17.

PROPERTY, PLANT AND EQUIPMENT


	2017							2016
	Historical cost		Accumulated depreciation			Net value		Historical cost		Accumulated depreciation			Net value
In service
Land		225		(14	)		211		287		(8	)		279
Reservoirs, dams and watercourses		3,285		(2,051	)		1,234		5,347		(3,586	)		1,761
Buildings, works and improvements		1,117		(786	)		331		1,789		(1,371	)		418
Machinery and equipment		2,936		(2,062	)		874		4,519		(3,347	)		1,172
Vehicles		29		(26	)		3		29		(25	)		4
Furniture and utensils		16		(13	)		3		15		(12	)		3

		7,608		(4,952	)		2,656		11,986		(8,349	)		3,637
In progress		106		—			106		138		—			138

Net property, plant and equipment		7,714		(4,952	)		2,762		12,124		(8,349	)		3,775

This table shows the changes in PP&E:


	2016		Addition		Jaguara, Miranda and Volta Grande Plants (1)			Disposals			Depreciation			Transfers / capitalizations			2017
In service
Land		279		—		(61	)		(1	)		(6	)		—			211
Reservoirs, dams and watercourses		1,761		—		(441	)		(4	)		(85	)		3			1,234
Buildings, works and improvements		418		—		(69	)		—			(20	)		2			331
Machinery and equipment		1,172		—		(305	)		(5	)		(93	)		105			874
Vehicles		4		—		—			—			(1	)		—			3
Furniture and utensils		3		—		—			—			—			—			3

		3,637		—		(876	)		(10	)		(205	)		110			2,656
In progress		138		83					(17	)		—			(98	)		106

Net property, plant and equipment		3,775		83		(876	)		(27	)		(205	)		12			2,762

(1)	Transferred to Concession financial assets , in relation to the Jaguara, Miranda and Volta Grande Plants (more details in Note 15).


	2015		Addition		Disposals			Depreciation			Transfers / capitalizations			2016
In service
Land		279		—		—			—			—			279
Reservoirs, dams and watercourses		1,830		—		—			(99	)		30			1,761
Buildings, works and improvements		437		—		(1	)		(23	)		5			418
Machinery and equipment		1,192		—		(42	)		(110	)		132			1,172
Vehicles		8		—		—			(2	)		(2	)		4
Furniture and utensils		4		—		—			—			(1	)		3

		3,750		—		(43	)		(234	)		164			3,637
In progress		190		120		(13	)		—			(159	)		138

Net property, plant and equipment		3,940		120		(56	)		(234	)		5			3,775


	2014		Additions		Disposals			Transfer of assets to Aliança Geração de Energia			Indemnity receivable			Depreciation			Transfers to Other long term assets			Transfers / capitalizations			2015
In service
Land		372		—		(12	)		(41	)		(16	)		(3	)		(17	)		(4	)		279
Reservoirs, dams and water courses		2,261		—		—			(163	)		(46	)		(127	)		(102	)		7			1,830
Buildings, works and improvements		609		—		(1	)		(116	)		(17	)		(32	)		(13	)		7			437
Machinery and equipment		2,053		—		(3	)		(308	)		(466	)		(149	)		(69	)		134			1,192
Vehicles		9		—		—			—			—			(3	)		—			2			8
Furniture and utensils		5		—		—			—			—			—			—			(1	)		4

		5,309		—		(16	)		(628	)		(545	)		(314	)		(201	)		145			3,750
In progress		235		126		(4	)		(3	)		(1	)		(1	)		(22	)		(140	)		190

Net PP&E		5,544		126		(20	)		(631	)		(546	)		(315	)		(223	)		5			3,940

The average annual depreciation rate for the year 2017 is 3.14% (cf. 3.51% in 2016 and 3.39% in 2015). Depreciation rates, which take into consideration the expected useful life of the assets, are revised annually by Management.

The Company has not identified any evidence of impairment of its Property, plant and equipment assets. The generation concession contracts provide that at the end of each concession the grantor must determine the amount to be paid to Cemig GT for the residual value of the infrastructure assets. Management believes that the amounts ultimately received will be higher than the historical residual value.

The residual value of the assets is the residual balance of the assets at the end of the concession contract which will be transferred to the grantor at the end of the concession contract and for which Cemig is entitled to receive in cash. For contracts under which Cemig does not have a right to receive such amounts or there is uncertainty related to collection of the amounts, such as in the case of thermal generation and hydroelectric generation as an independent power producer, no residual value is recognized, and the depreciation rates are adjusted so that all the assets are depreciated within the concession term.

Consortium

Cemig GT is a partner in the electricity generation consortium for the Queimado plant, for which no separate company with independent legal existence was formed to manage the object of the concession, whose controls are being kept in Fixed assets and Intangible assets. Cemig GT’s portion in the consortium is recorded and controlled separately in the respective categories of PP&E and Intangible assets.


	Interest in power output, %		Average annual depreciation rate %		2017			2016
In service
Queimado plant		82.50		4.0		217			217
Accumulated depreciation		—		—		(91	)		(90	)

Total in operation						126			127