ML19331D128
| ML19331D128 | |
| Person / Time | |
|---|---|
| Site: | Summer  |
| Issue date: | 07/23/1980 |
| From: | Mescher W SOUTH CAROLINA PUBLIC SERVICE AUTHORITY (SANTEE COOPE |
| To: | Chanania F NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| Shared Package | |
| ML19331D126 | List: |
| References | |
| NUDOCS 8008270337 | |
| Download: ML19331D128 (150) | |
Text
-
William C. Mescher
- pr...o.niano cn.et Executive of ficer July 23, 1930 Mr. Frederic D. Chanania Counsel for NRC Staff U.S. Nuclear Regulatory Comission Washington, DC 20555
Dear Mr. Chanania:
This is in response to your letter of July 8,1980, requesting certain infonnation for the use of the Comission Staff.
- 1. Since January 1979, has Santee Cooper (South Carolina Public Service Authority) discussed joint ownership of (or other means of access to) generation and transmission facilities with Central Electric Power Cooperative (Central)? If so, provide the dates of such discussions, the results of those discussions, and future plans to continue and conclude such discussions.
- 1. Yes. The Authority and Central have on a continuing basis since January 1979 discussed joint ownership of generation facilities and access to transmission facilities with Central. These discussions have culminated in a series of agreements between the Authority and Central, copies of which are attached. These agreements, which will eventually supplant virtually all existing contractual agreements between the Authority and Central, have been approved by the Board of Directors of both organizations and have been submitted to the REA for approval. Photo copies of such approvals are enclosed. One such agreement, an interim amendment to the "F" Power Contract between the parties, has received REA approval and has been in effect since July 1, 1980; the remaining agreements remain under consideration by the REA.
i Although the agreements are self-explanatory, an overview together with a brief sumary of the more significant provisions might be helpful.
Most simplistically, the new agreements provide Central with the oppor-tunity to obtain an ownership interest in future generation facilities constructed by the Authority and to join with the Authority in the coordination and planning of future generating and transmission facili-ties. The Authority has granted Central an option to purchase an antee m ovemx - cssco- m o .,. m ,,.,,,, Cooper
%"?"au' AUTHORITY 800gg79 ,
e 4 .
Mr. Frederic D. Chanania
' ~ July 23,1980 Page Two 1
i undivided interest of up to 45 percent in each future generating facility to be constructed by the Authority, and Central has granted the Authority an option to purchase an undivided interest of up to 45 percent in each future generating unit constructed by Central.
, In addition, Central may construct or acquire generating facilities in addition to those planned jointly by the Authority and Central, and such facilities may, with proper safeguards and where feasible, be connected to the combined Authority-Central system.
With respect to the Authority's Cross Generating Station, which is presently under construction, and which will ultimately consist of four units, the Authority has agreed to grant Central an undivided 45 percent interest (not merely an option) in the entire facility.
With respect to the Sumer Nuclear Generating Station, also under construction, the Authority has agreed to grant Central an option to purchase a 33-1/3 percent interest of the Authority's share of that facility. (The Authority holds a 33-1/3 percent interest in the Sunner Station; South Carolina Electric & Gas holds the remain-ing interest.) If the option to purchase an interest in Summer is exercised by Central, the parties have agreed that the Generating Station Ownership and Operating Agreement between the Authority and Central will be substantially the same as the Cross Generating Station Agreement, a copy of which is attached hereto. ;
l The agreements further provided that the Authority is connitted to supply Central's power requirements and at rates detennined on a cost of service basis (to the extent that Central's load is provided by the Authority rather than by Central through its ownership interest in future generating units). While the Authority is cosnitted to ful-fill Central's power requirements, it has also agreed, where p~er !
cannot be obtained by the Authority, to wheel power obtained ty t tral from outside sources.
1 The foregoing agreements were approved after the Constitution of the State of South Carolina was amended to authorize the Authority to become a part owner with electric cooperatives in electric generation and transmission (Article X, Section 11). The South Carolina Legis-lature also enacted legislation granting to the Authority the power to become a joint owner with Central in generation and transmission facilities and the power to "make plans and enter into such contracts !
as are necessary or convenient for the planning, financing, acquisi-tion, construction, ownership, operation and maintenance of such plants and facilities ... " (Section 58-31-210). Copies of the fore-going are also attached.
4 Mr. Frederic D. Chanania July 23, 1980 Page Three l
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- 2. What is the status of discussions with Central for access to the Virgil C. Sumer Nuclear Station Unit 1 facility? If discussions 1
are continuing, please provide infomation as to which personnel ,
are involved, as to whether unit power or unit ownership is being l discussed, and as to whether associated coordination service pro- '
visions are being offered by South Carolina Electric and Gas Com-pany (SCE&G) or Santee Cooper.
- 2. Discussions with Central regarding access by Central to the Virgil C. Sumer Nuclear Station have culminated in an agreement which has been approved by the Board of Directors of the Authority and the Board of Trustees of Central. (See Article III, p.11 of Power System Coordination Agreement). The agreement grants to Central an option to purchase one-third of the Authority's share of the Sumer Nuclear Station.
- 3. Has Santee Cooper recently discussed the possibility of merger with Central? If so, what was the nature of these discussions.
l
- 3. No.
Aside from the attached agreements, which have been approved by both the Authority and Central but not by the REA (with the exception of the in-terim amendment to the "F" Power Contract, which has received REA approval and is presently in effect) there have been no changes in Santee Cooper's business or competitive relationship with Central since December 1978.
There have been no changes since December 1978 in Santee Cooper's business or competitive relationship with South Carolina Electric & Gas Company.
With respect to the unnumbered questions posed in the final paragraph of your letter of July 8, 1980 concerning changes in the Authority's projec-tions of peak loads and in generation and transmission plans I am enclos-ing a tabulation of our current projections of peak loads; a tabulation of our future generating capability; a tabulation of our proposed bulk power lines; a copy of our latest Annual Report; a copy of our latest financial statement; and a copy of a preliminary official statement used in connection with a proposed bond issue.
The foregoing infomation and attachments are true and correct to the best of my knowledge.
Sincerely, SWORN te before me this Eshd day of 1(1 ,1980.
- \ \
A William C. Mescher, President ' Notah Public For' South' Carolina Enclosures My Comission Expires: 4\1-Tl
4 Allill0Rl/ldf; LXI Cill10il Or Ar.RLLitLilTS Ichruary 25, 19::0
. 111 111 Cillli!Al. II LCil:!C POWLR C00PLRAl lVI. , IllC. Adopted .
Rejected , , , _
PosLponed _
- )
, RES0LUTI00 /
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t!!!LI:I AS, for several years the staff t, of the Authority and Central Liectric Power Cooperative, Inc. (" Central") have conducted extensive neqot.iations with a vicu toward the recision of the f Pour e Contract and it s replacenent wi t h a coniprehensive agreenient pur,u. nit in whic h t.cnt r.il .ind t he Authori t y will, ainonti other things, share ownership in ftLure addition'. Lo the Authority's system and Central will reimburse the A'sthority for elec-tricity . uni services on a cost-of-service basis; and. .
Willl!LAS, tiie aforesaid negotiations have resulted in aqreenient by the Parties' sta ffs as to the form and content of a nunber of proposed agreements, na!acly:
- 1. Power System Coord.ina tion and Integra tion Agreeincnt;
- 2. Cro ,s Cencrating Station Ownership and operating Ayrcement;
- i. Cross Generating Station Lease Anrectnent: and,
- 1. Aqrnement ior the the of a Portinn of AuthoriLy .*;icrowave
' y .lem Ir/ Contral f or Load llanarp nent. .nel lla ta !!otrieva l
- 5. Amendment fM.10 to "f" '!bnice. ale Po icr contract ami, tillLRLAS, copies of the agreements listed above have been furnished to the members of the Board; and, UllEREAS, Central's Board of Trustees, by resnintion aduf,ted on February 15, 1980, approved the execution of those agreements; now, tiierefore, UE IT RESOLVED, that the President is authori:cd to execute on behalf of the Authority the agreements listed in this resolution, with such minor changes therein as in his opinion are necessary or desirabic; provided,
,hopeye,r, that. should the Authority's Trust Indenture or ",ond Resolution require that all or a portion of monics to be paid by tentral to the Anthority be used to retire any of the Authority's priority obligations, Central shall pay any expenser, or penalties which are incurred by the Anthority in retirinq such obliga tions; provided fur *.her. ' hat. f.I'c .1:ereval containei! in '.hir. re ilo-tion ir, condi tionad unon the aninion of luthori t.v'*. hond e.nune.a1 to f i'e af'e :t fl'a t un'binq contain+"I in the cont rar's vill advera.ol r a f fect '.5 n 'ay nynmp' status of the futhority's debt iswancne..
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CERTIFIED COPY OF RESOLUTION 4
RESOLVED, that the Power System Coordination and Integration agreement with the South Carolina Public Service Authority as presented to the Board is approved for submission to the Rural Electrification Administration for comment and approval and subject to the following language changes as may be approved by.the Executive Vice President and General Manager:
(1)" Debt Coverage" provision, (2) " Central's Territory" provision (3)
Other language changes needed to conform the prasent draft to the changes agreed upon in the latest negotiating session with the Authority.
1 This is to certify that the foregoing is a true and correct copy of a resolution adopted by the Board of Directors of Central Electric Power Cooperative, Inc. at its special meeting of the Board on February 15, 1930, and that same has neither been modified nor rescinded.
. s/k^ dud % 0adh.,
Sdbert B. Awbrey, Secretary "
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AVERAGE ANNUAL GROWTH RATES SUMER & WINTER PF.AKS EBASCO i
i E Winter Change Sumer Change 81 1794 1868 82 1894 5.3% 1966 5.0%
83 2024 6.4% 2084 5.7%
84 2173 6.9% 2227 6.4%
85 2334 7.0% 2377 6.3%
86 2487 6.2% 2518 5.6%
87 2554 6.3% 2672 5.8%
88 2834 6.4% 2836 5.8%
89 3020 6.2% 3003 5.6%
90 3216 6.1% 3174 5.4%
GROWTH RATE FOR MWH FY 81 26.1% - Due to Alumax FY 82 9.8%
FY 83 4.3%
FY 84 4.9%
FY 85 5.3%
FY 86 4.9%
FY 87 4.7%
FY 88 4.8%
FY 89 4.7%
FY 90 4.5%
ITDI 2-D Itagion SEPC FtrillRE (.EllCITATitlG CAPADII,ITY IllGTALLATI0ll". AllD REr10VAIS Par t.y VACAR
( Aftar _the liccinninc of Lite lleporting Cnlenelnr Yenr)
L Primnry Fuel Alternate Fuel liet tin I t. Cnpniei l i ty_-lM Fuel Trnnap. Fuel Trrump. ErfeetIve s'.en Elftlen !!nne nnd ifnit flo. I.oc . Type Ginr:i. r Winter Tyn fictliod_ Tyn Me ttiod Date floten Sie*
- -[1] ___ _ 02 0 3__ oli 05 06 07 08 09_ __ 10 11 12 __
SOCA Winyah Steam Unit #3 45043 ST 280 280 BIT RR 5/80 E'1C A Summer fluclcar Unit fl 45039 flP 300 300' UR TK 12/80 A V SOCA llinyah Steam Unit #4 45043 ST 280 280 BIT RR 5/81 t, SnCA Cross Site Unit #2 45015 ST 450 450 BIT Rp 11/83 L St. Stephen Ilydro Unit #1 45015 llY 28 28 ilAT 1/85 B U 50CA St. Stephen liydro Unit #2 45015 llY 28 28 WAT 1/85 B U SOCA St. Steplien flydro Unit #3 45015 IlY 28 28 HAT 1/85 B U SCCA Cross Site l' nit #1 45015 ST 450 450 BIT RR 11/86 L SOCA Cross Site Unit f3 45015 ST 450 450 BIT RR 11/88 L
$ - 900 1111 Unit Operated by SOCG, Owned 600 IPl By SOCG and 300 RI By SOCA
' - Owned by U. S. Army Corps of Engineers, Dispatclied by and for SOCA V - Und:r construction, more than 50% complete U - Under construction, less than 50% complete L - Regulatory Approval Pending
. V:
ITEM 5-0 LIST OF PROPOSED Bt'LK p0'.'ER LillfS
.' e Line Expected flominal
'ce ership Length Service
' Voltage in KV
. -- Terminals km miles Date _0pe r. Design, flotes 02 03 04 05 07 08
__06
.i ! ".
- Su mer Blythewood 30.6 19.0 6-80 230 230 Deliver Generator Output
- "#~- Su ,er I:cwberry 22.5 14.0 6-80 230 230 Deliver Generator Output
- Cf 'linyah Jef feries 67.6 42.0 6-80 230 230 Deliver Generatnr Output
- ~.C f. Jc'feries Carnes Crossroads 24.1 15.0 6-80 230 230 Relieve Overloads
??:* Vcenville Bluffton 82.1 51.0 6-80 230 230 Maintain Adequate Voltage
- Je'feries Carnes Crossroads 24.1 15.0 12-80 230 230 -
Relieve Overloads
~ C :? ' inyah itemingway 40.2 25.0 5-81 230 230 Deliver Generator Output
- 7Cf. Miryah Charity 67.6 42.0 6-81 230 230 Deliver Generator Output
'CC? Yerassee Carnes Crossroads 91.9 57.1 6-82 230 , 230 Maintain Adequate Voltage
' C C *- Cross Site Carnes Crossroads 40.2 25.0- 11-83 230 230 Deliver Generator Output
~~:? Cross Site Kingstree 48.3 30.0 11-33 230 230 Deliver Generator Output
..- C oss Site Jefferies 32.2 20.0 11-83 230 230 Deliver Generator Output
? ? C ,*- l'arion llemingway 40.2 25.0 6-84 230 230 Maintain Adequate Voltage SCC
- Si te lill flayesville 99.8 62.0 6-85 230 230 Maintain Adequate Voltage ICCf Batesburg Aiken 33.9 21.1 6-86 230 230 Maintain Adequate Voltage
'CCI Varnville St. George 64.2 39.9 11-86 230 230 Maintain Adequate Voltage ICC" Cross Site St. Georne 46.7 29.0 11-86 230 230 Deliver Generator Output TC* Varnville Bluffton 71.4 44.4 6-87 230 230 Maintain Adequate Voltage
'CCA Site HM Perry Road 53.1 33.0 6-87 230 230 Relieve Overloads
~2CA Cress Site Carnes Crossroads 40.2 25.0 11-88 230 230 Deliver Generator Output
- 'C2 Lueoff flayesville 75.6 47.0 6-89 230 230 Maintain Adequate Voltage
- CA "arion Darlington 56.3 35.0 6-89 230 230 Maintain Adequate Voltage e
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FINANCE AND TAXADON Art. X, i 11
- 1 Resecrch and Practice References-63 Am Jur 2d, Public Funds il 45 et seq. ;-
81 CJS. States il 160 et seq. '
{ 9. Statement of receipts and expenditures. j . _
An accurate statement of the receipts and expenditures of the ;
A public money shall be published annually in such manner as may i be prescribed by law. (1976 (59) 2217; 1977 (60) 90.)
Editor's Note-The present provisions of this section are similar to former i 8 of Article X as it existed prior to the 1977 revision.
i 10. Claims against State.
The General Assembly may direct, by law, in what manner -
claims against the State may be established and adjusted. (1976 .,
(59) 2217; 1977 (60) 90.) gd ,
Editor's Note-
- The provisions of this section are identical to i 2 of Article XVil.
Research and Prac. ice References-72 Am Jur 2d, States. Territories, and Dependencies ll 99 et seq. . .
81 CJS, States il 191 et seq. o
% ~
{ 11. Credit of State and political subdivisions.
The credit of neither the State nor of any of its political s subdivisions shall be pledged or loaned for the benefit of any ,
~
individual, company, association, corporation or any religious or ,
i.ih. t private education institution except as permitted by Section i un. h XI of this Constitution. Neither the State nor any of its i ..his..il subdivisions shall become a joint owner of or stockholder m .my iompany, association or corporation. The General Assem- '
bly may, however, authorize the South Carolina Public Service Authority to become a joint owner with privately owned electric ,
utilities, including electric cooperatives, of electric generation or transmission facilities, or both, and to enter into and carry out agreements with respect to suchjointly owned facilities. (1976 (59) 2217; 1977 (60) 90; 1979 Act No.1, elfJanuary 24,1979.) '
Editor's Note-The provisions of the first two sentences of this section are somewhat similar to the first sentence of former i 6 of Article X as it existed prior to the 1977 revision; the prosisions of the third sentence of this section are identical to the ,
second sentence of former i 6 of Article X as it existed prior to the 1977 i res mon. ,
s ENect of Amendments--- The 1979 amendment specifies that electric coopera. !
tives are among the privately owned electric facilities with which the South i
Carolina Public Servire Authority may be permitted to enter into joint ownership '
and other agreements regarding electric generation or transmission 1.nilities.
61 l
}
{
Puntic SERVICE AITTHoRr!Y mune to an action ex delicto the same as the State itself. Boyce v La, caster
{ 58-31-210 County Natural Gas Authority (1976) municipal corporation and is thus im . 266 SC 398,223 SE2d 769.
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6 58-31--100. " Payment of additional sums in lieu of taxes. . -
L i i Related I. meal Laws-As to division of Orang 6urg County's share of payments required by this section, see Index to Local Laws. , l' j
j Q 58-31-180. ' niversion of water from Sampit niver,' Pennyro k ;;
j generating plant. g' '
l ALR arid L Ed Annotations---Liability for overflow of water confmed or diverted for public water power
} ^
e purposes.91 ALR3d 1065. ,
58-31-190. Diversion of water from Santee niver and its
]hr tributaries for use in operation of generating plant. b j
g ' fi ALR and L Ed Annotations--Liability for overilow of water confmed or diverted for public g water power g l ? V purposes.91 ALR3d 1065.
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i Public Service Authority empowered to enter i
Q 58-31-210. joint ownership of electric generation and transmission 1 .. p i
i facilities with Central Electric Power Cooperative. ^
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The South Carolina Public Service Authority shall have the .
l owner with Central Electric Power .
I i power to become a jointCooperative Inc., iof electric generation and transmissio ,
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' the power to plan, fmance, acquire, own, operate and mainta n anun -..
dental to the generation and transmission of electric power and i the power to make plans and enter into such contracts as areneces '
i construction, ownership, operation and maintenance of such .
i plants and facilities; provided, however, that the Public ServiceA
' to the percentage of the money furnished or the value of property supplied by it for the acquisition and construction of the plants and facilities and shall own and control a like percentage of the .j
} electrical output thereof; provided, further, that the Public Service Authority shall be severally liable in proportion to its ownership share of such plants and facilities for the acts, omissions or obligations performed, omitted or incurred by Central ElectricPo '
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the Public Service Authority for purposes of constructing, operat-45 j
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(58-31-210 Pusuc Unt.rr Es, SERVICE ETC.
i ing or maintaining the plants and. facilities or any of them, but { 58-35-10 shall not otherwise be liable, jointly or severally, for the acts. This chapte.
omissions or obligations of Central Electric Power Cooperative. Prevention A<
Inc.; nor shall any money or property of the Public Service itisTOnyt 197l
. Authonty be credited or otherwise applied to the account of I' ' ".
Central Electric Power Cooperative, Inc., or be charged with any C'7,',*tei[pho debt, lien or mortgage as a result of any debt or obligation of As to the une Central Electric Power Coope,rative, Inc. Nothing in this section 5 58 12 shall be construed to present the Public Service Authority from leasing facilities or interests therein from Central Electric Power ' Q58-35-2
- ' Cooperative Inc., and incurring obligations under such leases.
As used it HISTORY: 1979 Act Na,46 eff April 16,1979. ,
g) ..A33, Cross references- i representatt As to constitutional authorization for authority to enter joint ownership with public utili' electric cooperative, see SC Const. Art. X. I 16. notice of e3 p) " Dan Chapter 33 i or lateral Utility Facility Siting and Environmental Protection , struction ti
, of a utihty
- (3) " Dei I a structurt A R U C1.E I or remort explosive >
SuoRT Trrt.E; DEFINITIONS ,, g 58-33-10. Short title. i purpoye <
r matenals Cross references- I by g;3cgL As tojoint Municipal Electric Power and Energy Act, see Chapter 23 of Title 6. j ,
i diggmg.,
i Ing-in, nl CHAPTER 35 [New] ; mg the
' Underground Utility Damage Prevention Act i landscap
' y rd of s S ec.
5A35-10. Shor: title.
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58-35-20. Definitions. - - i means e 58-35-30. EITect of permit on liability. r shovels.
58-35--10. Determination af location of underground utilities prior to escasa- t gg tion or den.ohtion. ,
58-35-50. Exemptions. . PipC-5h35-60. Notice ofintent to excavate or demolish. (6) "
5A35-70. Operators shall form anociation for mutual receipt of notice. .. 5hiE ' a' 5A3%90. Infonnation to be supplied by operators. .
any sta 5A35-90. Notice m case of emergency excasation or demohtion.
53-35-100. Additional duties of persons responsible for escavation or demoli. authon
, tion.
- p) 5A35-110. Notification rettuired when damage done. <
'.^ sed fa SA35-120. Penalties; actions; etTect on enil remedies. ;
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44th Ara f or the Fmat Yeae 1new Our product is energy ,
but our most immrtant Compars resource is peop .e. Energy Sales (milld
- e Peak Demand
- Customers Served '
l( Average Annual-Re j ,j Average Residentia y' Operating Revenue Gross income
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44th Annual Report for the f ewt Year f ewled June 30.19/9 f
!jj Comparative Highlights Table of Contents
' ' FY79 FY78 % Change uessage f rom the chauman of the Board . 2 Energy Sales (million Kwh) 5,953 "'55*9' f *" Ih' "'5*"' l 5.562 7.0 3
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Peak Demand * " *
,.. 1.352 Mw 1.231 Mw 9.8 ,,,g,,,,,,,. ,
.', Customers Served 47,151 44,279 6.5 se,,,ce ie,,,so,, . ir
' ig Average Annual Residential Consumption Kwh 12.097 13.174 (8.2) Energy sales .
g Average Residential Cost per Kwh 3.44' 3.27' 5.2 Revenue Donar .
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Operating Revenue $135,697,426 conme er l $118.980.177 14.1 .
Gross income $ 140.612,400 $ 122.427.480 14.9 industrui Betates . 2: '
Electric Operating Expenses $103.928.136 5 88,143,827 17.9 renance and Accountmg .
..) Gross Expenses $129.811,871 $116,911,887 11.0 stais ownership and Advisory Board .
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Reinvested Earnings $ 10,790,530 $ 5.515,593 95.6 8 8'd D(s . 29 i
Management . 29 l 'N ' Calendar year #""" ^#' ' "'
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t .
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is e w s ognf fe r t t e ir o ret n wor u o leo opuo n ud eb eht e wo c c tc c ot s u et t a
r i n
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tc r n b r r ge po y e o r
p" p f it' enf l C ts e r tsmj u sd e od eiht ei e a yn e ys
. . le u c e tc e o e ud u lp d sscpt or otioo eo w d d mmick t g ge - es e t
ndyn n o a n 'e r g et a s cl a n pa yt t in od gr o ni r a r c e r ityvt aC m In p pS y
gs pnain ouo n ot c c ep a n u la r a eo y e er n pnh r e r c r le e eh ch e o o let et w u , o d e e eh g s E os u o i aC ana. imues an a t
q s r t olt t u ol t r o n el pni d e g yt a n -
t h e e yge or s n r e gwu r yh S e c r g , e a - ic ecmaainl r r r spe e ms t gi gr ae oih ed s n o s g e le at s
e d m
le o el n e af o ru d
d et nh o e ep e
ci ns oe aei o v pelo w l dih ist ioC e n n st mt n a eeadsi M o pee ru ml o r
pt a atv leitv a pn e co nte en ur o
e re c ob e ec e o o a e s eSt e r la c e d e r
x ra e a c lc omd esid e n eh h f P g nptoht sf g r r T f
t toht E t mit sh Siin n .
. t' ;' - . , ,
19l y
_ j
I Message from the President 2
3 ti y .:.-.-.. . ,. . . . , . . : .
serge is ettective The 1979 calendar year summer peak Our federallicense to operate the hydro t a ma ntarn demand increased to 1352 megawatts, an project was renewed for 30 years by the set te tosis of -
annual growth of 9.8 percent compared to I ederal Energy Regulatory Commission in P es ter our
- the national average of 0.5 percent. May. The renewal culminated more than 10 ents 5snee Cooper's b gens a good order, Total retail and wholesale energy sales, years of extensive work to satisfy the excluding energy sales to other utilities, changing requirements of the Commission 3 are structures are 4 as udt eth -
increased 7.0 percent compared to the including remapping and surveying of all
),4 mudants. national average of 5.0 percent. project boundaries, development of recreational and master land use plans, and
(
gg [ Our energy growth this year, although above land use classifications.
easien ts the national average, was decidedly less W mimew y g than previous years. Major factors in a ellod to dilize W is normly a A e nsam taper. ,
responsible for the reduction were the le prodd a @ an aqualtwe w posigin, program using the warmed water discharged warmer than normal winter and the cooler g, , gg g w and summer. We also believe our conservation e as put g program conducted over the last few years h ammedal prown of TilapiA a i n Its med of is affecting some of the slowdown. vegetation-eating tropical fish used for l
8 88 food, and weed control in farm ponds and A rate increase of 2.0 percent to Central utility company cooling reservoirs. So far, .
"'"9Y- Electric Power cooperative became effective W
the demand greatly exceeds our ability to January 1,1979. A rate increase for all supply the fish.
Although the pressures of inflatiori and other customers became effective in May, A recession have slowed the nation"s 1979. The increase averaged 11.8 percent Q economy Santee Cooper continues to for commercial,10.5 percent for industrial; and 9.6 percent for residential customers.
experience growth in energy sales and
, industrial expansion considerably above the To finance the construction program l national average. Customer expansion and necessary to meet the demands of our plans for growth highlight us as one of the customers, a $110 million bond issue was fastest growing electric utilities in the sold at a net interest rate of 6.81 percent in country. April,1979. The financing provided $100 million for the partial construction of Winyah Unit No. 4, and $10 million for general ;
system improvements. j
, 1.
5
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. n pt cd e c n a o nn t t 1, c1 a e0 .
o oo e g0f s ,h e3 e n o uaUl r NaT 1 y n eit mae Ci .$le i
d ct nf i o e .ia ia C le an0 t
s e re ao y C mta e s el n utcd e nec r in neeot r vi h 8, o l
e r e e
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r t o r ir nue t f it s - it od e m Uitapsr le a tc ep G G Sk e a wte 9, r en lo s n pgasl i5 o F Si n pc ml eim m e ta nlaah oot c o m SC cS sc aemis e pon e yoc ur t
4
6 6 l' units. A permit has been received from the in late March 1979, the
. South Carolina Department of llealth and Mile Island Nuclear Stati y ., Environmental Control for discharge of had immediate and long
, ,- ,/ h,-j h emissions. nuclear plants in operati e nstmchon. We somi l
The hrst unit's projected cost is $374
- design and operation of
. ,[ million and it is scheduled for commercial wHI ely I uH from W Ql I -
operation in November,1983. The second impacts on the protect c.
, ;,3 , 3 -- enit is planned for operation in 1985. During
" # " Y ' " " # " * " 8'
, g ~. F the year contracts for $65,819,989.75 toward equipment and services for the first hscal year.
- jg,.f unit were commilled. The legal action regardir l
V Lead times required to conduct which was initiated agali
' Corporation in October I
/
environmental studies, obtain necessary permits, and complete construction of new with the court ruling in i Santee Cooper on Octobe I e < generating facilities have increased. In s
j ct Iab ity as response to these problems, Santee Cooper , ,
began site studies which will identify sites 9 1
~
}' L, where new generating stations can be even though discussions no settlement is reached
. constructed in the late 1980's.
damages is expected du Expanding Facilities Summer Nuclear r ni t iond Ihi u n b liilton llead Combustion Turbine No. 3 By the end of the fiscal year construction of adversely affect the oper aP, began commercial operation on April 30. the V.C. Summer Nuclear Station, Unit No- the Summer project sinc l
3 djyijyj),4,h,/,S)i E TN 1979. This $10 million peaking unit adds 56 1 was 86 percent complete. Santee Cooper initial core was fabricate ll , ',' 9 a;-j t h!hij Mw to Santee Cooper's generating capacity. is a one-third owner of this 900 megawatt late 1978.
generaung sta n an wHI rece e 00 Mk.\F(1 Yj 3 Construction of a 450 megawatt coal-fired generating unit at a site near Cross along megawatts of its output. South Carolina
' Electnc and Gas Company (SCE&G), which
- ,Y the diversion canal between Lakes Moultrie
~
<c
- owns the other two-thirds of the project.
- Us[($ and Marion was authorized. The Cross site 4
' acts as agent for Santee Cooper in the
,J I will accommodate four units. Environmental design, constmcuon, Hcensing, operahon g 8 8' '.' studies have been completed and submitted and maintenance. The Summer Stahon is 7,,7 4
, " to the Federal Energy Regulatory currently in the operating hcense review Y l Commission for permits to construct two stage with commercial operation scheduled for December 1980.
j j -----n
)* Generating capacity, (%)
P 6 7
+
in late March 1979, the accident at shree :_ -?
penteuiteceived from the ;,,,, . . . . .s :
,9:pw1 , mgg ;n.as,;,
Rtapuent of Health and Mile Island Nuclear Station in Pennsylvania . . .: - W .x .
()
hts escharge of had immediate and long range impacts on all . r,--jf.G'Q.'- A"f!""M i nuclear plants in operation and under. CM '~~
- ' ~ ^ " - " '
construction. While some changes in the --
D design and operation of the Summer Station
'"' will likely result from this accident, the Sh_ .
b vi 85 ing impacts on the project costs and schedule, ,, k ,
% 2 09.989 5 il any, were unknown at the close of the ?
. ;y q.g --
,4 >
- ' heleswas for the first Uscal year. {4Q,;h g up ., h ; y_
l
% The legal action regarding fuel supply, f**;;Q;' y, f'l% "
l' - - - l j
kug g which was initiated against Westinghouse i. y y g.,: ,
- 33. ,
% men necessary Corporation in October 1975, continued. --
s . .'.
utsettle of new with the court ruling in favor of SCE&G and g,,., h .
f--
Santee Cooper on October 27,1978 with
- v. ,,
( hlb 4teaueased in g gy 3 r che ith stingh us s da nag even though discussions were continuing. ll ease keuu un be g .
yg -
- ; gg.,q;%j g k'f %gg no settlement is reached, the trial for damages is expected during the summer or g%' c'*?WLj Q -
..h fall of 1979 in the U.S. District Court in / * 'C k .m
)h Richmond. This htigation is not expected to adversely affect the operating schedule for t,I
' { y. ([ l
. %qig,g tt. ' y n.
teh the Summer project since the fuel for the < #
'k [N g;8Ph e,- ,
%g "
initial core was fabricated and delivered in , . , '. ! P' em, late 1978. g;C
- i .
ten tes,n, .
%I. wheth
,q *penci. .
.. 2 f- [
g%u
' M. $ , 4*g icoo
...,c" ,r;,-
.. , ,eo uw A wmv a .3 hg ..> '
seven - d al. ,[ h. N ,f " C 5% y-7 .,
y m ec
_. .. w I ..se .I
.w -
.So uW j
- m. y.- . . - . r ., .so - .
scm.n
,., . ;- fi 'I8 *
.so uw t
'*, ' / g15 *"
. - M 'a= Sa v .: eso uw ,
I , Lead & Capability Forecasts
.~ . ' .. f5 . .,(I .
1979-1993
-~.;.
__ ( _
System Operations i 8 IIh h
I g..- .y;e3p -
Transmission I
^l
-,3 Santee Cooper's transmission system gl.b S ,rM yk ' '-
7.y H S .W : . A Ul
- s i. -
l.
} [( *: ' . :
f, consists of approximately 2800 miles of 4
]. _ ; :- e transmission lines with voltages ranging 7,f ife . ,)j.;' ,'
from 34 through 230 Kv. The transmission I pN6h@[J. .? "
~
'. 4,}:
. ; system extends through 35 of the state's 46 i
1
- 4,3 y, .' i.ounties providing service to two f
- 'I t-l
- A, -
g <
3 .if4 municipalities, three military insta!!ations, 21 3 , . - p ;; Y[
~'
. Q[3
- ? ? industrial customers, and 15 electric
- 4. y. -
' ' i l cooperatives. L
" 6* ', "
~ ' '
7.- Construction of 230 Kv lines to the 4 y,
- fc.g { ;w *[A - h A .
4j Batesburg, Newberry, Blythewood, and
.g .
- 3' i.' , . p[ j f Camden Substations was completed.
\
- t . . V. j f ,y , . [ C,,,[ '
- Santee Cooper has approximately 90
.[ j. "
J [ - [2 4
/)j transmission and distribution substations
}. *
.c%- -
'1 -
4i and switching stations with about 200 e,. - 4
,.[ .
fh....es- N -
y q -
>Q-....z g--
delivery points. Approximately 6 billion kilowatt hours of electricity were delivered to
(
Reliability Electric and Gas Company, Carolina Power ? 9 "'
indostry and live new cooperative k
Santee Cooper is one of the thirty member and Light Company, Duke Power Company, substations were added to the transmission N organizations in the Southeastr.rn Electric Virginia Electric and Power Company, system.
Yadkin, Inc., and Southeastern Power ,
Reliability Council, which includes all power Administration. The member systems have a suppliers in the region with a generatmg ,
capacity of 25 Mw or more. The Council co rdination agreement to safeguard the ? s .
reliability of their service. j assists member systems in coordinating overall planning and studies to achieve Interconnections are maintained with the maximum reliability. South Carolina Electric and Gas Company at D Santee Cooper is also one of seven power Bushy Park, North Charleston, St. George, systems in the Virginia-Carolinas Reliability and Columbia, with the Southeastern Power Group, which includes South Carolina Administration at Clark Hill, and with the Carolina Power and Light Company at Kingstree, Darlington, llemingway, Lugott, and Robinson.
1 I
.l -
l
i 8
9 ission i j'
'-"2 7 . , ' - 2 a
,,ej r.;alke$$ ,,l ooper's transtmssion system of approximately 2800 triles of ~-pf' ,g d-- g- l{ ~ ~ l aon hnes with voltages ranging jgg,N , . . , y ,,p g
~
', L- '. { 5 l, -
m- , through 230 Kv. The transmissian 'I $ F .i
~
{,g [ ,- .p l.,,
niends through 35 of the state's 46 , providing service to two l l 1 {j ,, 3 ,r.
~
.A ,,p ;
e ,i ' hhes, three mihtary installations, 21
, I,{ [
- I customers, and 15 electric ,'
i { -'} ) (Y '
', J- '
l ves. "
'O }\l, -
! hon of 230 Ky hnes to lhe N , g. Newberry, Blythewood, and j Substahons was completed.
=
, \ N d
j.% ooper has approximately 90 5' uon and distribution substations \' *
- .hmg stations with about 200
- 5nts Approximately 6 bilhon ,' *'
\ \
j icurs of electricity were delivered to
.) w s through these facilities. One new g i 7,g . g - *, .
< and ime new cooperative +
' f[
j j l ns witte added to the transmission ~ 4 ?h . f - . g, ,. J'f I p(i.' .,G ; <- y %e-l 9 a uau
~.:;
m ;AAN_, V* q' ~. .
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4 o I M Tr The Myrtle Beach District is enjnying a Along Highway 501 ir ! i k * ' ' I healthy rate of growth in both commercial provided to several nt j (' . s and residential customers. Tourism and the establishments, inciut ' e
, attractiveness of the area for retirement Weady's, Kentucky F o e promise continued development fo; the
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' luture.
New commercial estat [ i 4 Q ( f, . . COnWay 7 Citizens and Trust on h / 4 Customers in the Conway District service K mart and Wood's at
- t. area include those in the towns of Conway l ,, i .
and Loris, the Red Hill, Bucksport, and Gurly 6 ' W communities, and areas surrounding these Moncks Cornet j {y _, b3
'"". i locations. The number of customers in this "C S 0 8 y g, district increased 2,74 percent to a to'al of i p
7,975 and their electric power consumption
"
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.t . .. 2.49 percent to a tota l -d- - q*EMtl -y fi , '
The bulk of construction in the Conway energy consumption u ! l District was for new residential subdivisions l! and new commercial buildings. Underground Other than normalloat !* Myrtle Beach While the number r,! customers in the distribution was installed at Westridge signWcant projects in ov on o s uc , i .' Custo ners served in the Myrtle Beach district increased 7.86 percent ?a a total of Subdivision which will contain approximately p District reside in the towns of Myrtle Beach, 35,079, the sale of energy decreased .6 200 residences, at Buck Forest No. 2 which 4 j jd i percent. This reduction was most likely due will have 40 residences, and at Burning North Myrtle Beach, Surfside, Atlantic I . . $' Beach, Briarcliffe, and all other areas along I ncreased energy conservation, pnmanly Ridge which will contain over 200 residential am ng e commac al cushs. Bypass-l> the Grand Strand between the North Carolina Ms.
- $ State line and Georgetown. Included in these Approximately 800 mobile homes and j'!! last growing areas are the communities of campsites and 1000 condominium units i L,% Garden City, Little River, Pawleys Island,and were added to the Myrtle Beach District. The I3 Litchfield. residential developments of Caropines 111, Deerfield 11 Waverly Mills, and The Forest I
)' accounted partially for the more than 500 l residentiallots added. Most of the new I
subdivisions are being served by l underground distribution systems. A new hospital, two schools, one large shopping center, a 140 boat-slip marina, ten theaters, I - [ litteen new restaurants, and approximately l 200 motel units were part of the District's
, j growth.
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Energy Sales 14 B4
. . ~, _ . . .. .. .. .
... J ' t '" ' ' ~ . . , . - .'
.' * ~
M - .,- r.- t., The number of Santee Cooper residential. For'y s% ' k
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' ..$.ii[;;.MA,3g' N " (l commercial and small industrial customers t.j l: [7 ; ' .; .- Q .T ' ' ,8 ". : '. imw gg,
.,. . , . y totalled 47,124, an increase of 2.871 over all!*hy i
'h'.-r I' . f-
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l J'i.' . j the previous year, or about 6.5 percent es:nWegII
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$~e'*F, growth. Sales to these customers totalled 966 gigawatt hours of electricity, up 1.5 c:strela Q..h pe:st m%
tD.) * ) O , it }c, *"' ij F -L . 7 N J '5. f- Yp i ' ) percent over the previous year. These 3 psumie ' i'ly 4l'
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4 tigures reflect a leveling ott when comp,Jed to increases the previous year of 8.5 percent reweg t' gesiasi
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-7
'i fggg; YhlJ'.' .,,c, ;.) j 1 , y- ( sk.. - h in the number of customers and 9.7 percent W8rnas fg( ~
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Sales to large industrial customers increased Ind e m Wbesu e 'O
; ,k ' [l
./ .. 94 - %
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. . 24 percent, compared to a 6.3 percent increase the previous year. Ilowever, sales Ndre ela$c amen y 7-c
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and Myrtle Beach and to the Charleston Naval Shipyard decreased 2.2 percent.
,H ses .,,
. '. ( ,
M. _- hh. com d to a 6.9 percent increase the
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M . 'l Sales to 15 of the state's 20 electric , C, '. . . . # - f; ; - cooperatives through Central Electric Power g ,. ,1 y.gf f s ,. ' 4'- 9 Cooperative and to the municipalities of gan9,g g,;g ],,
...t. . y 7- nowa" Georgetown and Bamberg were 2.882 p,,,m p gi kyg? ':4 f[; $; $
- I gi9awatt hours, an increase of I percent 9, K#f * .
1 over the previous year. The electric T!us W y
.4 4, y- r$ easd 4- .
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I cooperatives and municipalities distribute l'5PC'8
- 7 CC'** M' p-.[Ljfg' Santee Cooper power to more than 220.000 b
- y, p' ,.g . ' y4 y
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A Q .'p& g.W.% ?,,.Qf-' , . $'^*W , , - b' O' N. 1 QMk i 0 . N"Wy,<wf.u$hg?.&.n$.. hp-
.. . l f I., k[ - .. U . .. 7]_ . . . , , , ..f4% m.v; g'x[y . . ; s. . . , - ~
- g. .,:t - y. h.', .[k.;c .,D,i ._.,m l
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- g i n, het - 4% .,,..~,$..e
.% . , . . . m y .L.,* + , . -g. sp; ; . 3. u .s n s .4 m. _- s .- ,c --L-M, g.M,, '
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17 I q. 6. e a W
- 0 The National Energy Conservation Policy Act . -:S
. .f ,
~
-' ?
S l of 1978 will not have a pronounced impact '
. g:
3 [ . k .I l.M :. M r j.;
) on the conservation services provided by Santee Cooper because the Customer
- t. ' "
p "- ,. ~J . [M@., %MF8,[ E88 3~ 4 i
=s
,. . . 8 ,
s
/
~~f
, dd
' ;d, Services Division is already providing the P f.g k ,]M'". . ;vsS ~J frf ,, g "
,t _ ,
nM - type of services required by the Act. *, . _ y. i g [gy) [.% Aff 3 Public Relations 3- .s ji ,' !
.h,
^ '
Communications with its customers and kh,'
'p % N --
w '., 4 employees was emphasized by Public ' t t .,,
-{ ,
Relations through a greater and more timely 'a 4f ,g.. -
-c'3'3,
- jf .
flow of information designed to increase I' $.M.lT . y$ @ # ~ ' i.j energy awareness, promote understanding of Santee Cooper operations, and encourage g;;'l,j
$.ir d.,.
y;:9 ,. . y.. ? M f 1'Jr. gh
,p
'. [,i( % j':# 7;f.f7'.3 7 ,y' p g Q {: ly. ,.-
'q the efficient use of energy. <.3 ,,[ .{ h *;j,? p p '* K ;, g$
., . y.., .
-f ji'a L' i b~-[-fM. ['N " f l Information flow was increased to electric
$<"./.M i 'I 4 f' ;M A %d :, 4 ik% ; eO ~ uf. d V .* N f1 7. [, h '
cooperative and municipal distributors of 1. $- - iR: Santee Cooper power and to the more than
~
'" ' ' f L 'M ' ", '
,a page au ak Mant Management U achieved by ring energy conserva on versi n of the armual mport was introduced Environmental Control personnel provided i information for their use and providing
}}j <
advertising materials to several co ops for by Public Relations as a pocket-sized quick refemnce f facts, figums, and information the leadership in the development of a state organization dedicated to the management of
' fug promoting energy conservation. about Santee Cooper. It is distributed to noxious aquatic plants. Over one hundred
}
~.[ l When a crippling ice storm swept through employees and has become a standard members from universities, state and federal handout to civic and business organizations,
[ I the state in February, Public Relations agencies, and industry are affiliated with the j s worked closely with the media in visitors, etc. non-profit organization.
'. y communicating the story of how Santee Research and field management studies on
; Cooper emergency crews were helping Mosquito Abatement electric cooperatives restore power to their n x us aquatic plant species in the Santee
; I Mosquito abatement field operations were Cooper lakes were conducted using control custonWs.
I" relocated from the Church Branch area to asums in puMc access and Ngbuse Santee Cooper's print media and radio the Clarendon County Airport to provide for a i j central project location with improved
% , advertising programs promoting the Energy ated recreat on 1 o tuniies n ake '
- p Efficient llome program and the efficient use runways and greater efficiency. Abatement Marion. .
y of energy were awarded top recognition in activities were conducted throughout a live- *
. I~ Charleston, state, and regional advertising county area of the project in the combined competition. interest of outdoor recreation, tourism, 3.
y) industrial development, and wildlife
. M protection.
- O
L 18 x
~
m Land Management, Revenue from forest pr.
, . . . , > . .~7 ..4r -
Aquaculture r h.,h
'# Hecreation, and Forestry agricultural teases exce The aquaculture section was expanded with
' I mst land base wm be qH;- 5, the employment of a fish cetturist from the The Project Lands Management Division acres as a asun d me
* 'g ?; Q' h E =-
// ' stall at Auburn University to develop and administers the leases of 3,977 parcels of
""* 98" "9 "
. ^ j/2) M . Ye N supervise a commercial fish production land which include 2,984 recreational lots in Approximately 22,000
' * = '.y - j /, ., program. The commercial production 0! lish. Saatee Cooper's 52 subdivisions,845 "'
4 ,. ['p',4,bi. in
;.. l' ' . eel, and freshwater shrimp using waste-heat marginal lots adjacent to privately-owned "
' '~ water at the Winyah Generating Station is
. . . - 3 h i subdivisions, 88 commercial leases, five
%[i'h ~
. being evaluated under this program. miscellaneous tease:.. and 34 gratis leases to The multiple-use conce 2Y public and quasi-public entities. Revenue
[ ,f a 1 * ~ $.N ' ,l. - T P Management Information Systems from property leases is about $500,000 management program i 13,640 acres on a grat e y ;. 4.!', - The Division was renamed Management annually. na e and M A ..'., ' # .. .#-
, .. #.-S 4. .
k. 1,- L Information Systems from Data Processing to better describe the Division's function of A land use plan for the management of project lands was recently approved by the admen I r use in t
# " management prograrn.
c - c, [ providing accurate data for timely Federal Energy Regulatory Commission as a pr v es controlled hun N ( A 'y h( , [ ? M,.$ management information. A Methods and part of Santee Cooper's new operating yp C.g Procedures section was created to develop license. The plan includes the development pg,y g and coordinate interdepartmental of five public recreational sites within the Funds from the sale of
, -., '[.;f ,. o ;'<
i'
.y ,. - procedures. next five years. the Wildlife Department maintenance of roads, a
<T p , g .)nf ,. n.4. O . ' ,'%y.g
, .' f';
4 '. ;? Numerous enhancements to systems were There are 20 public boat-launching ramps preparation of dove fieli achieved and several on-line capabilities and parking areas around the lake system. [ improvements. were added. Planning continued on the A large public recreation facility was recemly 1 Water Quality Management development of Database completed on Lake Marion in the Cross The quality of project waters was monitored Data / Communication Systems. community in conjunction with a gratis lease
- by Environmental Control with the help of to Berkeley County.
- Clemson University in order to detect harmful pollutants and maintain the An effective inspection and compliance standards of the reservoirs for recreational. program and a permitting system have been
. ,e . , 3 aesthclic, industrial, agricultural, and implemented to govern the placement of navigational uses. dwellings and improvements on leased properties. This program is designed to enhance property values and maintain Orderly development. I + t e f O
i gg
, - - 18 I
Revenue from forest products and inagement. agnculturai teases exceeded $150.000 The ,
- n. and Forestry ,8 f I rest land base will be reduced by 3.500 .
! : t,.nds Management Dmseon
'C'"5 35 ' 'esult I the constmchon of a ,;
g g. '
- .,ine ieases of 3.977 parceis of new generahng stan n on a site near Cross y ;r g ,
n ,oduce 2.984 recreahonal lots in ^PP' ""naiay 22.000 aaes reniain in ine - g 4., s s2 suhdms.ons. 84s forest management program and protectrons g ;/[ 9 in ate u ame revenues f 100,000 1 , l,w 88 commercial leases, five
"" "# e: ' Z-- 2 "*he .:*
{ ou', leases and 34 grahs leases to ~ ji quasi pubbc enhties Revenue The mu!!rple use concept of the forest
- ff-- ---
1erly leases is about 5500.000 management program includes the leasmg of ' 13.640 acres on a grabs basis to the South * - i a ea une ouKes , c- . v__
- pian for the management of N Department I r use n their game . . . .
l._J i.o. was recently approved by the --y - management program ibis program . hetgr Regulatory Commission as a pr vides c ntrolled huntmg for the general $ fjfEf, M6 atee Cooper's new operatmg x2 < pu ic --
.g
! he plan includes the development au recreahonal sites withm the Funds from the sale of hunting permits by pears the Wildhfe Department are uhteled for the
< 70 pubtet boat launchmg ramps maintenance of mads, conhoHed burning- F100d COntf01 h. $ Pg- 1.* :} , bk preparahon of dm fields, and other Santee Cooper conducted spilkng operations j ig areas around the talie system improvements. for 48 days during the months of February, N[J , 1e [
j sbhc recreahon facihty was recently '- March Aprit and May,1970 as part of its .j ',~ g j on late Manon m the Cross flood control program. e ,l ! y m coniunchon with a grabs lease I II The maximum daily average inflow which .,, occurred on February 26,1979 resulted in 'F
- M J i <e inspection and comphance
{ ind a permathng system have been the flood crest on the lower Santee River ,
'/'3 :b ,','
bemg reduced to about 60 percent of what if t ,
' i. .s
. L ; ,.
i ted to govern the placement of l and unprovements on leased would have been without Santee Cooper's .
'; ) '* l.4 e flood control operations. /c ;l. h,. ,
f this program is designed to U - t'operty values and maintain * , d'a 4 , ~ M .
- '""*"' iWQ.j%
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1 Finance and Accounting ,
.o
[2 23 e t h [
. ,,, Since Santee Cooper was created in 1934, a i4
**a -
3:-. r b
. . oegun and net amount of $858,052,000 has been [ .' , , ,. , ,.,x e rerns
- invested in its production, transmission.
. ,, ,, f. ., g cors4e distribution, and general plant facihties. g
, , , ,, , . g g, These capital additions have been lmanced V .,, ,, , 4
,, . _,, .. : yoressenal
. through nel revenues, issuance of electric _ _ . ,
,,, ,,,, ;..:ses revenue bonds, lease contracts, and a /,,, .- >
.. . , ,,, 6 :,, a.on federal grant in aid of $34,438,000. *\
*' " # W in June 1979. Santee Cooper retroactively '
'g '
* ****** W recorded all capital leases as assels and E ~-
b
- liabihtees in accordance with Statement No. .- $[-
I speveess Opperlseity 13 of the financial Accounting Standards ~' \
- p. , ,,g
- _ Y .,
M Board - Accounting for Leases. Capitat q , y [',g] [,i
.+r
.. .. .v pomoten
. . si se tused solely leases entered into before January 1,1977, were previously treated as operating leases.
~4 .
d f,.,.'_ . g .]
%j ~ .~~ . p-
.- . . .
- e n e.moul regard The effects of this change are explamed in S '
- a. eye utenalorigm. the Notes to financial Statements.
On April 19,1979, $110,000,000 Electric .. . System Expansion Revenue Bonds,1979 Series A, were issued. The major purpose of Santee Cooper's net revenues since the first outstanding balance of $215,674,000 at the i
- e- * . , .ec D, the this issue is to pay a portion of the power was generated in 1942 total time they were refunded. Principal payments {
e . ., siwren for the estimated costs of construction of Unit No. 4 $111,763,000. Payments in lieu of taxes on all bond issues, including the issues
* * * * '" ****g the test of the Winyah Generating Station. The net have been made to the State of South refunded, totat $24,230,000. Outstanding
*.w ..~% operat ng m Carolina totalling $15,723,000 and to the bonds as of June 30,1979, totatted interest cost of this issue was 6.81 percent.
* ' ""' * *' %'s annually. counties and municipalities within our $917,690,000. The average annual interest A general rate increaso became effective service territory tolatting $4,977,000. The F cost on these bonds is 5.78%.
S83WY May 1,1979, which will produce remaining nel revenues of $91,063.000 ;I approximately $9.8 million additional As of June 30,1979, unexpended funds ., have been reinvested in generating facilities [*I revenues for the fiscal year beginning July fr m sak d Nnds amounW to ;
,,,, and other system improvements. ,
5 3, 1979, $208,764,000 in addition to debt reserve, , q l
* * '*' 'd '8 ht (ona. tens Revenue bonds totalling $1,157,594,000 debt service, and interest funds which i
i a'= h units , have been issued since the creation of totalled $170.118,000. ;I
. . . ..,, W ' m ed h Santee Cooper. Bonds which were originally
- I
;I o.
i,- . veng $,,,,, issued in 1949,1971, and 1976 were I;
+ ; ,n an one minion .
advance refunded in 1973 and 1977 and y
+ w s ue.,rg g,y have been defeased. These bonds had an j h
m i iin .
E ectric Statistics 4l@
- e==s 'glh 6/30/77 6/30/78 6/30/70 6/10/11 6/30/76 6/30/15 6/30/14 6/30/13 6/3ns19 6/30178 hscal Year ,
Totas Ut'hty fiant net av hart.ng 355.971 271.976 223 633 166 761 146 84I I38.54 I 338.584 , f jN 159 839 511.9 % 431 167
' of diWlass) 82.514 r I 383 905 175 170 180.649 81624 495 t90 481.210 383 050 of di s 971 690 810 190 ,,l[
Oscatmq Revenues im tieruntfs 3.495 2 779 8 354 4 910 4 206 3.736 14 *,a5 to 801 9.109 3 060 t5 2% 5 703 4 833 4 330 3.130
", e ,ie e 12 439 to 138 9 665 16 8?? IS 530 9 624 8 662 8.442 6.0/4 Comnversat 70 979 11.349
. ;,g, ,jl.3 Indust:6is 35.131 26 6/2 28.551 19.357 2.834 2.410 2 314 2359 1.858 .j 6 310 5049 4. F54 4.564 148 l Md.ts y 6 567 398 257 217 1% 200 170 l G. Munw ipal 546 526 477 16.512 13.594 18.124 9.58 1 84% q, 54 101 4? ?65 36 215 32.038 506 l 59 915 4 220 51% 4 132 5 070 Wtw* sate 507 1.021 j ,,. 975 1.009 1 012 925 646 4 321 )
; Ottwr flet tric Uttibes*
1 401 f ?]6 1 219 f.168 t 1.516 ) Mm enaneous 36.023 33.499 ?? 543
's . 82 239 75 317 46,154 41.131 135 691 Ii8 980 94.721
- Total Opcialmn & Mantenance ispemes
; !, 36.86I 76 958 24.134 25 840 87 121 88 144 11.904 51.131 59 214 103 928
# t thou ds Of 4#s)
' Paynents m ien et f ases Cheged I 177 120 176 405 176 124 126 658 134 %0 nos of dastesp if im
'* Payerents so the $441e Clueged 894 I COT 751 458 844 164 1.013 avu I 700 1 201 l.791 tm i of l
l
, , hj j d T=e"=',,':'%~
of donais) 35 9'.8 33 7 % 78 091 79 199 19.983 13.604 16 889 14.182 9 114 7.318
!%ei.
6.159 2.176 2.291 8 Of4 3.104 12.530 1019t 5 516 8.918 1I.902 c Im of tars ,,,
, 6, , 8, , ,0 ,,,
2 ,,
, ,8 .6 , 4,
'.. .e - .- , 8.
I EDB'.h b imenN m h
1 27 g'a G a N
.- .. - . . . - - - - - ~ . . . ~ . . - . . _ ~. . .. -
m - - . - - . . . ._ ...
'g!
