ML19327B009

Taunton Municipal Lighting Plant 1988 Annual Rept.

ML19327B009
Person / Time
Site:	Seabrook
Issue date:	12/31/1988
From:	TAUNTON MUNICIPAL LIGHTING PLANT
To:
Shared Package
ML19327A998	List: ML19327A997 ML19327A999 ML19327B001 ML19327B002 ML19327B004 ML19327B006 ML19327B008 ML19327B009 ML19327B010 ML19327B019
References
NUDOCS 8910240187
Download: ML19327B009 (22)

Text

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LP Annual Report 1988 I

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'# General Manager's Letter .,

a Public utilities can no longer measure ' Recogniting that w are a vital success only in terms of how safely, player in our community's well-b "

efficiently, and cost-effectiwly we we also began to outline a decision. )

meet the energy demands of our making methodology to identify the 1

' [" customen. While those standards will impact of major decisions on the com- 1 always be critical facton in assessing munity. In the future, new programs,'. l

' our performance, the rapidly chang. projects and policies will be scrutinized

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ing world market and the undeniable using such criteria as creating jobs, mowment toward deregulation here keeping any necessary rate increase be .

\ low inflatwo loels, improving quality at home haw added a new criterion

- how nll prepared we are to sue- of life, enhancing customer service -

ceed in an increasingly competitive and fostering economic dewlopment. <

environment. While 1988 was a year of charting '!

The Taunton hiunicipal Lighting Th!LP's course into the future, it was h.

Ple.nt faced that question in 1988 and also a year during which we contin- >

TSfLP's Cleary Flood Genemting , y _ yg challenging era for public power. In a to. day expectations of our constituency.. *  ;

Station - providing efficient electric e neerted effort that extended from Again, we offered one of the lowst 'j powerfor more than 75,000 homes, our commissioners and managers to residential rates in New England. We each employee, w dewloped a well- added more than a thousand new -  ;

defined mission statement and a list of. members to the ThiLP customer :

u, goals and objectives that haw set the family and successfully met a 9.7 per-K wheels in motion for on going, . cent increase in demand. We offered aL p I strategic planning in ewry ThtLP new prompt. payment program which -

department. Increased custorner discounts by 22.5 p -

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We continued negotiations to percent owr 1987. We transferred \.f broaden our fuel mix, increase our - $1,770,000 tr tM City of 'lkunton for ,

generating capacity and expand low. the reducou of taxes, $350,000 more J' l- than in 1987. And we stepped up our '

cost transmission access - with minimal risk for our ratepayen. We demand reduction efforts, for which ,

established a large industrial rate we captured energy innovation awards .

I on the state and nationallevels.

schedule to foster continued economic growth. We instituted new programs hiaintaining high standards today.

to give ThiLP an edge in the most Charting a clear coune into the l competitive of marketplaces: ten-year future. These tw accamplbhments supply and demand forecasting; pro. summarize ThtLP's activities in 1988.

active environmental safety and Both will serve as a strong foundation ,

regulatory compliance; computer- for carrying our ninety one-year-old  !

based reliability and efficiency anal- tradition of low cost public power ,

yses; skill enhancement seminan for proudly into the Elst century.

our employees; and training programs to continually upgrade the competen-cles of each of our managers.

'From left to right: j, fik Geneml hfanager

1. 'h Joseph bl. Blain ,g  %

i Secretary Joseph hiedeiros $. \f #

Commledoner

• i John A. blartyniak .

Chairman g 2 Arthur G. Pimenta N* ,

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y / Power Production .

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TMIIs Cleary Flood Station suc- Comput:rized inwntory progr:m l 9I~ ' '

cessfully met power production de- Initiated. The new partionable cabi-

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mands in 1988, generating a total of nets willlead to a more efficient. l 336,857 MWh of electricity. In addi- computerized inwntory control l tion, major performance upgrades at rystem. Designed to accept informa-  !

I' the station resulted in increased sales tion manually and from bar coding L

to other utilities, generating rmnum devices, the new system will track i]

part usage, automatically flag I that flow to our retail customers in the form of lower electric rates. The reorders, and saw many manhours in . .j impact of these increased rmnues annual imentory audits. Because it t F

will be enn greater in 1989. will gradually eliminate excess inven-l tory, the new system will also reduce

f i But the real accomplishments of i TMiys power production team in owrhead costs.

