation in 1996 and
1997, capitalization of interest costs and special obligations as described in
note 2 to CEMIG&#146;s December 31, 2006 financial statements. Under U.S. GAAP,
property, plant and equipment are depreciated over their useful lives to their
salvage or residual value at the end of the concession period.&#160; The residual value at the end of the
concession period will be at least the book value of the property, plant and
equipment under Brazilian GAAP, which is equal to the amount to be reimbursed
by the Brazilian government at that time.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that it has paid in full for and has legal title to all its
infrastructure assets and has recorded them as property, plant and equipment
under U.S. GAAP. CEMIG believes this is appropriate and reflects the substance
of the concession agreements. The beneficiaries of CEMIG&#146;s assets are the final
consumers who, in turn, pay tariffs for the energy distributed. Additionally,
part of the tariffs paid by the consumers is invested in a fund which will be
used to reimburse CEMIG&#146;s investments at the end of the concession term. As
such, CEMIG does not believe that the concession agreements result in the
infrastructure being leased to or from the Brazilian government.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that it has no reason to believe that it will not be
adequately compensated by the Brazilian Government for the residual value of
its investments under the concession agreements and, consequently, CEMIG
believes that the use of the accounting described above is appropriate.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
response to the Staff&#146;s comment, CEMIG will revise its future filings on Form
20-F to specify that property, plant and equipment are depreciated over their
useful lives to their salvage or residual value at the end of the concession
period, and that the residual value at the end of the concession period will be
at least the book value of the property, plant and equipment under Brazilian
GAAP, which is equal to the amount to be reimbursed by the Brazilian government
at that time.</font></p>

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<p align="center" style="margin:0in 0in 12.0pt;text-align:center;text-autospace:none;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(p)
Regulation and deferred regulatory assets and liabilities, page F-15</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">Since &#147;Free Consumers&#148; may choose their energy suppliers and are not
subject to regulated rates, please explain to us how the portion of your
generation business that supplies power to such customers meets the criteria
outlined in paragraph 5 of SFAS 71 to apply the provisions of SFAS 71.&#160; Also see paragraph 6 of SFAS 71, which
clarifies that the Statement should only be applied to the portion of an
enterprise&#146;s operations that is regulated.&#160;
Note that the discontinuation of SFAS 71 should be applied to separable
portions of an enterprise&#146;s operations, such as a customer class.&#160; See paragraphs 5 and 39 through 40 of SFAS
101.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that the provisions of SFAS 71 have not been applied to its
generation business since this business does not meet the criteria established
in paragraph 5 of SFAS 71.&#160; In response
to the Staff&#146;s comment, CEMIG will revise its future filings on Form 20-F to
specify that SFAS 71 has been applied only to its distribution business.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(q)
Earnings per share, page F-16</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">With a view towards enhancing your disclosure in future filings, please
clarify for us the nature and terms of your obligation to issue capital stock
in connection with payments received on the accounts receivable from the State
Government.&#160; Also, please refer to
paragraph 10 of SFAS 128 and tell us why shares to be issued in connection with
this obligation are not included in <u>basic</u> earnings per share to the
extent that all necessary conditions for the share issuances have been
satisfied.&#160; In this regard, it appears
you have included in diluted earnings per share, but not basic earnings per
share, the shares whose conditions for issuance have been satisfied.&#160; Finally, please tell us if and when you
recognize a liability on your balance sheet for your obligation to issue these
shares.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that it has a contingent obligation to issue a capital stock
dividend to all shareholders when payments are made on the account receivable
from the State Government. We understand that the issuance of such capital
stock dividend will occur through the transfer of the balance in the Rate
Shortfall Reserve account in appropriated retained earnings to capital stock,
having no net effect on shareholders&#146; equity. However, pursuant to Brazilian
Corporate Law, the balance in the Rate Shortfall Reserve account may also be
used to (i) increase CEMIG&#146;s capital, (ii) reduce accumulated losses, and (iii)
make specific dividend payments to preferred shareholders.&#160; In the event that the Rate Shortfall Reserve
account is used for other purposes, CEMIG is no longer obligated to issue the
capital stock dividend in connection with payments received on the account
receivable from the State Government. All of the above transactions are subject
to approval by CEMIG&#146;s annual or extraordinary shareholders&#146; meeting.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This
account receivable is currently being offset by dividends payable to the State
Government. CEMIG believes that as of the balance sheet date, all of the
conditions for issuance of a capital stock dividend in connection with payments
received on the accounts receivable from the State Government have not been
satisfied since (i) the issuance of shares is still subject to approval by
either CEMIG&#146;s annual or extraordinary shareholders&#146; meeting, as required by </font></p>