- p. Fiscal Yew 6/10/19 6/30/18 6/30/11 6/30/16 6/30/15 6/30/14
- 6/30/13 6/30/12 6/30/18 6/30/10 Irdowatt Hnin Sales (m thousandst Y
;y Res*ntul 443 186 446 241 403.101 342 232 319 144 281.653 261.411 234 682 210 139 183.245 2 ,
(j' Commercui 506 243 489.431 449 335 404.501 315.320 333 608 303.306 212.913 228.0t.4 208.451 i' :
- Instushul I.188 081 1.441.494 I.356.106 8.207.298 1.240.921 1.255 888 1.181.805 1.081 860 1 021 949 928 258
( 284 449 285.440 216 655 212 902 26 .629 i iH j M*tm y 316 531 323.163 302.189 301.112 29 t .632 10 690 9 681 10.001 8 368 1.868 'Mi .
!l[' ,
MumrepA Wholesse 16 966' 16 610 2 881.118 2 843.949 15.495 14.38I 2.516.194 2.220.559 13.015 2.098.602 1.195.628 1.515.928 1.306 992 1.355 062 1.219.i43 9 fotd 5t[52.190 5.561I520 5.104 226 4.48'5.136 4.259.300 3.961.909 3.623.630 3.189.103 J.091.08 2.808.594 K. 1, Numtwr of Customers tat year endl jk
. Res e nh* 38 058 3S 590 32.513 30.138 28.580 26.958 25.254 23 620 27010 20.130 -
l Commercue 8 859 8 466 8.102 1.558 1.290 1.122 6.160 6.295 h.908 5.688
'l'" 20 )
f'. I endustrul 21 20 19 21 21 20 21 21 21
;y Mdriar y 3 3 3 3 3 3 144 3
119 3 114 3 818 3 114
;, MunerspA 201 191 189 183 163 ,
3 3 4 4 4 4 4 4
) Wholesale 3 3 lots 41,31 4 [ 219 40.829 38.506 36.05l 34.251 32.161 30 056 28.064 26.560 9'
I ,' '
$ Resentul Slahshes l Average)
.:j 12 091 13.114 12832 11.558 18 481 11.060 18.018 10 256 9 699 9.053 i
l(wh Cuskwner Cents /st sh 3 44 3 21 2 68 2 66 2 61 1 18 I 59 1 59 1 66 1 52 g
=
* [v Cenerating Capatzhty tyear endl
. (megawatts) 1.456 1.100 1.120 1.120 1.092 192 112 132 132 132 a,
4 Power Requaements and Supply Iwowan hours a m.rhonsi y
>f* ?. . ;
'; % Generahon Hydio 680 102 115 139 184 101 826 823 611 532 i
. Steam 5.343 5.238 4.402 3.119 3 012 3.399 3.459 2 929 3 008 2.012 1"j
'%' 9 Comtmhan Turtune
~ ~
6 38 21 2 11 11 1 1 2 8 Ikt total 6'029 ~5.918 5.138 4.520 3.801 4.111 4.292 3.145 3 681 2.6t2
,' T Purchases. Net Interchange. Ett 430 95 414 429 883 303 1 213 I i 159 I ( 330 3 318 ,
i, . di; iets 6,459 6 013 5.612 4.949 4.690 4.420 4.019 3.586 3.351 2.988 19 Y Calender Year 1918 1911 1916 1975 1974 1913 1972 1978 1970 1%9 N .e ; ! . System Feah loads imegawatts)** 1.231 f.161 1.065 943 911 829 136 622 600 504
$ , B t i Denoles Negatwo _
g, h, i *ttfecDve July 1.1971 Interchange saies were rectasuteed as a credit to purchased power. n g **A new system peak demand.1352 MW. occurred e August 1919 . ,E f nJ= -5 a,
. i
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Board of Directors Management ! - 29 . s. Robert S. Davis Chairman New Director William C. Mescher Chairman & President of R.L. Bryan Co. President a,1d Chief Executive O!!icer Columbia, S.C. Ben G. Alderman, Jr. of Manning was Henry N. Cyrus $., Vernon E. Sumwatt first Vice-Chairman appointed a Director of The South Carolina Senior Vice President Engineering Planning - Attorney at Law Public Service Authority effective January 1 Clarence S. Gramling 1. Rock Hill, S.C. 1979 by Governor James B. Edwards. Mr. Senior Vice President, System Operations i.. J. Thomas Grier Second Vice Chairman Alderman represents the Sixth Congressional Kenneth R. Ford Partner, Grier & Co. District on the Board of Directors. Vice President, finance and Treasurer ] Spartanburg, S.C. Alderman, a native of Clarendon County, B.G. Alderman graduated from Wake Forest College in 1960 Vice President, Commercial Operations '.. cas C Padg e Owner The Alderman Agency and is the owner of the Alderman Agency, ce es ent, Indusuial Developrnent ig Manning, S.C. an insurance and real estate firm in g C.B. Boyne Manning. He is married to the former Ann ' Guerry Taylor of Manning and they have tw ce Pre ide . Engineering Design Farmer and Retired Merchant Easlover, S.C. children. Alderman is a memoet of the First RM L h Si' V ce President, Production 5' Walter T. Cox Baptist Church of Manning. ' M Hi m A Vice President of Student Affairs and Dean Mr. Alderman has been a member of the Vice President, Nuclear h,! of Students Clemsnn University. South Carolina A.S.C.S. Committee Director Wallace S. Murphy Clemson, S.C. of the South Carolina Children's Bureau, General Counset ,!8{ ; Mark C. Garner State Printing Co. Trustee of Clarendon Memorial Hospital, and Chairman of the Clarendon County L.P. Dorman Secretary
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Myrtle Beach, S.C. Republican Party. Alderman is presently W. Andrew Burke 3.1 B. A. Jordan president-elect of r/ inning Rotary Club. Executive Staff Assistant Chairman Board of Directors Cherokee, Inc. John E. Bishop [M & L-J, Inc. Controtter 'g!; , Columbia, S.C. Albert Boyt, Jr. M;. E. Jarvis Morris qup anagu, seuhon g
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David E. Jellcoat ', gJ-Group Manager, Transmission President Robertson liardware Byron C. Rodgers W & Electrical SuppfV Group Manager. Production Operations Walterboro, S C. Jerry L. Stafford ' Marvin M. Thomas Public Relations Director Owner-Operator Georgetown Laundry, Inc Georgetown. S.C.
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- EgiangsmgiargsBEt, Table of Contents Auditors' Opinion. .2 Financial Statements of South Carchna Public Service Autnanty:
Balance Sheets. .3 Statements of Net Earnings. .5 Statements of Accumulated Earnings Reinvested in the Business. 6 Statements of Changes in Financial Position. .7 Notes to Financial Statements. . 9 - 1.: WW ~ N 1 : a-g _, . .-,v.#[ "O74,(T. 3 ,
Auditors' Opinion ~ 2
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g .-- s .- .-_ i - 2 J.W. Htat and Company 1607 St. Julian Place Post Office Box 265 3 Columbia, S.C. 29202 5 6 The Advisory Boarc 7 Soutn Carolina Puotic Service Authority '4 Columoia. South Carchna We nave examined the ba'ance sheets of the South Carotina Puoiic Service Authority as of June 30 1979 and 1978, and the related statements of net earnings accumu!atec earnings reinvestec in the business and cnanges in financial position for the years then encec. Our examinations were mace in ac-carcance with generatly accepted auciting standarcs anc. accorcingly. inc!uced such tests of the ac-counting recorcs and such other auditing procecures as we consicered necessary in the circumstances in our opinion. the accompanying financial statements present fairly the financial ;;osition of the South Carchna Public Service Authority as of June 30.1979 and 1978. and the results of its coerations and the changes in its financial position for the years then ended in conformity with genera!1y accepted accounting princiales applied on a consistent basis after restatement for the change witn wnicn we con-cur. in the metnoc of accounting for leases as described in Note 6 to the financia! stateTents. Respectfully submitted. U./ & % ;w November 20,1979
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Detail 1979 1978* OPERATING REVENUES: Sales of electricity. $ 134.296.072 S 117.744.105 Other operating revenues. 1.401.354 1.236.072 Total operating revenues. 135.697.426 118.980.177 OPERATING EXPENSES: . Operation expense. Production . 84.529.074 79.353.325 Purcnased and interchanged power - net. 2.109.654 (4.748.340) Transmission . 1.242.108 1.131.318 Distribution. 729.969 607.529 Customer accounts. 1.271.731 1.273.236 Sales . 214.227 235.142 Administrative and general. 3.642.924 2.655.041 Maintenance expense. 10.188.4a9 7.636.576 Total operation and maintenance expenses 103.928.136 88.143.827 Depteciation . 12.433.947 11.060.022 Sums in lieu of taxes. 726.315 658.418 Total operating expenses. 117.088.398 99.862.267 OPERATING INCOME. 18.609.028 19.117.910 OTHER INCOME: interest income. 26.879.580 17.159.446 Allowance for funds used during construction - other than borrowed funds (Note 1). 1.084.631 457.879 o Other - net. 132.398 (34.021) Total other income. 28.096.609 17.583.304 Total . 46.705.637 36.701.214 INTEREST CHARGES:
- - Interest on long term deot. 49.609.758 37.870.422 Allowance for funds used during construction -
borrowed funds (Note 1). (14.415.741) (7.215.703) Other . 721.090 530.902 Total interest charges. 35.915.107 31.185.621 NET EARNINGS. $ 10.790.530 $ 5 515.593
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- nteres: at 4% anc 410'. anc cue 1979:: '95' anc 2005 50 555.000 51 000 000 E ecinc Revenue Scncs Fefunc.ng Senes of 1973. teanng :nterast trcm 5% to 5-1/2% arc cue 1979 to 1959 9.250 000 9 Sua 000 Contrac: Cougations. cayac'e 1979 to 1955 2.257.509 2 645 542 Tctai Pncnty Ochga!!cns 73 492.509 74 350 342 E:ecinc System Excansion Revenue Bancs.
Excansion Boncs.1973 Senes ceann; :n:erest from 5% to 5-3/4% anc cue 1950 :: 1993 anc 2013. 100.C00.000 100.000.000 Excansion Sancs.1974 Seres. Deann; interest from 6% to 6-3/4% anc cue 1930 to 1999 anc 2014 109.00C.000 109.000.000 Excans:cn Soncs.1977 Refune.ng senes. cez . ing interest from 3 40'b to 5 6 and cue 1979 to 1997 and 2002 and 2016 212.455.000 213.975 C00 Excansion Scncs.1977 Senes. Deanng interest from 4% to 5-3/4% anc cue 1982 to 2002 anc 2017. 115.000.000 115.000.000 Excansion Sancs 1973 Senes. ceanng interest from 4.20% to 5-7/8% anc cue 1981 to 1993 anc 2008 anc 2015 200.000.000 200.000 000 Excansion Sonas. 1979. Senes A. teanng interest from 5.40% :0 6-7/S% anc cue 1980 to 2003 and 2009 anc 2019 110.000.000 - Total Excansion Boncs 846 455.000 737.975.000 Cacita:ized Succccinatec Lease Contrac:s. cayacle 1979:0 2014 23.056.022 58.204.642 1 Bank Crecit Agreement. 25 000 C00 - l Other 375 000 1.7CO 000 Total tong term cett. S1 033 378 331 S 862.740.484 1*e Au:wy a:es : acee:s :* :e:t ss.es :n aw .n .,rc ; . s c:nse.. e, : :; 2-
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L 43 i J NOTE 6 - Long-Term Lease Commitments (Continued): as Future minimum ' ease cayrrents an Central eases at Ju'.e 30.1979. were Years encing June 30: amcunt a-1980. 4 903.494
5 1981. 5 263.354 1 1932. 5.337.C57 l 1983 5.503 735 1954 5.515 113 j Thereafter 124 552.459
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! NOTE 7 - Commitments:
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1 i POWER SYSTEM C00RDIMTION AND INTEGRATION AGREEMENT BENEEN S0llTH CAROLINA PUBLIC SERVICE AUTHORITY AND CENTRAL EL[fCTRIC POWER COOPERATIVE, INC. 1 i f l l i I t c l i P' l i k l l
POWER SYSTEM COORDINATION AND INTEGRATION AGREFMENT TABLE OF CONTENTS e PAGE REFERENCE ARTICLE. SECTIONS. OR APPENDIX TITLES NUMBER RECITAL ............................... 1 DEFINITIONS ............................. 4 Article I . . . . . . Existing Agreement ............. 6 Artic)e II . . . . . . Joint Committees .............. 7 Article !!! . . . . . . Purchase of Generating Resources . . . . . . 11 Article IV . . . . . . Future Generating Resources . . . . . . . . . 12 Article V . . . . . . Power and Energy Rates and Requirements . . . 16 Article VI . . . . . . Transmission Services and Deliveries . . . . 18 Article VII . . . . . . Transmission System Coordination . . . . . . 19 Article VIII . . . . . . Delivery Points . . . . . . . . . . . . . . . 22 Article IX . . . . . . Electrical Characteristics . . . . . . . . . 23 Article X . . . . . . Dispatching & Operation of Capacity Resources
& Transmi ssion System . . . . . . . . . . . . 24 Article XI . . . . . . Me tering ..................27 Article XII . . . . . . B i l l i n g & P ayme n t . . . . . . . . . . . . . . 28 Articl e XIII . . . . . . Arbi tra tion . . . . . . . . . . . . . . . . . 29 Article XIV . . . . . . Mi sc ell aneou s . . . . . . . . . . . . . . . . 33 Effective 3 ate & Term . . . . . . . . . . 33 Central's Members . . . . . . . . . . . . 33 Interruptions to Service . . . . . . . . . 34 Force Majeure . . . . . . . . . . . . . . 34 Successors and Assigns . . . . . . . . . . 34 Selling or Leasing of Authority System . . 34 Selling or Leasing of Either Parties' System . . . . . . . . . . . . . . . . 34 Rights of Way ..............35 Entry of Pre.aises ............35 Ownership of Facilities & Right of Removal .35 Indemnification .............35 Interpretation and Captions .......36 Audit . . . . . . . . . . . . . . . . . . 36 Counter Parts . . . . . . . . . . . . . . 36 Severabil i ty . . . . . . . . . . . . . . . 36 Governing Law . . . . . . . . . . . . . . 36 Notices . . . . . . . . . . . . . . . . . 37 Signatures and Seal s . . . . . . . . . . . 37 APPENDIX A . . . . . . Provisions Relating To Resource Integration and Supplemental Power Sales . . . . . . . . 38 Exhibit I Cost of Service Methodology . . . . . . . 52 Exhibit II Schedules A & B . . . . . . . . . . . . . 55 Schedules C . . . . . . . . . . . . . . . 56 Exhibit III 7
Production Energy Charges . . . . . . . . 57 APPENDIX B . . . . . . Provisions Relating To Transmission Service . . . . . . . . . . . 58 APPENDIX C . . . . . . Provisions Relating To Transmission Operations and Maintenance . 62
This Power Systems Coordination and Integration Agreement (herein-af ter referred to as the " Coordination Agreement") entered into on the d"% day of ,1980, by and between the South Carolina Public Ser'vi. e Authority (hereinafter referred to as the " Authority"), an Agency of the State of South Carolina, and Central Electric Power Cooperative, Inc., (hereinaf ter referred to as " Central"), a cooperative corporation organized and existing under the laws of the State of South Carolina, witnesseth that, RECITALS
, Whereas, Authority owns and operates an electric power systen consi-ting of electric generating, transmission, and distribution facilities; Whereas, Central is a generation and transmission cooperative whi h throuqh wholesale purchases from Authority, furnishes electric power and ene:g" at wholesale to its Member distribution cooperatives under all requirements contracts; Whereas, Central through loans from the United States of America (hereinaf ter called the " Government") acting through the " Administrator of REA" has constructed certain electric generating and transmission facilities and through certain lease and power contracts leased these facilities to Authority.
Whereas, these certain lease and power contracts are by name and detail:
- 1. Contract Obligation: Commonly known as the A-B Agreement; ef fer tive date, January 1,1950; tennination date, January 1,1985 date of last payment, January 10, 1985.
- 2. C Lease: Ef fective date, October 22, 1952; tennination da te, October 22, 1982; date of last payment, November,1995.
- 3. C Power Contract: Effective date, October 22, 1952.
4 D Lease: Ef fective date, April 25, 1963; tennination date, criginally July 1,1996, and extended to June 7, 2007, by terms of the L Amendment of the D, E, F, G, H and K Leases; date of last payment, November, 2003.
- 5. O Power Contract: Effective date, April 25, 1963.
- 6. E Lease ( Amendment to the O Lease): Ef fective date, Octorier 23, 1968; termination date originally June 1, 2000, but extended to June 7, 2007, by terms of the L Amendment to the D, E, e, G, H, and K Leases; date of last payment, November, 2005.
- 7. F Power Contract: Effective date, April 29, 1971; termination date, June 15, 2005. ,
- 8. F Lease ( Amendment to the D and E Lease): Effective date, April 29, 1971; termination date, originally June 15, 2001, but extend-cd to June 7, 2007, by terms of the L Amendment to the D, E, F, 7
G, H, and K Leases; date of last payment, November, 2003.
s
- 9. G Lease (Amendment to the D, E, and F Leases): Ef fective date, Octob;r 10, 1973; temination date originally March 13, 2003, but extended to June 7, 2007, by tems of the L Amendment to the D, E, F, G, H, and F. Leases; date of last payment February, 2010.
- 10. H Lease Amendment to the D, E, F, and G Leases): Effective date December 3,1975; temination date, originally December 3, 2005, but extended to June 7, 2007, by tems of the L Amendment to the D, E, F, G, H, and K Leases; date of last payment November, 2011.
- 11. K Lease (Amendment to the D, E, F, G, and H Leases): Ef fective date, October 18, 1976; temination date, originally October 18,
. 2006 but extended to June 7, 2007, by tems of the L Amendment to the D, E, F, G, H, and K Leases; date of last payment, February.
2014
- 12. L Lease ( Amendment to the D, E, F, G, H end K Leases): Effec-tive date, June 7,1977, temination date June 7, 2007, date of last payment, February 2015.
Whereas, the aforementioned Contract Obligation contain provisions whereby Central is obligated to purchase, and Authority obligated to provide and sell, all of Central's electrical power and energy requirements during the tem of such Obligation, which such provisions (collectively, "all-requirements provisions") may be amended by mutual agreement of Authority and Central, but only with the consent of the Administrator of REA and of the holders of at least seventy-five (757.) percent (principal amount) of Authority's Priority Obliga-tions; and Whereas, the aforementioned C Lease contains provisions whereby Cen-tral is obligated to purchase, and Authority is obligated to provide and sell, all of the electrical power and energy requirements of Central's then current members, which such provisions (collectively "all requirements provisions") may be amended by mutual agreement of Central and the Authority with the consent of the Administrator of REA; and Whereas, the aforementioned Contract Obligation, the C Lease, the D Lease, the E Lease, the F Lease, the G Lease, the H Lease, the K Lease, and the L Lease each have an option clause whereby Authority has the option to purchase l the facilities covered by the aforenamed Obligation and Leases at any time ! during the terms of said Obligation and Leases; and j Whereas, Authority will exercise its option to purchase the facili-l ties covered by the A-B, C, D, E, F, G, H, K, and L Leases, and Authority and Central will eliminate and make void the "all requirements" provisions of the C Lease; and Whereas, Authority has awarded contracts for the construction of two coal-fired electric generating units at a generating facility known as the Crm
- Generating Station (hereinafter referred to as the " Cross Staticn") located nt.ar
, the community of Cross, South Carolina; and Whereas, Authority currently plans the Cross Station to ultimately house four coal-fired generating units, each unit to have a nominal net genera-ting output capacity of 450 megawatts with the first unit (Unit Number Two) having a projected Commercial Operating Date of November 1,1983, and the second
4
, unit (Unit Number One) having a projected Concercial 0porating Date of May 1, 1985. Units three and four are to be constructed as required to supply the das load requirements of the combined Authority-Central System; Whereas, Central desires an option whereby Central may acquire an undivided ownership interest in each unit to be constructed at the Cross Genera-ting Station; and Whereas, Authority, as tenant in common with the South Carolin6 Electric and Gas Company, owns an undivided ownership interest in the Virgil C.
Summer Nuclear Generating Station currently being constructed by Authority and the fouth Carolina Electric and Gas Company; and Whereas, Central desires an option whereby Central may acquire an undivided ownership interest in the Virgil C. Summer Nuclear Generating Station with such option to have a stated termination date; and Whereas, Central desires an option whereby Central may acquire an undivided nwnership interest in each future generating unit constructed by Authority, or by Authority and ary other Party or Parties; and Whereas, Authority desires an option whereby Authority may acquire au undivided ownership in each and every future generating unit constructed by Central, or by Central and any other Party or Parties; and Whereas, Central desires to purchase and receive from Authority all of the electrical power and energy requirements of Central's Members not supplied from Central Capacity Resources; and Whereas, Central desires Authority to transmit and deliver electric power fro 1 Central Capacity Resources and from Authority's Capacity Resources across Authority's transmission system to Central-owned transmission facilities anc' Delivery Points of Central's Members; and Whereas, Central desires to ultimately own all of the generating resources necessary to meet Central's total power requirements on a firm basis; and Whereas, Central and Authority desire, for their mutual benefit and that of their ultimate customers, to jointly plan all future generation and transmission facilities; and Whereas, after January 1,1985, Central and Authority mutually desire to terminate and make void each and every provision of the A-R Power Contract and supersede each and every provision of such Contract with this Agreement; and 1 Whereas, Central and Authority mutually desire to tenninate and make void each and every provision of the C, 0, and F Power Contracts and supersede each and every provision of such Contracts with this Agreenent; Now, therefore, in consideration of the foregoing and the mutual covenants and agreements herein contained, the Parties hereto contract and agree as follows:
. , DEFINETIONS A For the purposes of this Agreement the following definitions shall apply:
A. Annual Territorial Peak Demand: The maximum coincident one-hour integrated kilowatt demand of the cabined systems of Authority and Central during the Contract Year, as defined in Appendix A hereto. R. Bulk Power Transmission: Overhead and underground transmission linqs $hich serve a systen-wide bulk load-carrying or reliability function, incTudinq (1) lines or line seginents which at either end are connected to CapK-ity Resources, or (2) lines or line segments which at either end interconnect with other utility systems, or (3) lines or line segnents which at both ends are connected to lines described in (1) or (2) above whether or not transfonnation , of voltage is involved. Rulk Power Transmission Facilities s' all include all stations from which emanate one or more Bulk Power transmission lines or line segments. C. Capacity Resource: An electric generating unit, an ownership share in an electric generating unit, or the availability of electric capacity purchased fran an electric generating unit or source available to provide the electric power and energy requirements of Authority and/or Central. D. Co-generation: The process whereby a waste or by-product of a generating station is used by a separate entity, an industrial plant for ex-ample, in operation of the industrial plants production processes, and in turn, or, a waste or by-product of the industrial plant is used by the generating station in the generation process. E. Contract Year: The period beginning at 12:01 a.m. July 1 and ending at 12:00 midnight the following June 30. F. Delivery Point: Any point at which the conductors owned by ' Authority or Central connect with the conductors owned by the other Party for the sole purpose of delivering electrical power and energy in the case of Cen-tral to a Central Member-Cocperative and in the case of Authority to an Authori-ty Customer. G. Dispatching: The operating control of an integrated system involving operations such as, but not limited to:
- 1. The assignment of load to specific generating stations and other sources of pcwer supply to effect the most reliable and econanical power supply as the total of the significant and conbined area electrical loads rise and fall.
- 2. The control of operations and maintenance of generating units, transmission lines, substations, and equipment, including administration of environmental, operating, regu-latory, reliability, and safety procedures.
t, 3. The operation of transmission lines, switches, and related
, facilities.
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. 4. The negotiating and scheduling of power v1 energy transac-tions with interconnected electric utilities.
H. Eligible Capacity Resour e: A Capacity Resource of either Party which has met the notice provisions and other conditions of this Agreement. I. Generating Station: A station at which are located prime movers, electric generators, and auxiliary equipment for converting mechanical, falling water, chemical, solar or nuclear energy into electric energy.
, J. Good Utility Practice: Good Utility Practice at a particular time means any of the practices, methods and acts, which, in the exercise of reasonable judgment in the light of the facts (including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the electric utility indu:;try prior thereto) known at the time the decision was made, would have been expected to accomplish the desired result at a reasonable cost consistent with reliability and safety. Good Utility Practice is not intended to be limited to the optimum practice, method or act, to the exclu-sion of all others, but rather to be a number of possible practices, methods or acts.
K. Reserve Generating Capocity: Generating capacity available to meet unanticipated demands for power or to generate power in the event of loss of generation resulting from scheduled or unscheduled outages of regularly used generating capacity. r Article I. EXISTING AGREEMENTS Authority continues its sole responsibility and authority to possess, control, operate and maintain all property, interests in property and all faci-lities included in the A-B through L Leases, including the right to repair, replace, remove from service and the right to upgrade, modify or add to such facilities, when in the opinion of the Authority such would be in the best interests of reliable system operations. Authority hereby gives, and Central hereby accepts, notice of Authori-ty's, intent to exercise Authority's options pursuant to the A-R, C, 0, F, F, G, H, K, and L Leases to purchase the facilities envered by such leases, each such purchase to become effective no later than the latest date stipulated in each such lease or amendment. By mutual agreement, Authority and Central herehy terminate, vacate, and make null and void the C, D, and F Power Contracts and all amendments there-to and supersede such contracts, as amended, with this Agreement. By mutual agreement, effective January 1,1985, Authority and Central hereby terminate, vacate, and make null and void the A-B Agreement and all amendments thereto and superseda such Agreement with chis Agreement. All other existing agreements between Authority and Central, or por-tions thereof, shall continue in full force and effect unless and to the extent modified herein. l 1 l l l l
Article II. JGINT COMMITTEES ens A. EXECUTIVE COMMITTEE There shall be established an " Executive Canmittee" which shall he constituted by and act on behalf of the Parties on the matters and in the manner hereinafter set forth. The membership of the Executive Committee shall consist of one member of the Board of Directors of Authority and one member of Central's Board of Trustees, and the Chief Executive Officer of Authority and General Manager of Cent *ral . The appointment of each board member for each Party shall be confirmed in writing t o the other Party. Each such appointment shall be for an indefinite term and may be terminated at any time upon written notice from the appointing Party to the Other Party, which notice shall also name the successor to the member whose term is terminated. The Executive Canmittee shall meet not less often than semi-annually at the time and place designated by the Party having appointed the then current secretary. On written request of any member, the Executive Committee shall convene a called meeting at the time and place designated by the Party having appointed the then current secretary, provided, however, that such called meet-ing shall be not more than thirty (30) working days after such request unless the member requesting the meeting agrees to a later date. There shall be appointed a secretary of the Executive Canmittee who shall not he a member of such Canmittee and whose appointment shall rotate amnng the Parties, with the first secretary appointed by the Chief Executive Officer of Authority and the second secretary appointed by the General Manager of Cen-tral. Each secretary shall serve for a term of two years canmencing on July 1 of the change year, except that the first secretary shall serve through June 30 1982. The Party appointing each such secretary may terminate the tenn of such secretary and replace such secretary during the term thereof with another secre-tary with written notice to the other Party. The secretary shall be responsible for preparing and distributing minutes of the meetings of the Executive Commit-tee and such other duties and responsibilities as may be agreed to by the Execu-tive Committee. The Executive Committee shall be responsible for (i) the implementa-tion and administration, on behalf of the Parties, of the provisions of this Agreemeat as hereinafter provided, (ii) the resolution of disputes between the Parties arising under or relating to any provision of this Agreement, and (iii) such other matters as may be agreed upon among the Parties. The Executive Canmittee shall develop such manuals of procedures as may be necessary to implement and administer any transactions among the Parties. No action shall be taken by the Executive Canmittee except by a major-ity vote of all members unless otherwise specifically provided in this or other agreement s. Notwithstanding anything contained in this Agreement, no matter shall require the approval of the Executive Canmittee or that of any other colmittec created by this Agreement or by the Executive Canmittee, unless such matter (1)
Article II. JOINT COMMITTEES (cont'd) A is specifically assigned to such committee or (2) involves a facility which is jointly owned, or to be jointly owned, by Authority and Central. Each Party shall, within ninety (90) days after approval of the minutes of the Executive Committee, as hereinafter provided, submit such minutes to its Board for action and shall promptly notify the other Party of any action taken thereon.
,R. SURCOMMITTEES The Executive Committee shall not delegate its authority to others; however, the Executive Committee shall have the authority to appoint and direct standing or ad hoc subcommittees or task forces, the members of which need not be members of the Executive Committee, to study and make recommendations on any subject, and to discharge such other duties and responsibilities as may be agreed upon by the Parties.
There shall be established at least two such standing subcommittees; namely, the Planning Committee and the Operating Committee. The present Au-thority-Central Engineering Committee shall be superseded by the aforementioned subcommittees.
- 1. The Planning Committee shall consist of two salaried employees of Authority appointed by the Chief Executive Officer of Authority and two salaried employees of Central appointed by the General Manager of Central. Such appoint-ments shall be for indefinite tErd and each such appointment shall be confimeri in writing by the appointiry Party to the other. One member of the Planning Committee shall be designited Chairman and such chaimanship shall rotate among the Parties, with the first chairman appointed by Authority, and the second chaiman appointed by Central . Each chaiman shall serve a tem of two years, commencing on July 1 of the change year, except that the first chainnan shall serve through June 30, 1982, and each such appointment shall be confimed in writing by the appointing Party to the other. If a chairman is unable to complete a term, an interim chairman shall be appointed by the vacating chair-man's Party to serve out the tenn. The Planning Committee shall meet not less than quarterly with one quarterly meeting being held each April and shall be responsible for the exchange of infonnation and studies and analyses relating to matters involving generation and transmission system planning and such other
[ matters as may be specifically designated by the Executive Committee or as otherwise specifically set forth in this Agreement. l 2. The Operating Committee shall consist of two salaried employees of Authority appointed by the Chief Executive Officer of Authority and two salaried employees of Central, appointed by the General Manager of Central. Such appointments shall be for indefinite terms and shall be confimed in writ-ing by the appointing Party to the other. One member of the Operating Committ m shall be designated as chainnan of the Operating Committee, and such chainnan-ship shall rotate among the Parties, with the first chaiman appointed by Cen-tral and the seconi chairman appointed by Authority. Each chainnan shall serve a tem of two years, commencing on July I of the changing year, except that the ! first chairman shall serve through June 30, 1982, and each such appointment f shall be confirmed in writing by the appointing Party to the other. If a chair-1 l l l
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Article II. JOINT COMMITTEES (cont'd) man is unable to complete a tem, an interim chaiman shall be appointed by the vacating chairman's Party to serve oat the tem. The Operating Committee shall meet not less than quarterly and shall be responsible for the exchar.ge of infor-mation and studies and analyses relating to matters involving operations of the integrated generation, and transmission systems of Authority and Central as may be specifically designated by the Executive Committee or as otherwise specifi-cally set forth in this Agreement.
. Nothing in this Agreement shall prevent the Executive Committee fron
.}issolving the Planning Committee or the Operating Committee; provided, however, that in the event either cmnittee is dissolved, the responsibilities of such committee that are specifically set forth herein shall fall upon the Executive Committee or such other committee or committees as the Executive Committee may designate.
C. GENERAL RULES Unless the Executive Committee specifically agrees otherwise, the following rules shall apply to all joint committees fomed by the Parties pur-suant to this agreement:
- 1. Attendance at the meetings shall not be limited to members, but the Parties recognize the practical necessity of limiting attendance of non-members to those who are expected to take an active part in the agenda for a given meeting.
- 2. Each Party shall be responsible for the personal expenses of its members and its other attendees at a meeting of a committee. All other expenses necessary in the perfomance of the duties of such committee shall be allocated and paid as detemined by the Executive Committee.
- 3. Minutes of each meeting of a committee shall be kept so as to record the following: date, time and place of the meeting; those in attendance; ac-tions approved; agreements reached; date, time and place of the next meeting.
The minutes shall not include any position advanced by a Party which was not thereafter at the same meeting accepted; provided, however, when no agreement among the members of the committee can be reached on a matter, at the request of either Party, the Parties respective positions shall be entered into the minutes for review by the Executive Committee.
- 4. The secretary of a committee shall prepare and distribute draf t min-utes of each meeting of the cmmittee by either personally handing a copy to each member or mailing the same to each member, in each case not later than ten (10) calendar days after the close of the meeting. Each member shall prmptly notify the secretary of his approval or of any corrections he desires to be made to the minutes. The secretary shall be responsible for coordinating corrections with the members and shall prmptly mail corrected minutes for signature by the members. The approved minutes of the Executive Committee shall be presented to the Parties' respective Boards and the approved minutes of any other committee shall be presented to the Executive Committee.
7
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, Ar,ticle II. JOINT COMMITTEES (cont'd)
#"N
- 5. Realizing that publication of information furnished hereunder by one Party to the other may detrimentally affect the furnishing Party, the Parties agree to keep confidential any such information upon the written request of the furnishing Party. Public dissemination of such information by the furnishing Party shall constitute a termination of the confidentiality requirement as to 1
that specific information. Notwithstanding the above, nothing in this Agreement shall be con-strued as preventing the disclosure by either Party to bond counsel, underwrit-ers, consultants or REA of any information which in the opinion of such bond counsel, underwriters, consultants or REA may affect the security of any bonds or other evidences of indebtedness issued or to be issued by such Party. Fur-ther, neither Party nor its bond counsel, underwriters, consultants or REA shall be prevented from disclosure of such information in official statements neces-sary for the issuance of such bonds or other evidence of indebtedness. Further, neither Party nor its bond counsel, underwriters, consultants, or REA shall be prevented from meeting any disclosure requirements required under such Parties existing Bond Resolutions, Indentures or mortgages, including but not restricted to audit reports, engineering reports and any other related reports.
Article Ill. PURCHASE OF GENERATING RESOURCES d"N A. The Parties hereby agree to share undivided ownership of the Cross Generating Station whereby Central shall have a 45 percent undivided ownership interest in each and every unit, excluding real estate, at the Cross Generating Station if and when installed pursuant to the " Cross Generating Station Owner-ship and Operating Agreement" between the Parties which such Agreement shall be executed and become effective at the same time this Agreement is executed and becomes effective.
. If the covenants of the Rond Resolution under which Authority's out-standing obligations have been issued require the retirement of any or all of Authority's Priority Obligations as a result of the acquisition of a portion of the Cross Generating Station by Central, the purchase price to be paid by Cen-tral shall cover any and all penalties Authority has, will have, or is commit-ted to pay to retire the involved portion of Authority's Priority Obligations on the date sale is made to Central .
R. Authority hereby grants Central an option whereby Central may pur-chase up to a thirty three and one third (331/3) percent undivided ownership interest in Authority's share of the Virgil C. Summer Nuclear Generating Station (the Summer Station). Such purchase, if and when effectuated shall be pursuant to a Generating Station Ownership and Operating Agreement between the Parties which such Agreement shall be substantially the same as the above referenced Cross Generating Station Agreement taking into account any circumstances or requirements 5: 3cific to the Summer Station. Notwithstanding this or any other provision of this Agreement, such Authority option to Central shall terminate if not exercised by December 1, 1980, and if exercised such purchase shall be contingent upon (1) Central's obtaining any and all necessary consents agreements or approvals from SCE&G and appropriate governmental regulatory bodies and (2) Authority's ability to comply with the covenants of the Bond Resolution under which its outstanding obliga-tions have been issued and (3) the purchase price to be paid by Central cover-ing any and all expenses or penalties the Authority has, will have, or is com-mitted to pay to (i) construct the said portion of the Summer Station purchased by Central and (ii) retire the Authority's Priority Obligations on the date sale is made to Central.
1 Article IV. FUTURE GENERATING RESOURCES A. It is the Parties' intent to cooperate and coordinate the planning of future generating resources for their mutual benefit, and, in furtherance there-of, each Party, at the first regular meeting of the Planning Committee in each year, shall provide the other, through its respective representatives on such Committee, such Party's most current projections of that Party's annual Summer and Winter peak demands and annual energy requirenents for the twenty (20) year period commencing with the immediately preceeding January 1. The Planning Committee shall review such projections and, to the extent necessary and practi-cabl,e, reconcile any descrepancies, and cambine such projections into a forecast of the peak demand and energy require,ents of the ccrnbined Authority-Central system for such twenty (20) year period. B. It shall be Authority's right and responsibility to develop a prelimi-nary generation expansion plan and to construct or otherwise acquire such new generating resources as may be required and provided for in such generation expansion plan; provided, however, that Central shall have the option to acquire
. an undivided ownership interest in each such future generating unit pursuant to Section C below.
Authority shall develop such generation expansion plan based upon the projections of the future power and energy requirements of the combined Authori-ty-Central system described above, and present such plan to Central, through the Planning Committtee, at a regular meeting of the Planning Committee not later than July 31 of such year. C. Suhject to the provisions herein, Authority hereby grants Central an option tn acquire an undivided ownershir interest in each future generating unit, other than at the Cross and Summer Stations, to be constructed by Authority during the term of this Agreement. Such undivided ownership interest shall not be less than fifteen percent (15%) nor shall it exceed the lesser of (i) forty-five percent (45%) or (ii) Central's contribution, expressed as a percent, to the Annual Territorial Peak Demand of the combined Authority-Central system, as such contribution is projected for the first full year following the Commer-cial Operating Date of such generating unit. Provided, however, that the aggregate sum of the Net Dependable Capacities and related Reserve Margins of the capacity resources of Central shall not exceed Central's contribution to the l Annual Territorial Peak Demand of the combined Authority-Central system as such contribution is projected for the third full year following the Commercial Op; rating Date of such generating unit. In the case of each such future generating unit, Authority shall give Central as much notice as practicable, but at least eighteen (18) months written notice of Authority's intent to issue the first contracts or to sell bonds, whichever is earlier, for the construction of such unit. Central shall notify Authority as to its intentions as soon as practicable and Central's option with r;spect thereto shall expire if not exercised in the manner hereinafter provided at least twelve (12) months prior to the projected date contained in the notice. Central's option with respect to such generating unit shall be exer-cised by written notice to Authority, and such acquisition shall be pursuant to an Operating and Ownership Agreement to be timely executed by the Parties which Agreement shall be substantially the same as the Cross Generating Station Agree-
Article IV. FUTURE GENERATING RESOURCES (cont'd)
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A ment, as such Cross Generating Station Agreement may be appropriately modified or amended with the mutual consent of the Parties taking into account any cir-cumstance or requirements specific to such generating unit. D. Central may construct or otherwise acquire and own additional genera-tion resources, other than those called for in Authority's preliminary genera-tion expansion plan, to serve all or a portion of Central's power and energy requirements; provided, that in case of each such resource, (i) Central has made all gf the arrangements necessary, in the opinion of the Planning Ccamittee, to have the output of such resource delivered to Authority's transmission systen; and (ii) Central has made all of the arrangements necessary, in the opinion of the Planning Committee, to have such resnurce dispatched by Authority pursuant to Article X hereof; and (iii) the connection of such resource will not, in the opinion of the Planning Committee, compromise the security or integrity of the Authority-Central system. Furthemore, Central shall give Authority timely notice of Central's intent to acquire such additional generating resources so as to allow Authority sufficient time to make such system modifications and reinforcements as may be necessary in order to receive the output of each such resource consistent with the provisions of this Article IV, Section D. No such resource shall be con-nected to the combined Authority-Central system until such necessary system modifications and reinforcements have been made; and, additionally, Authority may require Central to provide and install such system protection and control equipment as Authority deems appropriate, consistent with Good Utility Prac-tice, to protect the security and integrity of the combined Authority-Central system. E. In furtherance of the provisions of Article IV, Section D, a Non-Conventional resource of Central shall not be connected to the canbined Author-ity-Central transmission system without prior approval of such connection by the Planning Committee. Further, a non-conventional resource shall not be declared an Eligible Capacity Resource unless and until (i) the Planning Commit-tee designates it as such and (ii) the Parties are in agreenent with respect to the terms and conditions of such classification. For purposes of this Agree-l ment, a "Non-Conventional" resource shall be any generating resource which is ( not conventionally fueled (i.e., pulverized coal, oil, gas, hydro, nuclear fission) and/or which is not based upon existing and conventional technologies widely accepted within the electric utility industry at the time such resource is proposed. , F. For the purposes of the Provisions Relating To Resource Integration and Supplemental Power Sales attached hereto as Appendix A, a generating re-source of Central shall be an " Eligible Capacity Resource" if and only if (i) the power and energy of such resource is available to Central as of the effec-tive date of this Agreement pursuant to then existing agreements between the Parties including increases in the amounts thereunder; or (ii) such resource is jointly owned with Authority; or (iii) such resource has been proposed in writ-ing to Authority at least ten (10) years prior to the Commercial Operating Date thereof, provided that no such notice shall be given prior to the second anni-versary of the effective date of this Agreement; or (iv) if less than ten (10) 7 but more than five (5) years notice is given, Authority can, at the time such Ar.ticle IV. FUTURE GENERATING RESOURCES (cont'd)
^ notice is given, reschedule any planned generating resources of Authority which are not then under construction so as to accomodate such resource of Central without increasing or decreasing the planned Territorial Reserve Margins, ex-pressed as a percentage, by more than two percentage points (2%) in any year during the five-year period following the scheduled Commercial Operating Date of such resource proposed by Central, as such reserve margins are indicated on the Generation Expansion Plan in effect at the tinie the resource is proposed.
Provided, however, that such resource may be classified as an Eligible Capacity Resource if the Planning Committee detemines that the addition of such re-source, and its classification as an Eligible Capacity Resource, will have a beneficial effect upon the reliability of the combined system and the econon-ics of both Parties. For purposes of this paragraph, the tem "under construc-tion" shall mean tha: a contractural obligation has been entered into which if cancelled or delayed would require the paynent of cancellation or postponement costs; provided, however, if Central agrees to pay any such cancellation or postponement costs, such generating resource shall not be considered as "under construction" for purposes of this paragraph. G. Subject to the provisions herein, Central hereby grants Authority an option to acquire an undivided ownership interest in each future generating unit to be constructed by Central during the tem of this Agreement. Such undivided ownership interest shall not be less than fifteen percent (15%) nor exceed the lesser of (i) forty-five percent (45%) or (ii) Authority's contribution, ex-pressed as a percent, to the Annual Territorial Peak Demand of the combined Authority-Central system, as such contribution is projected for the first full year following the Commercial Operating Date as such tem is defined in the ownership agreement relating to such generating unit. Provided, however, that once the aggregate sum of Central's Net Dependable Capacities equals Central's contribution to the Annual Territorial Peak Demand of the combined Authority-System the aggregate sum of the Net Dependable Capacities and related Reserve l Margins of the Capacity Resources of Authority shall not exceed Authority's l contribution to the Annual Territorial Peak Demand of the combined Authority-Central rystem as such contribution is projected for the third full year fol-lowing the Commercial Operating Date of such generating unit. I i in the case of each future generating unit, Central shall give Author-l ity as much notice as practicable, but at least eighteen (18) months written notice of Central's intent to issue the first contracts or to obtain funds, l whichever is earlier, for the construction of such unit. Authority shall notify 1 Central as soon as practicable as to its intentions and Aathority's option with respect thereto shall expire if not exercised in the manner hereinafter provided l at least twelve (12) months prior to the projected date contained in the notice. Authority's option with respect to each such generating unit may be exercised by written notice to Central and such acquisition, if and when effec-l tuated, shall be pursuant to an operation and ownership agreement to be timely l executed by the Parties which shall be substantially the same as the Cross Generating Station Agreement, as such Cross Generating Station Agreement may be appropriately modified or amended with the mutual consent of the Parties. l H. Authority's preliminary generation expansion plan shall be modified I or adjusted appropriately by the Planning Committee to incorporate Central's
Article IV. FUTURE GENERATING RESOURCES (cont'd)
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Eligible Capacity Resources, and such modified generation expansion plan shall be adopted by the Planning Committee not later than January 1 of the following year as the official generation expansion plan of the Parties until the next such plan is adopted the following year.
- 1. Notwithstanding any other provision of this Agreement it is the intent of both Parties to preserve the all-requirements provision of the Contract Obli-gation. Accordingly, both Parties agree that prior to January 1,1985, Central shall not acquire or receive power and energy from any resource or resources other than those acquired by Central pursuant to such Contract Obligation.
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Article V. POWER AND ENERGY RATES AND REOUIREMENTS j
^ A. Subject to the provisions of Paragraph C of this Article V, beginning with the effective date of this Agreement or retroactive to April 1,1980, if the effective date of this Agreement is later than April 1,1980, and until January 1, 1985, pursuant and subject to the provisions of this Agreement and Appendix A and the Provisions Relating To Transmission Service attached hereto as Appendix B Authority hereby agrees to sell and Central hereby agrees to re-ceive and purchase all of Central's electrical power and energy requirements not purchased from others for delivery points in territories not served by Coopera-tives which were members of Central as of June 30, 1979, or purchased from cthers under arrangements in effect as to Central or any of its members as of June 30, 1979.
After January 1, 1985, pursuant and subject to the provisions of this Agreement and Appendices A and B, Authority hereby agrees to provide and sell and Central hereby agrees to receive and purchase all of Central's electrical power and energy requirements not (1) provided by Eligible Central Capacity Resources or (2) purchased from others for delivery points in territories not served by Cooperatives which were members of Central as of June 30, 1979 or (3) purchased from others under arrangements in effect as to Central or any of its members as of June 30, 1979. R. The rates and charges calculated by the methodology specified in Ap-pendices A and B are based upon a cost of service approach which the Parties agree shall be applicable to the wholesale, partial requirements, and any other sales of capacity, energy, and services between the Parties. It is recognized that different cost of service methodologies can be derived. The Parties also recognize that the agreed upon cost of service methodology may, from time to time, contribute to differences between rates to the Authority's retail custo-mers and to Central's members and/or retail customers of Central's members. C. Authority and Central shall use their best efforts to implement the procedures and place in effect any and all charges applicable under this Agree-ment and its Appendices. Until the date of implementation but no later than June 30, 1981, the subject services shall be provided at charges mutually agree-able to Authority and Central, with neither Party unreasonably or arbitrarily withholding Agreement, which charges shall be approximately equivalent to those which would have been applicable if the Agreement had been in effect. D. Reginning on or prior to October 1,1980, and on or prior to October 1 of each following year Authority shall present to Central for its review and comments a enpy of the rate study used to detemine (1) the fixed charges to become effective on the following July 1 and (2) an estimate of fixed charges to become effective on the second following July 1. The charges shall be based on Authority budgeted cost data as approved by the Authority's Board of Directors for the subject fiscal years covered by the rate study. Nn earlier than April 1 of each year Authority shall review the cost data used to detemine the fixed charges to become effective the following July 1 and adjust such fixed charges to reflect then current cost data. E. The Cost of Service rate study for the fixed charges for the fiscal
' year 1981 ending June 30, 1981, except as modified by Section C of this Article V, shall be based on the fiscal year 1981 budgets approved by the Authority's Board of Directors as of July 1, 1980.
Article V. POWER AND ENERGY RATES AND REQUIREMENTS (cont'd)
*** F. If power and energy is not available within combined Authority-Central System to serve a new industrial customer which desires to be served by Central or one of its members referenced in Article XIV Section B or to serve a member of Central not referenced in Article XIV Section B, Authority shall be obligated to use its reasonable best efforts to obtain such power and energy from outside the System. If Authority fails to obtain and purchase such power and energy, Central may obtain such power and energy and Authority shall coordinate the transmission and delivery of such Central obtained power and energy until such time.as the power and energy is available within the system. In either case, Central shall be nbligated to pay any and all costs associated with the purchase and delivery of any and all power and energy so obtained from outside the com-bined Authnrity-Central System.
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Article VI. TRANSMISSION SERVICE AND DELIVERIES
^ Pursuant and subject to the provisions of this Agreement and Appendix R, Authority hereby agrees to provide transmission service to Central's Delivery Points, or to those of Central's Members, for capacity and energy purchased fran Authority and from Central Capacity Resources. -
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Ar'ticle VII. TRANSMISSION SYSTEM COORDINATION A. Authority will continue to own, operate, maintain, or alter all trans-mission line rights-of-way and all existing and future transmission line and substation facilities on the rights-of-way included in the A-B through L Leases. B. Rased nn (1) Central's Delivery Point requirements pursuant to Article VIII herein, and (2) on Central's notice of Central's intent to construct and own future generating facilities pursuant to Article IV herein, and (3) on the Parties respective transnission system requirements as presented to the Planning Commtttee, and (4) on other factors deemed appropriate by Authority, Authority shall annually prepare a transmission expansion and improvement plan for the combined Authority-Central system. Such plan shall result frm studies of the combined system of Authority and Central considering requirements for adequate-ly supplying the total present and anticipated future transmission requirements of the Parties and to maintain the integrity of such cambined system. Such plan shall be submitted to Central through the Planning Committee and, subject to the provisions of this Agreement, Authority shall give good faith consideration to the comments of Central regarding such plan. C. Through the Planning Committee, Authority and Central shall attempt to coordinate future transmission facility planning and avoid, to the extent pos-sible, the duplication of such future facilities. D. Subject to the provisions of this Agreement, the Planning Committee shall, pursuant to the provisions of Sectirin F of this Article, detennine the ownership and resultant ownership responsibilities of any proposed transmission facilities making an initial appearance on the transmission expansion and improvement plan. E. Ownership of future transmission facilities (1) not specifically identified as tn ownership in Section F of this Article VII or (2) not specifi-cally identified as Rulk Power pursuant to the definition of Bulk Power in the Definition ser. tion of this Coordination Agreement or (3) in bona fide dispute as to the categnry of ownership to which the subject facility should be assigned
- are to be apportioned as to ownership by the Planning Committee to Authority and l Central with a sixty (60) percent ownership accruing tJ Authority and a forty l (40) percent ownership accruing to Central .
The percentage of ownership shall be based on (1) line miles of each separate voltage level for line facilities and (2) non-depreciated construction cost in dollars, as entered on the respective Party's plant records, for each I substation of each separate voltage level. Running totals of the percentage of ownership of each Party of the transmission facilities specificially referenced as those facilities to be assigned pursuant to this Section E of Article VII shall be maintained by the P1anning Committee. Estimated miles of transmission line and substation construction costs are to be used during the planning and construction stages of any particular transmission facility. As soon as actual data is entered upon the plant records i of either Party the Planning Committee shall be infomed by the subject Party of
Article VII. TRANSMISSION SYSTEM COORDINATION (cont'd) A the actual data, which actual data shall then replace the estimated data on the running total list maintained by the Planning Committee. Assignments shall be by divided ownership so that separate and dis-tinct line, line segments, and entire substations and transmission structures shall be indentifiable as to ownership. Assignments of ownership by the Planning Committee shall be made in such,a manner that the apportioned ownership ratio set forth above shall be maintained as close as practicable. F. The responsibility for ownership, design, construction, operation, maintenance, alteration, and any other related matter involving the existing and future transmission facilities and related rights-of-way, regardless of voltage level, on or for the combined Authority-Central transmission system shall be as follows:
- 1. Central:
- a. Facilities owned by Central which are in service as of January 1,1980, (including the M Loan Facilities) and are not leased to Authority.
- b. Facilities, excluding bulk power facilities, in the plan-ning, design, or construction stage which have been (i) presented to the Authority-Central Engineering Committee prior to January 1,1980, as f acilities tn be owned by Cen-tral or (ii) budgeted by Central as of January 1,1979.
- c. Future radial facilities to serve only Central or members of Central .
- d. Future Delivery Points to serve only Central or members of Ce ntral .
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- e. Rulk power facilities connecting a generating station owned or partially owned by Central in which Authority does not have at least a fifteen (15) percent ownership interest provided however no such line shall extend past a point of contact or a point of crossing of any transmission line of the same voltage owned or leased by Authority,
- f. Forty (40) percent of those future transmission facilities referenced in Section E of this Article VII. Facilities referenced in a, b, c, d and e immediately above are speci-fically excluded from the apportioment. The forty (40) j percent is to be measured as follows:
l l (i) With respect to line facilities by line miles of each voltage level. . (ii) With respect to substation facilities by dollars of l l l t
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, Articlo VII. TRANSMISSION SYSTEM COORDINATION (cont'd) !
substation construction costs, as entered on Central plant record books, at each voltage level. Voltage level is that voltage at the high side of the trans-1 fomation if transfomation is made at the substation.
- 2. Authori ty:
- a. Facilities owned by or leased to Authority.
- b. Facilities (i) covered by approved government leases or (ii) in the planning, design, or construction stage which have been presented to the Authority-Central Engineering Commit-tee prior to January 1,1980, as f acilities to be owned by Authority or (iii) budgeted by Authority as of July 1,1979.
- c. Future radial facilities to serve only Authority customers.
- d. Future Delivery Points to serve any Authority customer.
- e. All Bulk Power facilities as specifically defined in the Definition Section of this Coordination Agreement except as excluded in Section F.1.e. of this Article VII.
- f. Sixty (60) percent of those future transmission facilities referenced in Section E of this Article VII. Facilities specifically referenced in a, b, c, d, and e immediately abnve are specifically excluded from the apportioment. The sixty (60) percent is to be measured as follows:
(i) With respect to line facilities by line miles of each voltage level. (ii) With respect to substation facilities by dollars of substation construction costs, as entered on Authority plant record books, at each voltage level. Voltage level is that voltage at the high side of the trans-famation if transfomation is made at the substation. G. Upon timely written request of Central, Authority shall operate and maintain any Central-owned transmission lines subject to and in accordance with the Provisions Relating To " Transmission Operation and Maintenance" attached hereto as Appendix C. H. All transmission facilities constructed or altered by the Parties shall be constructed, altered, operated and maintained in accordance with Good Utility Practice and so as to be compatible with the then existing transmission systems. ARTICLE VI!!. DELIVERY POINTS A. Central may connect any new Central Member Delivery Point to the transmission system if the Planning Committee determines such connection will not be detrimental to the system. B. The Planning Committee shall be provided any data regarding the pro-posed Delivery Point which it deems necessary or relevant. C. If the Planning Committee determines that a proposed connection will be datrimental to the system, Authority or Central, as the case may be, shall make its best efforts to reinforce the system so that the subject connection can be made. D. A Central Delivery Point may be terminated by either Party upon timely written notice to the other Paaty. If Authority is the initiator of the termi-nation, for any reason other than voltage conversion of a transmission line, Authority shall be responsible for paying any loss incurred by Central or its Members due to early retirement of facilities associated with such Delivery Point or Central may purchase such transmission facilities from Authority at replacement-cost-new less depreciation on a straight line basis, provided, however, if such transmission facilities are leased from Central, Central shall be entitled to take over such facilities pursuant to the recapture provisions of the applicable lease. If Central or one of Central's Members is the initiator of the termination, Central shall be responsible for paying any loss incurred by Authority due to early retirement of facilities associated with such Delivery Point. e
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Article IX. ELECTRICAL CHARACTERISTICS t O A. All power and energy to be furnished hereunder by either Party to the other shall be alternating current, three-phase, approximately 60 Hertz, unre-gulated and at a nominal standard voltage generally available in the crea in which service is provided. B. Central and Authority shall at all times take and use power and energy in such manner that the load at each point of delivery shall not be unbalanced between phases by more than ten percent. If the load is unbalanced by more than ten percent, the Party responsible for the unbalance may be required by the other Party to make the necessary changes to correct such unbalance within a reasonable time. In addition, Central shall be subject to any and all charges and penalties related thereto contained in other Agreements between the Parties. C. Power shall be used by Authority and Central in such manner as will not cause objectionable voltage fluctuations or other electrical disturbances to the generation, transmission, or distribution systems. If such fluctuations or disturbances are detencined by the Operating Committee to be objectionable, the abused Party may require the abusing Party, at its sole expense, to install corrective equipment which will reasonably limit such fluctuathns or distur-bances. If the abusing Party fails to install corrective equipment within a reasonable period of time, the abused Party may install such equipment and bill the abusing Party for the installed cost thereof. D. Both Parties shall maintain a power factor of as near unity as practi-cable. -If at any time the power factor is found by the Operating Committee to cause adverse effects on the system the Party or Parties causing the problem shall promptly cause it to be corrected. l l l l
, Article X. DISPATCHING AND OPERATION OF CAPACITY RESOURCES AND TRANSMISSION SYSTEM A. OPERATION AND MAINTENANCE Each Party shall, to the fullest extent practicable, cause all trans-mission facilities owned or controlled by it, and all generating facilities in which it has an ownership interest, to be designed, constructed, maintained, and operated in accordance with Good Utility Practice and in accordance with stand-ards, methods, and/or procedures established by the Planning and Operating Committees.
