ML12109A160

Independent Auditorss Report for Omaha Public Power District

ML12109A160
Person / Time
Site:	Fort Calhoun
Issue date:	03/13/2012
From:	Deloitte & Touche
To:	Office of Nuclear Reactor Regulation, Omaha Public Power District
References
Download: ML12109A160 (26)

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TO THE BOARD OF DIRECTORS INDEPENDENT Omaha Public Power District Omaha, Nebraska AUDITORS' REPORT We have audited the accompanying balance sheets of the Omaha Public Power District (OPPD) as of December 31, 2011 and 2010, and the related statements of revenues, expenses and changes in equity and cash flows for each of the three years in the period ended December 31, 2011. These financial statements are the responsibility of OPPD's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of OPPD's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of OPPD as of December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the three years for the period ended December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

The Management's Discussion and Analysis on pages 10 through 24 is not a required part of the basic financial statements but is supplementary information required by GASB. This supplementary information is the responsibility of OPPD's management.

We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit such information, and we do not express an opinion on it.

-:eLOL arTi A \\~cucwfL LL?

Omaha, Nebraska March 13, 2012 OPPD 2011 Annual Report 26

BAAC HES2011 2010 BALANCE SHEES Assets (thousands) as of December 31, 2011 and 2010 Utility Plant - at cost Electric plant.....................................

$4,943,363

$4,792,217 Less accumulated depreciation and amortization.......

1,741,196 1,648,230 Electric plant -net................................

3,202,167 3,143,987 Nuclear fuel - at amortized cost..............

83,730 73,200 Total utility plant - net...........................

3,285,897 3,217,187 Special Purpose Funds - at fair value Electric system revenue bond fund - net of current.....

54,914 42,540 Segregated fund -debt retirement (Note 3)...........

48,000 45,000 Segregated fund - rate stabilization (Note 3)..........

32,000 Segregated fund -other (Note 3)....................

30,306 28,074 Decommissioning funds (Note 3)...................

336,891 322,260 NC2 separate electric system revenue bond fund

- net of current.................................-

1,084 Total special purpose funds.......................

470,111 470,958 Current Assets Cash and cash equivalents.........................

30,661 35,505 Electric system revenue fund.......................

12,248 Electric system revenue bond fund..................

60,464 66,937 Electric system subordinated revenue bond fund......

6,445 6,465 Electric system construction fund...................

192,427 203,581 NC2 separate electric system revenue fund..........

13,782 24,515 NC2 separate electric system revenue bond fund......

8,504 7,393 NC2 separate electric system capital costs fund.....

3,819 3,547 Accounts receivable - net...........................

120,213 114,209 Fossil fuels-at average cost........................

51,683 66,017 Materials and supplies - at average cost..............

101,610 92,711 Other (Note 2)..........

21,342 10,981 Total current assets............................

623,198 631,861 Deferred Charges and Other Assets (Note 2)......

131,690 93,883 Total Assets.....................................

$4,510,896

$4,413,889 See notes to financial statements 27 OPPD 2011 Annual Report

2011 2010 Liabilities (thousands)

Long-Term Debt (Note 5)

Electric system revenue bonds - net of current........

$1,284,890

$1,208,790 Electric system subordinated revenue bonds..........

346,730 347,650 Electric revenue notes - commercial paper series.......

150,000 150,000 M inibonds.................

27,756 27,503 NC2 separate electric system revenue bonds

- net of current................................

242,560 245,325 Subordinated obligation - net of current.....

847 1,220 Total long-term debt............................

2,052,783 1,980,488 Unamortized discounts and premiums...............

49,826 6,403 Unamortized loss on refunded debt.................

(20,820)

(9,192)

Total long-term debt - net....

2,081,789 1,977,699 Commitments and Contingencies (Note 14)

Liabilities Payable from Segregated Funds (Note 2)......................

92,242 115,227 Current Liabilities Electric system revenue bonds (Note 5)...

29,620 28,465 NC2 separate electric system revenue bonds (Note 5)...

2,765 2,675 Subordinated obligation (Note 5)....

372 341 Accounts payable.................................

82,638 88,520 Accrued payments in lieu of taxes..................

27,156 26,792 Accrued interest.....

35,229 36,459 Accrued payroll...................................

29,337 33,555 Accrued production outage costs...................

24,840 NC2 participant deposits (Note 7)................

9,939 16,207 Other (Note 2)................

1.......

8,216 17,089 Total current liabilities 225,272 274,943 Other Liabilities Decommissioning costs...........................

336,891 322,260 O ther (N ote 2)...................................

15,219 18,717 Total other liabilities....

352,110 340,977 Equity Invested in capital assets, net of related debt.........

1,435,789 1,477,571 Restricted..................................

37,200 39,055 Unrestricted........

286,494 188,417 Total equity...........................

1,759,483 1,705,043 Total Liabilities and Equity......................

$4,510,896

$4,413,889 See notes to financial statements OPPD 2011 Annual Report 28

STATEMENTS OF

REVENUES, EXPENSES AND CHANGES IN EQUITY for theThreeYears Ended December 31, 2011 2011 Operating Revenues R etail sale s................................

O ff-system sales...........................

Other electric revenues......................

Total operating revenues................

$ 852,678 159,732 29,352 1,041,762 2010 (thousands)

$ 772,816 184,374 29,160 986,350 2009

$ 718,869 158,354 22,743 899,966 Operating Expenses Operations and maintenance Fuel...........

Purchased pow er.........................

Production.......................

Transm ission.............................

D istributio n..............................

Custom er accounts.......................

Customer service and information..........

Administrative and general.................

Total operations and maintenance...........

Depreciation and amortization................

Paym ents in lieu of taxes....................

Total operating expenses...................

Operating Incom e.........................

Other Income (Expenses)

Contributions in aid of construction............

Reduction of plant costs recovered through contributions in aid of construction..........

Decommissioning funds -

investm ent incom e.......................

Decommissioning funds - reinvestment........

Investm ent incom e.........................

Allowances for funds used during construction...

Products and services - net...................

Other - net (Note 10)........................

Total other income - net...................

Interest Expense...........................

Net Income Before Special Item.............

Special Item (Note 11)......................

N et Incom e.............

Equity, Beginning Of Year...................

Equity, End Of Year...............

276,030 64,079 235,004 18,351 35,965 14,024 13,537 132,526 789,516 126,077 28,217 943,810 97,952 7,470 (7,470) 14,631 (14,631) 3,121 12,185 2,896 19,055 37,257 89,149 46,060 8,380 54,440 1,705,043 252,278 40,282 223,050 14,225 39,357 14,213 16,015 121,537 720,957 123,193 27,851 872,001 114,349 3,867 (3,867) 16,631 (16,631) 2,815 8,699 2,720 7,021 21,255 87,177 48,427 (8,380) 40,047 1,664,996 201,664 28,772 220,893 11,037 43,113 14,205 14,650 119,659 653,993 114,587 24,810 793,390 106,576 27,652 (27,652) 27,451 (27,451) 3,077 19,047 2,446 2,008 26,578 86,597 46,557 46,557 1,618,439

$1,759,483

$1,705,043

$1,664,996 See notes to financial statements 29 OPPD 2011 Annual Report

2011 Cash Flows from Operating Activities Cash received from retail customers.........

Cash received from off-system counterparties.....

Cash paid to operations and maintenance suppliers..

Cash paid to off-system counterparties...........

Cash paid to em ployees........................

Cash paid for in lieu of taxes and other taxes.....

Net cash provided from operating activities.....

Cash Flows from Capital and Related Financing Activities Proceeds from long-term borrowings......

Principal reduction of debt.................

Interest paid on debt..........................

Acquisition and construction of capital assets......

Proceeds from NC2 participants.................

Contributions in aid of construction and other reim bursem ents............................

Acquisition of nuclear fuel........

Net cash used for capital and related financing activities.................

Cash Flows from Investing Activities Purchases of investments.......

Maturities and sales of investments.......

Purchases of investments for decom m issioning funds......................

Maturities and sales of investments in decom m issioning funds......................

Investm ent incom e............................

Net cash provided from (used for) investing activities......

Change in Cash and Cash Equivalents..........

Cash and Cash Equivalents, Beginning of Year...

Cash and Cash Equivalents, End of Year.........

Reconciliation of Operating Income to Net Cash Provided from Operating Activities Operating income........................

Adjustments to reconcile operating income to net cash provided from operating activities Depreciation and amortization.................

Am ortization of nuclear fuel...................

Changes in assets and liabilities Accounts receivable......

Fo ss il fu e ls........

M aterials and supplies......................

Regulatory asset for FPPA..................

Accounts payable...........................

Accrued payments in lieu of taxes...........

A ccrued payroll.......................

Accrued production outage costs..............

Debt retirement reserve................

O th e r....................................

