Companhia Energética de Minas Gerais – CEMIG involves the generation, transmission, distribution and sale of energy, gas distribution and the providing of energy solutions.
Segments
The segment information is disclosed separately into the following six reportable segments:
Generation: Comprises production of energy from hydroelectric, wind, and solar facilities, being characterized for the sale of the energy produced by the company itself in the Regulated Market ('ACR'); under physical guaran...
Companhia Energética de Minas Gerais – CEMIG involves the generation, transmission, distribution and sale of energy, gas distribution and the providing of energy solutions.
Segments
The segment information is disclosed separately into the following six reportable segments:
Generation: Comprises production of energy from hydroelectric, wind, and solar facilities, being characterized for the sale of the energy produced by the company itself in the Regulated Market ('ACR'); under physical guarantee quotas; and to the segment of Trading.
Transmission: Comprises construction, operation, and maintenance of transmission lines and substations.
Trading: Comprises the sale of energy to free customers and the provision of related services. To serve the market, the trading segment buys energy from the Generation segment, and/or from parties outside the CEMIG Group.
Distribution: Comprises the distribution and sale of energy to captive customers, and the operation and maintenance of infrastructure and related services.
Gas: This business segment includes commercial operation of industrial, institutional, and residential distribution and sale of piped gas in the State of Minas Gerais.
Investees: Comprises management of the equity interests in jointly controlled entities, in line with the company's business strategies. The results of CEMIG, through its holding activities, and of the subsidiary CEMIG Sim are also included in this segment.
CEMIG
The company is engaged in transactions to buy and sell energy through its subsidiaries. The total volume of energy resourced in 2024 was 100,604 GWh. The amount of energy produced by the company in 2024 was 8,923 GWh. The amount of energy purchased by the company in 2024 was 91,681 GWh. These figures include purchases from Itaipu of 5,455 GWh in 2024. Through the Energy Trading Chamber (Câmara de Comercialização de Energia Elétrica, or 'CCEE') and from other companies, the company purchased 86,226 GWh in 2024. From the generated and purchased resources in 2024, 43,396 GWh, or 44.3% of them, were energy delivered to final customers, both captive and free.
Generation
The electric power generation business consists of the generation of energy using renewable energy sources (water, wind, sun, and biomass).
As of December 31, 2024, the company was one of the largest energy generation groups in Brazil, by total installed capacity. As of that date, the company was generating energy at 36 hydroelectric plants (small hydroelectric power plants ('PCH') and hydroelectric power plants ('UHE')), wind plants, and solar plants, with total installed capacity of over 4,679 MW, with plants present in five states of Brazil. The vast majority of the company’s capacity is generated at hydroelectric plants (95.1% of installed capacity), with the remaining being generated by solar plants (3.4%) and wind plants (1.5%).
Transmission
The transmission business consists of transporting energy power from the facilities where it is generated to points of consumption, distribution networks, and free customers. Its revenue depends directly on the availability of its assets. The transmission network comprises energy transmission lines and substations with voltage of 230 kV or more, and is part of the Brazilian Grid regulated by ANEEL and operated by the ONS.
Distribution
Within the CEMIG Group, energy distribution activities are conducted by a wholly owned subsidiary, CEMIG Distribution ('CEMIG D').
CEMIG D has five public service energy distribution concession contracts in the State of Minas Gerais, granting rights to the commercial operation of services related to the supply of energy to customers in the regulated ACR market in municipalities in its concession area, including customers that may be eligible, under the legislation, to become customers in the free market (Ambiente de Contratação Livre-ACL, the 'Free Market').
CEMIG D's concession area covers 219,104 square miles, or 96.7% of the territory of the State of Minas Gerais. On December 31, 2024, CEMIG D's energy system consisted of 357,044 miles of distribution lines, through which it supplied 23,487 GWh to 9,400,734 regulated customers and transported 25,622 GWh to 4,368 free customers that use the company’s distribution networks. The total volume of energy distributed was 49,109 GWh, of which 47.4% was distributed to regulated and free industrial customers, 13.0% to regulated and free commercial customers, 25.9% to regulated residential customers, and 13.7% to other regulated and free customers.
