Operating Costs and Expenses

12 Months Ended

Dec. 31, 2023

28.

OPERATING COSTS AND EXPENSES

The operating costs and expenses of the Company is as follows:

a) Cost of energy and gas


	2023			2022			2021
Energy purchased for resale
Supply from Itaipu Binacional		1,207			1,644			1,946
Physical guarantee quota contracts		918			925			832
Quotas for Angra I and II nuclear plants		364			357			244
Spot market		478			530			1,224
Proinfa Program		511			598			401
‘Bilateral’ contracts		510			493			418
Energy acquired in Regulated Market auctions		3,940			3,334			6,242
Energy acquired in the Free Market (1)		5,612			6,003			4,976
Distributed generation (‘Geração distribuída’)		2,331			1,977			1,268
PIS/Pasep and Cofins credits		(1,223	)		(1,247	)		(1,450	)

		14,648			14,614			16,101

Charges for use of the national grid
Transmission charges – Basic network		3,220			2,925			3,663
Distribution charges		54			50			41
PIS/Pasep and Cofins credits		(337	)		(304	)		(367	)

		2,937			2,671			3,337

Gas purchased for resale		2,237			2,735			2,011

Total		19,822			20,020			21,449

(1)

The energy acquired in the free environment by the Parent Company derives from the contracts transferred by Cemig GT, as a result of the process of partial segregation of the Company's energy trading business.

(2)

The price of the gas molecule acquired by Gasmig is corrected for the variation in Brent-type oil and the variation in the exchange rate.

b) Construction and infrastructure costs


	2023		2022		2021
Personnel and managers		155		135		100
Materials		2,007		2,233		1,150
Outsourced services		1,458		1,052		682
Others		452		116		104

Total		4,072		3,536		2,036

c) Operating costs and expenses


	Operating costs						Expected credit loss						General and administrative expenses						Other operating expenses (revenue)								2023			2022			2021
	2023		2022		2021		2023		2022		2021		2023		2022		2021		2023			2022			2021
Personnel		1,000		976		983		-		-		-		308		376		258		-			-			-		1,308			1,352			1,241
Employees’ and managers’ profit sharing		-		-		-		-		-		-		-		4		2		157			79			132		157			83			134
Post-employment benefits (note 24)		-		-		-		-		-		-		-		-		-		591			626			15		591			626			15
Materials		100		93		76		-		-		-		40		55		18		-			-			-		140			148			94
Outsourced services		1,652		1,433		1,265		-		-		-		250		273		185		-			-			-		1,902			1,706			1,450
Depreciation and amortization		1,247		1,110		947		-		-		-		27		72		102		-			-			-		1,274			1,182			1,049
Operating provisions and adjustments for operating losses		333		278		86		-		-		-		-		-		-		101			123			145		434			401			231
Expected credit losses of accounts receivable		-		-		-		175		109		144		-		-		-		-			-			-		175			109			144
Reversal of provision for doubtful with related party - Renova		-		-		-		-		-		-		-		-		-		1			(54	)		-		1			(54	)		-
Write-off of financial asset (note 14)		-		-		-		-		-		-		-		-		-		-			172			-		-			172			-
Gains arising from the sale of equity interest (2)		-		-		-		-		-		-		-		-		-		(319	)		(52	)		-		(319	)		(52	)		-
Other operation costs and expenses		240		205		81		-		-		-		82		9		7		182			182			306		504			396			394

Total		4,572		4,095		3,438		175		109		144		707		789		572		713			1,076			598		6,167			6,069			4,752

(1)

With the conclusion of the appraisal report, Cemig GT wrote off the financial asset in the amount of R$172 in the second quarter of 2022. This amount is presented in the Income Statements under "Other expenses, net".

(2)

Refers to the gains obtained on the sale of investments in 2023, of which R$261 refers to the sale of Baguari Energia, R$27 refers to the sale of Retiro Baixo and R$31 refers to the sale of the direct stake in MESA. Further details on these operations are disclosed in note 15.

C.1) Outsourced services



	2023		2022		2021
Meter reading and bill delivery		161		146		134
Communication		169		153		148
Maintenance and conservation of electrical facilities and equipment		708		589		485
Building conservation and cleaning		85		73		72
Security services		20		17		17
Consultancy		21		39		43
Information technology		174		146		93
Disconnection and reconnection		87		90		82
Legal services and procedural costs		32		40		32
Environment services		58		49		46
Cleaning of power line pathways		117		91		92
Copying and legal publications		17		18		18
Inspection of customers		45		41		33
Other		208		214		155

Total		1,902		1,706		1,450

C.2) Other costs and expenses, net



	2023		2022		2021
Leasing and rentals		3		16		6
Advertising		14		9		12
Own consumption		23		24		28
Subsidies and donations		29		26		27
Paid concessions		4		4		4
Insurance		22		24		29
CCEE annual charge		7		6		5
Forluz – Administrative running cost		40		36		32
Collecting agents		72		77		86
Net loss (gain) on deactivation and disposal of assets		210		127		99
Obligations deriving from investment contracts		3		3		11
Taxes (IPTU, IPVA and other)		10		8		16
Other (reversals) (1)		67		36		39
Total		504		396		394

(1)

The following expenses were recognized in 2023, posted in Other operational expenses: a regulatory fine of R$11 resulting from an ANEEL inspection in 2019 to check the procedures and criteria adopted by the Company in application of the conditions required by regulations established for Micro- and Mini-Distributed Generation; and financial compensation totaling R$85 for delay in the commercial services arising from alterations in ANEEL Normative Resolution 1000 of December 7, 2021.