ML17297A625
| ML17297A625 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 07/31/1981 |
| From: | Gutierrez R LOS ANGELES DEPT. OF WATER & POWER |
| To: | |
| Shared Package | |
| ML17297A623 | List: |
| References | |
| NUDOCS 8108030403 | |
| Download: ML17297A625 (32) | |
Text
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Ta!bile OII'oal)(IIennQs Comparative Highlights. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 1 Board Letter of Transmittal . ~ ~ ~ 2 Commission and Management ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 3 General Manager's Report... ~ ~ ~ ~ ~ 4 The Water System .. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 6 Water System Facts in Brief . ~ ~ <<9 The Power System . ..10 Power System Facts in Brief .13 Finances. ~ ~ ~ 14 Water Sales .... .21 Power Sales ............ ~ ~ ~ ~ ~ ~ ~ 0 27 System Map .....................Inside Back Cover
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Photograph Identifications Cover Broadway and Second Street, Los Angeles, 1902l(inset, Modem Day Downtown); Inside Front Cover and Page 1 Haynes Generating Stationl (inset, Dredger used in construction of Los Angeles Owens River Aqueduct, 1912); Page 5 Jawbone Siphon along route of the Los Angeles Aqueduct, 1913/(Inset, Castaic Power Plant); Page 6 Silver Lake Reservoir; Page 7 Cascades at terminus of Los Ange! es 0>>vns River Aqueduct, Dedication Day, November 5, 1913; Page 10 Navaio Generating Station; Page ll San Francisquito Hplroelectric Po>>vr Plant No. 1, p! aced in service 1917; Page 14 DLVP First Revenue Bond, 1936; Page 15 Fourth and Hill Streets, Los Angeles, 1913; Page 28 Early Downtown Los Angeles, circa, 1902. ,
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MhtI:m Pomm'iscal IHI'ERVICE Fiscal Year Fiscal Year Year Fiscal Year 1980 1979 1980 1979 Sales 174.3 billion 164.8 billion 18.1 billion 18.2 billion gallons'allons" kilowatt hours kilowatt hours Customers (Average for the year) 626,936 619,176 1,199,957 1,175,254 FINANCIAL What We Received Revenue from water and electric sales, and other income Net $ 119,867,776 $ 119,916,999 $ 945,114,879 $ ?91,842,048 How It Was Used Operation of water and electric systems $ 72,829,360 $ 66,359,665 $ 734,661,298 $ 542,197,172 Interest and expenses on debt, charged to income 13,540,844 14,032,345 76,234,354 69,619,634 Provision for depreciation 17,266,030 16,662,871 73,387,868 67,048,728 Net income $ 16,231,542 $ 22,862,118 $ 60,831,359 $ 112,976,514 Transferred to City of Los Angeles reserve fund 5,555,000 39,194,000 35,634,000 available (together with
'emainder provision for depreciation) for "retirement of bonds and to pay part of cost of new facilities $ 10,676,542 $ 22,862,118 $ 21,637,359 $ 77,342,514 s
How We Stand
, Total assets,.less accumulated depreciation $ 745,463,120 $ 721,435,983 $ 2,891,763,754 $ 2,665,912,530 Less debt in bonds or other long-term debt 262,955,311 273,202,919 1,723,518(712 1,584,080,209 Less miscellaneous liabilities 36,711,026 24,093,570 159,945 232 97,048,649 e s Remainder Reinvested~,
in the-business: i - =,, I r $ 445,796,783 $ 424,139,494 $ 1,008,299,810 .$ 984,783, 672 Constructio'n i p, I'acthttbs constructed, i
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$ 33~219,363 $ ~29,119 899 $ 182,2 81'219 $ 85,320,243
~'Panciltties co 'sStucted,'-tenIyear)s to If
'IIIlt.lI'i,Ih~ilr of.free/years 1980 and '979 ~t
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$ 332 000 000-",'i f $ 348 000,60t),
s 1,738,0 00 000 $ 1,7 05,000,000
,<r'] a 65Itp fnillion"cubfc.inete'rs f 1tPL I'
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Beard of Water and Power Commissioners
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~g)Eg Tom Bradley Mayor of Los Angeles LOS ANGELES CITY COUNCIL The City of Los Angeles John Ferraro, Fourth District Honorable Tom Bradley, Mayor President, City Council Honorable Members of the City Council Bob Ronka, First District Joel Wachs, T his Seventy-Ninth Annual Report, which reviews the operations of the Department during the fiscal year ending June 30, 1980, is submitted in accordance Second District with provisions of the City Charter.
'Joy Picus, Legislative actions aimed at curtailing the City's water diversions from the Third District Mono Basin were defeated largely due to your efforts and the support of many Zev Yaroslavsky, community and business organizations and dozens of water agencies throughout the Fifth District State.
Pat Russell, Although our conservation program will continue to play a significant role in Sixth District water and power resource programs, we believe that there must be a balance between Ernani Bernardi, our economic well-being and the environment.
Seventh District A primary objective of the Power System is to achieve an oildisplacement of 50 Robert C. Farrell, percent by the end of the decade; and we are making excellent progress in Eighth District developing coal, geothermal, solar, and cogeneration projects.
Gilbert E. Lindsay, We appreciate the encouragement and support of you and the members of the Ninth District City Council and the cooperation of other elected officials of the City and Boards and Managements of other City Departments. For outstanding service to the people of
'David S. Cunningham, Los Angeles, we commend the management and personnel of the Department of Tenth District Water and Power.
Marvin Braude, Eleventh District Respectfully, Hal Bernson, Twelfth District Peggy Stevenson, Thirteenth District Arthur E. Snyder, RICARDO R. GUTIERREZ, President Fourteenth District Board of Water and Power Commissioners
'John S. Gibson, Jr.,
Fifteenth District "Chairman/'Member, City Council's Energy and Natural Resources Committee City Controller Ira Reiner City Attorney Burt Pines
3earIIIL of DEPARTMENT OF WATER AND POWER Voter andi Power Louis H. Winnard, Cozniinijssioners General Manager and Chief Engineer Paul H. Lane, Chief Engineer of Water Works and Assistant Manager James L. Mulloy, Chief Electrical Engineer and Assistant Manager Ricardo R. Gutierrez President William D. Sachau, Chief Financial Officer Edward C. Farrell, Chief Assistant City Attorney for Water and Power h
John J. Guarrera James K. Murphy Vice President Sara C. Stivelman 3
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l Herbert C. Ward
ith the City of Los Angeles The Poiver System's planned celebrating its 200th Anniversary, the resource program will reduce the use of Department of Water and Power is proud fuel oil by 50 percent by the end of the to note its role since 1902 in the orderly decade. Currently, the Department development of the City that has grown depends on oil and natural gas for more
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from a population of about 100,000 to a than 50 percent of its electrical genera-metropolis of three million. tion. This displacement of fuel oil will As population increased, water require accelerated construction of non-needs were met with completion of the oil generating facilities in excess of the Los Angeles Owens River Aqueduct in amount required to meet growth and to 1913, and the extension of the Aqueduct retire obsolete units.
System in 1940. Power distribution to Alternative energy resources being serve the growing City began in 1916. pursued include geothermal in the North Subsequently Hoover Dam power arrived . Brawley area, cogeneration, solar and in Los Angeles in 1936, and the first small hydroelectric projects. In addition, steam power plant, the Harbor the Department will continue to Generating Station, was put into encourage its customers to vigorously operation in 1940. Today 84% of Los pursue water and energy conservation Angeles electric energy is provided by programs.
thermal poiver plants, 10% by hydro-electric sources, and 6% of the energy It will be difficult for utilities to finance new projects. However, we are is purchased.
hopeful that new methods of financing Since the turn of the century, the will help us to minimize the impact on Department has faced many moor our ratepayers until the savings of non-oil challenges, and fiscal year 197940 was energy resources can be realized. In no exception. High inflation, attacks on order to support current operations and the City's water rights, financing, new provide funds for additional generating facilities for additional base load and capacity, the City Council and Mayor alternative energy resources, the oil- approved an average 12.9 percent reduction program, productivity improve- electric revenue increase, effective ment, conservation and the impact of October 18, 1980.
new laws and regulations required greater Like many other businesses, our effort at all levels within the Department.
costs are increasing due to regulatory During the past year, the Depart- controls, inflation, and other factors.
ment continued its productivity improve- There are many agencies, both State and ment programs. Since 1970, a 30-percent Federal, that signflicantly impact our reduction in the number of employees operations and add to our costs. The has been achieved through a policy of proliferation of environmental regulations attrition, the development of ivork require large capital outlays which could standards, changes in crew sizes, automa- have a substantial impact on the Depart-tion, and other factors. As a result, ment ratepayers. In dealing with these the Department has approximately the sensitive issues, we have stressed the same number of employees as it did 25 need for economic and environmental years ago. balance.