Other Businesses
While the company’s main business consists of the generation, transmission, and distribution of energy, it also engages in the following businesses: distributed generation, account services, cogeneration, energy efficiency (with Energy Efficiency Program resources - Programa de Eficiência Energética, or 'PEE'), supply and storage management, through its subsidiary CEMIG Soluções Inteligentes em Energia-CEMIG SIM; sale and trading of energy, through structuring and intermediation of purchase and sale transactions, trading energy in the Free Market, through its wholly-owned subsidiaries CEMIG Trading S.A. and Empresa de Serviços de Comercialização de Energia Elétrica S.A.; and acquisition, transport, and distribution of gas and its sub-products and derivatives through Companhia de Gás de Minas Gerais ('Gasmig').
Power Generation and Trading
CEMIG's top five power plants accounted for over 81.4% of its installed energy generation capacity as of December 31, 2024.
CEMIG's market consists of sales of energy to: regulated customers in CEMIG's concession area in the State of Minas Gerais; free customers both in the State of Minas Gerais and other States of Brazil, through the Free Market; other agents of the energy sector - traders, generators, and independent power producers, also in the Free Market; distributors in the Regulated Market; and CCEE (eliminating transactions between companies of the CEMIG Group).
The total volume of transactions in energy, during the year ended December 31, 2024, was 100,604 GWh.
Generation Assets
As of December 31, 2024, the subsidiaries, jointly controlled entities, and affiliates of CEMIG operated 36 hydro plants (4,449.0 MW), 2 wind farms (70.8 MW), and 10 photovoltaic power stations (158.99 MW), totaling 4,679 MW.
The company has incorporated subsidiaries in the State of Minas Gerais and other states in Brazil to operate certain of the company’s generation facilities and to hold the related concessions.
The following are companies in which CEMIG GT owns 100% of the equity:
CEMIG Geração Camargos S.A., CEMIG Geração Itutinga S.A., CEMIG Geração Leste S.A., CEMIG Geração Oeste S.A., CEMIG Geração Salto Grande S.A., CEMIG Geração Sul S.A., and CEMIG Geração Três Marias S.A. In 2016, CEMIG GT transferred these companies to seven Special Purpose Entities ('SPEs') to hold the concession contracts for 18 hydroelectric plants won in the auction the year before. The total installed generation capacity secured to CEMIG GT's portfolio was 699.6 MW. On May 31, 2023, CEMIG Geração Salto Grande S.A. and CEMIG Geração Três Marias S.A. were merged into CEMIG GT;
CEMIG PCH S.A. - Independent power producer, operating the Pai Joaquim small hydroelectric power plant;
Rosal Energia S.A. - Concession holder operating the Rosal hydro plant, on the border between the States of Rio de Janeiro and Espírito Santo;
Sá Carvalho S.A. - Production and sale of energy as a public energy service concession holder, through the Sá Carvalho hydroelectric power plant;
CEMIG Geração Poço Fundo S.A. - Independent power producer, operating the Poço Fundo small hydro power plant, in Minas Gerais state, which assets were transferred from CEMIG GT.
The generation companies in which CEMIG GT has joint control are:
Aliança Norte Energia Participações S.A. (49%) - together with Vale (51%), the company holds participation of 9% of Norte Energia S.A., holder of the concession to operate the Belo Monte hydroelectric plant, corresponding to an indirect equity interest of 4.41% and representing an installed capacity of 495 MW;
Amazônia Energia Participações S.A. (49% of voting share, 74.5% of total capital) - owned jointly with Light (25.5%), holds 9.77% of Norte Energia S.A., representing an installed capacity of 818 MW indirectly held by CEMIG GT;
Hidrelétrica Cachoeirão S.A. (49%) - an independent power producer operating the Cachoeirão SHP, located at Pocrane, in the State of Minas Gerais. The other 51% is held by Santa Maria Energética;
Hidrelétrica Pipoca S.A. (49%) - an independent power producer that built and operates the Pipoca SHP, on the Manhuaçu River, in the municipalities of Caratinga and Ipanema, in the State of Minas Gerais. The other 51% is held by Serena Energia S.A.;
Paracambi Energética S.A. (was denominated Lightger S.A. up to October 2022) (49%) - independent power producer, formed to build and operate the Paracambi SHP (or PCH), on the Ribeirão das Lages river in the county of Paracambi, in the state of Rio de Janeiro. The remaining 51% shareholding is owned by Light;
Guanhães Energia S.A. (49%) - Guanhães Energia S.A. is a jointly-controlled entity, which has four wholly-owned subsidiaries - PCH Dores de Guanhães S.A., PCH Senhora do Porto S.A., PCH Jacaré S.A., and PCH Fortuna II S.A. Guanhães Energia S.A. is engaged in commercial operation of these four SHPs. Three of them - Dores de Guanhães, Senhora do Porto, and Jacaré - are in the municipality of Dores de Guanhães; and one, Fortuna II, is in the municipalities of Virginópolis and Guanhães, all in the State of Minas Gerais. In July 2021, the project reached its 44 MW aggregate installed capacity;
Queimado Hydroelectric Power Plant - CEMIG GT holds an 82.5% interest in this entity and the company’s partner in this project is CEB Participações S.A. ('CEBPar'), a subsidiary of Companhia Energética de Brasilia ('CEB'), which owns 17.5% equity interest in the plant.
