ML023100352
| ML023100352 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 10/30/2002 |
| From: | Bauer S Arizona Public Service Co |
| To: | Document Control Desk, Office of Nuclear Reactor Regulation |
| References | |
| 102-04859-SAB/TNW/CJJ | |
| Download: ML023100352 (5) | |
Text
Financial Report T h i rd Q u a r t e r, P e r i o d E n d e d M a r c h 3 1 , 2 0 0 1 About the DWP Refinances $1.25 Billion in Power Bonds Department During the third quarter, the Los Angeles Department of Water and Power successfully The DWP serves refinanced $1.25 billion in power revenue bonds, resulting in millions of dollars in interest sav-ings that help further reduce the DWP debt load and keep rates stable.
more than 3.8 Ahead of the sale, the largest tax-exempt bond sale this year, Moodys Investor Service million people affirmed its Aa3 rating on the DWP power bonds. Standard & Poors and Fitch assigned A+ rat-ings with a positive outlook. Fitch noted: The strong rating and positive outlook are support-in Los Angeles and ed by DWPs solid financial position, below-market cost generation, very competitive retail rates and good revenue mix - Fitch is monitoring the California situation closely and sees DWP was established well positioned to meet all conceivable situations.
The DWP, the nations largest municipal utility, is among the highest rated utilities in almost 100 years Calfornia. The strong bond ratings for the Department at a time of extreme volatility in the energy industry reflects continuing confidence in the DWPs overall financial plan and its abil-ago to provide ity to maintain a reliable, cost-effective power supply for customers. In all, the savings from the water and electric bond sale amount to $2.1 million per year in interest for 34 years, resulting in stable costs to customers over time. The savings will help shield the Department against rising costs of nat- Page 1 services to ural gas, a critical fuel in producing electricity. The new bonds issued at 4.95 percent, replace
$1.22 billion in bonds at an average weighted rate of 5.8 percent.
Los Angeles residents and Highlights of Energy Services and Water Services Operations businesses. Energy Services continues this year with positive earnings ending the third quarter with net income of $44 million before the voluntary transfer to the City. This is $35 million below the third quarter of last year. Although operating revenue increased by $287 million compared to the third quarter of last year, energy costs increased $334 million for the same period. Year to date net income remains substantially ahead of last year by $101 million.
Water Services finished the third quarter with a net loss of $1.7 million before the volun-tary transfer to the City. This is due to a reduction of operating revenues for the quarter of $9 million and an increase in purchased water and other operating expenses. Year to date net income is $89.7 million.
Generation Debt During the third quarter of fiscal year 2000-2001 the Department continued its cost reduc-tion and revenue enhancement program to eliminate all existing generation debt. At the close of the third quarter, the Departments generation debt balance, net of offsetting funds, remained at $1.4 billion.
March 31, 2001 (Financial Statements in millions - unaudited)
Energy Services Financial Summary Condensed Statement of Income Three Months Ended Nine Months Ended March 31 March 31 2001 2000 2001 2000 Operating Revenues $ 809.6 $ 522.2 $ 2,296.3 $ 1,759.8 Operating Expenses Energy costs 551.8 217.3 1,370.6 775.0 Other operating expenses 212.6 209.2 612.8 619.1 764.4 426.5 1,983.4 1,394.1 Operating Income 45.2 95.7 312.9 365.7 Other Income and Expense - Net 35.2 25.2 103.4 (17.9)
Debt Expenses (38.9) (44.0) (136.1) (125.9)
Contributions in Aid of Construction 2.9 1.7 11.4 (4.3)
Net Income Before Transfers 44.4 78.6 318.6 217.6 Transfers to the Reserve Fund of the City - - 119.8 112.0 Net Income After Transfer to the City 44.4 78.6 198.8 105.6 Cumulative Effect of Change in Accounting for Energy Purchase and Sales (9.0) - (14.8) -
Page 2 Net Income 35.4 78.6 184.0 105.6 Retained Income Reinvested in the Business Balance at the beginning of the period 3,207.4 2,781.3 3,058.8 2,754.3 Balance at the end of the period $ 3,242.8 $ 2,859.9 $ 3,242.8 $ 2,859.9 Condensed Statements of Cash Flows Nine Months Ended March 31 2001 2000 Cash Flows from Operating Activities $ 563.0 $ 607.5 Cash Flows from Noncapital Financing Activities (86.7) 627.0 Cash Flows from Capital and Related Financing Activities (646.1) (292.5)
Cash Flows from Investing Activities 133.2 (752.6)
