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REVENUE | 12 Months Ended
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Dec. 31, 2021
REVENUE |
| 27. | REVENUE
Revenues are measured at the fair value of the consideration received or to be received and are recognized on a monthly basis as and when: (i) Rights and obligations of the contract with the customer are identified; (ii) the performance obligation of the contract is identified; (iii) the price for each transaction has been determined; (iv) the transaction price has been allocated to the performance obligations defined in the contract; and (v) the performance obligations have been complied. Schedule of net operating revenue
|  | 2021 |  | 2020 |  | 2019
Revenue from supply of energy (a) |  |  | 29,619 |  |  |  | 26,432 |  |  |  | 26,928 |
Revenue from use of the electricity distribution systems (TUSD) (b) |  |  | 3,448 |  |  |  | 3,022 |  |  |  | 2,722 |
CVA, and Other financial components (c) |  |  | 2,146 |  |  |  | 455 |  |  |  | 58 |
Reimbursement of PIS/Pasep and Cofins over ICMS credits to customers– realization (1) |  |  | 1,317 |  |  |  | 266 |  |  |  | — |
Transmission revenue |  |  |  |  |  |  |  |  |  |  |  |
Transmission operation and maintenance revenue (d) |  |  | 355 |  |  |  | 280 |  |  |  | 352 |
Transmission construction revenue (d) (note 14) |  |  | 252 |  |  |  | 201 |  |  |  | 312 |
Interest revenue arising from the financing component in the transmission contract asset (d) (note 14) |  |  | 660 |  |  |  | 438 |  |  |  | 328 |
Distribution construction revenue |  |  | 1,852 |  |  |  | 1,436 |  |  |  | 980 |
Adjustment to expectation of cash flow from indemnifiable financial assets of distribution concession (e) |  |  | 54 |  |  |  | 16 |  |  |  | 18 |
Revenue on financial updating of the Concession Grant Fee (f) |  |  | 523 |  |  |  | 347 |  |  |  | 318 |
Energy transactions on the CCEE (g) |  |  | 1,157 |  |  |  | 154 |  |  |  | 432 |
Mechanism for the sale of surplus (h) |  |  | 453 |  |  |  | 234 |  |  |  | — |
Supply of gas |  |  | 3,470 |  |  |  | 2,011 |  |  |  | 2,298 |
Fine for violation of service continuity indicator |  |  | (70 | ) |  |  | (51 | ) |  |  | (58 | )
Advances for services provided (i) |  |  | 154 |  |  |  | — |  |  |  | 1,428 |
Other operating revenues (j) |  |  | 1,935 |  |  |  | 1,709 |  |  |  | 1,721 |
Deductions on revenue (k) |  |  | (13,679 | ) |  |  | (11,722 | ) |  |  | (12,351 | )
Net revenue |  |  | 33,646 |  |  |  | 25,228 |  |  |  | 25,486 |
| (1) | For more information, see note 9a from these financial statements.
| a) | Revenue from energy supply
These items are recognized upon delivery of supply, based on the tariff specified in the contractual terms and approved by the grantor for each class of customer or in effect in the market. Unbilled supply of energy, from the period between the last billing and the end of each month, is estimated based on the supply contracted. For the distribution concession contract, the unbilled supply is estimated based on the volume of energy delivered but not yet billed. This table shows energy supply by type of customer:
|  | GWh (1) |  | R$
|  | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
Residential |  |  | 11,186 |  |  |  | 10,981 |  |  |  | 10,538 |  |  |  | 11,124 |  |  |  | 9,875 |  |  |  | 9,668 |
Industrial |  |  | 16,361 |  |  |  | 12,731 |  |  |  | 14,873 |  |  |  | 5,275 |  |  |  | 4,171 |  |  |  | 4,760 |
Commercial, services and others |  |  | 8,334 |  |  |  | 8,571 |  |  |  | 9,335 |  |  |  | 5,520 |  |  |  | 4,979 |  |  |  | 5,439 |
Rural |  |  | 3,975 |  |  |  | 3,766 |  |  |  | 3,795 |  |  |  | 2,566 |  |  |  | 2,190 |  |  |  | 2,058 |
Public authorities |  |  | 729 |  |  |  | 714 |  |  |  | 905 |  |  |  | 583 |  |  |  | 522 |  |  |  | 654 |
Public lighting |  |  | 1,226 |  |  |  | 1,243 |  |  |  | 1,357 |  |  |  | 718 |  |  |  | 550 |  |  |  | 614 |
Public services |  |  | 1,418 |  |  |  | 1,362 |  |  |  | 1,373 |  |  |  | 879 |  |  |  | 722 |  |  |  | 725 |
Subtotal |  |  | 43,229 |  |  |  | 39,368 |  |  |  | 42,176 |  |  |  | 26,665 |  |  |  | 23,009 |  |  |  | 23,918 |
Own consumption |  |  | 33 |  |  |  | 34 |  |  |  | 38 |  |  |  | — |  |  |  | — |  |  |  | — |
Unbilled revenue |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (14 | ) |  |  | 9 |  |  |  | 134 |
|  |  | 43,262 |  |  |  | 39,402 |  |  |  | 42,214 |  |  |  | 26,651 |  |  |  | 23,018 |  |  |  | 24,052 |
Wholesale supply to other concession holders (2) |  |  | 10,825 |  |  |  | 13,907 |  |  |  | 11,920 |  |  |  | 3,023 |  |  |  | 3,363 |  |  |  | 2,943 |
Wholesale supply unbilled, net |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (55 | ) |  |  | 51 |  |  |  | (67 | )
Total |  |  | 54,087 |  |  |  | 53,309 |  |  |  | 54,134 |  |  |  | 29,619 |  |  |  | 26,432 |  |  |  | 26,928 |
| (1) | Data not examined by external auditors.
