ML18040B017
| ML18040B017 | |
| Person / Time | |
|---|---|
| Site: | Susquehanna  |
| Issue date: | 10/31/1982 |
| From: | ALLEGHENY ELECTRIC COOPERATIVE, INC. |
| To: | |
| Shared Package | |
| ML17139B691 | List: |
| References | |
| NUDOCS 8308220064 | |
| Download: ML18040B017 (41) | |
Text
0 0 ELECTRIC COOPERATIVE, I NC.
FINANCIAL REPORT FOR YEAR ENDING OCTOBER 51, 1982 212 Locust Street P. 0. 13ox 1266 Harrisburg, PA 17108-1266 8308220064 830817 717/233-5704 PDR ADQCK 05000387 PDR
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FINANCIM REVIEW An Overview of 1982 During Fiscal Year 1982 a number of significant happenings occurred which will impact the future of Allegheny. The first will have to be kept in .mind when reviewing this Annual Report and financial summary which follows.
During 1982 the Allegheny Board of Directors elected to change its accountipg year from a calendar year to a fiscal year.
That fiscal year will run from November 1 to October- 31. It is readily apparent, when examining the financial. summary of Allegheny, that the 1982 fiscal figures actually represent 10 months of operations.
Also during 1982, Allegheny went from a tax-exempt entity to a non-exempt entity. These events should be kept in mind during the review of this Annual Report.
OPERATING RE%~JE The operating revenue of Allegheny Electric Cooperative increased $ 5.4 million (10.48 increase) for the year ended December 31, 1982 and is comprised solely of the sales of electricity to members. The revenue figure for the 10-month year of 1982 was $ 48,618,134. The revenue generated- from sales during 1982 increased $ 5.4 million even though the kilowatt hour sales increased 24.1 million kWh (1.428). The revenue increase from sales is due mainly to the rate increases which were necessitated by the increases received by the wholesale suppliers of power to Allegheny.
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OPERATING EXPENSES General operating expenses increased in .1982 by $ 5.5 million. This was due to the increased cost of purchased power (9-7t). General and administrative expenses increased $ 430g301 or 38.4 percent. This increase was due to Allegheny's continued involvement with EPRI and the engineering and legal work necessary in wholesale rate case negotiations instituted during 1981.
OTHER REVENUE Once again in 1982, Allegheny, through its Cash Money Management Program, continued to take advantage of the highest interest-bearing CD's available through National Rural Utilities Cooperative Finance Corporation (CFC),. and Commonwealth National Bank. In doing so, Allegheny's interest .income for .1982 was
$ 1,173,853. This is compared to $ 1,100,818 in 1981 for an increase of 6.6 percent. In 1982 Allegheny increased its emp'hasis on the money management program in order that all available funds would be invested at all times.
INTEREST CHARGES The interest on Allegheny's long-term debt increased during 1982 by $ 14.4 million or 51.1 percent from the previous year-This dollar amount is the interest charged by the Federal Financing Bank on 'the monies which have been advanced to Allegheny for its involvement in the Susquehanna .Steam Electric
E Station in Berwick, Pennsylvania. This figure will continue to grow during 1983 because of Allegheny's continued involvement with the Susquehanna plant although the interest rates have tapered off significantly from 1980-1981. During the '1982 year, Allegheny was forced to .use its approved line-of-credit with CFC, however, this short-term borrowing was repaid in early December 1982.
NET MARGINS Allegheny's net margin for 1982 was $ 2.3 million compared to
$ 2.2 million in 1981. This is an increase of about 2.3 percent.
This" increase was due largely to Allegheny's interest income being much greater than was anticipated in the budget.
FINANCING Allegheny's continued involvement in the Susquehanna. plant.
will require additional funds during 1983 to be advanced by the Federal Financing Bank (FFB). We feel that the current loan.
bal'ances which have been guaranteed by REA, will be sufficient to complete the Susquehanna.*project with Unit 2 of the Susquehanna Station going on line in the first calendar quarter of 1985 are a number of projects Allegheny is anticipating or'here considering at this time, and the front-end monies for these projects vill come from either CFC or REA. During the calendar year 1982, Allegheny was issued an additional $ 90,260,767 in long-term debt from the FFB. The current combined rate of interest for these monies is 12.046%.
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It will be extremely essential in the coming years that Allegheny be able to maintain a stong financial base and that its equity level continue to strengthen. Ne'are currently striving to maintain these positions by using a sound money. management.
program, negotiating the. best possible power purchase contracts and by our continued effort in- monitoring Allegheny's expenses in order to keep our overhead at a minimum.
In mid-Novembea 1982, Allegheny entered into a safe harbor lease, better known as a "tax benefit transfer" with an investor.
This tax benefit transfer involved approximately $ 50 million of..
the power plant eligible for the tax benefits; The net proceeds of the lease will be applied to long-term debt.