1988 are yet to be realized. For, like Proactiw maintenance program i

[ makes ttrides. Outage planning re-all other departments, we focused on f the future - implementing and en. cehed special attention in 1988. Use .

The contml panel at TAf LP's Cleary. hancing production.related programs of time and manpower during regular- ,

fled Genemting Station, where sea- to ensure that TMLP remains a strong ly scheduled maintenance outages was e mpetitiw player in the changing subjected to computerized critical ,

. tion opcmtors monitor critical piant utility marketplace. path methodology. More than ensuring a

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maximum efficiency and availability, P"*'"C* Engineering group established.

'! Through staff reorganization, a new the program promises to increase.

' engineering group was formed. Their TMLP income and consequently charten secure optimum efficiency lower customer rates - through a '

from all equipment; determine the - newly negotiated contract that direct.

most cost effectlw way to respond to ly links our plant availability rates to

' growth and regulatory requirements; the price we can charge for power and provide a high lewl of assurance sold to other utilities.

that safety remains our Number One New I&C shop under construction. o concern. Approximately $240 thousand was l Their first project was to allocated for a new Instrument and 1 determine the best way to expand Control Maintenance Shop and con-warehouse facilities. Rejecting a $132 struction got underway in the second l: thousand proposal for construction of half of 1988. The I&C shop will pro-l' vide a modern, clean environment for  ;

a mezzanine lew! as costly and ineffi.

cient, they recommended highly par. the solid state, equipment needed to tionable cabinets that could also serve extract maxfinum economy from the .

l as the foundation for a mezzanine if production system, l

needed at a later date The need for In all,1988 was a tribute to the ,

additional warehouse space was met, diligency and hard work of our labor l_

with adequate flexibility. force. They met energy demands.

They managed to cope with increas-1 Ing regulatory controls. And, together, they focused on the best way to meet j

future needs safely, efficiently and l

I cost effectiwly in an increasingly com.

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, N i Iower Pmduction Manager l 5

l Richard Wlez l 1

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( 1 Transmisalon and Distribution

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Providing reliable service to current .And the enryday work went on. f customers and getting new customers While charting our course into the 'I on line as quickly as possil,le have . next century occupied much of our ';

always been important goals at. time throughout 1988, it did not ,

TMLP. In 1988 the 'hansmission and detract from day-to day customer Distribution Department went one services. 3 step further. We initiated several pro. In 1988, Engineering processed 490 l grams to ensure our work and plan- service requests,7 percent more than ,

ning methods are rooted in the utmost in 1987. Our customer service team .,

attention to safety, efficiency, and installed 1,185 new rneters. And our positiw impact on the community, line department installed 475 poles, . 3 Safety and lleliability Assessment 190 transformers,67 padmount l I'lan instituted. Ilealizing that solid transformers, and 515 street and ren-information is one of the cornerstones tal lights - in addition to completing of maintaining a safe, reliable power tie ins to out 115,000 Wlt lines at the  ;

distribution system, we began to col. ' new Whittenton Junction Substation.

A TAfLP AfoterialJfandling Aeriallift lect data into a permanent central Providing safe, reliable, efficient Truck. Just one of 40 schicles shnt data base in 1988. In the future, this . day to. day transmission and distribu.

data will enable us to historically tion servlees continues to be the goal-males up T3fLP's acrticefleet, analyze our reliability, compare our of this department. Making sure we ,

reliability to other utilities, pinpoint are prepared to forecast and meet weaknesses, and establish criteria that those needs ont the long term added '

willlead to continual improwments a critical new dimension to that goal I in all transmission and distribution in 1988. I related activities in the years ahead. '?

Proactiw Environmental Compli. -

ance Program established. In light of ,

the increasingly aggressive regulatory climate for public utilities, we took a major step to augment our current compliance efforts. Working closely with an auditor from the Northeast I

Public Ibwer Association, we asased all current programs and implemented i a proactiw Environmental Com-pliance Program. Its goal is to ensure l

we remain in compliance with all current regulations and to enable us to keep abreast of new regulatory demands in the future.

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N-Trummlehm and Dhtrilmtkm Afanager 6 AlichaelJ. Iforrigan ,_.

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Energy Services tnd Planning

, In the Energy Services and Planning In addition, Newboy, a coal fired r . Department, we can say with a cer. plant under coretruction in East Pro-tain amount of confidence that we t vidence, Rhode Island, is on schedule.