| (2) | Includes a CCEAR (Regulated Market Sales Contract), ‘bilateral contracts’ with other agents, and the revenues from management of generation assets (GAG) for the 18 hydroelectric plants of Lot D of Auction no 12/2015.
| b) | Revenue from Use of the Distribution System (the TUSD charge)
These are recognized upon the distribution infrastructure becoming available to customers, and the fair value of the consideration is calculated according to the TUSD tariff of those customers, set by the grantor. The total amount of energy transported, in MWh, is as follows:
|  | GWh (1)
|  | 2021 |  | 2020 |  | 2019
Industrial |  |  | 20,447 |  |  |  | 18,612 |  |  |  | 17,723 |
Commercial |  |  | 1,535 |  |  |  | 1,300 |  |  |  | 1,320 |
Rural |  |  | 44 |  |  |  | 32 |  |  |  | 17 |
Public authorities |  |  | 4 |  |  |  | — |  |  |  | — |
Concessionaires |  |  | 310 |  |  |  | 315 |  |  |  | 341 |
Total |  |  | 22,340 |  |  |  | 20,259 |  |  |  | 19,401 |
| (1) | Data not audited by external auditors
| c) | The CVA account, and Other financial components
The results from variations in the CVA account (Parcel A Costs Variation Compensation Account), and in Other financial components in calculation of tariffs, refer to the positive and negative differences between the estimated non-manageable costs of the subsidiary Cemig D and the cost actually incurred. The amounts recognized arise from balances recorded in the current year, homologated or to be homologated in tariff adjustment processes. For more information please see Note 14.
| d) | Transmission concession revenue
| § | Construction revenue corresponds to the performance obligation to build the transmission infrastructure, recognized based on the satisfaction of performance obligation over time. They are measured based on the cost incurred, including PIS/Pasep and Cofins taxes over the total revenues and the profit margin of the project. For more information, see note 15.
| § | Operation and maintenance revenue corresponds to the performance obligation of operation and maintenance specified in the transmission concession contract, after termination of the construction phase. They are recognized when the services are rendered and he invoices for the RAPs are issued.
| § | Interest revenue in the contract asset recognized, recorded as transmission concession gross revenue in statement income. Revenue corresponds to the significant financing component in the contract asset and is recognized by the linear effective interest rate method based on the rate determined at the start of the investments, which is not subsequently changed. The average of the implicit rates is 6.86%. The rates are determined for each authorization and are applied on the amount to be received (future cash flow) over the contract duration. This includes financial updating by the inflation index specified for each transmission contract.
The margin defined for each performance obligation from the transmission concession contract is as follows:
|  | 2021 |  | 2020 |  | 2019 (1)
Construction and upgrades revenue |  |  | 252 |  |  |  | 201 |  |  |  | 312 |
Construction and upgrades costs |  |  | (183 | ) |  |  | (147 | ) |  |  | (220 | )
Margin |  |  | 69 |  |  |  | 54 |  |  |  | 92 |
Mark-up (%) |  |  | 37.40 | % |  |  | 36.73 | % |  |  | 41.82 | %
Operation and maintenance revenue |  |  | 355 |  |  |  | 279 |  |  |  | 352 |
Operation and maintenance cost |  |  | (235 | ) |  |  | (223 | ) |  |  | (388 | )
Margin |  |  | 120 |  |  |  | 56 |  |  |  | (36 | )
Mark-up (%) |  |  | 50.88 | % |  |  | 25,11 | % |  |  | (9.28 | %)
| (1) | The negative margin observed in 2019 related to the performance obligation to operate and maintain is due the recognition of the non-recurring tax provision, in the amount of R$135.
| e) | Adjustment to expected cash flow from financial assets on residual value of infrastructure asses of distribution concessions
Income from fair value change of the Regulatory Remuneration Asset Base.