Cash and Cash Equivalents Net increase (36.6) 189.1 Beginning of period 439.9 288.2 End of period $ 403.3 $ 477.3 Condensed Balance Sheets March 31 June 30 2001 2000 Assets Net Utility Plant $ 4,331.8 $ 4,241.6 Restricted and Other Investments 1,118.9 1,385.3 Current Assets Cash & cash equivalents 403.3 439.9 Other current assets 888.1 790.0 Long-term Notes Receivable 1,313.1 1,118.6 Net Pension Asset 109.0 100.2 Total Assets $ 8,164.2 $ 8,075.6 Capitalization & Liabilities Retained Income Reinvested in the Business $ 3,242.8 $ 3,058.8 Accummulated Other Comprehensive Income Long-term Debt 3,284.7 3,390.2 Advance Refunding Bonds 322.9 557.9 Current Liabilities 772.4 615.2 Deferred Credits 345.4 279.2 Accrued Postretirement Liability 196.0 174.3 Total Capitalization & Liabilities $ 8,164.2 $ 8,075.6
Energy Services-Third Quarter (2000-2001)
Operating Revenues Increased by $287 Million Operating revenues for the third quarter ending March 31, 2001 increased by $287 million or 55%
compared to the prior years third quarter. The increase was due to an increase in wholesale rev-enues. Of the $287 million, $251.7 million was due to increased surplus energy sales.
Energy Costs Increased by $334.5 Million With the large increase in surplus energy sales, fuel and purchased power costs also increased. Such costs for the third quarter totaled $551.8 million or 154% above last years third quarter energy costs of $217.3 million. The increase in the market price of natural gas combined with increased energy production caused this increase in expense.
Other Operating Expenses Increased by $3.4 Million With the increase in production, other operating expenses, including maintenance and depreci-ation, increased $3.4 million to $212.6 million for the quarter compared to $209.2 million for the third quarter of fiscal year 1999-2000. The increase was due to additional maintenance expenses incurred during the quarter of $13.7 million which were partially offset by a decrease in other operating expenses.
Other Income and Expenses - Net Increased by $10 Million Other income and expenses - net increased for the quarter ending March 31, 2001 by $10 million or 39%. The increase was primarily due to an increase in investment income from long term notes receivable of $11.7 million, which was partially established during the third quarter of last fiscal year, and other interest income totaling $10.8 million during the period. This increase in income was offset by a $12.4 million write down of the Departments customer information system project. There was no write Energy Services down recorded in the third quarter of the last fiscal year.
Number of Net Income Decreased by $34.2 Million electrical circuit feet The net result of the items above, with the major factors being a substantial increase in wholesale designed revenues and investment income, offset by increases in energy costs, was a net income of $44.4 million January:
before the voluntary transfer to the City. Compared to last years third quarter net income of $78.6 207,815 ft.
million, this resulted in reduction of $34.2 million, or 44%. Year to date net income before transfers 44%
to the City is $318.6 million, which is $101 million more than net income for the same period last year.
Third Quarter October-December/2000 2000-2001:
Energy Services Activities Quarterly Actual YTD 476,946 ft New business installations, removals and upgrades 4,506 13,041 Number of electrical circuit feet designed 476,946 1,482,709 Number of conduit feet designed 74,778 120,531 March:
February:
120,901 ft.
Power quality assignments completed 269 513 148,230 ft.
25%
Street lighting plans completed 25 87 31%
Trouble jobs met service level objectives 88% 89%
Meters installed and removed 14,184 43,074 Percentage Conductor circuit feet installed and removed 133,127 249,116 of Third Transformers installed 246 703 Quarter Conduit trench feet installed 2,001 8,116 Total Pole line feet installed and removed 99,027 259,758 Poles installed and replaced 178 527 Streetlights serviced 12,804 40,177 Financial Report T h i rd Q u a r t e r, P e r i o d E n d e d M a r c h 2 0 0 1
Water Services-Third Quarter (2000-2001)
Operating Revenues Decreased by $9 Million Operating revenues for the third quarter decreased slightly by $9 million or 8% compared to the same period last fiscal year. The decrease is primarily due to a decrease in demand in all cus-tomer classes with the largest decrease in demand coming from residential customers.
Purchased Water Expense Increased by $5.8 Million With less water available from internal supplies, purchased water expense increased to $28.8 million this quarter compared to last years third quarter expense of $23 million.
