
	2023							2022
	Historical cost		Accumulated depreciation			Net value		Historical cost		Accumulated depreciation			Net value
In service
Land		247		(33	)		214		247		(30	)		217
Reservoirs, dams and watercourses		3,323		(2,470	)		853		3,303		(2,433	)		870
Buildings, works and improvements		1,095		(868	)		227		1,092		(859	)		233
Machinery and equipment		2,826		(2,078	)		748		2,765		(2,059	)		706
Vehicles		19		(15	)		4		15		(13	)		2
Furniture and utensils		14		(11	)		3		14		(11	)		3

		7,524		(5,475	)		2,049		7,436		(5,405	)		2,031

In progress		1,207		-			1,207		379		-			379

Net property, plant and equipment		8,731		(5,475	)		3,256		7,815		(5,405	)		2,410

Changes in PP&E are as follows:


	2022		Additions (2)		Business Combination		Disposals - Assets classified as held for sale			Reversal of provision			Depreciation			Transfers / Capitalizations			2023
In service
Land (1)		217		-		-		(2	)		-			(3	)		2			214
Reservoirs, dams and watercourses		870		-		-		(22	)		-			(79	)		84			853
Buildings, works and improvements		233		-		-		(5	)		-			(17	)		16			227
Machinery and equipment		706		1		70		(29	)		(1	)		(69	)		70			748
Vehicles		2		-		-		-			-			(2	)		4			4
Furniture and utensils		3		-		-		-			-			-			-			3

		2,031		1		70		(58	)		(1	)		(170	)		176			2,049

In progress		380		1,005		-		-			(2	)		-			(176	)		1,207

Net property, plant and equipment		2,411		1,006		70		(58	)		(3	)		(170	)		-			3,256

(1)

Certain land linked to concession agreements with no indemnity provision is depreciated over the concession period.

(2)

This includes investments in the Boa Esperança and Jusante photovoltaic solar plants – respectively of R$369 and R$339.


	2021		Additions		Disposals			Depreciation			Transfers / Capitalizations			2022
In service
Land (1)		220		-		-			(3	)		-			217
Reservoirs, dams and watercourses		944		-		-			(81	)		7			870
Buildings, works and improvements		248		-		-			(17	)		2			233
Machinery and equipment		697		-		(12	)		(70	)		91			706
Vehicles		1		-		-			(1	)		2			2
Furniture and utensils		3		-		-			-			-			3

		2,113		-		(12	)		(172	)		102			2,031
In progress		306		176		-			-			(102	)		380

Net property, plant and equipment		2,419		176		(12	)		(172	)		-			2,411

(1)

Certain land linked to concession agreements with no indemnity provision is amortized over the concession period.


	2020		Additions		Disposals			Depreciation			Write-off (2)		Transfers / capitalizations			Reversion of provision		2021
In service
Land (1)		224		-		(1	)		(3	)		-		-			-		220
Reservoirs, dams and watercourses		1,020		-		-			(81	)		-		5			-		944
Buildings, works and improvements		264		-		-			(17	)		-		1			-		248
Machinery and equipment		717		-		(14	)		(69	)		-		63			43		697
Vehicles		2		-		-			(1	)		-		-			-		1
Furniture and utensils		3		-		-			-			-		-			-		3

		2,230		-		(15	)		(171	)		-		69			43		2,113
In progress		177		182		-			-			16		(69	)		-		306

Net property, plant and equipment		2,407		182		(15	)		(171	)		16		-			43		2,419

(1)

Certain land sites linked to concession contracts and without provision for reimbursement are amortized in accordance with the period of the concession.

(2)

Reversal of a provision previously recognized for impairment of works in progress assets.

Depreciation rates, which take into consideration the expected useful life of the assets, are revised annually by Management and are as follows:

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 the Company for the exception of the concession contracts related to Lot D of Auction 12/2015. Management believes that the amount 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.

The Company is a partner in an energy generation consortium for the Queimado plant, for which no separate company with independent legal existence was formed to manage the object of the concession. The Company’s portion in the consortium is recorded and controlled individually in the respective categories of PP&E and Intangible assets.

Property, plant and equipment are stated at the cost, including deemed cost, decommissioning costs and capitalized borrowing costs, less accumulated depreciation and impairment, if there is.

Gains and losses resulting from the disposal of a property, plant and equipment, are measured as the difference between the net proceeds obtained from the sale and the asset’s book value and are recognized in the Statement of income when the asset is disposed of.

The relevant components of certain assets that are replaced over the economic useful life of the main asset are recognized separately and depreciated over the estimated period until their replacement. Periodic maintenance costs are recognized in the income statement as incurred.

Depreciation is calculated on the balance of property, plant and equipment in service and investments in consortia, by the straight-line method, using the rates that reflect the estimated useful life of the assets, for assets related to energy activities, limited in certain circumstances to the periods of the related concession contracts.