Wind Farms
Wind farms have become one of the most promising power generation sources in Brazil. In addition to their low environmental impact, this source of energy is completely renewable and widely available in Brazil, according to numerous studies of potential wind power. Its rapid technical development over recent decades has successfully reduced costs per MWh in comparison to other power generation sources. CEMIG has monitored and observed the rapid evolution of wind energy and its inclusion in the range of Brazilian energy supply sources.
CEMIG GT owns 100% of the equity in the following companies with wind farms investments:
Central Eólica Praias de Parajuru S.A. and Central Eólica Volta do Rio - wind farms located in the State of Ceará with a total installed capacity of 70.8 MW.
Expansion of Generation Capacity
Poço Fundo
On February 5, 2019, the Brazilian electricity regulatory agency ANEEL approved an expansion of installed capacity of Poço Fundo, a Small Hydroelectric Power Plant located on the Machado River, in the state of Minas Gerais, from 9.16 MW to 30 MW. Additionally, the concession was extended until May 27, 2052. The plant consists of two generating units of 15 MW each.
Expansion works had been underway since January 2020. The first-generation unit began its commercial operation on September 30, 2022, and the second on October 1, 2022.
PV Advogado Eduardo Soares
On July 5, 2024, the operation of photovoltaic plant Advogado Eduardo Soares was initiated. This is the first Centralized Generation solar plant designed and built by CEMIG GT. This plant is fully in commercial operation by CEMIG GT. The investment amount between 2022 and 2024 was R$447 million. The plant has a capacity of 100.4 MWp and it is located on a site owned by the company at Montes Claros, Minas Gerais. This plant is fully in commercial operation.
PV Jusante
On October 12, 2024, the operation of the photovoltaic plant Jusante was initiated. The Jusante photovoltaic project is a photovoltaic complex composed of seven plants, each one of 12.4 MWp, totaling 87 MWp of installed capacity, and it is located on a site owned by the company in São Gonçalo do Abaeté, Minas Gerais, near the Hydro Plant Três Marias. Plant 4 is in test operation and is expected to start commercial operation by the end of the second quarter of 2025.
The implementation of these plants is in accordance with the CEMIG group's strategic planning, strengthening its generation from renewable sources, with profitability compatible with the company’s cost of capital for this type of project.
CEMIG SIM
CEMIG SIM, a wholly owned subsidiary of CEMIG that operates in distributed generation and energy solutions. Currently, CEMIG SIM has reached 35,500 customers.
Transmission
The transmission business consists of transferring energy from generation power plants to customers directly connected to the basic transmission grid, free customers, and distributors. The transmission system comprises transmission lines and step-down substations with voltages ranging from 230 kV to 500 kV.
All the basic transmission grid users, including generators, distributors, free customers, and others, execute contracts for the use of the transmission system - CUST with the ONS, and make payments to the transmission companies for making available the use of their basic transmission grid equipment.
Transmissora Aliança de Energia Elétrica S.A. - Taesa is a private company jointly controlled by CEMIG, which holds 36.97% of the voting capital and 21.68% of the total capital of Taesa, and by ISA Investimentos e Participações do Brasil S.A., which holds 14.88% of the total capital.
