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OPERATING COSTS AND EXPENSES | 12 Months Ended
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Dec. 31, 2021
Operating Costs And Expenses |
OPERATING COSTS AND EXPENSES |
| 28. | OPERATING COSTS AND EXPENSES
The operating costs are as follows: Schedule of operating costs and expenses
|  | 2021 |  | 2020 |  | 2019
Personnel (a) |  |  | 1,240 |  |  |  | 1,276 |  |  |  | 1,272 |
Employees’ and managers’ profit sharing |  |  | 134 |  |  |  | 142 |  |  |  | 263 |
Post-employment benefits (reversals) – Note 24 (1) |  |  | 16 |  |  |  | 438 |  |  |  | 408 |
Materials |  |  | 94 |  |  |  | 79 |  |  |  | 91 |
Outsourced services (b) |  |  | 1,450 |  |  |  | 1,265 |  |  |  | 1,239 |
Energy purchased for resale (c) |  |  | 16,101 |  |  |  | 12,111 |  |  |  | 11,286 |
Depreciation and amortization (2) |  |  | 1,049 |  |  |  | 989 |  |  |  | 958 |
Operating provisions and adjustments for operating losses (d) |  |  | 375 |  |  |  | 423 |  |  |  | 2,401 |
Charges for use of the national grid |  |  | 3,337 |  |  |  | 1,748 |  |  |  | 1,426 |
Gas bought for resale |  |  | 2,011 |  |  |  | 1,083 |  |  |  | 1,436 |
Construction costs (e) |  |  | 2,036 |  |  |  | 1,581 |  |  |  | 1,200 |
Other operating expenses, net (f) |  |  | 394 |  |  |  | 297 |  |  |  | 494 |
Operating costs and expenses |  |  | 28,237 |  |  |  | 21,432 |  |  |  | 22,474 |
| (1) | Due to the changes made in the Collective Work Agreement for 2021–23, for offer and payment of life insurance for the employees and former employees, the Company believes that the post-retirement benefit in question had been canceled, in its entirety, and as a result wrote down the balance of the obligation. More information, see Note 24.
| (2) | Net of PIS/Pasep and Cofins taxes applicable to amortization of the right-of-use assets in the amount of R$2.
| a) | Personnel
2021 Programmed Voluntary Retirement Plan (‘PDVP’) On May 2021, the Company approved the Programmed Voluntary Retirement Plan for 2021 (‘the 2021 PDVP’). All the employees are eligible to join the program, except as provided for in the Program, from May 10 to 31, 2021. The program provided the standard legal payments for voluntary termination of employment and a bonus, as an indemnity, which is calculated by the application of a percentage determined by the length of time the employee has worked for Cemig, on the current remuneration, for each year of employment, according to the Program terms, and, for those employees whose job tenure in Cemig is longer than 36 years, the value of 10.5 remunerations. The total amount of R$35 has been recorded as expense related to this program, corresponding to the enrollment of 324 employees.
| b) | Outsourced services
Schedule of outsourced services
|  | 2021 |  | 2020 |  | 2019
Meter reading and bill delivery |  |  | 134 |  |  |  | 127 |  |  |  | 128 |
Communication |  |  | 148 |  |  |  | 116 |  |  |  | 69 |
Maintenance and conservation of electrical facilities and equipment |  |  | 485 |  |  |  | 443 |  |  |  | 404 |
Building conservation and cleaning |  |  | 72 |  |  |  | 63 |  |  |  | 110 |
Security services |  |  | 17 |  |  |  | 19 |  |  |  | 18 |
Audit and consultant |  |  | 43 |  |  |  | 41 |  |  |  | 24 |
Information technology |  |  | 93 |  |  |  | 80 |  |  |  | 63 |
Disconnection and reconnection |  |  | 82 |  |  |  | 39 |  |  |  | 70 |
Legal services |  |  | 32 |  |  |  | 21 |  |  |  | 28 |
Tree pruning |  |  | 46 |  |  |  | 48 |  |  |  | 46 |
Cleaning of power line pathways |  |  | 92 |  |  |  | 75 |  |  |  | 61 |
Copying and legal publications |  |  | 18 |  |  |  | 17 |  |  |  | 21 |
Inspection of customer units |  |  | 33 |  |  |  | 35 |  |  |  | 14 |
Other expenses |  |  | 155 |  |  |  | 141 |  |  |  | 183 |
Outsourced services |  |  | 1,450 |  |  |  | 1,265 |  |  |  | 1,239 |
| c) | Energy purchased for resale
Schedule of electricity purchased for resale
|  | 2021 |  | 2020 |  | 2019
Supply from Itaipu Binacional |  |  | 1,946 |  |  |  | 1,990 |  |  |  | 1,429 |
Physical guarantee quota contracts |  |  | 832 |  |  |  | 780 |  |  |  | 715 |
Quotas for Angra I and II nuclear plants |  |  | 244 |  |  |  | 303 |  |  |  | 269 |
Spot market |  |  | 1,224 |  |  |  | 1,497 |  |  |  | 1,886 |