Upon timely written request of Central, Authority shall operate and maintain any Central-owned transmission lines subject to and in accordance with the provisions of the " Transmission System Operation and Maintenance Agreemer.t" between the Parties, which ,uch agreenent is attached hereto as Appendix C. R. CENTRALIZED DISPATCH Each Party shall subject all present and future transmission f acili-ties owned or controlled by it, and all present and future generating facilities in which it has an ownership interest, to centralized disp'atch by Authority. C. MAINTENANCE AND REPAIRS Each Party shall, to the fullest extent practicable: (a) cause trans-mission facilities owned or controlled by it, and generating facilities in which it has an ownership interest, to be withdrawn from operation for mainten-ance and repair only in accordance with maintenance schedules established or approved by the Operating Committee fran tinc to time; (b) restore such facili-ties to good operating condition with reasonable pronptness; and (c) in emer-gency situations, accelerate maintenance and repair at the reasonable request of the Operating Committee. D. OBJECTIVES OF CENTRALIZED DISPATCH The day-to-day scheduling and coordination by Authority of the opera-tion of transmission facilities which are owned or controlled by the Parties, l and of generating units in which the Parties have ownership interests, shall be designed to achieve the following objectives: (a) The reliability of the combined Authority-Central system shall at all times be reasonably assured, and properly distributed spin-ning and ready reserves shall'he provided; and (b) The combined energy requirements of the Parties shall be satis-l fled at the lowest practicable cost. E. TRANSACTIONS WITH OTHERS i in furtherance of the above stated objectives, Authority shall be Central's sole agent for entering into energy transactions with other utility l systems. Accordi; _ly, purchases of energy from others to serve the requirements p of the combined Authority-Central system shall be made by Authority, and payment by Central for any use of such energy shall be pursuant to Appendix A. Further-l l 1
Article 7. DISPATCHING AND OPERATION OF CAPACITY RESOURCES AND TRANSMISSION P SYSTEM (cont'd) more, any sales of energy to others from an; esources cf Authority or Central shall be made by Authority without regard to ownership so as not to make an adverse distinction between the Parties. When sucn a sale of energy from a Central-owned resource is made, Authority shall enter into such transaction on behalf of Central, and such transaction shall be made persuant to the then existing agreement between Authority and the purchaser of such energy, provided that.the tems of such transaction shall be so as to fairly compensate Central for the costs of generating such energy. In such event Authority shall be responsible for collecting any payment from the purchaser thereof, and each Monthly Rilling Statement for services proviued Central by Authority pursuant to Appendix A shall reflect credits to Central for such payments received by Authori ty. F. PAYMENT FOR DISPATCH-RELATED SERVICES Central shall reimburse Authority for all costs incurred by Authority related to the dispatch and control of Central's transmission and generating facilities and all costs incurred by Authority associated with additional re-cord-keeping, accounting, and reporting occasioned by this Agreement. Such costs shall be detemined in the following manner.
- 1. System Control and Load Dispatching Central shall be responsible for a portion of the costs incurred by Authority which are chargeable as Operating Expenses to Account 556 - System Control and Load Dispatching, of the tiniforr. System of Accounts. Such portion is to be detemined in the following manner.
l The total costs chargeable to Account 556 shall be allocated to each generating resource owned individually or jointly by the Parties in the ratio that the total hours of operation of such resource bear to the aggregate sum of the total hours of operation of all generating resources of the Parties. Central shall be responsible for (i) one hundred parcent (100".) # the costs so allo-cated to each generating resource in which Authority has no i nterest and (ii) Central's ownership share, relative to the total of Authority's and Central's l ownership shares in such resource, of the costs so allocated to each generating j resource in which both Central and Authority have an ownership interest. 1 Authority shall prepare and render to Central a hill for such Systen Contral and Load Dispatching Costs incurred each month as snon as practicable, and Cei .ral shall make payment thereof in accordance with Article XI herein. l 2. Other Costs Central shall be further responsible for an appropriately allocated share nf all other costs incurred by Authority from time to time in dispatching transmission facilities and generating units of Central, including a facili-ties charge to cover the capital costs of any equipment acquired by Authority in connection therewith. Article X. DISPATCHING AND OPERATION OF CAPACITY RESOURCES AND TRANSMISSION eas SYSTEM (cont'd) Any dispatch related capital improvement costing in excess of fifty thousand dollars ($50,000), the cost of which is to be directly allocated to Central, shall be submitted to the appropriate subcanmittee for review and analysis prior to purchase thereof. Reginning in the calendar year in which this Agreement becomes effective, the $50,000 threshold shall be increased or decreased in relation to the annual National Consumer Price Index (or successor index) published by the Rureau of Labor Statistics of the linited States Dmor t-ment of Labor or its successor Agency. Authority shall bill Central for Central's share of such costs as such costs are incurred, and Central's payment therefor shall be in accordance with Article X11 herein. 8
Article XI. METERING A. Power and energy deliveries to Central shall be metered at the point s of delivery from Authority's transmission system to the transmission or distri-bution systems of Central or Central's Members. If, in the case of particular delivery points, it is impractical in Authority's opinion to meter such deliver-ies at the point or points of actual delivery, Authority may meter such deliv-eries at another point or points and such resulting readings shall be appropri-ately adjusted to compensate for losses between the point or points of actual metering and the point or points of actual delivery. R Authority shall install, operate, maintain, and read the meters at each delivery point which Authority detennines is necessary to properly meter deliveries tn Central. Central shall supply without cost to Authority a suitable place for installing Authority's metering equipment. Central may at its own cost install, operate, maintain, and read additional metering equipment to check that of Authority. C. Authority shall test meters at least once every two years. D. If any meter used for billing fails to register or is found to be inaccurate, an appropriate billing, based on the best information available, shall be agreed upon by the parties hereto. Any meter tested and found to be not more than two percent (2%) above or below normal shall be considered accu-rate insof ar as correction of billings is concerned. If as a result of any test, a meter is found to register in excess of two percent (2%) either above or below normal, then the reading of such meter previously taken for billing purposes shall be corrected for the period during which it is established the meter was inaccurate. If such period of inaccuracy cannot be agreed upon by the Parties, no correction'shall be made .for any period extending more than ninety (90) days prior to the day on which an inaccuracy is discovered. F. In addition to such tests as are deemed necessary by Authority, Authority shall have any meter of the Authority tested upon written request of Central, and if such meter proves accurate within two percent (2%) above or below normal, the expense of the test shall be born by Central. F. Authority's meters shall be read as nearly as practicable at regular intervals of not less than twenty-eight (28) days or not more than thirty-two (32) days, so as to pennit the rendering of twelve monthly bills during each contract year.
-2i-
, Article Xfl. BILLING AND PAYMENT d"'
A. Authority shall bill Central for services rendered under this Agree-ment and its Appendices and Central shall pay such bill to the Authority, at the office of Authority in Moncks Corner, South Carolina, or some other location in South Carolina as stipulated by Authority, within ten (10) days after the date the bill is mailed or otherwise rendered. B. Service periods of 28 to 32 days will normally be billed on a regular monthly basis without proration. For irregular billing periods or billing periods determined by special meter readings, monthly capacity or demand charges will be prorated on a 30-day basis based on tne actual number of days between meter readings. C. When all or part of any hill shall renain unpaid ten (10) days after such bill is rendered, interest at the rate of Morgan Guaranty Trust Conpany Prime Ra'.e plus three (3) percent per annum on the unpaid balance shall be added to the bill thereafter, and, in addition to all other remedies available to it, Authority may discontinue service hereunder upon twenty (20) days' written notice. To avoid such discontinuance of service, Central shall, within such twenty (20) day period, pay such unpaid amounts, plus interest, and, at Authori-ty's request, deposit with Authority as collateral security for payment of future bills for service such sum as may be requested by Authority, not to exceed twice the highest monthly bill of Central during the preceding calendar year. D. Authority may discontinue all service after twenty (20) days' written notice whenever Central has violated any provision of this Agreement so as to constitute a substantial breach hereof, except that notice need not be given where discontinuance of service at any delivery point is necessary due to Cen-tral's failure to operate in a safe manner consistent with sound engineering or operating principles. To avoid such discontinuance of service, Central shall, immediately upon notice, cease such unsafe practice or remedy such violation. E. Where all service is discontinued for cause constituting substantial breach as discussed above, Authority may tenninate this Agreement upon giving Central thirty (30) days written notice. Resumption of service following any l such termination shall be conditioned upon payment by Central of collateral security, as provided above. Upon such termination, Central shall pay Authority, in addition to any unpaid charges for service, such other damages as may be provided by law. i o
' Article XIll. ARBITRATION A. Any controversy, claim, counterclaim, defense, dispute, difference or misunderstanding arising under or relating to any provision of this Agreement or its interpretation, perfomance or breach, which cannot be resolved by the Executive Committee shall be settled by an Arbitral Tribunal as hereinafter provided, with the exception, however of issues relating to provisions of this Agreement which are specifically exemp,ted from arbitration.
Except upon the prior written mutual agreement of the Parties, dis-putes arising under or relating to a provision of any joint ownership agreement between the Parties shall be exempt fron Arbitration hereunder. Either Party shall have the right to proceed with natters which have been disapproved by the other Party and which are the subject of arbitration; provided, however, that if a Party proceeds with such a disapproved matter and if the detemination made by the Arbitral Tribunal on such matter is inconsist-ent with that Party's action (or lack of action) thereon, such Party shall, upon such detemination by the Arbitral Tribunal, be subject to suitable financial j udgnent . Such financial judgment shall be determined by the Arbitral Tribunal . Notwithstanding other provisions of this Agreement whenever a matter has been referred to the Arbitral Tribunal and the Party v .ving responsibility for construction or operation, as the case may be, detemines that the other position or positions would create an immediate danger to the safe operation of the System or necessary to obtain the approval of or to comply with requirements of governmental agencies having jurisdiction, such Party may proceed in accord-ance with its position with respect to such matter until it has been resolved by the Arbitral Tribunal . If the Arbitral Tribunal recommends a course of action which such Party detemines would create a danger to the safety of the combined system of Authority and Central or would violate regulatory requirements of any governmental agency having jurisdiction, it may nevertheless proceed in accord-ance with its position subject to a suitable financial adjustment. Such finan-cial judgment shall be detemined by the Arbitral Tribunal. R. Either party may initiate arbitration by giving the other party writ-ten notice stating the question or questions to be arbitrated, the amount in dispute, if any, and the remedy or renedies sought. C. The Arbitral Tribunal shall be composed of three arbitrators each of whom shall be experienced in the econonics and rate structure of the electric utility industry and power system planning and engineering and who shall be appointed in the following manner:
- 1. The Party initiating the arbitration shall nane one arbitrator in the notice referred to in Paragraph B above.
- 2. Within twenty-one (21) calendar days af ter receipt of such notice, the second Party shall give the initiating Party written notice naming a second arbitrator and specifying any additional ques-tions to be arbitrated, the amount involved, if any, and the p remedy or renedies sought.
l
, Article XIII. ARRITRATION (cont'd) ^
- 3. The two arbitrators so appointed shall choose the third arbitra-tor. If the second Party fails to appoint its arbitrator within twenty-one (21) calendar days after receipt of written notice of the appointment by the initiating party of its arbitrator, or if the first two arbitrators fail to appoint the third arbitrator I within thirty (30) calendar days after the appointment of the I second arbitrator, the appointments which have not been made as contemplated above shall, on the written request of either Party,
. be made by the Chief Judge of the linited States District Court fnr the District of South Carolina or, failing appointnent by him, by the Chief Judge of the Fourth United States Judicial Circuit. The third arbitrator shall not be connected with either of the Parties. The third arbitrator shall be the chaiman.
D. Each of the arbitrators shall take such oath, if any, as may be re-quired under the laws of South Carolina. E. Any arbitration hereunder shall be held at a location in the United States to be selected by the Chaiman of the Arbitral Tribunal. F. The Arbitral Tribunal shall convene at such time as shall be fixed by the Chaiman. Thereaf ter, the Arbitral Tribunal shall detemine when it shall sit. G. Subject to the provisions of this Article and except as the Parties shall otherwise agree, the Arbitral Tribunal shall decide all questions relating to its competence and shall detemine its procedure. All decisions of the Arbitral Tribunal shall be by majority vote. H. The Arbitral Tribunal shall afford to both parties a fair hearing and shall render its award in writing within forty-five (45) calendar days af ter the date on which it shall declare the hearings to be closed. The award may be rendered by def aul t. An award signed by a majority of the Arbitral Tribunal may grant in its award any remedy or relief which it deems just and equitable and within the scope of this Agreement, including, but not limited to, specific perfomance. A signed counterpart of the award shall be transraitted to each Party. Any such award rendered in accordance with the provisions of this Article shall be final and binding upon the Parties, and each Party shall abide by and comply with any such award. I. Each Party shall pay the remuneration and expenses of the arbitrator i it selects. The remuneration and expenses of the Chaiman of the Arbitral l Tribunal and any persons, other than the arbitrator selected by each party, as may be required for the conduct of the arbitration proceeding (" third persons") shall be shared equally by the Parties. The Arbitral Tribunal shall fix the amount of the remuneration of the Chaiman of the Arbitral Tribunal and any third persons. Each of the Parties shall defray its own expenses in connection l with the arbitration proceedings. Any question concerning the division of the costs of the Chaiman of the Arbitral Tribunal and any third persor.s or the procedure for payment of such costs shall be detemined by the Arbitral Tribunal . Y
Article XIll. ARBITRATION (cont'd) "N J. The provisions for arbitration set forth in this Article shall be in lieu of any other procedure for the determination of the controversies and claims between the Parties referred to in Paragraph A of this Article. K. If any arbitrator appointed in accordance with this Article shall resign, die or become unable to act, a successor arbitrator shall be promptly appointed in the same manner as herein described for the appointment of the original arbitrator. Unless the Parties shall agree otherwise, the arbitral procqedings shall be resumed at the point at which they were interrupted by such death, resignation or inability; provided, however, that if the Chairman of the Arbitral Tribunal shall resign, die or become unable to act, any hearings held previously shall be repeated. L. Either Party may be represented by counsel. A Party intending to be 50 represented shall notify the other Party and the Arbitral Tribunal of the name and address of its counsel at least three (3) calendar days prior to the date set for.the hearing at which counsel is first to appear. When an arbitra-tion is initiated by counsel, or where counsel replies for the other Party, such notice is deemed to have been given. it. The Arbitral Tribunal shall make the necessary arrangements for the taking of a stenographic record whenever such record is requested by a Party. The cost of such stenographic record and all transcripts thereof, shall be pro-rated between the Parties ordering copies unless they shall otherwise agree. N. The Parties may of fer such evidence as they desire and shall produce such additional evidence as the Arbitral Tribunal may deen necessary to an understanding and determination of the dispute. The Arbitral Tribunal may, if it considers it appropriate, require a Party to deliver to each of the arbitra-tors and to the other Party, within such a period of time as the Arbitral Tribu-nal shall decide, a summary of the documents and other evidence which that Party intends to present in support of the facts set out in its statement of claim or statement of defense. When the Arbitral Tribunal is authorized by law to sub-poena witnesses or documents, it may do so upon its own initiative or upon the request of any Party. The Arbitral Tribunal shall be the judge of the rele-vancy and materiality of the evidence of fered, and confannity to legal rules of evidence shall not be necessary. All evidence shall be taken in the presence of all the arbitrators and of both Parties except where either of the Parties is absent after due notice, or is in default or has waived its right to 'oe present. O. The Arbitral Tribunal may issue sech orders as it may dena necessary to safeonard any property which is the subject matter of the arbitration without prejudice to the rights of the Parties or the final detennination of the dispute. P. Any communication by either party to the Chainnan of the Arbitral Tribunal shall be in writing and copies shall concurrently be sent by the Party to the other arbitrators and to the other Party. Q. If the Parties settle their dispute during the course of the arbitra-tion, the Arbitral Tribunal, upn- the Parties' request, may set forth the terms 7 of the agrced settlement in an estri. Article XIll. ARBITRATION (cont'd)
- R. No judicial proceedings brought by a Party in relation to the subject matter of the arbitration shall be deemed a waiver of that Party's right to arbitrate.
S. Either Party may cause judgment to be entered upon, or institute a proceeding to enforce, the award of the Arbitral Tribunal in any court of com-petent jurisdiction, and may enforce such judgment by execution and may pursue any other appropriate remedy against such other Party for the enforcement of the award. T. Any arbitration under this Article shall be governed by the statutory arbitration law of South Carolina of general application in effect at th.e time of arbitrat ion. If and to the extent that any provision of this Article is invalid under such statutory arbitration law, such provision shall be of no effect without, however, invalidating any other provisions hereof. 11 . This Article shall survive the temination of this Agreement. V. Notwithstandinq any other provision contained herein to the contrary, no dispute shall be arbitrable hereunder unless:
- 1. the amount of any individual item in dispute has an annual value to the Party initiating the arbitration of at least $100,000 or
- 2. the items in dispute at any one time have an aggregate annual value to the Party initiating the arbitration of at least $100,000.
Reginning in the calendar year in which the Agreement becomes effec-tive, the $100,000 threshold for arbitration shall be increased or decreased in relation to the annual National Consumer Price Index (or successor index) published by the Rureau of Labor Statistics of the United States Department of Labor or its successor Agency. U. The Parties expressly agree that this Article XIII shall constitute a condition precedent to the institution of any proceeding in any court relating to the subject matter. X. In matters not provided for herein, the rules of the American Arbitra-tion Association shall apply. Y. Trial De Novo When the prevailing Party to an arbitration applies to the court for enforcement of the arbitration award and the court detennines that one or more of the following elements is present in such award, the non-prevailing Party shall have the right to a trial de novo in a court of competent jurisdiction: (1) such award for any one proceeding exceeds five million dollars ($5,000,000) against the non-prevailing Party; or (2) where an award requires the perfomance by the non-prevailing Party of any act which (a) is not lawful, (b) is contrary to the provisions of the non-prevailing Party's security instruments, (c) vio-lates the conditions of any governmental or regulatory approval required herein g or jeopardizes the obtaininc, retaining, transferring or amending such govern-mental or regulatory approvals, or (d) has the effect of creating an Event of Default for the non-prevailing Party under the terms of this Agreement.
)
Article XIV. MISCELLANEOUS A. EFFECTIVE DATE AND TERM This Agreement shall become effective on or after April 1,1980, upon approval by the Administrator of REA; provided, however, that if such approval by the Administrator of REA is not forthcoming by December 31, 1980, either Party may, at its option, declare this Agreement and its execution thereof, null and void.
.This Agreement shall remain in force and effect for an Initial Tem of fifty (50) years from the effective date set forth hereinabove. Thereafter, this Agreement shall be automatically renewed for consecutive subsequent tems of fif teen (15) years, but may be tenninated at the end of the Initial Term or any Subsequent Tem by either of the Parties hereto by such Party providing written notice of such temination to the other Party at least ten years prior to the expiration of such Initial Tem or Subsequent Tem.
B. CENTRAL'S MEMBERS For the purposes of this Agreement and its Appendices, Central shall be deemed only to have those Members or their successors or new members in its existing territory which it had at the execution hereof, to wit: Aiken Electric Cooperative, Inc. Berkeley Electric Cooperative, Inc. Black River Electric Cooperative, Inc. Coastal Electric Cooperative, Inc. Edisto Electric Cooperative, Inc. Fairfield Electric Cooperative, Inc. Horry Electric Cooperative, Inc. Lynches River Electric Cooperative, Inc. Marlboro Electric Cooperative, Inc. Mid-Carolina Electric Cooperative, Inc. Newberry Electric Cooperative, Inc. Palmetto Electric Cooperative, Inc. Pee Dee Electric Cooperative, Inc. Santee Electric Cooperative, Inc. Tri-County Electric Cooperative, Inc. Further, such Members shall be deemed to serve only those territories presently assigned to them by the South Carolina Public Service Commission and any territory that is presently unassigned and which is subsequently so assigned to them by the South Carolina Public Service Commission. No obligation of Authority hereunder shall extend to any future members of Central. . C. INTERRUPTIONS TO SERVICE With respect to any services provided hereunder, Authority and Central will make reasonable provisions to insure satisfactory and continuous service but do g not guarantee a continuous supply of electrical energy and shall not be liable for damage occasioned by interruptions to service or failure to commence deliv-Article XIV. MISCELLANE0US (cont'd) r ery caused by an act of God, or the public enemy, or for any cause reasonably beyond its control, including but not limited to the failure or breakdown of generating or transmitting facilities, flood, fire, strike, or action or order of any agency having jurisdiction in the premises, or for interruption (when the other Party has been given reasonable notice) necessary for inspection, repair or changes in the generating equipment or transmission and distribution system of Authority or Central .
*D. FORCF MAJEURE In addition to the specific provisions of paragraph C above, neither Party shall be liable fnr breach of contract with respect to any obligation under this Agreement nr any of its Appendices if prevented from perfoming such obligation by any cause beyond its reasonable control, including, but not limited to act of God or the public enemy, failure or breakdown of generating or transmitting, flood, fire, strike or action or order of any agency having' jurisdiction in the premises.
E. SUCCESSORS AND ASSIGNS This Agreement shall apply to and be binding upon the successors and as-signs of the Parties hereto as fully as if the words " successors and assigns" were written herein wherever reference to Central or Authority occurs in this Agreement. This Agreement shall not be assigned by either Party without the written consent of the other, except that it may be assigned, without the con-sent nf Authority, by Central to the United States, represented by the Adminis-tratnr nf Rf A or any successor agency as additional security under any mortgage securing any REA loan and to any purchaser of the systen or any part thereof under foreclosure of said mortage in the event of default by Central there-under. F. SELLING OR LEASING OF AUTHORITY SYSTEM If during the life of this Agreement the Authority's System shall be sold or leased to another entity, Central shall have the right, with the approval of the Administrator of REA, to teminate any existing REA leases. In such event, Central shall pay to the Authority the excess, if any, of Net Book Value of such system or part thereof over the principal remaining to be paid thereon. If, however, the Net Book Value shall be less than the principal remaining to be paid on the loan or loanr. the Authority shall pay the difference to Central.
" Net Book Value" shall mean original cost, including capitalized replacements, less book depreciation. Notice of election to exercise said option shall be given by Central to the Authority or its lessee or purchaser within six (6) months after written notice has been received by Central of the happening of the event giving rise to the option.
G. SELLING OR LEASING OF EITHER PARTY'S SYSTEM If during the Life of this Agreement either Party's System shall beco,e available for sale or lease to another entity, the other Party shall have first (
Article XIV. MISCELLANE0US (cont'd)
/** refusal rights to the purchase or lease of such System to the extent permitted by law.
H. RIGHTS OF WAY Central agrees to convey to Authority for the term of this Agreement and without charge, all easements and other rights of way reasonably necessary for the construction, operation, maintenance, replacement, and removal of facilities upon, across or within Central's property for purposes of providing service under this Agreement, provided, however, that upon the termination of this Agreement, any such easements and rights of way shall automatically reiert to Central. The location of such easements and rights of way shall be mutually agreed upon by the Parties through the 'oint Conmittees. I. ENTRY OF PREMISES Either Party shall have the right to enter the prenises of the other Party to read, maintain, install, remove, inspect, test and alter the entering Parties meters, poles, conductors, appurtenances and other equipment located thereon. J. 0WNERSHIP OF FACILITIES AND RIGHT OF REMOVAL Except as otherwise may be provided in this Agreement or other agreements between the Parties, any and all equipment installed by either Party on the premises of the other Party shall be and renain the property of the Party owning and installing such equipment, regardless of the manner of attachment to the real property of the other Party. Upon tennination of this Agreement, the owner of the equipaent shall have the right to enter the prenises of the other Party and shall, within a reasonable time and in a reasonable manner, and with all due diligence, remove such equipment at the owner's sole cost and expense, repair any damage to the other Party's property caused by such removal, and restore the prenises to the condition in which they existed before such equip-ment was installed. K. INDEMNIFICATION Each Party assumes all responsibility on its side of a delivery point for ! the service supplied or taken as well as for the electrical installation, appli-ances and appartus used in connection therewith. Neither Party shall be respon-I sible to the other for the transmission or control of electrical energy beyond the respective Party's side of the delivery point. Each Party shall and hereby does indemnify and hold the other Party and its officers and employees free and harmless fran any and all legal and other expenses, suits, claims, damages, costs, fines, penalties, liohilities or other obligations af what:oever kind, including but not limited to damage or destruction of property and injury or death of persons, resulting from or connected with the indemnifying Party's performance under this Agreement, including but not limited to the operation, maintenance or defective condition of such Party's equipnent, or any act or omission of such Party's employees. agents or contractors, regardless of whether such act or omission occurred on the other Party's prenises; provided, however, l , f., that nothing in this Article XIV or elsewhere in this Agreement shall make any Party hereto liable for consequential damages or loss of profits. I l
i
. I Article XIV. MISCELLANE0US (cont'd) ^ L. INTERPRETATION AND CAPTIONS l
- 1. If any provision of this Coordination Agreement or any of its Appendices is in conflict with any provision of any prior dated agreement, the provisions of this Coordination Agreement shall prevail .
- 2. The captions of Articles and Sections of this Coordination Agree-ment and its Appendices are for convenience only and shall be ignored in construing or interpreting the provisions of this Coordination Agreement.
M. Audit
- 1. Notwithstanding any other provision contained herein to the contrary and in addition to any other rights Central may have under this Coordination Agreement, Central shall have the right at any time, but no more often than annually, to audit Authori-ty's books at Central's expense.
- 2. Notwithstanding any other provision contained herein to the contrary and in addition to any other rights Authority may have under this Coordination Agreement, Authority shall have the right at any time, but no more often than annually, to audit Central's books at Authority's expense.
N. COUNTERPARTS This Coordination Agreement may be executed in any number of original counterparts. All such counterparts shall constitute but one and the same Coordination Agreement.
- 0. - SEVERABILITY
! If any provision of this Coordination Agreement is held invalid or unen-l forceable by any governmental authority or court having jurisdiction over the subject matter hereof, the remaining provisions shall remain in full force and effect according to their terms and the Parties shall renegotiate in good faith any provision held invalid or unenforceable in order to reach agreement as to replacement of or modification to such provision. - P. GOVERNING LAW l The provisions of this Coordination Agreement shall be construed and governed in accordance with the laws of the State of South Carolina. This Coordination Agreement and its Appendices attached hereto may be changed as required to:
- 1. Remove any grossly unfair or unjust burden imposed on either Party or its customers by operation c' any part of this Coordin-
,, ation Agreement.
O
, Article XIV. MISCELLANEOUS (cont'd)
^ 2. Comply with rulings of any governmental authority or court having jurisdiction over the subject matter hereof.
- 3. Correct any inequities due to inadvertent errors or omissions in this Coordination Agreement.
Q. NOTICES
.Any notice or communication required or pemited hereunder shall be effec-tive when personally delivered or when addressed:
If to Central: Central Electric Power Cooperative, Inc. Post Office Box 1455 Columbia, SC 29202 If to Authority: South Carolina Public Service Authority 223 North Live Oak Drive Moncks Corner, SC 29461 and deposited, postage prepaid, certified or registered, in the United States mail. Any such notice so given shall be deemed to have been given on the date of such deposit of such notice in the United States mail as evidenced by the postmark on the envelope. Either Party by notice to the other given as afore-said may change its mailing address for future notices hereunder. IN WITNESS WHEREOF, the Authority, pursuant to a resolution duly adopted by its Board of Directors, has caused this Coordination Agreement to be executed by its President and its seal to be affixed by its Secretary, and Central, pursuant to a resolution duly adopted by its Board of Trustees, has caused this Coordination Agreenent to be executed by its President and its corporate seal to be affixed by its Secretary, all as of the day and year first above written. Attest: SOUTH CAROLINA PUBLIC SERVICE AUTHORITY BY Secretary President CENTRAL ELECTRIC POWER COOPERATIVE, INC. Attest: BY Secretary President [ (SEAL)
,- APPENDIX A j 1
PROVISIONS RELATING TO ! pas 1 RESOU9CE INTEGRATION AND SUPPLEMENTAL POWER SALES ARTICLE I. DESCRIPTION OF SERVICE A. SALE AND DELIVERY OF POWER Subject to the provisions of this Appendix and the Coordination Agree-ment, Authority shall sell and deliver and Central shall purchase, receive, and pay fnr all of the bulk electric power and energy requirements of Central's Members in excess of that supplied to Central fran bulk electric power supply resources owned by or otherwise available to Central which are the result of joint planning with Authority and which are part of Authority's generation and transmission system. R. SERVICE CHARACTERISTICS AND AVAILABILITY The bulk electric power supply services provided hereunder shall consist of (1) Firm Wholesale Supplemental Capacity and Energy to supplement power and energy received by Central from Central-owned Capacity Resources, (2) Reserve Capacity and (3) Back-up Energy for Eligible Capacity Resources of Central, and Economy Energy services, all as hereinafter defined. All capacity and energy to be furnished hereunder shall be alternating current three-phase, unregulated electric service at a naninal frequency of approximately 60 Hertz, and available at the high-voltage bus bars of Authority's step-up substations at its several Generating Stations and at the points of interconnection with other utility companies, but metered at the actual Points of Delivery to Central's Members and adjusted for losses as described hereinaf ter. The availability of this service shall be conditioned upon Central's compliance with the general terms and conditions of this Appendix and the provisions of the Coordination Agreeme nt. As provided in the Coordination Agreement, Authority shall transmit (" wheel" or " provide transmission service") across the Authority's transmission system to Central's Members all of the electric power and energy requirements of such Members, such transmission service to be providri pursuant to the terms of the Coordination Agreenent and Appendix B thereto, entitled " Provisions Relating To Transmission Service." s APPENDIX A p.s ARTICLE II. GENERAL TERMS AND CONDITIONS A. ESTIMATED AND ADJUSTED BILLINGS In preparing Monthly Billing Statements for services rendered here-under, the detennination of capacity charges pursuant to Articles VI and VII herein shall be predicated initially on the basis of the Parties' projections of the Territorial Peak Demands for each Contract Period and each Party's contribu-tions thereto pursuant to the Coordination Agreement, and these projections shali be used as the basis for billing until the actual data becomes available. When actual Territorial Peak Demand data becomes available for each Contract Period, the capacity charges hereunder shall be recalculated to reflect such actual Territorial Peak Demand data. A special bill shall be rendered to Cen-tral, as soon as practicable, reflecting the aggregate difference between the estimated bills previously rendered to Central and recalculated bills based upon the actual Contract Period Territorial Peak Demand data. As between the Author-ity and Central, whichever Party owes the other as a result of such recalcula-tion shall make payment to the other as follows: the paying Party may elect to spread the total amount owed in equal installments over a number of months not to exceed six (6) nor to extend beyond the period Central takes service here-under; provided, however, the amount of each such installment except the last shall not be less than One Hundred Thousand Dollars ($100,000). Such payments may be reflected as additional charges or credits to succeeding monthly bills. Additionally, it is recognized that due to delays in accounting and record keeping, actual fuel cnsts may not be available at the end of each month in time to allow timely rendering of bills based upon such actual costs. In consideration thereof, each month Authority shall estimate tne Average Fuel Cost (as defined het.nw) of each Capacity Resource; and as soon as practicable after the end of the current Monthly Billing Period, Authority shall prepare and render a Preliminary Billing Statement to Central based on such estimates. Payment of such Preliminary Billing Statement by Central shall be subject to the Payment provisions of the Coordination Agreement. As snon as actual fuel cost data becomes available for the current Monthly Billing Period, a Final Billing Statement shall be calculated using such actual costs, and the aggregate difference between such Final Billing Statement and the Preliminary Billing Statement previously rendered shall be credited or debited as appropriate to the Preliminary Billing Statement for the next suc- , ceeding Monthly Billing Period. Central shall provide Authority the actual fuel l costs of Central's generating resources for each Monthly Billing Period as soon as practicable after the close of such Monthly Billing Period. B. TEST RATING OF CAPACITY RESOURCES The Operatlng Committee shall be responsible for rating and evaluating each Capacity Resource in order to detennine its Net Dependable Capability for l the purposes of this Appendix. Such rating and evaluations shall be made in accordance with Good Utility Practices (as defined in accordance with the Coor-dination Agreement) and shall be without regard to ownership so as not to unduly discriminate between the Parties. f At the request of either Party, any generating unit of the other Party I shall be tested for the purpose of rating such generating unit, and representa-
,- APPL.NDIX A
,,s tives of the requesting Party may be present to observe such test. The costs of such test shall be borne by the requesting Party if the requested test results in a rating not more than five percent (5%) above or below the rating thereto-fore utilized. If the evaluation of the requested test results in a rating which is in excess of five percent (57.) either above or below the rating there-tofore utilized for such resource, then the owner of such generating unit shall bear the costs of such test, and the resulting rating shall be utilized for the next monthly billing hereunder and thereafter until the next testing and rating.
,C. MAINTENANCE SATt! RATION For the purposes of this Appendix, the integrated system of Authority and Central shall be deemed to be " Maintenance Saturated" during a Contract Year if the Planning Committee detennines that capacity was added to the system for the reason that Authority or Central, in order to maintain adequate operating reserve margins at other times during the Contract Year, have planned or sche-duled outages for the routine maintenance of one or more generating resources for the time of the expected Annual Territorial Peak Demand. However, such detennination shall be made without regard to generating units not operated by one of the Parties or generating units over which the Parties otherwise have no control with respect to the scheduled maintenance thereof.
In any Contract Year during which the Planning Committee detennines that the combined system of Authority and Central is Maintenance Saturated, the determination of the Territorial Reserve Margin for the Contract Period in which the Annual Territorial Peak Demand occurred shall be adjusted upward or downward only for the purposes of determining Central's Reserve Capacity Requirements pursuant to Article VII, Section A, herein to properly account.for the Net Dependable Capability of those Capacity Resources or portions thereof which were added to the system in consideration of such Maintenance Saturation. D. OTHER TERMS AND CONDITIONS All service provided hereunder shall be pursuant to and in accordance with the provisions of the Coordination Agreement. f
APPENDIX A
. ARTICLE III. DEFINITIONS
^ For the purposes of this Appendix and unless otherwise defined herein, the following tems shall be defined as follows: Contract Period: Either a Summer Contract Period or a Winter Contract Period. A Summer Contract Period shall be the period beginning 12:01 a.m. on July 1 and ending 12:00 midnight on the following December 31. Winter Contract Period shall be the period beginning 12:01 a.m. on January 1 and ending 12:00 midnight on the following June 30. Coordination Agreenent: The " Power Systen Coordination and Integra-tion Agreement" between South Carolina Public Service Authority and Central Electric Cooperative, Inc., to which this Appendix A is attached and made a part of. Eligible Capacity Resource: A Capacity Resource of Central for which Central has met the notice requirements and other conditions specified in the Coordination Agreement. Fim Purchases: Electrical capauty and energy purchases frum another party, generally not from specific or designated generating units, which are intended to have associated with them sufficient reserve capacity so as to be continuously available except during the most severe emergencies. For the purposes of this Appendix, Firm Purchases from others must carry a level of reserves or reliability at least equal to those of the overall combined Author-ity-Central System. Het Dependable Capabilig: The maximum net dependable generation outral level in megawatts, exclusive of station use, that can reasonably be expected to be maintained by such Capacity Resource during peak demand periods. Such Net Dependable Capability shall be detemined or adjusted for losses s; as to reflect the net maximum power available fran such Resource at the bus har at the high-voltage side of the associated Generating Station substation if such Capacity Resource is a generating unit or unitsIflocated on the intergrated such Capacity Resource is the transmission system of Authority and Central . availability of capacity and energy purchased from another utility system, the Net Dependable Capability shall reflect the net maximum power available at the time of the annual peak demand of the integrated Authority-Central Systen at the point or points of delivery of such power and energy to the Authority's system. Peak Period: Either a Summer Peak Period or a Winter Peak Period. A Summer Peak Period shall be the period beginning 12:01 a.m. on June 1 and ending 12:00 nidnight on the following November 30. A Winter Peak Period shall be the period beginning 12:01 a.m. on December 1 and ending 12:00 midnight on the following May 31. Territorial Reserve Margin: During either the current Winter or Summer Contract Period, the amount, if any, by which the aggregate sum of the Net Dependable Capabilities of the Capacity Resources of Authority and the Eligible Capacity Resources of Central exceed the Territorial Peak Demand for such Contract Period. The Territorial Reserve Margin may be expressed as a percent of the Territorial Peak Demand less the Net Dependable Capabilities of ( the Firm Purchases of Authority and the Eligible Fim Purchases of Central. Fxcept as specifically provided to the contrary, all other tems used herein shall be as defined in the Coordination Agreement and the other Appen-dices thereto. __41., - _ _ _ _ _ _ . - _ _ . _ . ~ . _ ,
- APPENDIX A ARTICLE IV. DETERMINATION OF CAPACITY AND ENERGY REQUIREMENTS A. TERRITORI AL CAPACITY AND ENERGY REQUIREMENTS The Territorial Demand in each hour shall be the total net one-hour integrated kilowatt demand on the integrated transmission system of Authority and Central during such hour as metered or measured at the high-voltage bus bars of the various generating station substations of the integrated system and at the bus bars at the Authority's side of the points of interconnection with other util.ity systems. If Authority deems it impractical to meter or measure all or portions of the Territorial Demand at one or more such points, Authority may meter or measure such net energy input where practical, and the resulting readings or measurements shall be adjusted appropriately to compensate for losses between the points of actual metering or measurement and the high-voltage bus bars of the Generating Station substations and/or the bus bars on Authori-ty's side of points of interconnection with other utility systems.
The Territorial Energy Requirement for any period of time (e.g., a month) shall be the aggregate sum, in kilowatt-hours, of the Territorial Demands for the hours comprising such time period. The Territorial Peak Demand for each Contract Period shall be deter-mined as follows: the Summer Territorial Peak Demand shall be the maximum Territorial Demand occurring during the most current Summer Peak Period; the Winter Territorial Peak Demand shall be the maximum Territorial Demand occuring during the most current Winter Peak Period. The Annual Territorial Peak Demand shall be the maximum Territorial Demand occurring during the tien current Contract Year. R. CENTRAL'S CAPACITY AND ENERGY REOUIREMENTS Central's Total Demand in each hour shall be the total combined coin-cident one-hour integrated kilowatt demand of Central and Central's Members during such hour as metered or measured at the Points of Delivery in accordance with the Coordination Agreement. Central's Total Demand in each hour shall be further adjusted for losses between the Points of Delivery and the high-voltage bus bars of the various generating station substations of the integrated system and at the bus bars at the Authority's side of the points of interconnections with other utility systems in a manner to be detennined from time to time by the Planning Committee. Central's Total Energy Requirement for any time period (e.g. , a month) shall be the aggregate sum, in kilowatt-hours, of Central's Demands for the hours comprising such time period. Central's Coincident Peak Demand shall be Central's Total Demand occurrinq at the time of the occurrence of the Contract Period Territorial Peak Demand for the then current Contract Period. Central's Annual Coincident Peak Demand shalI be Central's Total Demand occurrinq at the time of the occurrence of the Annual Territorial Peak F Demand for the then current Contract Year.
. APPENDIX A C. AUTHORITY'S CAPACITY AND ENERGY REQUIREMENTS Authority's Net Demand in each hour shall be detennined as (i) the Contract Period Territorial Demand in such hour, less (ii) Central's Total
~
Demand, adjusted for system losses, in such hour. Authority's Net Energy Requirement for any time period shall be deter-mined as (i) the Territorial Energy Requirement for such time period, less (ii) Central's Total Energy Requirement, adjusted for system losses, for such time period. Authnrity's Coincident Peak Demand shall be Authority's Net Demand occurrinq at the time of the Contract Period Territorial Peak Demand for the then current Contract Period. Authority's Annual Coincident Peak Demand shall be Authority's Net Demand occurring at the time of the Annual Territorial Peak Demand for the then current Contract Year. I l l
.f' j -4 3-
APPENDIX A e ARTICLE V. ENERGY AND FUEL COST ACCOUNTING A. NET GENERATION AND COSTS
- 1. The Net Generation of a Capacity Resource during any time period shall be the net one-hour integrated demand, exclusive of station use, generated or produced from such Capacity Resource during such time period that is avail-able from such resource as input into the integrated Authority-Central transmis-sion system. Such Net Generation shall be metered or measured at the high-volttge hus bars of the various Generating Station substations in the case of generating units or at the points of delivery to Authority's system in the case of purchased power Capacity Resources. If Authority deens it impractical to so meter or measure the Net Generation of a Capacity Resource at such points, such Net Generation may be metered or measured where practical and adjusted appropri-ately to compensate for losses between the actual point of metering or measure-ment and the high-voltage hus bar to the Generating Station substation or the-points of delivery to the Authority's systen.
- 2. The Net Fuel Cost of a Capacity Resource during any time period shall be determined as follows:
The Net Fuel Cost of a generating unit shall be the dollar cost of fuel burned or used during such time period, as recorded in Accounts 501, 518, or 547. The Net Fuel Cost of a purchased power resource or transaction shall be the total net cost of the energy, exclusive of demand and station or customer charges, received through or fran such resource during such time period as stated in the statements, bills, or invoices received for such purchases. If such statements, hills, or invoices do not explicitly state such net cost of energy associated with such purchases, net cost of energy shall be estimated in a manner similar to the manner in which the Net Fuel Costs of generating units are determined. If either Party hereto is subject to the South Carolina State Genera-tion Tax, or any similar tax or sum in lieu thereof, the Net Fuel Cost of each Capacity Resource of such Party shall be increased for the purposes of this Appendix so as to account for such tax.
- 3. The Average Fuel Cost of each Capacity Resource during each month shall be the Net Fuel Cost of such Capacity Resource during such month divided by the Net Generation of such Capacity Resource during such month, '" both as defined above.
i l 4. It is recognized that fram time to time Authority may enter into power and energy transactions with other utility systems, such transactions representing sources or uses of energy not represented or otherwise reflected as Capacity Resources in the Capacity Resource List. In order to account for any l such transaction, the Net Generation and Net Fuel Cost of each such transaction l l shall be determined in such a manner similar to those for Capacity Resources as hereinabove described. In the case of a purchase of energy by Authority, such transaction gr shall be treated during the current month as a Capacity Resource having a Net Dependable Capability of zero and included in the Resource Classification List at a position directly below that Capacity Resource having an Average Fuel Cost l
Al'N NDI X A
,, most nearly equal to hut not less than that of such transaction. In the case of a sale of energy by Authority, the Net Generation and Net Fuel Cost of the Capacity Resource or Resources having an Average Fuel Cost most nearly equal to that associated with such sale shall be reduced by the Net Generation and Net Fuel Cost, respectively, associated with such sale.
This procedure notwithstanding, if an energy transaction with another utility system can otherwise he identified as being firectly associated with one or more particular Capacity Resources, then the Net Generation and Net Genera-tion Cost of such particular Capacity Resource or Resources shall be increased or reduced by the Net Generation and Net Fuel Cost, respectively, of such trans-action.
- 5. The Variable Operation and Maintenance Rate of each Capacity Resource shall be the estimated average annual Variable Operation and Mainten-ance Expenses per kilcwatt-hour of Net Generation as detennined in the case of Authority's Capacity Resources for each Contract Year from Authority's Cost of Service Study for the then current Contract Year in accordance with Exhibit III attached hereto. The Variable Operation and Maintenance Rate for Central's Capacity Resources shall be determined in the same manner as then currently used by Authority and Authority's Capacity Resources.
- 6. The Increnental Cost of each Capacity Resource in each month shall be the som of (i) the Average Fuel Cost of such Resource during such month and (ii) the Variable Operation and Maintenance Rate for such Resource for tha current Contract Year, both expressed as mills per kilowatt-hour.
B. RCSOURCr i IST For each month, there shall be prepared a Resource List. The Resource List shall be a list of the Capacity Resources of Authority and rentral arranged in asconding order of increnental Cost so that the Capacity Resource inwest on the List shall he that Capacity Resource with the Lowest Increnental Cost and the Capacity Resource at the top of the list will be that Capacity Resource with the highest incremental Cost. ! C. ENFRGY ACC0llNTING
- 1. The Fxpected Generation of each Capacity Resource of each Party in each hour shall be determined as follows. The Expected Generation of the Capacity Resource lowest (compared to other Capacity Resources of the Party) on the Resource List shall be the lesser of (i) the Net Dependable Capability of l
such Capacity Resource, and (ii) the Demand, appropriately adjusted for losses, of such Party during such hour. The Expected Generation of each successive l Capacity Resource of such party shall be the lesser of (i) the Net Dependable ! Capability of such Capacity Resource, and (ii) the amount , if any, by which such Party's total Demand, appropriately adjusted for losses, in such hour exceeds the aggregate sum of the Fxpected Generation of all other Capacity Resources of i the Party below or lower than such Capacity Resource in the Resource List. l
- 2. The Surplus Generation of a Capacity Resource in each hour shall
, be the amount, if any, by which the actual Net Generation of such Resuurce during such hour exceeds the Expected Generation of such Resource during such hour.
-4 5-
,' y APPENDIX A
- 3. TI e Replacement Energy Requirement of a Capacity Resource in each hour shall be the amount, i f any, by which the Expected Generation of such resource in such hour exceeds the actual Net Generation of such Resource in such hour.
- 4. For the purposes of detennining Back-up and Economy Energy trans-actions between the Parties, the Replacement Energy required by each capacity Resource shall be deemed to be supplied from those Capacity Resources having Surplus Generation in the following manner. Starting at the top of the Resource List.and proceeding to the bottom, the Replacement Energy for the Capacity Resource hiqhest on the Resource List which has a Replacement Energy Requirenant shall be deaned to he supplied fran the Surplus Generation or portions thereof of the Capacity Resource or Resources highest on the Resource List fran which Surplus Generation is available. Replacement Energy for each next succeeding Capa' city Resource having a Replacement Energy Requirement shall be dee,ed to be supplied from the Surplus Generation or portions thereof of the Capacity Re-source or Resources next higher on the Resource List from which such Surplus Generation is available and not previously used to provide such Replacement Energy for another Capacity Resource.
D. RACK-UP AND ECONOMY SERVICES
/
When Replacement Energy for a Capacity Resource of one Party is sup-plied (in the manner hereinabove described) from one or more Capacity Resources of the other Party higher on the Resource List than the Capacity Resource for which such Replacement Energy is thus supplied, such Replacement Energy shall be deemed Back-up Energy purchased by the former Party from the latter. The price for such Rack-up Energy purchase shall be at the current incremental Cost in mills per kilowatt-hour of the Capacity Resources providing such Back-up Energy. When Replacement Energy for a Capacity Resource of one Party is sup- ' plied (in the manner hereinabove described) from one or more Capacity Resources of the other Party lower on the Resource List than the Resource for which such Replacement Energy is thus supplied, such Replacement Energy shall be deened Economy Enerov purchased by the former Party from the latter. The price for such Economy Energy purchase shall be one-half (1/2) of the sum of (i) the current incremental Cost of the Capacity Resource for which such Economy Energy l purchased and (ii) the current incremental Cost of the Capacity Resources i from which such Economy Energy is supplied. l f l
,- APPFNDly A ARTICLF VI. FIRM SUPPLEMENTAL PURCHASES Central shall purchase and receive from Authority all of Central's Supplemental Power and Energy Requirements, as defined herein, and pay Authority for such purchases at the prices detemined in the manner described hereinbelow.
A. CENTRAL'S SUPPLEMENTAL DEMAND AND ENERGY REOUIREMENTS
. rentral's Supplemental Demand in any hour shalI he tb; amount, if any, by which Central's Intal Demand in such hour exceeds the aggregate sum of the Net Dependable Capabilities of all of Central's Eligible Capacity Resources.
Centeil's Supplemental Power Billino Demand shall be detemined as follows: for each month of a Summer Contract Period, Central's Supplemental Power Billing Demand shall be Central's Supplemental Demand which occurred at the time of the most recent Summer Territorial Peak Demand; for each month of a
- Winter Contract Period, Central's Supplemental Power Billing Denand shall be Central's Supplemental Demand which occurred at the time of the most recent Winter Territorial Peak Demand.
Central's Supplemental Energy Reouirement for each Monthly Billing Period shall be the amount, if any, by wnich Central's Total Energy Requirement for such Monthly Billing Period exceeds the aggregate sum of the Expected Gener-ation of all of Central's Capacity Resources for such Monthly Billing Period. R. PRICES FOR FIRM SUPPLEMENTAL POWER AND ENERGY l 1. Supplemental Capacity i The price per kilowatt of Central's Supplemental Power Billing Demand I shall be detemined in the following manner: l
- a. Prior to the beginning of each Contract Year pursuant to
( I Article V Section D of the Coordination Agreement, Authority shall prepare or have prepared a Cost of Service Study to detemine its pro.iected Annual Revenue Requirements as functionalized or classified as between the following classifi-cations: (i) Production Demand Costs (ii) Production Energy Costs (iii) Transmission Costs (iv) Distribution Costs (v) Customer Accounting Costs
- (vi) Customer Infomation and Sales Costs (vii)0ther Costs
- b. Such Cost of Service Study shall be prepared in accordance with the Partial Requirements Cost of Service Methodology attached hereto as Exhibit 1.
- c. Such Cost of Service Study shall be presented to Central for Central's review not later than two hundred seventy (270) days prior to the
' j-beginning of such Contract Year, and Central shall have ninety (90) days to review such study and submit Central's comments thereon for consideration by l
. 1 APKN111x A s
Authority. Authority shall consider such comments at a regularly scheduled meeting or, at Authority's option, at a special meeting of its Board of Direc-tors prior to the beginning of the Contract Year. ,
- d. Based on such Cost of Service Study as it may be revised pursuant to this Exhibit and Section D of Article V of the Coordination Agree-ment, Authority shall detemine the price per kilowatt of Fim Capacity in accordance with Exhibit 11 attached hereto, and such price per kilowatt of fim Capatity shall apply to each kilcwatt of Central's Supplemental Power Billing Demand.
- 2. Supplemental Energy The price per kilowatt-hour of Central's Supplemental Energy Require-ment in each Monthly Billing Period shall be the sun of (i) Authority's Monthly Fuel Cost in mills per kilowatt-hour and (ii) Authority's then current Produc-tion Energy Charge Rate in mills per kilowatt-hour, both as detemined in the following manner:
- a. Authority's Average Monthly Fuel Cost in each Monthly Billing Period shall be detemined by the following fomula:
F= [F /G ] x [1/(1-K)] Where: F= Averace Monthly Fuel Cost in mills per kilowatt-hours, rounded to the nearest one-thousandth of a cent. F=m Authority's total fuel cc,t for the current Monthly Billing Period, and such costs shall include the following: (a) the cost of fossil and nuclear fuel burned or used in i Authority's own plants and Authority's share of fossil l and nuclear fuel burned or used in jointly owned or leased plants as such costs are recorded in Accounts 501, 518, and 547, plus (h) the actual identifiable fossil and nuclear fuel cos'. associated with energy purchased for reasons' other than identified in (c) below, plus l (c) the net energy cost of energy purchases exclusive of capacity or demand charge (irrespective of the designa- ! tion assigned to such transaction) when such energy is < l purchased on an economic dispatch basis. Included therein may he such costs as the charges for economy energy purchases and the charges as a result of sched-uled outage, all such kinds of energy being purchased hy the Authority to substitute for its own higher cost jg energy; and less 48-
J APM MDly 8 d* (d) the cost of fossil and nuclear fuel recovered through inter-system sales including the fuel cost related to economy energy sales and other energy sold on an eco-nomic dispatch basis. G= Authority's total Net Generation for the current Monthly
- Rilling Period which shall be equated to the sum of (i) generation, (ii) purchases, (iii) interchange in, less (iv) energy associated with pumped storage operations, less (v)
- inter-system sales referred to in F, (d) above.
K= Authority's Allowance for Capital Improvements, expressed as a decimal fraction, which was included in Authority's Cost of Service Study, referenced in Subsection 1 of Section B of this Article VI, for the then current Contract Year. The determination of F and G herein shall reflect appropriate credits (charges) for sales (purchasc9) by ADthority to (fron) Central of Back-up and Economy Energy pursuant to Article VI herein,
- b. Authority's Production Energy Charge Rate for each Contract Year shall be detennined from Authority's above referenced Cost of Service Study for the then current Contract Year in accordance with Exhibit III attached hereto.
i i i l l l
. . APPI.NDI/ A ,, ARTICLE VII. RESERVE CAPACITY CHARGES In consideration of Authority's providing Back-up Energy services for Eligible Central-owned Capacity Resources, Central shall purchase and pay for !
l Reserve Capacity associated with such Back-up Energy services in the manner set I forth hereinafter. \ A. Central's Reserve Capacity Requirement
. Central's Reserve Capacity Requirement in each Monthly Billing Perind shall be (Il the aggregate sun of the Net Dependable Capabilities of Cent.ral's Eligible Capacity Resources other than Firm Purchases, multiplied by (ii) the then current Territorial Reserve Margin expressed as a decimal fraction.
B. Price for Reserve Capacity The price per kilowatt of Reserve Capacity purchases from Authority shall be determined fran Authority's above referenced Cost of Service Study for the then current Contract Year in the manner set forth on Exhibit !! attached hereto. l f l l l l
APPENDIX A g ARTICLE VIII. MONTHLY BILLING STATEMENT A Monthly Billing Statement shall be prepared and rendered for ser-vices provided hereunder for each Monthly Billing Period. Each such Monthly Billing Statement, prepared and rendered in accordance with the provisions of Article II, Section A, hereof, shall reflect the monthly charges for (a) Firm Supplement:1 Power and Energy purchases by Central, (b) Reserve Capacity purchases by Central, and (c) Back-up and Economy Energy purchases by Central . Each such Monthly Billing Statement shall also reflect any credits for Back-up and Economy Energy purchases by Authority from Central so that to the extent possible a net bill is rendered. When, however, that Monthly Bill re-flects a net credit due Central, Authority shall render payment to Central for such credit within ten (10) days, and, in such event, Authority shall be subject to the late payment provisions of Article X11, Section C, of the Coordination Agreement. l t l I l-I
. EXHIRIT 1 APPENDIX A # COST OF SERVICE METHODOLOGY The purpose of this Methodology is to describe the methods of func-tionalization of Authority's costs to be used in developing annual Cost of
! Service studies pursuant to Appendices A and B to this Power System Coordinatici and Integration Agreement (" Coordination Agreement"). l As used herein, " functional classification" or " function" shall refer to one nf the following categories or classifications of costs: (i) Production Demand (ii) Production Energy (iii) Transmission (iv) Distribution 1 (v) Customer Service Except as otherwise specifically provided herein, the uses of such functional classificaions herein shall be consistent with the uses of such classifications contained in the Unifom System of Accounts and as used in accordance with Good Utility Practice. As used herein, the term "functionalization" shall mean the assignment or allocation of Authority's costs to and between such functional classifica-tions. I. OPERATION AND MAINTENANCE EXPENSES A. Production 0&M Expenses
- 1. Fuel Expenses - 957, allocated by energy sales, 57. associated with spinning reserves allocated by demand.