FIVE YEAR FittAt<CIAL ST*TEtlEHT 1982 1981 CALENDAR(1) CALENDAR(i) CALENDAR(i) CALENDAR( 1 )
ASSETS F ISCAL% YEAR FISCAL'EAR 1981 1980 1979 ~ 1978 Genel a l P lant 26,471,895 20,577,S10 363,443 333 ~ 336 223 r 402 Constr uction Wor k in Pr ogr ess 365 '12r220 297,283,087 241 r 424,845 180,806,793 1 8,442,220 Total Pl.ant 392 r284 r 1 15 317,860,597 241,788,288 181,140r129 128,665,622 Accumulated Provision for Deprec iat ion (131,193) (99,516) (66,654) (41 '52) (23r376)
Net Plant 392 1 52 922 317 761 r081 241 721 r634 181 r098r777 128,642,246 Hon"Utility Property - Het
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6,383,681 brSOSrS64 brb58t496 Capital Credits - HRUCFC 491,888 622,606 612,0S6 607,240 507,240 Investments in Assoc l.ated Organizations 2,249,166 1,925,223 1,634',964 4,381,064 4,138,269 Cash Genei al Funds 8,579,'916 Cr303 398 27,795 25,656 275,372 Cash - Construction/Working Funds
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2,477 2,473 3,725,852 3,587,410 2,400,28'9 Temporary Investments 8,S80,000 6r273rooo 3r305rooo 1,037,000 1, 141,000 Special Deposits 1,115,000 Accounts Receivable 4 r 607 r 098 5,807,292 9,344,654 8,685,866 3,445,465 Other Current 8 Accrued Assets 276,146 143,562 143,240 42,921 Deferred Debits 4,259,108 4,340,935 ir144r435 1,618 '97 1,025,S57 Total. Assets 427,582,402 348 r 135 134
~ 268 r 318 126
~ 201 ~ 084 331 142 r790 439
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LIABILITIES tlembersh ips '2,800 2,800 2,800 2,800 2,800 Patronage Capital 15;681,19S 13r571r011 11,329,301 8,509,7S2 hr388r731 Donated Capital 29,665 29,665 29,665 29,665 29r665 Long Term Debt - REA 392,224,000 316r528 000 F 239r956rooo 183,037rooo 123 16rooo Long Term Debt Other 3,279,357 3,274,640 3,243,529 Accounts Payable 8,S43,825 10r059 ~ '724 9 r 429 ~ 191 8 r 386 ~ 064 10 ~ 918r041 Accr ued Interest 4,098,993 92,966 84,038 35,162 Other Cui r ent 8 Accrued Liabilities 568,018 1,417,19S 1r085 989 ~ 1r075r734 Deferred Cr edits 3,154,549 3r 159r 133 3,157,613 8,154 1,S35,202 Total Liabilities 427,582;.402 348,135,134 268,318,126 MEtiBER REVENUES REVENUE CONPARISOH Adams 5,904,890 5,322,387 55 730 6,225r062 5,213,560 4,299,793 Bedford 2r 152r946 1 r 955 r 182 2r391r780 2r316 683 ~ 1 r965 r 523 1,630,044 Centr al 4,951,695 4,309,346 5 '75 '95 4,975,921 4,080,578 3,412,779 2r900r848 Claver ack 3r687 985 ~ 3r364r422 4 ~ 105 r 543 3r906r778 3r31 1 386~
Hew Enterpr ise 898,520 822,112 1,00S,435 941,901 796,629 679,8SO Northwestern 4,857;966 4, 472,318 Sr464r256 5r242r740 4r468 200~ 3 ~ 845 r 06 1 Somer set 4,855,100 4,244,914 5,201,376 4,919,087 4,063,346 3,O28,28O Southwest Central 6r081 529 ~ 5,504,358 bg735rioo 6,430,997 S,317,067 4r321r955 Sullivan 998,2'9l 911,475 1r127r505 1,092,508 895,240 820,758 Sussex 2r3S7r605 2r 124 r646 2,559,274 2,453r578 ir962 ~ OS9 1 '08r605 Tr l-County 3,086,704 2,829r163 3r528,347 3,364,007 2,821,159 2,412,768 United 3,381,769 3,082r119 3,776,038 3rh03r828 2,970,617 2,494,753 Valley 4, 137,935 3,736,929 4,607,799 4r376,196 3,711,442 3,145,238 Warr en 1,265,199 1 r 127 r 382 1,391,7'78 1,273,774 ir020r639 859,084 Total 48 r 618 r 134 43 r 806 r 753 S3 ~ 72S r 856 Si 123 r 060
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42 r 597 r 445 35 r 4S9 r 816
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ALL EGHENY ELECTRIC COOPERATIVE, INC.
STATEMENTS OF CHANGES IN FINANCIAL POSITION TEN MONTHS ENDED OCTOBER 31, 198Z AND YEAR ENDED DECEMBER 31, 1981 October 31, December 31, 1982 1981 Funds were provided by:
Net margins before provision for depreciation of $ 172, 634 - 1982;
$ 201, 149 - 1981 $ 2,282,816 $ 2, 442,858 REA mortgage notes 75, 696,000 76,572,000 U. S. Department of Ener gy note 16,050 45,062 Increase in deferred ere/its 1,520 Decrease in deferred debits 81,827 Decrease in utility plant 7,213
$ 78 076 693 79 068 &53 Funds were used for:
Extension of utility plant $ 74, 426, 306 $ 76,082,327 property 'onutility 16,287 12,550 Investments in associated organizations 193,225 300,809 National Rural Utilities Cooperative Finance t Corporation - loan payments 11,333 13,950 Decrease in deferred credits '4, 584 Increase in other special fund 345 Increase in deferred debits 46,500 Increase in working capital 3, 424, 613 2, 612,517
$ 78 076 693 $ 79 068 653
ALLEGHENY ELECTRIC COOPERATIVE, INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 1:
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES:
Utilit Plant and De reciation - Utility plant is recorded at cost, De-preciation is provided on a straight-line basis over the estimated, useful lives of the assets. Substantially all utility plant is subject to the liens of the Coopera-tive's mortgages.
Accountin Methods - The Cooperative's accounting methods're pre-scribed by .the U.S. Department of Agriculture Rural Electrification Administration.
Accounts are kept in accordance with REA Bulletin 181-1, Uniform System of Ac-counts Prescribed for Electric Borrowers of the Rural Electrification Administration.
