18. PROPERTY, PLANT AND EQUIPMENT


	2018							2017
	Historical cost		Accumulated depreciation			Net value		Historical cost		Accumulated depreciation			Net value
In service
Land		231		(16	)		215		225		(14	)		211
Reservoirs, dams and watercourses		3,282		(2,132	)		1,150		3,285		(2,051	)		1,234
Buildings, works and improvements		1,114		(800	)		314		1,117		(786	)		331
Machinery and equipment		2,773		(1,919	)		854		2,936		(2,062	)		874
Vehicles		32		(27	)		5		29		(26	)		3
Furniture and utensils		16		(12	)		4		16		(13	)		3

		7,448		(4,906	)		2,542		7,608		(4,952	)		2,656

In progress		120		—			120		106		—			106

Net property, plant and equipment		7,568		(4,906	)		2,662		7,714		(4,952	)		2,762

Changes in PP&E are as follows:


	2017		Additions		Disposals			Depreciation			Transfer to Held for sale			Adjustment for business combination		Transfers / capitalizations			2018
In service
Land		211		—		—			(2	)		—			—		6			215
Reservoirs, dams and watercourses		1,234		—		(2	)		(82	)		—			—		—			1,150
Buildings, works and improvements		331		—		—			(19	)		—			—		2			314
Machinery and equipment		874		—		(9	)		(70	)		(256	)		296		19			854
Vehicles		3		—					(2	)		—			—		4			5
Furniture and utensils		3		—		—			—			—			—		1			4

		2,656		—		(11	)		(175	)		(256	)		296		32			2,542

In progress		106		77		(22	)										(41	)		120

Net property, plant and equipment		2,762		77		(33	)		(175	)		(256	)		296		(9	)		2,662


	2016		Additions		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


	2015		Additions		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

The average annual depreciation rate for the year 2018 is 3.72% (3.14% in 2017 and 3.51% in 2016). Depreciation rates, which take into consideration the expected useful life of the assets, are revised annually by Management.


Generation	(%)		Administration	(%)
Reservoirs, dams and watercourses		2	Software		20
Buildings – Machine room		2	Vehicles		14.29
Buildings – Other		3.33	IT equipment in general		16.67
Generator		3.33	General equipment		6.25
Water turbine		2.5	Buildings – Other		3.33
Pressure tunnel		3.13
Command station, panel and cubicle		3.57
Town planning and improvements		3.33

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 indemnified 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.