. how mastered the shoit. term fore. Under a previously negotiated, no casting and purchasing skills needed liability contract, Newbay will be ,

to meet our customers' energy needs able to supply TMLP with up to 10.- l

~at the lowest possible cost. The statis. MW of capacity beginning in 1991, ties support the claim. In 1988, elec- enough to handle 15 percent of _ i tricity sales increased by 8.4 percent TMLP's energy requirements. 3 and rates dropped again, allowing us Hydro. Hydro-Quebec Phase II, a to continue our tradition of highly project in which TMLP is an equity j' competittw commercial rates and one shareholder in new transmission lines of the lowest residential rates in New now under construction, will increase England, So, in 1988 we focused on hydropower to New England in the the future. We entered into creatlw fall of 1990 from a current 690 MW supply negotiations and began equally to 2000 MW, In addition to further i TMLP's competitite Indmtrial Rat' creatise demand side management reducing TMLP's dependence on oil and leased transmission lines, power j Schedule - dcrigned to retain and programs to keep TMLP financially str ng and independent in the 21st from Hydro Quebec Phase 11 will j attmet large industrial men.

eentury. translate into $3.2 million (10S8 dol.

Broadening our fuel mix and trans- lars) in savings for TMLP customers - i mission access - without liability for through the year 2000. l the ratepayer. Realizing that depen- New industrial rate schedule. Con.

- dence on foreign oil pilces and private- scious that large corporations consider ,

ly owned transmission line is a poten- utility rates a key factor in expansion tial liability for all public utilities, and relocation decisions TMLP de-TMLP entered into sewral negotia. signed a Large Industrial Rate Sche.

tions in 1988 designed to reduce the dule in 1988. This new rate schedule impact of these two critical factors on will put TMLP on record as a utility p ,

I: our long. term success. that is interested in retaining and ,

Coal. Seven architectural engineers attracting large industrial users. We  ;

/ development firms responded to our plan to continue to refine pricing for-1988 Request for Proposals to design mulas for large industrial users in and construct a 100MW coal fired 1989, paying careful attention that

, facility at the Cleary Flood Station. appropriate industrial rate reductions

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Under the proposal, TMLP would are not offset oy adverse increases in lease the land, staff the facility, retain other rate classifications.

preference buying of energy produced, L and have first option to purchase the l- facility early in the next century. The l proposal is structured to amid finan.

ll cial risk for our ratepayers. Selection l' of endors is scheduled for mid 1989.

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. . s t Energy terrices und I'lanmng Manager 9

Mark Cordeiro y _- , , . . -

", n Energy Seniws cnd Planning p

' Conservation and efficiency programs In addition to the ShlARTLIGHT .~.

net savings, win awards. Recognizing program, the number of residential b that maintaining low electric rates ' energy audits increased by 300 per-L must be a community effort, TMLP cent in 1988, with materials and fu took major strides to increase long. Installation work valued at $60 per M term customer imchement in comer- customer per year. We see this year's -

e vation programs and efficient use of increase in audits and the deselop-L energy in 1988. ~ ment of innovathe services as a pre.

Compact fluorescent technology lude to more extenshe savings and sened as the base for TN11Es - demand reduction in 1989 for our

[ Sh1ARTLIGHT program, a residen. commercial and industrial customers. .

b tial conservation program that won - Customer communications were J' the United States Department of also part of ou fwus throughout u? Energy's 1988 Award for Energy In- 1988. Radio and newspaper ads were'

- novation, an Energy innovator Award successful in encouraging wluntary from the American Public Ibwer load reduction during the heat wase The airard trinning SMARTLICIIT

. Association and a citation for excel-of 1988. " Light Reading l' our quar.

. pmgrum highlighted TMI.P's inscrest in lence from the Cowrnor of hiassachu. terly n<wsletter, enjoyed its first tull setc.s. Leased to the customer at 20 year of famrable reception by the energy comerration and efficiency.

cents a month, each Sh1ARTLICHT community. And, for the long term, guarantees $50 in customer savings. the foundation has been laid for a Within the first nine months of the . more extenshe customer communica-program, household penetration ex- tion and service assessment program ceeded 5 percent cf the customer with our ratepayers, to be fully im-base, representing a direct savings to plemented in 1989.- o,

. ThtLP customers of $180,000. We forecast a 10 percent penetration rate within two years. Though Sh1 ART.

LICHTS deliver as much light as a 75 watt incandescent bulb, they use only 18 watts of etwtricity and last 13 times longer than ordinary light bulbs.