Chan e in Fiscal Year - In 1982, the Cooperative changed its fiscal year from a calendar year ending to a-fiscal, year ending October 31, due to the scheduled start-up of the Susquehanna Nuclear Steam-Generating Station.
NOTE 2: ASSETS PLEDGED:
All assets are pledged as security for long-term debt to Rural Electrifica-tion Administration.
NOTE 3: UTILITY PLANT:
Provision has been made for computing depreciation using the straight-line method with depreciation rates prescribed by the U.S. Department of Agriculture Rural Electrification Administration as follows:
Net Utilit Plant Depreciation October..31, December 31, Rate 1982 1981 Transmission station equipment 3 wp .-$ 20,206 $ 20, 903 Structures and improvements 3% 7, 253 5, 591 Office furniture and equipment 6-10% 203, 654. 150, 318 Transportation equipment 20't 62,025 53; 600 Laboratory equipment 6% 9, 079 9, 617 Communication and load management equipment 5g, 161,727 123,689
$ 463 944 $ 363 718 Depreciation amounted to $ 34, 465 for the ten months ended October 31, 1982 and $ 35, 667 for the year ended December 31, 1981.
ALLEGHENY ELECTRIC COOPERATIVE, INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 4: JOINT OWNERSHIP AGREEMENT:
In January 1978, pursuant to agreements entered into in March 1977, the Cooperative purchased from Pennsylvania Power E Light Company '(PPfkL) a 10% un-divided ownership in the Susquehanna Nuclear Steam Generating Station now under construction by PPEL in Salem Township, Luzerne County, Pennsylvania.
The cost of construction work in progress at October 31, 1982 is
$ 365,812,220 and $ 297,283,087 at December 31, 1981., The following assets shown on the balance sheet represent the Cooperative's 10% ownership of assets other than con-struction work in progress. Both the Cooperative and PP@L provide their own financing. I October 31, December 31, 1982 1981 Nuclear fuel in process $ '5,876,758 '20,114;276 Working funds 8,712,388 4,283,300 Miscellaneous current and accrued assets 118,077 , 63,541 Deferred debits - nuclear production plant 262, 042 235, 825 NOTE 5; NONUTILITY PROPERTY:
Nonutility property consists of the following:
October 31, December 31, 1982 1981 Parking lot $ 360,264 $ 360,264 Building and land Locust Court 6,203,000 6,186,713 Restaurant furniture and equipment 289,123 289,123 6, 852,387 6,836,100 Less - accumulated provision for depreciation 468,705 330,536
$ 6 383 682 $ 6 505 564 Nonutility plant is recorded at cost. Depreciation is provided on a straight-,
line basis over the estimated useful lives of the assets. The estimated useful lives are within guidelines prescribed by the U.S. Department of Agriculture Rural Electri fication Administration.
ALLEGHENY ELECTRIC COOPERATIVE, INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 6: INVESTMENTS IN ASSOCIATED ORGANIZATIONS:
Investments in associ'ated organizations is composed of:
October 31, December 31, 1982 1981 National Rural Utilities Cooperative Finance Corporation Patronage capital $ 491, 888 622, 606 Membership 1,000 1,000 Capital Term Certificates 2,248,146 1, 924, 203 Association Building Corp.
Capital stock 20 20
$ 2 741'054 $ 2 547 829 The Capital Term Certificates subscribed for were based on the following:...
Percentage Subscription Year Series Revenue Factor Amount 1972 2025 $ 9, 248," 453 1.086480% 100, 483 1973 2025 10, 468, 486 1.012000 105,941 1974 2025 16, 476, 197 0.900780 148, 414 1975 2025 19,585,453 0.805150 157, 692 1976 2025 26,228,474 0.762189 199, 911 1977 2025 32,383,249 0.723443 234,274 1978 2025 35, 459, 816 0.684704 242,795 1979 2030 42,589,089 0.667857 284, 434 1980 2030 50,164,659 0.637200 290,259 +
2025 Long-term loan of $ 3,200,000, 160,000 1981 2030 53,725,856 0.602955 323,943 2 248 146 Adjusted $ 29,390 for 1976, 1977, 1978 and 1979 power cost refunds.
The certificates are fifty-year 3%, unsecured subordinated Capital Term Certificates. Those certificates purchased prior to October 1, 1980 and October 1, 1985 will mature on October 1, 2025 and October 1, 2030, respectively. Interest ac-crues from the most recent April 1 or October 1, the interest payment dates.
ALLEGHENY ELECTRIC COOPERATIVE. INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 7: TEMPORARY CASH INVESTMENTS:
Temporary cash investments consists of the following short-term investments:
October 31, December 31, 1982 1981 NRUCFC - Commercial paper (Interest: 12.25%
to 12.625% - 1981) $ 4,655,000 Commonwealth National Bank-Repurchase agreement (Interest: 8-1/Z~o 1982;
- 11. 375% - 1981) 930,000 208,000 I
Certificates of Deposit ((Interest: 9.75% - 1982; ll-l/2% to 14-1/2% - 1981) 7,650,000 1,860,000
$ 8 580 000 $ 6 723 000 NOTE 8: DETAIL OF PATRONAGE CAPITAL:
October 31, December 31, 1982 1981 Assignable $ 2, 110, 182 $ 2, 241, 709 Assigned 13, 571,010 11, 329, 301
$ 15,681- 192 13 571 010 NOTE 9: DETAIL OF DONATED CAPITAL - MEMBERS:
Total Contributed Retired B alance Adams Electric Cooperative, Inc. $ 19, 455 $ 17, 622 $ 1,,833 Bedford Rural Electric Cooperative, Inc. 7, 238 6, 341 897 Central Electric Cooperative, Inc. 18, 619 15,634 2, 985 Claverack Rural Electric Coopex'ative, Inc. Zl,b62 20,143 1, 719 New Enterprise Rural Electric Cooperative, Inc. 159 159 Northwestern Rural Electric Cooperative, Inc. 20,768 18,700 2, 068,.