- 2. Purchased Power Expenses shall be functicnalized into Pro-duction Demand and Production Energy components as the basis of the then current rates and charges under which such power is to be purchased by Authority.
- 3. Other Production O&M Expenses - 657, of such expenses shall be assigned to the Production Demand function and the re-mainder to the Production Energy Component; prnvided, how-ever, this functionalization shall be subject to refinement as the result of more detailed analyses or studies at such time as the Authority detennines, pursuant to such studies, that such functionalization is no longer appropriate.
B. Transmission O&M Expenses shal! be assigned to the Transmission function. C. Distribution 0&M Expenses shall be assigr.ed to the Distribution
' function.
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// g % $*<
NNNN TEST TARGET (MT-3) i ^ 1.0 MBH EM 5 m g=n mm = l,l m I!!IM j .8 1.25 1.4 g_ e 6" > N ' % >,,,,, s/4* 4 M,3,,,///// - -
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' E ? HE l.8 1.25 1.4 1.6
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y,ii ,,. s
EXH1111 APPEMDIX A
'*' D. Customer Accounting Expenses shall be assigned to the Custoner )
Accounting function. E. Customer Service and Informational Excenegs shall be assigned to the Customer Service function. F. Sales Expenses shall be assigned to the Customer Service func-tion, e G. Administrative and General Exnenses shall be allocated to func-tional classifications in proportion to the Wages and Salaries included in Operation and Maintenance Expenses other than Admin-istrative and General Expenses assigned or allocated to such functional classifications in the manners hereinabove described, provided, however, to the extent that the test-year p ajections of such Operation and Maintenance Expenses are not in sufficient detail to so identify such Wages and Salaries, then historical ratios of such Wages and Salaries may be used as the basis for this functionalization. t II. Suns in Lieu of Taxes A. Payments to Municipalities of sums in lieu of franchise payments or fees shall be assigned to the Distribution function. All other payments to governmental agencies shall be assigned to the Production Demand function. The amount of Payments to the State of South Carolina included in any test-year Cost of Service study shall not exceed the lesser of the amount included in the test year as to the Payment to the State er 10% of the balance projected in that test year's line iten entitled " Balance Available for. Payment to the State, Renewals, Replacements, Capital Additions to Plant and for Other Lawful Purposes," or items similar thereto; provided, however, that l all items included in that line item are related to the generation, I transmission or distribution of electric power and energy and pro-vided, further, that no additional reserve contingency itens or f I similar reservations of revenues that are not as of the date of this l Agreement included in " Balance Available for Payments to the State, i, Renewals, Replacements, Capital Additions to Plant and for other l Lawful Purposes," shall be included in this item in detennining the l cost of service or rates to be charged. l l III. Debt Services and Lease Payments Interest expense and principal paid on debt (collectively, " Debt l Service") shall first be allocated to the plant classifications of Produc-tion, Transmission, Distribution, and General, as reflected in the Unifonn System of Accounts, on the basis of the application or utilization of the proceeds of such debt. Lease Payments shall first be allocated to such plant classifications on the basis of the utilization and classification of the corresponding leased facilities so that payments for the lease of
-f facilities which are recordable as Production Plant facilities, Transmission
EXHIB!T 1
' APPENDIY A e
Plant facilities, Distribution Plant f acilities, and General Plant facilities shall be classified accordingly. Debt Service and Lease Payments thus classified as Production, Transmission, and Distribution Plant-related shall be assigned to the Production Demand, Transmission, and Distribution functional classifi-cations, respectively. The Debt Service ar.d Le'ase Payments classified as General Plant-related shall be functionalized in proportion to the
- functionalization of Administrative and General Expenses as described hereinabove.
IV. Working Capital Allowance An allowance to provide to Authority additional working capital required on a year-to-year basis shall be included in the cost of service. This allowance is fomulated to allow Authority to increase its working capital annually in an amount equal to one-eighth of the increase in its annual Operation and Maintenance Expenses other than Purchased Power Expense, Nuclear Fuel Expense, and Lease Payments, if any, during the test period over the immediately preceding 12-month period. This Working Capital Allowance shall be allocated to function-al classifications on the same basis as the corresponding O&M. V. Other income and Revenues Miscellaneous Other Incone and Revenues received by Authority other than for Sales of Electricity shall be functionalized and cred-ited to each functional classification so as to reflect the functional classifications of the activitics giving rise to such Income and Reve-nues. VI. Allowance for Capital Improvement s
- Authority shr.ll be entitled to include in the cost of service an l'
allowance for tri.nsfers to Authority's Capital Improvement Fund, which allowance shall not in total exceed the greater of (i) eight and one-half percent (8.57.) of Authority's Operating Revenues and other Income , or (ii) seventy-five percent (75%) of the total Debt Service included in such cost of service study. VII. Debt Service Coverage l Notwithstanding any other provisions of this Agreement, should f l the Authority's five-year projections disclose that its debt service
~
coverage will be less than 1.75 during one or more years of such five-year period, the Authority may increase Central's Allowance for Capital Improvements sufficient to maintain a debt service coverage of 1.75 in each such year; provided, however that such increase shall not exceed l the aggregate average Allowance for Capital Improvements (expressed as a percentage of Debt Service charges) included in the Cost of Service t' Study from which the Authority's other rates were developed, excluding from such limitation, however, certain Authority contracts in existence i as of the effective date of this Agreement wherein the Allowance for Capital Improvements may not be exceeded.
.' I Xillit! I II
- , APPENDIX A
+
Schedule A Reserve Capacity Price for Each Contract Year Line No. Descri ption Amount Notes and Reference *,
- 1. Total Production Fixed Costs $ C.O.S. Study
- 2. Aggregate Monthly Installed kW Schedule C, Line 14 Capacity Column (c)
- 3. Ilnreserved Capacity Rate $/kW Line 1 + Line 2 4 Reserve Capacity Price $/kW Line 3 Schedule B Firm Capacity Pru.e for Each Contract Period Line
!!a . Description Amount Notes and References
- 1. tinreserved Capacity Rate $/kW Schedule A, Line 3
- 2. Territorial Reserve Margin ?,
- 3. Fim Capacity Price $/kW Line 1 x [1.00 + (Line 2+100)]
l f
,' LXillBIT II APPENDIX A P
Schedule C Projected Monthly Installed Capacity Line Existing Additions Total No. Month _ MW) ( _(iW) (MW) (a) pl (c)
- 1. July
- 2. August
- 3. September i 4. October l
- 5. November
- 6. December l
- 7. January l
- 8. February
- 9. March
- 10. April
- 11. May
- 12. June
- 13. Aggregate Monthly Installed Capacity (MW's)
- 14. Aggregate Monthly Installed Capacity (KW's)
(Line 13 X 1000)
?
EXtt1 BIT !!! APPENDIX A A Production Energy Ch,,arges Production Projected Variable Variable Costs
- Net Generation 08M Rate (5) (KWH) (Mills)
(a) (b) (c) Generat'ing Resources: 1. 2. 3. 4 5. 6. 7. 8. 9. 10. Total Resource Costs Other Variable Costs Total Production Energy Charge Rate
Reference:
- 1. Columns (a) and (b) data obtained from Cost of Service Study.
- 2. Column (c) = Column (a) + Column (b).
- Excluding Fuel.
1
', APPfNDly. R l
PROVISIONS RELATING TO TRANSMISSION SERVICE f ARTICLE I. DESCRIPTION OF SERVICE A. CHARACTER OF SERVICE The service provided hereunder (" Transmission Service") shall be the transmission of electric power and energy over Authority's transmission systen from-(1) the high-voltage bus bars of the various generating station substations of Authority, (2) Authority's side of points of interconnection with other utility systems, and (3) points of receipt by Authority on its transmission system of electric power and energy frc.c Central-owned generating facilities or electric power and energy otherwise delivered by Central to Authority for Trans-mission Service hereunder, to (a) existing Delivery Points of Central's Members and (b) such other Delivery Points as may be established on the integrated Authority-Central transmission system pursuant to the Coordination Agreement. All electric power and energy delivered hereunder shall be alternating current, three-phase, unregulated, at a nominal frequency of approximately 60 Hertz and at a nominal standard voltage generally available in the area of each Delivery Point. B. APPLICARILITY This Appendix shall be applicable to all electric power and energy supplied to Central and Central's Members, as sucn Members are defined in the Coordination Agreement. C. AVAILABILITY Transmission Service hereunder is available throughout the service area referenced in the Coordination Agreement at the existing Delivery Points of Central's Members, at the existing points of interconnection between Authority's and Central's transmission systems, and at such future points of interconnection t and such future Delivery Points to which the Parties may agree in accordance ! with the Coordination Agreement. i l l i '? l . . _ . . _
I RPPLNDIX B em ARTICLE II. GENERAL TERMS AND CONDITIONS A. RILLING AND PAYMENT Monthly Billing Statements for Tra.ismission Service hereunder shall be prepared as hereinafter provided and rendered monthly to Central by Authority. Payment by Central of amounts due in accordance with such Monthly Billing State-ments shall be made pursuant to the tents, conditions, and provisions of the Coor,dinatir.n Agreement. B. EST; MATED AND ADJtiSTED RILLINGS in preparing Monthly Billing Statements for services rendered, tne determination of Transrciission Demand Charges pursuant to Article !!!, Section A. herein shall be predicated initially on the basis of the Parties' projections of the Annual Territorial Peak Demand for the then current Contract Year and each Parties' contribution thereto, and these projections shall be used as a basis for billing until actual Annual Territorial Peak Demand data becomes available. When actual Annual Territorial Peak Demand data becomes available for the con-tract year, the Demand Charges hereunder shall be recalculated to reflect such actual dcta. A special bill shall be rendered to Central, as soon as practica-ble, reflecting the aggregate difference between the estimated bills previously rendered to Central and the recalculated bills based upon the actual contract year Annual Territorial Peak Demand data. As between Authority and Central, whichever Party owes the other as a result of such recalculation shall make payment (s) to the other as follows: the paying Party may elect to spread the total amount owed in equal installments over a number of months not to exceed six (6) nor to extend beyord the period Central takes service hereunder; pro-vided, however, the amount of each such installment except the last shall not be less than One Hundred Thousand Dollars ($100,000). Such payments may be re-flected as additional charges or credit to succeeding Monthly Billing State-ments. C. ACCESS FOR At!THORITY EMPLOYEES Authority shall have the right and privilege to enter the creaises of Central and Central's Members at all reasonable times for the purposes of read-ing meters, inspecting or repairing apparatus used in connection with service hereunder, removing Authority's property or for any other purposes to carry on the work of Authority in connection with the delivery of power and energy hereunder, and to do all things necessary and expedient in the proper operation of Authority's system. In exercising such right and privilege, Authority shall assume all liability for damage or personal injury caused by negligence of Authority. D. CONTINillTY OF SERVICE Authority shall exercise due care and diligence to provide Transmis-sion Service hereunder free from interruption; provided, however, the Authority shall not be responsible for any failure to provide such service, nor for inter-ruption, reversal, or abnormal voltage of the supply, if such failure, inter-ruption, reversal, or abnormal voltage is without negligence on Authority's y' part. Whenever the integrity of Authority's system or the supply of electricity is threatened by conditions on Authority's system, on Central's systen or that of Central's Members, or on the systems with which Authority or Central are
ApN NDlx 11
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directly or indirectly interconnected, or whenever it is necessary or desirable
- "' to aid in the restoration of service, Authority may, in conformance with Good litility Practice, curtail or interrupt electric service or reduce voltage to some or all of Central's Members and such curtailment, interruption, or reduc-tion shall not constitute negligence by Authority.
E. LIABILITY Central expressly agrees to indemnify and save harmless and defend Authgrity against all claims, demands, costs or expense for loss, damage, or injary'to persons or property in any mariaer directly or indirectly connected with or growing out of the generation, transmission, or distribution of electric energy on Cent ral's side (or that of a Member of Central) of any Delivery Point, unless such claim or demand shall arise out of or result from negligence or willful misconduct of Authority, its agents, servants, or employees. F. DEFINITIONS Except as specifically provided to the contrary, all tenas used herein shall be as defined in such Coordination Agreement and the other Appendices thereto.
" Coordination Agreement" as used herein shall be the " Power System Coordination and integration Agreenent" between South Carolina Public Service Authority and Central Electric Pcwer Cooperative, Inc., to which this Appendix B is attached and made a part of.
for pic poses of the Cost of Service Study referenced in Exhibit !! of Appen.fix A of th Coordination Agreement the tem " Wholesale Classification" refers to those t lassifications to which " sales for resale" are made by At".5ori-ty: nanely: Central, Members of Central, and Municipals. " Retail Classifica-tion" refers to those classifications to which " sales to the ultimate user" are made by Authority: namely; the Authority's Canmercial, Industrial, the Mili-tary, Street Lighting, and,other miscellaneous retail customers. G. OTHER Additionally, all service provided hereunder shall be in accordance wii. and pursuant to the provisions of the Coordination Agreement. f 50-
AtPFNhl/ I' 4 j,g ARTICLE 111. CHARGES FOR TRANSMISSION SERVICE A. MONTHLY BILLING STATEMENT Each Monthly Billing Statement for Transmission Service hereunder shall include (1) Transmission Demand Charges and (2) Delivery Service Charges, both as determined in the manner hereinafter set forth. B. TRANSMISSION DEMAND CHARGES Transmission Demand Charges in each month shall be deten,ined as (1) Central's Annual Coincident Peak Demand less the SEPA capacity allotment of Central's Membere,, as adjusted for losses, for the then current Contract Year, as defined in Appendix A of the Coordination Agreement multiplied by (2) Authar-ity's Transmission Service Derc.and Charge, as determined in the manner set forth hereinafter. Pursuant to the aforementioned Appendix A and Article V Section D of the Coordination Agreement, prior to the beginning of each Contract Year, Au-thority shall prepare or have prepared a Cost of Service study to determine its prejected Annual Revenue Requirements as functionalized or classified as between the following classifications: (i) Production Demand Costs (ii) Production Energy Costs (iii) Transmission Costs (iv) Distribution Costs (v) Custnner Accounting Costs (vi) Customer Infonnation and Sales Costs (vii)0therCosts From such Cost of Service Study, Authority's Monthly Transmissinn Service De,and Charge, in dollars per kilowatt, will be determined as one-twelfth of the quotient obtained by dividing the total Annual Transmission Costs deter-mined pursuant to such Cost of Service Study, by the then projected Annual Territorial Peak Demand, as such Annual Territori31 Peak Demand, less the SEPA capacity allotments of Central's Members and other Authority Customers, as adjusted for losses, is defined pursuant to the aforementioned Appendix A of l the Coordination Agreement. Such Monthly Transmission Service Demand Charge, in j dollars per kilowatt, shall apply throughout the Contract Year. B. DELIVERY SERVICE CHARGES From the aforementioned Cost of Service Study, the Authority shall determine those conponents of the cost classifications of (1) Distribution Costs, (2) Customer Accounting Costs, (3) Customer Information and Sales Costs, and (4) Other Costs which are directly associated with service to Central and Central's Members and delivery of power thereto or which are reasonably allo-cable to such service and delivery. Such detenninations sball be made in ac-cordance with the provisions of Exhibit I of the aforementiorad Appendix A, and l the Delivery Service Charges for each month shall be one-twelf th of the aggre-g gate sum of such components so assigned or allocated to Central.
. APPENDD C " PROVis10NS RELATING TRANSMISSION OPERATION AND MAINTENANCE ARTICLE I. GENERAL A. COORDINATION AGREEMENT This Appendix is attached to and is a part of the " Power System Coor-dination and Inteqration Agreement" between South Carolina Public Service Au-thority and Central Electric Power Cooperative, Inc., hereinaf ter referred to as the " Coordination Agreenent."
Fxcept as specifically provided hereir., all provisions of this Appen-dix are subject to the qualifications, terms and conditions, and other provi-sions and Appendices of such Coordination Agreement, and all terms used herein, except as specifically provided otherwise, shall be as defined in such Coordina-tion Agreement. B. TRANSMISSION MANAGEMENT, OPERATION, AND MAINTENANCE Subject to and in accordance with the provisions hereinafter set forth, Authority shall manage, operate, and maintain Designated Transmission Facilities of Central, as such Designated Transmission Facilities are defined hereinafter. C. DESIGNATED TRANSMISSION FACILITIES Designated Transmission facilities shall he those transmission facili-ties owned by Central which Central desires Authority to manage, operate, and maintain in accordance herewith. Central will furnish, install, and own at its sole expense and cost, all lands and transmission line equipment and shall have such lands and equip-ment ir, condition acceptable to Authority before Authority will commence ser-i vice under this Appendix C of the Coordination Agreement. l No transmission facilities of Central shall be Designated Transmission Facilities if (1) such fccilities are not owned by Central, or (2) such facili-ties are leased by Centrol to any other party, or (3) such facilities are lo-cated outside the State of South Carolina, or (4) such facilities are substan-tially different in kind or nature from the transmission facilities of Authori-ty. D. NOTICE The management, operation, and maintenance of any Designated Transnis-sion Facilities shall be subject to timely written notice of Central's desire ! for facilities to be so managed, operated and maintained in accordance herewith. l For the purposes of this Appendix, " timely written notice" shall be written ! notice received by Authority not less than one full Contract Year prior to the
, time such management, operation, and maintenance is desired by Central. Such l
notice shall include plans and specifications of said facilities for review and comrent by Authority. l l
. APPfNI)IX C Notwithstaniing any other provision hereof or of the Coordination g,g Agreement, Authority shall have no responsibility with respect to the manage-ment, operation, or maintenance of any transmission f acility of Central which is under construction or otherwise prior to the time such facility is energized or placed into service for the purposes of transmitting electrical power and energy on a continuous basis consistent with Good Utility Practice.
Central or Authority may withdraw Designated Transmission Facilities from the management, operation, and maintenance of Authority hereunder upon five (5) years written notice. E. LIARILITY Central expressly agrees to indemnify and save harmless and defend the Authority against all claims, demands, costs or expense for loss, damage or injury to persons or property in any manner directly or indirectly connected with or growing out of, the operation and maintenance of Central-owned transmis-sion lines unless such claim or demand shall arise out of or result from the negligence or willful misconduct of the Authority, its agents, servants or empl oyees .
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o APPENDIY r e . a** ARTICLE 11. OPERATION OF DESIGNATED TRANSMISSION FACILITIES Authority shall have the sole authority to manage and operate all Designated Transmission Facilities, and Central hereby appoints Authority as Central's sole agent for all purposes of management and operation of such De-signated Transmission Facilities. Authority shall manage and operate Designated Transmission Facilities in accordance with Good litility Practice. In the management and operation of tran'smission facilities, Authority shall make no adverse distinction between Designated Transmission Facilities hereunder and Authority's own transmission facilities. Authority will use its reasonable best efforts to comply with al' applicable law and governmental regulations with respect to such management ami operation. Authnrity shall managa and operate Designated Transmission Facilities in accordance with the same standards, procedures, and methods used by Authority from time to time with respect to Authority's own transmission facilities, unless provided, however, Central requires more rigorous standards or proce-dures. In the case Central reqeires more rigorous standards or procedures than those then currently used by Authority with respect to Authority's own transmis-sion facilities, Central shall be responsible for any additional costs associ-ated therewith in addition to any other cost responsibility payments by Central hereunder. Authority will provide Central any information or data in such form as such information or data is routinely available to Authority. If Central re-quests and Authority provides any additional information or data, Central shall be responsible for all costs incurred by Authority in providing such additional information or data, and such responsibility shall be in addition to any other cost responsibilities of or payments by Central hereunder. l t
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APPLNDIX C ARTICLE Ill. MAINTENANCE OF DESIGNATED TRANSMISSION FACILITIES Authority shall have the sole authority to maintain d'~ Designated Transmission Facilities, and Central hereby appoints Authority as Central's sole agent for all purposes of maintaining such Designated Transmission Facilities. Authority shall maintain Designated Transmission Facilities in accord-ance with Good Utility Practices, and in the maintenance of transmission facili-ties, Authority shall make no adverse distinction oetween Designated Transmis-sion* Facilities and Authority's own transmission facilities. i Authority shall maintain Designated Transmission Facilities in accord-ance with the sane standards, procedures, and methods used by Authority from l time to time with respect to the maintenance of Authority's own transnission facilities: unless provided, however, Central requires more rigorcus standards or procedures. In the case Central requires more rigorous ssandards or proce-dures than those then currently used by Authority with respect to Authority's own transmission facilities, Central shall be responsible for any additional costs associated therewith in addition to any other cost responsibility payments by Central hereunder. Authority will provide Central any information or data in such fe m as such information or data is routinely available to Authority. If Central re quests and Authority provides any additional infon?.ation or data, Central shail be responsible for all costs incurred by Authority in providing such additional information or data, and such responsibility shall be in addition to any other cost responsibilities of or payments by Central hereunder. i H i l I l l i
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, AP11 ft91x C ARTICLE IV. CAPITAL ADDITIONS, RETIREMENTS AND REPLACEMENTS In the event Authority is of the opinion, in accordance with the Uniform System of Accounts and Authority's own then current accounting standards and criteria, that additions, retirements, or replacements of any Designated Transmission Facilities or portions thereof will result in additions to or reductions of Central's capital investment in such facilities, Authority shall purchase or otherwise acquire any necessary facilities, materials, or equipment
> and make such necessary additions, retirements, or replacements, and Central shall be responsible for the costs associated therewith in accordance with Article VI, Section B, hereis.. However, when Authority is reasonably able to provide timely notice to Central of the need for major facilities, materials, or equipment, Central may at Central's option purchase or otherwise acquire such facilities, materials, or equipment ano provide them to Authority. t M 4 e
U APPENDlx C ARTICLE V. INVENTORY OF SPARE PARTS AND EQUIPMENT Authority shall maintain an inventory of spare parts, miscellaneous material, capital equipment, and other equipment necessary in the opinion of Authority to discharge Authority's responsibilities hereunder with respect to management, operation, and maintenance of Authority's transmission facilities and Designated Transmission Facilities. Authority shall accept into such inventory all materials associated with.or retired from Designated Transmission Facilities and will credit Central for the value of materials so received. Such value shall be determined in the same manner in which Authority determines the value of materials received into such inventory from or for Authority's own
- ansmission facilities.
Notwithstanding any other provision of this Appendix or the Coordina-tion Agreement, if Central constructs or otherwise acquires and owns any trans-mission facilities requiring parts, or materials, or equipment different from those required by Authority for Authority's own transmission facilities, Author-ity shall have no obligation to maintain an inventory of such different parts, materials, or equipment, except at Central's sole expense, i t I f i i
APPENDIX C s e ARTICLE VI. PAYMENTS A. GENERAL lt is the desire and intent of the Parties hereto that Central reim-burse Authority as precisely as possible for all actual costs incurred by Au-thority in the .unagement, operation, and maintenance of Designated Transmission Facilities. It is realized by the Parties, however, that the specific identifi-cation of all individual costs would be impractical, and, in consideration thefeof, the Parties have agreed to the methods of fairly allocating and assign-ing costs as betwen the Parties that are set forth below. To the extent, however, that such methods f ail to satisfy this intent of the Parties, or at such times as oth9r fair and reasonable methods for more accurately identifying such actual costs become practical, in the opinion of both Parties, then the Parties hereto shall negotiate in good faith to modify the allocation methods herein in keeping with such intent. B. PAYMENT FOR OPERATION AND MAINTENANCE OF DESIGNATED TRANSMISSION FACILITIES Central: shall pay Authority each month one-twelf th of Central's pro-portionate share of the aggregate annual Costs of Operation and Maintenance of Designated Transmission Facilities hereunder in the ratio that Central's capital investment in such Gesignated T.ansmission Facilities bears to the aggregate sum of the Authority's capital investment in Authority's own transmission facilities and Central's capital inv:.sbent in such Desicnated Transmission Facilities. Such Costs of Operation and Maintenance shall consist of:
- 1. Trinsmission Ope gon and Maintenance Expenses - all costs in-cu-red by Author).s in the operation and maintenance of transmis-sion facilities which are charqeable to Accounts 560-573 of the Unifom System of Accounts excluding, however, Accounts 565 - ,
Trinsmission of Electricity by Others, and Accounts 567 - Rents.
- 2. Administrative and General Costs - a proportionate share of Authority's costs which are chargeable in Administrative and General Expenses in Accounts 920-931 of the Unifom System of l Ac;ounts. Such proportionate share, to be allocated to Central, l shill be in the ratio that the Wages and Salaries Costs included in!the total Transmission Operation and Maintenance Expenses defined in 1 above bear to the total Wages and Salaries Costs incurred by Authority and chargeable as Operation and Maintenance Expenses under the Unifom System of Accounts, excluding those Waqes and Salaries Costs chargeable as Administrative and General i Expenses.
Each Molthly Payment by Central for Operation and Maintenance of Designated Transmission Facilities by Authority shall be based upon Authority's ( then current Oper1 ting Budget and the Parties' then current projections of the , Parties' respective capital investment in transmission facilities. As soon as l practicable a'ter the end of each month, as actual costs are recorded and avail-
# able, Authority shall prepare a revised Monthly Billing Statement reflecting such actual costs and capital investment. The aggregate difference between the l estimated Monthly Billing Statement previously rendered to and paid by Central
APPtNDix C
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shall be reflected'as an additional charge or credit, as appropriate, on the estimated Monthly Billing Statenent in the next succeeding month. C. PAYMENT FOR CAPITAL ADDITIONS, RETIREMENTS, AND REPLACEMENTS . Central shall reimburse Authority for Authority's costs of Capital, Additions, Retirements, and Replacements made to Desinated Transmission Facili-ties. Such costs shall include the original costs of necessary parts, materi-als, and equipment, and other applicable costs associated therewith including but not limited to direct lahor, outside services, allocable overheads and stores expenses, all as detemined in the sane nanner in which Authority deter-mines and assigns such costs to Capital Additions, Retirements, and Replacements made to its own facilities. D. PAYMENT FOR MAINTAINIfG SPARE PARTS AND E0t!!PMENT INVENIDRY Central shall pay Authority nonthly an Inventory Carrying Charge in consideration for Authority naintaining an inventory of spare parts, materials, and equiceent as hereinahove described. Such Inventory Carrying Charge shall be detemined by multip'ying (1) one-twelfth of Authority's then current Fixed Char'e Rate by (2) Central's proportionate share of A"'hority's total dollar investment balance in spare transmission parts, materials, and ecuipment, which such proportionate share shall be in the ratio that Central's capital investrent in Designated Transmission Facilities bears to the aggregate sum of Authority's capital investment in transmission facilities and Central's capital investment in Designated Transmission Facilities. Authority's Fixed Charge Rate shall be the net effective annual interest rate of Authority's then most recent long-ten: Sond Issue. E. MONTHLY BILLING STATEMENTS For services rendered hereunder, Authority shall render a Monthly Billing Statement to Central about the first of each month setting forth the costs, as hereinabove described, for which Central shall reimburse Authority hereunder. Such Monthly Billing Statement shall reflect (1) Charges for Opera-tion and Maintenance as estimated to be incurred by Authority during such month, (2) any charces or credits necessary to correct to actual the previous month's estimate of such Charges for Operction and Maintenance which was included in the monthly Billing Statement for the previous month, (3) Inventory Carrying Charges for the second preceeding month, and (4) the costs of any Capital Additions, Replacements, or Retirenents made during the preceeding month, all such costs detemined pursuant to the foregoins. Central shall pay such Monthly Billing Statement in accordance with the billing and payment provisions of the Cecrdina-tion Agreement.
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End of Coordination Agreement and its Several Appendices and Exhibits l l[ l
Q 3 0 CROSS GENERATING STATION OWNERSHIP AND OPERATING AGREEMENT RETWEEN SOUTH CAROLINA PUBLIC SERVICE AUTHORITY AND CENTRAL ELECTRIC POWER COOPERATIVE, It'C. , /
. l CROSS GENFRATING STATION # OWNERSHIP AND OPERATING AGREEMENT BE TWEEN l SOUTH CAROLINA PUBLIC SERVICE AUTHORITY AND CENTRAL ELECTRIC POWER COOPERATIVE. INC. .
This Cross Generating Station Ownership and Operating Agreement (herein-after referred to as the " Cross Agreement") entered into on the day of
,1980, by and between the South Carolina Public Service Authori-ty (hereinafter referred to as " Authority"), an Agency of the State of South Carolina, and Central Electric Power Cooperative, Inc., (hereinaf ter referred to as " Central"), a cooperative corporation organized and existing under the laws of the State of South Carolina, witnesseth that, RECITALS Authority owns a site and a railroad extension of approximately eleven.
(11) miles in the vicinity of Cross, South Carolina and is proceeding with all steps, actions and activities (including purchasing and procurement), incident to and required for the design, engineering, construction and subsequent opera-tion by Authority of a coal-fired steam-electric generating station to be known as the Cross Generating Station and hereinafter defined as the " Project" having a net capability of approximately 1800 MW and with the first unit presently expected to be placed in commercial operation during the 4th quarter of calen-dar year 1983, with the remaining three units to follow as the conbined Authori-ty-Central load requirements dictate; and Authority has entered into certain contracts for planning, engineering and construction of the Project; and Central has detennined that forty-five percent (45%) of the Project Output will be required on or about the expected Dates of Commercial Operation of the respective units to serve its growing power and energy requirements; and l l Authority has detennined that the disposition of forty-five percent (45%) l of the Project Output to Central is desirable; and i Authority and Central have detennined that it is in their best interests l and in the best interests of the State of South Carolina for them to own the Project excepting the land thereon as tenants in common and for Authority to proceed with Project design, construction, operation and maintenance for itself and as agent for Central pursuant to this Agreement. NOW, THEREFORE, the Parties mutually agree as follows: if t l l
- 1. DEFINITIONS p 1.01 " Costs of Construction" means all costs allocable to the acqui-sition, design, engineering, and construction of the Project, obtaining neces-sary pemits and making it ready for operation, including the cost of initial fuel supply and allowance for funds used during construction. Credi.ts relating to suc1 costs, including insurance proceeds, shall be applied to Costs of Con-struc', ion when received.
1.02 " Cost of Operation" mean3 all costs applicable or allocable to the operation and maintenance of the Project, fuel and rights relating thereto, elec'tive capital additions made pursuant to Section 20, and, subsequent to the Date of Commercial Operation, repairs and renewals and replacements necessary to assure design capability, bettements, modifications and additions in keeping with Good Utility Practice and when in the reasonable judgment of Authority necessary to obtain the approval of or to comply with the requirements of gov-crnmental agencies have jurisdiction. Credits relating to such costs, includ-ing insurance proceeds. shall be applied to Costs of Operation when received. Also included are Authority Administration and General Costs, Suns in Lieu of Taxes, Payment to the State, Capital Improvement Funds, Working Capital Require- . ments, rental of the Project real estate, debt service on railroad cars and' related equipment, and other related costs allocable to the Project. 1.03 " Construction Disbursing Account" means the separate account established by Central for the purpose of paying Central's Ownership Share of Costs of Construction. 1.04 "Date of Commercial Operation" means the date fixed by Authority and agreed to by Central as the point in time when a Generating Unit is ready to be operated on a commercial basis at an output as detemined by the Central-Authority Operating Committee to be in accordance with Good Utility Practice. 1.05 " Generating Station" means the steam generator, the turbine-generator and related structures and facilities, including the cooling facili-ties, emission control facilities, Project Substation, including facilities for switching and transfomation, together with additions and bettements thereto and replacements thereof, and appropriate equipment and spare parts. 1.06 " Good Utility Practice" at a particular time means any of the practices, methods and acts, which in the exercise of reasonable judgment in the light of the facts (including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the electrical utility indus-try prior thereto) known at the time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consis-tent with reliability, safety and expedition. Good Utility Practice includes due regard for manufacturer's warranties and shall apply not only to functional parts of the Project, but also to appropriate structures, landscaping, painting, signs, lighting and other facilities. Good Utility Practice is not to be limit-ed to the optimum practice, method or act to the exclusion of all others, but rather to be a number of possible practices, methods or acts. In evaluating whether any Matter ennfoms to Good Utility Practice, the Parties and the Pro-ject Consultant shall take into account the fact that the Authority is an Agency of the State of South Carolina with prescribed statutory powers, duties and f responsibilities. 1.07 " Labor Costs" means all payroll, related employee benefit costs and employee expenses of all employees of the Parties chargeable to the Project.
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1.08 " Matter" means any subject, or any aspect thereof, arising out of or relating to the interpretation or perfomance of this Agremnt, including any proposal that may be made by either of the Parties. 1.09 " Output" means that net capacity and energy from the Generating Unit or Station which at any time can be made available at the high voltage teminals of the Project Substation after station use and losses. 1.10 "0wnership Share" of a Party means the fract onal share specified in Paragraph 2.01 hereof, or as the same may be adjusted pursuant to Sections 18 and 19. 1.11 " Plant Real Property" means the real property owned by Authority as a site for and necessary and useful for the cnnstruction, operation and maintenance of the Project. A description of the Plant Real Property and state-ment of the estimated value thereof is attached as Exhibit I, and made a part hereof. , 1.17 " Coordination Agreement" means the Power System Coordination and Integration Agreement between the Parties. 1.13 " Project" means the (a) Generating Station, (b) all licenses, pemits, rights and approvals necessary or convenient for construction, opera-tion, maintenance of the Project, (c) roads, railroad extension, railroad spurs, docks, parking lots, fencing and similar facilities, and (d) all things acquired by the Parties for use in construction, operation, maintenance and repair of the Project. A description of the Project and a statement of the estimated cost thereof is attached as Exhibit II, and made a part hereof. 1.14 " Project Consultant" means an individual or fim of national reputation and recognized expertise in the field or subject referred to it, the appointment of which is mutually agreed to by the Parties, retained for the purpose of resolving differences referred to it. A different Project Consult-ant may be retained for each Matter referred. 1.15 " Project Construction-Engineer" means Burns A Roe, Inc., of Oradel, New Jersey, retained by Authority for the design and engineering and construction supervision of units one and two of the Project under the direc-tion of Authority. The Project Construction-Engineer may or may not be Burns & l Roe, Inc., for units three and four of the Project. 1 l 1.16 " Project Substation" means lines and switching facilities con-necting the Generating linits to the Cross 230 KV substation, line and switch-ing j facilities for connecting the startup and emergency t'ransfomer for the Generat-l ing Units to the 230 KV substation, 230 KV buses, insulators, structures and l foundations, bus tie switching facilities, 230 KV bus potential and current l transformers including interconnection metering equipment, relays and meters and l control devices for these bus facilities installed and made operational with the i Generating tinits. l
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1.17 "Unifom System of Accounts" means the Federal Energy Regulatory Commission Ifnifom Systen of Accounts prescribed for Class A Public Utilities b and Licensees in effect on January 1,1980, as the same may be amended from tine to time.
- 2. 0WNERSHIP, RIGHTS AND OBLIGATIONS
. 2.01 The Parties shall have title to the Project except the real estate as tenants in common and shall, as co-tenants with an undivided interest therein and, subject to the terms of this Agreement, own the Project, have the related rights and obligations, including payment therefor, and be entitled to the hutput as follows:
Pa rty Ownership Share Aut hori ty 5 5*. Central 45% 2.02 Subject to Paragraphs 2.07 and 5.01, the Parties c.b2Il prmptly and with all due diligence, acting jointly or individually as may be appropri-ate, take all necessary actions and seek all regulatory approvals, licenses.and pemits necessary to carry out their obligations under this Agreement. 2.03 Authority shall within a reasonable time and wn receipt of any required regulatory approvals and from time to time, execuue and deliver deeds, bills of sale and such other documents as nay be necessary in addition to this Agreement to grant Central an easement over Project lands for the duration of the Project and to vest ownership in the Parties as set forth in Paragraph 2.01 above.
?.04 (a) The duties, obligations and liabilities of the Parties are intended to be several and not joint or collective, and neither Party shall be jointly or severally liable for the acts, omissions or obligations of the other Party, except that Central shall be severally liable, in proportion to its Ownership Share of the Project, for the acts, omissions, or obligations per-fomed, omitted or incurred by Authority while acting as the agent of Central under the terms of this Agreement.
(b) No provision of this Agreement shall be construed to create an association, joint venture, partnership, or impose a partnership duty, obligation or liability, on or with regard to any of the Parties. Neither Party shall have a right or power to bind any other Party without its written consent, except as expressly provided in this Agreement. Each Party shall severally bear its Ownership Share of all obligations, including the supply of energy for station use when not generated by the Project, and shall severally bear its Ownership Share of liabilities relating to the Project at they arise. 2.05 lintil such time as the Project, or any part thereof, as origi-nally constructed, reconstructed or added to, is no longer used or useful for
- the generation of electric power and energy, or until the end of the period l pemitted by applicable law, whichever occurs first, the Parties wab the right to partition, whether by partition in kind or ule and division one proceeds thereof, and agree that during said tine they will not resort to any action at law or equity to partition and further that for said time they waive the benefit i of all laws that may now or hereafter authorize partition of the properties comprising the Project.
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?.06 fach Party and its designees shall have the right to go upon }
and into the Project at any time subject to insurance and industrial security and safety requirements and the necessity of efficient and safe construction and peration of the Project. 2.07 In order to provide unified management of the Project, Central authorizes and designates Authority, and Authority agrees to so act, as its agent to design, construct, operate and maintain the Project under the tenns of this Agreement, and the Parties agree that Authority shall have sole possession and control of the Project for the Parties subject to the provisions of Para-graph 2.06, and shall have sole authority for the design, . construction, opera-tion *and maintenance of the Project in accordance with Good Utility Practice and in such manner as is required in the reasonable judgnent of Authority to obtain the approval or comply with the requirenents of regulatory agencies having jurisdiction. The Parties agree that such relationship shall not be changed except hy the written consent of both Parties. 2.08 (a) In the design, construction, operation and maintenance of the Project, each Party shall act without compensation other than payment or reimbursement of costs and expenses as provided herein. , (b) Each Party releases the other Party, its agents and eroployees frm any claim for loss or damage, including consequential loss or damage, arising out of the construction, operation, maintenance, reconstruction or repair of the Project due to negligence, but not any claim for loss or damage resulting from breach of this Agreement or for willful or wanton misconduct. Authority acting for and on behalf of Central and itself, shall take timely and appropriate legal action to recover losses from damages resulting from breach of any other contract relating to the Project, and shall promptly notify Central of any such breach and anticipated loss resulting therefron. Notwithstanding the foregoing, Authority and Central acting jointly may initiate and pursue any legal actions or proceedings, and enforce any legal or equitable rights or claims relating to or affecting the Project as and when it may be necessary, appropriate or prudent for them so to do. (c) Any loss, cost, liability, damage and expense to the Parties or either of then, other than damages to either Party resulting from loss of use and occupancy of the Project or any part thereof, arising out of the construction, operation, maintenance, reconstruction or repair of the Project or based upon injury to or death of persons or damage to or loss of Project property and property of others, to the extent not covered by collectible in-surance, shall be charged to Costs of Operation or Costs of Construction, which-ever may be appropriate. (d) Each Party to the extent obtainable shall cause its insurers to waive any rights of subrogation against the other Party, its agents and employees, for losses, costs, damages or expenses, arising out of the con-struction, operation, maintenance, reconstruction or repair of the Project.
- 3. PROJECT COORDINATION
/ 3.01 At the time of the execution of this Agreement the Parties shall each appoint by notice in writing to the other Party a representative and
an alternate, who shall be employees of the Party making the appointments. Changes in the representative or alternate shall be made by written notice to the other Party. Notice to an appointed representative or alternate shall be deemed to be notice to the Party represented by him. 3.;02 Authority shall keep Central informed of all significant Mat-ters with respect to licensing, design, construction, operation and maintenance of the Project (including plans, specifications, engineering studies, environ-mental reports, budgets and supporting data, staffing and maintenance programs and schedules) and, when practicable, shall furnish such infonnation in time for
-Central to submit comments and recommenaations thereon before decisions are made, and shall confer with Central as and whenever needs arise. Authori ty shall give due consideration to comments and recommendations made by Central.
Authority shall furnish or make available any and all other information relating to any aspect of the Project upon request of Central. 3.03 Nothinq contained in this Section 3 shall in any manner dimin-ish the authority, possession and control of Authority as set forth in Par. graph 2.07.
- 4. RESOLUTION OF DISAGREEMENTS 4.01 If Authority and Central cannot agree on any Matter which under the terms of this Agreenent requires mutual consent of the Parties, a Project Consultant will be appointed to settle the disagreement. In the absence of an agreement as to the selection of a Project Consultant, either Party may request the Chief Judge of the United States District Court for the District of South Carolina to appoint a Project Consultant.
4.02 The Project Consultant shall consider all written arguments and factual naterials which have been submitted to it by the Parties within 30 days following its appointment, and as prontly as possible make a written determina-tion as to whether any Matter referrel to it would or would not have been con-sistent with Good Utility Practice. If the Project Consultant determines that the Matter referred to it was not consistent with Good Utility Practice, it shall at the same time recommend what would under the same circumstances have met such test. i 4.03 Matters found by the Project Consultent to be consistent with Good Utility Practice shall become immediately effective and Central shall be obligated to expend funds for its Ownership Share of the increased cost, if any. l Subject to Paragraph 4.05, Matters found by the Project Consultant to be incon-sistent with Good Utility Practice shall be modified to confonn to recommenda-tions of the Project Consultant or as the Parties may otherwise agree, and shall become effective when so modified. 4.04 Authority shall have the right, but not the duty, to proceed with Matters which have been disapproved by Central; provided, however, if Authority takes such action on a disapproved Matter and if the detennination made by the Project Consultant is that such Matter was act consistent with Good Utility Practice, then Authority shall hear the net increase in the Costs of Construction and Costs of Operation of such action to the extent it was incon- ! sistent with what the Project Consultant determined would under such circum- !/ stances have met such tests. ( e
4.05 Notwithstanding other provisions of this Section 4 whenever a F Matter has been referred to the Project Consultant and Authority detemines that the other position or positions would create an immediate danger to tha safe operation of the Project or when in the reasonable judgment of Authority neces-sary to obtain the approval of or to comply with requirements of governmental agencies having jurisdiction, Authority may proceed in accordance with Authori-ty's position with respect to such Matters until such Matter has-been resolved by the Project Consultant. Whenever the Project Consultant has recommended a course of action which the Authority detemines would create a danger to the safe,ty of the Project or would violate regulatory requirments of any qovern-mentai agency having jurisdiction of the Project, Authority may nevertheless proceed in accordance with Authority's position subject to a suitable financial adjusinent. 4.06 The cost of employing the Project Consultant shall be shared equally by the Parties.
- 5. CONSTRUCTION AND LICENSING 5.01 Authority, acting for itself and as agent for Central, shall take whatever action is necessary or apropriate to seek aqd obtain all licenses, pemits and other rights and regulatory approvals necessary to construction and operation of the Project.
5.02 Authority shall prosecute construction of the Project in accordance with Good Utility Practice and plans and specifications f:- the Project prepared or approved by the Project Construction-Engineer. Authority shall use its best efforts to achieve the Date of Commercial Operation for the fi"st unit at Cross during the 4th quarter of calendar year 1983, and the second unit at Cross during the 2nd quarter of Calendar Year 1985 but shall not be responsible for delays which are beyond its control, as provided for in Section 17, or for delays resulting from the regulatory process. 5.03 Authority shall, as a matter of nomal practice, award separ a contracts for readily separable parts of the work to the extent consistent with the construction of the Project at the least overall cost, high quality and the requirements of governmental agencies having jurisdiction. Construction con-tracts may be lunp sum, unit price, and, whenever deemed prudent by Authority, nay be negotiated, and may also contain incentive and liquidated damages claus-es. As a matter of policy, Authority shall request bids fran qualified con-tractors and award contracts after appropriate evaluation and review to the lowest evaluated bidder unless there are substantial reasons for deviating frm that policy in a particular case. AlI bids, contracts and related documents shall he nade.available to Central as infomation; provided, however, that the award of any contract in excess of $500,000 and any change order which would increase a contract price by an amount in excess of $200,000 shall be subject to the approval of Central . Reginning in the calendar year in which this Agreement becomes effective, the above dollar amount shall be increased or de-creased in direct relation to the annual National Consumer Price Index (nr any successor index) published by the Bureau of Labor Statistics of the United States Department of Labor. i 5.04- Any and all licenses, rernits, approvals, contracts, chliga-tions and connitrents obtained, na1e and entered into or incurred by Authority ("N prior to the effective date of this Agreerent in connection with the acquisition and construction of the Project are hereby ratified and approved by Central. A list of licenses, permits, approvals, contracts, obligations and connitrents and the arounts expended and connitted therefor, prior to the effective date of this Agreenent is attached hereto as Exhibit III and made a part nereof.
- 6. REIMBURSEMENT FOR COSTS -
6.01 Within ninety (90) days after the date of the execution of this Agree' ment , Central shall establish a disbursing account fra, which payments are to bo made on acccunt of its Ownership Share of all Costs of Constructicn. Authority shall prepare an initial statement reflecting an estinate of all Costs of Construction paid by Authority to the date of the establishment of such disbursing account. Central shall promptly pay into such disbursin; ac-count its Dwnership Share of the anount set forth on the initial statencnt. The initial statement shall include an amount for interest conputed at the Morgan Guaranty Trust Company Prine Rate per annun en a 365-day basis on all payments for Costs of Construction nade by Authority to the date of the ini-tial statecent. Thereaf ter each Party shall pay when due its Ownership Share of Costs of Construction and Costs of Operation. 6.02 Each Party shall pay to the other Party its Ownership Share of ' Costs of Construction expended for the benefit cf the Project by such other Party after the effective date of this Agreement for, among other things: (a) Lahnr Costs, (b) Other Costs of Construction including, without liciting the generality of the foregoing, equipment, insurance, licensing fees, raterials, supplies, travel, construction power, and (c) adninistrative and general costs chargeable to the Project. 6.03 Each Party shall pay to the Other Party its Ownership share of Costs of Operation expended for the benefit cf the Project by such other Party after the ef fective date of this Agreenent for, anong other things: (a) Labcr Costs, (b) other operating costs including, without liciting the generality of the foregoing, equiprent, insurance, licensing fees, raterials, surplies, and ; travel, (c) administrative and general costs chargeable to tne Project, and (d) , fuel purchases. r All net test energy generated by Unit 2 prior to the date of comrer-cial operation of such unit shall be integrated into Authority's systen and said
- by it. Central shall be credited for an arount equal to Central's cwr.ership l share of the net test energy at the sane price the Authority pays for such j energy.
j 7. CONSTRUCTION Bt!DGET , 7.01 An initial budget of the arounts expended or expectei to be expended for specific itens of Costs of Construction in each nonth during the period July 1,1980 through ,?une, 30, 1981 and for each 6-month period there-after to the completion of construction as deternined by Authority is attached hereto as Exhibit IV and is hereby approved.
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t h I 1 t i I
. 7.02 By January 1 of each year until completion of construction, ^ Authority shall provide Central an annual construction budget (subject to ap-proval by the Authority's Board of Directors) supported by detail adequate for the purpose of comprehensive review, describing the items of Costs of Construc-tion and of the amounts expected to be expended therefor in each month during the next 12-month period and in 6-month periods thereafter to the completion of construction. Central shall, within 30 days after receipt of such budget, indicate its approvai or disapproval of the budget or any part thereof and may submit to Authority any comments or reconmendations it deems appropriate.
Consf.ruction budgets shall be changed by Authority from time to time during a calendar year as necessary to reflect substantial changes in construction sched-ules, plans, specifications or costs, and when so changed shall be submitted similarly to Central and action to approve or disapprove shall be taken by Central within 15 days of receipt thereof.
- 8. CONSTRIICTION PAYMENTS 8.01 Not later than the fifth working day of each month Authority shall furnish Central an estimate of Costs of Construction expected to be paid during the following calendar month together with Authority's approximate sched-ule of payr.ents of such cost, and will fran time to time as appropriate advise Central of any changes in such estimates or schedules.
8.02 Authority shall pay all Costs of Construction and prior to the close of business on each working day, shall notify Central of the total of such payments made that day and of any significant changes in Authority's schedule or estimate furnished pursuant to Paragraph 8.01. Not earlier than 12:00 noon of the next worhiay following such payments, Authority shall draf t Central's Con-struction Disbursing Account for Central's Ownership Share of such payments subject to Paragraph 6.02. Authority shall furnish Central canplete supporting data including accounts distribution as soon as practicable.
- 9. OPERATION 9.01 Authority shall operate and maintain the Project in accordance with Good litility Practice and in such manner as is required in the reasonable judgment of the Authority to obtain and maintain the approval of or to comply with the requirements of governmental agencies having jurisdiction.
9.02 Subject to Paragraph 9.01 and to the provisions of Section 13, Authority shall operate and maintain the Project as if it were a risinterested party without regard to the benefits of the respective ownership of the Par-ties. l
- 10. OPf RATION RilDGETS '
10.01 For purposes of this Section 10, Contract Year shall be the twelve-month period beginning July 1 and ending June 30 except that the first l Contract Year shall be the period beginning on the Date of Conmercial Operation of the first unit at Cross and ending the next succeeding June 30. V
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10.02 At least two (2) months prior to the expected Date of Commer-
, cial Dreration, Autharity shall provide Central a budget of the Costs of Opera-A tion, including adninistrative and general expenses relating to operation far each month from the expected Date of Comnercial Operation to the end of the first Contract Year. Thereafter, on or before June 1 of each year, Authority shall provide Central a similar operating budget for the next succeeding Con-tract Year. Each operating budget shall be supported by detail adequate to allow Central's detailed review and shall show, among other things, staffing allocations and Authority services. Central shall indicate its approval or disapproval of the proposed operating budget or any part thereof within 30 days afte,r receipt.
10.03 The effective operating budget shall be revised sami-annually and clso shall he changed from time to time: (a) to include costs occasioned by an energency, (b) to provide for repairs, renewals, replactments or additions necessary to achieve and maintain design capacity and energy capability and (c) to provide for expenditures which in the reasonable judgnent of Authority are necessary to obtain the approval of or to comply with the requirenents of gov-ernmental agencies having jurisdiction or an expenditure required by Section 18 Promptly after the semi-annual revision or the occurrence of any of the above events and promptly af ter the occurrence of other circumstances requiring the expenditure of funds not contemplated in the effective operating budget, Author-ity shall provide a revised operating budget to Central. Costs incurred by Authority in the exercise of Good Utility practice prior to the time a revised operating budget becomes effective shall be added as incurred to the amounts due under the operating budget. Central shall indicate its approval or disapproval of the revised operating budget or any part thereof within fif teen days after receipt.
- 11. OPERAT10fi pAYP.EflTS 11.01 Authority . agrees to make payments of :111 Costs of Operation and Central, upon notice, shall promptly reimburse Authority for Central's Ownership Share of such costs subject to the provisions of Paragraph 6.02.
11.02 flot later than the next to the iast working day of each month and at such other times as is practicable Authority shall notify Central of any significant changes in Costs of Operation expected to be paid in the following month. 11.03 Authority will notify Central one (1) working day prior to anticipated payment of Costs of Operation and of the amount of noney required to make such pavnent. Central will transfer to an operating disbursing account in a bank mutually agreed con sufficient monies to cover Central's Ownership Share of such Costs of Operation. Authority shall furnish Central co,plete supporting data, including accounts distribution, as soon es practicable.
- 12. FUEL 12.01 A mininun of seventy (70) days supply of fuel adequate to operate the station at seventy (70) percent of the average annual burn estimate will be the target stockpile for the station.
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^ 12.02 Fuel for the original stockpile and deliveries to maintain ' at least the above minimum stockpile level shall be acquired through long-tem contracts to the extent possible and practical. As a matter of policy, Author-ity shall request bids from qualified suppliers and award long-tem contracts and spot-market purchases, after appropriate evaluation and review, to the lowest evaluated bidder unless there are substantial reasons for deviation fran that policy in a particular case.
12.03 All bids, contracts, and related documents shall be made avaijable to Central as infomation; provided, however, that the award of any contract for any period longer than one year shall be subject to review by Central's representative invited to participate with the Authority's staff committee which approves such contract awards. 12.04 Fran time to time purchases on the spot-market or transfers to the Cross Station from other generating stations may be used to supplement the amounts of f uel obtained under long-tem contracts. It may also be neces-sary to transfer fuel fran the Cross Station stockpile to the stockpile of other Authority or Authority-Central owned geneating station if Authority . considers such transfers to be in the best interest of the systeo. Transfers of fuel to an't fran the Cross Station will be valued at the Authority's adopted method of costing coal to all customers. 12.05 Authority shall make all payments of the cost of fuel pursuant to the provisions of paragraph 6.03 of this Agreement.
- 13. SCUEDULING OF PROJECT GUTPUT D.01 Each party shall be entitled to receive its Ownership Share of the Output of the Generating Station.
13.02 Authority shall be responsible for the scheduling and dis-patching of capacity and energy available from the Generating Station to give effect to the provisions of this Agreement and the most economical mix of avail-able resources, including econanic dispatch purchases, which results in the lowest overall cost to meet system load requirements. 13.03 Authority with the concurrence of Central shall schedule Generating Station outages, other than emergency outages, and notify Central as to the time and duration thereof as far in advance as practicable. Notwith-standing the foregoing, Authority may shut the Generating Station down, reduce , power or take other appropriate action which in the reasonable judgnent of the i Authority is necessary to obtain the approval of or comply with the require-ments of governmental agencies having jurisdiction, or to insure safety to per-sons or property.
- 14. DELIVERY OF PROJECT GUTPUT 14.01 The parties shall equitably compensate each other for losses incurred in effecting the delivery of Project Output. Such losses shall be detemined pursuant to the Coordination Agreement.
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- 15. ACCOUNTING 15.01 Authority shall keep separate, complete and accurate account of all receipts and expenditures of Costs cf Construction and Costs of Opera-tion. Each of the Parties shall keep complete and accurate accounts of all costs incurred by it for whi:h it is to be reimbursed as a Costs of Construc-tion or Costs of Operation as appropriate.