$ 820,042 167,152 (616,956)

(41,719)

(147,173)

(27,853) 153,493 467,314 (348,694)

(102,072)

(206,995) 2,848 10,213 (15,057)

(192,443)

(714,429) 745,472 (297,537) 297,537 3,063 34,106 (4,844) 35,505

$ 30,661 97952 126,077 5,873 (4,572) 14,334 (8,899)

(35,345) 8,770 364 (4,218)

(24,840)

(24,000) 1,997 2010 (thousands)

$821,041 168,903 (555,820)

(13,290)

(128,784)

(24,894) 267,156 120,000 (46,182)

(85,491)

(199,474) 2,805 11,664 (25,578)

(222,256) 2009

$ 730,261 161,757 (512,011)

(15,774)

(141,651)

(22,345) 200,237 85,000 (50,153)

(84,488)

(206,642) 3,772 (37,492)

(290,003)

STATLMLNI'S F GASH FLWS for the Three Years Ended December 31, 2011 (848,357)

(1,122,048) 813,916 1,183,018 (369,587) 369,587 4,093 (30,348) 14,552 20,953

$ 35,505

$ 114,349 123,193 20,738 (23,517)

(4,339)

(7,111)

(5,671) 2,957 6,056 24,840 13,000 2,661 (161,229) 161,229 10,245 71,215 (18,551) 39,504

$ 20,953

$ 106,576 114,587 12,654 1,229 (20,341)

(3,583) 19,805 2,465 (2,458)

(9,586)

(13,000)

(8,111)

Net cash provided from operating activities.....

$ 153,493

$267156

$200,237 Noncash Capital Activities Utility plant additions from outstanding liabilities....

$ 25,025

$ 39,678

$ 34,726 See notes to financial statements OPPD 2011 Annual Report 30

NOTES TO FINANCIAL I.

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES STATEMENTS Organization and Business -The Omaha Public Power District (OPPD or Company),

a political subdivision of the state of Nebraska, is a public utility engaged in the generation, transmission and distribution of electric power and energy and other related as of December 31, 2011 and 2010, and for activities. The Board of Directors is authorized to establish rates. OPPD is generally not theThreeYears Ended December 31, 2011 liable for federal and state income or ad valorem taxes on property; however, payments in lieu of taxes are made to various local governments.

Basis of Accounting -The financial statements of OPPD are presented in accordance with generally accepted accounting principles (GAAP) for proprietary funds of govern-mental entities. Accounting records are maintained generally in accordance with the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission (FERC) and all applicable pronouncements of the Governmental Accounting Standards Board (GASB). In accordance with GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, OPPD has elected not to follow the pronouncements of the Financial Accounting Standards Board (FASB) issued after November 30,1989. In December 2010, GASB issued Statement No. 62, Codification of Accounting and Financial Report-ing Guidance Contained in Pre-November 30,1989 FASB and American Institute of Certi-fied Public Accountants (AICPA) Pronouncements. This statement will supersede GASB Statement No. 20 and will be implemented by OPPD in 2012.

OPPD applies the accounting policies established in FASB's Accounting Standards Codification (ASC) 980-10. This guidance permits an entity with cost-based rates to include costs in a period other than the period in which the costs would be charged to expense by an unregulated entity if it is probable that these costs will be recovered through rates charged to customers. ASC 980-10 also permits an entity to defer revenues by recognizing liabilities to cover future expenditures. The guidance applies to OPPD because the rates of the Company's regulated operations are established and approved by the governing board.

If, as a result of changes in regulation or competition, OPPD's ability to recover these assets and to satisfy these liabilities would not be assured, then pursuant to ASC 980-20, OPPD would be required to write-off or write-down such regulatory assets and liabilities, unless some form of transition cost recovery continues through established rates. In addition, OPPD would be required to determine any impairment to the carrying costs of deregulated plant and inventory assets. There were no write-downs of regulatory assets in any of the three years in the period ended December 31, 2011.

Revenue Recognition - OPPD recognizes electric operating revenues as earned.

Meters are read and bills are rendered on a cycle basis. Revenues earned after meters are read are estimated and accrued as unbilled revenues at the end of each accounting period. Accounts Receivable includes $36,898,000 and $41,137,000 in unbilled revenues as of December 31, 2011 and 2010, respectively.

Cash and Cash Equivalents -The operating fund account is called the Electric System Revenue Fund (Note 3). OPPD considers highly liquid investments for the Electric System Revenue Fund with an original maturity of three months or less to be cash equivalents.

Cash and cash equivalents in the Special Purpose Funds are reported as investments.

Accounts Receivable - Accounts Receivable includes outstanding amounts from customers and an estimate for unbilled revenues. An estimate is made for the Reserve for Uncollectible Accounts for retail customers, based on an analysis of the aging of Accounts Receivable and historical write-offs net of recoveries. Additional amounts may be included based on the credit risks of significant parties. The Board of Directors authorized a regulatory liability for the greater of $5,000,000 or an estimate based on the previous year's Accounts Receivable for off-system sales customers, which is in the Reserve for Uncollectible Accounts. Accounts Receivable was reported net of the Reserve for Uncollectible Accounts of $5,774,000 and $5,740,000, as of December 31, 2011 and 2010, respectively.

Utility Plant - Utility plant is stated at cost, which includes property additions, replacements of units of property and betterments. Maintenance and replacement of minor items are charged to operating expenses. Costs of depreciable units of electric plant retirements are eliminated from electric plant accounts by charges, less salvage plus removal expenses, to the accumulated depreciation account. Electric plant includes 31 OPPD 2011 Annual Report both tangible and intangible assets. Intangible assets include the costs of software and

licenses. Electric plant includes construction work in progress of $360,085,000 and

$277,790,000 as of December 31, 2011 and 2010, respectively.

Electric plant balances as of December 31, 2010, activity for 2011 and balances as of December 31, 2011, were as follows (in thousands):

2010 Additions Retirements 2011 Electric plant

$4,792,217

$192,848

$(41,702)

$4,943,363 Less accumulated depreciation and amortization 1,648,230 134,668 (41,702) 1,741,196 Electric plant - net

$3,143,987

$ 58,180

$3,202,167 Allowances for funds used during construction, approximating OPPD's current weighted average cost of debt, were capitalized as a component of the cost of utility plant. These allowances for both construction work in progress and nuclear fuel were computed at 4.2%, 4.3% and 4.4% for the years ended December 31, 2011, 2010 and 2009, respectively. Allowances for funds used during construction for the participants' share of Nebraska City Station Unit 2 (NC2) were offset by the actual interest cost of their funds, resulting in no impact on net income.

OPPD periodically reviews the carrying amount of long-lived assets for impairment.

An asset is considered impaired when estimated future cash flows are less than the carrying amount of the asset. There were no write-downs for impairments in any of the three years in the period ended December 31, 2011.

Contributions in Aid of Construction (CIAC) - OPPD receives payments from customers for construction costs primarily relating to the expansion of OPPD's electric system. OPPD follows FERC guidelines in recording CIAC, which direct the reduction of utility plant assets by the amount of contributions received toward the construction of utility plant. In order to comply with GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions, while continuing to follow FERC guidelines, CIAC is recorded as other income and offset by an expense in the same amount representing the recovery of plant costs. CIAC from participants for the capital costs of NC2 was $3,407,000 and $16,846,000 for the years ended December 31, 2011 and 2009, respectively. The capital costs of NC2 were insignificant for the year ended December 31, 2010. CIAC from the United States Department of Energy (DOE) for reimbursement of capital costs incurred for the storage of high-level nuclear waste was insignificant for the years ended December 31, 2011 and 2010, and $7,035,000 for the year ended December 31, 2009.

Depreciation and Amortization - Depreciation for assets is computed on the straight-line basis at rates based on the estimated useful lives of the various classes of property. Depreciation expense for depreciable property has averaged approximately 2.8% for the years ended December 31, 2011 and 2010, and 2.9% for the year ended December 31, 2009.

Amortization of nuclear fuel is based on the cost thereof, which is prorated by fuel as-sembly in accordance with the thermal energy that each assembly produces. Intangible assets are amortized over their expected useful life. Amortization of intangible assets included with depreciation and amortization expense in these financial statements was

$4,478,000, $3,940,000 and $4,571,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

In 2009, NC2 was placed in commercial operation. Half of the output is sold under 40-year Participation Power Agreements (PPAs). Certain participants funded their share of construction costs with NC2 Separate Electric System Revenue Bonds. These participants are billed for the debt service related to these bonds. The amounts recovered for debt service for the electric plant construction and other costs are included in off-system sales revenues. The revenues related to principal repayment will equal related depreciation and other deferred NC2 expenses over the 40-year term of the PPAs. To maintain revenue neutrality in the interim years, a regulatory asset was established to equate expenses and the amount included in off-system sales revenues for principal repayment. This regulatory asset will increase annually until 2030. After 2030, as principal repayments exceed depreciation and other deferred expenses, the regulatory asset will be reduced annually by recognizing deferred depreciation and other deferred expenses until its elimination in 2049, which is the end of the initial term of the PPAs.

OPPD 2011 Annual Report 32

In 2004, OPPD's Board of Directors approved a change in the depreciation estimate for Fort Calhoun production plant assets to 2043, which is ten years beyond the term of Fort Calhoun Station's (FCS) current operating license. A regulatory asset was established for the difference in depreciation expense resulting from the use of the estimated economic life of the asset versus the license term. The reduction in depreciation expense will be recorded each year as a regulatory asset in deferred charges until 2033. The regulatory asset will be reduced through the recognition of depreciation expense over the assets' remaining economic life in the years 2034 through 2043.

Nuclear Fuel Disposal Costs - Permanent disposal of spent nuclear fuel is the responsibility of the federal government under an agreement entered into with the DOE. Under the agreement, OPPD is subject to a fee of one mill per kilowatt-hour on net electricity generated and sold from FCS. The spent nuclear fuel disposal costs are included in OPPD's nuclear fuel amortization and are collected from customers as part of fuel costs. Nuclear fuel disposal costs were $1,124,000, $4,073,000 and $3,547,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

OPPD's contract required the federal government to begin accepting high-level nuclear waste by January 1998; however, the DOE does not have a storage facility. In May 1998, the United States Court of Appeals confirmed the DOE's statutory obligation to accept spent fuel by 1998, but rejected the request that a move-fuel order be issued.