Somexset Rural Electric Cooperative, Inc. :5, 667 4,338 1, 329 Southwest Central Rural Electric Cooperative, Inc.
Sullivan County Rural Electric Cooperative, Inc. 6, 490 5,717 773 Sussex Rural Electric Cooperative, Inc. 6, 500 6, 500 Tri-County Rural Electric Cooperative, Inc. 13, 762 11,7Z3 2, 039 United Electric Cooperative, Inc. 16,390 14, 124 .2,266
,Valley Ruxal Electric Coopex'ative, Inc. 5, 474 283 5,191 Warren Electric Cooperative, Inc. 8,083 6, 526 1,557
$ 150 467 $ 121 151 $ 29 316 ALLEGHENY ELECTRIC COOPERATIVE, INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 10: LONG-TERM DEBT:
The Cooperative obtained a Rural Electrification Administration guaranteed loan of $ 406,408,000 in order to participate with Pennsylvania Power & Light Company (PPLL) in the joint ownership of the Susquehanna Nuclear Steam Generating Station.
Subsequent to October 31, 1982 the Cooperative executed a note payable to the Federal Financing Bank in the amount of $ 200,000,000 pursuant to a commitment of an additional Rural Electrification Administration guaranteed loan to finance the additional cost.'of the Susquehanna Nuclear Steam Generating Station. The balance payable at October 31, 1982 amounted to $ 391,789,000; and at December 31, 1981 the, balance payable amounted to
$ 316, 093, 000.
i The loan is comprised of 81 separate notes which vary in interest rate and maturity date. The amounts by maturity dates are as, follows: Terms of the loans per-mit refinancing at maturity dates.
1982 $ 5, 752, 000 1983 48,410,000 1984 159,078,000 1985 47,121,000 2012 123, 916, 000 Z013 7,512,000
$ 391 789 000 The Cooperative obtained a loan of $ 3,Z00,000 in 1980 from National Rural Utilities Cooperative Finance Corporation'.to puichase its headquarters building at 212 Locust Street, Harrisburg, Pennsylvania. The balance payable at October 31, 1982 amounted to $ 3,168,206; and at December 31-, 1981 the balance payable amounted to
$ 3,179,539. The terms include interest payable at 9-1/4~a with a maturity date of Jan-uary 31, 2015. The loan is being amortized monthly with paym'ents of $ 77,218. Interest paid for the ten months ended October 31, 1982 amounted to $ 244,569.
The Cooperative executed two notes amounting to $ 722,000 guaranteed by'the Rural Electrification Administration, to finance feasibility study costs associated with pro-posed hydroelectric projects. Advances of $ 435,000 had been made on the notes as of, October 31, 1982 and December 31, 1981.
The Cooperative and the United States Department of Energy entered into a feasibility study loan agreement in the amount of $ 100,000 on November 17, 1980. The ~
balance payable at October 31, 1982 amounted to $ 100,000; and at December 31, 1981 the balance payable amounted to $ 90,000. Interest in the amount of $ 11,152 has accrued to October 31, 1982. The interest rate on the loan is 7-3/8't per annum. The loan including.
interest is to be repaid over a maximum period of ten years.
The line of credit in the amount of $ 12 million, from National Rural Utilities Cooperative Financing Corporation(CFC) as of October 31, 1982, had been increased on January 31, 1983 to $ 43,500,000, which is the maximum combined principal amount that can be outstanding at any one time on the CFC and other bank lines of credit. Any un-paid principal amount of all advances is payable by January 30, 1984. The balance payable to CFC as of October 31, 1982 amounted -to $ 571,000. No balance was outstanding't December 31. 1981.
ALLEGHENY ELECTRIC COOPERATIVE, INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 10: LONG-TERM DEBT (CONTINUED):
The Cooperative secured on December 16, 1982 a line of credit in the amount of $ 12 million from the Baltimore Bank for Cooperatives, Baltimore, Maryland.
Any advances made must be repaid by January 1, 1984.
The Cooperative's maximum authorized indebtedness was established by board resolution in August 1977 at $ 2 billion.
NOTE ll: INCOME DEDUCTIONS:
Income deductions include: October 31, December 31, 1982 1981 Interest on long-term debt '3.4,499,700 $ 28,111,200 Interest charged to construction (34,499,700) (28,111,200)
Preliminary survey and investigation expenses related to abandoned projects 106,156 14, 955 Totals $ 106 156 $ 14 955 As provided in the Uniform System of Accounts, the cost of funds used to finance construction is capitalized as part of construction cost.
NOTE 12: INTEREST INCOME:
Interest income is composed of the following:
October 31, December 31, 1982 1981 Temporary cash investments $ 958, 762 $ 1,049, 605 NRUCFC Capital Term Certificates 48, 904 51, 213 Total interest income $ 1 007 666 $ 1 100 818 A
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~1 JOHN B[SBANO & CO.
CERT(F(ED PUSLtC ACCOUNTANTS LOCUST'OURT 2T2 LOCUST STRCCl HARR!ssURo, PcKNCTT YAN(A TVl01 711 S$ 4iCSS7 March 14, 1983 ACCOUNTANTS'EPORT The Board of Directors Allegheny Electric Cooperative, Inc.