As a result of continuing efforts to To meet these and other challenges, achieve high efficiency in our generating we are fortunate that we can rely on a plants, the Department was named by Department strength qualified, loyal, Electric Light and Power magazine in and well-trained employees. We com-1979 as the fifth most efficient of the 100 mend the high level of performance of largest electric utilities in the nation. these employees. We appreciate the con-Vital to the City's existence is the tributions and dedication of the Board of need for a safe and adequate supply of Water and Poiver Commissioners, and ive water. During fiscal year 197940, the look forward to the continued coopera-Water System faced threats to the con- tion of the Mayor, City Council, and tinued use of Owens Valley and Mono other government officials, and the Basin resources. Proposed State legisla- support of our customers.
tion aimed at curtailing the City's water diversions from the Mono Basin was defeated, largely due to the coordinated efforts of the Department, the City Coun-cil and Mayor, many community and business organizations, and dozens of LOUIS H. WINNARD water agencies throughout the State. General Manager and Chief Engineer 4
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cather throughout California In June, the Department joined produced above-normal rainfall in with a private engineering firm in 197940 which resulted in a snowmelt applying for a Federally-funded contract runoff of 155% of normal in the Owens Valley-Mono Basin area.
The high runoff enabled the Water to study the effect of recently enacted local ordinances aimed at encouraging water conservation. These ordinances require the installation of low-flow water
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System to deliver a near record amount of water through the Los Angeles appliances in all new construction in the Aqueduct (LAA) system. The increase in City of Los Angeles. The three-year study will provide more definite information supply permitted a significant amount of Aqueduct water to be stored on the potential for residential water underground in the San Fernando conservation.
Groundwater Basin for use during future dry years. %ately Consumption Water demand for the fiscal year Water Consenation totaled 186.8 billion gallons (706.9 Water conservation continued to million cubic meters), an increase of be a high priority for the Department 3.5% in total water demand from during the fiscal year. Retrofit kits, 19?8-79, but still 6.0% below 1975-76 designed to reduce the use of water in (pre4rought year) consumption. Los toilets and showers, continued to be Angeles received 28.6 inches (730 made available freewfcharge to our millimeters) of rain during the year, 14.5 customers from depots throughout the inches (370 millimeters) above normal.
City. Leak detection crews surveyed 567 The per capita water use was 172 gallons miles (915 kilometers) of the 7,000-mile (651 liters) daily, based on an official (11,300-kilometer) distribution system. population served of 2,980,000. However, Customers were also notified of leaks because there are an estimated 525,000 found on their property. undocumented residents in the City, the actual per capita use is about 146 gallons More than 200 applications were (552 liters) per capita per day.
received and processed in conjunction with the Water Conservation for Business and Industry Awards Program. Research Sources of Supply and evaluation of The City's Owens Valley water candidates'onservation plans, water consumption supply continued to be challenged due to records, and variations in productivity environmental concerns. The led to the eventual presentation of Environmental Impact Report on almost 80 awards of achievement for Increased Pumping of the Owens Valley reductions in water use ranging from Groundwater Basin, prepared to comply 16% to 80%. with the California Environmental Quality Act and to satisfy a mandate of The Department continues to the Third District Court of Appeals, is maintain and expand its Los Angeles being challenged by Inyo County.
City Schools Water Conservation Groundwater pumping in the Owens Program. While continuing to distribute Valley normally supplies about 10% of curriculum materials in both English and the City's water supply needs while Spanish, another dimension has been providing water for irrigation and added. The H20 show, a Department- recreational purp'oses on City lands sponsored play which emphasizes within the Owens River watershed.
prudent water use, was developed and I performed by a professional acting Proposed legislation and litigation ensemble. Thus far, the play has been also threaten the City's supply from the presented to more than 70,000 students Mono Basin. Nearly 20% of the City' at 50 Los Angeles junior high schools. total water supply comes from the diversion of streams flowing into saline A water conservation demonstra- Mono Lake. Two bills were introduced tion garden encouraging greater use of in the State Legislature seeking low water consumption, drought-tolerant reductions in the stream diversions to plants is nearing completion. Located in increase the water level of the declining front of the Department's General Office Building at ill North Hope Street, Los lake. These bills were based on the Mono Lake Interagency Task Force Angeles, the garden illustrates that recommendation that the City reduce i pleasing aesthetics and water conservation export from the Mono Basin by 85%
are compatible goals. (85,000 acre-feet/year) and replace it with additional water conservation and reclaimed wastewater. Another bill,
supported by the City, would have Aqueduct, 13% from local wells in the Plans and specifications were provided State funds for a cooperative Los Angeles River Basin and other completed for the construction of the research study of the Mono Lake groundwater basins, and 4% from the 208 acre-foot (257,000 cubic meters) environment and potential methods of Metropolitan Water District of Lower Franklin Reservoir No. 2. The new itigating any environmental changes Southern California. reservoir will replace the existing ound to be harmful. All three bills were Groundwater pumping in the reservoir which was removed from service defeated; however, the Board of Water because the dam does not meet State Owens Valley was at near normal levels and Power Commissioners has resolved seismic safety requirements.
until spring when heavy rainfall and to continue with environmental research runoff allowed the pumping to be Plans and specifications were also at the saline lake. reduced to minimal levels. completed for the construction of the Litigation was filed by groups of 1-million-gallon (3,785 cubic meters) environmentalists and private parties in Construction. Donick Tank and for a new inlet~utlet May 1979 seeking to reduce the City' facility at Bouquet Canyon Reservoir.
Construction was completed on the diversions from Mono Basin. The connection to MWD's West Valley litigation was broadened to include all Feeder No. 1, the DeSoto Reservoir Distribution parties having water rights in the Mono spillway drain line, and erosion control The Water System installed 612 Basin, including the Federal devices were installed on the dam and fire hydrants, 2,336 new water meters, Government, when the City filed a cross- North Dike of the Los Angeles Reservoir. and 34.2 miles (55 kilometers) of complaint. A lawsuit was also filed by distribution mains in the past year. The environmental groups against the During the year, construction total length of Water System mains is Secretary of Interior, Cecil Andrus, in an contracts were awarded for the 96-inch now 6,960 miles (11,200 kilometers).
effort to require the Federal government (240-millimeter) LA-25 emergency to take an active role in protecting connection to MWD's Jensen Filtration A program to clean and cement Mono Lake. Plant, installation of the 60,000<allon mortar line existing trunk lines and (230<ubic meter) Hillmont Tank, and distribution mains to increase their capacity and prolong their life has Supply construction of the 36-inch (90 millimeter) and 42-inch (110-millimeter) continued with 7.5 miles (12.1 Last year, the City obtained 83% East Los Angeles Trunk Line, Unit II. kilometers) of pipe lined last year.
of its water supply from the Los Angeles
Envixonmenta1 completed a study to define the best treatment program and has selected a The Department and other agencies are investigating the treatment Concerns design consultant for the project. The and reuse of wastewater in the Los As part of the continuing environmental research at Mono Lake, an annual census is conducted to determine if the declining lake level is consultant contract was approved in July 1980 by the Board of Water and Power Commissioners.
Angeles area. The Department is participating with 11 other agencies in the Orange and Los Angeles Counties Water Reuse Study (OLACWRS). This
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The total design and construction having a significant effect on the cost of the water filtration facility is study will cost $ 4 million and last three California Gull population. A team of projected to be $ 80-$ 100 million and years to investigate possible uses for wildlife biologists counted more than will be the most significant element of reclaimed water in Orange and Los 40,000 adult California Gulls nesting on the Department's Water Quality Angeles Counties. The potential uses various islands in the saline lake during Improvement Program. This long-range include: supplemental groundwater the first joint census of the rookery this program will require additional recharge, seawater intrusion barrier summer. Results show the gull population expenditures totaling an estimated $ 300 supply, park and landscape irrigation, has nearly doubled since a similar census million for future improvements to inanity and industrial water supply. The study is was conducted during 1979. More than reservoirs and major unpressurized also investigating public health concerns 12,000 gull chicks were observed, bringing distribution conduits to protect the water and costs for treatment and distribution the total rookery gull population to more quality in the distribution system once it of reclaimed water which currently than 52,000 birds. The Department plans has been filtered. restrict development of this source of to conduct additional research at Mono supply. The study is scheduled for Lake to determine the impact of a An Interim-Use Agreement was completion in early 1982.
declining lake level on birdlife, brine approved by the Metropolitan Water District allowing for a portion of the Los In addition to participating in the shrimp, air quality, and other issues. OLACWRS, the Water System is actively Angeles Aqueduct supply to be filtered at The above-normal winter snowpack its Jensen Filtration Plant for a 10-year pursuing industrial uses for the City' allowed the Department to help stabilize period. The Agreement will allow the wastewater treatment plant effluent.