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In an increasingly competitiw en. Recognizing that competent man.

Q vironment, the service a customer agement is an important ingredient in ,

receives may well be the deciding fac- the larger customer service picture, a tor in the choice of utilities. During commitment was also made to on' going 1988, TMLP continued to delher training for all department managers.

timely service to its customers and it This year this commitment took the - j

also looked to the future - reviewing form of an intenstw 12-day institute . j service policies and initiating pro- on proactiw planning, dewloping >

t grams designed to continually en- team performance and other compe-' .

hance the quality and lew! of service tency expanding skills. '

TMLP customers can expect, New prompt payment program 1 Customer se vice representathes results in more customer savings. I kept busy again. A record high num. While prompt, efficient senIce is a -

ber of senice requests were processed standard by which all customers l in 1987, Those numbers increased judge their utilities, the cost of energy again - by 10 percent - in 1988, still remains a key factor in determin. 1 Cwtomer Sente - making sure nw Our customer service representathes ing customer satisfaction. In addition l

DfLP cwtomer reccim prompt and. processed more than 11,200 senice to a full year of across the. board rate -

effinent sente - everyday and rders and 550 temporary servim reductions effecthe from November, l orders and responded to customer 1987, TMLP instituted a new discount j

. ewrvaish8- telephone inquiries at the rate of 1650 program in July. The " Summer lioll- a calls per month - with no increase in day Prompt Payment Discount" net.

staff. ted our customers $101,286 in savings.

Long term training programs Coupled with out traditional winter instituted. To maintain a high lewl of discount program, discounts in 1988 customer service in the future, a com.

• Jumped to a new high of $427,200, a .

mitment to annual skill updates for 22.5 pernnt increase owr 1987. I all customer service personnel was More than meeting an increased ,

made in 1988. This 3 ear they attended demand for prompt, courteous ser-a series of workshops sponsored by the vice,1988 was a year of putting the Northeast Public Power Association on mechanisms in place that will con- ,

how to handle customer inquiries and tinue to imprme our performance in complaints. Similar programs will be the future.

required annually.

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pMfi g Report of Independant Certified Public Accountants 3

, Municipal Light Commimion of the City of Taunton ,

F. - _4-.,, 7bunton, Massachusetts 4 .

We have audited the accompanying balance sheets of hunton Municipal Lighting ,

Plant (a department of the City d hunton) as of December 31,1988 and 1987, and the related statements of earnings, surplus, and cash flows for the > tars then ended.

E These financial statements are the responsibility of the Plant's management. Our P

responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. -

D Those standards require that ww plan and perform the audit to obtain reasonable 'i f

assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and [

disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating  ;

the owrall financial statement presentation. We believe our audits provide a reasonable 7

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basis for our opinion.  ;

As discussed in note F, hunton Municipal Lighting Plant records pension expense based on a formula determined by the City, whereas generally accepted accounting -  !

principles require the use of actuarial methods in determining annual pension expenn

• The effect on the financial statements of not using actuarial methods has not been determined. In addition, certain disclosures required by the Covernmental Accounting 1 Standards Board relating to pensions have been omitted.

In our opinion, except for the effect on the financial statements of the accounting policy discussed in the preceding paragraph, the financial statements referred to abow, '

c

. present fairly in all material respects, the financial position of Dunton .h!unicipal Lighting Plant as of December 31,1988 and 1987, and the results of its operations and ,

m its cash flows for the years then ended in conformity with generally accepted accounting principles.  ;

Boston, Afassachusetts February 23,1989 1

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December 31 1988 1987

' Assets ,

Utility Plant At Cost -

' ' Pl a nt in a:rvice .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 68,991,569 $ 65,858,659-37.382.310 34.789,869-

. Less eaum ulated depreciation (note A2) . . .. ... . .. . .... . . . . . ... . .... .. .... . . . . . . . . . . . . . . . .. . . . . . .. . ...

31,609,259 31,068,790 1

. Net utility plant in service . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,945,376 5.479.298 Construction verk in p rogress (note E) . . . .... . . .. . . .. .. .. . .. . . . ... .. .. . . . . .. .. . . ... . . . . .. . . .. . . .. . .. .. ,

36,554,635 36,548,088 Tot al u tility plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . .'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,075,611 5.974,433 L Deprecia tion Fund (notes A2 a nd B) . . . . . ... .. . . . . . . . .. . . .. . . . . . .. . . . . . . . . . ... . .. . . . . . .. . . . . .. . .. . .. . . .