212 Locust Street Harrisburg, Pennsylvania 17101 Ne have examined the balance sheets of.AL'L'EGHENY ELECTRIC COOPERATIVE, INC. as of October'1, 1982 and December'1, 1981, and the statements of revenue and patronage capital, schedules of administ'ra- 'elated tive and general expenses, schedules'f nonoperating 'rental income, and statements of changes in financial position for the ten'onths 1982 and year ended December'1, 1981. Our examination was made in'ac-en'ded'ctober'1, cordance with generally accepted'uditing standards and, accordingly, included'.
such tests of the'ccouriting records and such other auditing 'procedures hs we considered necessary in the circumstances; In our opinion, the financial statements referred to above present fairly the financial position of ALL'EGHENY ELECTRIC'OOPERATIVE 'NC. as'f October 31, 1982 and December 31, 1981, and the results'.of.its changes in its financial position for the ten months. en'ded'ctober'1', 1982 operations'nd and year ended December'31, 1981., in conformity wit7i ge'n'erally'accepted ac-counting principles applied'n a consist'ent basis."
0 PENNSYLVANIA 27 DAUPHIN ALLEGHENY ELECTRIC COOPERATIVE, INC.
HARRISBURG, PENNSYLVANIA FINANCIA'L'TATEMENTS AS OF OCTOBER 31, 1982 AND ACCOUNTANTS'EPORT
. ALLEGH ELECTRIC COOPERATIVE~ I HARRISBURG PENNSYLVANIA
'ONTENTS PAGE Accountants'eport Financial statements:
Balance sheets Statements of revenue and patronage capital Schedules of administrative and general expenses Schedules of nonoperating 'rental income 5' of changes in'nancial'osition'tatements Notes to Qnancial statements
0 JOHANN BISBANO 8: CO.
CERTIFIED PUBLIC ACCOUNTANTS LOCUST COURT 212 LocUsT STREET HARRIsBURG, PENNsYLYANIA I7IOI 7I7 2S4 2557 March .14, 1983 ACCOUNTANTS'EPORT The Board of Directors Allegheny Electric Cooperative, Inc.
212 Locust Street Harrisburg, Pennsylvania 17101 Ne have examined the balance sheets of AL'L'EQHENY EL'ECTRIC COOPERATIVE, INC. as of October'1, 1982 'and December'1, 1981, and the related statements of revenue'nd patronage'apital, schedules'f administr'a-tive and general expenses; schedules of nonoperating 'rental income., and statements of changes in financial position for the ten'onths ended October 31, 1982 and year ended'ecember 31, 1981, Our'xamination was made in ac-cordance with generally accepted auditing standards and, accordingly, included'uch tests of the accouriting records and such other auditing 'procedur'es as we considered necessary in the circumstances'.
In our opinion, the financial statements referred to above present fairly the financial position of ALL'EGHENY ELECTRIC'OOPERATIVE 'NC. as of October 31, 1982 and December 31, 1981, and the results'.of its operations' and changes in its financial position for the ten months ended October'1, 1982 and year ended December'31, 1981; in conformity witli ge'n'erally "accepted ac-counting principles applied'n a consistent basis."
4 ALLEGH . ELECTRIC COOPERATIVE, I BALANCE SHEETS OCTOBER 31, 1982 AND DECEMBER 31, 1981 ASSETS LIABIlITIES October 31, December 31, October 31, December 31, 1982 1981 1982 1981 Utility plant Notes 1, 3 and 4: Equities and margins:
Transmission station equipment $ 27, 896 27,896 Memberships $ 2,800 $ 2,800 Structures and improvements 7,769 5, 922 Patronage capital Note 8 15, 681, 192 13, 571, 010 Of6ce furniture and equipment 267, 399 200, 840 Donated capital members - Note 9 29,316 29,316 Transportation equipment 97,248 79,080 Donated capital non-members 349 349 Laboratory equipment 10,757 10,757 Communication and load management equipment 184,068 138,739 15 713 657 13, 603, 475 Construction work in progress electric 365,812,220 297,283,087 Nuclear fuel in process *25,876,758 20,114,276 Long-term debt Note 10:
REA mortgage notes 392,224,000 316,528,000 392, 284, 115 317, 860, 597 NRUCFC mortgage note 3,168,206 3, 179, 539 Less: Accumulated provision for depreciation 131,193 99, 516 U. S. Department of Energy note 111,152 95,102 Net utility plant 392,152,922 317,761,081 395,503,358 319,802,641 Other property and investments (at cost): Current liabilities:
Nonutility property (net of accumulated provision Note payable - NRUCFC 571,000 for depreciation and amortization - 1982 Accounts payable 7,841,024 10,050,782
$ 468,705; 1981 $ 330,536 - Note 5 6, 383, 682 6,505, 564 I Accounts payable to Pennsylvania Rural Investment in associated organizations Note 6 2, 741, 054 2,547, 829 Electric Association 131, 804 8,942 Special fund 345 Interest accrued 4,098, 993 92,966 Miscellaneous current and accrued 9, 125,081 9, 053, 393 liabilities 568,018 1,417,195 Current assets: 13,210,839 11,569,885 Cash general (132,472) 20, 098 Cash construction fund, trustee 2,477 2, 473 Deferred credits 3,154,549 3,159,133 Working funds 8, 712, 388 4,283,300 Temporary cash investments Note 7 8,580,000 6,723,000 Accounts receivable from members - (power bills) 4,577,699 5,620,169 Other accounts receivable 129,054 287,123 Prepayments 85,364 49, 963 Interest receivable 72,705 30,058 Also Available On Miscellaneous current and accrued assets 118,077 63, 541 Aperture Card 22, 145, 292 17,079,725 Deferred debits 4, 159, 108 4,240, 935 PRC
$ 427 582 403 $ 348 135 134 APERTURE IN . $
CARI3 The accompanying notes are an integral part of this statement.