On December 23, 2021, CEMIG completed acquisition of the totality of the equity interests held by Cobra Brasil Serviços, Comunicações e Energia S.A. and Cobra Instalaciones y Servicios S.A. in Sete Lagoas Transmissora de Energia S.A. ('SLTE'), becoming the holder of 100% of the shares in that company. SLTE acquired the concession for Lot H in ANEEL Auction 8/2010 for construction and operation of the Sete Lagoas 4 substation. The concession period of Sete Lagoas 4 substation started from June 2014 until June 2041.
Distribution and Purchase of Electric Power
The company’s distribution operation consists of transfers of energy from distribution substations to final customers. The company’s distribution network comprises a widespread network of overhead and underground lines and substations with voltages lower than 230 kV. The company supplies energy to small industrial customers, at the higher end of the voltage range, and to residential and commercial customers at the lower end of the range.
Expansion of Distribution Capacity
The company’s five-year distribution expansion plan, comprising 2023 to 2027, is based on market growth projections. To accommodate this growth, the company plans to add distribution lines, up to 41,850 miles of medium and low voltage, and 2,175 miles of high voltage; 127 descending substations, adding 2,800 MVA to the company’s distribution network.
Purchase of Electric Power
During the year ended December 31, 2024, the company purchased 5,455 GWh of energy from Itaipu, which represented 12.6% of the energy sold to final users, and 532 GWh (1.2%) of energy from PROINFA. The company also purchased 1,082 GWh under Nuclear Energy Quota Contracts - Contratos de Cotas de Energia Nuclear, or 'CCENs' (2.5%), and 5,025 GWh of energy under Assured Energy Quota Contracts - Contratos de Cota de Garantia Física, or 'CCGFs' (11.6%). In addition to this compulsory purchase, the company has two other types of supply arrangements: purchases of 19,148 GWh through public auctions, which accounted for 20.9% of the energy purchased for resale; and purchases of 1,367 GWh through long-term agreements existing prior to the New Industry Model Law, which represented 1.5% of the energy purchased in 2023.
Itaipu: Itaipu is one of the largest operational hydroelectric plants in the world, with an installed capacity of 14,000 MW. Centrais Elétricas Brasileiras S.A. ('Eletrobras'), a holding company controlled by the Federal Government, owns a 50% interest in Itaipu, while the government of Paraguay owns the remaining 50%. Brazil, pursuant to its 1973 treaty with Paraguay, has the option to purchase all the energy generated by Itaipu that is not consumed by Paraguay.
The company is one of the electricity power distributors operating in the south, southeast, and west-central regions of Brazil that are jointly required to purchase all of Brazil's portion of the energy generated by Itaipu, in accordance with Law 5,899/1973. The Federal Government allocates Brazil's portion of Itaipu's power among these energy companies in amounts proportionate to their respective historical market share of total energy sales.
CCENS: These are contracts that formalize the purchase of energy and power as established in Law 12,111/09 and ANEEL Resolution 530/12 between distributors and Electronuclear for the energy produced by the Angra I and Angra II plants.
CCGFs: Decree 7,805/12 regulated Provisional Act 579/12 and created contractual arrangements governing contracting of energy and power from the plants whose concessions were extended under Law 12,783/13.
Auction Contracts: The company has purchased energy from public auctions at the CCEE. These contracts are formalized between CEMIG and the various vendors in accordance with the terms and conditions of the invitation to bid.
'Bilateral Contracts' - CEMIG D entered into 'bilateral contracts' with various suppliers prior to the enactment of the New Industry Model Law in 2004.
Other Businesses
Natural Gas Distribution
Gasmig was established in Minas Gerais, Brazil, in 1986, for the purpose of developing and implementing the distribution of natural gas in the State of Minas Gerais. CEMIG holds 99.57% of the shares of Gasmig, and the Municipality of Belo Horizonte owns the remaining shares.