Mono Lake by releasing more than Department to initially build a smaller, Recently, the Board of Water and Power 59,000 acre-feet of surplus water into phased water filtration plant which may Commissioners agreed with five other the lake. allow a corresponding savings to the parties to participate in a two-year Department of about $ 10 million in demonstration project to test the Water'ua1ity capital investment. suitability of using part of the Hyperion The Environmental Protection Wastewater Treatment Plant's effluent Agency recently promulgated new 'Itbtater fox the Future for use in an oil refinery's cooling tower regulations on the control of The Water System plans to invest The water conservation program trihalomethanes (THM). Results of approximately $ 424 million in new will continue to seek additional ways the Department's monitoring for THM's facilities during the next five years to to optimize the use of the City's water show City water to be well below the meet the City's water requirements. supply. Future increases in water demand allowable limit. Included are capital improvements to the will be met by purchasing additional Water System's supply and distribution supplies from MWD, optimizing inanity The State Department of Health systems, supervisory control system, and groundwater pumping operations, and Services required the control of the Water Quality Improvement Program. continuing the development of safe, trichloroethene (TCE) and economical uses for reclaimed tetrachloroethene (PCE) as a result wastewater.
of recent findings of groundwater contamination. The Department is now monitoring for TCE and PCE to assure Water Consumption these constituents are within the State's limits. Actual and Projected In addition to monitoring for these 210 contaminants, the Department provided constant surveillance to protect the City' 175 water supply against other forms of contamination. About 54,000 chemical, 140 biological, and radiological examinations and analyses of the Los Angeles water supply were made during the year. 105 Although the Department's treatment methods have been successful 70 in protecting the safety of the water supply, current Federal and State 35 drinking water regulations require filtration of the entire Los Angeles Aqueduct supply to reduce turbidity (fine, 70-71 72-73 74-75 76-77 78-79 8081 8283 8445 suspended material). The Department has Gallons Cubic Neters-Billions Mimons
atm'ystemn IFacts iin Iaaf 1979-80 Increase (Decrease)
Over USE OF WATER 1979-80 1978-79 1969-70 1969-70 Average Los Angeles population served .... 2,980,000'35,435 2,937,000'33,018 2,828,000 5%
Active services 620,039 2%
Active meters . 635,153 632,817 631,266 1%
Average daily total demand, million gallons . 511.9 494.6 529.2 (3%)
Average daily use per capita, gallons ...... 172" 168 185 (7%)
Water sales for fiscal year, billion gallons ... 174.3 164.8 177.4 (2%)
Maximum daily demand, million gallons.... 733.6 787.9 792.0 (7%)
Annual pumpage, billion gallons 71.9 67.3 65.9 9%
GROWTH OF SYSTEM Utility plant (less accumulated provision for depreciation) . $ 656,514,967 $ 642,363,482 $ 480,404,245 37%
Reservoirs . 105 107 100 5%
Storage capacity, acre feet. 373,606 394,430 415,495 (10%)
Distribution lines, miles 6,959.5 6,944.7 6,722.0 4%
Main gate valves in system. 99,659 99,300 94,248 6%
Fire hydrants. 51,137 50,666 46,128 11%
WATER SUPPLY TO CITY AREA From local supply, cu. ft. per second (c.f.s.) .. 104.4 94.7 115.5 (10%)
From DWP Aqueducts, c.f.s. 682.1 696.6 491.8 39%
From Metropolitan Water District, c.f.s.
(California Aqueduct and Colorado River Aqueduct) 29.1 25.8 203.0 (86%)
Gross supply, c.f.s.. 815.6 817.1 810.3 1%
Diversion from (to) local storage, c.f.s....... (23.6) (51.9) (8.5)
Net supply to distribution systems, c.f.s...... 792.0 765.2 818.8 (3%)
Storage in aqueduct reservoirs at year end, acre feet . 258,272 263,943 318,085 (19%)
SELECTED METRIC STATISTICS Water sales for fiscal year, million cubic meters . 660.0 623.6 671.5 (2%)
Distribution lines, kilometers 11,197.8 11,176.4 10,817.9 4%
Gross supply, cubic meters per second 23.10 23.15 22.9 1%
'Excludes an estimated 525000 residents not counted in Ihe City Deparhnent of Planning 1970 population Census Includes 25000 people in certain areas, contiguous lo Los Angeles, uhich are served by the IVater System. Excludes 2,000 residents of Ihe City served by other water agencies.
" Using 3.5 million as the effective population of the City results in a per capita consumption of 146 gallons pef day.
Ten-year statistical reports providing additional uater system facts are available upon request.
I eak power demand by Depart- IFm5zre IResoma'ees ment customers during fiscal year 197940 decreased by 1.5% from the previous Efforts continued to develop power fiscal year; there was no change in the plant projects jointly with other utilities energy required to serve the Department and entities.
customer load. The Department is a 30% owner, Fuel oil consumption decreased by amounting to 210,000 kilowatts, of coal-10.9% from the previous fiscal year and fueled Coronado Generating Station in the use of natural gas burned increased St. Johns, Arizona. Unit 1 was placed in by 8% over that of fiscal year 1978-79. commercial operation on December 3, The average cost of fuel oil and natural 1979. Commercial operation of Unit 2 is gas burned during the year increased by expected in November 1980.
61.7% and 32.1%, respectively. Work continues on the Efforts were expanded to develop 3,000,000-kilowatt Intermountain Power new generating resources. In addition to Project to be located in Utah. Federal plans for joint participation in large coal- approval for the project was granted in fueled projects, the Power System is December 1979 by Interior Secretary continuing efforts to expand and improve Cecil Andrus. The process of obtaining existing oil, gas and hydro facilities, necessary permits and regulatory implement cogeneration projects, develop approval continues. Commercial geothermal generating capacity, upgrade operation of the four-unit facility is the Pacific Intertie DC line, and scheduled at one-year intervals beginning participation in a solar power pilot plant in 1986. The Department will have a project continues. 34.1% entitlement or approximately To more efficiently carry out its 1,023,000 kilowatts total.
work, the Power System continues to The White Pine Project is a improve its organization structure. proposed 1,500,000-kilowatt, coal-fueled, Personnel were further reduced during steam<lectric generating station to be the year from 4,482 employees to 4,335, located in eastern Nevada near Ely.
a decrease of 147 employees. Three 500,000-kilowatt units are The gross capital expenditure tentatively scheduled for commercial operation in 1989, 1990 and 1991, program for 1979-80 amounted to $ 193 respectively. From preliminary study million, a decrease of 1.5% from the agreements, the Department will have a preceding year.
39.1% entitlement or approximately Censexva5.on andi 588,000 kilowatts.
Enmomnent The Department is a 20.34%
participant in the California Coal Project Substantial portions of the Power being proposed by the Southern System's capital program were directed California Edison Company. At this time, toward the Department's continuing activities are limited to those related to policy of minimizing the impact of the filing of a Notice of Intention with operations and facilities upon the the California Energy Commission. The environment. Specific program areas Project, as proposed, would consist of involved undergrounding of power lines, three steam<lectric generating units each improvement of overhead power line with a capacity of 500,000 kilowatts. The appearance, air quality control, first unit is scheduled for commercial wastewater treatment, and preparation of operation in 1991.
environmental assessments and A contract was approved for two documents.
turbine-generator units to upgrade the Capital expenditures to reduce the San Francisquito Power Plant No. 1.
impact of Power System operations on Installation of the turbines will result in the environment were approximately $ 15 higher plant efficiency and energy million in fiscal year 197940. production of the power plant. This The Department continued its project is scheduled for completion effort to reduce the effect of emissions in 1984.
from its fossil-fueled steam boilers and insure continued compliance with air and water quality regulations.
10
Efforts are underway for the Department and others to obtain up to dominated geothermal reservoirs, fuel cells, wind power, processed municipal Generation Capability approximately 450,000-kilowatts from a waste and liquefied or gasified coal. Energy generated by the Power eveloping geothermal field north of System and power purchased and The Department is working with received through interchange with other rawley, California. As part of the several large industrial. customers to development, the Department would utilities amounted to 27.4 billion kwh for install approximately 100,000 kilowatts of obtain a 36% interest in a 10,000- the year, of which 19.5 billion kwh was cogeneration facilities in the mid-1980's.
kilowatt demonstration unit that began required to serve DWP customer load.
commercial operation in July 1980. The An agreement that will help in The net energy for load from Department Department's interest in the geothermal developing future joint projects is the basin steam generating stations was 57%;
field will be 72.2% with the remainder Southern California Public Power hydroelectric power plants, 6%; Hoover going to other participants. Authority Agreement. During August Dam Power Plant, 4%; and the 1980, the Los Angeles City Council will Department's share of Mohave, Navajo, Work is continuing on a be requested to act on this Agreement. and Coronado (coal-fueled generating 10-megawatt, solar-thermal pilot plant in Approval of this Agreement will authorize stations), 28%. The remaining 5% was which the Department is participating. the City's membership in the Authority. purchased energy.