8308220064-a(
. ALLEG Y ELECTRIC COOPERATIVE, STATEMENTS OF REVENUE AND'ATRONAGE CAPITAL TEN MONTHS'NDED OCTOBER 31', 1982
'ND YEAR ENDED DECEMBER 31, 1981 October 31, December 31, 1982 1981 Operating revenues and patronage capital $ 48, 618, 134 $ 53, 725, 856 Operating expenses:
Cost of power 42, 814, 417 47, 661, 913 Wheeling 2, 936, 838 3,346,072 Customer accounts expenses (billing 'and computer charges) 1, 850 2, 362 Administrative and general expenses "1 381 332 1,151,404 Depreciation, unallocated 28, 865 30,763 47,.1 63,'302 52, 192, 514 Income deductions Note. 11:
Miscellaneous income deductions 106.156 14, 955 Total operating expenses and income deductions 47 269 458 52,207,469 Net operating margins 1 348 676 1,518,387 Nonoperating margins:
Nonoperating rental income (e'xpense)" (246, 220) (388, 046)
Interest income Note 12 1,007,666 =1,100,818 Gain on disposition of property 60 761,506 712,772 Patronage capital allocations NRUCFC 10,550 Total nonoperating margins and patronage capital allocations 761, 506 723,322 Net margins for period 2,110,182 2,241,709 Patronage capital beginning of year 13,571,010 11,329,301 Patronage capital - end of year $ .15:, 681, 192 $ 13 571 010 The accompanying notes are an integral part of this statement.
, ALLEGH Y ELECTRIC',COOPERATIVE, I
'CHEDULES 'OF ADMINISTRATIVE"AND GENERAL EXPENSES TEN MONTHS'NDED 'OCTOBER 31, 1982
'ND YEAR ENDED DECEMBER 31, 1981 October 31, December 31, 1982 1981 Youth tour 2,100 $
Office supplies 26,059 21, 857 Telephone Travel, conventions and meetings Payroll and employee benefits Legal, auditing and engineering 5, 640 54, 978 525, 657 289, 877
',100 4, 044 43, 294 473, 591 196, 005 Miscellaneous 322 925 Association membership dues 22,756 18, 606 Experimental and general research 116,658 123, 707 Board meetings, directors'ees and travel 44, 013 56, 575 Annual report 2, 451 703 Penn Lines and information programs 98,606 92,041 Rent 74,387 63,251.
Payroll taxes 30,554 29, 832 Insurance 16,768 18, 755 Customer assistance energy conservation 3,589 4, 463 Automobile service and maintenance 242 2, 655 Printing 66,675 Total administrative and general expenses $
1'381'332'1'151'404'he accompanying notes're an integral part of this'statement.
I
~ ~ ~ y Y ELECTRIC COOPERATIVE I
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4 . ALLEGH
'CHEDULES OF. NONOPERATING RENTAL INCOME TEN MONTHSENDED OCTOBER 31, 1982 'ND YEAR ENDED DECEMBER 31, 1981 October'1, December 31, 1982 1981 Income:
Rental building $ 445, 102 $ 411, 005 Rental - parking 33,830 37, 240 Total income 478, 932 448, 245 Expenses:
Utilities 95, 171 92,502 Payroll and employee benefits . 44,190 51,766 Management and leasing fees 13,947 19, 818 OfQce and administrative 2, 508 1,548 1,728 expenses'ravel
,1, 440 Maintenance'nd repairs 58, 284 68,547 Advertising 766 155
. Real estate taxes 104, 932 114, 747 Insurance 20,221 18, 805 Interest 244, 569 294,708 Depreciation 138,169 165, 482 Directors'ees and expenses, 375 Legal and audit fees 6, 110 Protection service 955 Total expenses 725,152 836, 291 Net nonoperating rental income'e'xpense) $
246'20) $ '88'46)
The accompanying-notes are an integr'al part of this'statement.
, ALLEGH i Y ELECTRIC COOPERATIVE, I STATEMENTS O. CHANGES IN FINANCIAL POSITION TEN MONTHS'NDED OCTOBER 31, 1982 AND YEAR ENDED DECEMBER 31, 1981 October 31, December 31, 1982 1981 Funds were provided by:
Net mar gins before provision for depreciation of $ 172, 634 - 1982;
$ 201, 149 1981 2, 282, 816 $ 2, 442, 858 REA mortgage notes 75, 696, 000 76,572,000 U. S. Department of Energy note 16,050 45,062 Increase in deferred credits 1,520 Decrease in deferred debits 81,827 Decrease in utility plant 7,213
$ 78 076'93', 79'068 653 Funds were used for:
Extension of utility plant $ 74,426,306 $ 76, 082,327 Nonutility property 16, 287 12,550 Investments in associated or ganizations 193,225 300,809 National Rural Utilities Cooperative Finance "
Corporation loan payments 11,333 13,950 Decrease in deferred credits 4, 584 Increase in other special fund 345 Increase in deferred debits 46,500 Increase in working capital 3, 424, 613 2,612,517
$ 78'076 693 $ 79'068'653 The accompanying 'notes are an integral part of this statement.
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1
. ALLEG Y ELECTRIC COOPERATIVE, NOTES .TO, FINA,NCIAL'TATEMENTS.
OCTOBER 31; 1982 AND DECEMBER 31, 1981 NOTE 1:
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES:
Utilit Plant and De reciation - Utility plant is recorded at cost. De-preciation is provided on a straight-line basis over the estimated useful lives of the assets. Substantially all utility plant is subject to the liens of the Coopera-tive's mortgages.
Accountin Methods - The Cooperative's accounting methods are pre-scribed by the U.S. Department of Agriculture Rural Electrification Administration.
Accounts are kept in accordance with REA Bulletin 181-1, Uniform System of Ac-counts Prescribed for. Electric Borrowers of the Rur'al Electrification Administration.