In March 2001, OPPD, along with a number of other utilities, filed suit against the DOE in the United States Court of Federal Claims alleging breach of contract.

In 2006, the DOE agreed to reimburse OPPD for allowable costs for managing and storing spent nuclear fuel and high-level waste that OPPD incurred due to the DOE's delay in accepting waste. The reimbursements from the DOE have been included in CIAC. OPPD periodically submits applications to the DOE for reimbursement of costs incurred for the storage of high-level nuclear waste.

Nuclear Decommissioning - OPPD's Board of Directors has approved the collection of nuclear decommissioning costs based on an independent engineering study of the costs to decommission FCS. Based on cost estimates, inflation rates and fund earnings projections, no funding has been necessary since 2001. Decommissioning funds are reported at fair value. The decommissioning cost liability is adjusted for invest-ment income and changes in fair value, resulting in no impact on net income. Investment income was $8,873,000, $9,898,000 and $12,433,000 for the years ended December 31, 2011, 2010 and 2009, respectively. The fair value of the decommissioning funds increased

$5,758,000, $6,733,000 and $15,018,000 during 2011, 2010 and 2009, respectively. The present value of the total decommissioning cost estimate for FCS was $717,548,000 and

$673,694,000 as of June 30, 2011 and 2010, respectively.

Regulatory Assets and Liabilities - Rates for the Company's regulated operations are established and approved by the Board of Directors. OPPD applies the provisions of ASC 980-10, and under this guidance, regulatory assets are rights to additional revenues or deferred expenses, which are expected to be recovered through customer rates over some future period, and regulatory liabilities are reductions in earnings (or costs recovered) to cover future expenditures.

OPPD implemented a Fuel and Purchased Power Adjustment (FPPA) in the rate structure in 2010. The Board of Directors authorized the use of regulatory accounting to maintain revenue neutrality by matching retail revenues attributed to fuel and purchased power costs with the actual costs incurred. As a result of the extended outage at FCS due to the Missouri River flood (Flood Event), additional fuel and purchased power expenses were incurred, which resulted in an under-recovery of FPPA for the year ended December 31, 2011 (Note 12). There was a regulatory asset of $11,969,000 and $23,645,000 included in other current assets and deferred charges and other assets, respectively, as of December 31, 2011, which represented the Company's rights to additional revenues based on incurred expenses due to an under-recovery of fuel and purchased power costs for 2011. The regulatory asset was insignificant as of December 31, 2010.

The regulatory assets included in deferred charges consist of deferred depreciation expense for FCS production assets and other deferred expenses for NC2. In 2004, OPPD's Board of Directors approved a change in the depreciation estimate for FCS production assets to 2043, which is ten years beyond the term of the current oper-ating license. The balance of deferred depreciation expense was $48,477,000 and 33 OPPD 2011 Annual Report

$42,380,000 as of December 31, 2011 and 2010, respectively (Note 2). In May 2009, NC2 was placed in commercial operation. As previously noted, certain NC2 expenses were deferred to maintain revenue neutrality from transactions with participants who funded their share of construction costs with NC2 Separate Electric System Revenue Bonds. The balance of the regulatory asset for NC2 deferred expenses was $31,127,000 and $19,119,000 as of December 31, 2011 and 2010, respectively (Note 2).

Regulatory liabilities, which are primarily included in liabilities payable from segregated funds, consist of reserves for debt retirement, rate stabilization and uncollectible accounts from off-system sales. The Debt Retirement Reserve was established for the retirement of outstanding debt and to help maintain debt service coverage ratios at appropriate levels (Note 8). The Rate Stabilization Reserve was established to help maintain stability in OPPD's long-term rate structure (Note 8). The Reserve for Uncol-lectible Accounts from off-system sales, which is included as a reduction to Accounts Receivable, was established to recognize a loss contingency for uncollectible accounts from off-system sales customers. The balance of the Debt Retirement Reserve was

$34,000,000 and $58,000,000 as of December 31, 2011 and 2010, respectively (Note 2). The balance of the Rate Stabilization Reserve was $32,000,000 as of December 31, 2011 and 2010, The balance of the Reserve for Uncollectible Accounts from off-system sales was $5,000,000 as of December 31, 2011 and 2010.

Accrued Production Outage Costs - Costs of major planned production outages with estimated incremental operations and maintenance expenses of $5,000,000 or more are accrued during the period after a station is returned to service until it is taken out of service for a planned outage. FCS started a major refueling and maintenance outage in April 2011. Outage activities were suspended to focus on flood-mitigation efforts, but were resumed in September 2011. In December 2011, the Nuclear Regulatory Commission (NRC) placed FCS into a special category of their inspection manual, Chapter 0350. This Chapter is for nuclear plants that are in extended shutdowns with performance issues. Efforts are under way to satisfactorily address all issues.

Normal operations of FCS are expected to resume in 2012, subject to NRC review and approval. The next major planned production outage for FCS is scheduled to begin in the fall of 2013. The balance of accrued production outage costs was $0 and

$24,840,000 as of December 31, 2011 and 2010, respectively.

Natural Gas Inventories and Contracts - Natural gas inventories are maintained for the Cass County Station. The weighted average cost of natural gas consumed is used to expense natural gas from inventories. OPPD is exposed to market price fluctuations on its purchases of natural gas. The Company may enter into futures contracts and purchase options to manage the risk of volatility in the market price of gas on anticipated purchase transactions (Note 9).

Equity - Equity is reported in three separate components on the Balance Sheets. Equity invested in capital assets, net of related debt, is the equity share attributable to net utility plant assets reduced by outstanding related debt. Restricted equity represents net assets with usage restraints imposed by law or by debt covenants, such as certain revenue bond funds and segregated funds, net of related liabilities. Unrestricted equity represents net assets that are neither restricted nor invested in capital assets.

Use of Estimates -The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements-In December 2010, GASB issued Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. This statement is intended to enhance the usefulness of GASB's codification by incorporating certain accounting guidance issued by FASB and the AICPA that is applicable to state and local govern-ments into GASB's authoritative literature. This statement is effective for reporting periods beginning after December 15, 2011, and will be implemented by OPPD in 2012.

This statement will not have a significant impact on OPPD's financial position, results of operations or cash flows.

OPPD 2011 Annual Report 34

In June 2011, GASB issued Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. This statement provides financial reporting guidance for deferred outflows of resources and deferred inflows of resources, which are distinct from assets and liabilities. This statement also amends the reporting requirements in GASB Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, and other pronouncements by incorporating deferred outflows of resources and deferred inflows of resources into the financial statements. This statement is effective for reporting periods beginning after December 15, 2011, and will be implemented by OPPD in 2012.

This statement will impact the presentation of the financial statements, including the reclassification of certain assets/liabilities as deferred outflows/inflows.

2. ASSETS AND LIABILITIES DETAIL BALANCES OTHER CURRENT ASSETS The composition as of December 31 was as follows (in thousands):

2011 2010 Regulatory asset for FPPA - current

$ 11,969 Prepayments 4,369 4,657 Sulfur dioxide allowance inventory - current 2,580 2,686 Deferred cash flow hedges - unrealized loss on derivatives - current (Note 9) 1,035 2,095 Interest receivable 1,113 813 Commodity derivative instruments (Note 9) 91 664 Other 185 66 Total

$ 21,342

$ 10,981 DEFERRED CHARGES AND OTHER ASSETS The composition as of December 31 was as follows (in thousands):

2011 2010 Regulatory asset for FCS

$ 48,477

$ 42,380 Regulatory asset for NC2 31,127 19,119 Regulatory asset for FPPA - net of current 23,645 Deferred financing costs 18,360 19,868 Sulfur dioxide allowance inventory - net of current 3,250 4,875 Deferred cash flow hedges - unrealized loss on derivatives -

net of current (Note 9) 409 533 Other 6,422 7,108 Total

$131,690

$ 93,883 LIABILITIES PAYABLE FROM SEGREGATED FUNDS The composition as of December 31 was as follows (in thousands):

2011 2010 Debt retirement reserve (Note 8)

$ 34,000

$ 58,000 Rate stabilization reserve (Note 8) 32,000 32,000 Customer deposits 20,600 20,166 Incurred but not presented reserve 2,177 2,221 Customer advances for construction 2,164 1,706 Other 1,301 1,134 Total

$ 92,242

$115,227 OTHER CURRENT LIABILITIES The composition as of December 31 was as follows (in thousands):

2011 2010 Current deferred revenues 5,785

$ 6,020 Liability to SPP (Note 11) 8,380 Deposits 832 1,163 Payroll taxes and other employee liabilities 708 396 Other 891 1,130 Total 8,216

$ 17,089 35 OPPD 2011 Annual Report____

OTHER LIABILITIES The composition as of December 31 was as follows (in thousands):

2011 2010 Deferred revenues

$10,855

$13,623 Capital purchase agreement 2,387 2,625 Workers' compensation reserve 1,345 1,487 Public liability reserve 111 202 Other 521 780 Total

$15,219

$18,717

3. SPECIAL PURPOSE FUNDS Special purpose funds of OPPD are as follows:

Electric System Revenue Fund and NC2 Separate Electric System Revenue Fund -

These funds are to be used for operating activities for their respective electric system.