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<p align="center" style="margin:0in 0in 12.0pt;text-align:center;text-autospace:none;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Brazilian Corporate Law and CEMIG&#146;s bylaws and
(ii) CEMIG may use the Rate Shortfall Reserve account for other purposes, which
would relieve CEMIG of the obligation to issue such capital stock dividend.
Consequently, CEMIG has not included these shares in the computation of basic
earnings per share in accordance with paragraph 10 of SFAS 128. However, CEMIG
has included these shares in the computation of diluted earnings per share
since the shares would be issuable if the end of the reporting period were also
the end of the contingency period as required by paragraph 30.b. of SFAS 128.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that it does not record a liability relating to the
obligation to issue these shares under U.S. GAAP since the issuance of the
shares does not have any net effect on shareholders&#146; equity, as described
above. The share distribution is made to all shareholders based on their equity
participation on the date of the distribution.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
response to the Staff&#146;s comment, CEMIG will revise its future filings on Form
20-F to more clearly disclose the nature and terms of this obligation and its
treatment for earnings per share purposes.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Note 4.
Deferred Regulatory Assets and Liabilities, page F-19</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">If any portion of your regulatory asset balance includes amounts on which
you do not earn a current return, disclose the nature and amount of each asset
and its remaining recovery period.&#160; We
believe the best practices approach regarding regulatory assets is to
affirmatively indicate whether a particular regulatory asset is earning a rate
of return and the anticipated recovery period.&#160;
Refer to the requirements of paragraph 20 of SFAS 71.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that it earns a current return on all of its regulatory
assets. The remaining recovery period for the majority of these assets at
December 31, 2006 was less than 24 months. In response to the Staff&#146;s comment,
CEMIG will revise its future filings on Form 20-F to include the following
disclosure regarding the rates of return and anticipated recovery periods of
its regulatory assets:</font></p>

<p style="margin:0in 13.5pt 12.0pt .5in;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The regulatory assets
related to the Energy Rationing Plan, Energy transactions on CCEE/MAE and
additional Parcel A costs bear interest at the SELIC (Brazilian benchmark
interest rate) rate. The deferred rate adjustment and PIS-PASEP/COFINS
regulatory assets are restated based on IGP-M (General Market Price Index).
These assets are being recovered based on the rate adjustment on April 8, 2006.
CEMIG estimates the remaining recovery period for these assets at December 31,
2006 to be less than 24 months, except for a portion of the Parcel A costs,
related to the period from January 1, 2001 to October 25, 2001, for which the
recovery period, established by the regulatory agency, will commence in March
2008.&#160; CEMIG expects to recover that
asset by 2010.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Note 7.
Accounts Receivable, Net, page F-25</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">Please revise to disclose the changes in your allowance for doubtful
accounts for all three years for which an audited income statement is
provided.&#160; Additionally, please disclose
the changes in your provision for losses with respect to the account receivable
from the Minas Gerais State Government.&#160;
Refer to Item 17(a) of Form 20-F and Rules 5-04 and 12-09 of Regulation
S-X.</font></b></p>

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<p align="center" style="margin:0in 0in 12.0pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
response to the Staff&#146;s comment, CEMIG will revise its future filings on Form
20-F to include the following disclosure:</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
changes in its allowance for doubtful accounts for all three years for which an
audited income statement is provided in its future fillings as follows (in
millions):</font></p>