Construction began in 1979, and start-up The Agreement will enable various is scheduled for December 1981. Primary Peak demand occurred on Southern California municipalities and September 10, 1979, at 4,083,000 kw, activities during the past year included the Imperial Irrigation District to create a design work, contract negotiations with down 61,000 kw from the 1978-79 peak.
separate public entity for undertaking the equipment suppliers and fabrication of planning, financing, construction, System net capability was prototype heliostats. operation and maintenance of projects 6,228,400 kw. The Power System load The Department is continuing to for the generation and transmission of factor, based on net energy for load, monitor and, in some cases, support electrical energy. was 61.4%.
research and development work which may lead to commercial production of electricity from other nonconventional energy sources, such as the sun, liquid-
development of solar and geothermal Purchased Power energy and for the planned installation Purchases from both Pacific-Northwest (PNW) and Southwest utilities were made to meet the load and decrease In recognition of the need for at the Haynes Generating Station of a prototype Thermal DeNox system reduction of nitrogen oxides emissions.~
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increased industry-wide research and the cost of operation. The Bonneville development (RRD) efforts, the Power Planned expenditures for Power Administration (BPA) declared System expended approximately $ 3.5 subsequent years reflect the Power surplus in April 1980 and the million for RRD activities during fiscal System's increasing commitment to Department purchased 799,429,000 kwh year 197940. The principal use of funds needed RRD.
through the remainder of the fiscal year.
was in support of programs by the Surplus energy and energy purchased Electric Power Research Institute. In from other entities were transmitted over addition, RRD funds were used for the Pacific HVDC Intertie Line.
demonstration projects for the Additional purchases of 1,496,057,000 kwh were made from six Southwest utilities: Nevada Power Company, Salt River Project, Tucson Gas and Electric Power Company, Arizona Public Service, Power System Arizona Electric Power Cooperative, Peak Demand Public Service Company of New Mexico Forecasts'egawatts (Actual and Projected) and the Department of Energy.
To meet the Department's obligations to BPA for Exchange Peaking Capacity and Peaking Energy at the most economical price, the Department purchased 170,152,000 kwh of energy from 14 entities in the PNW and arranged to have it delivered directly to BPA. The Department also returned 899,429,000 kwh of energy that was recalled by the PNW Industries.
Transmission and Distribution Conversion of the Boulder Line 2 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 from the McCullough Switching Station
'Based on Calendar Year to Victorville Receiving Station was completed and placed in service at 500-kV on May 12, 1980.
Construction of the Victorville-Rinaldi Transmission Line 1 was started by Seaward Construction Company on January 7, 1980. The line is to Electric Energy Requirements'illions be completed one year after start of Kilowatt-hours (Actual and Projected) of construction.
20 During the fiscal year, the Department invested approximately 18
$ 17.4 million in 254 underground 16 distribution facilities. As of June 30, 1980, a total of 56,130 residential single- 14 family lots were served from the 12 underground distribution system.
During the year, 3,910 work orders 10 were issued for overhead distribution facilities costing approximately
$ 8.8 million.
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
'Based on Calendar Year 12
Power System Facts ~ IErIeif 1979-80 Increase (Decrease)
Over POWER PRODUCTION IN KILOWATT-HOURS 1979-80 1978-79 1969-70 1969-70 (Including all generation of Hoover units connected to DWP system)
Hoover Energy (including US Government and Public Allottee use) . 1,149,737,000 1,059,647,000 1,035,817,000 11%
Castaic Hydro Plant Production................. 317,508,000 442,876,000 Hydro Plant Production (Aqueduct, Owens Valley and Owens Gorge) . 1,257,146,400 1,232,210,500 969,286,900 30%
Steam Plant Production (L.A. Basin)
Oil . 8,112,414,000 8,981,882,040 2,278,845,410 256%
Gas . 3,429,690,000 3,322,065,960 11,126,127,590 (69%)
Coal Plants . 5,499,565,000 4,841,152,000 Gas Turbine Production 1,710,000 3,839,000 Received from Interchange and Purchases other than Hoover 7,604,260,127 6,630,935,620 2,996,836,758 154%
System Total Gross Energy Generated, Purchased and Received from Interchange ...... 27,372,030,527 26,514,608,120 18,406,913,658 49%
POWER USE Domestic Users . 1,026,883 1,012,757 934,980 10%
Commercial Users . 144,853 135,800 148,598 (3%)
Industrial Users . 22,285 20,907 10,825 106%
Miscellaneous Customers 5,936 5,790 1,109 435%
Total Customers All Classes .... 1,199,957 1,175,254 1,095,512 10%
Sales to Ultimate Consumers Kilowatt-hours 17,689,755,709 17,780,885,344 15,284,340,266 16%
Sales to Other Utilities Kilowatt-hours .. 392,377,507 401,368,055 32,762,930 1,098%
Transmission for, and Interchange with, Other Utilities 6,272,111,627 5,183,446,571 1,009,728,666 521%
Use in operations, transmission and distribution losses, and net interchange-Kilowatt-hours ....... 3,017,785,684 3,148,908,150 2,080,081,796 45%
System Total Kilowatt-hours . 27,372,030,527 26,514,608,120 18,406,913,658 49%
Average Annual Kilowatt-hours per Domestic Customer 4,735 4,890 4,422 7%
GROWTH OF SYSTEM Utility Plant (less accumulated provision for depreciation) . $ 2,361,887,508 $ 2,257,624,031 $ 1,196,756,360 97%
Generating Stations Net Dependable Capability, 6,228,400 6,146,000 4,039,000 54%
Circuits (Jointly Owned)
Kilowatts'ransmission 500 kv to 800 kv, miles 988 988 581 70%
Transmission Circuits 115 kv to 500 kv, miles 1,644 1,461 1,533 7%
Subtransmission Circuits 12 kv to 34.5 kv, miles 2,052 2,037 1,764 16%
Distribution Circuits 120 to 4800 volts, miles 12,717 12,620 11,738 8%
Transformer Capacity Distributing and Customer Stations at 13.8 kv and above, kilovolt-amperes 7,578,809 7,433,178 5,579,548 36%
Number of Distributing Stations ............. 169 166 151 12%
Number of Customer Stations at 13.8 kv and above 1,899 1,863 1,462 30%
Power Poles in use (Los Angeles Area)......... 292,484 292,931 302,420 (3%)
Overhead Distribution, Pole Line miles...... 6,128 6,128 6,370 (4%)
Underground Distribution, Conduit miles.... 2,103 1,959 1,502 40%
'ncludes purchased capacity 13
eflecting customer reaction to Operating expenses rose to the higher prices for energy as well as the $ 808,049,166, an increase of success of the Department's conservation $ 198,803,266, over 80 percent of which programs, sales of electricity decreased was attributable to higher energy costs.
0.6% during the 1980 fiscal year. On the The combination of the sharp escalati other hand, water sales increased 5.8% in operation and maintenance expens for the year, but reached a level still and reduced energy sales resulted in a below the usage recorded prior to the drop in net income from last year's figure mandatory conservation program which of $ 112,976,514, a record high, to was in effect in 1977-78. $ 60,831,359 for the 1980 fiscal year.
Operating revenues for the Investment in the construction of Department's Water and Power Systems new Power System facilities totaled totaled $ 1.052 billion, an increase of $ 157 $ 182,281,219 during the year. The million over the prior fiscal year. Over largest expenditures were associated with 80% of the increase resulted from the progress payments for the Department's recovery of fuel and purchased energy 30% ownership share in the Coronado costs billable under the energy generating station, continuing adjustment clause. The balance of the construction of the 500 kv Victorville increase came largely from the full year to Rinaldi transmission line, completion effect of the December 1978 electric of the McCullough to Victorville revenue increase and the higher level of transmission line 500 kv conversion, water sales. and replacements and additions to Water sales totaled 174.3 billion existing facilities.
gallons, an increase of 9.5 billion gallons, Two Power System revenue bond producing operating revenues of issues totaling $ 150 million and a
$ 115,999,000. The average number of revenue note issue of $ 50 million were individually metered water customers sold during the year. Interest costs for increased by 7,760 to 626,936. the bonds were 7.96% and 7.09%,
Net income of the Water System respectively, while the notes carried an fell to $ 16,231,542 from the fiscal 1979 interest cost of 6.95%. Bonds and notes outstanding at year<nd totaled
~
all-time high figure of $ 22,862,118. Part of the reduction was a reflection of the $ 262,955,311 in the Water System
$ 1,723,518,712 in the Power System.
an~
settlement last year of litigation on water rights, resulting in a one-time credit to Maturing principal payments on bonds income of $ 4.8 million. The balance of and notes of $ 10,715,000 and the reduction was related to a $ 7.1 $ 60,236,000 were met by the Water and million increase in expenses which more Power Systems, respectively.
than offset added revenues from Total assets of the Department on increased water sales. June 30, 1980 were approximately $ 3.6 During the year, a total of billion, with $ 745,463,120 assigned to
$ 33,219,361 was invested by the Water the Water System and $ 2,891,763,754 to System in capital construction, most of the Power System.
which was associated with upgrading the In accordance with its basic fiscal reliability of the distribution system. policy, the Department pays all costs of Power System operating revenues operation and debt service and part of totaled $ 936,235,118, $ 152 million above the cost of capital improvements from the prior fiscal year. As indicated, current revenues. The remainder of the recovery of fuel and purchased energy cost of capital improvements is met costs and the December 1978 revenue through the sale of revenue bonds and increase accounted for most of the from contributions in aid of construction.
change. Sales of 17.7 billion kilowatt- In addition to meeting all costs of hours were down 91 million kilowatt- operation from current revenues, the hours from fiscal 1979, notwithstanding Department paid $ 44,749,000 into the an increase of 24,703 in the average Reserve Fund of the City in support of number of customers served by the general City government $ 5,555,000 Power System to a new total of from the Water System; $ 39,194,000 1,199,957. from the Power System. Operations of the two systems are entirely self-supporting and no financial obligation burden is ever placed on taxpayers of t City of Los Angeles.