Cash and cash equivalents in the Electric System Revenue Fund are shown separately from the investments on the balance sheets.

Electric System Revenue Bond Fund, Electric System Subordinated Revenue Bond Fund and NC2 Separate Electric System Revenue Bond Fund -These funds are to be used for the retirement of their respective revenue bonds and the payment of the related interest and reserves as required. Investments with maturity dates within the next year are designated as current.

Electric System Construction Fund and NC2 Separate Electric System Capital Costs Fund -These funds are to be used for capital improvements, additions and betterments to and extensions of their respective electric system.

Segregated Fund - Debt Retirement -This fund is to be used for the retirement of outstanding debt and to help maintain debt service coverage ratios at appropriate levels.

Since there is no funding requirement for the Debt Retirement Reserve, this fund also may be used to provide additional liquidity for operations as necessary. The balance of the Debt Retirement Fund was $48,000,000 and $45,000,000 as of December 31, 2011 and 2010, respectively.

Segregated Fund - Rate Stabilization -This fund is to be used to help stabilize rates through the transfer of funds to operations as necessary. Since there is no funding requirement for the Rate Stabilization Reserve, this fund also may be used to provide additional liquidity for operations as necessary. This fund was used to help finance the higher fuel costs and unexpected energy purchases in 2011. Commencing in 2012, this fund will be replenished over a three-year period with increases to the Fuel and Purchased Power Adjustment. The balance of the Rate Stabilization Fund was $0 and

$32,000,000 as of December 31, 2011 and 2010, respectively.

Segregated Fund - Other -This fund represents assets held for payment of customer deposits, refundable advances, certain other liabilities and funds set aside for terminal removal costs for NC2 and OPPD's self-insured health insurance plans (Note 6).

The balances of the funds as of December 31 were as follows (in thousands):

2011 2010 Segregated Fund - self-insurance

$ 6,145

$ 4,872 Segregated Fund - other 24,161 23,202 Total

$30,306

$28,074 Decommissioning Funds -These funds are for the costs to decommission FCS when its operating license expires. The Decommissioning Funds are held by an outside trustee in compliance with the decommissioning funding plans approved by OPPD's Board of Directors. The 1990 Plan was established in accordance with NRC regulations for the purpose of discharging OPPD's obligation to decommission FCS.

The 1992 Plan was established to retain funds in excess of NRC minimum funding requirements based on an independent engineering study, which indicated that decommissioning costs would exceed the NRC minimum requirements.

OPPD 2011 Annual Report 36

The balances of the funds as of December 31 were as follows (in thousands):

2011 Decommissioning Trust - 1990 Plan Decommissioning Trust - 1992 Plan Total

4. DEPOSITS AND INVESTMENTS

$257,849 79,042

$336,891 2010

$246,978 75,282

$322,260 Investments - Fair values of OPPD's investments in cash equivalents and special purpose funds were determined based on quotes received from the trustees' market valuation service. The weighted average maturity was based on the face value for investments.

As of December 31, OPPD's investments were as follows (in thousands):

2011 2010 Investment Type Fair Value Cash 8,935 Commercial paper 4,936 Money market 57,975 Mutual funds 174,121 U.S. agencies 480,469 U.S. treasuries 28,975 World bank security notes 10,460 Total

$765,871 Portfolio weighted average maturity Weighted Average Maturity (Years) 0.1 1.2 3.8 0.1 Weighted Average Fair Value Maturity (Years) 24,714 162,575 603,179 25,841

$816,309 1.1 0.8 0.9 0.8 Interest Rate Risk - OPPD's investment in relatively short-term securities reduces interest rate risk, as evidenced by its portfolio weighted average maturity of 0.9 and 0.8 years as of December 31, 2011 and 2010, respectively. In addition, OPPD is a buy-and-hold investor, which minimizes interest rate risk.

Credit Risk - OPPD's investment policy is to comply with its bond covenants and state statutes for governmental entities, which limit investments to investment-grade fixed income obligations. OPPD was in full compliance with bond covenants and state statutes as of December 31, 2011 and 2010.

Custodial Credit Risk - OPPD's bank deposits were entirely insured or collateralized with securities held by OPPD or by its agent in OPPD's name at December 31, 2011 and 2010. OPPD delivers all of its investment securities under contractual trust agreements.

5. DEBT OPPD utilizes the proceeds of debt issued primarily to finance its construction program.

Debt balances as of December 31, 2010, activity for 2011 December 31, 2011, were as follows (in thousands):

and balances as of 2010 Electric system revenue bonds

$1,237,255 Electric system subordinated revenue bonds 347,650 Electric revenue notes -

commercial paper series 150,000 Minibonds 27,503 NC2 separate electric system revenue bonds 248,000 Subordinated obligation 1,561 Total

$2,011,969 Additions Retirements 2011

$421,770

$(344,515)

$1,314,510 (920) 346,730 495 (242) 150,000 27756 245,325 1,219

$2,085,540 (2,675)

(342)

$422,265

$(348,694) 37 OPPD 2011 Annual Report

Lien Structure - In the event of an OPPD default, subject to the terms and conditions of debt covenants, OPPD is required to satisfy all Electric System Revenue Bond obligations before paying second-tier bonds and notes, which are Electric System Subordinated Revenue Bonds, Electric Revenue Notes - Commercial Paper Series and Minibonds. OPPD will pay the Subordinated Obligation after second-tier debt.

Electric System Revenue Bonds -These bonds are payable from and secured by a pledge of and lien upon the revenues of the Electric System, subject to the prior payment therefrom of the operations and maintenance expenses of the Electric System. The Electric System Revenue Bonds are OPPD's Senior Bonds. Moody's Investors Service and Standard & Poor's Rating Services rated OPPD's Electric System Revenue Bonds as Aal and AA, respectively, in 2011 and 2010.

Outstanding Electric System Revenue Bonds as of December 31, 2011, were as follows (in thousands):

Issue Maturity Dates 1993 Series C 2002 Series B 2003 Series A 2005 Series A 2005 Series B 2006 Series A 2006 Series A 2007 Series A 2007 Series A 2008 Series A 2008 Series A 2009 Series A 2009 Series A 2010 Series A 2011 Series A 2011 Series B 2011 Series B 2011 Series C 2012-2014 2012-2013 2012-2013 2012 2017-2022 2018-2044 2029-2046 2018-2027 2029-2043 2018-2028 2029-2039 2023-2029 2030-2039 2022-2041 2014-2024 2023-2029 2031-2042 2013-2030 Type Term Serial Serial Serial Serial Serial Term Serial Term Serial Term Serial Term Term Serial Serial Term Serial Interest Rates 5.500%

4.500%-5.000%

3.700%-3.800%

3.550%

5.000%

4.250%-4.750%

4.650%-5.000%

4.000%-5.000%

4.750%-5.000%

4.600%-5.500%

5.500%

4.000%-4.750%

5.000%

5.431%

3.000%-5.000%

3.250%-5.000%

4.000%-5.000%

2.000%-5.000%

Amount 44,820 27260 14,000 1,000 50,660 62,000 138,000 108,705 136,295 34,710 70,290 25,700 59,300 120,000 143,375 34,570 103,360 140,465

$1,314,510 Outstanding Electric System Revenue Bonds follows (in thousands):

as of December 31, 2010, were as Issue Maturity Dates Type 1993 Series C 2002 Series B 2003 Series A 2003 Series A 2005 Series A 2005 Series A 2005 Series B 2006 Series A 2006 Series A 2007 Series A 2007 Series A 2008 Series A 2008 Series A 2009 Series A 2009 Series A 2010 Series A 2011-2014 2011-2017 2011-2024 2016-2018 2011-2026 2027-2030 2017-2022 2018-2044 2029-2046 2018-2027 2029-2043 2018-2028 2029-2039 2023-2029 2030-2039 2022-2041 Term Serial Serial Term Serial Term Serial Serial Term Serial Term Serial Term Serial Term Term Interest Rates 5.500%

4.250%-5.000%

3.550%-4.750%

4.250%

3.400%-4.600%

4.700%

5.000%

4.250%-4.750%

4.650%-5.000%

4.000%-5.000%

4.750%-5.000%

4.600%-5.500%

5.500%

4.000%-4.750%

5.000%

5.431%

Amount 61,045 150,550 77,000 21,000 89,000 33,000 50,660 62,000 138,000 108,705 136,295 34,710 70,290 25,700 59,300 120,000

$1,237,255 OPPD 2011 Annual Report 38

On February 1, 2011, a principal payment of $28,465,000 was made for the Electric System Revenue Bonds. On August 1, 2011, a principal payment of $8,350,000 was made for the early call of the 1993 Series C term bonds due February 1, 2012.Term bonds are subject to call every six months. On June 15, 2011, OPPD issued 2011 Series A Electric System Revenue Bonds. On December 16, 2011, OPPD issued 2011 Series B Electric System Revenue Bonds and Series C Electric System Revenue Bonds.

On February 1, 2010, a principal payment of $36,830,000 was made for the Electric System Revenue Bonds. On August 2, 2010, a principal payment of $7,875,000 was made for the early call of the 1993 Series C term bonds due February 1, 2011.Term bonds are subject to call every six months. On November 17, 2010, OPPD issued 2010 Series A taxable Electric System Revenue Bonds. These bonds were designated as Build America Bonds. The federal government will subsidize 35.0% of the interest paid on these bonds.

