29. OPERATING COSTS AND EXPENSES

The operating costs are as follows:


	2018		2017			2016
Personnel (a)		1,410		1,627			1,643
Employees’ and managers’ profit sharing		77		5			7
Post-employment benefits – Note 24		337		(229	)		345
Materials		104		61			58
Raw materials and inputs for production of energy		—		10			—
Outsourced services (b)		1,087		974			867
Energy bought for resale (c)		11,084		10,919			8,273
Depreciation and amortization		835		850			834
Operating provisions (reversals) and adjustments for operating losses (d)		466		854			704
Charges for use of the national grid		1,480		1,174			947
Gas bought for resale		1,238		1,071			878
Construction costs (e)		897		1,119			1,193
Other operating expenses, net (f)		405		383			155

		19,420		18,818			15,904

For details about the discontinued operating costs and expenses, see Note 33.

a)	Personnel

2018 Programmed Voluntary Retirement Plan (‘PDVP’)

On March 2018, the Company approved the Programmed Voluntary Retirement Plan (‘the 2018 PDVP’). Those eligible to take part were any employees who will have worked with the Company for 25 years or more by December 31, 2018, and would join the program between April 2 and 30, 2018. The program will pay the standard legal payments for severance – including: payment for the period of notice, and especially, an amount equal to the ‘penalty’ payment of 40% of the base value of the employee’s FGTS fund, as well as the other payments under the legislation, but with no additional premium.

The amount appropriated as expense in the year for this program, including the severance payments, was R$ 26, corresponding to acceptance of the plan by 151 employees.

In 2017, the amount appropriated as expense on the 2017 PDVP (including severance payments) was R$ 214, corresponding to acceptance of the plan by 1,189 employees. In 2016, the amount appropriated to Personnel as expense on the PDVP in effect at that time was R$ 93.

2019 Programmed Voluntary Retirement Plan (‘PDVP’)

On December 2018, the Company launched the Programmed Voluntary Retirement Plan for 2019 (‘the 2019 PDVP’). Those eligible – any employees who had worked with the Company for 25 years or more by December 31, 2018 – were able to join from January 7 to 31, 2019. The program will pay the standard legal payments for severance – including: payment for the period of notice, and especially, an amount equal to the ‘penalty’ payment of 40% of the Base Value of the employee’s FGTS fund, as well as the other payments under the legislation, but with no additional premium.

A total of R$ 66 has been appropriated as expense in 2018 related to the 2019 PDVP, including severance payments, corresponding to acceptance by 458 employees.

2019 Programmed Voluntary Retirement Plan (‘PDVP’) reopened

On March 2019 the Company launch again the 2019 PDVP program, for those joining between April 1 and 10, 2019, with some changes in the requirements for joining, but with the same financial conditions. A total of R$ 21 has been appropriated as expense in 2019 related to the relaunch of 2019 PDVP, including severance payments, corresponding to acceptance by 155 employees.

b) Outsourced services


	2018		2017		2016
Meter reading and bill delivery		129		142		140
Communication		80		66		55
Maintenance and conservation of electrical facilities and equipment		323		266		246
Building conservation and cleaning		110		108		97
Contracted labor		21		15		13
Freight and airfares		7		8		7
Accommodation and meals		12		13		13
Security services		20		23		25
Consultant		16		16		15
Maintenance and conservation of furniture and utensils		4		4		4
Information technology		59		62		49
Maintenance and conservation of vehicles		2		2		8
Disconnection and reconnection		62		35		7
Environmental services		14		11		19
Legal services		25		22		26
Legal procedural costs		2		3		4
Tree pruning		28		21		14
Cleaning of power line pathways		41		16		8
Copying and legal publications		21		23		16
Inspection of customer units		10		1		1
Printing of tax invoices and energy bills		—		3		3
Other expenses		101		114		97

		1,087		974		867

c) Energy purchased for resale


	2018			2017			2016
Supply from Itaipu Binacional		1,351			1,243			1,144
Physical guarantee quota contracts		679			461			537
Quotas for Angra I and II nuclear plants		267			244			217
Spot market		1,818			1,498			761
Proinfa Program		324			303			323
‘Bilateral’ contracts		484			385			292
Energy acquired in Regulated Market auctions		3,346			3,555			2,540
Energy acquired in the Free Market		3,871			4,283			3,279
Pasep and Cofins credits		(1,056	)		(1,053	)		(820	)

		11,084			10,919			8,273

d) Operating provision (reversals) and adjustments for operating losses


	2018			2017			2016
Estimated losses on doubtful accounts receivables (Note 8)		264			248			382
Estimated losses on other accounts receivables		(4	)		27			40
Contingency provisions (reversals) (Note 25)
Labor claims		42			206			120
Civil		13			27			30
Tax		(5	)		7			2
Environmental		1			—			—
Regulatory		(2	)		(3	)		—
Other		2			(6	)		31

		51			231			183

		311			506			605

Adjustment for losses
Put option – Sonda		—			1			(5	)
Put option – RME and LEPSA (Note 32)		48			231			55
Put option – SAAG (Note 32)		107			116			49

		155			348			99

		466			854			704

e) Construction costs


	2018		2017		2016
Personnel and managers		70		36		58
Materials		379		550		534
Outsourced services		364		406		448
Others		84		127		153

		897		1,119		1,193

f) Other operating expenses (revenues), net


	2018		2017			2016
Leasing and rentals		93		103			112
Advertising		19		30			13
Own consumption of energy		27		24			22
Subsidies and donations		22		19			17
Onerous concession		3		3			3
Insurance		7		8			9
CCEE annual charge		6		8			8
Net loss (gain) on deactivation and disposal of assets		7		193			112
Forluz – Administrative running cost		28		26			25
Collection agents		78		71			70
Gain on disposal, Taesa (1)		—		(207	)		(181	)
Gain on disposal, Transchile		—		—			(134	)
Fine for violation of service continuity standard (2)		—		42			—
Taxes and charges		9		—			—
Other expenses		106		63			79

		405		383			155

(1)	On 2017 and 2016 the Company sold part of its equity interest in the jointly-controlled entity Taesa.

(2)	As stated in Note 2.2, as from January 1, 2018 these amounts started to be recognized as reduction of revenue instead of operational expenses, as per a change contained in IFRS 15.

Operating leasing

The Company and its subsidiaries have operating lease contracts relating to, mainly, vehicles and buildings used in its operating activities. Related amounts are not material in relation to the total costs of the Company.