14
1980 1980 5119.9 S945.1 Nllllon Million 1%
1975
$ 84.2 Million Purchased Water 2%
1975 S457t3 Operation 4 Maintenance Million Fuel 41 Purchased Energy Taxes 4%
Operation Itt Maintenance 1%
Depreciation Taxes 1%
Depreciation 10%
Interest IKK> Interest 10%
Pa ment to Clty and Payment to City Relnvested Earnings 5% and Relnvested Earnings IIÃmttiII'ilhzlIiiezZ!I'lmceZmI9 Gim!Kilhiiiit!Iiti~xef Emeti~mmI9 VI@ttm Fciiemz ii I
A,t.
t I 'I tt--
I II I
II I:I). 'I (M~
~ HALI ti wW)'7~
Year ended June 30 1980 1979 Operating revenues:
Sales of water (Note D). $ 111,564,039 $ 106,662,129 Fire hydrant rentals . 3,770,626 3,734,800 Other operating revenues 664,335 695,828 Total operating revenues . 115,999,000 111,092,757 Operating expenses:
Purchased water . 1,576,114 2,158,491 Other operation. 48,176,829 44,370,843 Maintenance 20,744,340 17,534,505 Provision for depreciation (Note B) 17,266,030 16,662,871 Taxes on property outside the City 2,332,077 2,295,826 Total operating expenses . 90,095,390 83,022,536 Operating income . 25,903,610 28,070,221 Other income:
Water rights settlement (Note G) 4,784,000 Other net. 3,868,776 4,040,242 Total other income 3,868,776 8,824,242 Income before long-term debt expenses 29,772,386 36,894,463 Interest on long-term debt 13,540,844 14,032,345 Net income $ 16,231,542 $ 22,862,118 SIhttlIement of Retained Income Eeiinveslted in the Business Balance at beginning of year $ 219,670,540 $ 196,808,422 Net income for the year 16,231,542 22,862,118 235,902,082 219,670,540 Less Payments to the reserve fund of the City (Note A) 5,555,000 Balance at end of year (Note H) . $ 230,347,082 $ 219,670,540 See accompanying Notes to Financial Statements.
16
Water System Balance Sheet June 30 ASSETS 1980 1979 UTILITYPLANT, at original cost:
Source of water supply $ 204,184,100 $ 203,783,583 Pumping . 20,236,483 19,694,091 Purification 5,453,926 5,388,447 Distribution. 677,565,235 651,164,820 General 60,183,057 57,082,093 Construction work in progress . 15,506,669 14,123,835 983,129,470 951,236,869 Less Accumulated provision for depreciation (Note B) . 326,614,503 308,873,387 656,514,967 642,363,482 LONG-TERM RECEIVABLES (Note G) . 3,664,661 4,012,500 CURRENT ASSETS; Deposits with City Treasurer Revenue fund (including short-term, investments of $ 1?,631,980 and $ 45,343,071 at cost which approximates market) .. 18,908,205 47,319,692 Bond redemption and interest funds . 6,202,103 1,361,200 Cash on hand and revolving funds . 159,421 136,076 Customer and other accounts receivable, less $ 300,000 allowance for losses......................... 48,598,394 15,634,683 Materials and supplies, at average cost 7,851,329 7,615,945 Deferred purchased water costs (Note A) 1,288,600 984,500 Prepayments and other current assets 1,627,303 1,757,345 84,635,355 74,809,441 648,137 250,560
$ 745,463,120, $ 721,435,983 LIABILITIESAND EQUITY EQUITY:
Retained income reinvested in the business, per accompanying statement... $ 230,347,082 $ 219,670,540 Contributions in aid of construction 215,449,701 204,468,954 445,796,783 424,139,494 LONG-TERM DEBT, excluding advance refunding bonds (Note C):
Revenue bonds, less $ 594,689 and $ 632,081 unamortized discounts... 262,955,311 273,202,919 Less Long-term debt due within one year (see below) 12,490,000 10,715,000 250,465,311 262,487,919 CURRENT LIABILITIES:
Long-term debt due within one year (see above) 12,490,000 10,715,000 Accrued interest on bonds . 4,103,623 4,676,485 payable and accrued expenses .
'ccounts 20,863,194 11,677,329 Customer deposits . 11,744,209 7,739,756 49,201,026 34,808,570
$ 745,463,120 $ 721,435,983 See accompanying Notes to Financial Statements.
17
W@ttm'yslteRMt Sttatttezne2itlt Of C~es ht IFti2itmnetiell Post'ttRottit Year ended June 30 1980 1979 FINANCIALRESOURCES PROVIDED BY:
Operations-Net income . $ 16,231,542 $ 22,862,118 Charges and credits to income not affecting working capital Provision for depreciation (Note B) . 19,067,876 17,765,309 Noncurrent portion of water rights settlement (Note G) . (4,012,500)
Other, net 417,654 53,318 Resources provided by operations 35,717,072 36,668,245 Amount received from escrow account (Note C) 16,430,000 Contributions in aid of construction . 10,980,747 14,565,599 63,127,819 51,233,844 FINANCIALRESOURCES USED FOR:
Expenditures for plant and equipment (including cost of removing facilities retired from service) . 33,219,361 29,119,899 Reduction of long-term debt 12,490,000 10,715,000 Long-term debt refunded, including call premium (Note C) 16,430,000 Payments to the reserve fund of the City . 5,555,000 67,694,361 39,834,899 Increase (decrease) in working capital . ($ 4,566,542) $ 11,398,945 INCREASE (DECREASE) IN COMPONE NTS OF WORKING CAPITAL:
Deposits with City Treasurer Revenue fund ($ 28,411,487) $ 7,928,299 Bond redemption and interest funds 4,840,903 52,903 Cash on hand and revolving funds. 23,345 (2,341)
Customer and other accounts receivable 32,963,711 4,253,293 Materials and supplies . 235,384 (401,198)
Deferred purchased water costs. 304,100 (715,500)
Prepayments and other current assets. (130,042) 247,751 Net change in current assets 9,825,914 11,363,207 Long-term debt due within one year . 1,775,000 250,000 Accrued interest on bonds . (572,862) (65,220)
Accounts payable and accrued expenses . 9,185,865 (976,175)
Customer deposits. 4,004,453 755,657 Net change in current liabilities . 14,392,456 (35,738)
Increase (decrease) in working capital ($ 4,566,542) $ 11,398,945 See accompanying Notes to Financial Statements.
18
Wats'yste2n Notes to Financial Staite2nents NOTE A Summary of significant Debt expenses Debt premium, discount and issue accounting policies: expenses are deferred and amortized to income over the lives The financial statements of the Water System are of the related issues.
presented in conformity with generally accepted accounting Employees'etirement plan See Note F for principles, and substantially in conformity with accounting policy relating to the employees'etirement plan.
principles and methods prescribed by the California Public Utilities Commission except for the method of accounting for Payments to the reserve fund of the City contributions in aid of construction described below. The Under the provisions of the Charter of the City of Los Department is not subject to regulations of such commission. Angeles, the Water System transfers funds at its discretion to the reserve fund of the City. Such payments are not in lieu of Utility plant and depreciation The cost of taxes and are recorded as distributions of retained income.
additions to utility plant and replacements of retirement units of property is capitalized. Cost includes labor, materials and NOTE B Depreciation:
allocated indirect charges such as engineering, supervision, Provision for depreciation for the years ended June 30, construction and transportation equipment, retirement plan 1980 and June 30, 1979 was $ 19,067,876 and $ 17,765,309, contributions and other fringe benefits, and certain respectively, of which $ 17,266,030 and $ 16,662,871 was administrative and general expenses. The Department also charged directly to income and the balance was charged capitalizes an allowance for funds used during construction through clearing accounts to construction and operating equivalent to the cost of long-term debt incurred to finance expense accounts. These aggregate provisions approximated plant under construction. Research and development costs 2.13% and 2.06%, respectively, of average depreciable plant directly related to current and future construction projects are for such two fiscal years.