Electric System Revenue Bonds, from the following series, with outstanding principal amounts of $459,850,000 and $173,555,000 as of December 31, 2011 and 2010, respectively, were legally defeased: 1986 Series A, 1992 Series B, 1993 Series B, 2002 Series A, 2002 Series B, 2003 Series A and 2005 Series B. Defeased bonds are funded by government securities deposited by OPPD in irrevocable escrow accounts.

Accordingly, the bonds and the related government securities escrow accounts are not included in OPPD's balance sheet.

OPPD's bond indenture amended effective March 4, 2009, provides for certain restrictions, the most significant of which are:

" Additional bonds may not be issued unless estimated net receipts (as defined) for each future year equal or exceed 1.4 times the debt service on all Electric System Revenue Bonds outstanding, including the additional bonds being issued or to be issued in the case of a power plant (as defined) being financed in increments.

" The Electric System is required to be maintained by the Company in good condition.

There is no longer a prescribed amount for replacements, renewals or additions to the Electric System.

Electric System Revenue Bond payments are as follows (in thousands):

Principal Interest 2012 29,620 58,392 2013 39,580 61,775 2014 39,930 59,911 2015 40,465 58,107 2016 43,065 56,232 2017-2021 251,395 248,857 2022-2026 157,760 200,577 2027-2031 204,860 156,357 2032-2036 186,980 104,058 2037-2041 221,385 49,482 2042-2046 99,470 12,623 Total

$1,314,510

$1,066,371 The average interest rate for Electric System Revenue Bonds was 4.9%, 4.8% and 4.7% for the years ended December 31, 2011, 2010 and 2009, respectively.

Electric System Subordinated Revenue Bonds -These bonds are payable from and secured by a pledge of revenues of the Electric System, subject to the prior payment of the operations and maintenance expenses of the Electric System and the prior payment of the Electric System Revenue Bonds. The payment of the principal and interest on these bonds is insured by a municipal bond insurance policy.

The Electric System Subordinated Revenue Bonds include Periodically Issued Bonds (PIBs). Certain issues of the PIBs may be redeemed prior to maturity upon the death of the holder subject to certain conditions as outlined in the offering document.

39 OPPD 2011 Annual Report

Electric System Subordinated Revenue Bonds (PIBs) payments are as follows (in thousands):

Principal 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027-2031 2032-2036 2037-2041 2042 Total Interest

$ 6,561 6,561 6,561 6,561 6,561 32,803 32,803 32,804 30,616 14,737 564

$177,132 50,000 72,460 24,270

$146,730 Electric System Subordinated Revenue Bond payments for the 2007 Series AA are as follows (in thousands):

Principal Intere st 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027-2031 2032-2036 2037-2038 Total 3,000 26,000 49,000 90,000 32,000

$200,000 8,901 8,901 8,901 8,902 8,902 44,219 41,948 32,366 16,650 1,485

$181,175 The average interest rate for the Electric System Subordinated Revenue Bonds (PlBs and the 2007 Series AA was 4.5% for each of the three years in the period ended December 31, 2011.

Electric Revenue Notes - Commercial Paper Series - On September 21, 2010, OPPD executed a Credit Agreement for its Commercial Paper Program, which will expire on October 1, 2013. The average borrowing rates were 0.3% for the years ended December 31, 2011 and 2010, and 0.5% for the year ended December 31, 2009.

The outstanding balance of the Commercial Paper Program was $150,000,000 as of December 31, 2011 and 2010.

Minibonds - Minibonds consist of current interest-bearing and capital appreciation minibonds.

The minibonds may be redeemed prior to their maturity dates at the request of a holder, subject to certain conditions as outlined in the Minibond Official Statement. There were no minibond maturities in 2011 other than redemptions for the annual put option. The average interest rate was 5.05% for each of the three years in the period ended December 31, 2011.

The principal and interest on these bonds is insured by a municipal bond insurance policy.

The outstanding balances as of December 31 were as follows (in thousands):

Principal 2001 minibonds, due 2021 (5.05%)

Accreted interest on capital appreciation minibonds Total 2011

$23,711 4,045

$27,756 2010

$23,909 3,594

$27,503 Subordinated Obligation -The subordinated obligation is payable in annual installments of

$481,815, including interest at 9.0%, through 2014.

OPPD 2011 Annual Report 40

Credit Agreements-On September 21, 2010, OPPD executed a Credit Agreement with the Bank of America, N.A., for $250,000,000, which will expire on October 1, 2013. The Credit Agreement includes a covenant by OPPD to retain drawing capacity at least equal to the issued and outstanding amount of Commercial Paper notes. There were no amounts outstanding under this Credit Agreement as of December 31, 2011 and 2010.

NC2 Separate Electric System Revenue Bonds - OPPD executed Participation Power Agreements with seven public power and municipal utilities for half of the output of NC2. The participants' rights to receive, and obligations to pay costs related to, half of the output is the "Separate System."

NC2 Separate Electric System Revenue Bond payments are as follows (in thousands):

Principal Interest 2012 2,765

$ 11,709 2013 2,865 11,607 2014 2,970 11,498 2015 3,080 11,381 2016 3,200 11,258 2017-2021 18,070 54,166 2022-2026 22,360 49,741 2027-2031 28,100 43,840 2032-2036 35,530 36,221 2037-2041 42,635 26,335 2042-2046 50,000 14,931 2047-2049 33,750 2,469 Total

$245,325

$285,156 The payment of principal and interest on the 2005 Series A and 2006 Series A Bonds is insured by municipal bond insurance policies. The average interest rate for NC2 Separate Electric System Revenue Bonds was 4.8% for each of the three years in the period ended December 31, 2011.

Fair Value Disclosure -The aggregate carrying amount and fair value of OPPD's long-term debt, including current portion and excluding unamortized loss on refunded debt at December 31 were as follows (in thousands):

2011 2010 Carrying Fair Carrying Fair Amount Value Amount Value

$2,135,366

$2,265,351

$2,018,372

$2,014,068 The estimated fair value amounts were determined using rates that are currently available for issuance of debt with similar credit ratings and maturities. As market interest rates decline in relation to the issuer's outstanding debt, the fair value of outstanding debt financial instru-ments with fixed interest rates and maturities will tend to rise. Conversely, as market interest rates increase, the fair value of outstanding debt financial instruments will tend to decline.

Fair value will normally approximate carrying amount as the debt financial instrument nears its maturity date. The use of different market assumptions may have an effect on the estimated fair value amount. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that bondholders could realize in a current market exchange.

6. BENEFIT PLANS FOR EMPLOYEES AND RETIREES RETIREMENT PLAN Plan Description - All full-time employees are covered by OPPD's Retirement Plan (Retirement Plan) as they are not covered by Social Security. It is a single-employer, defined benefit plan, which provides retirement and death benefits to Retirement Plan members and beneficiaries. The Retirement Plan was established and may be amended at the direction of OPPD's Board of Directors and is administered by OPPD. Actuarial valuations are completed as of January 1 of each year. As of January 1, 2011, 1,628 of the 4,363 total participants were receiving benefits. Generally, employees at the normal retirement age of 65 are entitled 41 OPPD 2011 Annual Report

to annual pension benefits equal to 2.25% of their average compensation (as defined) times years of credited service (as defined) under theTraditional Option (as defined). Under the Cash Balance Option (as defined), members can receive the total vested value of their Cash Balance Account at separation from employment with OPPD. Employees hired after December 31, 2007, may make a one-time irrevocable election to have benefits determined based on the Cash Balance Option instead of theTraditional Option before the end of their first year of continuous service. There were 81 active members with the Cash Balance Option as of December 31, 2011.

Funded Status and Funding Progress - Employees contributed 6.2% of their covered payroll to the Retirement Plan for the years 2011 and 2010 and 5.6% for the year 2009. OPPD is obligated to contribute the balance of the funds needed on an actuarially determined basis.

The Present Value of Accrued Plan Benefits (PVAPB) is the present value of benefits based on compensation and service to that date. This is the amount the Retirement Plan would owe participants if the Retirement Plan were frozen on the valuation date.

The PVAPB is presented in the table below based on the actuarial valuation as of January 1 (dollars in thousands):

Under Funded Present Value of PVAPB as a Actuarial Value Accrued Plan Under Funded Covered Percentage of of Assets Benefits (PVAPB)

Funded PVAPB Ratio Payroll Covered Payroll (a)

(b)

(b-a)

(a/b)

(c)

((b-a)/c) 2011

$771,588

$929,439

$157,851 83.0%

$187,285 84.3%

2010

$733,227

$854,121

$120,894 85.8%

$188,277 64.2%

2009

$698,111

$782,059

$ 83,948 89.3%

$177,297 47.3%

The Actuarial Accrued Liability (AAL) is the present value of retirement benefits adjusted for assumptions for future increases in compensation and service attributable to past accounting periods. The funded ratio for the AAL was lower than the PVAPB because the AAL method assumes future compensation and service increases. The annual contributions to the Retirement Plan consist of the cost for the current period plus a portion of the unfunded accrued liability.