1,5S5,139 1.352,000

Sick Leave Trust Fu nd (note A5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred Debit [

Ad vance to Q uebec Hpiro Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

707,M4 Current Assets 5,241,"A1 4,32S,268 Cash (noteB)...............................................................................................

Customer deposits (note B) ,t 42,157 47,091 Intere:* fund........................................................................................... l 314.2SS 292,438 Principalfund......................................................................................... '

Accounts receivable less allowance - t I r doubtful accounts of $491,245 3,6M,590 4.297,251 cnd $361,684, respectinly............................................................................... '

1,545,349 1,428,999.

- M aterials and supplies inventory (note A4) . ...... ...... ........................ ........ .. .. .... ... .. .. ,

168,949 315,405 Prep a id expe nses ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,976,564 10.709.452 Total cu rren t assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

- 8 57,899.593 $ 54.583.973-s December 31 1988 1987 Surplus and Liabilitics e

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, Surplus Appropriated surplus

$ 12,512,000 Loa ns rep aym e n t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,992,000 Construction repayment .. . . .. . ..... ... ... . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 32,434 _ 32,434 13.024,434 12,544,434 19.576,3S3 17.002.947

U n : pp ropri ated su rpl us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32,600,817 29,547,381  ;

Totalsurplus..........................................................................................

.lmngTerm Debt (note C) 19,662,294 20,185.64S

<Bondspayable.................................................................................. ,

Current Liabilities - .

2,327,400 1,856,344 Accou nts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

314,288 292,438

' C usto m e r deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

520,000 480,000 Current maturities of long term debt (note C) .. ... . . .. . . . . . . .. . . . . . . . . . . . . . . . . . . .

Accrued liabilities

. . 674,632 688,832 I nte rest ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,693,577 1.463.520 Compensated absences (note A5) . . . . ... .. .. .

106,585 69,810 Payroll . .. . . . . . . . . . . . . ... .. . . . . . . . . .

5,636,482 4.850,944

. Tot:1 current liabilities . . . . . ... .. .. .. . . .

i Commitments and Contingencies (note E) .

$ 57,899.593 $ 54.583.973 16 , The accompanfng notes are an integral part of these statements.

YV:[

' p;tements of Earnings c, w 5.

1988 1987 U Year Ended December 31

[. % Opecating menues

>. 7 Sales of electricity

$ 18,793,749  !

Com mercial and ind ustrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,264.082 11,167,550 10,869,106 Residential.............'................................................................................. i 7,213,000 8,937,687

Sales for nsale (note E) . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . .. .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .

1,514.498 1.790.011 i L Municipal...............................................................................................

38,159,220 40,320,553 I13.394 77.645 L Other oper ati n g menues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38,272.614 40,398,198 ,

Total opera ting menues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ,

Cperating expenn 22,787,384 24,865,579

. Power p rod uct io n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 1,504,564 1,513,516

' Da nsmission and distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,018,135 888,629 Cust omer accountin g . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,549,618 1 4,221,823 Administratlw and general (notes A3 and A5) .... ... .................... ............................

2.609.217 2,408,104

~ Depreciation (note A2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 32.141.123 33,225.446

' Tot al ope r a ting ex pe mes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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6.131,491 7,172,752 Iz rni n gs f rom opera tions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other expeme (income) 1,585,306 1,619,142 ,

, I nterest expense on bonds . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.641 17,487

-Otherexpense..............................................................................................

487,360 Loss on write down of inwstment (note E) ..... . ...... ..................... ..,.... ...................

(289.892) (255,411) .

I nterest income (note B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• 1,308,055 1,868,578' Total other erpeme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -

i I . Net earnings before provision .

4,823,430 5,304,174 f ;r payment i n lieu of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for payment to the City of 1,770,000 1.420,000

'Ih u nton in lieu of t axes (note D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . ,

3.053,436 $ 3.884.174 j- Net Eamings . .........................................................................................$ i h.

Statements of Surplus

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Appropriated Surplus i1

' ' Loans Construction Unapprt.priated L Repayment Repayment Surplus Year Ended December 31,1988 and 1987 32,434 8 13,563.773 Balance at December 31, 19 5 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12.067,000 $

Add (Deduct) hansfer from unappropriated 445,000 (445,000) surplus for bond payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.884,174 Netearnings.......................................................................... 17,002,947 12,512,000 32,434 .

Balance at December 31,1987...................................................