capitalized and all other such costs are charged to income as incurred. The cost of relatively minor replacements is included in maintenance expense. The original cost of property retired, NOTE C Long-term debt:
together with removal cost, less salvage, is charged to Long-term debt outstanding at June 30, 1980 comprised accumulated depreciation at such time as property is removed thirty-two issues of revenue bonds due serially in varying from service. annual amounts through 2016. Interest rates, which vary among individual maturities, average approximately 5.34%
Depreciation of utility plant is provided by the straight- (5.31% at June 30, 1979). The revenue bonds are callable line method based on the estimated service lives of the generally ten years after the date of issue. Scheduled principal properties, except for transportation and construction maturities during the five years succeeding June 30, 1980 are equipment on which depreciation is based upon hours of use. $ 12,490,000, $ 12,540,000, $ 12,690,000, $ 12,625,000 and Contributions in aid of construction Under the $ 12,375,000, respectively.
provisions of the Charter of the City of Los Angeles, amounts In 1972 and 1977 the Water System sold advance received from customers and others for construction of utility refunding bonds totaling $ 16,430,000 and $ 33,625,000, plant are combined with retained income reinvested in the respectively. Until the bonds to be refunded are called, business to represent equity for purposes of computing the interest on the advance refunding bonds is payable from Water System's borrowing limitations. Accordingly, interest earned on securities of the United States government contributions in aid of construction are shown in the purchased out of the proceeds of the sales and held in escrow accompanying balance sheet as an equity account and are not accounts with Citibank, N.A., New York; $ 33,625,000 and offset against utility plant; depreciation provided for the $ 50,055,000 of said escrow accounts has been offset against related utility plant is charged against income. the advance refunding bonds in the accompanying balance Revenues Revenues are recognized as billed to sheet at June 30, 1980 and 1979. After the moneys in the customers. Billings are on a cyclical basis and the Department escrow accounts are applied to redeem the bonds to be does not accrue revenues for water sold but not billed at the refunded ($ 32,650,000 to be redeemed in 1985), the end of a fiscal period. Residential and the smaller commercial outstanding advance refunding bonds will be payable from accounts are billed on a bi-monthly basis; all others are billed Water System revenues. On February 1, 1980, the Issue of monthly. 1970, $ 16,000,000, was redeemed.
Purchased water costs Billable purchased water costs'are deferred until they are actually billed to customers through the cost of purchased water adjustment formula (Note D).
Shared operating expenses The Water System shares certain administrative functions with the Power System of the Department. Generally, the cost of these functions is allocated on the basis of benefits provided to the Systems.
19
Water Syste2rt NG(es t0 IFhianeiall Sta(e2nents NOTE D Sales of water: A number of claims and suits are pending against the Rates charged customers are established by ordinance of Department for alleged damages to persons and property and the City of Los Angeles, the most recent of which became for other alleged liabilities arising out of matters usually effective December 1977. One provision of this rate ordinance incident to the operations of a utility business such as that of allows the recovery of all purchased water costs by direct the Department. In the opinion of management, the uninsured adjustment of billings to customers. liability under these claims and suits would not materially affect the financial position of the Water System as of June The Water System sells water to other departments of 30, 1980.
the City of Los Angeles at regular rates provided in the rate ordinance.
NOTE E Operational expenses:
Operating expenses shared with the Power System amounted to $ 111,943,000 and $ 97,582,000 for the years ended June 30, 1980 and June 30, 1979, respectively, of which $ 38,603,000 and $ 32,667,000 was allocated to the REPORT OF INDEPENDENT ACCOUNTANTS Water System. Amounts due from the Power System for materials and supplies purchased and shared operating To the Board of Water and Power Commissioners expenses were $ 37,189,229 and $ 1,260,000 at June 30, 1980 Department of Water and Power and 1979, respectively. Research and development costs City of Los Angeles amounted to $ 201,940 and $ 323,141 for the years ended June 30, 1980 and June 30, 1979, respectively, substantially all of In our opinion, the accompanying balance sheet and the which was charged to construction. related statements of income, retained income reinvested in the business and changes in financial position present fairly NOTE F Employees'etirement plan: the financial position of the Water System of the Department of Water and Power of the City of Los Angeles at June 30, The Department has a funded contributory retirement, 1980 and 1979, and the results of its operations and the disability and death benefit insurance plan covering changes in its financial position for the years then ended, in substantially all of its employees. Costs of the plan to the conformity with generally accepted accounting principles Water System for the years ended June 30, 1980 and June 30, consistently applied. Our examinations of these statements 1979 amounted to $ 17,445,284 and $ 15,332,746, were made in accordance with generally accepted auditing respectively, which includes amortization of prior service costs standards and accordingly included such tests of the generally over a 30-year period ending June 30, 2003. The accounting records and such other auditing procedures as we Department's policy is to fund all accrued retirement plan considered necessary in the circumstances.
costs. The actuarially computed value of vested benefits in excess of plan assets, as indicated in the current actuarial valuation, is approximately $ 365,000,000 of which
$ 102,000,000 has been allocated to the Water System.
NOTE G Settlement of water litigation:
In January 1979 the Department settled litigation regarding groundwater pumping in the San Fernando water Los Angeles, California basin for $ 6,000,000 to be received by the Department in ten September 11, 1980 equal annual installments without interest commencing October 1979. The discounted amount of this settlement was recorded as Other Income in the year ended June 30, 1979.
NOTE H Commitments and contingencies:
The Department has budgeted payments totaling
$ 5,805,000 for the fiscal year 1980-1981 from the revenue fund of the Water System to the reserve fund of the City.
The Department's budget for the fiscal year 1980-1981 provides for capital expenditures of approximately
$ 59,871,500 in the Water System and substantial commitments have been made in connection therewith.
20
Commercial City Other All and Power Govern- Govern- Classes Residential Industrial Irrigation System ment mental Combined Revenue from sales of water:
Year ending June 30 1980 ............... $ 55,557,523 $ 48,988,714 $ 192,429 $ 626,203 $ 3,471,968 $ 2,727,202 $ 111,564,039 1979 ............... 54,678,278 45,109,557 322,183 598,077 3,300,920 2,653,114 106,662,129 Increase (decrease) . $ 879,245 S 3,8?9,157 $ (129,754) $ 28,126 $ 171,048 $ 74,088 $ 4,901,910 Per cent increase (decrease) ....... 1.61 (40.27) 4.70 5.18 2.79 4.60 Units of 100 cubic feet sold:
Year ending June 30 1980 ............... 105,771,588 108,910,581 977,553 1,552,912 9,108,276 6,716,811 233,037,721 1979 ............... 102,962,413 99,516,152 1,415,631 1,459,714 8,498,493 6,403,165 220,255,568 Increase (Decrease) 2,809,175 9,394,429 (438,078) 93,198 609,783 313,646 12,782,153 Per cent increase (decrease) ........ 9.44 (30.95) 638 7.18 Average billing price per 100 cubic feet:
Year ending June 30 1980 ............... $ .5253 $ .4498 $ .1968 $ .4032 $ 3812 $ .4060 $ .4787 1979 ............... .5311 .4533 .2276 .4097 3884 .4143 .4843 Increase (decrease) . $ (.0058) $ (.0035) $ (.0308) $ (.0065) $ (.0072) $ (.0083) $ (.0056)
Per cent increase (decrease) ....... (1.09) (0.77) (13.53) (1.59) (1.85) (2.00) (1.16)
Average number of customers (calculated on number of billings):
Year ending June 30 1980 ............... 516,247 104,988 35 431 3,950 1,285 626,936 1979 ............... 520,154 93,300 150 433 3,852 1,287 619,176 Increase (decrease) ..... 11,688 (115) (2) 98 7,760 Per cent increase (decrease) ~ ~ ..... ... ~ (0.75) 12.53 (76.67) (0.46) (0.16) 1.25 Average annual con-sumption per customer (ln units of 100 cubic feet):
Year ending June 30-1980 ............... 205 1,037 27,930 1979 ............... 198 1,067 9,438 Increase (decrease) ~.... (30) 18,492 Per cent increase (decrease) e ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ (2.81) 195.93 21
Year ended June 30 1980 1979 Operating revenues:
Sales of electric energy (Note D) . $ 931,378,437 $ 781,348,407 Other operating revenues 4,856,681 2,526,293 Total operating revenues 936,235,118 783,874,700 Operating expenses:
Fuel for generation . 431,824,159 297,638,385 Purchased power 80,426,709 48,829,529 Energy costs . 512,250,868 346,467,914 Other operation 141,051,241 128,237,734 Maintenance 76,104,122 60,874,159 Provision for depreciation (Note B) 73,387,868 67,048,728 Taxes on property outside the City 5,255,067 6,617,365 Total operating expenses . 808,049,166 609,245,900 Operating income 128,185,952 174,628,800 Other income net. 8,879,761 7,967,348 Income before long-term debt expenses. 137,065,713 182,596,148 Long-term debt expenses:
Interest on long-term debt 88,310,974 82,021,769 Allowance for borrowed funds used during construction (12,076,620) (12,402,135)
Netlong-term debtexpenses 76,234,354 69,619,634 Net income $ 60,831,359 $ 112,976,514 S(lR(tceiiililtlt Qf RHmme8 EmIcomM IEeiimvestedl ilm lily IEIIii2teas Balance at beginning of year $ 945,784,025 $ 868,441,511 Net income for the year 60,831,359 112,976,514 1,006,615,384 981,418,025 Less Payments to the reserve fund of the City (Note A) 39,194,000 35,634,000 Balance at end of year (Note H) $ 96?,421,384 $ 945,784,025 Sce accompanying Notes to Financial Statements.