<table border="1" cellspacing="0" cellpadding="0" width="100%" style="border:none;border-collapse:collapse;width:100.02%;">
 <tr>
  <td width="56%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:56.54%;">
  <p align="center" style="margin:0in 0in .0001pt 10.0pt;text-align:center;text-autospace:none;text-indent:-10.0pt;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="39%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:39.14%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Year ended December 31</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:56.54%;">
  <p align="center" style="margin:0in 0in .0001pt 10.0pt;text-align:center;text-autospace:none;text-indent:-10.0pt;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">2005</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.62%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">2004</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:56.54%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.62%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:56.54%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Balance at beginning of the year</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">214</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">165</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:11.62%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">106</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:56.54%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accounts written off</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(11</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(5</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.62%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:56.54%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Provision for the year recorded as part of other operating costs</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">94</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">54</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.62%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">62</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:56.54%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.62%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:56.54%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Balance at end of the year</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;border-bottom:double windowtext 1.5pt;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">297</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;border-bottom:double windowtext 1.5pt;padding:0in .7pt 0in .7pt;width:11.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">214</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;border-bottom:double windowtext 1.5pt;padding:0in .7pt 0in .7pt;width:11.62%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">165</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
changes in its provision for losses with respect to the account receivable from
the Minas Gerais State Government as follows (in millions):</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="1" cellspacing="0" cellpadding="0" width="100%" style="border:none;border-collapse:collapse;width:100.02%;">
 <tr>
  <td width="56%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:56.56%;">
  <p align="center" style="margin:0in 0in .0001pt 10.0pt;text-align:center;text-autospace:none;text-indent:-10.0pt;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="39%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:39.5%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Year ended December 31</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.94%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:56.56%;">
  <p align="center" style="margin:0in 0in .0001pt 10.0pt;text-align:center;text-autospace:none;text-indent:-10.0pt;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">2006</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">2005</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">2004</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.94%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:56.56%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.94%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:56.56%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Balance at beginning of the year</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,625</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,848</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,522</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:1.94%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:56.56%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Provision (reversion) for the year recorded on financial revenue</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(99</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0.375pt .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(223</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0.375pt .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">326</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.94%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:56.56%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:1.94%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:56.56%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-autospace:none;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Balance at end of the year</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,526</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,625</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.98%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0in .7pt 0in .7pt;width:11.84%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,848</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:1.94%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Note 15.
Employee Post-Retirement Benefits, page F-36</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">Please disclose the accumulated benefit obligation for your defined
benefit pension plan and contributions expected to be paid to the plan during
the next fiscal year.&#160; See paragraphs 5.e
and 5.g of SFAS 132R.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that the Accumulated Benefit Obligation as of December 31,
2006 and 2005 amounted to R$4,426 million and R$4,884 million, respectively,
and that the contributions expected to be paid to the defined benefit pension
plan and other&#160; plans for the next year
are&#160; R$182 million and R$41 million,
respectively.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
response to the Staff&#146;s comment, CEMIG will revise its future filings on Form
20-F to include this information.</font></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">10.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">Please
explain to us and disclose how you calculate the market related value of plan
assets as that term is defined in SFAS 87.&#160;
Since there is an alternative to how you can calculate this item, and it
has a direct effect on pension expense, we believe you should disclose how you
determine this amount in accordance with paragraph 12 of APB 22.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that it uses different methodologies to calculate the market
related value of the plan assets. Such methodologies are as follows:</font></p>

<div style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:0in;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in 12.0pt;text-align:center;text-autospace:none;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="21%" valign="top" style="padding:0in .7pt 0in .7pt;width:21.8%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Debt
  securities:</font></i></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="76%" valign="top" style="padding:0in .7pt 0in .7pt;width:76.04%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Market quotations<br><br></font></p>
  </td>
 </tr>
 <tr>
  <td width="21%" valign="top" style="padding:0in .7pt 0in .7pt;width:21.8%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Equity
  securities:</font></i></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="76%" valign="top" style="padding:0in .7pt 0in .7pt;width:76.04%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Market quotations for
  traded securities and estimated selling price for non-traded securities<br><br></font></p>
  </td>
 </tr>
 <tr>
  <td width="21%" valign="top" style="padding:0in .7pt 0in .7pt;width:21.8%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Real
  estate:</font></i></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="76%" valign="top" style="padding:0in .7pt 0in .7pt;width:76.04%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Estimated selling price,
  based on external appraisal reports<br><br></font></p>
  </td>
 </tr>
 <tr>
  <td width="21%" valign="top" style="padding:0in .7pt 0in .7pt;width:21.8%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Participant loans:</font></i></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.16%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="76%" valign="top" style="padding:0in .7pt 0in .7pt;width:76.04%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Recorded using contractual terms of the respective
  participant agreements. As described in Note 15 to CEMIG&#146;s consolidated
  financial statements, these loans have floating rates, which approximate
  market rates.<br><br></font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;text-autospace:none;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
response to the Staff&#146;s comment, CEMIG will revise its future filings on Form
20-F to include this information.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Note 17.
Shareholders&#146; Equity, page F-45</font></u></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(d.1)
Dividends and interest on capital in lieu of dividends:, page F-46</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">11.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">We note
your disclosure on page 9 that your subsidiaries&#146; ability to distribute
dividends is subject to certain limitations.&#160;
To the extent restricted net assets of such subsidiaries exceeds 25% of
consolidated net assets as of the end of the most recently completed fiscal
year, please disclose the nature of the restrictions on the ability of
consolidated and unconsolidated subsidiaries to transfer funds to you in the
form of cash dividends, loans or advances and disclose separately the amounts
of restricted net assets for consolidated and unconsolidated subsidiaries as of
the end of fiscal 2006.&#160; Refer to Rule
4-08(e)(3) of Regulation S-X.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that at the end of fiscal 2006, the majority of its
consolidated and unconsolidated subsidiaries qualify as either concessionaires
of public services or independent power producers. Pursuant to the terms of the
respective concession agreements, these subsidiaries are unable to transfer
funds to their respective parent companies, in the form of loans or advances,
without regulatory approval. However, these subsidiaries are not restricted
from paying cash dividends and, therefore, the net assets of these subsidiaries
are not technically considered restricted pursuant to Rule 4-08(e)(3) of
Regulation&nbsp;S-X. CEMIG has presented certain disclosures in Note 30 to its
consolidated financial statements relating to these subsidiaries.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
response to the Staff&#146;s comment, CEMIG will revise its future filings on Form
20-F to disclose more clearly the nature of the restrictions on its
subsidiaries to make loans or advances.</font></p>