, 1 Add (Deduct)

Wansfer from unappropriated 480,000 (480,000) ,

surplus for bond payments ........... . . . . . . . . .

3,053,436 Net earnings . . . . . . . . . . . . . . . .. . . .......... ...... ..... . . . . . . . . . . . . .

. 3 12.992.000 $ 32.434 $ 19,576,383 4 Bilance at December 31.1968 . ..... . . . . . . . . . . . . . .

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Statements of Cadi flom

' Year Ended December 31 1988- 1987 I

Cash flows from operating activities:

Notearnings................~.........................................................................$ 3.053,436 6 3,884,174 Adjustments to reconcile net earnings L

to net cash provided by operating activities:

! Depreci a tio n of pl a nt assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.009,217 2,408,104 L Amortiza tion of bond premi um . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,354) (3,354)

Loss on write.down of imatme nt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4S7,360 -

I' Change in assets and habilities:

(I ncrease) in customer deposit f u nds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,916) (21,899)

Decrease in accoun ts receivable . . . . . . . . . . .. . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 632.661 100,602 I

(I ncrease) decrease in imento ry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (110,350) 229,536

j. Decrease in prepaid expenses . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,456 11,881 I ncrease in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471,056 129,534 L

Increase in customer deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,850 23,514 e

(Decrease) in accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,200) .. (9,152)

Increase in accrued compensated absences ................., ................................ 230,057 164.760 I nercase in accrued payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.775 22.280-i N et ca sh provided by opera ting activities . . . . . . . . . . . . . . . . . .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , 7,050,68S 7,427,540 h Cuh flom from imesting activities:

I. Additions t o utility pla nt in service . . .. . .. . . . . . .. .. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . (2.615,,7N) '(3,482,108)

(Increase) in Sick Leave 'nust W nd . . . . . . . . ... . . . . . .. . . ... . . . . . .. . . .. . . .. . . . .. . . . . ... . . . . . . . .(233,139) .. . . . . . (145,000)

Ad vance to Quebec flydro Project . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (707.644)

Net cash und in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,556,547)' (3,627,108)

.  : Cash flom from financing activities: ti-

' Payment of bond payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . (480.000) (445,000)

' Net cash uml in financing activities .............. .......... ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (480,000) (445.000) -

N e t increa se in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . t. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,014,141 3,355,432 Cash a t begi nni ng of yea r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . 10,302.701 6.947,269 .

Cash at e nd 'of yea r . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .. . . . $ 13.316.642 $ 10,302,703 -

[ Supplemental disclosure of cash flow informatiom j Cash paid during the year for interest ......... ...... . . . . . . . . . . . . . . ..................$ 1,599,506 $ 1,028.294  !

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18' The accompan@ng notes are an integral part of these statemenu.

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• Notes to Financial Statements .

!" Note Ai Sumrr.sry of Significant Accounting Iblicies I i A summary of hunton blunicipal Lighting Plant's (the " Plant") significant acrounting policies consistently applied in the preparation of the accompany.

) ing financial statements follows.

6 . L Jteses Rates charged by the Plant are not subject to the approval of regulatory agencies. Pursuant to state laws, rata must be such that the resulting not earnings before payment to the City, less bond payments and interat income, do not exceed 8 % of the cost of utility plant. The Plant's earnings, less l

F bond payments, amounted to 6.0% and 7.5% of utility plant in 1968 and 1967, tapectinly.

2. Depew4eedon Pursuant to the Department of Public Utuities regulations, depreciation is calculated as a percentage of deprciable property at January 1. Depreciation is computed at 4% of the cost of depreciable property. Depreciation fund cash is used in accordance with state laws for replacernents and additions to the electric plant in service (see note B).

3. Pension Plan Substantially all employees of the Plant are covered by a contributory pension plan administered by the City of %unton in conformity with State Retirement Board requirements (see note F).

4. Inwntory hiaterials and supplia inventory is carried at cost, principally on the awrage cost method.

5. Sick Lecce 7 hat The Plant etablished a Sick Leam Dust (" Dust") in 1982 for the financing of future sick lesw payments. It is the Plant's intention that the Dust be funded to the extent of the Plant's sick lesw liabuity, at which time the Trust will meke all sick leave liability payments under current Plant policies. 'Ihe amets of the Wust are shown on the financial statements of the Plant to provide a more meaningful presentation, as the aneu of the Dust are for the sole benefit of the Plant. The amets of the Dust, shown at cost, which app oximates market, are Imnted in money market funds, treasury notes, mutual funds which inest in gosernment securities and a corporate bond. Net imestment income for the Trust of approxirnately $91,000 and $108.000 in 1988 and 1967, respectbely, is reflected in the earnings statement as an offset to compensated absence expense, as thee funds are ratricted and can only be used for the payment of sick lea e benefits.