In July 1995, the State Government granted Gasmig an exclusive 30-year concession (as from January 1993) for distribution of piped gas covering the entire State of Minas Gerais and customers located within it. On December 26, 2014, the Second Amendment to the Concession Contract was signed. This document extended Gasmig's concession for commercial operation of piped gas services for industrial, commercial, institutional, and residential use in the State of Minas Gerais for 30 years. As a result, the expiration of this concession was extended from January 10, 2023, to January 10, 2053.
Gasmig's marketing efforts focus on its ability to provide a more economically efficient and environmentally friendly alternative to oil products, like diesel and liquefied petroleum gas ('LPG'), wood, wood products, and charcoal. During the year ended December 31, 2024, Gasmig supplied 2,822 million cubic meters of natural gas per day to 103,885 customers in 49 cities: 99 large and medium-sized industrial plants, 1,379 small industrial plants and commercial customers, 68 retail distribution stations that supply natural gas to vehicles, 2 distribution stations supplying natural gas for fleet vehicles, 2 retail distribution stations that supply compressed natural gas ('CNG') to vehicles, 7 co-generation projects, 4 distributors of CNG to industrial customers, and 102,324 homes.
The number of customers has increased by 8.34% (mainly residential).
In the city of Belo Horizonte, the main projects developed were those aimed at serving the Urban Market. High Density Polyethylene ('HDPE') densification networks were implemented in the Ouro Preto, Santa Efigênia, Castelo, Centro, Serra, Buritis, Barro Preto, and Belvedere neighborhoods. There were also investments in the cities of Nova Lima, Poços de Caldas, and Juiz de Fora.
Gas Distribution Concessions
On September 19, 2019, Gasmig signed, with the Grantor, the Third Amendment to the Concession Agreement for Industrial, Institutional, and Residential Exploration of Piped Gas Services in the State of Minas Gerais. This guarantees maintenance of the period of Gasmig's concession up to 2053.
Consulting and Other Services
During the year ended December 31, 2024, CEMIG SIM started a new business model, which is the leasing of plants from generation partners (third-party plants), which gave the company considerably greater access to solar generation sources and customers. In 2024, CEMIG SIM sold a total of 32,576 MWh/month in supply, generated by 14 photovoltaic plants (the Janaúba, Corinto, Manga, Bonfinópolis II, Lagoa Grande, Lontra, Mato Verde, Mirabela, Porteirinha I, Porteirinha II, Brasilândia, Jequitbá, Montes Carlos, and Prudente de Morais plants) and other third-party plants. The new business model made it possible to reach up to 103 photovoltaic plants by the end of 2024. On December 31, 2024, CEMIG SIM had 35,500 customers.
Regarding energy solutions, in 2024, CEMIG SIM worked on the implementation of photovoltaic plants.
Customers and Billing
Customer Base
The CEMIG Group sells energy through the companies CEMIG D, CEMIG GT, CEMIG Holding, and other wholly-owned subsidiaries - Horizontes Energia, Sá Carvalho, CEMIG PCH, Rosal Energia, CEMIG Geração Camargos, CEMIG Geração Itutinga, CEMIG Geração Salto Grande, CEMIG Geração Três Marias, CEMIG Geração Leste, CEMIG Geração Oeste, CEMIG Geração Sul, CE Praias de Parajuru, and CE Volta do Rio.
This market comprises sales of energy to: regulated customers in CEMIG's concession area in the State of Minas Gerais; free customers both in the State of Minas Gerais and other states of Brazil, through the Free Market; other participants of the energy sector - traders, generators, and independent power producers, also in the Free Market; and distributors, in the Regulated Market.
During the year ended December 31, 2024, the company sold a total of 63,031 GWh, while the total power transported for free customers was 8.2% higher, at 25,621 GWh. Sales of energy to final customers plus its own consumption in 2024 totaled 45,826 GWh. Sales to distributors, traders, other generating companies, and independent power producers in 2024 totaled 17,205 GWh.
As of December 31, 2024, the CEMIG Group invoiced 9,409,229 customers. Of these, 9,408,728 are final customers, including CEMIG's own consumption; and 501 are other agents in the Brazilian energy sector.
Sales to Final Customers
Residential
The residential customer category accounted for 20.2% of CEMIG's energy sales in 2024, totaling 12,715 GWh. The average monthly consumption per customer in 2024 was 133.1 kWh/month.