<div style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:0in;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in 12.0pt;text-align:center;text-autospace:none;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;page-break-after:avoid;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Note 19.
Operating Costs and Expenses, page F-49</font></u></b></p>

<p style="margin:0in 0in 12.0pt .5in;page-break-after:avoid;text-autospace:none;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">Please clarify for us the nature and terms of the Anuenio indemnity
payment and explain why the entire payment represented a current period
expense.</font></b></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG
advises the Staff that its employees had the right to receive an annual 1,00%
increase in their salaries over and beyond the normal performance/inflation
increase for the remaining term of their employment (the &#147;Anu&#234;nio&#148;). On April
2006, CEMIG made an offer to settle this future obligation by making a one-time
payment to eligible employees.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CEMIG&#146;s
employees accepted the offer on June 30, 2006, and the payment of the indemnity
of R$178 million was made in August 2006 and recorded in operating expenses.
The amount of this payment, as described in note 19 to CEMIG&#146;s consolidated
financial statements, represents an estimate of the future incremental salaries
to be received until the employees complete 35 years of contribution to the
National Social Security System (INSS), discounted at a rate of 12.00%, plus
the application of a variable discount rate.&#160;
The entire payment was recorded as a current period expense in 2006
since the payment was non-reimbursable in the event the employee leaves CEMIG,
and did not impose any performance requirements on employees.</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
response to the Staff&#146;s comment, CEMIG will revise its future filings on Form
20-F to disclose the rational for the accounting for the Anu&#234;nio payment.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in 12.0pt;text-align:center;text-autospace:none;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; *&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; *</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As
requested in your letter, CEMIG acknowledges the following:</font></p>

<p style="margin:0in 0in 12.0pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">CEMIG is
responsible for the adequacy and accuracy of the disclosure in the filing;</font></p>

<p style="margin:0in 0in 12.0pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Staff comments
or changes to disclosure in response to Staff comments do not foreclose the
Commission from taking any action with respect to the filing; and</font></p>

<p style="margin:0in 0in 12.0pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">CEMIG may not
assert Staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.</font></p>

<p align="center" style="margin:0in 0in 12.0pt;text-align:center;text-autospace:none;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; *&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; *</font></p>

<p style="margin:0in 0in 12.0pt;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Should
you have any questions about the responses in this letter, kindly contact the
undersigned at (212) 530-5224 or Steven Sandretto at (212) 530-5476.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="51%" valign="top" style="padding:0in .7pt 0in .7pt;width:51.12%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:48.88%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Very truly yours,</font></p>
  </td>
 </tr>
 <tr>
  <td width="51%" valign="top" style="padding:0in .7pt 0in .7pt;width:51.12%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:48.88%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="51%" valign="top" style="padding:0in .7pt 0in .7pt;width:51.12%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="24%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:24.44%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Michael L. Fitzgerald</font></p>
  </td>
  <td width="24%" valign="top" style="padding:0in .7pt 0in .7pt;width:24.44%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="51%" valign="top" style="padding:0in .7pt 0in .7pt;width:51.12%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:48.88%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="51%" valign="top" style="padding:0in .7pt 0in .7pt;width:51.12%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:48.88%;">
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael L. Fitzgerald</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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