15.02 All accounts shall be kept in accordance with or so as to pemit conversion to the Unifom Systen of Accounts. The allocation of costs by Authority between Costs of Construction and Costs of.0peration pursuant to this Agreenent shall be binding on the Parties for purposes of this Agreement, but the manner in which accounts are kept purruant to this Agreement is at intended to be determinative of the manner in which they are treated in the separate books of account of the Parties. 15.03 Central shall have the right at any reasonable time to examine the separate books of account relating to the Project kept by Authority pur-suant to this Section 15 and to examine and copy all plans, specifications, bids and contracts relating to the Project. Each party shall have the right to examine the books of account and all supporting data and documents relating to amounts for which the other Party is to be reimbursed. The measure of the acceptability of the amounts for which a Party is to be reimbursed shall be Good Utility Practice. Either Party shall have the right to challenge any of the amounts for which the other Party has made payment, and if the Parties cannot agree on the amounts so challenged, the Matter shall be referred to a Project Consul tant . 15.04 Authority shall cause all accounts to be audited by a fim of independent Certified Public Accountants of national reputation acceptable to both Parties and regulatory agencies at opproximately annual intervals and when such accounts are closed. Copies of such audits shall be supplied to Central.
- 16. INSURANCE Authority shall maintain in force, for the benefit of the Parties as their interest shall appear, as Costs of Construction or Costs of Operation as appropriate, such insurance as Authority and Central may agree upon, but not less than as is nomally carried by electrical utilities in similar circumstances to confom to Good Utility Practice. Authority shall keep Central infomed as to the status of insurance in force and if it does so, Authority shall not te liable for any failure to insure or inadequacy of coverage. Central may reques additional insurance to the extent available, and Authority shall purchase such requested insurance at the expense of Central. The proceeds fron such requested insurance shall be disbursed as directed by Central. If additional units or generating projects are proposed for the site of the Project, Authority may cause the insurance on the Project to be extended to such units or generating projects.
- 17. UNCONTROLLABLE FORCFS Neither Party hereto shall be in default in perfomance of any obliga-g tion hereunder, except the payment of moneys, if such failure of perfomance is
due to causes which such I arty could not have reasonably been expected to avoid. A 18 DAMAGE TO PROJECT 18.01 If the Project suffers damage resulting from causes other than ordinary wear, tear or deterioration to the extent that the estimate of the cost of repair is twenty-five (257.) percent or less of the depreciated value of the Project prior to the damage, and does not exceed available insurance pro-ceeds by $_ or more, and if the Parties do not agree that the Project shall be ended pursuant to Section 24, Authority shall promptly submit to Cen-tral
- a revised ennstruction or operating budget, as appropriate. Authority shall then proceed to repair the Project and each Party shall pay as budgeted its Ownership Share of the cost of such repair.
13.02 If the estimate of the cost of repair exceeds twenty-five (25?,) percent of the depreciated value of the Project, or if the estimated cost of repair exceeds the available proceeds of insurance by $ or more, the Parties shall detemine the estimated fair market value of the Project if it is then teminated without repair, if within ninety (90) days thereaf ter, .the Parties do not mutually agree that the Project shall be repaired as provided in Paragraph 18.01, each Party shall become entitled tr its Ownership Share of available insurance proceeds and the Party desiring such repair shall have the option to either (a) purchase the other Party's Ownership Share of the Project by payinq to the other Party its Ownership Share of the estimated value of the Project without repair, or (b) paying the full amount of the cost of repair, in which latter case the Ownership Share of the Party not desiring repair shall be reduced at the end of each month to the extent detemined by the following fomul a:
=
S S O ( V ) (V+C) where: V = Estimated fair market value of the Project if it is teminated without repair. C = Actual expenditures for repair. ! S o = Ownership Share prior to loss, b r = Reduced Ownership Share. 18.03 Any change in the Parties' Ownership Shares resulting from Paragraph 18.02 shall be subject to necessary reguitory approvals.
- 19. DEIAULT 19.01 Upon failure of either Party hereto to make any payment when due or perfom any obligation of any owner herein, the other Party may make written demand upon said Party, and if said failure is not cured within 60 days
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from the date of such demand it shall at the expiration of such reriod consti-tute a default. A Party in default shall have no right to the Output of the f Project or to exercise any other right of a Party. If a Party in 9000 f aith disputes the existence or extent of such failure, it shall within said 60-day period make such payr.ent or perfom such obligation under written protest di-rected to the other Party. Such dispute shall be submitted to a Project Con-sultant who shall detemine the extent of the obligation of the Party disputing such failure and any paynents shall be adjustt cordingly. Payrents not made when due may be advanced by the other Party and, M advanced, shall bear interest, until paid, at the Morgan Guaranty Trust yny Prire Rate. Notwith-standing any of the provisions of this Section 19, it .athority is the Party in default, Authority shall continue to operate the Project in accordance with Goy! Utility Practice. 19.07 If the default results frm non-pay ent of capital costs, as defined in the finifom Systen of Accounts, and continues for a period of four nonths, the defaulting Party shall afford the other Party the right (but such other Party shall not have the obligation) for an additional period of two
, months by notice in writing, to undertake the paynent of such capital costs in full and the Ownership Share of the Parties shall be adjusted as detemined by the following fomula:
= ( V S
S ) O (V+A) where: Y = Estimated fair value of Project without the capital addition assign-able to non-pay ent. A = Capital addition assignable te non-payrent plus interest thereen. o = Dwnership Share prior to default. S r = Reduced Ownership Share. 19.03 Any change in the Parties' Ownership Shares resulting frm , Paragraph 19.02 shall be subject to necessary regulatory approval. 19.04 In addition to the rights granted in this Section 19, any nondef aulting Party may take any action, in law or equity, to enforce this Agree ent and to recover for any loss or damage, including attorney's fees ard collection costs, incurred by reason of such default.
- 20. ELECTIVE CAPITAL ADDITIONS Renewals and replacements not necessary to assure design capability, and bettements and additions to the Project which in the reasonable judg ent of Authority are not required to obtain the approval of or cmply with require-nents of governmental agencies, shall be nade after the Date of Connercial Orer-ation only upon agreement between the Parties; provided, however, that Authority may nake such additions at its own expense.
- 21. ADDITIONAL FACILITIES 21.01 If Authority detemines to construct additional generating facilities on Plant Real Property, Central shall become a joint owner thereof with Authority in the same proportion as its Ownership Share set forth in Para-graph 2.01 hereof. The terms and conditions of such joint ownership shall be in accordance with the provisions of this Agreenent as the same may be appropriate-ly modified, amended or supplemented with the mutual consent of the Parties to reflect such joint ownership.
71.07 Authority shall furnish Central copies of pertinent swdies relating to the construction of such additional facilities as soon as such studies becone available, and as soon as practicable shall notify Central in writing of its detemination to construct such additional facilities. The notice shall specify a period of time, but not less than ninety (90) days, within which Central shall indicate its approval.
- 22. ASSIGNMENTS 22.01 This Agreement shall be binding upon and shall inure to the benefit of successors and assigns of the Parties; provided, however, that no transfer or assignment of other than all of a Party's interest in the Project ~
and under this Agreement to a single entity shall operate to give the assignee or transferee the status or rights of a " Party" hereunder. Except as provided in Section IR and 19 of this Agreement, the undivided interest (or a portion timreof) of either Party in the Project under this Agreement may be transferred and assigned as set out below but not othentise; (a) Tn any mortgagee, trustee, or secured party, as security for bonds or other indebtedness of such Party, present or future; and such mort-gagee, trustee or secured party may realize upon such security in foreclosure or other suitable proceedings, and succeed to all right, title and interests of such Party; (b) To any corporation or other entity acquiring all or sub-stantially all the property of the Party making the transfer; (c) To any corporation or entity into which or with which the Party making the transfer may be merged or consolidated; (d) To any corporation or entity, the stock or owrership of which is wholly owned by the Party making the transfer; (e) To any corporation or entity in a single transaction constituting a sale and lease back to the transferor or assignor. 22.02 Transfer or assignment shall not relieve a Party of any obli-gation hereunder except to the extent agreed to in writing by the Parties and shall be subject to the approvals of governmental agencies having jurisdic-tion. f
23, 1 RAINING A (a) Authority shall carry out a familiarization and training program to maintain adequate staffing, engineering and operation of the Project and the expenses thereof shall be part of the Costs of Construction or Costs of Operation as appropriate. (b) Each Party shall be entitled within the limits of opera-ting efficiency and safety requirements to use of the Jacilities of the Project for t'.e training of its own employees for staffing of other facilities or the engineering and operation thereof. Any increase in the Costs of Construction or the rosts of Operation resulting from such training shall be borne by the Party employing such trainees.
- 24. Ef:0 0F PROJECT When the Generating tinit or Station can no longer be made capable, consistent with Good Utility Practice, of producing electricity, or when the Project is ended pursuant to Section 18, Authority shall sell for removal by the Purchaser all saleable parts of the Project to the highest bidders. The net proceeds or costs of the sale shall be distributed to each Party in accordance with its Ownership Share. In the event such costs of ending the Project exceed available funds, each Party shall pay its Ownership Share of such excess as incurred.
- 25. PERSONAL COVENANTS AND LIMITATION AGAINST ALIENATION 25.01 Except for the Parties' mutual waiver of the right to parti-tion set forth in Section 2, all of the covenants and conditions herein shall be personal to the respective Parties and not covenants running with the land and shall be binding upon any person or entity acquiring any right, title or in-terest of any Party in or to the Project or under this Agreenent, by assignment or in any other way.
- 26. PROPRIFTARY INFORMATION All infomation made available to Central by Authority hereunder shall be subject to any applicable restrictions on disclosure of proprietary infor-mation.
- 27. C0llNTERpARTS This Cross Agreement may be executed in any number of original coun-terparts. All such counterparts shall constitute but one and the same Cross Agreement.
- 28. SEVERABILITY If any provision of this Cross Agreement is held invalid or unenforce-able by any governmental authority or court having jurisdiction over the subject matter hereof, the remaining provisions shall remain in full force and effect according to their terms and the Parties shall renegotiate in good faith any provision held invalid or unenforceable in order to reach agreement as to
'I replacement of or modification to such provision.
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- 29. INTERPRETATION AND CAPTIONS A
- 1. If any provision of this Cross Agreement or any of its Exhibits is in conflict with any provision of any prior dated agreement, the provisions of this Cross Agreenent shall prevail..
- 2. The captions of Articles and Sections of this Cross Agreenent and its Exhibits are for convenience only and shall be ignored in construing or interpreting the provisions of this Cross Agree-
, ne nt .
30 GOVERNING LAW The provisions of this Cross Agreement shall be construed and governed in accordance with the laws of the State of South Carolina.
- 31. NOTICES Any notice or ccrinunication required or remited hereunder shall be effec-tive when personally delivered or when addressed:
If to Central: Central Electric Power Cooperative, Inc. Post Of fice Box 1455 Columbia, SC 29202 If to Authority: South Carolina Public Service Authority 223 North Live Oak Drive Moncks Corner, SC 29461 and deposited, postage prepaid, certified or registered, in the United States nail. Any such notice so given shall be deemed to have been given on the date of such deposit of such notice in the United States mail as evidenced by the postmark on the envelope. Either Party by notice to the other given as afore-said nay change its nailing address for future notices bereunder.
- 32. EFFECTIVE DATE AND TERM This Agreenent shall become effective on or af ter April 1,1980, upon approval by the Administrator of REA; provided, howevar, that if such approval by the Administrator of REA is not forthcoming by December 31, 1980, either Party nay, at its option, declare this Agreement and its execution thereof, null and void.
! IN WITNESS Wi!ERE0F, the Authority, pursuant to a resolution duly adopted by its Board of Directors, has caused this Cross Agreement to be exe-cuted by its President and its seal to be affixed by its Secretary, and Cen-tral, pursuant to a resolution duly adopted by its Roard of Trustees, has caused this Cross Agreement to be executed by its President and its corporate seal to be affixed by its Secretary, all as of the day and year first above written. (
Attest: SOUTil CAROL!fiA PUBLIC SERVICE AllTit0RITY X BY Secretary res Went Attest: CENTRAL ELECTRIC POWER COOPERATIVE, IflC. RY
. - Secretary President (SEAL)
I i
i 5"% EXHIBIT I 0F CROSS AGREEMENT ! 4 , PLANT REAL PROPERTY Approximately 2,150 acres located East of the Authority's Diversion Canal in the Cross Section of St. John's Parish, Berkeley County, South Carolina, ' as shown on Authority Drawing C-33BB, dated 2/18/80, entitled " Detail Map of Project Area", attached hereto as Appendix I. A " General Map of Project Area", Authority Drawing C-3389, dated 2/18/80 is attached as Appendix !!. 1 'l f f{
X EXHIBIT 11 Of CROSS AGREEMLNT PROJECT DESCRIPTION Santee Cooper proposes to construct four 450-MWe (net) coal-fired steam-electric generating units on an approximately 2,660-acre site adjacent to the north bank of the Diversion Canal connecting Lakes Marion and Moultric of the licensed Santee Cooper Hydroelectric Project, FERC No.199, and near the town of Cross, South Carolina. The proposed water intake and discharge struc-tures and parts of the transmission line corridors would be 'nated within the boundary of the licensed Santee Cooper project. Commercial .,peration of the first unit is planned for 1983, with succeeding units scheduled for 1985, 1987, and 1988. Support facilities would include a 10.5-mile rail spur to bring coal to the plant, and approximately 180 miles of new 230-kV transmission lines with six separate circuits supply existing substations at four primary load centers. Major station facilities include two approximately 600-foot high stacks wi% dual flues (one for each unit), mechanical draft cooling towers, electrostatic precipitators for the removal of particulates, a wet limestone flue gas desulfurization (FGD) system for the renoval of sulfur dioxide, boilers designed to reduce nitrogen oxide emissions, a chemical waste treatment plant, and intake and discharge structures at the Diversion Canal. The site is charac-terized by a level topography, varying between 80 and 85 feet above mean sea level. Some lowland areas are marshy during the wet seasons, and several are classified as Corps of Engineers 404 Wetlands. The site is presently timbered with pine and mixed pine-hardwoods. There are no residences c9 the site, which is owned by Santee Cooper. Fuel lhe Cross Ganerating Station would burn bituminous coal from reserves in Eastern Kentucky. At full load each unit would consume approximately 221 tons /hr, approximately 1,400,000 tons /yr at a 70 percent annual load factor. Coal would he delivered by unit trains of 10,000 ton capacity at an average rate of 3 per week per unit. Forty-six acres of land would be provided for 120 days of dead storage. Water Resources ! Water for plant operations would be withdrawn from the Diversion Canal. Two intake structures would be located at the bank of the canal. Each structure would contain trash racks, a vertical traveling screen, and three ! 7,500-gpm intake pumps. Structures would be designed for a maximum intale velocity of 0.5 fps. Potable water (300 gpm maximum) would be supplied f rom wells and/or treated canal water. The heat dissipation system would consist of mechanical draft cooling towers operating in a closed circuit. i(
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Air Resources A The nroposed air pollution control system consists of three parts: particulate conc m1, flue gas desulfurization, and nitrogen oxides control. Particulate control would be achieved by cold-side electrostatic precipitators located after the heat exchangers. Flue gas desulfurization would employ wet limestone scrubbers, designed to remove 90 percent of the 50 In nonnal opera-tion removal efficiency would be between 70 and 90 percent, $s. required to maintain 50 emissions below 0.6 lb/million BTU, with some bypass to minimize flue gas re$ eat requirements. Nitrogen oxide control would be by boiler and furnace design. Solid Wastes Sludge frm the FGD system would be dewatered and mixed with dry fly ash and a lime additive to stabilize it in solid fom. The solidified material would be disposed of on site. Fly ash, as described above, would be cmbined with the FGD sludge. Bottom ash would be sluiced to clay-lined ash ponds for settling and clarifica-tion, with the supernatant recycled to the plant. Transmission Facilities A total of six new 230-kV transmission lines (total length about 180 miles) would be required to transmit power to existing substations at four primary load centers. Where possible and advantageous, existing corridors would be used, widened where necessary. Approximately 105 miles of new corridor would be required. Railroad Spur A new 10.5-mile rail spur would be required to connect the plant to the Seaboard Coast Line main line near St. Stephen. The route would cross the Cooper River Rediversion Canal and the abandoned historic Santee Canal. Railroad Cars The Cross Station will have facilities for rotary dump ccal cars. As these cars will not be furnished by the railroad company, they will be purchased by the Authority as part of the Coets of Construction of the Project. (
EXHIBIT Ill Of CROSS AGREFMENT h PERMITS AND CONTRACTS Santee Cocper has retained Burns and Roe, Inc. of Paramus, New Jersey, to provide engineering services and construction management services for the Cross Generating Station. Burns and Roe, Inc. will be reimbursed on a cost basis.
- The estimated cost to the Project for engineering and construction manaqement services is $20 million dollars for the first unit.
Santee Cooper is awarding contracts for equipment procurtnent and construction services. The administration of these contracts and coordination of field construction will be handled by Burns and Roe's construction management with advice and guidance from Santee Cooper's Station Construction Section. A list of purchase orders, list of licenses, pemits, end certifica-tions obtained by Santee Cooper is shown in Tables I and 11 to th:s Exhibit. This Exhibit and the Tables are correct as of January 31, 1980. I (
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TABLE I CROSS GENERAllNG STA110N FIRST UNIT Contract No. Equipment Supplier Contract An.ount 201 Turbine-Generator General Electric $15,880,419 202 Condenser Ecolaire Condenser $ 1,016,773 203 Condenser Tubes Olin Brass Group $ 1,525,418 204 Condensate Pumps Ingersoll-Rand $ 396,109 i 205 Feedwater lleaters Yuba $ 1,351.E40 206 Deaerator L*A Water $ 195,790 207 Boiler Feed Pumps Delaval $ 467,900 208 B.F.P. Drives General Electric $ 1,227,624 211 Steam Generator Combustion Engineering $43,867,411 213 Precipitator C-E Walther $13,834,055 221 Cooling Tower Research-Cottrell $ 4,805,400 231 High Pressure Valves Rockwell International $ 566,198 236 Overhead Traveling Crane Landel, Inc. $ 371,015 281 Chimney Pullman $ 5,941.000 287 Elevator Southern Elevator $ 134,967 271 Site Preparation Eastern Contractor.s $ 1,756,500 291 Preliminary Site Survey Moore, Gardner $ 21,340 292 Subsurface Investigation Law Engineering $ 488,900 292A Geophysical Probe Investigation Law Engineering $ f 6,000 292B Test Caisson Installation Caisson Corporation $ 304,169 293 Material Testing Pittsburg Testing $ 175,000 241 Makeup Demineralizing System Belco Polluticn $ 863,419 214 FGD System Peabody Pracess $21,672,000 216 Coal Handling System Fairfield Engineering $16,453,186
,, . /
CROSS GE!!LRAllNG STA110N SECOND UNIT Contract No. Equipment Supplier Contra.c,t__ Ar..ount 101 Turbine-Generator General Electric $16.055,599 102 Condenser Ecolaire Condenser $ 1,079,E99 104 Condensate Pumps Ingersoll-Rand $ 360,544 105 Feedwater Heaters Yuba $ 1,351,540 106 Deaerator L*A Water $ 190,300 107 Boiler feed Pump Delaval $ 379,900 108 B.F.P. Drives General Electric $ 1,318,128 111 Steam Generator Combustion Engineering $41,434,411 113 Precip,itator C-E Walther $13,593,055 121 Cooling Tower Research-Cottrell $ 4,704,900
. 187 Elevator Southern Elevator $ 153,894 114 FGD System Peabody Process $17,991,300 131 High Pressure Valves Rockwell International $ 566,198 0
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TABLE II 8 The following is a list of permits and certifications from the local, State, and Federal agencies which Santee Cooper has obtained .r expects to obtain as being required for the project: Local :
' A. Berkeley County Auditor's Of fice.
- 1. Berkeley County Construction Pernit.
State: A. Department of Health and Environmental Control. j 1. Construction Pennit for Water Polution Control Facilities. i
- 2. Operating " " " " "
- 3. Construction "
Sewage Treatment Plant. - , 4. Operating " " " " "
- 5. Construction Run Of f Permit (4/20/79).
- 6. 401 Cert ification.
- 7. Pernit for disposal of cellulosic material by earth burial.
- 8. Permit for disposal of inert, non-toxic waste by earth burial.
- 9. Fuel Burning Construction Permit, Unit No. 1 (4/16/79).
- 2 (4/16/79).
3. 4.
- 10. Fuel Burning Operating Pernit, Unit No. 1.
2. 3. f, , , , , Permit obtained. Table 11 F B. Water Fesources Commission.
- 1. Water Resources Construction Permit.
Federal: A. Federal Energy Regulatory Commission.
- 1. Environmental Impact Statement.
- 2. Intake and Discharge Construction Permit 2
B. Corp of Engineers.
- 1. Intake and Discharge Construction Pennit.
C. Federal Aviation Administration.
- 1. Tall Stack Construction Notification.
C
EXHIBIT IV 0F CROSS AGREEMENT INITIAL BilDGET (CROSS tlNIT NO. 2) Type !
- Type II ** Total Fiscal Year 1979 $1,787,654 $5,148,436 $ 6,936,094 Fiscal Year 1980 July 1979 78,004 48,330 126,337 August, 1979 187,783 810,469 998,225 September, 1979 432,001 1,043,698 1,475,703 October 1979 1,364,920 1,098,152 2,463,078 November, 1979 399,146 2,009,137 2,408,288 December,1979 11,782 1,047,121 1,058,906 January, 1980 2,298,796 F ebruary,1980 2,328,000 March, 1980 2,232,000 April, 1980 2,276,000 May, 1980 2,193,000 June, 1980 2,019,000 Fiscal Year 1981 37,545,750 Fiscal Year 1982 113,147,793 Fiscal Year 1983 151,483,000 Fiscal Year 1984 42,627,000 TOTAL $373,617,000
-Type I expenditures include enviromental studies, investigations, engineering, geophysical work, etc., for the facility.
Type !! expenditures include physicel work at the site and contract purchases which will become a part of the facility. [ Figures through December,1979, are actual expenditures. Others are estinates.
i O
'A 4
-i f AGREEMENT FOR THE USE OF A PORTION OF AUTHORITY MICROWAVE SYSTEM BY CENTRAL FOR LOAD MANAGEMENT AND DATA RETRIEVAL l
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Microwave Letter Agreement e This Agreement for the Use of a Portion of Authority Microwave System by Central for Load Management and Data Retrieval (hereinafter referred to as the " Microwave Agreement") entered into on the day of
, 1980, by and between the South Carolina Public Ser-yice Authority (hereinafter referred to as the " Authority"), an: Agency of the State of South Carolina, and Central Electric Power Cooperative / Inc., (herein-after referred to as " Central"), a cooperative corporation organized and exist-ing.under the laws of the State of South Carolina, witnesseth that, RECITALS WHEREAS, Central has constructed and leased to Santee Cooper certain microwave facilities to which have been added by Santee Cooper other microwave facilities together to be known as "the microwave systen" (System); and WHEREAS, Central, by virtue of shared generating capacity ownership with Santee Cooper and Central's desire for self-sufficiency, must provide -means to control and manage its member load characteristics; and, WHEREAS, the Systen provides the only practical means of such load control and management between Central and its members; and, WHEREAS, duplication of existing facilities is economically impracti-cal; and, WHEREAS, Santee Cooper desires to cooperate in such system load con-trol .
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, the Parties hereto contract and agree as follows: Santee Cooper will provide sixty (60) channels of the existing three hundred (300) channel System for Central use in load management and data re-trieval under the following conditions: Such use by Central shall be on a non-profit, cost-sharing basis pursuant to Sections 94.17 (a) (2) and 94.17 (d) of the regulations of the Federal Communications Cannission. Central shall coordinate the use of all of the channels with Santee Cooper so that there will be no adverse effects on the existing System. The System shall continue to be operated and maintained by Santee Cooper.
- Central agrees to pay to Santee Cooper for the operation and nainten-ance of the sixty (60)- channels a sum equal to one-fifth of the total annual costs -(debt service, operating and maintenance expense, and related burdens) allocated to the System.
t
Microwave letter Agreement e
- For each contract year, until actual data becomes available, Central shall pay a monthly sum equal to one-twelfth of the above-estimated cost for the
. System. When actual monthly data becomes available, succeeding monthly billing statements will be adjusted to reflect, as additional charges or credits, actual c sts incurred by Santee Cooper; I
System costs not allocated directly to Central shall be allocated purst{ ant to Appendix R of the Coordination Agreement. This System use agreement shall become effective upon the date the Administrator of REA approves the above-mentioned Coordination Agreement. Any notice or communication required or permitted hereunder shall be effective when personally delivered or when addressed: If to Central: Central Electric Power Cooperative, Inc. Post Office Rox 1455 , Columbia, SC 29202 If to Authority: South Carolina Public Service Authority 223 North Live Oak Drive Moncts Corner, SC 29461 and deposited, postage prepaid, certified or registered, in the United States i mail. Any such notice so given shall be deemed to have been given on the date of such deposit of ushe notice in the United States mail as evidenced by the postmark on tho envelope. Either Party by notice to the other given as afore-said may change its mailing address for future notices hereunder. IN WITNESS WHEREOF, the Authority, pursuant to a resolution duly adopted by its Board of Directors, has cause:f this Microwave Agreement to be executed by its President and its seal to be affixed by its Secretary, and Central, pursuant to a resolution duly adopted by its Board of Trustees, has caused this Microwave Agreement to be executed by its President and its corpo-rate seal to be affixed by its Secretary, all as of the day and year first above written. Attest: SOUTH CAROLINA PUBLIC SERVICE AUTHORITY RY Secretary President Attest: CENTRAL ELECTRIC PCWER COOPERATIVE, If C. BY Secretary President f' ! (SEAL) I i . - _ _ _ -_. . - . - - - - - _ . - --
AMI tildi til, th). 10 111 "i* 'nud1Stl1 I V,0 it I (OllR Af.1 1 i - i lhis Agreement made as of , between the 50llHI CAlt01 Illa Pllitt lC SERVICE AllTitoRlii-(hereina f ter cal'icel'Ifie "Aut hori t y"), an agency of the State of South Carolina, and the Cf.filitAl f l i '. l e l f. POWi l8 f.irn'i UA-
'11VE, . ltlC. , (hereinaf ter called " Central"), a conperat ive corporatR>n organized and{cxistingunderthelawsoftheState'ofSouthCarolina. N l
i ., .. Will HI AS, the Authori t y and Central heretof ore hav" entered into .rtree-ment s protidinq f or t he con"trut t. ion by rentril itel loas" h/ tho Authority of an el ec t r ie. pot.or q '. t ent .ind a.p cenent s providing f or the sile of pon": hy the Authori ty t o I.ont ral, the la tost aqrcement f or the sale of I"ranr lu!t<.een the Partie:. heing known as the "I Power Contract" of April 2/,19/0; and, 1'
*'illitI A',, Sec tion ', nf the "r power Cont rac t", a'. las t amnd"el by Amendment fin. H to "I'" Wholesale Power Contrac t. <l.ited as of Oc tober 10, 19/5, l provieles f or t.he manner of deternining the rate to be charged tentral by the i
Authority f or electric energy; anel, I j Will.Pl AS, Central and tho Authority have a'p eed to an intertia rate increase pending review and renegotiation of all their contractual relation-ships. 1 tjod , t ill RU ORI , in consirloration of the mutual urniertaking herein containeil, the Parties agree as f ollows:
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'.ettinn 1. Iho sa id "F Power f.ontrae.t", as amemleil, is forther cend-1 ed by elolot inq t h" t v t of *,ettion 'ec a", i t appear s on patp / 01 said contract, and substituting theiefor the following:
i "t. ' t a s t i n.: wi th t he monthly billin'i perinel hoqinnite; ,luly 1, l'Hiu
- (hilled August 1, !"HO) endinq with, but inclutling, th" monthly hill-irvi period htuli nninq of une 1, In41 (leilled .luly 1,1981), the energy
! charge per monthly billing period shall be riotermi'.ed in accordance l wi th t he provision *, of the irmnediately preceding subsection b of this j sect inn 5, as . ins etof ore revisod pursuant to '.ection H; provided, however, that there shall in addition be billed a surchargo of 7,1 , mills per Dll of total hilling f.ncrgy. Further provided, that tho e,urcharoe provided in this subsection shall not he included as a part. of the ' rate speci f ied in Section 5' to be reviewed in accordance with the rate review provisions of $cction H hereof." Section 7. l xcept as herein omlilied, the "r Power Contrac t", as ! amcHderl, remaitis in f ull lorce aml ef f ect. . l . ( hection .l. lhe amendment herein <.et forth does not constitute an ! increase in Central's power rates accomplished "at any time or by'any method ! other than in, accordance with the provisions f or periodic rate review" within i the purview of Section 74 of the "I Power Contrac t", as amended, nor will this amendment be construed by either party to indicete that the rate in ef f ect prior [ i to this amendment is or is not equitable. ' ! 5ection 4. Ihis amendment shall become elt>.ctive upon approval in j writing by the Administrator of itural Electrificatior. Administration.
, . ~ . _ _ - - _ - . - _ - _ _ _ _ . . . _ . _ _ . - . - _ . . . - _ _ _ , .._ - - _ . _ , . - . . - _ _ . - . , - , _ _ . - - - . .
A l u Wi l t;i s', '.all lM 's , : :" t.u t her i t , , pur.uant to a ee.olution riul i
.irlop t rel b y i t , ilo.ird o f Di r er. t o r",, h.i s r. a u ',' d lis t ". Au+ n du"n t. Ib. 10 to tin; "I Power (.on tr.u' t " to he executort by ite, l'e r'. i e!"n t a ni! i t , ".oa l ,i t i t s ett Irf i te, Secretary, and Central, pursuant to a resolution duly arlopted by its i oard of Trustec , b.is caused this A nend,ent IJo. 10 to be executcri by i ts President and
,its corporate seal to be af fixed by its Secretary, in quintuplicate original all as of the date and year aforesaid.
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~
SI AI ' mil a r ,, ' : g r. m . ; ; . . ' i m; ; . . ! Ag r i!v I r y Al li.' i : iy tiet re ta ry i> re ",i de n t WlItil'.'.: p _ _ _ . 5 t. Al. Li tii L AL i. l l t. lH IL i't ..'! R t.ls ti'L P A l l'. i , !!iC . A l li 'i l : _.._n . _ . ~ . _ _ _ _ . . . - _ _ _ - - . ~ ~ ~ ~. - - - . - - - - ~~~ ~ ~ ~ ~ ~ ' ' ~ ~ .r
51t 1L Oi' 50!!!110/S.nl IriA)
)
b CUlllll Y i, llLRKl.LL Y ) Personally appeared , who being duly sworn,
,says that he saw , as President of South Carolina Pub);ic Service Authority, and _ _ _, as Secretary, sign, a t tes t.g affix the Au thori ty's seal and as the ac t and dod of South Larol ina Public Service Tut hority, eleliver the f oregoing Instrument; and that he with
__ _ . . . . _ . . . _ . . _ . _ _ . _ . witoessed the esecution thereof. Sworn to hetore me this day of _ _ _ _ , , _ , _ , , , _ _ _ , _ , ,, 1980. (I.S.) flotary l'uhlic for ',nuth Carolina My Commission expires: ,__ O SI All til till LARULINA)
)
CollfilY Ui' R ' Cill. AND ) l'ersonal ly appeared , who being duly sworn, says that he saw Robert W. Williams, Jr., as President of Crntral Liectric l'ower Loopera tive, Inc. , and Robert B. Awbrey, as Sec retary, sign, a ttest, a f fix the Corporate seal and as the act and deed of Central Electric Power cooperas tive, Inc., deliver the f oregoing instrument; and thit he with
, _ _ _ , _ , _ , , _ _ wi tne", sed the execution thereot .
Sworn to before me this day of , 19)io .
. . . . . _ . . __ _ . ... . I I 5 I. -e tiotary I'uhlic f or south Carolina My Commission expires:
M M 9 CROSS GENERATING STATION LEASE AGREEMEtiT BETWEEtt 50tlTH CAROLINA PUBLIC SERVICE AUTHORITY AND CENTRAL ELECTRIC POWER COOPERATIVE, INC. f
e Agreement and lease made as of , 1980, between South Carolina Public Service Authority (" Authority") an agency of the State of South Carolina, and Central Electric Power Cooperative, Inc. (" Central?) a ceaperative corporation organized and existing under the laws of the State of Soul Caro-l'i na . RECITALS MIEREAS, Authority owns an'd operates an electric power system consist-ing of electric generating, transmission and distribution facilities; and
. MIEREAS, Central is a generation and transmission cooperative, which, through wholesale purchases frm Authority, furnishes electric power and energy to its member distribution cooperatives under all requirements contracts; and WilEREAS, Central, through loans from the United States of America, (the " Government") acting through the Administrator of the Rural Electrification Administration (the " Administrator") has constructed electric generating and transmission facilities and by means of certain lease contracts has leased such facilities to Authority; and MIEREAS, that certain Contract Obligation entered into between Author-ity and Central as of January 1,1950 contains an all requirements clause which so long as the Contract Obligation renains outstanding may only be deleted or amended with the consent of 757, of the holders of the Authority's priority obligations; and MifREAS, af ter ilanuary 1.1985, said Contract Obligation will no longer be outstanding, and after such date the Parties hereto intend to delete such all requirements provision; and MIEREAS, the Parties hereto have entered into an agreement whereby they will construct and own an electric generating station now known as the " Cross Generating Station" at which they intend ultimately to construct four generating units; and MIEREAS, the commercial operation date of the first such generating unit (Unit 2) is scheduled for November 1,1983.
WITNESSETH, that in consideration of the mutual undertakings contained herein the Parties hereto agree as follows:
N ARTICLE I Construction of the Cross Plant Unit 2 Section 1. Scope of the Cross Plant Unit 2. The Cross Plant Unit 2 shall consist of a fossil-fueled steam-electric jenerating unit (the " Unit) and related substation facilities. The unit shall consist of one 510 MW (nane plate) steam-electric generating unit and its related generation and substation facilities to be installed near Cross, South Carolina, more fully described in Exhibit I. Section 2. Cross Ownership Agreement. The construction of the Cross Plant Unit 2 shall be accomplished by the Authority on bt half of itself and as agent for Central as set forth in the Cross Ownership A reement t hereto-fore entered into between the Parties hereto. In case of any conflict between any provision of this Agreement and any provision of the Cross Ownership Agree-ment, the latter shall govern. Section 3. Completion and Lease of the Cross Plant Unit 2. Upon completion of the construction of the Cross Plant Unit 2, as provided in the Cross Ownership Agreement, the Authority shall inform Central that such unit is compl eted. Thereupor Central shall have<the right to inspect such unit, and such unit shall be sta-ted and tested and the Authority shall cause the defects, if any, disclosed by such inspection and tests, to be corrected. The Authority shall designate the date of commercial operation of Unit 2 and fron such date Central leases its ownership share of Unit 2 to Authority and Authority shall take possession of Central's cwnership share. ARTICLE II Operation and Maintenance of the Cross Plant Unit 2 Section 1. General . During the tem of this lease, the Authority shall operate and maintain Unit 2 in eccordance with the usual standards of operation and maintenance and in comfomity with all applicable laws and regu-1.etions now or hereafter in force. Without limiting the general "3ty of the foregoing, the Authority shall, while this lease is in force: (a) Pay all expenses arisinq from or in connection with the opera-tion and maintenance of Unit 2, including, without limitation, taxes of any kind or character arising from or in connection with the ownership or operation of Unit 2, and the cost of insurance in respect of Unit 2 in such kinds and amounts as may be required by the tems of any loan contracts or mortgages entered into by Central to finance its ownership share. (b) Pay or cause to be paid to Central as rental for Central's owr.e. ship share the following amounts at the times indicated: (c) Promptly perfom all of its o' ligations to Central under this lease and refrain from doing any act which would result in a violation of any obligation of Central incurred as part of Central's financing of ite ownership share of Unit 2. (d) Return Central's nwnership share of Unit 2 to Central upon expii ation of the tem of this lease or upon its temiriation for any reason, in as good condition as when received, reasonably wear and tear expected. (e) All obligations to pay rentals and other financial commitments under this lease are junior and subordinate to Authority's Electric System Expansion Bonds and are on a parity with payments mace by Authority pursuant to other leases heretofore entered into between the Parties hereto. Provided, however, that nothing herein contained shall be construed to prevent Central fron retaking possession of its ownership share of Unit 2 if the Authority shall fail, because of compliance wi the Provisions of its Trust Indenture of 1949 or its Bnnd Resolution of 1971, as the same have or may be amended or supple-mented, otherwise, to make rental payments herein provided or to perfom any other ob'igation herein contained, and provided further, that approval of this l lease by the Administrator shall not be construed as a waiver of the right of foreclosure which may be available to the Administrator under any mortgage lien held by him or any other right available to the Administrator. l Section 2. Rec ord s_. The Authority, upon commen:ement of operation and maintenance of Unit 2, shall maintain complete accounting records for Unit 2 in accordance with the Federal Energy Regulatory Commission Unifom S stem of Accounts, including, without limitation, records of the electric plant accounts including all capital additions and retirements, and cost records of the opera-tien and maintenance of Unit 2, which shall be available for inspection by the
/ duly authorized representatives of Central and the Administrator at all reason-l able times.
i I
M ' ARTICLE III Mi scellaneot. u,. 3 i T- Section 1. Effe'ctive Date and Tem. This lease shaIl be effective as of the date of commercial operation of Unit 2 when approved in writing by the Admi*nistrator and shall continue in force until January 1,1985 or until the Contract Obligation is no longer outstanding, whichever is earlier. Section 2. Specific Perfomance. The Parties hereto agree that in the event of a breach of any material provision hereon, Authority or Central, as the case may be, shall, in addition to any other remedy at law or in equity or by statute available to it, be entitled to a decree for specific perfomance hereof according to the terms of this lease. Section 3. Uncontrollable Forces. Neither Party shall be consid-ered to be in default in respect of any obligation hereunder if prevented fron fulfilling such obligation by reason of uncontrollable forces, the tem "uncon-trollable forces" being deemed for the purpose c. this agreement and lease to mean any cause beyond the control of the parties affected, including, but not limited to, failure of facilities, floods, earthquakes, stonns, lightning, fires, epidemics, wars, riots, civil disturbances, labor disturbances, sabotage, and restraint by court or public authority, which, by exercise of due diligence and foresight, such party could not reasonably have been expected to avoid. Either party rendered unable to fulfill any obligation by reason of uncontrol-lable forces shall exercise due diligence to renove such inability with all
. reasonable dispatch. In the event of destructioi; or damage to Unit 2, the provisions of the Cross Ownership Agreement shall govern.
Section 4. Successors and Assigns. This agreement and lease shall apply to and be binding upon the successors and assigns of the parties hereto as fully as if the words " successors and assigns" were written herein wherever reference to Central and the Authority occurs in this agreement. This agreement and lease shall not be assigned by either party without the written consent of the other, except that it may be assigned without the consent of the Authority, by Central to the Government represented by the Administrator of REA and its successors as additional security under any mortgage securing Central's owner-ship share and to any purchaser of Central's ownership share upon foreclosure of any mortgage in the event of default by Central thereunder. ( i
- IN WITNESS WHEREOF, the Authority, pursuant to a resolution duly adopted by its Board of Directors, has caused this agreement and lease to be-
~A . executed by its President and its seal to be affixed by its Secretary and Cen-tral, pursuant to a resolution duiy adopted by its Board of Trustees, has cause<! 1
- this agreement to be executed by its President and its corporate seal to be l affixed by its Secretary, all as of the day and year first above written.
4 i SOUTH CAROLINA PUBLIC SERVICE AUTHORITY t -. By i SEAL ATTEST: Secretary WITNESS: J b CENTRAL ELECTRIC POWER COOPERATIVE, INC. By ; SEAL ATTEST: s a Secretary 1 WITNESS: ( ; t
o PRLlli!!\ \in 011 Il I \1 si M 1311 VI D VII is .It'll 2! 1% Fe2 NEW ISSUE 3s! $150,000,000 e:: Qn ej South Carolina Public Service Authority Ey[ C . ,g (Santee Cooper)
;jg Electric System Expansion Revenue Bonds,1980 Series B ii [
2E3 yE{
-<c Dated: August 1,1980 Due: July 1, as shown below 0[g Principal and interest, January 1 and July 1, beginning Januarv 1,1981 f five monthst payable at the t' .g i principal office of ,in the City of , South Carolina, or, at the Egi option of the holder, at the principal office of ,in the City 9cg and State of New York. Coupon Bonds in the denomination of $5,000, registrable as to rincipal only, or yP< fully registered Bonds in the denomination of 55,000, or any integral multiple thereof. Coupo;)n and registered
. Bonds interchangeable.
j .E_E t'i The 1980B Bonds maturing on and after July 1,1991 will be aubject to redemption prior to matu..ty, {, p ; on or afterJuly 1,1990, as set forth herein. txI
?tt sE :g i Interest exempt, in the opinion of Bond Counsel, from present Federalincome taxes under existing laws E 5 E and regulations. Exempt, in the opinion of Bond Counsel, imm present South Carolina property and
- b c
- a. income taxes. Eligible, in the opinion of the Chief Insurance Commissioner of the State' of South Carolina, as investments ofinsurance companies doing business in South Carolina 5 * ;C by reason of which said companies may obtain the reduction of the premium taxes
*?- permitted bylaw.
Lt Ee SI; S37,500,000 Serial Bonds
~ E '. Due Amount Interest Due Amount Interest t7- July 1 Due Rate Pnce July 1 Due Rate Price r et 5=s. 51,180,000 1993 52,275,000
- y E
- 1985 1986 1,280,000 1994 2,470,000
" s ;;; g 1987 1,385,000 1995 2,690,000 1,505,000 5 ;; 5=3 r; .E E 1989 1988 1,635,000 1996 1997 2,915,000 3.160,000 1,775,000 1990 1998 3,430,000
, " ~7 ':= 5 1991 1,935,000 3,725,000 i 1999 1$$3E 1992 2,095,000 2000 4,045,000 Fmta "3 i S35,000,000 % Term Bonds DueJuly 1,2005 Price % l E ) 2** 'E S77,500,000 %Tbrm Bonds Due Jttly 1,2020 Price % l W (Plus accrued interestl l @ay2 oE-e lE*=E The 1980B Bonds are offered when, as and if issued and accepted by the Underwriters subject to the 1 32E approval of legality by Bond Counsel, Wood & Dawson, New York, New Yc-k, and McNair Glenn Konduros
~
i 5." E E Corlev Singletary Porter & Dibble, Columbia, South Carolina. Certain legal matters will be passed upon on e3Ea behallof the Underwriters by Simpson Thacher & Bartlett, New York, New ork, it is expected that delivery
- E g p2 of the 1980B Bonds to the Underwriters will be made in New York on or abat August 28,1980.
,e. - l "Mi Lehman Brothers Kuhn Loeb lgjgy Incorporated 1 32:5 Blyth Eastman Paine Webber N = 'E 5 Incorporated l Esi E Merrill Lynch White Weld Capital Markets Group l .E Eo2* OS = Mernil Lynch, Pierce, Fenner &, Smith incorporated . niii Smith Barney,Incorpor tedHarris Upham &, Co. l A 0, y g iE.: E The Robinson-Humphrey Company, Inc. August ,1980
. SOUTH CAROLINA PUBLIC SERVICE AUTHORITY 223 North Live Oak Drive hioncks Corner, South Carolina 29461 (803) E99-2121 ADVISORY BOARD Governor RICHARD W. RILEY Attorney General DrNxEL R. h1CLEOD State Treasurer GRADY L. PATTERSON, JR.
Comptroller General EARLE E. hf 0RRis, JR. Secretary of State JOns T. CAMPBELL DIRECTORS ROBERT S. DAVIS, Chairman WALTER T. COx VERNON E. SUMWALT, First Vice Chairinan hfARK C. GARNER J. THOMAS GRIER, ScCond Vice Chairinan HAROLD hi. ROBERTSON B. G. ALDERMAN, JR. hlARVIN M. THOMAS C.B.BOYNE MANAGEMENT WILLIAM C. MESCHER . . .. President HENnr N. CYnUs .. Senior Vice President CLARENCE S. GRAMuNG Senior Vice President KENNETH R. FORD Vice President JOE C. NORMAN Vice President LUCAS C. PADGETT Vice President ROBERT E. RAINEAR .. .. . Vice President ROBERT V. TANNER Vice President WiturM A. WiturMS, JR. Vice President WALLACE S. MURPHY General Counsel L. P. DORMAN Corporate Secretary DENnst C. MCWHORTER . Assistant Corporate Secretary JOnN E. BIsnOP Contro,ller TRUSTEES The South Carolina National Bank-Indenture Trustee Charleston, South Carolina The Citizens and Southern National Bank of South Carolina-Expansion Bond Fund Trustee Columbia, South Carolina PAYING AGENTS FOR 1980B BONDS BOND COUNSEL Wood & Dawson New York, New York McNair Glenn Konduros Corley Singletary Porter & Dibble Columbia, South Carolina CONSULTING ENGINEER R. W. Beck end Associates Orlando, Florida FINANCIAL ADVISOR Lazard Frtres & Co. New York,New York
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No dealer, broker, salesman or other person has been authorized by the South Carolina Public Service Authority or the Underwriters to give any information or to make any representations with respect to the 1980B Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations may not be relied upon as having been authorized by any of the foregoing. 'Hiis Official State-ment does not constitute an 05er to sell or the solicitation of an o6er to buy nor shall there be any sale of the 1980B Bonds by any person in any jurisdiction in which it is unlawful for such person to make such ofer, solic-itation or sale. The information set forth herein has been obiained from the South Carolina Public Service Authority and other sources which are believed to be reliable but such information is not guaranteed as to accuracy or completeness, and is not to be construed as a representation, by the Underwriters. The informations rnd expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the aKairs of the South Carolina Public Service Authority since the date hereof. IN CONNECTION MTTH THE OFFERING OF THE 1980B BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 1980B BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHER. WISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. TABLE OF CONTENTS Page Page Summary Statement . . i Fuel Supply . . 24 Coal . .. 25 Purpose of tl- 1980B Bonds . 1 Nuclear . . 26 Regulatory Matters . . . . . . . . ..... 27 Authorization of Bonds, Funds and Accounts 1 Federal Energy Regulatory Commission 27 Environmental Matters . .. 28 Security for Expansion Bonds , 2 Nuclear Matters Pledge of Revenues . 2
. ... ...... .......... 29 Department of Energy-Rate Making and Fuel Use 30 a ovenant. . '.. . 3 Certain Provision of the Indenture and Resolution 31 Capital Improvement Requirement . 3 Funds and Accounts,. 31 Effect of the Resolution . . . . . 32 Investment of Funds . . . . . . .
Descr.iption of 1980B,Ilonds 3 33 Redemption Provisions . . . 4 Additional Expansion Bonds . . . . . . . . . . . 33 Sinking Fund Installments . 4 Amendments of the Resolution Effected by Supplemental Resolutions . 35 Outstanding Obligations and Equity . at S 5 $p n Ugdihns . . . . . . Debt Service Schedule 6 Engineering Reports and Audits . . 35 Insurance ..... .... . ..... .... 36 "Its Authorit 7 Sale. Lease or Other Disposition of Properties 36 Organiza ion an'd' 'M'anagement' 7 Evgnts of Default and Remedies under the i nca hperhingie' ults s .... Emits of De$1Eand EeSes unEeM Historical Demand, Sales and Revenues 9 I ritu * " Central Contracts .. ............ ...... Il g ti N 5 'E'lUih . 9,g**58"C' ' l Residential. Commercial and Small Industrial Sales . 11 *
- 38 Municipal, Military and Large Industrial Contracts. 12 Payments to State and Imcal Governments Rates .. ... 12 39 Power Supply . 14 Pending Legal Proceedings . .. 39 Transmission .. 15 Tax Exemption Interconnections .. . 15
. 39 Reliability Agreement . .. 15 Approval of I.egal Proceedings . . 39 Distribution .... ... . ... . . 15 Ratings . .. . . .. .. ... .... 39 Capital Improvement Program 15 Underwriting . ..... ... .... . 40 General ..... ...... 15 Miscellaneous . . .. .. .... 40 Summer Nuclear Station . . . . . . . . . . . . 16 Winyah Generating Station Unit No. 4. 17 Map-Principal Generating Stations Cross Site-Unit 2. . . . 18 and Transmission lines of the Authority General Improvements ........ .... 19 Centerfold Future Power Supply Program-Cross Site . . . . . . 19 Appendices Estimated Financing Requirements for Capital Report of R. W. Beck and Associates . . I.1 Improvement Program .. .... 20 Accountants' Opinion and Financial Statements . 11-1 Estimated Power Supply Resources and Letter of Burns and Roe. Inc. . . .... 111 1 Requirements . . .... . .. 20 Form of Opinions of Wood & Dawson and McNair Glenn Konduros Corley Singletary Projected Operating Results . . . . . . . . .. 22 Porter & Dibble . ... . I%1
F s
SUMMARY
STATEMENT This Summary Statement is subject in all respects to more complete information contained in this Official Statement. The Authority The Authority is a body corporate and politic of the State of South Carolina. Its management is vested in a Board of Directors consisting of eleven members appointed by the Governor of the State of South Carolina with the advice and consent of the South Carolina State Senate. The Authority operates an integrated electric utility system, including facilities for generation, trans-mission and distribution of electric power and energy at retail and wholesale. The Authority serves, either directly or indirectly, approximately 269,000 customers in the State of South Carolina. Purpose of Issue The proceeds of the sale of the 1980B Bonds will be used to pay part of the estimated cost of construction of Unit 2 of an electric generating station being constructed at a site near Cross, South Carolina. This coal-fueled unit will have an estimated capability of 450 MW and is preser!!y scheduled for commercial operation in May 1984. Security for the 1980B Bonds So long as any Priority Obligations are outstanding ($72,072,356 principal amount were outstanding on June 30,1980), the 1980B Bonds will be payable from and secured by a pledge of the revenues of the Authority's System on a parity with the presently outstanding $919,890,000 Expansion Bonds and any addi-tional Expansion Bonds issued pursuant to the Resolution, after the deduction only of (1) operation and maintenance expenses (exclusive of certain lease payments) and (2) amounts sufficient to pay the debt service on the Priority Obligations and to maintain a reserve therefor. The 1980B Bonds are also payable from other funds of the Authority available for such purpose. After all Priority Obligations are no longer outstanding, the 1980B Bonds and all other Expansion Bonds will be, subject to the provisions of the Resolution, payable from, and secured by a first lien upon and pledge of, the gross revenues of the Authority's System. As further security for the Expansion Bonds, there is established by the Resolution a Reserve Account, the requirement of which, with respect to each series of Expansion Bonds, including the 1980B Bonds, is a sum equal to the maximum amount required to be paid into the Interest Account in the Expansion Bond Fund to pay interest on such Bonds in any fiscal year. The 1980B Bonds are not debts of the State of South Carolina or of any political subdivision thereof and are not payable from any funds other than those of the Authe rity. Rate Covenant The Authority covenants in the Resolution to establish rates and charges adequate to provide revenues sufficient, among other things, to pay debt service when due on the Priority Obligations and Expansion Bonds, to make required payments when due into the Lease Fund and the Capital Improsement Fund, and to pay the costs of operation and maintenance of the authority's System and all necessary repairs, replacements and renewals thereof. There is no agency, other than the Authority, which has jurisdiction over the rates of the Authority. CapitalImprovement Requirement The Authority is now required to pay annually into its Capital Improvement Fund an amount which, together with the amounts deposited therein in the two preceding fiscal years, is at least equal to 8% of the Authority's gross revenues in the three preceding fiscal years. After certain Expansion Bonds are no longer outstanding, the amount required to be paid into the Capital Improvement Fund will be changed. See caption
" Security for Expansion Bonds--Capital Improvement Requirement".
1
1 s FinaheialInformation The following table shows selected historical financial data for the fiscal years ended June 30,1978 and 1979 and the 12 months ended hiay 31,1980 (unaudited) and selected projected financial data for the fiscal years ending June 30,1981 through 1983 for the Authority as estimated by the Consulting Engineer: Historical Projected Fiscal Year Ended June 30, 12 Months Fiscal Year Ended June 30, Ended i May 31,1980 1978 1979 (Unaudited) 1981 1882 1,983, Total revenues (Dollars in Thousands) '
$122,598 $140,612 $155,011 $252,087 $304,843 $371,383 Revenues availabic for debt service 33,796 36,303 46,296 65,503 Debt service
- 93,561 131,505 17,081 19,343 21,436 35,389 43,125 76,323 Revenues after debt service 16,715 16,960 24,860 30,114 50,436 55,182 Debt service coverage
- 1.98 1.88 2.16 1.85 2.17 1.72
- Priority Obligations and Expansion Bonds only; does not include funded interest and subordinated lease payments and note P werSupply The Authority's total generating capability is 1,736 hiW. Of this amount,1,330 MW is generated by coal-fueled units; 130 hiW, by the Authority's hydroelectric stations; and 266 MW and 10 MW, by oil-fueled tnd oil / gas fueled units, respectively, generally used for peaking purposes. In addition, the Authority prese receives a firm supply of 105 MW of hydroelectric power from the Southeastern Power Administration. The Authority has direct interconnections with four other entities with power supply facilities.
C:pitalImprovement Program The Authority's capital improvement program includes completion of the Summer Nuclear Station, a 900 MW nuclear generating unit which for financial planning purposes the Authority estimates will be avail-a.ble for commercial operation in December 1981, in which the Authority has a one-third interest (300 MW); Winyah No. 4, a 280 MW coal-fueled generating unit scheduled for commercial operation in May 1982; and Cross No. 2, a 450 MW coal-fueled generating unit scheduled for commercial operation in May 1984. The Authority's total capability from such units is expected to be 1,030 MW. The Authority is engaged in advance planning and initial design work for a second unit to be constructed adjacent to Cross No. 2. This unit will be a 450 MW coal-fueled generating uni' icheduled for commercial operation in November 1986. The Authority plans additional units at the Cross site. I The Authority's capital improvement program also includes major improvements to its transmission and distribution systems and general plant. The estimated 1980-1985, total expenditures for the Authority's capital improvement program for the fiscal yezrs excluding funded interest, reserves and financing costs, are projected as follows: 1981--
$274,900,000; 1982-5249,700,000; 1983-5206,900,000; 1984--$238,500,000; and 1985-5130,000,00).
