Macao, 27 April 2012

Throughout the years, CEM is committed to maintaining a stable tariff for Macao citizens. With the support of the Macao SAR Government, the Tariff Clause Adjustment (TCA) for Tariff A has been reduced for consecutively three and a half years to be lower than the contractual calculated value and despite huge increases of primary energy prices. A lower tariff has been maintained for 99% of the customers mainly residential and small & medium enterprises (SME) which fully reflects CEM’s commitment to Macao’s society.

However, the primary energy prices continued to have strong increases in 2011/2012. The rising cost of electricity importation, the continuous lack of natural gas supply and the upsurge prices of fuel oil have created great pressure on CEM’s operation and the electricity tariff. For example, the purchase price of fuel oil used for power generation increased 42% and the importation prices went up 9.5% in the past 12 months.

According to the calculation under the concession contract, the 2nd quarter TCA will be 49 cents per kWh. Taking into account the impact of the increase of TCA to the residential and SME customers, CEM decided to subsidize 13 cents (27%) of TCA for Tariff A, i.e., to reduce the TCA from 49 cents to 36 cents per kWh. This means that CEM will be subsidizing about MOP 100 million during the first semester of 2012.

On the other hand, TCA of Tariffs B, C and D, in accordance with the contractual calculated value, are set at 49 cents per kWh.

The increase of primary energy prices imposes great pressure on the electricity tariffs all over the world and in the nearby regions as well such as in Singapore, Taiwan and Hong Kong. The electricity tariff of Macao remains competitive. The tariff of Singapore is 61% higher than ours, Tokyo is 104% higher and Seoul is 170% higher. CEM remains committed to providing reliable power supply at reasonable prices, and also takes on wider responsibility of caring those in need in the community.