Chan e in Fiscal Year In 1982, the Cooperative changed its fiscal year from a calendar year ending to a fiscal year ending October'31, due'o the scheduled of the Susquehanna Nuclear Steam Generating Station. 'tart-up NOTE 2: ASSETS PLEDGED:
All assets are pledged as security for long-,term debt to Rural Electrifica-tion Administration.
NOTE 3: UTILITY PLANT:
Provision has been made for computing depreciation us'ing the straight-line method with depreciation rates prescribed by the U.S. Department of Agricultur'e Rural Electrification Administration as follows:
Net Utilit Plant Depreciation October..31, December 31, Rate 1982 1981 Transmission station equipment 3g. $ 20, 206 $ 20, 903 Structures and improvements 39. 7, 253 5, 591 Office furniture and equipment 6-10% 203, 654 150,'318 Transportation equipment 20% 62, 025 53, 600 Laboratory equipment 6% 9,079 9, 617 Communication and load management equipment 161, 727 123, 689
$ 463'44 $ 363 718 Depreciation amounted to $ 34,465 for the ten months ended October 31, 1982 and $ 35,667 for the year end'ed December 31, 1981.
)
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. ALLEGH ELECTRIC COOPERATIVE~ I NOTES TO FINANCIAL'TATEMENTS OCTOBER 31, 1-982 AND DECEMBER 31, 1981 NOTE 4: JOINT OWNERSHIP AGREEMENT:
In January 1978, pursua'nt to agreements entered into in March 1977, the Cooperative purchased from Pennsylvania Power' Light Company '(PP&L) a 10% un-divided ownership in thous'quehanna Nuclear'team Generating Station now under construction by PP&L in Salem Township, Luz'erne County,'. Pennsylvania.
The cost of construction work in progress at October 31, 1982 is
$ 365,812,220 and $ 297,283,087 at December'31, 1981. The following assets shown on the balance sheet represent the Cooperative's 10~a ownership of assets other than con-struction work in progress. Both the Cooperative and PP&L'rovide their own financing.
October. 31, December 31, 1982 1981 Nuclear fuel in process $ 25, 876,758 $ 20,114,276 Working funds 8,712,388 4,283,300 Miscellaneous" current and accrued assets 118,077 63,541 Deferred debits nuclear produc'tion plant 262,042 235,825 NOTE 5: NONUTILITYPROPERTY:
Nonutility property consists of the following:
October 31, December 31, 1982 1981 Parking lot $ 360, 264 $ 360, 264 Building and land Locust Court 6,203,000 6,186,713 Restaurant - furniture and equipment 289,123 289,123 r
.6,.852,387 6,836,100 Less accumulated provision for depreciation 468,705 330,536
$ 6'383'682 $ 6'505 564 Nonutility plant is recorded at. cost. Depreciation is provided on a straight-line basis over the estimated us'eful'lives'of the assets.'The estimated useful lives are within guidelines'prescribed by the U.S. Department of Agricultur'e Rural Electrification Administration..
ALL'EG~Y ELECTRIC COOPERATJVE, I~.
NO~ TO FINANCIAL"STATEMENTS~
OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 6: INVESTMENTS IN ASSOCIATED ORGANIZATIONS:
Investments in associated organizations is composed of:
October 31, December 31, 1982 1981 National Rural Utilities Cooperative Finance Corporation-Patronage capital $ '91,888 622, 606 Membership 1,000 1,000 Capital Term Certificates 2,248,146 1, 924, 203 Association Building Corp.
Capital stock 20 20
$ 2 741'054'2'47'29 The Capital Term Certificates subscribed for were based on the following:
\ Percentage Subscription Year Series Revenue Factor Amount 1972 2025 $ 9, 248, 453 1. 086480% $ 100, 483 1973 2025 10, 468, 486 1. 012000 105,941 1974 2025 16, 476, 197 "
0.900780 148, 414 1975 2025 19,585, 453 0.805150 157,692 1976 2025 26, 228, 474 0.762189 199, 911 1977 2025 32, 383, 249 0.723443 234, 274 1978 2025 35, 459, 816 0.684704 242, 795 1979 2030 42, 589, 089 0. 667857 284, 434 1980 2030 50, 1'64, 659 0.'637200 290,259 +
2025 Long-term loan of $ 3,200,000 '.
160,000 1981 2030 53, 725; 856 602955 323, 943
$ 2'48'46 Adjusted $ 29,390 'for 1976, 1977, 1978 and 1979 power cost refurids.
The certificates are fifty-year 3%, unsecur'ed subordinated Capital Term Certificates. Those certificates pur'chased prior'o October 1, 1980 and October 1, 1985 will mature on October 1, 2025 and October'1, 2030, r'esp'ectively. Interest ac-crues from the most recent April 1 or October', the interest "payment dates.