The Authority presently plans to finance such expenditures from revenues and proceeds of Expansion Bonns end notes previously issued, the 1980B Bonds, and Expansion Bonds to be subsequently issued. Additional Bonds Under the Resolution, the Authority may issue additional parity Expansion Bonds if, among other' things, the Consulting Engineer certifies that Net Revenues in each succeeding fiscal year after the date on which such Additional Bonds are sold to and including the later of (a) the third succeeding full fiscal year after such date or (b) the first full fiscal year after the estimated date of commercial operation of any Power Plant to pay the cost of construction of which additional Expansion Bonds have been, are being or are then authorized to be issued, shall be at least equal to the sum of the amounts required in such fiscal year for (i) debt service on the Priority Obligations and the Expansion Bonds then outstanding, being issued, or authorized but not yet issued; (ii) payments into the Lease Fund; and (iii) payments into the Capital Improvemrnt Fund. ii
o
$150,000,000 South Carolina Public Service Authority (Santee Cooper)
Elect 2ic System Expansion Revenue Bonds,1980 Series B Dated: August 1,1980 Due: July 1, as shown below The purpose of this Official Statement, which includes the cover page, summary statement and appendices hereto,is to set forth information concerning the South Carolina Public Service Authority (the " Authority") and the Authority's $150,000,000 Electric System Expansion Revenue Bonds,1980 Series B (the "1980B Bonds"), offered hereby. The Authority is a body corporate and politic created by Act No. 387 of the Acts of South Carolina for 1934 and acts supplemental thereto and amendatory thereof (Code ol Laws of South Carolina,1976-Sections 58-31-10 through 58-31-390) (the "Act '), which, among other things, authorizes the AuthQy to produce, distribute and sell electric power. The Authority began electric pcwer operations in 1942. PURPOSE OF THE 1980B BONDS The 1980B Bonds will be issued for the purpose of providing funds to pay part of the estimated costs of construction of the first unit of a new electric generating station being constructed at a site near Cross, South Carolina which for planning purposes has been designated Unit 2 (" Cross No. 2"). This coal-fueled unit will have an estimated capability of 450 MW and is presently scheduled for commercial operation in May 1984. The estimated disposition of the 1980B Bonds proceeds is as follows: Construction Costs (1) $108,750,000 Bond Reserves (2) 12,750,000 Funded Interest (2)(3) 25,500,000 Bond Discount (4) 3,000,000 Principal Amount of 1980B Bonds $150,000,000 (1) Includes issuance expense (other than bond discount). (2) Interest calculated at an assumed rate of 8H%. (3) Interest funded to August 1,1982. (4) Calculated at 2%. AUTHORIZATION OF BONDS, FUNDS AND ACCOUNTS Pursuant to the Act, the Authority has in the past incurred obligations under an indenture of trust between the Authority and The South Carolina National Bank of Charleston, to which the South Carolina National Bank is successor (the " Indenture Trustee"), dated as of July 1,1949, as amended and supple-mented (the " Indenture"). Such obligations are herein referred to as " Priority Obligations". See caption
- Outstanding Obligations and Equity".
By amendment to the Indenture, consented to by the holders of more than 75% in principal amount of outstanding Priority Obligations, which became effective on April 29,1971, the incurring of additional Priority Obligations for other than refunding purposes is prohibited. However, by such amendment, provisions are made with respect to bonds which are secured by a lien upon and pledge of revenues junior to the lien and pledge provided by the Indenture for the Priority Obligations. I
l s
- Pursuant to the Act and in accordance with the Indenture, the Authority, on August 31, 1971, adopted a resolution providing for the issuance of Electric System Expansion Revenue Bonds (" Expansion Bonds")
secured by such a junior lien upon and pledge of revenues of the Authority. Copies of such resolution and amendatory supplemental resolutions adopted September 27,1971, November 8,1973, February 16,1977 and August 31,1977 (collectively, the " Resolution") may be obtained from the Authority or the Underwriters. Under the Resolution, the Authority created the Expansion Bond Fund and within such Fund the Interest Account, the Principal Account, the Bond Retirement Account and the Reserve Account and rppointed The Citizens and Southern National Bank of South Carolina, in Columbit South Carolina, as the Expansion Bond Fund trustee (the " Bond Fund Trustee") to hold such Fund and Accounts. > Under the Tenth Supplemental Bond Resolution adopted by the Authority on the date of this Official Statement, the Authority created the Cross No. 2 Construction Fund (the " Construction Fund") into which the , proceeds of Expansion Bonds to be used to pay construction costs of Cross No. 2 will be deposited. The Construction Fund is held by the Authority. Certain terms of the 1980B Bonds were established by the Tenth Supplemental Bond Resolution, copies cf which may be obtained from the Authority or the Underwriters. Section 11-9-350, Code of Laws of South Carolina 1976, provides that the rate of interest paid by discount cr otherwise upon the obligations of the State or any agency or political subdivision of the State, including the Authority, may equal, but shall not exceed, seven percent per annum, except that any such obligation may have a greater rate of interest when such rate is approved by the State Budget and Control Board, the members of which are the Governor, State Treasurer, Comptroller General, the Chairman of . the Finance Committee of the State Senate and the Chairman of the Ways and Means Committee of the State House of Representatives. SECURITY FOR EXPANSION BONDS Pledge of Revenues So long as any Priority Obligations are outstanding, the principal of and premium, if any, and interest on Expansion Bonds, including the 1980B Bonds, are payable from and secured by a lien upon and pledge of the revenues derived by the Authority from the ownership and operation of the Authority's System, as d:Sned in the Resolution, after the deduction only of: (1) expenses of operation and maintenance of the j System (exclusive of certain lease payments) and (2) amounts required for the payment and security of the Priority Obligations, sufficient to pay such principal, premium, ni any, and interest thereon and to maintain a r: serve therefor, allin the order of priority, in the manner and to the extent provided in the Indenture and the Resolution. See caption "Certain Provisions of the Indenture and Resolution-Funds and Accounts". The Expansion Bonds are also payable from Expansion Bond proceeds and other available funds to the extent provided in the Resolution. After all Priority Obligations have been retired or provision has been made therefor (the date of their final maturity is July 1,2006), the principal of and premium, if any, and interest on the Expansion Bonds will be payable, subject to the provisions of the Resolution, from and secured by a first lien upon and p! edge cf the gross revenues derived by the Authority from the ownership and operation of the Authority's System. The Priority Obligations and the Expansion Bonds are not debts of the State of South Carolina, nor cf any political subdivision thereof, and neither said State nor any of its political subdivisions shall be liable thereon, nor shall they be payable from any funds other than those of the Authority. Reserve Account Requirement i The Resolution provides that at the time of issuance of a series of Expansion Bonds there shall be deposited ! in the Reserve Account in the Expansion Bond Fund, from the proceeds of such Bonds or other sources, an I amount such that the total then to be in the Reserve Account snall be, vith respect to each series of Expansion Bonds, an amount equal to the maximum amount required to be paid intc tia Interest Account in the Expan-sion Bond Fund to pay interest on such Bonds in any fiscal year (twelve months ending June 30) from the f date of the Expansion Bonds to the final maturity date thereof (the " Reserve Account Requirement"). 2 I _ 1
o Securities held as investments in the Reserve Account shall be valued at cost, but, in the event of any loss upon the sale of std securities and in the event of any withdrawal from the Reserve Account, the amount of any deficiency in the Reserve Account then resulting, unless restored from the proceeds of additional Expansion Bonds, shall be restored by payments from revenues, which payments shall, in each month, after the occurrence of such deficiency and until the amount of the deficiency has been restored, be not leu than th of the amount of the deficiency. As of June 30,1980, an amount sufficient to meet the Reserve Account Requirement of $57,763,487 for the outstanding Expansion Bonds was on deposit in the Reserve Account in the Expansion Bond Fund. For the Reserve Account Requirement for the 1980B Bonds, see caption " Purpose of the 1980B Bonds". Rate Covenant The Resolution provides that the Authority shall establish, maintain and collect rates and charges 4r electric power and energy which shall be adequate to provide the Authority with revenues sufficient to pay the principal of and interest on the Priority Obligations and Expansion Bonds when due, to make when due all payments which the Authority is obligated to make into the Expansion Bond Fund, the Lease Funi the Capital Improvement Fund and the special funds created under the Indenture for the payment of principal of and interest on the Priority Obligations, to pay all costs and expenses of operation and maintenance of the System, and to make all necessary repairs, replacements and renewals thereof, and to pay all taxes, assess-ments or other governmental charges lawfully imposed on the Authority or the revenues thereof, or payments in lieu thereof, and to pay any and all amounts which the Authority may now and hereafter become obligated to pay from the revenues of the System by law or contract. There is no agency, other than the Authority, having jurisdiction over the rates of the Authority. Capital Improvement Requirement The Resolution provides that the Authority shall pay into its Capital Improvement Fund, as an annual Minimum Capital Improvement Requirement, an amount which, together with the amounts deposited therein in the two preceding fiscal years, is at least equal to 89 of the Authority's gross revenues in the three preceding fiscal years. A supplemental resolution adopted February 16,1977, provides that, after the 1973 and 1974 Series of Expansion Bonds are no longer outstanding, the Authority shall pay into its Capital Improvement Fund, as an cnnual Minimum Capital Improvement Requirement, an amount which, together with the amounts depos'ted in the Capital Improvement Fund in the two immediately preceding fiscal years, will be at least equal to 12% of the Authority's gross revenues derived from the ownership and operation of the Authonty's System in the ihree immediately preceding fiscal yeart, after deducting therefrom " fuel" expense (including " nuclear fuel expense") and the energy related comronent of " purchased power" expense, determined in accordance with the Uniform System of Accounts prescobed for Public Utilities and Licensees of the Federal Energy Regulatory Commission in effect on January 1,1917. Moneys in the Capital Improvement Fund shall be used to make good deficiencies in the Debt Service Reserve Fund for the Priority Obligations, to make renewals, replacements, extensions, additions, betterments, and other capital additions to the System, and, after the Priority Obligations are retired, to make up any deficiency in the Interest Account, Principal Account and Bond Retirement Account in the Expansion Bond Fund to the extent moneys in the Revenue Fund are not sufficient therefor. , DESCRIPTION OF 1980B BONDS 1 The 1980B Bonds will be dated August 1,1980 and will bear interest at the rates per annum and mature et times and in amounts as shown on the cover page hereof. Interest will be payable on January I and July 1, commencing January 1,1981 (6ve months). Principal and interest will be payable at the principal office of
, South Carolina, or of in New York, New York. The 1980B Bonds will be issuable as coupon Bonds in the denomination of $5,000, registrable as to prin,ipal only, or as fully registered Bonds in the denomination of $5,000 or any integral 3
. .I inultiple thereof. Coupon and registered Bonds will be interchangeable. As a condition of Authority charge may that may requirethereon.
be imposed the payment of a sum sufficient to reimburse it for any stamp tax or c'h Redemption Provisions i 1' The 1980B Bonds maturing on and after July 1,1991 shall be subject to redemption prior option of the Authority, on or after July 1,1990, upon not less than 30 days' notice, as a whole orin part in the inverse order of maturity on any interest payment date (and in the event that less th such Bonds of any maturity are called for redemptionBthe particular ~ onds of such maturity to be re shall be selected by lot), at the redemption prices expressed in percentages of principal amoun plus in each case, accrued interest to the date fixed for redemption. Period Durlag Which Redeemed (Both Dates Inclusive) Redesaption Prices July 1,1990 to June 30,1991 July 1,1991 to June 30,1992 103 "c July 1,1992 to June 30,1993 102 % July 1,1993 to June 30,1994 102 July 1,1994 to June 30,1995 101% July 1,1995 to June 30,1996 101 July 1,1996 and thereafter 100 % 100 The 1980B Bonds due 2005 and 2020 shall also be subject to mandatory redemptic.i p , upon not less than 30 days' notice, on interest payment dates on and after January 1,2001 a 2006, respectively, from sinking fund installments at 100% of principal amount plus accrued inter dateInstallments". Fund fixed for redemption in the yeus and principal amounts as set forth below under the Sinking Fund Installments l 1 into the Bond Retirement Account in the Expansion Bond Fun of each in the table year below: the principal amount of 1980B Bonds due 2005 or 2020 speci'ed for each of the ye Principal Amount 1989B Bonds Doe 2005 Principal Amount 7 #80B Bonds Due 2020 Year Amount Year 2001 Amount
$5,900,000 2006 2002 5 345,000 6,415,000 2007 2003 365,000 6,955,000 2008 2004 395,000 7,545,000 2009 2005 430,000 8,185,000 2010 465,000 2011 2,820,000 2012 3,055,000 2013 3,315,000 2014 3,600,000 2015 3,900,000 2016 4,235,000 2017 4,590,000 2018 4,985,000
- 2019 20,000,000 I 2020. 25,000,000 4
i
o OUTSTANDING OBLIGA110NS AND EQUITY I The following table sets forth the outstanding obliga*;ons and equity of the Authority as of May 31, l 1980, adjusted to reflect the issuance of the Electric Revenue Notes,1980 and the 1980B .9onds: l Ixng-Term Obligations (1) Priority Obligations Electric Revenue Bonds, Series of 1950, beanng interest at 2.70% and due 1980 to 1993 . . ........ .... .. $ 10,880,000 Electric Revenue Bonds, Series of 1967, beanng interest at 4% and 4.10% and due 1980,1981 and 2006 ............ 50,725,000 Electric Rever.ie Bonds, Refunding Series of 1973, bearing interest from 5% to 5% % and due 1980 to 1989 8,605,000 Contract Obligation, payable 1980 to 1985(2). 1,862,356 Total Priority Obligations 72,072,356 Expansion Bonds Expansion Bonds,1973 Series, bearing interest from 5% to 5% % and due 1980 to 1993 and 2013 ... ..... ...... 100,000,000 Expansion Bonds,1974 Series, bearing interest from 6% to 6% % and due 1980 to 1999 and 2014 . . . . ... ... 109,000,000 Expansion Bonds,1977 Refunding Series, bearing interest from 3.70% to 6% and due 1980 to 1997 and 2002 and 2006 . . . . . . 210,890,000 Expansion Bonds,1977 Series, bearing interest from 4% to 5% % and due 1982 to 2002 and 2017 . ... ....... 115,000,000 Expansion Bonds,1978 Series, bearing interest from 4.20% to 5% % and due 1981 to 1998 and 2008 and 2018 . ....... 200,000,000 Expansion Bonds,1979 Series A, bearing interest from 5.40% to 6% % and due 1980 to 2003 and 2009 and 2019 . . . ... 110,000,000 Expansion Bonds,1980 Series A, bearing interest from 8%% to 10% % and due 1981 to 1995 and 2002 and 2010 ... 75,000,000 Expansion Bonds,1980 Series B, bearing interest from % to
% and due 1985 to 2000 and 2005 and 2020 150,000,000 Total Expansion Bonds 1,069,890,000 Subordinated Lease Contracts, payable 1980 to approximately 2014(3) . 86,075,351 Bank Credit Agreement (4)(5) 50,000,000 Electric Revenue Notes,1980, bearing interest at 5% % and due Decem-ber 1,1983(4) 50,000,000 Bank Loan, bearing interest at 4.25% and due 1981 to 1984(4) 300,000 Total Long-Term Obligations 1,328,33",707 Equity Accumulated Net Revenues 111,188,336 Capital Contributions-U. S. Government Grants 34,438,264 Total Equity 145,626,600 Total long-Term Obligations and Equity $1,473,964,307 (1) Includes $4,079,210 at May 31,1980, of long-term debt due within one year.
(2) Originally dated January 1,1950, and subsequently amended, requiring payments to Central Electric Power Cooperative, Inc., (" Central") equal to interest on (at 2% per annum) and principal of certain mortgage notes (the "A B I.can") of Central held by the United States of America through the Admmistrator of the Rural Electrification Administration (the "REA"), to which the payrnents by the Authority have been assigned. (3) The Authority has entered into lease contracts with Central (known as the C, D, E, F, G H. K and L Lease Contracts) for the purpose of providing for the leasing and operating by the Authority of certain transmission lines and related facil-ities, the Grainger Generating Station of Conway, South Carolina, and a combustion turbine at Hilton Head, South Caro-lina. These facilities are financed by loans from REA to Central, or from REA to other cooperatives which loans were later assumed by Central, all of which are or will be evidenced by Central's mortgage notes. Under the lease contracts the buthority is required to make payments equal to interest (the C, D, E and F lease contracts at 2%. the G. H, K and L lease contracts at 5%) and principal of Central's mortgage notes. Payments assigned by Central to REA under such lease contracts with Central are subordinated to payments on the Priority Obligations and on the Expansion Bonds. The lease contracts provide for an additional $4,000,000 to be advanced in the future by REA to Central. (4) Payable fr i the revenues derived from the ownership and operation of the Authority's System, subordinate to the pay-ments requued to be made to the Operating Fund, the Interest Fund, the Bond Fund and the Debt Service Reserve Fund created by the Indenture and to the payments required to be made to the Expansion Bond Fund (and the accounts therein) and the lease Fund created by the Resolution, but prior to the payments required to be made to the Contingency Fund, Capital Improvement Fund and Special Reserve Fund created by the Indenture. (5) In May 1979, the Authority authorized the execution of a credit agreement with several banks which expires on April 30, 1982. The participating banks agreed to loan to the Authority from time to time up to $50,000,000 at a Ductuating rate per annum equal to 40% of the prime commercial rate of one of the major lending banks, plus 2% per annum (7.6% at June I,1980). In accordance with the agreement, the Authority borrowed $25,000,000 on the date the agreement was executed, June 1,1979. On April 30,1980, the Authority borrowed the remaining $25,000,000. The proceeds from loans must be used solely for plant construction. 5
l I
. DEBT SERVICE SCHEDULE (Thousands of Dollars)
Esthnared Annual Debt Service on 19808 Bonds
- Debt Debt Service Service Charges Total Charges on Serial Bonds Debt Fiscal Year on Sinking Service Outstanding on Fund on Eading Priority Expansion on Total June 30 following following Obtigations Bonds _ July 1 1980B Debt July 1 Bonds l_aterest(1) Service 1981 4,319 29,674(2) - -
1982 4,322 35,225(2) - 33,993(2) 1983 4,319 39,547(2) 59,778(2) - - 1984 4,473 64,400 - 64,097(2) 1985 4,337 64,537 68,873(2) 1,180 8,500(2) , 1986 4,340 8,500(2) 78,554(2) 64,532 1,280 19'37 12.650 13,930 82.802 4,339 64,536 1,385 - 12,541 13,926 82,801 1983 4,340 64,532 1,505 - 12,423 13,928 82,800 1989 4,328 64,542 1,635 - 12,295 13,930 82,800 1990 4,442 64,426 1,775 - 12,156 13.931 82,799 1991 4,444 64,419 1,935 - 12,005 13,940 82,803 1992 4,443 64,421 2,095 - 11,841 13,936 82,800 1993 4,448 64,414 2,275 - 11,663 13,938 82,800 1994 4,438 64,426 2,470 - 11,469 13,939 82,803 1995 4,446 64,409 2,690 - 11,259 13,949 82.804 1996 4,460 64,395 2,915 - 11,031 13,946 82,801 1997 4,473 64,384 3,160 -- 10,783 13,943 82,800 1993 4,481 64,375 3,430 - 10,514 13,944 82,800 1999 4,494 64,363 3,725 - 10,223 13,948 82,805 2000 4,511 64,341 4,045 - 9,906 13,951 82.803 2001 4,521 64,333 - 5,900 9,562 15,462 84,316 2002 4,536 64,307 - 6,415 9,061 15,476 84,319 2003 4,549 64,299 - 6,955 8,516 15,471 84,319 2004 4 565 64,279 - 7,545 7,924 15,469 84,313 2005 4,585 64,264 - 8,185 7,283 15,468 84,317 2006 4,601 64,245 - 345 6,587 6,932 75,778 2007 - 68,854 - 365 6,558 6,923 75,777 2008 - 68,858 - 395 6,527 6,922 75,780 2009 - 68,858 - 430 6,494 6,924 75,782 2010 - 68,859 - 465 6,457 6,922 75,781 2011 - 60,815 - 2,820 6,417 9,237 70,052 2012 - 60,819 - 3,055 6,178 9,233 70,052 2013 - 60,816 - 3,315 5,918 9,233 70,049 ! 2014 - 60,814 - 3,600 5,636 9,236 70,050 l 2015 - 60,818 - 3,900 5,330 9,230 70,048 2016 - 60,818 - 4,235 4,999 9,234 70,052 2017 - 60,820 - 4,590 4,639 9,229 70,049 2018 - 60,818 1 - 4,985 4,249 9,234 70,052 l 2019 -- 27,307 - 20,000 3,825 23,825 51,132 2020 - - - 25,000 2,125 27,125 27,125 l (1) Ripresents an assumed rate of 8% E (2) Excludes portion of interest which has been or is to be funded from Expansion Eond proceeds. 6 i L
N-_
~
THE AUITIORITY OrEmmization and '/-- ,_.;nt The Authority's Board of Directors consists of eleven members appointed by the Governor with ,the advice and consent of the Senate as follows: one from each of the six congressional districts of the Statet one from each of the counties of Berkeley, Georgetown and Horry; and two from the State at large, one of whom shall be Chairman and the other shall have had experience with the operations of rural electric cooperatives. Appointments are for seven years. There are two vacancies. Present directors are: Term Namne Besimess Residence Empires Robert S. Davis, Business Executive Columbia, SC 1983 Chairman Vernon E. Sumwalt, Attorney Rock Hill, SC 1981 First Vice Chairman ' J. Thomas Grier. Insurance Spartanburg, SC 1986 Second Vice Chairman Mark C. Garner Newspaper Executive Myrtle Beach, SC 1981 C. B. Boyne Retired Business Executive Eastover, SC 1984 Waher T. Cox University Executive Clemson, SC 1984 Harold M. Robertson Wholesale-Retail Executive Walterboro, SC 1985 B. G. Alderman, Jr. Real Estate and Insurance Manning, SC 1985 Marvin M. Thomas Business Executive Georgetown, SC 1987 The President and Chief Executive Officer of the Authority is appointed by the Board of Directors. The Authority's staff is appointed by the President with the approval of the Board of Directors. Authority staff executives are: Electric Utility Position Experience William C. Mescher President and Chief Executive Officer 29 years Henry N. Cyrus Senior Vice President, System Planning 34 years Clarence S. Gramling Senior Vice President, System Operations 30 years Kenneth R. Ford Vice President, Finance and Treasurer 20 years Joe C. Norman Vice President, Commercial Operations 8 years Lucas C. Padgett Vice President, Industrial Development 23 years Robert E. Rainear Vice President, Engineering Design 19 years Robert V. Tanner Vice President, Production 21 years William A. Williams,Jr. Vice President, Nuclear 7 years Wallace S. Murphy General Counsel 10 years L. P. Dorman Secretary 30 years Denise C. McWhorter Assistant Corporate Secretary 11 years John E. Bishop Coctroller 7 years The Authority had 995 employees as of June 30, 1980. Authority employees are members of a contributory state pension plan administered by the South Carolina State Retirement System. 7
The Act establishes an Advisory Board composed of the fol?owing officials of the State of South Cafolina: the Governor, the Attorney General, the State Treasurer, the Comptroller General and the Secretary (fState. The Authority has engaged A. W. Beck and Associates as Consulting Engineer. R. W. Beck and Asso-cirtes has prepared a repon on the Authority's financing and capital improvement prog *am (the " Beck Report"), a copy of which is attached hereto is Appendix I. The Authority's Advisory Board for many years has designated J. W. Hunt and C ampany, Certified Public Accountants, to prepare reports on audit. In addition, the Authority's Board of Directors has retained the firm of Coopers & Lybrand. These firms have prepared a report on audit for the fiscal year ended June 30,1979, copies of which may be obtained from the Authority. The balance sleet, the statements of net earnings, certain exhibits and the notes to the financial statements contained in scch report on audit, together with the opinions of J. W. Hunt and Company and Coopers & Lybrand with respect thereto, are tttached hereto as Appendix II. The Authority has engaged B'arns and Roe, Inc. to provide engineering design and construction manage-ment senices for Unit 4 at the Winyah Generating Station ("Winyah No. 4"), Cross No. 2 and Unit I at the ' Cross site (" Cross No.1"). Burns and Roe, Inc. has prepared a letter describing Cross No. 2 and esti-mating the cost of its construction (the " Burns and Roe Letter"), which is attached hereto as Appendix III. The Authority has engaged, as Bond Counsel, Wood & Dawson, New York, New York, and McNair Glenn Konduros Corley Singletary Porter & Dibble, Columbia, South Carolina. The form of their proposed I; gal opinions with respect to the validity of the 1980B Bonds is attached hereto as Appendix IV. Servlee Ana The Authority's senice area consists of substantially all of the counties of Berkeley, Georgetown and Horry. This senice area is shared with rural electric cooperatives but not with investor-owned uti!ities. The only municipal electric system in this senice area is the City of Georgetown. The Authority also serves certain other customers, including Central, outside its service area and may supply the future load growth of such customers. Central is an association of 15 electric distribution cooperatives located in 35 of the 46 counties of South Carolina sening primarily residential, commercial and small industrial customers. In addition, the Authority may compete for and, at the request of the customer, serve any customer with a load of 750 kW or higher so long as the customer is located in an area assigned to a member of Central by the South Carolina Public Senice Commission. l The Authority sells electric power and energy at wholesale to Central, the City of Georgetown and the To7n of Bamberg. Electric power and energy are sold directly to three militarv establishments, 24 large industrial accounts and approximately 49,000 residential, commercial and small industrial retail customers in the counties of Berkeley, Georgetown and Horry. Through wholesale customers approximately another 220,000 customers are served. 6 1 4 8
I I HistoricalOperating Results A summary, condensed from the Beck Report, showing revenues available , lease for debt servic payments and other purposes for the fiscal years ended June May 31,1980 follows: 30,1975 through 1979 and the 12 months ended 12 Months Ended Fleeal Year Ended Jane 38(1) May 31, 1975 1976 1977 1980 1978 1979 (Unandited) (Dollars la Thousands) Operating Revenues $77,806 $82,239 $94,727 $118,980 $135,697 Other Income 1,993 2,819 $149,369 2,914 3,618 4,915 5,642 Total $79,799 $85,058 $97,641 $122,598 $140,612 Operating Expense (except $155,01 i depreciation) 59,817 55,259 69,550 88,802 104,309 108,715 Revenue Available for Debt Service, Lease Payments and Other Purposes $19,982 $29,799 $28,091 $ 33,796 $ 36,303 $ 46,296 Debt Service: Priority Obligations S 4,318 5 4,324 $ 4,317 Expansion Bonds $ 4,319 $ 4,319 5 4,321 3A50 7,825 7,110 12,762 15,024 17,115 Total Debt Service $ 7,778 $12,149 $11,427 $ 17,081 $ 19,343 $ 21,436 Balance Available for Pay-ments of Leases, Other Obligations, and Capital Improvements
$12,204 $17,650 $16,664 $ 16,715 $ 16,960 $ 24,860 Lease Payments and Other Obligations (2)(3) 2,252 4,103 4,348 4,757 3,969 4,618 Balance Available for Capital Improvements and Other Purposes $ 9,952 $13,547 $12,316 $ 11,958 $ 12,991 $ 20,242 Debt Service Coverage (Pri- -
ority Obligations and Ex-pansion Bonds)(4) 2.57 2.45 2.46 1.98 1.88 2.16 l (1) See footnotes in Exhibit C to the Beck Report, Appendix L (2) Cash basis. Obligations and the Expansion Bonds.Such lease psyments are, under the Indenture and Resolution, subordinated to Accounts". See caption "Certain Provisions of the Indenture and Resolution-Funds and (3) Does not include intc:st on the Bank Credit Agreement and the Electric Revenue Notes,1980, which has been funded. (4) Does not include funded interest and subordinated lease payments and notes. Historical Demand, Sales and Revenues The following table sets forth the peak demand on the Authority's system for the calendar years 1970-1979: Calendar Feak Demand (1) Increase
.. Year MW %
1970 600 - 1971 622 3.7 % 1972 736 I 8.3 1973 829 12.6 1974 911 9.9 1975 943 3.5 1976 1,065 12.9 1977 1,161 9.0 1978 1,231 6.0 1979 1,352 9.8 (1) Annual peak demand normally occurs in August of each calendar year. 9
The following table sets for$ the sa!es and revenues of the Authority for the fiscal years1971-1979 and the twelve months ended May 31,1980. Sales Revenue From Sales Ammaal Ammeal Increase Mitts Period Increase Per GWH(1) % Annount % EVE Fiscal Year Ended June 30: 1971 3,097 -
$27,783,776 1972 9.0 3,189 3. Orc 30,966,273 1973 11.5 c'c 9.7 3,624 13.6 34,923,846 12.8 1974 9.6 3,967 9.5 41,525,532 18.9 10.5 1975 4,259 7.4 75,806,186 82.6 17.8 1976 4,486 5.3 80,564,225 6.3 18.0 1977 5,104 13.8 92,533,095 14.9 18.1 1978 5,562 9.0 117,744,105 27.2 21.2 1979 5,953 7.0 134,296,072 14.1 22.6 12 months ended May 31, 1980 (Unaudited) 6,223 4.2(2) 5147,982,632 10.3(2) 23.8 (I) Million k%%.
(2) Increase over 12 months ended May 31,1979. Sales and revenues by customer class for the fiscal years 1975 through 1979 and the twelve months ended May 31,1980 are set forth below: Sales (GM11) 12 Months Ended May 31, 1975 1976 1980 1977 1978 1979 (t'amuditedi Clann et % of % of Castomers % of % of % of % of Total Total Total Total Total I Total ! Wholesa14(1) 2,018 47.4 2,221 49.5 2,577 50.5 2,845 51.2 2,882 48.4 3,050 Militrry 292 6.9 301 6.7 303 49.0 5.9 324 5.8 3t7 5.3 305 4.9 1.arge Industrial I,241 29.1 1,202 26.8 1,256 26.6 1,441 25.9 1,788 30.0 1,889 30.4 Residential 320 7.5 343 7.6 403 7.9 446 8.0 443 7.5 461 7.4 i Commercial, Small [ Industrial and Other 388 9.1 419 9.4 465 9.1 506 i 9.1 523 8.8 518 8.3 Total 4.259 100.0 4,486 100.0 5,104 100.0 5,562 100.0 5,953 100.0 6.223 100.0 t (I) locludes Central. See subcaption " Central Contracts". Revenees l (Dollars is noessads) 12 Months Ended May 31, 1975 1976 1980 j 977 1978 1979 (l'eaudited) Clam ot % ot % ot % of Custoseers % of % of "A of Total Total Total Total Total Total Wholesale (I) $32,038 42.3 $36.216 45.0 $42,265 45.7 5 54,101 i Military 45 9 $ 59,975 44.6 $ 64,999 43.9 4.564 6.0 4,754 5.9 5,049 5.4 6.329 5.4 6,567 4.9 6,874 4.7 l I.ar8e Industrial . . 20,931 27.6 19,357 24.0 21,557 23.3 26.672 22.7 35.131 26.2 39,991 Residential . 27.0 8.354 11.0 9,107 11.3 10,802 11.7 14,585 12.4 15,255 Commercial, Small 11.4 17,158 11.6 Industrial and Other 9,919 13.1 11,130 13.8 12.860 11.9 16,057 13.6 17,368 12.9 18,960 12.8 Total $75,806 100.0 $80,564 100.0 $92,533 100.0 $117,744 100.0 $134.296 100.0 $147,982 100.0 (1) Includes Central. See subcaption " Central Contracts". 10 4 m
Central Contracts having become effective on AprilExisting power convacts entered into between t Central to purchase, until October 29,1971 (tha "F Power Contract"), require the Authority to furnish and 22, 1987, , which Central purchases directly from the Southeastern Power months ended May 31, 1980, Administration In the twelve sales to Central amounted to approximately 2,948 GWh. After October 22,1987, and for the remainder of the term of the F Power Contract (June 2005), the to sell 600 GWh. and deliver to Central, and Central is obligated to purchase and receive annually from the ority, The F Power Contract prescribes the rate schedule applicable to the power and . It energy sold to includes a provision for adjustment of the energy rate related n lieu of taxes paid by the Authority. The F Power Contract also includes provisions for rate rev changes related to costs according to a certain formula. ' Pursuant to the provisions of the F Power Contract, a rate review was conducted in the Fall of a result, effective January 1,1979, the monthly rates applicable at each delivery point for po under the F Power Contract are: (1) for demand charges $1.875 per kW of billing demand, and (2 energy charge 5.65 mills per kWh for the first 100,000 kWh of billing energy and 4.33 mills per kWh fo additional kWh of billing energy. The next review will take place in the Fall of 1980 to become effectiv January 1,1981. Central and the Authority have entered into an agreement calling for a surcha mills per kWh of billing energy for the fiscal year ending June 30,1981. R. W. Beck and Associates state in the Beck Report, Appendix I, that they have projected t revenues to be derived from Central on the basis of the present contract terms. The Authority has advised Central of its intent to reconsider the fuel clause and rate provisions of the F Power Contract and to changes which would be equitable to both parties when nuclear power becomes available. Revenues from sales to Central during the twelve months ended May 31,1980, amounted to $62,4 representing approximately 42% of revenues from firm sales, and averaged 21.2 mills per kWh. Recent negotiations between the Authority and Central concerning the nature and extent of their future contractual provisions: arrangements have resulted in a number of proposed contracts containing the following major (1) the Authority and Central will share ownership of the generating units to be constructed a: the Cross site; (2) each party will have an option to share ownership of future generating facilities to be constructed by the other; (3) the combined Authority-Central system will be dispatched by the Authority on an economic dispatch basis; and (4) all power contracts existing between the Authority and Central will be superseded and Central will pay for its supplemental power and energy requirements on the basis of a cost of service methodology similar to that used by the Authority in determining its rates to its large industrial custmners. The poposed contracts have been approved by the Authority's Board of Directors and Central's Loard of Trustees, but must be approved by the REA Administrator prior to their becoming effective. In the opinion of R. W. Beck and Associates, the proposed contractual arrangement will produce revenues
" rom Central which will be equal to or greater than revenues derived from Central under rates determined pursuant to the F Power Contract for equivalent amounts of power.
R. W. Beck and Associates' projections of future sales to Central and of revenues and expenses attribut-able to Central have been based on the terms of the F Power Contract. l Residential, Commerrlal and Small Industrial Sales Sales to residential, commercial and small industrial customers are made pursuant to rate schedules established from time to time by the Authority. All of such rate schedules include a fuel adjustment clause. Revenues from residential, commercial and small industrial sales during the twelve months ended May 31, 1980 represented approximately 24% of revenues from firm sales anri averaged 36.95 mills per kWh. l 11
I
\
Municipal, Military and Large Industrial Contracts industrial customers which 350,000 use in excess ofSales to municipal, military and larg
. For large kWh per month, the Authority has a large power rate schedule and requires that such customers enter into contracts for . All periods of not contracts contain rate provisions of the demand and energy type, and include er fuel adjustm upon the customer's consumption and load factor. provisions generally used i 1980 represented approximately 33.4% of revenues from f .
The Authority's municipal customers are the City of Georgetown and the Town of B The Authority's five largest industrial customers for the 12 months ended May contribution to revenues from firm sales of the Authority were as follows: 31, 1980 and their
$10,604,357 (7.29c ), Macalloy, Inc.-510,157,107 (6.9% ), Georgetown Steel Corporation-(4.1%), Santee Portland Cement Company-$2,561,267 (1.7%),Amoco Chemicals Corporation- 56
$2,054,732 (l.4% ). and International Paper Company-("Alumax*'), an integrated aluminum company,rmfor power the sale by on a long-term basis. The power is to be used for a two potline primary reduction pla constructingin the Authority's service area.
Under the contract between the Authority and Alumax, as amended, service to Alumax potline (building up to 166 MW) began in June 1980, and service for the second pot 135 MW) is expected to begin in October 1980. Alumax has an option to purchase an add for these two potlines upon six months' notice to the Authority. The contract provides tha pay for power and energy according to the Authority's large industrial rate schedule, which during a build-up period of 12 months for the 6rst potline and . c en additional 320 MW of power for up to two additional potlines.also g Alumax has informed the Authority that as of June 30, 1980, the Beck Report, Appendix I. complete and was slightly ahead of schedule. , e For addition Rates The Authority's Board of Directors is empowered and required to set rates as necess expenses, including debt service, of the Authority. The rates presently in effect were adopted on January29,1979, trial customers. These rates reflect an overall in effect. . increase of appr es previously On March 26, 1979, the Authority adopted new rate schedules applicable to municipal residential' commercial, municipal pumping, street lighting and industrial customers to become effect billings. These rates, based on projections for the fiscal year ending June 30,1982, rates currently in effect, are estimated to produce an increase in revenues of $22,912,v00, or an i overall revenues of 12.7% from customers other than Central. The average percentage increas rate schedules to major customer classes is estimated to be 8.9% and 10.2% for large aud smal customers, respectively; 7.7% for municipal customers; 26.1% for commercial customers; and 217% residential customers. . November 1982 billings. These rates, based30on , projections for the 1984 and as i 12
compared
$41,804,000, with rates to become effective in May,1981, are estimated to produce an increase in revenuj or an increase in overall revenues of 17.6% from customers other than Central. The avera:
percentage increase on the basic rate schedules to major customer classes is estimated to be 12.5% and for large and small industrial customers, respectively; 16.2% for municipal customers; 27.5% for c customers; and 29.3% for residential customers. The Authority is also expected to adopt on August 1,1980 a program providing for a rate incre l cable to municipal, residential, commercial, municipal pumping, street lighting and industrial customers to become effective with July 1984 billings. Based on projections for the fiscal year ending June 30,1985,and as compared with rates to become effective in November 1982, rates pursuant to the program would produ I an increase in revenues of approximately $30,000,000. The Authority's rate schedules include fuel adjustment clauses which provide for increases or decreases to the from basic rate base a predetermined schedules cost. to cover increases or decreases in the cost of fuel to the extent such co The Authority's rates compare favorably with those of other utilities in South Carolina. A comparison the Authority's rates with those of three other utilities as of June 30,1980 is set forth below. Residential Electric Seevice 300 500 700 1,000 kWh kWh kWh Authority (l) kB Summer $15.21 $22.66 $29.76 $40.42 Wintet 14.46 21.11 27.11 36.12 Carolina Power & Light Ccmpany(2) Summer 17.99 25.98 33.97 45.96 Winter 17.99 25.98 33.97 44.46 Duke Power Company (3) 16.46 24.45 32.44 44.42 South Carolina Electric & Gas Company (4) 19.38 28.30 37.21 50.59 Comunercial Service (300 Hours of kW Demand) 3,000 5,000 7,500 kWh kWh kWh Authority (l) Summer .$123.66 $201.70 $299.25 Winter 105.46 171.50 254.05 Carolina Power & Light Company (2) 124.79 204.80 292.83 Duke Power Company (3) 148.05 237.56 333.25 South Carolina Electric & Gas Company (4) 165.48 275.80 381.70 Industrial Service 1,000 'sW 2,000 kW 9,000 kW 40,000 kW 500,090 kWh 1,000,000 kWh 5,000,000 kWh 25,000.000 kWh Authority (5) $ 12,793.00 $23,918.00 $109,868.00 $527,478.00 Carolina Power & Light Company (2) 14,610.00 29,010.00 138,810.00 666,210.00 Duke Power Company (3) 13,621.71 25,651.21 119,522.21 573,192.21 South Carolina Electric & Gas Company (4) 15,600.00 30,550.00 144,900.00 695,650.00 (1) Includes fuel adjustment credit of $.00298/kWh. (2) Rates under bond effective for service rendered on and after April 14.1980. (3) Rates under bond effective for service rendered on and after June 1,1980. (4) Rates shown The new rates do will not reflect lower be slightly the rates approved than those on June 30,1980, to be effective on bills rendered on and after July 1,1980. shown. (5) locludes fuel adjustment credit of $.00283/kWh. Residential customers of the Authority paid an average of 3.70 cents per kWh during the twelve months ended March 31,1980. This compares with the national residential average of 4.47 cents per kWh as reported by the Edison Electric Institute for the same period. The Authority's average annual use per residential cutomer was 12,042 kWh for the twelve months ended March 31, 1980, 38.11 % more than the national t.verage of 8,719 kWh as reported by the Edison Electric Institute for the same period. 13
Ps'wer Sepply The Authority's existing generating facilities consist of: Facility Date Placed Energy Location in Servlee Capability _ Source JeHeries Hydroelectric Generating ' Station Moncks Corner 1942 128 MW(1) Hydro Wilson Dam Generating Station Lake Marion 1950 2 Hydro Jefferies Generating Station Moncks Corner i Nos. I and 2 1954 I 92 Oil Nos. 3 and 4 1970 320 Coal
)
Grainger Generating Station (2) Conway l 1966 170 Coal Combustion Turbines Myrtle Beach l 1962 20(3) Oil / Gas Combustion Turbines Myrtle Beach 1972 Combustion Turbine (2) 40(3) Oil Hilten Head Island 1973 Combustion Turbine 20(3) Oil Hilton Head Island 1974 Combustion Turbine 20(3) Oil ! Myrtle Beach 1976 Winyah Generating Station 28(3) Oil Georgetown No. I 1975 No.2 280 Coal 1977 280 Coal No.3 1980 280 Coal Combustion Turbine Hilton Head 1979 56(3) Oil Island Total Capability 1,736 MW (1)and A operation projectbyauthorized by the U. S. Congress will require the diversion into the Santee Riv the U. S. Army Corps of Engineers of an 84 Stephen. South Carolina f the "St. Stephen Plant"). MW hydroelectric project in the vicinity of St. For a discussion of the Cooper River redisersion project, which will affect Supply operations Operations at the Jefferies of the Authority." Hydroelectric Generating Station see the E ck Report. Appendix I " Future Power (2) The Authority has entered into certain of the lease contracts referred to in footnote (3) of the table under " Outstanding such facilities and certain transmission facilities. The Authority has an option under eac ? the respective facilities at any time during the term of such lease contract for a sum equal to Central's indebtedness in . respect of such facilities remaining outstanding at the time of the exercise of such option. If the option is not exerci,ed ! before or at the time of the expiration of such lease control of such facilities will retrn to Central. The Authoritytt plans to exercise each and every option to acquire ownership of such facilities prior to expiration of the leases. (3) Summer rating. ! In addition, the Authority receives a firm power supply from SEPA of 105 MW, bringing its total power supply resources to 1,841 MW. In Lne 1977, SEPA advised the Authority that its power supply contract Cith the Authority will terminate effective June 30, 1981. SEPA has advised the Authority, however, that prior to the effective date of termination it intends to review its existing supply contracts with utilities, including the Authority, and that power reallocations may or may not result. Preliminary indications from SEPA are that present allocations will continue and that a new contract will be signed prior to the termination of the present contract. In the table below the capability in MW of the Authority's existing power supply resources is classi6ed by energy source. For information as to the projected additional capability nianned to be placed in commercial operation through the 6 scal year ending June 30,1985, see caption " Capital Improvement Program--General". Sources of Power Supply _ Capability 8re of Total Hydro Generation 130 MW 7.17c SEPA (Hydro) 105 Coal 5.7 1,330 72.2 Oil, Oil / Gas 276 15.0 Total . 1,841 M W 100.07c 14
g 1 Tr'ansmission The Authority's transmission system (includin7 facilities leased from Central) consists of approximate 2,580 miles of transmission lines of 44 kV and above and 93 substations. Interconnections The Authority's transmission system is interconnected with other major electric utilities in the region. It is directly interconnected with South Carolina Electric and Gas Company ("SCE&G") at five locations with two additional interconnections scheduled to be completed in 1980 with the Virgil C. Summer Nuclear Station Unit No.1 (" Summer Nuclear Station"); with Carolina Power & Light Co. ("CP&L") at five locations; and with SCE&G, Duke Power Company (" Duke"), Georgia Power Company and SEPA through a five-way interconnection at the SEPA Clark Hill hydroelectric plant on the Savannah River. Through the foregoing interconnections, the Authority's system is interconnected with the regional transmission system sening the
*outheastern area of the nation.
Reliability Agreement The Authority is a party to the Virginia-Carolinas Reliability Agreement ("VACAR") which exists for the purpose of safeguarding the reliability of electric service of the parties thereto. Other parties to the VACAR agreement are SCE&G, CP&L, Duke, SEPA, Yadkin, Inc. and Virginia Electric and Power Company. Distribution The Authority owns distribution facilities in three districts: the Moncks Corner District sening St. Stephen, Moncks Corner and Pinopolis; the Conway District serving the City of Conway, the Town of Loris and part of the adjacent rural area; and the Myrtle Beach District serving an area along the Atlantic coast from the North Carolina border to Georgetown. CAPITAL IMPROVEMENT PROGRAM General The Authority's capital improvement program for the fiscal years 1981-1985 consists of major power supply facilities to be added to the Authority's system and general improvements, including improvements to present power supply facilities, extensions of and improvements to transmission facilities, improvements to the Authority's distribution system and a new office and senice complex at Moncks Corner. The capital improvement program includes four new power supply facilities: the Authority's one-third share in the Summer Nuclear Station, Winyah No. 4 and Cross No. 2, all of which are now under construction, I cnd Cross No. I for which detailed site investigations are underway and for which certain contracts have been awarded. Present forecasts of capability and load demand indicate that the Authority's existing power supply resources and reserves (assuming extension of the SEPA contract), plus the planned capability of such units r.vailable to the Authority, will be adequate to serve the Authority's needs throua,h 1988. l l 15
v The following table sets forth certain information with respect to the Authority's resources. funded Construction interest, reserves costs or financing costs. do not include the cost of related transmission facilities, c , Power Sepaly - Estimated Resource and 5'arinn=#ed Cowruction 14casion Description Commercial Cost _ Operation Date Estimated I er kW _Coastruction Costs Summer Nuclear Station 900 MW, nuclear-fueled (near Columbia, South December 1981(1) 1912 $273,594,000(2) steam-electric unit Carolina) (Authority's share is ' one-third or 300 MW) Winyah No. 4 280 MW, coal-fueled May 1982 (Georgetown, South $447 $125,175,000 ' steam-electric unit Carolina) Cross No. 2 (near Cross, 450 MW, coal-fueled South Carolina) May 1984 $857 $385,618,000 steam-electric unit Cross No.1 (near Cross, 450 MW, coal-fueled South Carolina) November 1986 $708 $318,775,000 steam-clectric unit (1) Assumes six months delay from commercial operation date projectedppendix . by SCEAG I. See Beck Report A (2) Report, Authority's one-third Appendix I. share of Summer Nuclear Station costs, including nuclear , fu:1 and other c apitalized costs. See Beck The following table sets forth the Authority's projected capability as of November 1986 b Projected Additional Capability To Sources of Power Sopply Capability Become Available _Available Through 1986 % of Hydro Generation Total Total 130 MW - 130 MW SEPA (Hydro) 3.9 % 105 - Coal 105 3.2 1,330 1,180 MW(1) Nuclear 2,510 75.6 Oil, Oil / Gas 300(2) 300 9.0
. 276 -
276 8.3 Total 1,841 MW 1,480 MW 3,321 MW ' 100.0 % (1) Includes Winyah No. 4 (280 MW) and Cross Nos. I and 2 (450 MW each). (2) Authority's one-third share of Summer Nuclear Sta' ion. Summer Nuclear Station The Summer Nuclear Station, now under construction, is located approximately 26 miles of Columbia, South Carolina, on the east bank of the Broad River and adjacent to SCE&G Pumped Storage Project, which will provide the cooling water requirements for the Summe St tion. The Station will contain a Westinghouse Electric Corporation (" Westinghouse") pr having a net output of approximately 900 MW under expected con
'Ihe Authority and SCE&G have entered into a joint ownership agreement dated October ,
18 1973 (the " Summer Agreement"), providing that the Authority and SCE&G shall own the Summer Nucle on as for SCE&G. SCE&G, as gent for itself and the Authority, is sole , , shire of all' costs relating thereto. The award of contracts fo which would increase a contract price by an amount in excess of $200,000 are subject to th Authority. The Authority also has the right of approving operating and construction budgets. 16
SCE&G's present construction effort calls for completion of the Summer Nuclear Station and its readiness for fuelloading in December 1980. After fuelloading, approximately six months will be required for start-up, testing, power ascension procedures, compliance with regulatory procedures and other matters before com-mencement of commercial operation. SCE&G's estimate of construction costs for Summer Nuclear Station is based on a June 1981 commercial operation date. - The Nuclear Regu'atory Commission ("NRC") staff currently projects that an operating license (which is requind prior to loading of nuclear fuel) will not be issued prict to the Spring of 1981 because of stafr and licensug restraints evolving from the Three Mile Island ("TMI") accident. Accordingly, the ability of SCE&G to meet a June 1981 commercial operation date will require that the NRC greatly accelerate its licensing activities. The Authority and R. W. Beck and Associates believe it prudent to plan for a further delay of the June 1981 commercial operation date of Summer Nuclear Station (to reflect possible delays in the issuance of the operating license) in planning the power supply resources available to meet expected loads during Ge Summer of 1981. Accordingly, the Authority is assunung a commercial operation date of December 1,1981 for its power supply and financial planning purposes. The Authority's estimated capital cost of its 300 MW ownership share of the Summer Nuclear Station, based on a December 1,1981 date for commercial operation, exclusive of funded interest, reserves and financing costs, is $273,594,000. This amount provides for the Authority's share of the initial fuel core, working capital and contingency (including amounts related to TMI modi 5 cations', in addition to con-struction costs. See Beck Report, Appendix I. For additional information concerning licensing delays and other licenses and authorizations required in connection with the Summer Nuclear Station, see the caption " Regulatory Matters-Nuclear Matters". SCE&G reports that as of June 30,1980 the engineering of Summer Nuclear Station was approximately 96% complete and construction was approximately 95% complete. SCE&G has not completed its financing arrangements for its share of the Summer Nuclesr Station. SCE&G is subject to the informational requirements of the Securities Exchange Act of 1934 and in accordance there-with files reports and other information with the Securities and Exchange Commission. The Annual Report ca Form 10-K for the fiscal year ended December 31,1979 (the " Form 10-K") and the Ouarterly Reports on Form 10-0 for the quarters ended March 31,1980 and June 30,1980 (the " Form 10-O's") of SCE&G have ben filed by SCE&G with the Securities and Exchange Commission. The Form 10-K and the Form 10-O's may assist the reader in assessing SCE&G's ability to finance its construction program, including its ownership share of the Summer Nuclear Station and de fuel cores therefor. The Form 10-K and other annual and quarterly reports of SCE&G (including financial infermation) may be inspected and copied at the public reference facilities maintained by the Commission at Room 6101,1100 L Street N.W., Washington. D. C. and at the Commission's regional offices at 219 South
Dearborn Street,
Chicago, Ill.; 26 Federal Plaza, New York, N. Y.; and 10960 Wilshire Boulevard, Los Angeles, Calif., and copies of such material can be obtained from the Public Reference Section of the Commission, 500 North Capitol Street, Washington, D. C. 20549 at prescribed rates. SCE&G's Common Stock is listed on the New York Stock Exchange, where reports and other information concerning SCE&G may also be inspected. SCE&G will furnish without charge to each person to whom this Official Statement is delivered, upon written request, a copy of the Form 10-K and Form 10-O's excluding exhibits. Requests should be addressed to: Robert W. Stedman, Controller, South Carolina Electric & Gas Company, 328 Main Street, Columbia, SC 29218. Neither the Authority nor the Underwriters make any representation as to the accuracy or completeness of such information, nor do they represent that there has been no material change in the information presented since the respective dates as of which it is given. l For information concerning the fuel supply for the Summer Nuclear Station, see caption " Fuel Supply". i Winyah Generating Station Unit No. 4 Winyah No. 4, now under construction by the Authority, will consist of a coal-fueled steam-electric unit cf approximately 280 MW at:d associated transmission facilities. Winyah No. 4 will be located at and become an integral part of the Wicyah Generating Station. The Authority has retained Burns and Roe, Inc. 17
as design and construction engineers for Winyah No. 4 to prepare plans and specifications, to perform re services and to manage construction of the project. Winyah No. 4 willinclude a single steam-turbine generating unit having a net capability of approx 280 MW; boiler; condenser; coal pulverizing. handling and storage equipment and facilities; related electrical and mechanical equipment and a limestone scrubber. The construction permit for Winyah No. 4 has been received from South Carolina Department of Health and Environmental Control ("DHEC"). For information as to compliance of Winyah No. 4 with environ-mental laws and regulations and other permits and authorizations required for construction and operation of Winyah No. 4, see the caption " Regulatory Matters-Environmental Matters" Site work for Winyah No. 4 was initiated in September 1978. As of June 30,1980, engineering of Winyah No. 4 was approximately 71G complete and construction was approximately 44'7c complete. Initial operation of Winyah No. 4 is scheduled for June 1981, and commercial operation is scheduled for May 198 The total construction costs for Winyah No. 4, exclusive of funded interest, reserves and financing cos are estimated by Burns and Roe, Inc. to be $125,175,000. These estimated total construction costs include the cost of pollution control equipment considered adequate, in the opinion of Burns and Roe, Inc., to meet existing pollution control codes and regulations. As of June 30,1980, the Authority had entered into 58 contracts totaling approximately $95,956,000, which represents approximately 77'7c of the estimated total direct construction costs of the unit. In addition to the construction costs for Winyah No. 4, the capital costs of Winyah No. 4 include approximately $9,000,000 to finance transmission facilities necessary to deliver output frcm the Winyah Generating Station to the Authority's existing transmission system and $5,000,000 to increase the coal stockpile at the Station. The Authority and Burns ad Roe, Inc. estimate the total capital costs of Winyah i No. 4 to be $139,175,000. The Authority is expe:ted to reduce the authorization of Expansion Bonds to finance the capital costs of Winyah No. 4, funded interest and reserves from $184,000,000 to $151,000,000, of which $100,000,000 were a part of the 1979A Bonds and $51,000,000 were a part of the J80A Bonds. Cross Site- Unit 2 . The Authority has begun construction of and awarded certain long-lead time contracts for Cross No. i 2 which will be located on the north side of the Authority's diversion canal as it enters Lake Moultrie in Berkeley County, South Carolina. The site of Cross No. 2 as presently envisioned will ultimately be expanded to include four units with a net station capacity of approximately 1,800 MW, subject to federal and state I regulatory approvals and the receipt of necessary licenses and permits. The first unit to be built at the Cross site will be designated as Unit 2 so that better construction access is available when the other units i are constructed. The Authority has retained Burns and Roe, Inc. as design and construction engineers for , Cross No. 2 to prepare plans and specifications, to perform related services and to manage construction of i the project. The Burns and Roe Letter, describing Cross No. 2 in more detail, is attached to this Official State-ment as Appendix III. Commercial operation is scheduled for May 1984, subject to timely receipt of the neces-sarylicenses and permits and execution of an accelerated construction schedule. The coal fueled unit will include a boiler; turbine-generator; condenser; coal pulverizing, handling and storage equipment and facilities; an eleven mile rail spur; and related electrical and mechanical equipment and c limestone scrubber. The circulating water system will be a closed loop utilizing a mechanical draft cooling tower. l Tbc construction permit for Cross No. 2 has been received from DHEC. For information as to com-pliance of Cross No. 2 with environmental laws and regulations and as to other permtis and authorizations required for construction and operation of Cross No. 2, see captions " Regulatory Matters-Federal Energy Regulatory Commission and Environmental Matters". s The total construction costs for Cross No. 2, exclusive of funded interest, reserves and financing costs, cre estimated by Burns and Roe, Inc. to be $385,618,000. These estimated construction costs include the 18 1 - I
cost of pollution control equipment considered adequate, in the opinion of Burns and Roe, Inc., to meet existing pollution control codes and regulations. As of June 30, 1980, the Authority had enterec into 47 contracts totaling approximately $234,141,000, which represents approximately 61% of the total estinated construction costs of the project. For a discussion of litigation seeking an injunction against the award of, e construction under, one of the contracts, see the caption "Pending Legal Proceedings". mately In$40,200,000 addition to the construction costs for Cross No. 2, the capital costs of Cross No. 2 include approxi to finance transmission facilities necessary to deliver output from the Unit to the Authority's existing transmission system and $13,100,000 for the initial coal stockpile. The Authority and Curns and Roe, Inc. estimate the total capital costs of Cross No. 2 to be $438,918,000 which will be obtained from the proceeds of the 1980B Bonds and future financings. Generallmproteaments The Authority's general improvement program for fiscal years 1981-1985 consists of extensions and improvements to the Authority's existing generating facilities, transmission and distribution systems and general plant. The Authority estimates the total capital costs of the extensions and improvements, exclusive of funded interest, reserves and Snaneir:g costs, to be approximately $222,800,000. These improvements tre described below. The Authority plans to make extensions and improvements to its transmission and distribution system, in addition to transmission facilities included in the capital costs of new generating units under construction or planned, estimated to cost approximately $119,000,000. Included in this amount are the cost of a 230kV Line (42 miles) from the Winyah Generating Station to Charity Switching Station, a 230kV Line (57 miles) from Carnes Crossroad to Yemassee, a 230kV Line (34 miles) from Marion te Hemingway, and the Heming-way 230/Il5kV Substation. The balance of the Authority's general improvement program consists of improvements to existing generating facilities, estimated to cost $38,700,000; improvements to the Authority's general plant, estimated to cost approximately $41,600,000; future generating station site studies and acquisitions, estimated to cost spproximately $8,000,000; and initial construction of additional future generating units with estimated expen-ditures of $15,500,000. Included in improvements to general plant is a new office and service complex, including a seven story general office building, central warehouse complex, central garage and general main-tenance build!ng, to be built on a 75-acre tract in Moncks Corner. The Authority plans to finance the cost of its general improvement program through the proceeds of Expansion Bonds previously issued, future financings and revenues from the Authority's system. l F1ture Power Supply Program-Cross Site The Authority's long range power supply progam contemplates the development of three additional gen-erating units of 450 MW each adjacent to Cross No. 2. Present projections indicate that Cross No.1, the second unit to be constructed at the Cross site, will l be required to be placed in commercial operation in November 1986. Cross No.1 is planned to be a duplicate l ; cf Cross No. 2. The Authority has retained Burns and Roe, Inc. as design and construction engineers of the project. The total capital costs of Crow No.1, including the cost of transmission facilities and initial coal i stockpile but exclusive of funded interest, reserves and financing costs, are estimated to be approximately l
$351,375,000. Contracts are presently awarded simultaneously with the Cross No. 2 contracts with zero cancellation charges for eighteen months to two years after the Cross No. 2 award. As of June 30,1980, the j Authority has entered into 28 contracts totaling approximately $165,023,000, which represents approximately 52% of the total estimated construction costs of the unit.