22
June 30 1980 1979 ASSETS UTILITYPLANT, at original cost:
Production $ 1,297,865,824 $ 1,132,893,502 Transmission 408,133,681 335,270,508 Distribution. 1,063,152,022 1,023,824,836 General 135,571,471 127,622,853 Construction work in progress . 167,116,264 282,975,430 3,071,839,262 2,902,587,129 Less Accumulated provision for depreciation (Note B) . 709,951,754 644,963,098 2,361,887,508 2,257,624,031 CONSTRUCTION AND NOTE FUNDS:
Short-term investments, at cost which approximates market, and cash deposited with City Treasurer 5,030,392 49,795,997 Less Amount payable to revenue fund (see below) . 5,030,392 49,795,997 CURRENT ASSETS:
Deposits with City Treasurer Revenue fund (including short-term investments of $ 17,755,019 and
$ 28,920,661 at cost which approximates market) . 28,238,602 36,030,914 Bond redemption and interest funds 19,048,986 8,481,908 Amount receivable from construction and note funds (see above)........ 5,030,392 49,795,997 Cash on hand and revolving funds . 973,905 646,639 Customer and other accounts receivable, less $ 2,000,000 allowance for losses 90,764,832 71,622,849 Materials and supplies (Note A) . 39,591,365 34,818,032 Fuel for generation (Note A) 172,000,268 79,011,590 Deferred energy costs (Notes A'and D) 145,777,000 95,801,000 Prepayments and other current assets 8,566,726 6,888,554 509,992,076 383,097,483 DEFERRED DEBITS:
Unamortized nuclear project costs (Note G) 17,240,928 23,500,759 Unamortized debt expenses . 2,643,242 1,690,257 19,884,170 25,191,016
$ 2,891,763,754 $ 2,665,912,530 LIABILITIESAND EQUITY EQUITY:
Retained income reinvested in the business, per accompanying statement... $ 967,421,384 $ 945,784,025 Contributions in aid of construction . 40,878,426 38,999,647 1,008,299,810 984,783,672 LONG-TERN DEBT, excluding advance refunding bonds (Note C):
Revenue bonds, less $ 2,419,314 and $ 1,711,291 unamortized discounts and premiums . 1,599,055,686 1,484,080,209 Revenue notes, less $ 536,974 unamortized discounts at June 30, 1980..... 124,463,026 100,000,000 1,723,518,712 1,584,080,209 Less Long-term debt due within one year (see below) 65,611,000 60,236,000 1,657,907,712 1,523,844,209 CURRENT LIABILITIES:
Long-term debt due within one year (see above) 65,611,000 60,236,000 Accrued interest on bonds 25,316,645 22,471,943 Accounts payable and accrued expenses. 133,025,698 73,263,799 Extension and other deposits 1,602,889 1,312,907 225,556,232 157,284,649
$ 2,891,763,754 $ 2,665,912,530 See accompanying Notes to Financial Statements.
23
Povven Systtesn S&itesnen(
of C~es ~ Flnmnct@ Postbox Year ended June 30 1980 1979 FINANCIALRESOURCES PROVIDED BY:
Operations-Net income $ 60,831,359 $ 112,976,514 Charges and credits to income not affecting working capital Provision for depreciation (Note B) 78,017,742 70,217,934 Amortization of nuclear project costs (Note G) 6,259,831 5,340,300 operations. 324,250 85,537 Other, net.
Resources provided by 145,433,182 188,620,285 Sale of revenue bonds and notes . 198,563,340 99,529,515 Amount received from escrow account (Note C) 31,569,500 Contributions in aid of construction . 1,878,779 4,423,569 377,444,801 292,573,369 FINANCIALRESOURCES USED FOR:
Expenditures for plant and equipment (including cost of removing facilities retired from service) . 182,281,219 185,320,243 Reduction of long-term debt . 65,611,000 60,236,000 Long-term debt refunded, including call premium (Note C) . 31,569,500 Payments to the reserve fund of the City 39,194,000 35,634,000 Expense of issuing bonds and notes . 166,072 95,287 318,821,791 281,285,530 Increase in working capital $ 58,623,010 $ 11,287,839 INCREASE (DECREASE) IN COMPONENTS OF WORKING CAPITAL:
Deposits with City Treasurer Revenue fund ($ 7,792,312) $ 15,385,003 Construction and note funds (44,765,605) (4,822,983)
Bond redemption and interest funds 10,567,078 (1,192,147)
Cash on hand and revolving funds 327,266 (96,095)
Customer and other accounts receivable 19,141,983 5,115,980 Materials and supplies. 4,773,333 1,776,989 Fuel for generation . 92,988,678 (24,177,296)
Advances to supplier for fuel oil . (4,566,480)
Deferred energy costs 49,976,000 32,244,383 Prepayments and other current assets 1,678,172 1,023,262 Net change in current assets 126,894,593 20,690,616 Long-term debt due within one year . 5,375,000 1,890,000 Accrued interest on bonds . 2,844,702 116,262 Accounts payable and accrued expenses . 59,761,899 6,995,442 Extension and other deposits 289,982 401,073 Net change in current liabilities. 68,271,583 9,402,777 Increase in working capital . $ 58,623,010 $ 11,287,839 See accompanying Notes to Financial Statements.
24
PGvveir Syste2in Notes to IFii2iia2tciall State2ne2iits NOTE A Summary of significant Energy costs Billable energy costs are deferred accounting policies:, until they are actually billed to customers through the energy The financial statements of the Power System are cost adjustment formula (Note D).
presented in conformity with generally accepted accounting Shared operating expenses The Power System principles, and substantially in conformity with accounting shares certain administrative functions with the Water System principles and methods prescribed by the Federal Energy of the Department. Generally, the cost of these functions is Regulatory Commission and the California Public Utilities allocated on the basis of benefits provided to the Systems.
Commission except for the method of accounting for contributions in aid of construction described below. The Debt expenses Debt premium, discount and issue expenses are deferred and amortized to income over the lives Department is not subject to regulations of such commissions.
of the related issues.
Utility plant and depreciation The cost of additions to utility plant and replacements of retirement units Employees'etirement plan See Note F for of property is capitalized. Cost includes labor, materials and policy relating to the employees'etirement plan.
allocated indirect charges such as engineering, supervision, Payments to the reserve fund of the City construction and transportation equipment, retirement plan Under the provisibns of the Charter of the City of Los contributions and other fringe benefits, and certain Angeles, the Power System transfers funds at its discretion to administrative and general expenses. The Department also the reserve fund of the City. Such payments are not in lieu of capitalizes an allowance for funds used during construction taxes and are recorded as distributions of retained income.
equivalent to the cost of long-term debt incurred to finance plant under construction. Research and development costs NOTE B Depreciation:
directly related to current and future construction projects are Provision for depreciation for the years ended June 30, capitalized and all other such costs are charged to income as 1980 and June 30, 1979 was $ 78,017,742 and $ 70,217,934, incurred. The cost of relatively minor replacements is included respectively, of which $ 73,387,868 and $ 67,048,728 was in maintenance expense. The original cost of property retired, charged directly to income and the balance was charged together with removal cost, less salvage, is charged to accumulated depreciation at such time as property is removed through clearing accounts to construction and operating expense accounts. These aggregate provisions approximated from service.
2.92% and 2.83%, respectively, of average depreciable plant Depreciation of utility plant is provided for the major for such fiscal years.
portion of the facilities by the 5% sinking fund method based on the estimated service lives. The straight-line method is NOTE C Long-term debt:
used for major projects completed subsequent to July 1, 1973 Long-term debt outstanding at June 30, 1980 comprised and for office and shop structures and related furniture and sixty-six issues of revenue bonds and notes due serially in equipment. Depreciation of transportation and construction varying annual amounts through 2020. Interest rates, which equipment is based upon hours of use. vary among individual maturities, average approximately Materials and supplies and fuel for generation 5.85% (5.57% at June 30, 1979). The revenue bonds are Materials and supplies and coal inventories are stated at callable generally ten years after the date of issue. Scheduled average cost. Fuel oil inventories are stated at last-in, firstwut principal maturities during the five years succeeding June 30, cost commencing in September 1979. This change had no 1980 are $ 65,611,000, $ 67,261,000, $ 70,111,000, material effect on income for the year ended June 30, 1980. $ 71,811,000 and $ 74,126,000, respectively.