| f) | Revenue on financial updating of the Concession Grant Fee
Represents the inflation adjustment using the IPCA inflation index, plus interest, on the Concession Grant Fee for the concession awarded as Lot D of Auction 12/2015. See Note 14.
| g) | Energy transactions on the CCEE (Power Trading Chamber)
The revenue from transactions made through the Power Trading Chamber (Câmara de Comercialização de Energia Elétrica, or CCEE) is the monthly positive net balance of settlements of transactions for purchase and sale of energy in the Spot Market, through the CCEE, for which the consideration corresponds to the product of energy sold at the Spot Price.
| h) | Mechanism for the sale of energy surplus
The revenue from the surplus sale mechanism (‘Mecanismo de Venda de Excedentes – MVE’) refers to the sale of power surpluses by distributor agents. This mechanism is an instrument regulated by Aneel enabling distributors to sell over contracted supply – the energy amount that exceeds the quantity required to supply captive customers.
| i) | Advances for services provided
Corresponds to the negotiation with a free customer that resulted in a revenue recognition related to trading services provided in advance by the subsidiary ESCEE.
| j) | Other operating revenues
|  | 2021 |  | 2020 |  | 2019
Charged service |  |  | 17 |  |  |  | 11 |  |  |  | 17 |
Services rendered |  |  | 53 |  |  |  | 139 |  |  |  | 183 |
Subsidies (1) |  |  | 1,592 |  |  |  | 1,395 |  |  |  | 1,266 |
Rental and leasing |  |  | 211 |  |  |  | 164 |  |  |  | 189 |
Reimbursement for decontracted supply (2) |  |  | 27 |  |  |  | — |  |  |  | 65 |
Other |  |  | 35 |  |  |  | — |  |  |  | 1 |
Total |  |  | 1,935 |  |  |  | 1,709 |  |  |  | 1,721 |
| (1) | Includes the revenue recognized for the tariff subsidies applied to users of the distribution system, in the amount of R$986 in 2021 (R$1,035 in 2020). Includes the subsidies for sources that are subject to incentive, rural, irrigators, public services and the generation sources that are subject to the incentive; and also includes the tariff flag revenue in the amount of R$108 in 2021, recognized because of the creditor position assumed by the Company in CCRBT; and revenue recognized arising from subsidies, in the amount of R$205, relating to the Program to Encourage Voluntary Reduction of Energy Consumption.
| (2) | Reimbursement for suspension of energy supply –Renova.
| k) | Deductions on revenue
|  | 2021 |  | 2020 |  | 2019
Taxes on revenue |  |  |  |  |  |  |  |  |  |  |  |
ICMS |  |  | 6,993 |  |  |  | 6,098 |  |  |  | 6,358 |
Cofins |  |  | 2,842 |  |  |  | 2,214 |  |  |  | 2,408 |
PIS/Pasep |  |  | 618 |  |  |  | 481 |  |  |  | 524 |
Others |  |  | 11 |  |  |  | 5 |  |  |  | 7 |
|  |  | 10,464 |  |  |  | 8,798 |  |  |  | 9,297 |
Charges to the customer |  |  |  |  |  |  |  |  |  |  |  |
Global Reversion Reserve (RGR) |  |  | 15 |  |  |  | 16 |  |  |  | 16 |
Energy Efficiency Program (PEE) |  |  | 74 |  |  |  | 73 |  |  |  | 69 |
Energy Development Account (CDE) |  |  | 2,658 |  |  |  | 2,443 |  |  |  | 2,448 |
Research and Development (R&D) |  |  | 34 |  |  |  | 43 |  |  |  | 41 |
National Scientific and Technological Development Fund (FNDCT) |  |  | 55 |  |  |  | 43 |  |  |  | 41 |
Energy System Expansion Research (EPE of MME) |  |  | 27 |  |  |  | 21 |  |  |  | 20 |
Customer charges – Proinfa alternative sources program |  |  | 66 |  |  |  | 39 |  |  |  | 52 |
Energy services inspection fee |  |  | 35 |  |  |  | 35 |  |  |  | 30 |
Royalties for use of water resources |  |  | 37 |  |  |  | 62 |  |  |  | 43 |
Customer charges – the ‘Flag Tariff’ system |  |  | 162 |  |  |  | 149 |  |  |  | 294 |
CDE on R&D |  |  | 21 |  |  |  | — |  |  |  | — |
CDE on PEE |  |  | 31 |  |  |  | — |  |  |  | — |
|  |  | 3,215 |  |  |  | 2,924 |  |  |  | 3,054 |
|  |  | 13,679 |  |  |  | 11,722 |  |  |  | 12,351 |

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- Definition The entire disclosure for revenue. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Name IAS -Number 1 -IssueDate 2021-01-01 -Paragraph 10 -Subparagraph e -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=1&code=ifrs-tx-2021-en-r&anchor=para_10_e&doctype=Standard -URIDate 2021-03-24 + Details
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