Industrial
Energy billed to regulated and free industrial customers in the State of Minas Gerais and other states was 27.9% of the total volume of energy traded by the company in 2024, at 17,577 GWh.
Commercial and Services
Energy sold to regulated and free customers in this category in Minas Gerais and other states was 15.4% of the total volume of energy traded by the company in 2024, at 9,676 GWh.
The reduction of 2.9% in the number of customers in the captive market is due to the migration of consumers to the free market and to the distributed microgeneration and minigeneration. In the free market, the number of customers increased by 67.6%.
Rural Customers
Energy consumed by the rural customer category in 2024 totaled 3,102 GWh, representing 4.9% of the total in 2024.
Other Customer Categories
Supply to other categories - government, public lighting, public services, and the company’s own consumption - totaled 2,756 GWh in 2024.
Sales in the Free Market
During the year ended December 31, 2024, total sales of energy were 12,916 GWh.
Sales in the Regulated Market
Sales in the Regulated Market in 2024 totaled 4,289 GWh.
The ten largest industrial customers served by the CEMIG Group, located in Minas Gerais and other states of Brazil, in terms of revenue, are: MOSAIC FERTILIZANTES, SAMARCO, FIAT AUTOMÓVEIS, CBMM-CIA BRAS DE METALURGIA E MINERAÇÃO, USIMINAS, HOLCIM, APERAM INOX AMERICA DO SUL, MINERAÇÃO USIMINAS, CARBETO DE SILICIO SIKA BRASIL, and VILLARES METAIS.
Seasonality
CEMIG's sales of energy are affected by seasonality. Historically, consumption by industrial and commercial customers increases in the fourth quarter (year ended December 31, 2024) due to their increase in activity. The seasonality of rural consumption is usually associated with rainfall periods. During the dry season between the months of May and November, more energy is used to irrigate crops.
Contracts with Free Customers
On December 31, 2024, the CEMIG Group had a portfolio of contracts with 9,243 customers, including free customers and suppliers (energy traders, energy distributors, and power generators). Of this total, 7,422 are free customers, amounting to 58% of the total volume of energy sold by the CEMIG Group in 2024.
Maintenance and Repair Systems
The 12,030.40 miles of high voltage distribution lines in CEMIG D's network, operating at from 34.5 kV to 230 kV, are supported by 58,739 structures, mainly made of metal.
The network of CEMIG GT has 3,145 miles of high voltage transmission lines, operating at from 230 kV to 500 kV, supported by 11,913 structures.
Most of the service interruptions to the company’s distribution and transmission lines are the result of lightning, farm surface fires, vandalism, and wind. Distribution also suffers from corrosion to structures.
The entire high voltage transmission line system of CEMIG D is inspected once a year by helicopter, using a 'Gimbal gyro-stabilized system with conventional and infrared cameras, allowing for simultaneous visual and thermographic (infrared) inspections. Land-based inspections are also made at intervals of between one and three years, depending on the characteristics of the line, such as time in operation, number of outages, type of structure, and the line's importance to the energy system.
All the extra high voltage transmission lines of CEMIG GT are inspected twice a year by helicopter. Land-based inspections are made every two years to inspect the supporting structures. Line pathways are inspected annually, aiming to keep the areas free of vegetation that could lead to surface fires.
The company uses modern modular aluminum structures to minimize the impact of emergencies involving fallen structures. Most of the company’s maintenance work on transmission lines is done using live-wire methods. The company has a well-trained staff and special vehicles and tools to support live- and dead-wire work.
The company’s set of spare equipment (transformers, breakers, arresters, etc.) and mobile substations are of great importance in the prompt reestablishment of power to its customers in the event of emergencies involving failed substations.
Divestment of Aliança Energia S.A.
On August 13, 2024, CEMIG GT concluded the sale of all the equity interest - equivalent to 45% of the share capital - it held directly in Aliança Energia S.A. to Vale S.A.
Research and Development
CEMIG invested R$56.8 million in research and development ('R&D') projects in 2024, encompassing 15 R&D projects across various areas.
History
Companhia Energética de Minas Gerais – CEMIG was founded in 1952. The company, a state-controlled mixed capital company, was incorporated in 1952.