The Authority has filed all permit applications for Cross No. I simultaneously with the Cross No. 2 applications. See captions entitled " Regulatory Matters--Federal Energy Regulatcry Commission and Environ-mental Matters." 19
- -. - - . -----l
.a '
l The Authority is also evaluating additional locations for selection as sites for nerating stations. Estimated Financing Requirements for Capital Improvement Program "Ihe following table sets forth estimated financing requirements for the A h program during fiscal years 1981-1985 ut ority's capital improvement elsewhere in this OfEcial Statement, the Authority has begun initial pla . As stated ng units, and it is and will be Snanced with the proceeds of additional Expansion Bo o s shown Capital Capital Costs gs _To Be Incurred in Fascal Year _ Ner d rInF anear Dare 19e k i 19eott) 1981 1982 Re . Issuance 19ss unent Espenses Total n$ste[1 nan Issued Funds Requere) Summer Nuclear Station 12/81 $224.0 (Douars in MilUon.:s Winyah No. 47 $ 29.1 $ 20.5 $ 5/82 56.0
$ 27.5 $ 84.9 $386.0 Cross No. 2 . 5/84 30.4 60.8 78.3 22.4 -
11.7 21.1 172.0
$284.6 151.0
$ - $ 1014 Cross No. I 142.3 187.9 21.0(2) 1I/86 51.8 118.6 GenerrJ Improvements 23.1 29.2 609.3 -
- 299.1 45.6 139.0 609.3 83.6 35.3 536.0 -
88.4 2.6 536.0 16.1 226.0 ,
$3105 $274.9 196.0 30.0
$249.7 $575.4 $139.2 $379.7 $1,929.3 $435.6 $217.0 $1,276.7 (1) IIcludes estimated expenditures for June 1980.
(2) Amount to be available trom Winyah No. 3 Construction Fund. With respect to the fmancing needs described above, it has o pursue been an the Authority orderly process of entry into the bond market and, consequently, on Bonds the amount o! which for will be issued during each subsequent fiscal year may such year. not a requirements correspond to th Estimated Power Supply Resources and Requirements The following table sets forth the Authority's projected energy s 1981 1985. requirements for Fiscal Year Ending June 30 1981 1982 Energy Sales 1983 1984 1985 Wholesale (l) ' Military and Large Industdal 3,421GWh 3.679GWh 3,960GWh 4,292GWh 4,643GWh 4,281 4,941 5,030 5,150 Residential, Commercial, Small 5,309 t Industrial and Other 1,131 1,206 ! 1,287 1,377 1,474 Total Sales . 8,833 9,826 10,277 10,819 Losses and Wheeled for SEPA 628 11,426 666 691 718 753 Total Energy Requirements . 9,461GWh 10,492GWh 10,968GWh 11,537GWh 12,179GWh l (1) Includes sales to Central. l l ' { \ l l l r l I l 20 l 1 t
The following table prepared by R. W. Beck and Associates sets forth the Authority's projected power supply resources and requirements for the calendar years 1980-1985: Projected Researces and Regoirements--1980-1985 (MW) 1984 1981 1982 1983 1984 1985 Power Supply Resources: Generating Capability Existing (1) 1,736 1,736 1,736 1,736 1,736 1,736 Under Construction (2) Summer Nuclear Station - - 300(3) 300 300 300 Winyah No. 4 - 280(4) 280 280 280 280 Cross No. 2 - - - - 450 450 Planned (2) Cross No.1(5) - - - - - - Total Generating Capability (6) 1,736 2,016 2,316 2,316 2,766 2,766 SEPA Allocation 105 105(7) 105(7) 105(7) 105(7) 105(7) St. Stephen Ilydro Plant - - - - 20(8) 40(8)
~
Total Power Supply Re-sources 1,841 2,121 2,421 2,421 2,89' 2,911 Maximum Annual Demand (July-August)(9) 1,600 1,868 1,966 2,084 2,227 2,377 Less: Interruptible Demand 40 40 40 40 40 40 Net Maximum Annus! De-mand Responsibility 1,560 i,'28 1,926 2,044 2,187 2,337 Power Supply Resources Avail-able for Reserves 281 293 495 377 704 574 Purchased Reserves 50 50 50 50 50 50 Total Purchased Reserves and Resources Available for Reserves 331 343 545 427 754 624 Total Purchased Reserves and Resources Available for Re-serves as a Percent of Net Maximum Annual Demand 1 l Responsibility Less SEPA Al-lotment 23 % 20 % 30 % 22 % 36 % 28 % (I) See the caption 'The Authority-Power Supply" I (2) Unit capabilities are shown in the first calendar year during which units under construction or planned will be available to meet the summer peak demand, which normally occurs in August. (3) Summer Nuclear Station is presently assumed to be available for commercial operation in December 1981; however, the first calendar year during which its capability will be available at the time of the Authority's projected annual system peak demand will be 1982. The capability included for Summer Nuclear Station assumes that the NRC operating license will not restrict the output below rated capability. (4) Winyab No. 4 is planned to commence temporarily initial operation in June 1981, during the time of the projected 1981 annual system peak demand. (5) Cross No. I is presently scheduled to be available for commercial operation in November,1986; however, the first i calendar year during which its capability will be available at the time of the Authority's projected annual system peak
- demand will be 1987.
(6) Amounts shown assume all units will be available for service at the designated capability during the time of the I annual system peak demand. (7) Assumes SEPA power equal to that provided under the present contract will continue to be avai'able after June 30, 1981, which includes approximately 44 MW of SEPA capacity wheeled to SEPA preference customers. , (8) The Authority plans to purchase gradually increasing portions of the capacity which will be made available as a result of the St. Stephen Plant: 20 MW in 1984, and 40 MW in 1985. See section captioned ** Future Power Supply Operations of the Authority"in the Beck Report, Appendix 1.
)
(9) Projected maximum annual demands shown include projected interruptible loads. In 1981 and thereafter the amounts shown include approximately 286 MW of demand associated with Alumax. 21
)
i 1
w
' PROJECTED OPERATING RESULTS ending R.June W. 30,1981 Beck and Associates have made a projection of the operations of the Authority for the fis through 1985 based upon analyses of historical operations and trends and the Authority's adopted budget, and taking into account factors known to them and factors which can, in their opi Appendix I, andbe reasonably expectedform in condensed to occur.
herein. A summary of these projected operating results is shown in the Bec I The major considerations and assumptions utilized by R. W. Beck and Associates in preparing the estimate of the projected revenues and expenses are summarized as follows:
- 1. Projected revenues from sales of electricity to customers other than Central have been based:
(i) for power deliveries through April 1981, on rates presently in effect; (ii) for power deliveries durin the period May 1981 through October 1982, on rates adopted by the Authority to become effective l
?.ay 1981; (iii) for the period commencing with power deliveries in November 1982 through June 1984 on rates to be adopted by the Authority to become effective November 1982; and (iv) for the period commencing with power deliveries in July 1984 and continuing through the term of the projections on rates to be subsequently adopted to implement the rate program adopted by the Authority to become effective July 1984, including in each case the fuel adjustment provisions of such rates. Revenues from sales of electricity to commercial and large consumers, other than Central, reflect the terms of the Author-ity's contracts with such customers.
- 2. Revenues to be derived from sales of electricity to Central have been projected on the basis of the present terms of the F Power Contract. Revenues from Central for the fiscal year ending June 30, 1981 reflect the 2.3 mills per kWh surcharge as provided for in the most recent amendment to the F Power Contract.
- 3. Projections of revenues and expenses assume that Alumax will require power supply from the Authority with a build-up of 'oads to approximately 286 MW by November 1980 for the first and second potlines. If Alumax gives notice to proceed with additional potlines as provided in the Alumax contract, or if the operation dates of any potlines change, projected revenue and expenses could change significant 4.
Generation by the Jefferies Hydroelectric and Wilson Dam Generating Stations has been pro-jected to range from 628 million kWh to 529 million kWh for the fiscal years 1981-1985.
- 5. Purchases and wheeling of power and energy from SEPA have been projected on the basis that the Authority and SEPA will execute a new contract containing terms and conditions, including the power allocated to the Authority, which will be substantially the same as the present contract as to which SEPA has served notice of termination effective June 30, 1981. Such assumption reflects the average energy available for wheeling and direct use of the Authority's system of approximately 300 million kWh annually of which approximately 198 million kWh are wheeled for Central and municipal customers.
- 6. The cost of coal has been projected using as the base the Authority's budget estimate for fiscal years ending June 30,1%I,1982 and 1983 and escalated at the rate of approximately 8.0%,per year throughout the remaining portion of the projection.
- 7. No sales of surplus energy have been assumed to be made to SCE&G or CP&L.
- 8. Power costs are predicated in part on the availability of the following new generation in addition to the Authority's present generating resources: (i) 300 MW-Summer Nuclear Station in December 1981; (ii) 280 MW-Winyah No. 4 in May 1982 with temporary initial operation in June 1981; and '
(iii) 450 MW-Cross No. 2 in May 1984. ,
- 9. The Authority has or will obtain all licenses and permits required for all fossil generation and transmission facilities in its 1981-1985 capital improvement program on a schedule commensurate with construction needs.
- 10. SCE&G will obtain all licenses and permits necessary for and Summer Nuclear Station will commence commercial operation in December 1981 as presently anticipated by the Authority and R. W. Beck and Associates. Summer Nuclear Station is projected to optrate at an average monthly plant factor of 60% during the first two years of operation and a 70% mordly plant factor for subsequent 22
_.mm _ *_ _ -_________.mm_.
m** years with two-month refueling periods. (A 70G monthly plant factor, with annual refueling period of two months, is equivalent to approximately a 58Fc annual plant factor.) The capability availabic from Summer Nuclear Station is predicated on the assumption that the NRC operating license wdl not include provisions restricting operations below rated capability.
- 11. Nuclear fuel costs for Summer Nuclear Station are estimated on the basis that the 82% of the initial fuel core uranium already delivered will be at costs provided in the Westinghouse contract. The remsining 18G of the initial fuel core reflects the spot market prices paid therefor. See caption entitled
" Fuel Supply-Nuclear". All reload fuel uranium will be purchased on the open market at costs based on price levels of approximately $44 per pound escalated at SG per year.
- 12. The total amount of Expansion Bonds required to be issued to pay the costs of Summer Nuclear Station was estimated based upon the Authority purchasing its ownership share of the initial nuclear fuel under the terms and at the costs set forth in the Westinghouse contract, with the exception of the approxi-mately 18G of the initial core uranium concentrates purchased by SCEAG on the spot market.
- 13. Operation t.nd maintenance expenses, exclusive of fuel, have been based on the Authority's budget estimate for fiscal years ending June 30,1981,1982 and 1983, and increased each year there-after to reflect increased expenses required for projected growth and escalation based on inflation rates and other conditions prevailing in the present economy.
14. Debt service requirements for the period shown have been projected utilizing the following criteria: (i) the actual debt senice schedules on outstanding Priority Obligations and on the Expansion Bonds heretofore issued; (ii) the estimated debt senice requirements at an annual interest rate of 8% Q as provided by the Authority's financial advisor on $150,000,000 of 1980B Bonds with interest require-ments funded from Expansion Bond proceeds to August 1,1982; (iii) the estimated debt senice on the
$459,300.000 of additional Expansion Bonds authorized to be issued to pay the costs of construction of Cross No. 2 at an annualinterest rate of 8% G with interest requirements funded on a!! Expansion Bonds authorized for Cross No. 2 to November 1,1984; (iv) the estimated debt service requirements at an annual interest rate of 8% G on $101,400,000 of Expansion Bonds assumed to be issued for the completion of Summer Nuclear Station with interest requirements funded from Expansion Bond proceeds to June 1, 1982 on said Expansion Bonds and Expansion Bonds heretofore issued alocable to Summer Nuclear Station; (v) the estimated debt senice requirements at an annual interest rate of SH G on $30,000,000 of Expansion Bonds assumed to be issued in the Spring of 1981 to fund general improvements; (vi) the estimated debt senice requirements at an annual interest rate of 8% G on $536,000,000 of Expansion Bonds assumed to be issued to fund the construction of Cross No. I with interest requirements funded from Expansion Bond proceeds to May 1,1987 which is beyond the period of the projection shown; and (vii) the payment of principal and interest requirements, if any, associated with short-term borrowings, utilized by the Authority for interim financing of capital improvements is assumed to be paid from the proceeds of future Expansion Bond issues.
23
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In the table below, figures from Exhibit D, captioned " Projected Operating Results", contained in the Beck Report have been summarized. Macal Year Ending June 30(I) 1981 1982 1983 1984 1985 Operating Revenues (Dollars in Thousands)
.. $246,062 $297,146 $360,848 $440,217 Other Income $516,159
.. 6,025 7,697 10,535 10,556 14,371 Total . ... . $252,087 $304,843 $371,383 $450,773 Operating Expense (except depre- $530,530 ciation) 186,584 211,282 239,878 294,688 325,956 Revenues Available for Debt Serv-ice, Lease Payments and Other Purposes S 65,503 $ 93,561 $131,505 $156,085 $204,574 Debt Service:
Priority Obligations $ 4,319 $ 4,322 $ 4,319 Expansion Bonds-Issued (2) 29,674
$ 4,473 $ 4,337 35,225 59,777 64,401 73,841 Expansion Bonds - Author-ized but Not Yet Issued and Expected to be Authorized and Issued (3) 1,396 3,578 12,227 12,227 40,719 Total Debt Service. $ 35,389 $ 43,125 $ 76,323 $ 81,101 $118,897 Calance Available for Payment of Leases, Other Obligations, and Capital Improvements . . . . . . $ 30,114 $ 50,436 5 55,182 $ 74,984 5 85,677 Lease Payments and Other Obliga-tions(4) 5,349 5,469 5,590 5,591 5,503 B: lance Available for Capital Im-provements and Other Purposes $ 24,765 f, 44,967 $ 49,592 $ 69,393 $80,174 Debt Service Coverage (Priority Ob-ligations and Expansion Bonds) 1.85 2.17 1.72 1.92 1.72 (1) See footnotes in Exhibit D to the Beck Report, Appendix 1.
(2) Includes estimated debt service at an assumed interest rate of 8%% on the 1980B Bonds in the assumed principal [ i amount of $150,000,000 and excludes portion of interest which has been or is to be funded. (3) Includes estimated debt service at an assumed annualinterest rate of SM % on additional Expansion Bonds: (1) $101.400.. 000 assumed to be issued for the completion of Summer Nuclear Station. (ii) $459.300.000 completion of Cross No. 2 and (iii) assumed to be issued for the i shown exclude that portion of interest which is to be funded from bond proceeds.530,000,000 assumed: to be iss (4) Does not include debt service on Bank Credit Agreement and Electric Revenue Notes,1980; interest has already funded and principal is expected to be paid from the proceeds of Expansion Bonds to be issued. FUEL SUPPLY The availability of fossil fuels (coal and oil) used by the Authority and the prices at which such fuels can j be purchased by the Authority are subject to various factors which affect the availability and the price of fuels in the domestic and world markets and to actions by governmental authorities with uspect to fuels, including mandatory federal al'acation programs for oil and regulations with respect to mining. During the fiscal year .ded June 30,1980, the Authority's energy supply including energy wheeled to SEPA preference customers was derived approximately 81% from coal-fueled gene ation, .2% from oil-fueled generation,11.5% from the Authority's hydro facilities and 7.3% from purchases from SEPA, SCE&G and CP&L. l l 24 1
A . The following table indicates the percentages of energy to be produced by the various fossil fuels and non-fossil sources expected to be available to the Authority through the fiscal year ending June 30,1985: Flatal Year Endles Jane 30 Oil Coal Neelear Hydro Osber(1) 1981 1.0% 86.4 % - 6.6 % 6.0 % 1982 .1 81.3 9.1 % 6.0 3.5 1983 .1 76.7 13.9 5.7 3.6 1984 2.0 77.7 12.1 4.9 3.3 1985 .... ..... .7 79.3 12.6 4.3 3.1 (I) SEPA hydro, assuming power equal to that provided under present contract will continue to be available in $ scal year 1982 and thereafter, and purchases from SCE&G. For information concerning a potential reduction in supply of energy from SEPA in such year, see caption "The Authority-Power Supply" Coal The Authority receives bituminous coal for its Grainger, Jefferies and Winyah Generatir.7 Stations from five companies under six separate contracts and from limited spot purchases. One contract, expiring December 31, 1983, provides for delivery of 350,000 tons annually. A second contract, expiring December 31,1989, provides for delivery of 480,000 tons annully. A third contract, expiring September 30,1998, or upon the exhaustion of the coal reserves leased by the supplier, provides for delivery of 420,000 tons annually and grants to the Authority options to increase tonnage to be delivered to 500,000 tons snnually. A fourth contract provides for delivery of 1,000,000 tons annually and expires December 31, 1999. A fifth contract, expiring January 1, 2004, provides for delivery of 100,000 tons annually beginning in 1981, gradually increasing to 1,000,000 tons annually in 1986. Under this contract, the Authority has the first right of refusal to all recoverable coal reserves on the mined properties estimated to be 34,500,000 tons. A sixth contract, expiring December 31, 2000, provides for delivery of 500,000 tons annually. The Authority may increase tonnage to be delivered under such contract by 500,000 tons annually by the end of 1980, by an additional 500,000 tons annually during 1983 and 1984, and by an additional 500,000 tons annually during 1984 and 1985. In addition, the Authority has first right of refusal to any additional tonnage above 2,000,000 tons produced annually from the mined properties which are estimated to contain over 70 million tons of recoverable coal reserves. All of such suppliers, with the exception of one, have fast loading facilities and provide for delivery of coal in unit train shipments. As of July 3,1980, the Authority had on hand coal sufficient to satisfy its requirements for rpproximately 74 days of projected operation. The actual coal tonnages required during the fiscal year ended June 30, ;979 and the estimated tonnages required for the fiscal years ending June 30,1980 through 1985 and amounts under contract, are as follows: l Finest Year Toms Under Emded Jose 30 Toes Regelred Contract (1) i 1979 2,441,456 . - l 1980 2,411,466 - 1981 3,577,000 2,800,000 1982 3,570,000 2,950,000 1983 3,532,000 3,050,000 , 1984 3,744,701 2,975,000 1985 . .. .. . . 4,038,671 3,025,000 I j (1) Does not include additional tonnage available under contract expansion options. I Air quality requirements for emissions from the Authority's generating units limit the maximum sulfur l content of coal used by the Authority. Such requirements range from a limit of 1.1% in the case of Unit 2 at the Winyah Generating Station to 2.0% in the case of Units 3 and 4 at the Jefferies Generating Station and the 25 (
.u l Grainger Denerating Station. The sulfur content of coal received under existing contracts ranges from mitgly .9% to 2.0%. The Authority does not anticipate difficulty in obtaining an adequate coal supply with sulfur content within acceptable ranges to meet foreseeable needs.
Should the need arise, the Authority has the flexibility to transfer unit train deliveries between the Jefferies and Winyah Generating Stations, as well as receiving less than unit train deliveries at either of these two st tions. The Authority has purchased 154 coal cars to insure their availability. The average cost of coal purchased by the Authority during the four fiscal years ended June 30,1979 and during the 12 months ended May 31,1980, including the cost of rail freight, was as follows: i Period Averase Averase Cost Cost per Ton per Million Btu Fiscalyear ended June 30: 1976 $25.85 $1.102 1977 25.99 1.124 1978 31.80 1.384 1979 34.95 1.484 12 months ended May 31,1980 36.60 1.498 The Authority believes that as a result of the Federal Surface Mining Control and Reclamation Act of 1977 and the rules promulgated thereunder, which also affect underground mining, there will be increases in the cost of coal to the Authority which will be recovered through its fuel t.djustment clause. Nuclear Under the Summer Agreement SCE&G acts for itself and as agent for the Authority in the construction and operation of the Summer Nuclear Station including the acquisition and management of nuclear fuel. In order to fuel and operate a nuclear generating station, six distinct stages of the fuel cycle are involved: (1) the mining and milling of uranium ore to yield uranium concentrates, (2) the conversion of uranium concentrates to uranium hexafluoride, (3) the enrichment of the uranium hexafluoride, (4) the conversion of the uranium hexaffurride to uranium dioxide and the fabrication of fuel assemblies into which the uranium dioxide is incorporated, (5) the utilization of the nuclear fuel in the generating station reactor and (6) the reprocessing of the spent fuel including the appropriate disposition of radioactive wastes, or, alternatively, the extended storage of the spent fuel. Uranium. The initial core for the Summer Nuclear Station, consisting of three regions of fuel, has been procured from Westinghouse and other sources and is available at the Station. , SCE&G had originally contracted with Westinghouse for eight regions of fuel for reload pur-poses, in addition to the three regions required for the initial core. Approximately one reload region would be required each year. In September 1975, Westinghouse notified SCE&G that "Under present and anticipated market conditions, Westinghouse 6nds itself un.*ble to obtain sufficient uranium to meet . . . customer needs ' cxcept at such onerous prices that performance on Westinghouse's part would be commercially impracticable". l In October 1975, SCE&G commenced an action against Westinghouse seeking specific performance of the uranium supply provisions of the contract and damages for its breach. In October 1978, the United States District Court for the Eastern District c' Virginia ruled that Westinghouse had breached its contract to supply > uranium for the Summer Nuclear Station and recommended that SCE&G and other utilities with similar contracts attempt to negotiate a settlement of the damages with Westinghouse. SCE&G, foritself and as agent for the Authority, has entered into an agreement to settle this lawsuit. The settlement agreement has been approved by the Authority, SCE&G and Westinghouse and by order of the Court. By terms of the order approving the settlement, the Court imposed confidentiality upon the details of the settlement. The settlement generally provides for a cash payment of $30,000,000 to the Authority and SCE&G (of which the Authority's share is $10,000,000) and that Westinghouse will supply up to 1,600,000 pounds of uranium from 1981 26
through 1988 from specified sources, provide equipment and services and fuel fabrication with various discounts l from the regular charges therefor during the period of 1980 through 1996, and waive its rights to price adjust-ments with respect to 731,000 pounds of uranium previously delivered under a prior Court-ordered allocation plin. Under the terms of the settlement agreement Westinghouse has the right to supply uranium from sources other than those specified. The Authority and SCE&G also may be entitled to certain proceeds that Westing-house may receive as a result of an antitrust suit against 29 uranium producers. The Court has retained jurisdiction over the parties and the subject matter until there has been final compliance with all provisions of the settlement. 9 The original Westinghouse contract provided for the furnishing of suiicient uranium for the first eleven regions of nuclear fuel for the Summer Nuclear Station. The settlement agreement provides that deliveries of 200,000 pounds of uranium are to be made in 1981, and that the remaining 1,400,000 pounds will be delivered in regular instalments through 1988. SCE&G estimates that the total uranium requirements for the first eleven regions will be 3,700,000 pounds. SCEAG has to date acquired from Westinghouse and others 968,000 pounds (26% of the total requirement). The 1,600,000 pounds provided for in the settlement agreement represent 43% of the total requirement, leaving 1,132,000 pounds (31% of the total requirement) to be obtained through purchases in the open market. SCE&G has not purchased any uranium in the open market since 1976. On April 23,1980, Westinghouse notified SCE&G that the NRC had issued a show cause order which could result in the closing of the mine which is the source of most of the uranium to be supplied und:r the settlement agreement. On May 23,1980, following the submission of analyses by the mine operator, the NRC terminated the show cause order, imposed certain conditions to the resumption of operations at the mine and required the mine operator to demonstrate within 90 days that control of certain pollutants and restoration of contaminated areas can be achieved by prescribed procedures. Although Westinghouse is taking steps to meet such requirements, it has indicated that it believes that the matters described above could constitute a force majeure under the terms of the settlement agreement. The force majeure provisions of the settlement agreement provide, among other things, for delays in deliveries and may permit certain payments by Westing-house in lieu of deliveries, the details of which are covered by the Court's confidentiality order. This develop-ment could require SCE&G to make additional purchases of uranium on the open market beyond those contemplated at the time of settlement, the economic consequences of which SCE&G cannot predict with certainty. Conversion, Enrichment, Fabrication and Reprocessing. Conversion services to be provided by Westing-iouse are deemed adequate for all reload regions through 1989. Fabrication services are to be provided ty Westinghouse for 12 reload regions. SCE&G has also contracted with the United States Department of Energy (" DOE") for supplying the necessary enrichment services through the year 2002, which is adequate for operation through the year 2004. SCE&G currently has no commitments for reprocessing nuclear fuel as there are nc, reprocessing facilities presently operating commercially or planned in the United States. The presently known alternative to reprocessing is extended storage of the spent fuel. Facilities are being incorporated in Summer Nuclear St: tion for on-site storage of 13 relcad regions of fuel which is expected to be adequate for approximately ten years of operation and to permit storage of the entire reactor core (3 regions) in the event complete unloading should be required for any .~ason. SCE&G presently has no arrangements for off-site storage of spent nuclear fuel. REGULATORY MATTERS Federal Energy Regulatory Commission The Authority operates its Jefferies Hydroelectric Generating Station and certaic other property under License No.199 issued by the Federal Energy Regulatory Commission ("FERC") pursuant to the Federal Power Act. The license is scheduled to expire on March 31,2006. The Authority is required to obtain the approval of the FERC for the construction of its planned generating station near Cross, South Carolina as it will be necessary to draw make-up waters from the project 27
37 - _ - - _ .-_ _ crea of FERC Project No.199. An application for permission to use the project waters for the Cross station has been filed with FERC and public notice of that filing has been issued. No protests or petitions to intervene h ve been filed in connection with that application. Dam Safety In.rpection. Under regulations of the FERC, dams forming a part of a licensed project must undergo safety inspections at five year intervals. In 1976 the engineering firm of Chas. T. hiain, Inc. ("hfain") was retained by the Authority to perform the required inspection. ! Extensive testing performed under hiain's supervision and " viewed by the FERC staff and its expert consultants reveals that the West Pinopolis Dam at Lake Moultrie would be marginally unstable under applicable design earthquake criteria and the North Santee Dam at Lake Marion would be unstable under applicable design earthquake criteria. It was determined that all dams could withstand the probable maxi-mum flood. Additional tests are being performed on the West Pinopolis Dam which may establish that this dam complies with FERC standards. However, because of the location of that dam with regard to heavily populated areas, the Authority is conducting studies to determine what action is necessary to increase the West Pinopolis Dam's safety with respect to seismic activity. As the area along the Santee River below the North Santee Dam is uninhab' red swamp and flood plain, c break in that dam would result in little property damage and probably no loss of life. Main has advised the Authority preliminary cost estimates te repair or rebuild the'Ncrth Santee Dam are approximately $120,000,000. This information has been furnished to FERC. Main has also furnished the Authority with flood maps showing the extent and time delay for flooding of both the Santee and Cooper Rivers. These maps have been used by the Authority to update its Emergency Action Plan. Meetings have been held with emergency preparedness officials of the State and the counties concemed in order that they might be made aware of allinformation available to the Authority.
' Die FERC has not determined what action the Authority will be required to take with regard to either ,f the mentioned dams.
I vironmentalMatters Both federal and state authorities have imposed various environmental control requirements relating pri-m, ly to airborne pollution and the discharge of pollutants, including heat, into waters in the vicinity of the A t. ority's generating stations. Standards related to environmental suitability are subject to change, and litiga-tion by environmental groups and others may affect the construction of facilities or their operation. The Authority endeavors to insure that its facilities comply with applicable environmental regulations and standards; however, no assurance can be given that necessary authorizations and permits will be received, or that standards as to environmental suitability will not be changed in a manner to affect adversely the Authority er its operations. The Authority cannot now estimate the precise effect of existing and potential regulations and legislation upon any of its existing and proposed facilities and operations, nor the impact of additional costs which may be incurred in effecting compliance with potential regulations and legislation. Air Quality. Pursuant to the Federal Clean Air Act of 1970, as amended (the " Air Act"), the Environ-ment:1 Protection Agency (" EPA") promulgated primary and secondary ambient air quality standards with respect to certain air pollutants including particulates, sulfur oxides and nitrogen oxides. These standards tre to be achieved by the application of control strategies developed by the states and included in imple-mentation plans filed with the EPA for approval and by the enforcement of federal new or modified source performance standards. DHEC has adopted state implementation plans generally designed to achieve the prim:ry and secondary air quality standards, which plans have been approved by the EPA. These regulations affect the siting of new plants as well as the type of pollution controls required and provide for penalties f:r noncompliance after a certain date. Plants on which construction commences after the promulgation of proposed regulations must use the "best technological system of continuous emission reduction", and the use of untreated low sulfur coal as a sole means of compliance is precluded. 28 j
l The EPA has promulgated regulations establishing stringent standards for particulate, sulfur dioxide tad nitrogen oxide emissions for generating stations, the construction of which is commenced subsequent to August 17, 1971 or which after such date, are modified in such a way as to increase emissions of air pollutants or cause the emission of air pollutants not previously emitted. The EPA Administrator proposed revised new source performance standards in September 1978. These standards, which have a prospective I effect from the date of proposal, include not only an emission limitation but also require the achievement of a percentage ? eduction from the emissions that would otherwise result from combustion of non-treated fuels. 1 The Authority has received operating permits for all of its existing generating facilities, except Winyah I No. 3. The operating permit for Winyah No. 3 is contingent on demonstrating compliance with pollution control requirements. The Authority does not anticipate any difficulty in obtaining this permit Tne Authority believes its facilities are operating substantially in compliance with the permits. The EPA has published regulations (the "PSD regulations") designed to prevent "significant deterior-ction" of air quality in portions of a state where air quality is now better than the applicable secondary ambient standards. In June 1978, the EPA published amended PSD regulations. Revised regulations have been proposed. He Authority is unable to predict the effect which the PSD regulations will have upon its operations. The Authority has received construcwon permits for Winyah No. 4 and Cross Nos. I and 2, subject to certain conditions. The Authority does not anticipate any difficulties in meeting the conditions of the permits. Water Quality. The Federal Water Pollution Control Act, as amended (the " Water Act") prohibits the discharge of pollatants, including heat, from point sources into waters of the United States, except as authorized in permits of no longer than five years duration issued under the National Pollutant Discharge Elimination System (" NPDES permits"). The Water Act provides for reduction of pollution discharges in various stages and categories. The Water Act also requires that cooling water intake structures reflect the "best technology available for minimizing adverse environmental impact". The EPA has promulgated regulations with respect to such matters, some of which are being contested in the courts. DHEC has issued NPDES permits, expiring in 1981, for all of the Authority's existing generatmg freilities, except Winyah No. 3. It is expected that the Authority will be required to comply with more stringent requirements in order to obtain renewals of such permits as additional provisions of the Water Act become tpplicable. De Authority has applied to DHEC to modify the existing NPDES permit for Winyah Nos. I and 2 toinclude Winyah Nos. 3 and 4. The Authority has applied for a NPDES permit for Cross Nos. I and 2. The Authority does not anticipate any difficulties in obtaining such permits In November 1975, the EPA promulgated regulations requirire each state or regional planning agency within each state to develop and implement water qutlity manage.,. ent plans for all waters of the strte, which plans are to give effect to, among other things, a state-wide " anti-degradation" policy. In June 1979, the EPA issued revised regulations governing the permit program under the Water Act. Proceedings seeking review of certain aspects of these regulations have been instituted by the electric utilities cnd other industries. Although it is not possible to predict the outcome of these proceedings, should the contested regulations ultimately be sustained in their present form, they could result in substantial additional costs for the Authority in obtaining and implementing water discharge permits, although the exact nature cnd the amount of such costs cannot be accurately predicted. The EPA has also proposed new sampling r:quirements for water discharge permit renewals by adding over one hundred pollutants to existing testing requirements. While some sampling requirements may be reduced upon final promulgation, it is expected that signiScant additions to the Authority's sampling and testing effort will be necessary. The Authority cannet predict how or whether this additional sampling will affect its water discharge permits. Nuclear Matters The Summer Nuclear Station is subject to regulation by the NRC, a successor to the Atomic Energy Commission ("AEC"). The construction permit for the Summer Nuclear Station was issued by the AEC in 1973. In December 1976, an application for an operating license for the Summer Nuclear Station was filed with the NRC. In February 1978, the NRC granted the petition of a party living near the site of the Summer Nuclear Station to intervene in the licensing proceeding. 29 l l l
In December 1978, Central petitioned the NRC to make a finding of significant change in th the Authority and SCE&G, the licensees, and to refer the matter to the Attorney s or General of th an antitrust review and his advice as to any conditions relating to the antitrust laws that shou , operating license for the Summer Nuclear Station. The petition as amended alleges that to restrict competition between themselves in the sale of electric power, thatn Central is almos upon the Authority for bulk power supply, and that the Authority's dual rates to Central i unfa SCE&G have opposed such petition. While the ultimate relief i the NRC has no direct jurisdiction over the Authority's rates, and Centrars petition states that " C notes that it is dependent on the Authority for almost all of its power supply and would sdier serious injury if there were to be any delay in granting an operating license for said Summer unit." and SCE&G do not believe, even if the petition were granted, that any such antitrust review would r delay in issuance of the operating license. In March 1979, the staff of the NRC filed a response to C unended petition concluding that the NRC should deny such petition. In June 1980, the NRC requ Department of Justice to provide its views whether a hearing would be required and also invi provide it and Contracts". Authority-Central the Department of Justice with information concerning their negotiations. See capti The NRC has issued a rule, effective September 4,1979, which is being contested by certain in't venors in court proceedings, relating to the emironmental impact of fuel processing . This and waste dispo rule would provide for a generic proceeding to consider evidence "regarding the likelihood that nuclea can be safely disposed of and when that, or some other off-site storage solution, can be accompli prediction can be made as to whether these matters will delay the issuance of an operating license fo Summer Nuclear Station. SCE&G and the Authority are required to obtain liability insurance and a United States Government indemnity agreement for the Summer Nuclear Station prior to the time the NRC operating license is to insure against their maximum liability under the Price Andersen Act (currently public claims arising from a nuclear incident. , ,
$560 000 000) for any Commencing August 1,1977, the United States Government's indemnity responsibilities began to be phased out and replaced by a mandatory -
program industry of wide self-insurance, under which each licensee of a nuclear power plant became obligated, in the event of a nuclear incider.t invohing any commerci:5 i.uclear facility in the country, to pay a deferred prem to $5,000,000 The $560,000,000 per incident, up to a maximum of $10,000,000 per year in the event of more than one incid that amount, due to an increase in the number of units subject to such assessm
. After the Summer Nuclear Station becomes subject to the deferred premium system, the Authority will be liable for one-third of ea
- deferred premium assessed with respect to the Station.
}
In March 1979, an accident occurred at TMI located near Harrisburg, Pennsy!vania resulting in a down of Unit 2, the release of radiation to the environment, and damage to the core of the nuclear reacto Investigations of the accident were undertaken by various governmental and regulatory commissions recovery operations are in progress. As a result of this accident, the NRL auspended the issuance of o licenses for new nuclear power plants pending the completion of certain studies. Commencing 1980, the NRC has granted restricted operating licenses for new nuclect plants. It is not clear ho full power operating licenses will be issued by the NRC, and neither SCE&G mor the Authority ca the operating license for the Summer Nuclear Station will be received. Changes evolving from the TMI accident have been and are being made to the Summer Nuclear Stat on c priority basis to meet new regulatory requirements. Additional changes may be required, but neither th Authority nor SCE&G can predict the extent of such changes or the magnitude of the costs thereof. Ne the Authority nor SCE&G can predict the ultimate effect of the TM1 accident and subsequent deve legis!: tion and regulation upon the future operations of the Summer Nuclear Station. Department of Energy-Rate Making and Feet Use The Public Utility Regulatory Policies Act of 1978 reouires, among other things, that each electric utility having annual retail sales in excess of 500 million kWh, including the Authority, determine, after 30 - f
public hearing held prior to November 9,1981, whether adoption of various retail rate design standards 1 (such as time of day, seasonal and interruptible rates, rates based on cost of senice, the prohibition of 1 certain declining block rates and various load management techniques) will conserve energy supplied by such utility, promote efficient use of such utility's resources and provide equitabic rates to such utility's retail customers. The Act provides that the Secretary of the DOE, any affected electric utility, or any affected retail customer of such utility may intervene in any ratemaking or similar proceeding in order to initiate and partici-pote in the consideration of such standards. The Authority has retained Main as consultants to advise it concerning steps necessary to comply with the foregoing requirements. In addition, the Act requires such electric utilities to determine, after public hearings held prior to November 9,1981, whether to adcpt certain retail practice standards (concerning automatic adjustment clauses, master metering, information to consumers, advertising and termination of electric senice). The Authority has held the required hearings concerning the retail practice standards and its Board of Directors hos completed the required determinations. The Powerplant and Industrial Fuel Use Act of 1978 places restrictions, among other things, on the use of petroleum and natural gas as a fuel in certain electric powerplants. With respect to certa:n existing powerplants, which are fueled by oil, including Units I and 2 of the Jefferies Generating Station and the Authority's existing combustion turbines, the Economic Regulatory Administration (" ERA") of the DOE may prohibit the use of oil as a primarr energy source if the ERA finds that such powerplant has or had the technical capability to use coal or an alternate fuel as a primary energy source or could have su;h capability without substantial physical modification or substantial reduction in its rated capacity, and that it is financially feasible to use coal or an alternate fuel. The Authority normally generates less than two percent of its power supply from oil. CERTAIN PROVISIONS OF THE INDENTURE AND RESOLUTION The fo!!owing statements are summaries of certain provisions of the Indenture and Resolution and are subject to the detailed provisions thereof. See also caption " Security for Expansion Bonds-Pledge of Revenues, Reserve Account Requirement and Rate Covenant". Terms used under this caption which are defined in the Indenture and Resolution are used herein as so defined. Funds and Accounts Revenue Fund: The Reverue Fund shall be held in trust and administered by the Indenture Trustee so long as any of the Priority Obligations are outstanding and thereafter shall be held in trust and admirdstered by the Authority. The Authority covenants and agrees in the Indenture that it will pay into the Revenue Fund, as promptly as practicable after receipt thereof, all of the revenues of the System. Order of Payments from Revenue Fund: Under the Indenture moneys sha!! be disbursed o' y the Indenture Trustee from the Revenue Fund to other funds and accounts of the Authority, created by the Indenture, or permitted by the Indenture and created by the Resolution, in the following order:
- 1. Operating Fund: To pay monthly to the Authority for its Operating Fund an amount sufficient to cover operating and maintenance costs for 30 days. However, no moneys shall be so paid for Lease Payments.
- 2. Interest Fund: To pay monthly to the Interest Fund a proportionate amount of the next due interest payment on the Priority Obligations.
- 3. Bond Fund: To pay monthly to the Bond Fund a proportionate amount of the next due pay-ment for the principal and sinking fund installments on the Priority Obligations.
- 4. Debt Service Reserve Fund: To pay to the Debt Senice Reserve Fund for the Priority Obliga-tions amounts sufficient to maintain that Fund at the required level equal to debt senice on the Priority Obligations for the next 24 months.
- 5. Expansion Bond Fun.!: To pay monthly to the Expansion Bond Fund Trustee, proportionate amounts cf the next due interest, principal and sinking fund installments on the Expansion Bonds, for 31
E-
. deposit appropriately in the interest Account, Principal Account, and Bond Retirem n . In the . deSciency over a period of 60 months would Reserve Account Requirement". onds-be required auch
- 6. Lease Fund:
amount of the next due Lease Payments.To pay monthly to the Authority for deposit in
- 7. Contingency Fund:
in such fund less than the required amount of $1,152,000,Whenever a deficie made to restore such deficiency over a period of 60 months. payments into such fundu reare req i d to be the Authority. Under the Indenture no minimum . amount is re er the Resolution which, together with the amounts deposited in the y Capital preceding fiscal years, is at least equal to 8rc of the gross revenues (Operating Reven Income) derived from the ownership and operation of the Authority'sySystem in the t preceding fiscal years; provided that, after the 1973 Bonds and 1974 Bonds are the requirement is an amount which, together with the amounts deposited in the Capit mprovement Fund in the two immediately preceding fiscal years, is at least equal to 12rc of
" nuclear fuel expense") and the energy related compone in accordance with the Uniform System of Acccunts prescribed for Public Utilities an e
Federal Power Commission in effect on January 1,1977, derived from the ownersh the Authority's System in the three immediately preceding fiscal years
- 9. Special Reserve Fund:
The Indenture provides that on January 15 and July 15 of each year, after meeting all the requirements of the funds and accounts previously mentione in the Revenue Fund, accumulated prior to the preceding January 1 and July 1, s Indenture Trustee into two parts. One half shall be paid by the Indenture Trustee to the T the State of South Carolina for the general funds of the State, andn othe the remainder shall Special Reserve Fund, and become available for any lawful purpose of the Author may determine. Effect of the Resolution Under the Resolution, after all Priority Obligations have been retired, or provision has been therefor, the Expansion Bonds wi!I become gross revenue bonds. Moneys se y theshall then be disb Authority from the Revenue Fund in the fo!!owing order: l 1. Expansion Bond Fund: l To pay monthly to the Expansion Bond Fund Trustee, proportionate \ deposit appropriately in the interest Account, Principal . In the Account an event that a deficiency should occur in the Reserve Account, payments into such account to resto deficiency over a period of 60 months would be required.
- 2. Lease Payments. Fund: To pay monthly to the Lease Fund a proportionate amount of the next due Le
- 3. Operating Expenses: To pay expenses of operation and maintenance.
- 4. CapitalImprovement Fund: To pay during each fiscal year into the Capital Improvement Fun amounts at least equal to the Minimum Capital Improvement Requirement.
j i f;r anylawful purpose of the Authority, including the making of pa . 32
Iavestment of Funds Funds established by the Indenture, other than the Operating Fund, the Interest Fund and the Bond Fund, may be invested, but only in securities constituting direct obligations of, or unconditionally guaranteed as to principal and interest by, the United States of America. Income received from the investment of such j moneys is to be deposited by the Indenture Trustee in the Revenue Fund. ' The Resolution defines " Government Obligations" as direct obligations of, or obhg. tions the principal of and interest on which are unconditionally guaranteed by, the United States of America and " Investment i Securities" as (1) Government Obligations, (2) obligations of any agency or corporation which is or may hereafter be created by an Act of the Congress of the United States as an agency or instrumentality thereof, (3) Public Housing Bonds or Project Notes fully secured by contracts with the United States of America and (4) obligations to the payment of the principal of and interest on which the full faith and credit of the State of South Carolina is pledged. Moneys in the Construction Fund may be invested in Investment Securities and in certificates of deposit issued by any bank, trust company or national banking association in South Carolina which has capital stock and surplus of at least $4,000,000 or in any other State which has capital stock and surplus of at least
$50,000,000.
Moneys in the Interest Account, Principal Account and Bond Retirement Account in the Expansion Bond Fund and in the Lease Fund may be invested in Government Obligations. Amounts in the Interest Account representing funded interest on the 1979A,1980A and 1980B Bonds may be invested in Investment Securities. Moneys in the Reserve Account in the Expansion Bond Fund may be invested in Investment Securities. After all Priority Obligations have been retired, or provision has been made therefor, moneys in the Revenue Fund and in the Capital Improvement Fund may be invested in Government Obligations and lavestment Securities, respectively. Ip /estments of any fund or account shall mature at the times required to provide moneys to make the payments required to be made from said fund or account, except that investments of the Reserve Account in the Expansion Bond Fund must mature within seven years from the date of making the investment. Additional Expansion Bonds
- 1. Additional Expansion Bonds may be issued under the Resolution and their terms shall be established by a Series Resolution.
- 2. If such additional Expansion Bonds are being issued to acquire or construct a Power Plant, the amount to be authorized shall be not less than the amount of the estimated cost of the Power Plant, including capitalized interest, Reserve Account provision and expenses of issuarce after deducting estimated investment earnings and any amount being provided for by moneys other than bond proceeds. Such authorized amount may be issued at one time or from time to time.
- 3. However, in case of issuance from time to time, debt service computations (involved in determining compliance with the earnings test provision of the Resolution respecting additional Expansion Bonds) shall re-late to the total authorized amount, with equal annual combined principal and interest payments, computed at the average interest rate on the Expansion Bonds then being issued, beginning the second July 1 following the then estimated date of commercial operation of the Power Plant and continuing until the final maturity date of such Expansion Bonds theretofore issued or then being issued. Also, in case of issusace from time to time, after the first of such authorized Expansion Bonds have been issued in compliance with the earnings test provision of the Resolution, second and subsequent installments of the authorized Expansion Bonds may be issued provided that the Construction Engineer shall 61e with the Expansion Bond Fund Trustee a certificate that in his opinion the costs of construction of the Power Plant have not increased so as to require an increase in the amount of Expansion Bonds authorized for the Power Plant. If the costs of construction have increased, the Authority must increase the amount of the authorized issue accordingly and must again comply with the ecrnings test provision of the Resolution.
33
L
,4. ,
If the Authority proposes to issue Expansion Bonds for a second project while a Power Plant partiaHy Snonced is still under construction, the Construction Engineer for such Power Plant shad certify that the costs of construction of such Pour Plant have not iacreased. If such costs have increased, the amount of Expansion ! Bonds authorized for such Power Plant shall be increased accordingly unless the investment of the proceeds of the Expansion Bonds or Revenues of the Authority will be available to meet such de6ciency, and the Authority must,in complying with the earnings test provision of the Resolution, reflect such increased amount of Expansion Bonds.
- 5. hdditional Expansion Bonds may be issued provided that (a) there is no default in any of the provisions of the Indenture or Resolution; (b) the amount in tl.c Reserve Account in the Expansion Bond Fund is, or will be upon issuance of such Expansion Bonds, equal to the Reserve Account Requirement; and (c) except in the case of the second or subsequent instaHments of authorized Expansion Bonds as set forth above, a certificate of the Consulting Engineer is filed with the Expansion Bond Fund Trustee evidencing compliance with the earnings test provision of the Resolution. Such earnings test provision is contained in Article 11 (Section 2.6) of the Resolution and is briefly summarized below.
- 6. Net Revenues (being the Operating Revenues and Other Income less expenses of operation and maintenance, except Lease Payments and depreciation) in each succeeding fiscal year to and including (a) the fiscal year which is the third succeeding fiscal year after the date of sale of the additional Expansion Bonds or (b) the fiscal year which is the first fiscal year after the date, or estimated date, of commercial operation of any Power Plant to pay the costs of construction of which additional Expansion Bonds have been or are then being issued or are then authorized to be issued, whichever is later, shall be at least equal to the sum of (i) the amount required in such fiscal year to provide for the payment of the principal of and interest on the Priority Obligations, the Expansion Bonds then outstanding, and the additional Expansion Bonds then being issued; (ii) the amount estimated to be required in such fiscal year to provide for the payment of the principal of and interest on additional Expansion Bonds which have been authorized but not yet issued; (iii) the amou't required in such Sscal year for payment into the Lease Fund; and (iv) an amount equal to Sc~c of the gross revenues (Operating Revenue and Other Income) in such fisca! 3 ear. In computing interest requirements, amounts funded or authorized to be funded shaU be omitted.
- 7. Net Revenues for each fiscal year covered by the earnings test shan be Net Revenues for the Base Period adjusted by the Consulting Engineer as provided in the Resolution and summarized below. The Base Period shall be twelve consecutive months out of the preceding eighteen months.
- 8. 'Ihe Consulting Engineer shah adjust the Net Rewaues for the Base Period by any or all of the foDowing conditions and requirements as may be approprir : to the circumstances:
(a) Acquisition of operating electric utili y properties; (b) Changes in rates including any which are to go into effect not less than 12 months prior to (i) the estimated Date of Commercial Operation of the new Power Plant or (ii) the date to which interest on the additional Expansion Bonds then being issued is capitalized, whichever occurs earlier; (c) New or amended power sales contracts with customers; (d) Investment income on increased amounts to be held in the Reserve Account in the Expansion l Bond Fund by reason of the issuance of additional Expansion Bonds; (e) Increases or decreases in power production expenses in case water conditions during the Base Period resulted in output of the Authority's hydroelectric generating facilities being more or less than the average of the preceding twenty years; (f) Estimated resisions of salary and wage rates and fuel, equipment and supply prices and rate escalation provisions of power sales contracts; (g) Power sales contracts with other electric utilities for the sale by the Authority of surplus power and energy and power purchases from other electric utilities to supplement the tuthority's generating capability; and 34
(b) Increases in sales to customers at rates of increase determined after a study of the rates of increase for the preceding ten fiscal years and other factors which the Consulting Engineer may deem pertir.ent and increases in cost associated with the increase in sales and the installation of additional facilities. Amendments of the Resolution Effected by Supplemental Resolutions By a supplemental resolution, adopted February 16, 1977, the Authority has amended the foregoing provisions of the Resolution respecting additional Expansion Bonds, to take effect at such time as the 1973 Bonds and the 1974 Bonds are no longer outstanding, so that subclause (iv) of clause (b) of paragraph 6 shall read:
"(iv) an amount equal to 127c of the gross revenues (Operating Revenues and Other Income) after deducting therefrom ' fuel' expense (including ' nuclear fuel expense') and the energy related com-ponent of ' purchased power' expense determined in accordance with the Uniform System of Accounts prescribed for Public Utilities and Licensees of the Federal Power Commission in effect on January 1, 1977, in such fiscal years."
By a supplemental resolution, adopted August 31,1977, the Authority has amended the foregoing pro-visions of the Resolution respecting additional Expansion Bonds, to take effect at such time as the 1973 Bor.ds, the 1974 Bonds and the 1977 Refunding Bonds are no longer outstanding, so ' hat clause (b) of paragraph 8 shall read:
"(b) Changes in the rates of the Authority which have been adopted by the Authority and are then in effect or will be in effect in a fiscal year to which his certificate pertains."
Separate System Under the Resolution, after the Priority Obligations have been retired, the Authority may create a separate utility system for the purpose of financing facilities for the generatior of electric power and energy or for the transmission thereof at voltages of 230 kV or more, by the issuance of L 'nds or other evidences of indebtedness, other than Expansion Bonds, which shall be payable solely from the rt.'enues or other income
- d. rived from the ownership and operation of such senarate utility system. In the event that the Authority should purchase, for use in the System, power and energy produced or transmitted by such separate utility system, payments therefor wou!d be payable only after required payments have been made to the Expansion Bond Fund and the Lease Fund.
I Junior Lien Obligations l l Nothing in the Resolution shall prevent the Authority from issuing bonds, notes, bond anticipation notes, warrants, certificates or other evidences of indebtedness the payment of which shall be made inom the pro-ceeds of Expansion Bonds or other indebtedness of the Authority or from revenues, and if payable from revenues shall be made junior and subordinate to the payment of the Expansion Bonds. The Authority may create special funds to provide for the payment of such obligations, payments to which shall be made after payments to the Expansion Bond Fund, and rnay, at the Authority's option, be made prior to or after payments into the Lease Fund. Engineering Reports and Audits The Indenture requires that, no less frequently than once in each period of three yearr the Authority end the Indenture Trustee shall each appoint an Independent Engineer who together shah select a third Independent Enginen the three to constitute a " Board of Engineers", who shall review the books and records of the Authority, ir.@ct the properties and report its findings and recommendations. Under the Resolution, after the Priority Obligations have been retired, the Consulting Engineer will perform such function. The Resolution requires that, whenever the Authority has determined to issue additional Expansion Bonds in connection with the acquisition and constr _; ion of a Power Plant,it shall engage a Construction Engineer, 35
with experience in the design and construction of power plants and estimating the cost thereof, to supenise construction and to prepare the cost estimates and quarterly progress reports required by the R lution. For the Summer Nuclear Station, Gilbert Associates, Inc. is performing the design senices, isaniel Construction Company is providing construction senices and SCE&G is providing overall management a preparing the cost estimates. Burns & Roe, Inc. has been appointed Construction Engineer for Winyah No. 4 and Cross Nos. I and 2. The Resolution also requires the Authority to employ a Consulting Engineer, with experience in analyzing the operation of electric utility systems, forecasting loads and revenues rate analyses and preparing feasibility reports respecting the financing of electric systems, to prepare certificate whi:h is required by the Resolution in connection with additional Expansion Bonds, sales of property or any other matters. The Resolution requires quarterly Snancial reports and an annual full audit and report to t>e made b a cenified or chartered Accountant. Power Plant, a quarterly progress report.The Resolution also requires, during the period of constru Any such report shall be furnished to any Bondholder who has furnished his name and address for such purpose. Insurance
'II.e Indenture and the Resolution require the Authority to insure such of its various properties as are usually insured by utilities owning like properties in similar amounts and coverages, with insurance companies and to carry liability insurance in reasonable amounts.