The AAL is presented in the table below based on the actuarial valuation as of January 1 (dollars in thousands):

Unfunded UAL Actuarial Value Actuarial Accrued Accrued Funded Covered Percentage of of Assets Liability (AAL)

Liability (UAL)

Ratio Payroll Covered Payroll (a)

(b)

(b-a)

(a/b)

Wc)

((b-a)/c) 2011

$771,588

$1,094,909

$323,321 70.5%

$187,285 172.6%

2010

$733,227

$1,018,914

$285,687 72.0%

$188,277 151.7%

2009

$698,111

$ 963,325

$265,214 72.5%

$177,297 149.6%

Annual Pension Cost and Actuarial Assumptions -The annual pension cost and required contribution by OPPD was $47,585,000, $42,045,000 and $45,278,000 for the years ended December 31, 2011, 2010 and 2009, respectively. There was no net pension obligation for any of the three years in the period ended December 31, 2011. Retirement Plan contributions by OPPD employees for their covered annual payroll were $11,369,000, $11,313,000 and

$10,135,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

The Entry Age Normal (Level Percent of Pay) cost method was used to determine contributions to the Retirement Plan. Under this actuarial method, an allocation to past service and future service is made by spreading the costs over an employee's career as a level percentage of pay. The actuarial value of Retirement Plan assets was determined using a method which smooths the effect of short-term volatility in the market value of investments over approximately five years. Cost-of-living adjustments are provided to retirees and beneficiaries at the discretion of the Board of Directors. Ad-hoc cost-of-living increases granted to retirees and beneficiaries are amortized in the year for which the increase is authorized by the Board of Directors. Except for the liability associated with cost-of-living increases, the unfunded actuarial accrued liability was amortized on a level basis (closed group) over 15 years. A 15-year fresh start was used for the valuation as of January 1, 2010, with future assumption changes, plan changes and actual gains or losses OPPD 2011 Annual Report 42

amortized over 15 years. The healthy mortality table used was the RP-2000 Combined Healthy MortalityTable projected to the valuation date, and the disabled mortality table was the RP-2000 Disabled Retiree MortalityTable.

Other actuarial assumptions are presented in the table below based on the actuarial valuation as of January 1:

2011 2010 2009 Investment return (discount rate) 775%

8.00%

8.00%

Average rate of compensation increase 5.20%

5.20%

5.20%

Ad-hoc cost-of-living adjustment 1.00%

OPPD provides for other employee benefit obligations to allow certain current and former employees to retain the benefits to which they would have been entitled under OPPD's Retirement Plan, except for federally mandated limits and to provide supplemental pension benefits. The related pension expense, fund balance and employee benefit obligation were not material for any of the three years in the period ended December 31, 2011.

DEFINED CONTRIBUTION RETIREMENT SAVINGS PLAN - 401 (K)/457 OPPD sponsors a Defined Contribution Retirement Savings Plan - 401(k) (401 k Plan) and a Defined Contribution Retirement Savings Plan - 457 (457 Plan). Both the 401 k Plan and 457 Plan cover all full-time employees and allow contributions by employees that are partially matched by OPPD. The 401 k Plan's and 457 Plan's assets and income are held in an external trust account in the employee's name. OPPD's matching share of contributions was

$7,143,000, $7,279,000 and $7,334,000 for the years ended December 31, 2011, 2010 and 2009, respectively. The employer maximum annual match on employee contributions was

$4,000 per employee for each of the three years in the period ended December 31, 2011.

POST EMPLOYMENT BENEFITS OTHERTHAN PENSIONS OPPD has two separate plans for Other Post Employment Benefits (OPEB). For post employment health care benefits, OPEB Plan A is for employees hired prior to January 1, 2008, and OPEB Plan B is for employees hired after December 31, 2007 OPEB Plan A provides post employment life insurance benefits to qualifying employees.

OPEB PLAN A Plan Description - OPEB Plan A (Plan A) provides post employment health care benefits to retirees, surviving spouses, and employees on long-term disability and their dependents and life insurance benefits to retirees and employees on long-term disability. Health care benefits are based on the coverage elected by Plan A members. OPPD's Medical Plan becomes a secondary plan when the members are retired and eligible for Medicare benefits. Substantially all full-time employees of OPPD hired prior to January 1, 2008, participate in OPEB Plan A.

As of January 1, 2011, 1,500 of the 3,805 total members were receiving benefits.

Funded Status and Funding Progress - Plan A members are required to pay a monthly premium based on the elected coverage and the respective premium cost share agreement at the time of retirement. OPPD contributes the balance of the funds needed on an actuarially determined basis.

The Actuarial Accrued Liability (AAL) is the present value of benefits attributable to past accounting periods.

The AAL is presented in the table below based on the actuarial valuation as of January 1 (in thousands):

Unfunded UAL Actuarial Value Actuarial Accrued Accrued Funded Covered Percentage of of Assets Liability (AAL)

Liability (UAL)

Ratio Payroll Covered Payroll (a)

(b)

(b-a)

(a/b)

(c)

((b-a)/c) 2011

$51,274

$360,200

$308,926 14.2%

$187,285 164.9%

2010

$37,729

$316,629

$278,900 11.9%

$188,277 148.1%

2009

$28,239

$277,823

$249,584 10.2%

$177,297 140.8%

43 OPPD 2011 Annual Report

Annual OPEB Cost and Actuarial Assumptions -The annual OPEB cost and annual required contribution (ARC) for OPEB Plan A was $29,511,000, $25,751,000 and $22,050,000 for the years ended December 31, 2011, 2010 and 2009, respectively. Accounting standards require recognition of an OPEB liability on the balance sheet for the amount of any unfunded ARC. Since OPPD funded the entire ARC, there was no net OPEB obligation for any of the three years in the period ended December 31, 2011. Contributions by Plan A members were

$2,303,000, $2,096,000 and $1,790,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

The actuarial assumptions and methods used for the valuations on January 1, 2011, 2010 and 2009, were as follows:

• The pre-Medicare health care trend rates ranged from 8.0% initial to 5.0% ultimate for 2011, 9.0% initial to 5.0% ultimate for 2010, and 8.5% initial to 5.0% ultimate for 2009,

• The post-Medicare health care trend rates ranged from 75% initial to 5.0% ultimate for 2011, 9.0% initial to 5.0% ultimate for 2010, and 10.0% initial to 5.0% ultimate for 2009.

• The investment return (discount rate) used was 75% for 2011 and 785% for 2010 and 2009, which was based on OPPD's expected long-term return on assets used to finance the payment of plan benefits.

• The average rate of compensation increase used for all three years was 5.2%.

• The actuarial cost method used was the Projected Unit Credit.

" Amortization for the initial unfunded AAL and OPEB Plan changes was determined using a period of 30 years and the increasing method at a rate of 3.0% per year.

" Amortization for all changes (including gains/losses, assumption and plan provisions) after the intial year were determined using a closed period of 15 years and the level dollar method.

• The healthy mortality table used for all three years was RP-2000 Combined Healthy MortalityTable projected to the valuation date.

OPEB PLAN B Plan Description - OPEB Plan B (Plan B) provides post employment health care benefits to retirees and surviving spouses and employees on long-term disability. Health care benefits are based on the coverage elected by the Plan B members and the balance in the mem-ber's hypothetical account, which is a bookkeeping account. The hypothetical accounts are credited with $10,000 upon commencement of full-time employment, $1,000 annually on the member's anniversary date and interest income at 5.0% annually. Plan B benefits are for the payment of OPPD's share of the members' health care premiums. OPPD's Medical Plan becomes a secondary plan when the members are retired and eligible for Medicare benefits.

Plan benefits will continue until the member and eligible spouse cease to be covered under OPPD's Medical Plan, the member's hypothetical account is depleted or Plan B terminates, whichever occurs first. Benefits are forfeited for any member who fails to retire or who retires but does not immediately commence payments. Substantially all full-time employees of OPPD hired after December 31, 2007, participate in Plan B. As of January 1, 2011, there were 318 Plan B members. No members received benefits in 2011 or 2010.

Funded Status and Funding Progress - Commencing in 2010, OPEB Plan B was funded on an actuarially determined basis. Prior to 2010, OPPD funded $10,000 per member upon commencement of full-time employment and an additional $1,000 for each year of service completed. Members do not contribute to Plan B.

The AAL is presented in the table below based on the actuarial valuations as of January 1, 2011 and 2010, and December 31, 2009 (in thousands):

Overfunded OAL Actuarial Value Actuarial Accrued Accrued Funded Covered Percentage of of Assets Liability (AAL)

Liability (OAL)

Ratio Payroll Covered Payroll (a)

(b)

(a-b)

(a/b)

(c)

((a-b)/c) 2011

$3,281

$ 486

$2,795 675.1%

$23,888 11.7%

2010

$3,098 176

$2,922 1,760.2%

$18,494 15.8%

2009

$3,090

$1,308

$1,782 236.2%

$13,074 13.6%

OPPD 2011 Annual Report 44

Annual OPEB Cost and Actuarial Assumptions -The valuation date was changed from December 31 to January 1 starting in 2010 to be consistent with OPEB Plan A. The actuarial cost method was also changed to more evenly spread the cost of the plan over an employee's working career, as opposed to the prior method, which front-loaded the liability. The ARC for OPEB Plan B was $0 for the years ended December 31, 2011 and 2010, and $384,000 for the year ended December 31, 2009. The annual OPEB cost was $91,000,

$87,000 and $429,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

There was an OPEB net asset of $1,764,000 and $1,855,000 as of December 31, 2011 and 2010, respectively.