Proinfa Program |  |  | 401 |  |  |  | 318 |  |  |  | 376 |
‘Bilateral’ contracts |  |  | 418 |  |  |  | 333 |  |  |  | 311 |
Energy acquired in Regulated Market auctions |  |  | 6,242 |  |  |  | 3,334 |  |  |  | 3,021 |
Energy acquired in the Free Market |  |  | 4,976 |  |  |  | 3,977 |  |  |  | 4,098 |
Distributed generation (‘Geração distribuída’) |  |  | 1,268 |  |  |  | 678 |  |  |  | 207 |
PIS/Pasep and Cofins credits |  |  | (1,450 | ) |  |  | (1,099 | ) |  |  | (1,026 | )
|  |  | 16,101 |  |  |  | 12,111 |  |  |  | 11,286 |
| d) | Operating provision (reversals)
Schedule of operating provision (reversals)
|  | 2021 |  | 2020 |  | 2019
Estimated losses on doubtful accounts receivables (Note 7) (1) |  |  | 144 |  |  |  | 147 |  |  |  | 238 |
Estimated losses on other accounts receivables (2) |  |  | 21 |  |  |  | — |  |  |  | 11 |
Estimated losses on accounts receivables from related parties (4) |  |  | — |  |  |  | 37 |  |  |  | 688 |
Contingency provisions (reversals) (Note 25) (3) |  |  |  |  |  |  |  |  |  |  |  |
Labor claims |  |  | 35 |  |  |  | 46 |  |  |  | 136 |
Civil |  |  | 54 |  |  |  | 43 |  |  |  | 24 |
Tax |  |  | 2 |  |  |  | 75 |  |  |  | 1,228 |
Other |  |  | 19 |  |  |  | 22 |  |  |  | 12 |
|  |  | 110 |  |  |  | 186 |  |  |  | 1,400 |
|  |  | 275 |  |  |  | 370 |  |  |  | 2,337 |
Adjustment for losses |  |  |  |  |  |  |  |  |  |  |  |
Put option – SAAG (Note 31) |  |  | 100 |  |  |  | 53 |  |  |  | 64 |
|  |  | 100 |  |  |  | 53 |  |  |  | 64 |
|  |  | 375 |  |  |  | 423 |  |  |  | 2,401 |
| (1) | The expected losses on receivables are presented as selling expenses in the Statement of Income.
| (2) | This refers mainly to the estimated loss on credits for sharing of infrastructure (rental of overhead cable poles).
| (3) | The provisions for contingencies are presented in the consolidated Statement of income as operating expenses.
| (4) | Estimated losses on accounts receivable from Renova, as a result of the assessment of the jointly controlled entity credit risk.
| e) | Construction costs
Schedule of construction cost
|  | 2021 |  | 2020 |  | 2019
Personnel and managers |  |  | 100 |  |  |  | 83 |  |  |  | 85 |
Materials |  |  | 1,150 |  |  |  | 775 |  |  |  | 595 |
Outsourced services |  |  | 682 |  |  |  | 598 |  |  |  | 421 |
Others |  |  | 104 |  |  |  | 125 |  |  |  | 99 |
Construction cost |  |  | 2,036 |  |  |  | 1,581 |  |  |  | 1,200 |
| f) | Other operating expenses (revenues), net
Schedule of other operating expenses (revenues), net
|  | 2021 |  | 2020 |  | 2019
Leasing and rentals |  |  | 6 |  |  |  | 11 |  |  |  | 20 |
Advertising |  |  | 12 |  |  |  | 7 |  |  |  | 9 |
Own consumption of energy |  |  | 28 |  |  |  | 24 |  |  |  | 21 |
Subsidies and donations |  |  | 27 |  |  |  | 22 |  |  |  | 40 |
Onerous concession |  |  | 3 |  |  |  | 3 |  |  |  | 3 |
Insurance |  |  | 29 |  |  |  | 25 |  |  |  | 12 |
CCEE annual charge |  |  | 6 |  |  |  | 6 |  |  |  | 6 |
Net loss (gain) on deactivation and disposal of assets |  |  | 97 |  |  |  | 81 |  |  |  | 88 |
Forluz – Administrative running cost |  |  | 32 |  |  |  | 30 |  |  |  | 30 |
Collection agents |  |  | 85 |  |  |  | 86 |  |  |  | 88 |
Obligations deriving from investment contracts (1) |  |  | 11 |  |  |  | 9 |  |  |  | 32 |
Taxes and charges |  |  | 16 |  |  |  | 7 |  |  |  | 10 |
Losses (gains) on investments (2) |  |  | 40 |  |  |  | (13 | ) |  |  | — |
Other revenues (expenses) |  |  | 2 |  |  |  | (1 | ) |  |  | 135 |
Other operating expenses (revenues), net |  |  | 394 |  |  |  | 297 |  |  |  | 494 |
| (1) | This refers to claims under the agreement made between Aliança Geração, Vale S.A. and Cemig. The action is provisioned at the cost of R$149 (R$119 on December 31, 2020), of which Cemig is responsible for R$52 (R$41 on December 31, 2020).
| (2) | The Company injected capital into UHE Itaocara S.A., to assist in compliance with the final Arbitration Ruling against the investee, given by the FGV in its Mediation and Arbitration Chamber, in the amount of R$40. This amount is proportional to its shareholding interest in the investee, and was recognized under Other expenses in the Company’s income statement.

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