Note B Cash The Plant's cash is deposited with the City of Taunton Deasurer who commingles it with other city funds. The City imtsts the cash and credits the Plant with interest earned each year on certain of the cash deposits. Cash deposited with the City of Taunton consists of the following at Daember 31 1968 19J8 Non.interat earning pooled funds (a) .......... ...... $9,374,975 $6,364,756 7.75% to 9.05% certificates of deposit . . . . .. . . . . . . . . . . . . . 4,290,5N 4,269,726 Savings accounu ....... . . .... 7,748 7,748 ,

$13.673.287 810.642.230 (a) includa restricted customer deposits of $201697 and $339.529, respecticely.

Note C . long term Debt Iong-term debt is comprised of the following:

1968 1987 Electric loan, Act of 1969 Aggregate maturities of long term debt are as follows:

Interest rate . various rates 1989 . . . . . .. . . . . . . . . . . . $520,000 from 7% to 8.5% dated 1990 ......... .. . . . . . . . . . . . . . . 565.000 February 1.1966. Interest 1991... . . . . . . . . . . . . . . . . . . . ...... 610,000 payable February I and 660,000 August 1. Due serially from M*

February 1,1977 to 3993 * * * "" "'..'".*.*.*."..'*..'".."."." . 715,000

$20,605,000 1994 2006 . . . . . 17,055.000 February 1,2006... .. . 320.125.000 . . . . . . . .

57,294 60,648 Bond premium . . . . .. 57,294 Unamortized premium .. .. . . . .

20,182,294 20,665,648 $20.182.294 Less current maturities . ..... . 520,000 480.000 Total long term debt ... . .. .. . . , $19.662.294_ $20.185.648 Note D . Contribution to the City of Taunton in lieu of taxes The Plant wluntarily contributed $1,770.000 and $1,420.000 in 1988 and 1987, resiatively, to the City of Taunton in lieu of tues. All contributions to the City are wted by the Municipal 1.lght Commesion.

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..: Notes tn Financial Staterner ts

[s . Note E- Cornmitments and Contingencies

,' Interconnection Agnement The City of Taunton, acting by vote of its Munleipal Lighting Plant Commhslon, enteied into an agreement with Mon- ,

tarp Electric Company ("Montaup"), dated July 31,1970, as amended, concerning interconnweton of electrical operations, purchase and sale of kilowatt espacity, and construction by Taunton of a generating unit of approximately 110 megawatt capability. The agreement, originally for the twehe (12) pars following the commencement of operations of Unit Na 9 on December 1,1975, was amended and the term extended to October 31,1988. Under the cur.

, sent informal interconnection agreement, the City agnes to exchange with Montaup Electric Company fifteen (15) megawatts of Unit Na 9 capacity for

[- ten (10) megantts of capacity from the Canal Na 2 generating unit,50% of which is owned by Montaup. Since the expiration of this agreement, the

!. Plant and Montaup han continued this arrangement without a formal agreement in place A formal egnement is expected to be finalized during early

1989. The plant credited to sales for resale 82,908,872 and $2,796,642 of capacity and energy charges billed to Montaup Electric Company in 1968 and 1987, respectively, for its share of power under the interconnection agnement. ,

Mnt Ownership The Plant is a 0.10034 % Joint owner of the Seabrook Units 1 and 2 nuclear generating station located in Seabrook, New Itampshire.

! Seabrook Unit 2 has been cancelled by the joint owners, and the Plant wrote off its innstment of H87,360 in the Unit during 1987. The: Plant's imat.

rnent in Benbrook Unh I at Dwember 31,1988 and 1987 was approximately $3,700,000 and $3,500,000, respeethely, which is included in construction work in progress. The Plant is not capitalizing interest costs on Seabrook Unit 1. Seabrook Unit I h currently 99% complete and awaiting regulatory ap-proval for licensing before it can begin commercial operation. It cannot be estimated when or if, Unit I will be put into commercial operation due to limnsing problems. The Plant's latest estimates put its share of the cost for the completion and maintenance at approxirnately 8200,000 for 1989. In addition Public Service Company of New llampshire, the lead partleipant in the Seabrook project, b operating under Chapter !!