The actuarial assumptions and methods used for the valuations on January 1, 2011 and 2010, and December 31, 2009, were as follows:

• The investment return (discount rate) used for all three years was 5.5%, which was based on OPPD's expected long-term return on assets used to finance the payment of plan benefits.

• The actuarial cost method used was Projected Unit Credit for 2011 and 2010, and the Pure Unit Credit for 2009.

" Amortization for gains/losses was determined using a closed period of 15 years and the level dollar method.

• The healthy and disabled mortality table used was the RP-2000 Combined Healthy Mortality table projected to the valuation date.

SELF-INSURANCE HEALTH PROGRAM OPPD provides employee health care and life insurance benefits to substantially all full-time employees. There were 2,170 and 2,152 active employees with medical coverage as of December 31, 2011 and 2010, respectively. An Administrative Services Only (ASO) Health Insurance Program is used to account for the health insurance claims. With respect to the ASO program, reserves sufficient to satisfy both statutory and OPPD-directed requirements have been established to provide risk protection (Note 3). Additionally, private insurance has been purchased to cover claims in excess of 125% of expected aggregate levels and

$450,000 per member.

Health care expenses for full-time employees (reduced by premium payments from participants) were $22,603,000, $26,557,000 and $21,990,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

The total cost of life and long-term disability insurance for active employees was $1,190,000,

$854,000 and $1,807,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

The balance of the Incurred But Not Presented Reserve was $2,177,000, $2,221,000 and

$2,707,000 as of December 31, 2011, 2010 and 2009, respectively.

Audited financial statements for the Retirement Plan, Defined Contribution Retirement Savings Plans and OPEB Plans may be reviewed by contacting the Pension Administrator at OPPD's Corporate Headquarters.

7. NC2 PARTICIPANT DEPOSITS NC2 Participants were given the option to provide their own funds or to use OPPD Separate Electric System Revenue Bonds to fund their share of construction and start-up costs. In addition, since commercial operation, Participants have provided funds for capital renewals and expenditures. This liability represents the amount that the Participants' funds, including interest, exceeded allocated costs. Participants were refunded a portion of their deposits in 2011. NC2 Participant deposits were $9,939,000 and $16,207,000 as of December 31, 2011 and 2010, respectively.

8. ADDITIONS TO AND UTILIZATIONS OF RESERVES The Debt Retirement Reserve was used to provide additional revenues and funding for capital expenditures and debt retirement in the amount of $24,000,000 and $13,000,000 for the years ended December 31, 2011 and 2009, respectively. Revenues of $13,000,000 were transferred to the Debt Retirement Reserve to use in future years for the year ended December 31, 2010.

The Board of Directors approved a $4,200,000 expense in 2010 for 2011 wind energy purchases to limit the 2011 FPPA. The Rate Stabilization Reserve was used to offset the financial impact from this expense. Due to strong financial results, the Board approved 45 OPPD 2011 Annual Report

the $4,200,000 replenishment of this reserve for 2010. There were no net revenue adjustments from changes to the Rate Stabilization Reserve for the years ended December 31, 2011, 2010 and 2009.

9. DERIVATIVES OPPD entered into natural gas futures contracts with the NewYork Mercantile Exchange (NYMEX) to hedge expected cash flows associated with purchases of natural gas for operations. As required by generally accepted accounting principles, OPPD's natural gas futures contracts were evaluated and determined to be effective hedges. Accordingly, the deferred cash flow hedges for the unrealized losses and the fair value of the commodity derivative instruments were reported on the balance sheet.

OPPD had futures contracts with NYMEX based on the notional amount of 600,000 and 1,040,000 Million Metric BritishThermal Units (mmBtu) of natural gas with negative fair values and deferred cash outflows of $1,444,000 and $2,628,000 as of December 31, 2011 and 2010, respectively. The current portion was 320,000 and 630,000 mmBtu, with deferred outflows of $1,035,000 and $2,095,000, as of December 31, 2011 and 2010, respectively.

The long-term portion was 280,000 and 410,000 mmBtu, with deferred outflows of $409,000 and $533,000 as of December 31, 2011 and 2010, respectively. The fair value and deferred cash outflows for these contracts were determined using published pricing benchmarks obtained through independent sources. All of these contracts will be settled based on the pricing point at Henry Hub on their respective expiration date. These deferred cash flow hedges were reported in other current assets and deferred charges and other assets (Note 2).

The balance in the margin account of $1,535,000 was reported with the fair value of the derivative instruments. The net amount for commodity derivative instruments reported in other current assets was $91,000 and $664,000 as of December 31, 2011 and 2010, respectively (Note 2). There were realized losses of $2,213,000, $2,600,000 and $3,560,000 for the years ended December 31, 2011, 2010 and 2009. Realized gains or losses from effective hedges are included in fuel expense.

Information regarding OPPD's NYMEX natural gas contracts outstanding, along with the deferred cash outflows of the aggregate contracts by maturity dates, as of December 31, 2011, was as follows (dollars in thousands):

Notional Effective Maturity Reference Amount Fair Value/Change Date Date Rate (mmBtu) in Fair Value Various June 2012 Pay average $6.392/mmBtu 50,000 (160)

Various July 2012 Pay average $6.324/mmBtu 150,000 (462)

Various August 2012 Pay average $6.716/mmBtu 120,000 (413)

Current 320,000 (1,035)

Various June 2013 Pay average $5.206/mmBtu 50,000 (67)

Various July 2013 Pay average $5.503/mmBtu 80,000 (128)

Various August 2013 Pay average $5.446/mmBtu 70,000 (106)

Various June 2014 Pay average $5.578/mmBtu 10,000 (13)

Various July 2014 Pay average $5.626/mmBtu 40,000 (54)

Various August 2014 Pay average $5.670/mmBtu 30,000 (41)

Long-term 280,000 (409)

Total 600,000

$(1,444)

Basis Risk - Basis risk is the risk that arises when variable rates or prices of a hedging derivative instrument and a hedged item are based on different reference rates. OPPD has location basis risk created by purchasing natural gas at the Northern Natural Gas "Demarcation" pricing point and entering into the futures contract at the Henry Hub pricing point. Critical terms risk exists because the hedging instrument is a monthly transaction and the purchase of physical natural gas is typically a daily transaction. These two differences create the greatest amount of varia-tion between OPPD's hedging instruments and the price paid for physical purchases.

Rollover Risk - Rollover risk is the risk that a hedging derivative instrument associated with a hedgeable item does not extend to the maturity of that hedgeable item. Rollover risk exists because the purchase of natural gas for the generation of electricity is an ongoing process, whereas OPPD's hedges are only for the summer load months.

OPPD 2011 Annual Report 46

I0. OTHER - NET The composition for the years ended December 31 was as follows (in thousands):

2011 2010 2009 Grants from FEMA

$15,645

$4,593

$1,552 Interest subsidies from the federal government 2,281 279 Health care subsidies from the federal government 1,031 1,967 Other 98 182 456 Total

$19,055

$ 7,021

$2,008 I!. SPECIAL ITEM OPPD gave notice to SPP in 2010 of its intent to change membership status from a transmission-owning member to a non transmission-owning member. A Special Item and related liability for the estimated fees of $8,380,000 to change membership status was recorded in 2010. The decision was made in 2011 to retain the same membership status because of several changes made by SPP including the approval of a 20-Year Integrated Transmission Plan with substantial benefits to OPPD's service area, the creation of a task force to address unintended consequences of the transmission cost allocation, and the planned move to an Integrated Marketplace in 2014. In 2011, the $8,380,000 liability for the estimated fees to change membership status was removed and a corresponding amount was recorded as a Special Item.

12. FLOOD IMPACT Due to record snowfall in the Rocky Mountains and high water levels in the Missouri River Reservoirs, the United States Army Corps of Engineers released record amounts of water from dams along the Missouri River in 2011.This release of water caused flooding in areas near the Missouri River and impacted the operation of FCS. The reactor has been in cold shutdown since April 2011, which was the start of a planned refueling outage. In June 2011, outage activities were suspended to protect FCS facilities from rising river levels. In September 2011, water levels had receded enough to allow outage activities to resume and inspections for any flood damage to begin. OPPD incurred higher fuel costs and unexpected energy purchases due to this extended outage, which resulted in an under-recovery of fuel and purchased power costs for 2011. Retail revenues and the related regulatory asset were increased $35,345,000 for the under-recovery of the Fuel and Purchased Power Adjustment for 2011.

The Flood Event impacted all of the coal and nuclear generating units and some transmission and distribution structures. Estimated expenditures for the Flood Event were $47,525,000.

These expenditures were partially offset by estimated insurance proceeds of $11,536,000 in 2011, of which $7,000,000 was received in 2011.

Certain areas of OPPD's service territory were declared disaster areas, which will allow OPPD to receive disaster assistance from FEMA. Estimated 2011 claims with FEMA for the Flood Event were $15,605,000.

13. NUCLEAR REGULATORY COMMISSION OVERSIGHT The NRC placed FCS into a special category of their inspection manual, Chapter 0350, in December 2011. This Chapter is for nuclear plants that are in extended shutdowns with performance issues. Efforts are under way to satisfactorily address all issues. Normal operations of FCS are expected to resume in 2012, subject to NRC review and approval.

14. COMMITMENTS AND CONTINGENCIES At December 31, 2011, OPPD's commitment for the uncompleted portion of construction contracts was approximately $58,936,000.