Other Operating Expenses Decreased by $1.4 Million With less water being pulled from internal resources during the quarter, other operating expenses, including maintenance and depreciation, decreased to $67.5 million, or 2%, from last years third quarter total of $68.9 million.
Other Income and Expenses - Net Decreased $2.7 Million During the third quarter Water Services wrote down its customer information system by $5.2 million. This expense was offset by an increase in investment income of $3.3 million to end the quarter with other income and expenses - net decreasing by $2.7 million.
Water Services Debt Expense Decreased by $2.2 Million Cement Mortar During the third quarter debt expense dropped $2.2 million to $10.7 million compared to last Lining Installed years third quarter debt expense to $12.9 million. The reduction was due to a reduction on (in feet) interest expense on debt.
January:
66,501 ft. Net Income Decreased by $14.6 Million 32%
The net result of the items above, with the major items being an increase in purchased water and other operating expenses (partially offset by the increase in investment income, and a Third Quarter decrease in debt expense), was a net loss of $1.7 million before the voluntary transfer to the 2000-2001: City. Compared to last years third quarter net income of $12.9 million, Water Services net 220,440 ft income decreased by $14.6 million.
January-March/2001 March: February:
85,779 ft. 54,901 ft. Water Services Activities Quarterly Actual YTD 41% 27% New distribution mains installed 32,254 ft. 89,683 ft.
News services installed 272 1,092 Cement mortar lining installed 207,181 ft 660,519 ft.
Percentage Services renewed-new main 91 276 of Third Services renewed-cement lining 0 0 Quarter Services renewed-substandard 185 603 Total Services renewed-other 57 206 New meters installed 4,232 8,257
Financial Report T h i rd Q u a r t e r, P e r i o d E n d e d M a r c h 3 1 , 2 0 0 1 March 31, 2001 (Financial Statements in millions - unaudited)
Water Services Financial Summary Condensed Statement of Income Three Months Ended Nine Months Ended March 31 March 31 2001 2000 2001 2000 Operating Revenues $ 102.7 $ 111.7 $ 415.4 $ 384.5 Operating Expenses Purchased water 28.8 23.0 107.0 63.3 Other operating expenses 67.5 69.0 208.7 196.1 96.3 92.0 315.7 259.4 Operating Income 6.4 19.7 99.7 125.1 Other Income and Expense - Net (0.8) 1.9 11.8 3.4 Debt Expenses (10.7) (12.9) (34.9) (36.4)
Contributions in Aid of Construction 3.4 4.2 13.1 5.0 Net Income Before Transfer to the City (1.7) 12.9 89.7 97.1 Transfer to the Reserve Fund of the City of Los Angeles - - 25.5 22.2 Net income after Transfer to the City (1.7) 12.9 64.2 74.9 Retained income reinvested in the business Balance of the beginning of the year 1,721.0 1,606.7 1,655.1 1,544.7 Page 3 Balance at the end of the period $ 1,719.3 $ 1,619.6 $ 1,719.3 $ 1,619.6 Condensed Statements of Cash Flows Nine Months Ended March 31 2001 2000 Cash Flows from Operating Activities $ 159.0 $ 199.5 Cash Flows from Noncapital Financing Activities (17.8) (15.4)
Cash Flows from Capital and Related Financing Activities 116.9 (85.5)
Cash Flows from Investing Activities 13.8 12.5 Cash and Cash Equivalents Net increase 271.9 110.9 Beginning of period 106.9 62.6 End of period $ 378.8 $ 173.5 Condensed Balance Sheets March 31 June 30 2001 2000 Assets Net Utility Plant $ 2,423.1 $ 2,314.7 Restricted Investments 318.1 308.2 Current Assets Cash & cash equivalents 378.8 106.9 Other current assets 228.7 165.3 Net Pension Asset 50.8 45.5 Total Assets $ 3,399.5 $ 2,940.6 Capitalization & Liabilities Retained Income Reinvested in the Business $ 1,719.3 $ 1,655.1 Long-term Debt 1,024.7 709.5 Advance Refunding Bonds 316.1 316.0 Current Liabilities 259.8 191.0 Accrued Postretirement Liability 79.6 69.2 Total Capitalization & Liabilities $ 3,399.5 $ 2,940.8 Financial Report T h i rd Q u a r t e r, P e r i o d E n d e d M a r c h 2 0 0 1