Bankruptcy The Plant h unable to predict whether this also will han any effect on the ultimate commercial operation of ti,e Unit: No allowance for possible loss in the Plant's imatment in Seabrook I has been reflected in the financial statements.

' Hydro-Quebec Agreement The Plant has entered into an agreement with the Massachusetts Munielpal Wholesale Electric Company and other New

. England Utilities to support the operation of a transmbslon line to permit the interchange of electricity between such utilities and II>dro-Quebec Electric Corporation. In connection with this agreement, the Plant had advanced $707,M4 toward dewtopment of the project. In February of 1989, approximate-ly 8450,000 of thh advance was returned after the project had obtained financing' Note F. Pension Plans The Plant contributes to the City of Taunton Emplopes' Retirement System ('Sptem"), a public emplope retirement sptem that acts as the Imatment ,

and adminhtrative agent for the City. All Plant full time emplopes participate la the System. Instituted in 1937, the System is a member of the Massachusetts Contributory System and is governed by Massachusetts General Laws Chapter 32 Wmbership in the System b mandatory immediately upon the commencement of employment for all permanent, full time employees The System provides for retirement allowance benefits up to a maximum of 80% of a member's highest three par awrage annual rate of regular compensation. Benefit payments are based upon a rnember's age, length of creditable service, level of compensation and group classification. Members joining the System after January 1,1979 are subject to a cap of ,

$30,000 on the lent of compensation upon which their benefits are calculated. Members of the System become wated after 10 years of creditable servics A retirement allowance may be receiwd upon reaching age 65 or upon attaining twenty pars of service. The system also provides for early retire.

ment at age 55 if the participant (1) has a record of 10 years of creditable service, (2) was on the City's payroll on January 1,1978, (3) mluntaruy left Cl-ty employment on or after that date, and (4) left accumulated annuity deductions in the fund. Aethe members contribute either 5,7 or 8% of their gross >

regular compensation depending on the date upon w hich their membership began. The Sptem also provides death and disabuity benefits. The amount referred to in the next paragraph as the " pension benefit obligation" h a standardized disclosure measure of the present value cf pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of emplope service to date. The measure is intended to help users assess the funding status of the System on a going concern basis, assess the progress made in tccumulating sufficient assets to pay benefits when due, and make comparisons among emplo ers. The measure is the actuarial preent value of credited projected benefits and is independent of the funding method used to determine contributions to the System. The System does not make a separate measurement of assets and the pension benefit obligation for the Plant. The pension benefit obligation at January 1,1987 for the System as a whole, determined through an actuarial valuation performed as of that date, was $56,329,000. The System's net assets available for benefits on that date

- (valued at market) were 819,539,000, leaving an unfunded pension benefit obligation of $36,790,000. The Plant's share of the unfunded pension benefit obligation has not been determined. The System's funding polley for the participating entities is not actuarially determined. The par.

ticipating entities are required to contribute each fiscal year an amount approximating the pension benefits (less certain interest credits) expected to be paid during the par (" pay-aspu.go" rnethod). Thh amount is determined in advance by the Public Emplopes Retirement Administration (PERA) and is based in part on the previous year's benefit payout. No actuarial information is used in determining this amount. The Commonwealth of Massachusetts currently reimburses the Sptem on a quarterly basis for the portion of benefit payments owing to cost.of.living increases granted after the implementa.

tion of Proposition 2%. The effect on the accompanying financial statements of the departure from generally accepted accounting principles refer.

red to in the previous paragraph has not been determined. Ten-year historical trend information showing the System's progress in accumulating suf. l ficient assets to pay benefits when due is presented in the City of Taunton's general purpose financial statements. In addition, the Plant has e i I

sep; rate Employees Retirement Trust for the financing of future pension payments. The Retirement Trust had net assets of $6.925,143 and $6,005,251 at December 31,1988 and 1987, respectively. The Plant had pension expense of $1,488,126 and $1,466,584 for pensions in 1988 and 1987, which includes contributions to the Retirement Trust of $350,000 for both 1983 and 1987.

l Note C . Statement of Cash Flom 1

During the year ended December 31,1988, the Plant implemented Statement of Financial Accounting Standards W 95," Statement of Cash Flows? Ac. I cordingly, fiscal year 1%7 amounts have bwn restated to conform with the current year prewntation..

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