. ALLEGH Y ELECTRIC COOPERATIVE, I NOTES TO. FINANCIAL STATEMENTS OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 7: TEMPORARY CASH INVESTMENTS:
Temporary cash investments consists of the following short-term investments:
October 31, December 31, 1982 1981 NRUCFC - Commercial paper (Interest: 12,25%
to 12. 625% 1981) 4,655,000
~ Commonwealth National Bank Repurchase agreement" (Interest: 8-1/2% 1982; ll, 375 o 1981) 930,'000 208,000 Certificates of Deposit ((Interest: 9.75% - 1982; ll-l/2% to 14-1/2% - 1981) 7, 650, 000 1, 860,000 8"580 '000 $ 6 723 000 NOTE 8: DETAIL OF PATRONAGE CAPITAL:
October 31, December 31, 1982 1981 Assignable $ 2, 110, 182 2, 241, 709 Assigned 13,571,010 11,329,301
$ 15 681 192 13 571 010 NOTE 9: DETAIL OF DONATED CAPITAL - MEMBERS:
Total Contributed Retired Balance Adams Electric Cooperative, Inc. $ 19, 455 $ 17, 622 $ 1, 833 Bedford Rural Electric Cooperative, Inc. 7,238 6, 341 897 Central Electric Cooperative, Inc. 18, 619 15,634 2,985 Claverack Rural Electric Cooperative, Inc. 21, 862 20,'143 1,719 New Enterprise Rural Electric Cooperative, Inc. 159 159 Northwestern Rural Electric Cooperative, Inc .. 20,768 18, 700 2,068 Somerset Rural Electric Cooperative, Inc. 5, 667 4,338 1, 329 Southwest Central Rural Electric Cooperative, Inc.
Sullivan County Rural Electric Cooperative, Inc. 6, 490 5,717 773 Sussex Rural Electric Cooperative, Inc. 6, 500 6,500 Tri-County Rural Electric Cooperative, Inc. 13,762 . 11,723 2,039 United Electric Cooperative, Inc., 16,390 14, 124 2,266
. Valley Rural Electric Cooperative, Inc. 5, 474 283 5, 191 Narren Electric Cooperative, Inc. 8,083 6,526 1,557
$ 150 467 $ 121"151 $ 29 316
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ELECTRIC COOPERATIVE, I I
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NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 10: LONG-TERM DEBT:
The Cooperative obtained a Rural ElectriQcation Administration guaranteed loan of $ 406,408,000 in order to participate with Pennsylvania Power & Light Company (PP&L') in the joint ownership of the Sus'quehanna Nuclear Steam Generating Station.
Subseque'nt to October 31, 1982 the Cooperative executed a note payable to the Federal Financing Bank in the amount of $ 200,000,000 pursuant to a commitment of an additional Rural Electrification Administration guaranteed loan to finance the additional cost of the Susquehanna Nuclear Steam Generating Station. The balance payable at October 31, 1982 amounted to $ 391,789,000; and at December 31, 1981'he balance payable amounted to
$ 316, 093, 000, The loan is comprised of 81 separate notes which vary in interest rate and maturity date. The amounts by maturity dates are as follows: Terms of the loans per-mit reQnancing at maturity dates.
1982 $ 5, 752, 000 1983 48,410,000 1984 159,078,000, 1985 47,121,000 2012 123, 916, 000 2013 7,512,000
$ 391'789 000 The Cooper ative obtained a loan of $ 3,200,000 in 1980 'from National Rur'al
. Utilities Cooperative Finance Corporation to pur'chase its.headquarters building at 212 Locust Street, Harrisbur'g, Pennsylvania. The balance payable at October'1, 1982 amounted to $ 3,168,20&; and at December 31, 1981 the balance payable amounted to
$ 3,179,539. The terms include interest payable at 9-1/4~a with a maturity date of Jan-uary 31, 201'5. The loan is being amortized monthly with payments of $ 77,218. Interest .
paid for the ten months ended October 31, 1982 amounted to $ 244,569.
The Cooperative executed two notes amounting to $ 722,000 guaranteed by the Rural Electrification Administration, to finance feasibility study costs associated with pro-posed hydroelectric projects. Advances of $ 435,000 had been made on the notes as of October 31, 1982 and December 31, 1981.
The Cooperative and the United States Department of Energy entered into a feasibility study loan agreement in the amount of $ 100,000 on November 17, 1980. The balance payable at October 31, 1982 amounted to $ 100,000;. and at December 31, 1981 the balance payable amounted to $ 90,000. Interest in the amount of $ 11,152 has accrued to October 31, 1982. The interest rate on the loan is 7-3/8% per annum. The loan including interest is to be repaid over a maximum period of ten years.
The line of credit in the amount of $ 12 million, from National Rur'al Utilities Cooperative Financing Corporation (CFC) as of October 31, 1982, had been increased on
. Janua'ry 31, 1983 to $ 43,500,000, which is the maximum combined principal amount that can be outstanding at any one time on the CFC and other bank lines of credit. Any un-paid principal amount of all advances is payable by January 30, 1984. The balance payable to CFC as of October 31, 1982 amounted to $ 571,000. No balance was outstanding at December 31, 1981.
11
ALLEGH ELECTRIC COOPERATIVE, I NOTES TOFINANCIAL STATEMENTS OCTOBER 31, 1982 AND DECEMBER 31, 1981 NOTE 10: LONG-TERM DEBT (CONTINUED):
The Cooperative secur'ed on December 16, 1982 a line of credit in the amount of $ 12 million from the Baltimore Bank for Cooperatives; Baltimore, Maryland.
Any advances'ade must be repaid by January 1, 1984.
The Cooperative's,maximum authorized indebtedness was established by board resolution in August 1977 at $ 2 billion.
NOTE 11: INCOME. DEDUCTIONS:
Income deductions include: October 31, December 31, 1982 1981 Interest on long-term debt $ 34,499,700 $ 28, 111, 200 Interest charged to construction (34, 499, 700) (28,111,'200)
Preliminary survey and investigation expenses related to abandoned projects 106,156 14, 955 Totals $ 106 156 $ '4955 As provided in the Uniform" System of Accounts, the cost of funds used to finance construction is capitalized as part of construction cost.
NOTE 12: INTEREST INCOME:
Interest income is composed of the following:
October 31, 31, 1982 'ecember 1981 Temporary cash investments $ 958, 762 $ 1,049, 605 NRUCFC Capital Term Certificates 48, 904 51,213 Total interest income $ 1'07'66 1 100'818