Contributions in aid of construction Under the In 1972 and 1977 the Power System sold advance provisions of the Charter of the City of Los Angeles, amounts refunding bonds totaling $ 99,800,000 and $ 161,700,000, received from customers and others for construction of utility respectively. Until the bonds to be refunded are called, plant are combined with retained income reinvested in the interest on the advance refunding bonds is payable from business to represent equity for purposes of computing the interest earned on securities of the United States government Power System's borrowing limitations. Accordingly, purchased out of the proceeds of the sales and held in escrow contributions in aid of construction are shown in the accounts with Citibank, N.A., New York; $ 199,085,000 and accompanying balance sheet as an equity account and are not $ 230,657,500 of said escrow accounts has been offset against offset against utility plant; depreciation provided for the the advance refunding bonds in the accompanying balance related utility plant is charged against income. sheet at June 30, 1980 and 1979. After the moneys in the Revenues Revenues are recognized as billed to escrow accounts are applied to redeem the bonds to be customers. Billings are on a cyclical basis and the Department refunded ($ 193,300,000 to be refunded in 1980 through "oes not accrue revenues for energy sold but not billed at the 1986), the outstanding advance refunding bonds will be nd of a fiscal period. Residential and the smaller commercial payable from Power System revenues. On May 1, 1980, the Issue of 1970, $ 30,650,000 was redeemed.
accounts are billed on a bi-monthly basis all others are billed monthly.
25
Pmver Systemrt No(es to Financimll Statements On September 3, 1980 the Power System sold NOTE H Commitments and contingencies:
$ 40,000,000 Electric Plant Revenue Bonds, Third Issue of The Department has budgeted payments totaling 1980 and, $ 40,000,000 Electric Plant Revenue Notes, Issue $ 47,140,000 for the fiscal year 1980-1981 from the revenue of 1980. fund of the Power System to the reserve fund of the City.
NOTE D Sales of electric energy: The Department's budget for the fiscal year 1980-1981 provides for capital expenditures of approximately Effective December 10, 1978 under the provisions of a
$ 171,891,000 in the Power System and substantial restructured electric rate ordinance, rates were adjusted to commitments have been made in connection therewith. Also, provide additional revenues of approximately 4.6%. One of the Department has entered into a number of fuel supply and the provisions of this rate ordinance allows the recovery of all energy and capacity contracts which involve substantial fuel costs incurred in the generation of electric energy and all commitments.
purchased power costs through the energy cost adjustment formula. Deferred energy costs at June 30, 1979 increased A number of claims and suits are pending against the approximately $ 22 million as a result of the change in the Department for alleged damages to persons and property and energy cost adjustment formula. for other alleged liabilities arising out of matters usually incident to the operation of a utility business such as that of The Power System sells electric energy to other the Department. In the opinion of management, the uninsured departments of the City of Los Angeles at regular rates liability under these claims and suits would not materially provided in the rate ordinance.
affect the financial position of the Power System as of NOTE E Operational expenses:
June 30, 1980.
Operating expenses shared with the Water System amounted to $ 111,943,000 and $ 97,582,000 for the years ended June 30, 1980 and June 30, 1979, respectively, of which $ 73,341,000 and $ 64,915,000 was allocated to the Power System. Amounts due the Water System for materials and supplies purchased and shared operating expenses were
$ 37,189,229 and $ 1,260,000 at June 30, 1980 and 1979, REPORT OF INDEPENDENT ACCOUNTANTS respectively. Research and development costs amounted to
$ 3,918,758 and $ 3,505,350 for the years ended June 30, 1980 To the Board of Water and Power Commissioners and June 30, 1979, respectively, substantially all of which was Department of Water and Power charged to income.
City of Los Angeles NOTE F Employees'etirement plan: In our opinion, the accompanying balance sheet and the The Department has a funded contributory retirement, related statements of income, retained income reinvested in disability and death benefit insurance plan covering the business and changes in financial position present fairly substantially all of its employees. Costs of the plan to the the financial position of the Power System of the Department Power System for the years ended June 30, 1980 and June 30, of Water and Power of the City of Los Angeles at June 30, 1979 amounted to $ 43,617,545 and $ 40,565,888, 1980 and 1979, and the results of its operations and the respectively, which includes amortization of prior service costs changes in its financial position for the years then ended, in generally over a 30-year period ending June 30, 2003. The conformity with generally accepted accounting principles Department's policy is to fund all accrued retirement plan consistently applied. Our examinations of these statements costs. The actuarially computed value of vested benefits in were made in accordance with generally accepted auditing excess of plan assets, as indicated in the current actuarial standards and accordingly included such tests of the valuation, is approximately $ 365,000,000, of which accounting records and such other auditing procedures as we
$ 263,000,000 has been allocated to the Power System.
considered necessary in the circumstances.
NOTE G Nuclear Project costs:
In 1978 the San Joaquin Nuclear Project and the 6/ ~C Sundesert Nuclear Project were canceled. The Department had invested $ 33,182,000 in these projects, $ 30,252,000 of which was identified as having no continuing value and is Los Angeles, California being amortized over sixty-month periods which began in September 11, 1980 1978. In September 1979, the Department sold certain rights to nuclear enrichment services which had been acquired in connection with the San Joaquin Nuclear Project.
26
Public Street Other All and High- Water Electric Classes Residential Commercial Industrial way Lighting System Utilities Combined Revenue from sales of electric energy:
Year ending June 30 1980 ............... $ 290,014,606 $ 421,519,678 $ 188,312,287 $ 22,029,856 $ 4,672,079 $ 4,829,931 $ 931,378,437 1979 ............... 250,814,962 351,590,162 151,756,526 20,152,738 3,671,774 3,362,245 781,348,407 Increase (decrease) ..... $ 39,199,644 $ 69,929,516 $ 36,555,761 $ 1,87?,118 $ 1,000,305 $ 1,467,686 $ 150,030,030 Per cent increase (decrease) ........... 15.63 19.89 24.09 9.31 27.24 43.65 19.20 Kilowatt hours sold:
(ln thousands):
Year ending June 30-1980 ............... 4,862,591 8,292,513 4,093,297 343,089 98,266 392,377 18,082,133 1979 ............... 4,932,227 8,286,605 4,123,865 343,749 94,439 401,368 18,182,253 Increase (decrease) . (69,636) 5,908 (30,568) (660) 3,827 (8,991) (100,120)
Per cent increase (decrease) ....... (1.41) .07 (.74) (.19) 4.05 (2.24) (.55)
Average billing price per kilowatt hour:
Year ending June 30-t 1980 $ .0596 $ .0508 $ .0460 $ .0642 $ .0475 $ .0123 $ .0515 1979 ............... .0509 .0424 .0368 .0586 .0389 .0084 .0430 Increase (decrease) . $ .0087 $ .0084 $ .0092 $ .0056 $ .0086 $ .0039 $ .0085 Per cent increase (decrease) ....... 17.09 19.81 25.00 9.56 22.11 46.43 19.77 Average number of customers (calculated on number of billings):
Year ending June 30 1980 ............... 1,026,883 144,853 22,285 5,449 482 1,199,957 1979 ............... 1,012,75? 135,800 20,907 5,307 480 1,175,254 Increase (decrease) . 14,126 9,053 1,378 142 24,703 Per cent increase (decrease) ....... 1.39 6.67 6.59 0.42 66.67 2.10 Average annual con-sumption per customer (ln kilowatt hours):
Year ending June 30-1980 ............... 4,735 57,248 183,679 1979 ............... 4,870 61,021 197,248 Increase (decrease) . (135) (3,773) (13,569)
Per cent increase (decrease) ....... (6.18) (6.88) 27
2 2 t Ylhe 1979-80 %atm BORD Revcnucs Residential 48C Commercial and industrial 42C Governmental 6C Fire hydrant rentals 3C Other I C Expenditures Operating salaries and wages 39C Other operating expenses 12C Interest expense 12 C Retirement of long term debt IIC Retirement, disability and death benellt related to operations I IC Avathfble for additions and rephfcements to system and payment to City ISC The 1I.979-80 Poem BOB'evcnucs Residential 31C Commercial fd tff 202~
46C Street lighting 3C J
Other IC Expenditures Operating salaries and wages Purchased energy 13C 9C ~
Fuel Other operating expenses Interest expense 46C SC 9C
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Retirement of long term debt 6C 2
f1 Retirement, dfsaffility and/eath benefit related to operations 4C +-
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CASTAIC Principal Power System facilities HYDAOEIKCTRIC '4 i/i:/
include electric generating stations, POWER PROJEC'T ~ Y // MOHAVE BOULDER POWKR GENERATINO ARIZONA receiving and switching stations, trans- 'TRANSMISSION SYSTKM STATION CORONADO missian lines within the City and trans- GENERATINO missian lines fram hydroelectric and Los Angeles Area -... STATION
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ii steam electric generating stations at Hoover Dam on the Colorado River, PALO VERDE Owens Gorge in the eastern Sierra OENERATINO STATION Nevada, Castaic Pumped Storage Pro- IUNDER CONSTiRUCRONI ject north of Los Angeles, the Federal Columbia River Power System in the Northwest, Navajo (Northern Arizona),
Is(abave (Southern Nevada) and Coronado (St. Johns Arizona).
0 )Vater System facilities include principal reservoirs, Los Angeles River wells, main supply lines, and portions of aqueducts entering the Los Angeles area. 29
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