OPPD has power sales commitments, which extend through 2027, of $82,678,000 at December 31, 2011. OPPD has power purchase commitments, which extend through 2020, of $106,879,000 at December 31, 2011.These amounts do not include the Participation Power Agreements (PPAs) for NC2 or OPPD's commitments for wind energy purchases.

47 OPPD 2011 Annual Report

OPPD has 40-year PPAs with seven public power and municipal utilities (the Participants) for the sale of half of the 684.6-megawatt (MW) net capacity of NC2. The Participants have agreed to purchase their respective shares of the output on a "take-or-pay" basis even if the power is not available, delivered to or taken by the Participants. The Participants are subject to a step-up provision, whereby in the event of a Participant default, the remaining Participants are obligated to pay a share of any deficit in funds resulting from the default.

OPPD has an NC2 Transmission Facilities Cost Agreement with the Participants, which ad-dresses the cost allocation, payment and cost recovery for delivery of their respective power.

OPPD has a 20-year PPA with the Nebraska Public Power District (NPPD) for a 16.8% share, or approximately 10 MW, of a 59.4-MW wind-turbine facility near Ainsworth, Nebraska.

OPPD's commitment through 2025 under the PPA is $25,694,000 at December 31, 2011.

OPPD is obligated, on a "take-or-pay" basis, under the PPA to make payments for purchased power even if the power is not available, delivered to or taken by OPPD. In the event another power purchaser defaults, OPPD is obligated, through a step-up provision, to pay a share of any deficit in funds resulting from the default.

OPPD has a 20-year PPA with NPPD for a 31.25% share, or 25-MW, of an 80-MW wind-turbine facility near Bloomfield, Nebraska. OPPD's commitment through 2028 under the PPA is

$11,118,000 at December 31, 2011. OPPD is obligated, on a "take-and-pay" basis, under the PPA to make payments for purchased power delivered to OPPD.

OPPD has a 20-year PPA with Flat Water Wind Farm LLC with an obligation for 100% of the output of the 60-MW wind-turbine facility near Humboldt, Nebraska. OPPD is obligated under the PPA to make payments for purchased power only when the power is made available to OPPD. OPPD's commitment through 2030 under the PPA is $171,000 at December 31, 2011.

OPPD has a 20-year PPA with TPW Petersburg LLC with an obligation for 100% of the output of the 40.5-MW wind-turbine facility near Petersburg, Nebraska. OPPD is obligated under the PPA to make payments for purchased power only when the power is made available to OPPD. OPPD's commitment through 2031 under the PPA is $360,000 at December 31, 2011.

At December 31, 2011, OPPD has coal-supply contracts, which extend through 2015, with minimum future payments of $237,223,000. OPPD also has coal-transportation contracts, which extend through 2013, with minimum future payments of $200,099,000 at December 31, 2011. These contracts are subject to price adjustments.

Contracts for uranium concentrate and conversion services are in effect through 2016 with estimated future payments of $61,535,000 at December 31, 2011. Contracts for the enrichment of nuclear fuel are in effect through 2025 with estimated future payments of

$181,963,000 at December 31, 2011. Additionally, OPPD has contracts through 2013 for the fabrication of nuclear fuel assemblies with estimated future payments of $4,924,000 at December 31, 2011.

In 2007, OPPD and the Metropolitan Community College (MCC), executed an Educational Services Agreement for $1,000,000 of educational services (as defined in the Agreement) over a ten-year period. If OPPD has not purchased the educational services by the end of the term, MCC shall have the right to extend the Agreement for an additional five years. As of December 31, 2011, OPPD's remaining commitment was $649,000.

Under the provisions of the Price-Anderson Act at December 31, 2011, OPPD and all other licensed nuclear power plant operators could each be assessed for claims and legal costs in the event of a nuclear incident in amounts not to exceed a total of $117,495,000 per reactor per incident, with a maximum of $17,500,000 per incident in any one calendar year. These amounts are subject to adjustment every five years in accordance with the Consumer Price Index.

OPPD is engaged in routine litigation incidental to the conduct of its business and, in the opinion of Management, based upon the advice of General Counsel, the aggregate amounts recoverable or payable from OPPD, taking into account amounts provided in the financial statements, are not significant.

OPPD 2011 Annual Report 48

STATISTICS (Unaudited) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Total Utility Plant (at year end)

(in thousands of dollars).............

5,027,093 4,865,417 4,678,449 Total Indebtedness (at year end)

(in thousands of dollars)...........

2,085,540 2,011,969 1,937,704 Operating Revenues (in thousands of dollars)

Residential.......................

337,053 335,294 292,887 Commercial......................

274,102 284,400 265,668 Industrial.......................

186,417 164,621 139,865 Off-System Sales...................

159,732 184,374 158,354 FPPA Revenue.....................

35,345 269 Unbilled Revenues...................

(4,239) 1,232 7,449 Provision for Rate Stabilization..........

Provision for Debt Retirement..........

24,000 (13,000) 13,000 Other Electric Revenues....

29,352 29,160 22,743 Total........................

1,041,762 986,350 899,966 Operations &

Maintenance Expenses (in thousands of dollars)..............

789,516 720,957 653,993 4,561,815 4,259,501 4,166,997 3,656,433 3,363,909 3,224,851 3,081,073 1,902,403 1,866,472 1,565,807 1,133,171 271,935 267,042 249,174 237,798 238,496 228,060 213,314 204,314 109,827 100,239 94,109 90,344 127,676 110,399 96,500 120,030 3,391 1,742 2,527 630 20,000 27,000 (15,000) 16,648 15,771 36,204 13,436 787,973 750,253 676,828 666,552 561,396 508,524 461,101 447,270 894,020 939,972 844,141 211,913 208,426 214,447 194,684 189,820 189,786 90,987 85,406 75,946 109,523 108,795 65,885 (1,134) 4,086 (1,268)

(10,500)

(55,000)

(35,000) 15,342 11,541 11,357 566,315 573,074 545,653 401,778 404,040 339,750 Payments in Lieu of Taxes (in thousands of dollars)..............

28,217 27,851 24,810 22,426 21,398 20,241 19,693 18,591 18,067 18,553 Net Operating Revenues before Depreciation, Amortization and Decommissioning (in thousands of dollars)..............

224,029 237,542 221,163 204,151 220,331 195,486 199,589 145,946 150,967 187,350 Net Income (in thousands of dollars)..............

54,440 40,047 46,557 79,186 89,489 84,290 82,171 24,844 25,878 80,621 Energy Sales (in megawatt-hours)

Residential.....................

3,602,973 3,644,400 3,361,672 Commercial....................

3,481,459 3,777,092 3,672,982 Industrial......................

3,698,719 3,427,710 3,039,396 Off-System Sales................

4,631,175 5,552,645 5,534,803 Unbilled Sales.....................

(85,917)

(24,109) 74,416 3,486,858 3,546,116 3,374,053 3,356,196 3,758,853 3,750,634 3,577,436 3,535,036 3,054,576 3,079,589 3,151,895 3,369,713 3,347,214 3,353,621 2,877,282 2,759,087 2,664,743 2,644,634 2,630,038 2,561,569 2,290,368 3,003,888 2,858,004 2,486,483 2,502,433 3,646,043 3,775,362 3,273,359 50,374 13,858 9,628 21,285 6,890 61,165 (23,697)

Total................

Number of Customers (average per year) 15,328,409 16,377,738 15,683,269 13,177,255 12,927,699 12,112,343 12,059,584 12,707,260 12,824,899 12,045,546 Residential......................

308,412 303,374 299,813 Commercial.......................

43,564 43,225 43,134 Industrial...........................

206 154 151 Off-System...........................

41 38 34 Total...........................

352,223 346,791 343,132 Cents per kWh 296,648 293,642 289,713 282,310 275,854 270,579 266,464 42,867 42,214 41,488 40,665 39,834 38,961 38,401 142 134 132 133 135 127 117 32 35 37 39 45 48 54 339,689 336,025 331,370 323,147 315,868 309,715 305,036 (average)

Residential................

9.37 Com m ercial.........................

7.89 Industrial..........................

5.05 Retail.............................

7.4 2 Generating Capability (at year end) 9.22 7.54 4.83 7.26 8.77 729 4.62 6.96 7.82 6.36 3.82 6.13 7.51 6.07 3.64 5.93 7.40 5.99 3.55 5.81 7.07 5.77 3.46 5.58 6.95 5.76 3.40 5.48 6.73 5.69 3.39 5.39 6.81 5.41 3.32 5.46 (in megawatts)....................

3,222.7 3,224.7 3,223.9 System Peak Load (in megawatts).............

2,548.8 2,548.8 2,544.1 2,542.5 2,540.5 2,540.5 2,220.5 2,181.1 2,197.4 2,271.9 2,223.3 2,143.8 2,144.8 2,037.4

. 2,468.3 2,402.8 2,316.4 Net System Requirements (in megawatt-hours)

Generated.....................

13,807,712 15,870,513 15,263,983 12,477,032 12,274,660 11,341,827 11,180,808 12,235,044 12,000,873 11,428,893 Purchased and Net Interchange...... (2,576,167)

(4,428,059) (4,627,627)

(1,864,214) (1,738,833) (1,268,780)

(1,148,903)

(2,716,242)

(2,557,981) (2,122,701)

Net..........................

11,231,545 11,442,454 10,636,356 10,612,818 10,535,827 10,073,047 10,031,905 9,518,802 9,442,892 9,306,192 49 OPPD 2011 Annual Report