Sale, Lease or Other Disposition of Properties The Authority may sell, lease or otherwise dispose of the System if simultaneously therewith phivision is made for the retirement of all outstanding Priority Obligations and Expansion Bonds. The Authority ma sell, lease or otherwise dispose of any part of the System if the Consulting Engineer shall certify to the Aut that, after taking into consideration the use by the Authority of the proceeds of such sale, lease or other disposition, the estimated Revenues to be derived from the remaining properties of the System will be suffi-cient to enable the Authority to comply with all the covenants and conditions of the Resolution. The Authority may sell, lease or otherwise dispose of surplus lands, crops, timber, stumpage, buildings and any portion of the works, plant and facilities which shall become unseniceable, inadequate, obsolete, worn out or unSt to be used in the operation of the System or no longer necessary, material to or useful for such operation. Eysts of Default and Remedies under the Resolution So long as any Priority Obligations are outstanding, the rights and remedies upon an Event of Default provided by the Resolution may only be exercised by the holders of the Expansion Bonds and the Bond Fund Trustee to the extent that the exercise of such right or remedy will not impair the rights of the holders of the Priority Obligations. Events of Default under the Indenture and the remedies of the bolders of the Priority Obligations and the Indenture Trustee are summarized below under the subcaption " Events of Default and Remedies under the Indenture" An Event of Default under the Resolution may occur whi6 is not an Event of Default under the Indenture and vice versa. Under the Resolution, the happening of one or more of the following events constitutes an Event of Default: (i) default in the performance of any obligation with respect to payments into the Revenue Fund; (ii) default in the payment of the principal of or default for 30 days in the payment of interest or sinking fund installments on any Expansion Bonds; (iii) default for 90 days in the observance and performance of any other of the covenants, conditions and agreements of the Authority in the Resol'ition; (iv) the sale or conveyance of any properties constituting part of the System except as permitted by the Resolution or the failure to use its best efforts to maintain, the voluntary forfeiture or the lapsing or termination by neglect or default of, any license, franchise, permit or other priwlege necessary or desirable in the operation of the System; and (v) certain events in connection with the bankruptcy, insolvency or reorganization of the Authority. In case an Event of Default has occurred which has not been cured, the Bond Fund Trustee is required to exercise such of the rights and powers vested in it by the Resolution and use the same degree of care and 36 f L
skillin the exercise t'sereof as a prudent man would exercise or use under the circumstances in the conduct of his own afsirs. If an Event of Default has occurred, ano shall not have been remedied, the Bond Fund Trustee or the holders of not less than 25% in principal arount of the Expansion Bonds then outstanding may declare the principal of all Expansion Bonds and the laterest accrued thereon to be immediately due and payable, but such declaration may be rescinded under c:rtain circumstances. After the occurrence of an Event of Default and prior to the curing of such Event of Default, the Bond Fund Trustee may, to the extent permitted by law, but or.ly if the Priority Obligations are no longer out-standing, take possession and control of the System and operate and maintain the same, prescribe rates for capability or power sold or supplied through the facilities of the System, collect the gross revenues resulting from such operation at:d perform all of the agreements and covenants contained in any contract which the Authorityis then obligated to perform. Such gross revenues, subject to the rights of the holders of the Priority Obligations, shall be applied first to the payment of the reasonable expenses and liabilities of the Bond Fund Trustee and thereafter to the payment of operating expenses and principal of and interest on the Expansion Bonds. After all sums then due in respect of the Expansion Bonds have been paid, and after all Events of Default have been cured or secured, to the satisfaction of the Bond Fund Trustee, the Bond Fund Trustee is required to relinquish possession and control of the System to the Authority. At any such time the Bond Fund Trustee shall be entitled to the appointment of a receiver of the business and property of the System, of the tuoneys, securities and funds of the Authority pledged under the Resolution, and of the Revenues, and of the income therefrom, with all such powers as the court or courts making such appointment shall confer. The Resolution empowers the Bona Fund Trustee to file proofs of claims for the benefit of the holders of the Expansion Bonds in bankruptcy, insolvency, or reorganization proceedings and to institute suit for the collection of sums due and unpaid in connection with the Expansion Bonds, to enforce specific performance of covenants contained in the Resolution or to obtain injunctive or other appropriate relief for the protection of the holders of the Expansion Bonds. No holder of Expansion Bonds has any right to institute suit to enforce any provision of the Resolution or the execution of any trust thereunder (except to enforce the payment of principal or interest installments as they mature), unless the Bond Fund Trustee has been requested by the holders of not less than 25G in principal amount of the Expansion Bonds then outstanding to exercise the powers granted it by the Resolution or to institute such suit and unless the Bond Fund Trustee has refused or failed, within 60 days after the receipt of such request and after having been offered adequate security and indemnity, to comply with such request. In the event the Bond Fund Trustee has failed or refused to comply with the aforesaid request, the Resolution provides for the creation of a " Bondholders' Committee". Events of Default and Remedies Under the Indenture Under the Indenture, the hap;ening of one or more of the following events shall constitute an Event of Default: (i) default in the payment of the principal of any Priority Obligation when the amount shall become due and payable whether by the terms thereof, by call for redemption or by declaration; (ii) default in the payment of any installment of idterest on any Priority Obligation wheni the same shall become due and payable, and such default shall continue for 30 days; (iii) default for 60 days in the payment or setting aside of any amounts required to be paid to or set aside in, or in the performance of any other obligation contained in the Indenture in respect of the Revenue Fund, the Interest Fund, the Bond Fund, the Debt Sersice Reserve Fund, the Contingency Fund, the Capital Improvement Fund or the Special Reserve Fund which is required by the terms of the Indenture to be made; (iv) any improper payments by the Authority out of any of the funds mentioned in (iii) above, unless reimbursed or corrected within 30 days after writter. notice of such default from the Trustee, which notice shall be given upon the request of the holdss of not less than 10% cf the outstanding Priority Obligations; (v) the sale, transfer, assignment or conveyance of the System or cny portion thereof, necessary or desirable in the use and operation thereof, otherwise than as permitted by the Indenture or the allowance of any of its franchises, easements, or other rights, necessary in the operation cf such properties to lapse or to be forfeited; (vi) the lapse of forfeiture of any license, permit or franchise 37
bankruptcy, insolvency or reorganization of the serv-Authority; an ance of any other covenant, condition or agreement of the Authority under the be given upon request of the holders of not less than 5fo of the Prio
'Ilie remedies available to the Indenture Trustee and the holders of the e e Priority Obligations u of the Expansion Bonds summarized herein under the subcap Resolution", except that the Indenture only provides for the appointment of a receiver an for the Indenture Trustee to take possession of the System.
Modifications of the Resolution Modifications of the Resolution and of the rights and duties of the Authority and the ho sion Bonds may be made with the consent of the Authority and written consent of the holders than 66% 7c in principal amount of the Expansion Bonds at the time outstanding; o modifica-provided that n tion shall be made which will (i) permit the creation of a lien on the Revenues esolution pledged under the R issuance of additional Expansion Bonds or Priority r Obligations date for the payment of any Expansion Bond, or reduce the Bond or reduce any premium payable upon redemption or advance the date upon which any may first be called for redemption; or (iii) reduce the percentage of Expansion Bonds the holders o preference over. any other Expansion Bond or Bonds or reduce Expansion Bond Fund, without the consent of the holders of all the Expansion Bonds affecte Defcasance Expansion Bond and such Expansion Bond shall no longer be de payment of the principal of and the applicable redemption premium, if any, on such Bond plus interest the due date thereof (a) shall have been made or caused toereof, be made in accorda therefor in trust solely for such payment (i) moneys rmitted sufficient to ma Investments (as hereinafter defined) maturing as to principal and interest in such amounts and at as willinsure the availability of sufficient moneys to make such payment, and, except for the purpo payment, such Expansion Bond shall no longer be secured by or entitled to the benefits of the Resol provided that, with respect to Expansion Bonds which by their terms may be redeemed or oth prior to the stated maturities thereof but are not then redeemable, no deposit under (b) above shall for redemption on the first date such Expansion Bond may be re thereof and notice of such redemption shall have been given or irrevocable provision shall have bee n made for the giving of such notice. Permitted Investments are defined in the Resolution as (i) direct ob or obligations the principal of and interest on which are unconditionally guaranteed by, the United Sta of America, (ii) Public Housing Bonds or Project Notes fully secured by contracts with the United St America and (iii) obligations to the payment of the principal of and interest on which the full faith and el the State of South Carolina is pledged. 38
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PAYMENTS TO STATE AND LOCAL GOVERNMENTS Payments in lieu of taxes to the State of South Carolina and local governments in each of the last five fiscal years have been: 1975 $1,168,063 1976 1,394,477 1977 2,531,775 1978 1,853,982 1979 1,926,696 See item 9 under caption *Certain Provisions of the Indenture and Resolution-Funds and Accounts" PENDING LEGAL PROCEEDINGS No litigation is now pending. or, to the knowledge of the Authority, threatened, questioning the corporate existence of the Authority or the right of its officers to their respective offices or the right of the Authority to fix rates and other charges for the sale of electric energy, or questioning the right of the Authority to issue the 1980B Bonds. Except as noted below, there are no other actions, suits or governmental proceedings pending, or to the knowledge of the Authority, threatened, before any court, administrative agency, arbitrator or governmental body which will, if determined adversely to the Authority, have a material adverse effect en its fina scial condi-tion or its ability to transact its business. An action was commenced in June 1980 against the Authority by Republic Contracting Corporation, (" Republic"), a disappointed bidder on a $13,000,000 coastruction contract for the plant a ca foundations for Cross No. 2. Republic requested in its petition that the Court issue a temporary injuretion restraining the Authority from proceeding any further with the award of, or construction under, the contract in question and an order declaring the contract awarded to Harbert Construction Company (the lov bidder) null and void and directing the Authority to award the contract to Republic. On June 25,1980, th: trial court denicd the grant of a temporary injunction. On June 27,1980, Republic filed a Notice of Intent to Appeal from the June 25,1980 order. The temporary relief requested was denied by the South Carolina Supneme Cour*. TAX EXEMPRON In the opinion of Bond Counsel, interest on the 1980B Bond., is exempt from present Federal income taxes under existing laws and regulations, and the 1980B Bands and interest thereon are exempt from present South Carolina property and income taxes. APPROVAL OF LEGAL PROCEEDINGS i l Wood & Dawson, New York, New York, and McNair Glenn Konduros Corley Singletary Porter & Dibble, l Columbia, South Carolina, Bond Couns! to the Authority, will render opinions with respect to the validity of the 1980B Bonds. A copy of such opinions will be printed on the 1980B Bonds and will be in substantially the form set forth in Appendix IV. Certain legal matters will be passed upon on behalf of the Underwriters by Simpson Thacher & Bartlett, New York, New York. RATINGS Moody's Investors Service, Inc. and Standard & Poor's Corporation have given the 1980B Bonds ratings of " " and " " respectively. Such ratings reflect only the respective view of such organizations and , en explanation of the significance of such ratmgs may be obtained only from the rating agency furnishing the same. 'Ihere is no assurance that such ratings will contiaue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating agencies,if in the judgment of either or both, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the 1980B Bonds. 39 i i
f UNDERWRITING The 1980B Bonds are being purchased by the Underwriters for whom Lehman Brothers Incorporated, Blyth Eastman Paine Webber locorporated, Merrill Lynch, Pierce, Fenn Smith Barney, Harris Upham & Co. Incorporated and The Pobinson-Humphrey Com representatives. The Underwriters the 1980B Bonds at an aggregate discount of $ have jaintly and severally agreed, subject to certain con from the initial offering prices set forth on the cover page of this Official Statement, plus accrued interest,if any. The Contract of Purchase provides t time to time, by the Underwriters. writers will purchase all 1980B Bonds if any are purche 1980B Bonds into investment trusts) and others at prices low . MISCELLANEOUS All of the foregoing summaries of the Act, Indenture, Resolution, Contract Obligation, Lear Co F Power Contract, Summer Agreement, Beck Report and Burns and Roe Letter are! mad the provisions of such documents and such summaries do not purport to be complete statemen provisions. Reference is hereby made to such documents for further information in connection the Beck Report, audited financial statements and the Burns and Roe Letter are attached' as A , tnd Ill, respectively, to this Official Statement. A copy of each of such documents may e be examined main office of the Authority in Moncks Corner, South Carolina, at the office of McNair Glenn Kond Corley Singletary Porter & Dibble, Bond Counsel, in Columbia, South Carolina, and at the office Diwson, Bond Counsel, in New York, New York. j o The agreements of the Authority with holders of the 1980B Bonds are fully set forth in the Resoluti cnd the Tenth Supplemental Bond Resolution. This Official Statement is not to be cora* ued as a co with the purchasers of the 1980B Bonds. Any statements herein invohing matters of opinion or estim whether or not expressly so stated, are intended merely as such and not as representations of fact. This Official Statement has been approved by the Board of Directors of the Authority. SouT11 CAROLINA Puntic SERVICE AITTHORITY < By William C. Mescher 1 President and Chief Executive Officer 1 l l l 40
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*g l SUMMER NUCLE AR STATION located near Colornbia, South Carolina, w ith a i
I capacity of 900 MW is scheduled fo r comme rcial ope ration in 1981 The Au-tho rity's owne r ship sha re is 300 MW. l l l
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APPENDIX I R. W. BECK AND ASSOCIATES ENCINEERs AND CONsULTANis l PL AN**'NG tl,0 t A5t COLOMAL D.tv1 CINf
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July 25,1980 South Carolina Public Service Authority 223 North Live Oak Drive Moncks Corner, South Carolina 29461 Gentlemen:
Subject:
Consulting Engineer's Report on Financing and Capital Improvement Program Presented herein is a summary of our analyses, investigations, and studies concerning the financing and capital improvement program of the South Carolina Public Service Authority (the " Authority") to accompany its Official Statement regarding the issuance of $150,000,000 Electric System Expansion Revenue Bonds,1980 Series B (the "1980B Bonds") to fund a portion of the costs of construction of a 450 MW coal-fueled steam-electric generating unit to be constructed at a new site near the community of Cross in Berkeley County, South Carolina, certain transmission facilities required to interconnect the generating unit to the Authority's high-voltage transmission system, and to provide an initial coal-fuel stockpile for the unit (collectively," Cross No. 2"). A detailed description of the unit which is to be constructed by the Authority with commercial operation scheduled M May 1984, is set forth in the section captioned " Cross Generating Station Unit No. 2". On August 1,1980, the Authority is expected to authorize the issuance of $609,300,000 of Electric System Expansion Revenue Bonds (" Bonds"), to Snance the costs of construction of Cross No. 2. The 1980B Bonds are the first issue of such authorized Bonds. The remaining $459,300,000 of Bonds expected to be l authorized for Cross No. 2 are planned to be issued subsequently in two or more series as may be required to meet cash flow needs during construction. l Concurrently, the Authority is expected to increase to $363,000,000 the authorized amount of Bonds to be issued to pay the estimated costs of acquisition and construction of its ownership interest in the Virgil C. Summer Nuclear Station Unit No.1 (the " Summer Nuclear Station") of which $284,600,000 of such Bonds have been issued. Such Bonds are not being issued at this time. The 1980B Bonds and the additional Bonds for Cross No. 2 and for Summer Nuclear Station which are to be authorized but not now being issued en considered authorized Bonds for purposes of this report. Reference is made to the Preli.ninary Official State-ment of the Authority dated July 25,1980 (the " Official Statement") for a description of the Bond Resolution, as amended and supplc. .ented (the " Resolution"). CAPITAL IMPROVEMEl%T PROGRAM ' The Authority's capital improvement program for the fiscal years 1981-1985 consists of new power supply facilities and general improvements, including improvements to present power supply facilities, extensions and improvements to transmission facilities, improvements to the Authority's distribution system and general plant and a new office and service complex at Moncks Corner, South Carolina. 'Ihe major power supply and transnission facilities included in the Authority's capital improvement program are shown on the centerfold map. The Authority's capital improvement program for the fiscal years 1981-1985 and the expected sources of funds therefor are summarized in the following paragraphs. I I-1 sesene.WA
- Des =or CO
- Phoents. AZ
- Ortende, R
- Colombes. N:
- Woheley. WA
- led:esepens, th WinesepeHs. WM
- Nashville.TN
- secremoete. CA
_J Cross Generadag Station Unit No. 2
'In order to spect projected load growth through the 1980's, the Authority has acquired land for and initiated constrtiction of a major new generating station near the community of Cross in Berkeley County, South Carolina. For planning purposes, the new station is being referred to as the Cross Generating Station.
Cross No. 2, which will be the first unit at the Cross Generating Station, will consist of a coal-fueled steam-electric unit of approximaW ;50 MW net capability and associated transmission facilities. The Cross Gen-erating Station is presently being planned, subject to federal and state regulatory approval and the granting of necessary licenses and permits, to accommodate four 450 MW units. In order to facilitate construction access when subsequent units are to be constructed, the first unit at the site has been designated as Cross N:. 2 and the second unit will be designated as Cross Generating Station Unit No.1 ("Crm,s No.1"). The Authority has retained Burns and Roe, Inc. as design and construction engineers for Cross No. 2 and Cross No. I to prepare plans and speciScations, to perform related services and to manage construction f.f the project. A detailed description of Cross No. 2, exclusive of certain facilities which are being handled by the Authority and the allowance for increasing the coal-fuel stockpile, as prepared by Burns and Roe, Inc. appears in Appendix 111 of the Official Statement. A construction permit setting forth required performance conditions has been issued by the South Carolina Department of Health and Environment Control ("DHEC"). The Authority and Burns and Roe, Inc. have indicated that other required permits and licenses have been er tre expected to be obtained on a schedule commensurate with construction and operation needs. Com-mercial operation of Cross No. 2 is now scheduled for May 1984. At the time of issuance of the 1980A Bonds, the commercial operation date of Cross No. 2 had been scheduled for November 1983. The latter commercial operation date as now scheduled will allow the Authority to more closely match its power supply resources with projected power supply requirements. The total construction costs for Cross No. 2 unit are estimated by Burns and Roe, Inc. to be $385,618,000. As of June 30,1980, the Authority had entered into 47 contracts totaling approximately $234,141,000 which represents approximately 61% of the total estimated construction costs of the unit. Engineering was approxi-mately 42% complete. In addition to the estimated constructico costs of Cross No. 2, amounts to fund certain 230-kV trans-mission facilities necessary to deliver the power and energy from the generating station to the Authority's existing transmission system and an amount to establish an initial coal-fuel stockpile at the Cross Generating Strtion are included as a part of the planned project capd costs. The Authority has estimated the cost of such transmission facilities, as presently planned, to be $40,200,000 and the allowance for initial fuel stockpile to be $13,100,000. The resulting total estimated capital cost of Cross No. 2, exclusive of funded interest, reserves cnd financing costs,is $438,918,000. The estimated total capital costs of Cross No. 2, as prepared by Burns and Roe, Inc. and the Authority, excluding funded interest, reserves and financing expenses, are summarized in the fol'owing table:
SUMMARY
OF ESTIMATED CAPITAL COSTS CROSS NO, 2 (000) Generating Station: Land and Land Rights 5 - Structures and Improvements 73,144 Boiler Plant Equipment 157,838 Turbine Generator Unit 57,704 Accessory Electrical Equipment 18,444 Miscellaneous Power Plant Equipment 2,701 Station Equipment . 4.206 Total Direct Construction Cost 1 . . 314,037 Engineering Design and Construction Manager 24,131 Owner's Cost . 35,450 Contingency . .. .. . 12,000 Total Construction Cost Generating Station 385,618 Transmission Facilities 40,700 Coal Fuel Stockpile . .. 13,100 Total Capital Costs--Cross No. 2 . $438,918 I-2
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Wisyah GenerstlagSenties Unit No.4 The Authority is now constructing a fourth and final unit at its Winyah Generating Station which is located approximately three miles southwest of the City of Georgetown, South Carolina ("Winyah No. 4"). Winyah No. 4, which consists of a coal-fueled steam-electric unit of approximately 280 MW net capability and associated transmission facilities, will be essentially a duplicate of Winyah Generating Station Unit No. 3 ("Winyah No. 3") located at the same site. The Wicyah Generating Station presently consists of Winyah Generating Station Unit No.1 ("Winyah No.1") which was placed in commercial operation on March 26, 1975; Winyah Generating Station Unit No. 2 ("Winyah No. 2") which was placed in commercial operation on July 1,1977; and Winyah No. 3 which was placed in commercial operation on May 31,1980. The Authority has retained Burns and Roe, Inc. as design and construction engineers for Winyah No. 4 to prepare plans and specifications, to perform related services, and to manage construction of the project. A construction permit setting forth required performance conditions has been issued by DHEC. The Authority and Burns and Roe, Inc. have indicated that other required permits and licenses have been or are expected to be obtained on a schedule commensurate with construction and operation needs. Commercial operation of Winyah No. 4 is now scheduled for May 1,1982. However, to meet the Authority's projected summer peak demand in 1981, the Authority has accelerated portions of the Winyah No. 4 construction activities to provide for initial operation in June 1981. Following the summer peak demand period, the Authority plans to remove Winyah No. 4 from service to complete final construction of the unit. The total construction costs for the Winyah No. 4 unit are estimated by Burns and Roe, Inc. to be
$125,175,000. This estimated total construction cost includes the cost of pollution control equipment con-sidered adequate, in the opinion of Burns and Roe, Inc., to meet existing State of South Carolina pollution control codes and regulations. As of June 30,1980, the Authority had entered into 58 contracts totaling approximately $95,956,000 which represent approximately 77% of the estimated total direct construction costs of the unit; engineering was approximately 71% complete; and overall construction was approximately 44% complete.
In addition to the construction cost of the Winyah No. 4 unit, the total capital costs of Winyah No. 4 include an amount to fund certain transmission facilities necessary to deliver the output from the generating station to the Authority's existing transmission system and an amount to increase the coal-fuel stockpile at the Winyah Generating Station. Such transmission facilities will include a 230-kV transmission line apd terminal facility from the Winyah Generating Station to the Authority's Hemingway Substation. Construction of such facilities has commenced, with completion planned in early 1982. The Authority has estimated the costs of the transmission facilities to be 59,000,000 and the coal-fuel stockpile to be $5,000,000, resulting in a total capital cost of Winyah No. 4, exclusive of funded interest, reserves and financing costs, of
$139,175,000 which is $21,000,000 less than the $160,175,000 estimated at the time of issuar'ce of the initialBonds for the poject.
The Authority has authorized the issuance of $184,000,000 of Bonds to finance the costs of construction of Winyah No. 4, of which $151,000,000 have been issued. To pay the retraining costs of construction of Winyah No. 4, the Authority now plans to utilize funds previously set aside to pay the costs of construction of Winyah No. 3 and which will not be required for such purpose together with other funds which the Authority anticipates will be available. The remaining $33,000,000 of Bonds authorized for Winyah No. 4 are not expected to be issued, and the Authority is expected to reduce th: amount of authorized Bonds to $151,000,000. Susumer Nuclear Station The Authority and South Carolina Electric & Gas Company ("SCE&G") have entered into a joint owner-ship agreement dated October 18,1973, providing the Authority and SCE&G, which own the Summer Nuclear Station as tenants in common, with undivided interests of 33% % for the At:thority and 66%% for SCN&G. Pursuant to this agreement, SCE&G acts for itself and as agent for the Authority in the construction and opera-tion of the Summer Nuclear Station, including fuel acquisition and managemer;t. The Summer Nuclear Station is new under construction at a site approxin;ately 26 miles northwest of the City of Columbia, South Carolina, on the east bank of the Broad River and adjacent to SCE&G's Fairfield Pumped Storage Hydroelectric Station. The Summer Nuclear Station will be capable of producing a net output I-3 l
14 issued "NRC"), on Marchby21,1973. the Atomic Energy Commission, the predecessor e SCEAG reports that as of June 96% complete and construction was approximately 95% complete.30,1980, the enginee SCE&G submitted its application for an operating license to the NRC10,1976 on Decemberand it was accepted by the NRC for docketing on February 24,1977. , In January 1980, SCEAG revised the construction requirements which have evolved as a consequence of the Th struction schedule calls for completion of Summer Nuslear Station and its readiness for fuel load ber 1980. However, SCEAG may not load fuel prior to the issuance of an operating license, and has projected that an operating license will not be issued prior to the spring of 1981. Af , latory procedures and other matters before commencement of of construction costs for Summer Nuclear Station are based on a June 1981 commercial oper the NRC diligently pursue licensing activitics as well , ruction as a major em allow for a further delay in the commercial operation , in part, date of Summ possible additional delays in the issuance of the operating license) in planning the power supp available to meet expected loads during the summer of 1981. We believe that it is reasonable at t cssume a commercial operation date of December 1,1981, for power supply and financial plannin the NRC will license the Summer Nuclear .Station The most recent to operate at its operating licenses issued by the NRC have contained restrictions limiting the operating Icvel of t for Summer Nuclear Station if and when issued by the NRC.this ig licence time we have The estimated construction costs, which hase been furnished by SCE&G, based on a com dite of June 1981, excluding nuclear fuel, contingencies and interest or other carrying c , at allowance for escalation to the June 1,1981 commercial operation date, are estimated to be $6 The Authority's ownership share of such total estimated construction cost is $227,543,000. , . In addition to the foregoing estimated construction costs of the project, the Authority is obligated to pay SCEAG water supplied from the upper resersoir of. SCE&G SCE&G's has recently Fairfield Pumpe retained United Engineers and Constructors, Inc. to prepare estimates of such costs. At this time purposes included of estimating 53,000,000 the Authority's share of the construction costs of Summer Nuclear Station, w as a pan of the capital costs to be provided from bond proceeds for such purp ose. In addition, we have included as a part of the Authority's total capital costs of the Summer Nuclear
$15,500,000 for estimated cost of the Authority's share of the initial nucicar fuel core based on ,
cost of uranium concentrates discussed hereinafter in the section captioned for the " Fuel Supply," $351, Authority's share of working capital, including , a working fund for nu
. The foregoing estimated amounts are exclusive of allowances for contingencies.
the financing for the Authority's ownership share of Summer Nucle r the possible delay in ecmmercial operation, as hereinbefore discussed, and a reasonable n-amount of unfo struction costs. We believe that an allowance for contingencies of $17,000,000 is reasonable at this time This contingency provides for a possible further six-month
$5,000,000 delay in commercial y operation svolving from the Three Mile Island accident. The resulting e ship share interest, reservesofand Summer Nuclearare Snancing expenses, Station, including
$273,594,000. the foregoing amount for contingencies I-4 1.._ ._ ..
Re Authority has heretofore issued $284,600,000 of Bonds to pay the costs of acquisition and construc-tion of its ownership share of Summer Nuclear Station and, concurrently with the authorization of the 1980B Bonds,is expected to increase to $363,000,000 the authorized amount of additional Bonds for such purpose. He total amount of Bonds issued and to be authorized is estimated to be suf5cient to pay the costs of construction based on a commercial operation date of June 1,1981 as presently projected by SCE&G, including the fundicg of interest requirements to that date. For purposes of planning the financing require-ments for Summer Nuclear Station, the Authority and we have assumed a commercial operation date of December 1,1981, with interest requirements funded to June 1,1982. Based on such assumption, the total amount of Betids which will be required to be issued to pay the costs of Summer Nuclear Station is estimated to be $386,000,000. The r naining $101,400,000 of Bonds are presently contemplated to be issued subse-quent to the assumed commercial operation date. Our projections of operating results assume such amount and anissuance date in early 1982. Wlapib Generation Station Unit No.3 All major construction work on Winyah No. 3 has been completed and the unit was placed in commercial operation on May 31,1980. Final clean-up work, including minor site work and painting, remains to be com-pleted. An amount of $17,285,000, including approximately $4,600,000 in contract retentions, has been includedin the Authority's 1981-1985 capitalimprovement program for final completion of Winyah No. 3. It is now estimated that the total construction cost of Winyah No. 3 including certain transmission facilities and increasing the coal fuel stockpile will be $144,390,000 which is approximately $10,840,000 below the construction costs estimated by Burns and Roe, Inc. and the Authority at the time of authorization of the 1978 Bonds. Cross Generating Station Unit No.1 The Authority is proceeding with initial work on a second 450 MW unit at the Cross Generating Station in order to meet projected load growth through the mid-1980's. The unit, designated Cross No.1, will be lccated adjacent to and be essentially a duplicate of Cross No. 2. The Authority has recently rescheduled the commercial operation date of Cross No. I to November 1986 to permit the Authority to more closely match its exi; ting and planned power supply resources and projected power supply requirements. The currently scheduled commercial operation date reflects a delay of 18 months from the prior schedule; however, the Authority is proceeding with certain of the work which could allow an acceleration of the construction schedule should it be determined desirable to do so. The total estimated construction costs for Cross No. I are estimated by Burns and Roe, Inc. to be
$318,775,000. As of June 30, 1980, the Authority had entered into 28 contracts totaling approximately $165,023,000 which represents approximately 52Fc of the estimated construction costs. The contracts hereto-
- fore entered into were predicated on a May 1985 commercial operation date and included certain cancellation provisions pursuant to which the Authority could cancel the contracts without incurring cancellation charges
[ for certain defined periods after the contracts were entered into. The Authority reports that it is presently j attempting to renegotiate the contracts to reflect the now planned commerchl operation date. In addition to the estimated construction costs of Cross No.1, amounts to fund certain transmission facili-l ties necessary to deliver the power and energy from the generating station to the Authority's existing transmission ! system and an amount to increase the coal-fuel stockpile at the Cross Generating Station are included as a { part of the project capital costs. The Authority has estimated the cost of such transmission facilities, as presently planned, to be $17,300,000 and the allowance for increasing the fuel stockpile at the Cross Generating Station to be $15,300,000. The resulting total estimated capital cost of Cross No.1, exclusive of funded l interest, reserves and financing costs is $351,375,000. The Autho-ity has not heretofore authorized Bonds for Cross No.1. Based on the present construction schedule and cost estimates, the Authority estimates that it will be necessary to issue approximately
$536,000,000 of Bonds for Cross No.1.
GeneralImprovessents The proposed general improvements for fiscal years ending 1981-1985 include extensions and improve-ments to the Authority's transmissica ano distribution systems, general plant, and existing generating facilities. I-5
The costs of transmission and distribution system improvements, which include both the construction of new facilities and the upgrading of existing facilities planned for construction during the fiscal years ending 1981-1985 as estimated by the Authority, are (i) transmission and distribution substations-534,000,000; (ii) transmission and distribution equipment, improvements, betterments and customer facilities-$25,400,000; and (iii) transmission and distribution lines-$59,600,000. Other general system improvements planned for fiscal years 1981-1985 and the estimated cost thereof include (i) improvements to existing generating facilities required to maintain and improve availability and efficiency including costs associated with Winyah No. 3-538,700,000; (ii) improvements to general plant-
$41,600,000; (iii) future generatine station site studies and acquisitions-$8,000,000; and (iv) initial con-struction of additional future generating units-515,500,000. This latter amount represents anticipated costs associated with future generating units, other than Cross No.1, scheduled to be completed subsequent to fiscal year ending 1985. The majority of such expenditures is expected to be incurred during the later portion of the Authority's capital improvements program.
The improvements to general plant include $12,700,000 for the completion of a new headquarters facility which as presently planned includes a seven-story office building, transportation sersice center, energy control center, warehouse complex, other maintenance facilities and certain equipment. The Authority has acquired approximately 75 acres of property in Moncks Corner, South Carolina for the new facihty, has entered into a contract with the County of Berkeley, South Carolina for the sale of the existing facility, and is proceeding with construction of the new facility which is expected to be completed in the Fall of 1981. The amount included in the capitalimprovement program for this facility is net after sale of the existing facility. Estimated Costs and Expected Sources of Funds-1981 1985 CapitalImprovement Program The estimated capital costs, exclusive of funded interest, reserves and financing costs, of the Authority's cipital improvement program for fiscal years 1981-1985, together with the expected sources of funds to pay such estimated costs, are summarized in Exhibit A. EXPECTED DISPOSITION OF 1980B BONDS AND ESTIMATED FINANCING REQUIREMENTS CROSS NO. 2 Based on the estimates of direct construction and other costs of Cross No. 2 as set forth hereinbefore cnd upon a commercial operation date of May 1,1984, the expected disposition of the proceeds from the sale of the 1980B Bonds and the Bonds authorized but not yet issued to pay the costs of construction of Cross No. 2 is shown in the following table: Financing Requirements for Cross No. 2 (900) Authorized Total 19805 but Unissued Authorized Bonds (l) Bonds (2) Bonds Capital Costs .. ... ... ..... $118,982 $319,936 $438,918 Less: Amounts from lavestment income (3) . 10,232 34,428 44,660 Paid from Bond Proceeds . $108,750 $285,50R $394,258 Reserve Account . 12,750 39,041 51,791 Funded Interest . . . 25,500(4) 125,565(5) 151,065 Bond Discount (6) . . 3,000 9,186 12,186 Principal Amount of Bonds . $150,000 $459,300 $609,300 (1) Based on estimated annualinterest rate of 8% %, as provided by the Authority's Financial Advisor. (2) Assumes issuance of additional authorized Bonds for completion of Cross No. 2 as follows: $150,000,000 in July 1981t
$ 150,000,000 in April 1982: and $159,300.000 in April 1983. Interest requirements are assumed at an estimated annual rate of 8% %, as provided by the Authority's Financial Advisor, funded from Bond proceeds to November 1,1984.
(3) Investment earnings calculated on available funds during the construction period, based on cash flow expenditures provided by Burns and Roe, Inc. and the Authority, at an average annual rate of 8% % as provided by the Authority's Financial Advisor. (4) Interest requirements on the 1980B Bonds at an estimated annual rate of 8M% funded to August I,1982 from the proceeds of 1980B Bonds. (5) Interest requirements on authorized but not yet issued Bonds and the 1980B Bonds to November I,1984, at an estimated annual rate of 8% % funded from Bond proceeds. (6) Estimated at 2.0%. I-6
z BUSINESS OF TIIE AUDIORITY The Authority was created in 1934 by an Act of the General Assembly of the State of South Carolina to construct and acquire flood control, navigation and reclamation works on the Cooper River, the Santee River and the Congaree River and to produce, distribute and sell electric power. The Authority initiated its electric power operations in 1942 upon completion of construction of the Santee Cooper Hydroelectric Project. During the twelve months ended May 31,1980, the Authority sold 6,223 million kilowatt-hours of electric energy and received total operating revenues of $149,368,923 (unaudited), as shown on Exhibit C. At May 31,1980, the Authority's net electric plant in service (electric plant in service less accumulated deprecia-tion) as reported by the Authority was $370,766,274 (unaudited). During the ten-fiscal year period 1970 through 1979, the Authority invested $41,114,742 .n additions and improvements to its utility plant from operahng revenues. The Authority sells electric energy at wholeme to public authorities and other utilities and at retail to industrial, commercial and residentia1 customers. Electric S3stem Properties The Authority owns electric generation, transmission and distribution facilities and leases certain generation and transmission facilities under contract with Central Electric Power Cooperative, Inc. (" Central") which are operated collectively by the Authority as a fully integrated electric system. The Authority's generating capability in service totals 1,736 MW comprising 130 MW of hydroelectric,1,422 MW of steam electric, and 184 MW of combustion turbine capability. In addition, the Authority purchases 105 MW of firm capacity from the Southeastern Power Administration ("SEPA"), which amount includes approximately 44 MW associated with wheeling SEPA energy to preference customers and 61 MW purchased by the Authority, and 50 MW of purchased reserves. Transmission and distribution facilities include approximately 2,580 miles of 230 kV,115 kV,69 kV and 44 kV overhead transmission lines,93 substations, distribution system properties, offices and other buildings, equipment and related facilities. Rates l In the opinion of the Authority's general counsel, the Authority is empowered and required under the Act I to fix, establish and collect rates, tolls and other charges which shall be at least sufficient to provide for the payments of all costs and expenses of ownership and operation and maintenance of the properties and facilities of the Authority and to conform to the requirements of its Resolution and Indenture. We have relied upon such opinion in developing our projections. The Indenture and Resolution, under which the Authority's outstanding priority obligations and Bonds were issued and the 1980B Bonds will be issued, require that the rates and charges shall be at least adequate to produce revenues sufficient for the payment of all obligations of the Authority, including payments into all funds established under the Indenture and Resolution, and that the Authority will, from time to time and as often as necessary, revise the rates and charges to provide the required revenues. The Authority has maintained rates for electric service which have been sufficient to provide for all l operation and maintenance costs and expenses, debt service, lease payments, repairs, renewals to and replace-I ments of its electric system and for substantial additions thereto. At the same time, the Authority's charges for electric service compare favorably with those of other major suppliers in the State of South Carolina as shown on Exhibit B. l The rates presently in effect applicable to residential, commercial, municipal street lighting and industrial customers were adopted on March 21,1978 and became effective on power deliveries after May 1,1979. '1)ese rates wen subsequently reviewed in light of the Authority's then most receu npital and operating budgets and modified accordingly by the Authority's Board of Directors on January 29,1979. The rates are applicable to residential, commercial, municipal street lighting and industrial customers. Rate increase-May 1981. On March 26,1979, the Authority's Board of Directors adopted new rates to become effective for power deliveries commencing May 1,1981. The new rates, based on projections for the fiscal year ending June 30, l I-7 l l
I 82, and as compared with rates presently in effect, are estimated to produce an increase in revenues from customers other than Central of approximately 12.7%. The average percentage increase in the basic rate schedules to major customer classes is estimated to be approximately 8.9% and 10.2% for large (350,000 kWh or more per month) and small industrial customers, respectively,7.7% for municipal customers,26.1% for commercial customers and 21.7% for residential customers. The Authority plans to review the new rates prior to their effective date and make adjustments,if any, required to reflect the most recent capital and operating budgets. Rateincrease-November 1982. On August 1,1980, the Authority's Board of Directors is expected to adopt new rates to become effective for power deliveries commencing November 1,1982. The new rates have been based on projected costs for the fiscal year ending June 30,1985, which is ie first complete fiscal year after the commercial operation date of Cross No. 2. The new rates reflect the implementation, with appropriate adjustment to reflect revised costs, of the rate program adopted by the Authority's Board of Directors in March 1979. The average per-centage increase in the basic rates to major customer classes based on projections for th: fiscal year ending June 30,1984, as compared with rates to be in effect, is estimated to be approximately 12.5% and 26.9% for large (350,000 kWh or more per month) and small industrial customers, respectively.16.2% for municipal customers,27.5% for commercial customers and 29.3% for residential customers. Trie overall increase in revenues for customers other than Central is estimated to be approximately 17.6%, or approximately
$41,804,000 in 1984, over rates as now adopted to become effective May 1,1981.
Consistent with its prior practice, the Authority has adopted a program providing for an increase in rates to customers other than Central which it estimates will be required. On August 1,1980, the Authority's Board of Directors is expected to adopt a resolution providing for an increase in rates to become effective for power deliveries commencing not later than July 1,1984 which, when compared with rates scheduled then to be in effect, will produce an increase in revenues from customers other than Central of approximately 9.7%, or tpproximately $30,000,000. Such rate program and revenues therefrom have been included in our projections of operating results. The adopted rates of the Authority have been based on future costs and reflect,in general, certain of the ratemaking standards established by the Public Utility Regulatory Policies Act. Under the provisions of contracts with certain industrial customers, the Authority is required to review its rates not less than 120 days prior to the effective date thereof and to adjust the rates to reflect then current data. Existing contracts entered into between the Authority and Central, the most recent contract having become effective April 29,1971, as amended (the "F Power Contract"), provide among other things that the Authority will fumish and Central will purchase, until October 22,1987, all of Central's power and energy requirements. After October 22, 1987, and for the remainder of the F Power Contract (June 2005), the Authority is obligated to sell and deliver to Central, and Central is obligated to purchase and receive annually from the Authority, 600 million kWh. The F Power Contract includes provisions for periodic rate review and rate chan.;es related to costs pursuant to a formula. As the result of the most recent rate review which became effective January 1,1979, the monthly charge applicable to power and energy delivered to each point of delivery is $1.875 per kilowatt of billing demand and 5.65 mills per kWh for the first 100,000 kWh of billing energy 1.nd 4.33 mills per kWh for all additional billing energy. The energy charges are adjusted monthly for increased cost of fuel and purchased energy pursuant to the terms of the F Power Contract. The next such rate review will become effective January 1,1981. In March 1980, the Authority's Board of Directors and Central's Board of Trustees executed an tmendment to the F Power Contract which has been approved by the Administrator of REA. The amendment provides for a surcharge in audition to the rates and charges determined in accordance with the terms of the F Power Contract of 2.3 mills per kWh to be applied to all energy sold to Central for the period July 1,1980 ) through Jtv : 30,1981. The revenue to be derived from the application of the surcharge during the fiscal y. ear i ending June 30,1981 is estimated to be approximately $7.6 million. Upon completion of Summer Nuclear Station, a substantial amount of energy produced by the Authority will be from nuclear fuel, the cost of which is projected to be less than the cost of fossil (coal and oil) fuel. ! l I-8 l }
The Authority has previously advised Central that it intends to reconsider the fuel adjustment clause in its contract with Central when nuclear power generation is comnenced by the Authority and that concurrent therewith, changes will be negotiated in the rate and fuel clause provisions of the contract which will be fair and equitable to both parties. The Authority and Central have carried out extensive negotiations concerning a new contract pursuant to which the Authority's rates to Central would be determined on the basis of a cost-of-service methodology suhtantially similar to the methodology utilized by the Authority in determining its rates to its other large cuuomers. In our opinion, rates so determined applicable to Central would produce revenues from Central which will be greater than revenues derived from Central under rates determined pursuant to the F Power Contract for equivalent amounts of power. The proposed contract contains provisions whereby Central will have the right to own a portion of future generating facilities to be constructed to serve the combined loads of the Authority and Central. The proposed contract has been approved by the Authority's Board of Directors and Central's Board of Trustees but must be approved by the REA Administrator prior to its becoming effective. Because it is not possible at this time to determine whether the REA Administrator will approve the contract or if changes may be required, our projections as they relate to the Cross Generating Station and future sales to Central and the attendant revenues and expenses attributable to Central have been based on the terms of the existing F Power Contract including the amendment thereto as discussed in the preceding paragraph. In our projection of operating revenues for the Authority for the period 6 scal years 1981-1985, we have utilized the rates, and revenues resulting therefrom, which are to become effective as hereinabove discussed. Power Contract with Alumar,Inc. On September 23,1977, the Authority and Alumax Inc., an integrated aluminum company, entered into a contract for power supply to a major primary reduction plant to be constructed in the Authority's service area. This contract has been subsequently assigned to Alumax of South Carolina, Inc. ("Alumax") but Alumax Inc. guarantees performance under the terms of the assignment. (See subsection captioncd " Power Contract with Alumax Inc." in the Official Statement.) Under the provisions of the power supply contract, as amended, the Authority agrees to make available ) and Alumax agrees to purchase (i) 166 MW for the first potline commencing April 1,1980, (ii) 80 MW for the first half of the second potline commencing October 1,1980, and (iii) 55 MW for the second half of the second potline commencing December 1,1980. In addition, the Authority agrees to make available, upon 6 months' notice,30 MW of additional power for the second potline. j The contract also contains provisions pursuant to which the Authority agrees to provide power supply i to third and fourth potlines as follows: for a third potline-150 to 160 MW upon at least 42 months' notice l from Alumax, for a fourth potline-150 to 160 MW upon at least 42 months' notice from Alumax to be given not prior to 8 months after notice is given for the third potline. Alternatively, the Authority agrees to provide 300 to 320 MW for third and fourth potlines upon Alumax giving at least 50 months' notice. The contract also provides that during an initial operating period of up to 12 months for the first potline and 8 months for the second, third and fourth potlines Alumax is required to pay for power and energy only as actually furnished and used. Therealter Alumax is required to pay the demand charge in accordance with the applicable rate schedule for the amount of power specified in the notice. The rate for service to Alumax is to be at the Authority's large industrial power rate schedule as revised from time to time by the Authority. Under the contract Alumax has certain rights of review of the Authority's rates applicable to it. Similar review rights are also extended to Macalloy Inc., another large industrial customer of the Authority. Alumax commenced initial site work in June 1978 and is proceeding with construction of the plant. Initial operation of the first potline commenced in June 1980 with build up to full operation scheduled in August. The initial operation of the first half of the second potline is scheduled in October 1980 and the second half of the second potline in November 1980. Alumax reports construction work is proceeding to meet the foregoing schedule. The contract permits a demand of 301 MW; however, Alumax has advised the Authority that the demand is expected to be approximately 286 MW. l I-9
Power Requirements and Supply The Authority provides retail electric service for residential, commercial and other customers in Berke-ley, Georgetown and Horry Counties, which includes the Myrtle Beach area, and to certain industries, public authorities, two municipalities and Central (which supplies 15 cooperative electric utilities) throughout its transmission area which encompasses,in whole or in part, the eastern two-thirds of the State of South Carolina. During the fiscal years ended June 30,1971 through 1980, the Authority's total system energy require-ments increased at an average annual rate of approximately 6.7% per year. During the period 1974 through 1976, the average rate of increase was less, reflecting the general effects of the energy crisis resulting from the oil embargo, conservation, and a cutback by one large industrial customer. The Authority's historical system power and energy requirements for the fiscal year 1971-1980 period are as follows: Historical System Power and Energy Requirements Uses of Energy-Million kWh Fiscal Non- Total Year Peak To SEPA Territorial System Ended Demand For Ultimate Wheeling Trans- System Energy June 30 (MW) Resale Customers Total (1) actions (2) Losses Requirements 1971 622 1,355 1,742 3,097 33(3) 631 227 3,988 1972 630 1,307 1,882 3,189 198 530 198 4,115 1973 736 1,576 2,048 3,624 198 680 257 4,759 1974 871 1,795 2,172 3,967 198 257 255 4,677 1975 911 2,018 2,241 4,259 198 46 232 4,735 1976 943 2,221 2,265 4,486 198 26 265 4,975 1977 1,089 2,577 2,527 5,104 198 53 310 5,665 1978 1,231 2,844 2,718 5,562 198 319 313 6,392 1979 1,241 2,882 3,071 5,953 198 50 307 6,508 1980 1,352 3,099 3,199 6,298 198 322 331 7,149 (1) Does not include losses associated with the wheeling of SEPA energy to preference customers. (2) Includes net interchange with SCEAG and CP&L, and inadvertent energy,if any. (3) The Authority commenced on May 1,1971, the wheeling of SEPA energy to preference customers. I { l \ , 1 l I-10 l l 1
The Authority's existing power supply resources consist of hydroelectric, steam electric and combustion turbine power plants together with power purchased from SEPA with supplemental amounts of power pur-chased from time to time from SCE&G and Carolina Power & Light Company ("CP&L"). The existing power supply resources, net capability of each and year of initialinstallation of the generating units are shown below: Power Supply Resources Year First CapabHity Operated (MW) Generation: Jefferies Hydroelectric Generating Station 1942 130(1) Jefferies Generating Station: Nos. I and 2 1954 92(2) Nos. 3 and 4 1970 320(2) Grainger Generating Station (3) 1966 170(2) Winyah No.1 1975 280(2) Winyah No. 2 1977 280(2) Winyah No. 3 1980 280(2) 1 Combustion Turbines 1962 20(4) Combustion Turbines 1972 40(4) Combustion Turbme(3) 1973 20(4) Combustion Turbine 1974 20(4) Combustion Turbine 1976 28(4)
; Combustion Turbine 1979 56(4)
Total Generation 1,736 Received from SEPA(5) 105 Total Power Supply . . 1,841 (1) Includes 2 MW from Wilson Dam Generating Station. (2) Net capability available for peak load or short term operation; net continuous capability may be less. (3) Leased from Central. (4) Summer rating. (5) Includes approximately 44 MW associated with the wheeling of SEPA enerFy to preference custouters and excludes 50 MW of reserve capacity purchased by the Authority from SEPA. Fuel Supply During the twelve months ended June 30,1980, the Authority's total system energy supply, including SEPA energy wheeled to prefcrence customers, was derived approximately 81.0% from coal-fueled generation, 0.2% from oilc.ueled generation,11.5% from the Auth>rity's hydroelectric facilities and 7.3% from pur-chases from SEPA, SCE&G and CP&L. By fiscal year 1983, the first full fiscal year following completion of i Summer Nuclear Station, this distribution of energy sources, including the wheeling of SEPA energy to pref-crence customers,is expected to be approximately 76.7% from coal-fueled generation,13.9% from nuclear-fueled generation, 5.7% from hydroelectric facilities, 3.6% from SEPA and other purchases, and 0.1% from oil-fueled generation. The Authority uses coal for fuel at three generating stations-Winyah, Jefferies (Units 3 and 4) and Grainger Generating Stations. Deliveries to Winyah and Jefferies Generating Stations are by unit train shipment under long-term contracts with five mining companies. The major part of the Authority's coal requirements are being purchased under five long-term contracts which expire December 31,1983, December 31,1989, September 30,1998, December 31,1999 and December 31,2000. The Authority has entered into an additional long-term contract providing for the delivery of coal beginning in 1981 and expiring in 2004. Lim-ited " spot" purchases are utilized when favorable prices can be cbtained and to meet requirements not satisfied
; by long-term contracts. Prices under the various coal contracts are subject to up or down adjustments based I on production costs and prevailing market conditions. (See caption " Fuel Supply-Coal" in the Official Statement).
I-11 i . _ _ i
The air quality requirements for emissions from the Authority's generating plants limit the maximum sulfur content of coal used at the individual coal-fueled stations and, in the case of the Winyah Generating Station, at the individual units. Following is the maximum sulfur content of coal allowable under the present specifications utilized by the Authority for coal purchases to assure compliance with existing sulfur emission codes and regulations. Maximum Sulfur Station or Unit Content (1) Jefferies 3 and 4 2.0% Grainger 2.0 Winyah No. I 1.3 Winyah No. 2 1.l(2) Winyah Nos. 3 and 4 1.5(2)(3) (1) Based on coal having a beat content of 11,500 Btu per pound. (2) With SO, scrubber in service. (3) Estimated by the Authority. The sulfur content of coal received under existing contracts ranges from about 0.9% to 2.0%. The Authority has informed us that it anticipates no difficulty in obtaining adequate coal with sulfur content within acceptable ranges to meet foreseeable needs. The average cost of coal purchased by the Authority during the fiscal years ended June 30,1978,1979 and the twelve months ended May 31,1980, including the cost of rail freight, was as follows: Average Fiscal Year Average Cost per Ended June 30 Cost per Ton Mmion Btu 1978 $31.80 $1.384 1979 . 34.95 1.484 Twelve Months Ended May 31, 1980 36.60 1.498 At the present time, SCE&G, acting for itself and as an agent for the Authority, has contracts with Westinghouse Electric Corporation (" Westinghouse") consistent with the provisions of the inel settlement for the supply of 1,600,000 pounds of uranium concentrates, conversion services to 1989, and fabrication services for 12 reload regions. The 1,600,000 pounds of uranium represents approximately 43% of the 3,700,000 pounds estimated by SCE&G to be required for the first eleven regions of nuclear fuel for the l Summer Nuclear Station. SCE&G has to date acquired from Westinghouse and others approximately 968,000 pounds, leaving the remaining 1,132,000 pounds to be obtained through purchases in the open market. SCE&G has also contracted with the Department of Energy to supply the necessary enrichment services through the year 2002, which is adequate for operation through the year 2004. Facilities are being incorporated in Summer Nuclear Station for on-site storage of thirteen reload regions of spent nuclear fuel which are expected to be adequate for approximately ten years of operation. SCE&G presently has no prosisions for off-site storage of spent nuclear fuel. For a discussion of litigation related to the nuclear fuel contract with Westinghouse and the status of settlement thereof, see caption " Fuel Supply-Nuclear" in the Official Statement. Our projections do not reflect any beneSts which the Authority and SCE&G may derive as a result of settlement of the dispute except to the extent that such settlement may relate to the initial core as stated in the following paragraph. Our projections of operating results of the Authority are based on the assumption that the cost of approx-imately 82% of the initial ccre uranium concentrate fuel requirements for Summer Nuclear Station previously supplied by Westinghouse will be the Westinghouse contract price as estimated by SCE&G. The remaining approximately 18% of the initial core uranium concentrate fuel requirements is included at the spot market prices paid therefor. Additionally, it has been assumed that SCE&G w;11 purchase uranium concentrates for reload nuclear fuel assemblies on the open market at costs based on price IcVels of approximately $44 per ; pound escalated at 5 % per year. ! I-12 l I
Based on the information made available to us concerning the settlement of the Wesdnghouse dispute, we are of the opinion that the cost of nuclear fuel to the Authority and SCE&G under the settlement will be less than those assumed in our projections. FUTURE POWER SUPPLY OPERATIONS OF THE AUTMORITY Estimates of the energy requirements of the Authority's system for the period 1981 through 1985 have been prepared based upon a dmiled analysis of customers and sales by class of service and the prospective sales to the several classes of customers prepared by the Authority and Ebasco Business Consulting Company. These projections include the requirements of Alumax as hereinbefore discussed. Following is a summary of the projected energy requiaments of the Authority for the period 1981 to 1985: Projected System Energy Requirements Uses of Energ&Million kWh a Sales Total i Fbcal System Year To Energy ' System Ended For Ultimate SEPA Require-June 30 Resale Customers Total Wheeling (1) Loebes ments 1980(2) 3,421(3) 3,199 6,620 198 331 7,149 1981 . 3,421 5,412(4) 8,833 198 430 9.461 1982 . 3,679 6,147(5) 9,826 198 468 10,6 2 1983 3,960 6,317(5) 10,277 198 493 10,96h 1984 . 4,292 6,527(5) 10,819 198 520 11,537 1985 . 4,643 6,783(5) 11,426 198 555 12,179 (1) Does not include losses associated with the wbeeling of SEPA energy to preference customers which are provided by SEPA. (2) Actual. (3) Includes 322 million kWh net interchange with SCE&G and CP&L, and inadvertent energy,if any. (4) Projected amounts of demand and energy sG to ultimate customers include 145 MW and approximately 1,933 million kWh of attendant energy attributable to Alu aax. (5) Projected amounts of demand and energy sales to ultimate customers include 286 MW and approximately 2,455 million kWh of energy attributable to Alumax. As indicated by the foregoing tabulation, the total system energy requirements of the Authority, including assumed annual energy sales to Alumax, can be expected to increase by approximately 28.7% in the five-year period 1981 through 1985. Such increase, excluding assumed direct sales to Alumax, is estimated to be approximately 29.2%. This compares with an increase of approximately 43.7% in the five-year period 1976 through 1980. Power supply to meet projected requirements through fiscal year 1985 will consist of the Authority's existing generation and firm purchases aggregating 1,841 MW, the 300 MW from the Summer Nuclear Station, the 280 MW from Winyah No. 4 and the 450 MW from Cross No. 2. The 450 MW Cross No.1 unit is now planned for commercial operation in November 1986. In addition, the Authority may construct two additional units at the Cross Generating Station which, as now bcing planned, will contain four units having a combined capacity of approximately 1,800 MW. The Authority is also in the process of evaluating additional potential sites for future generating stations. As hereinbefore discussed, the Authority and Centra' have reached greement on a new contract providing
'or possible joint ownership of future power supply resources. The areonent is subject to the approval of the e dministrator of REA before it can become effective. We do not knw at this time what action the Admin-ctrator of REA may take, or if changes may be required in the agresment as now constituted, or when an agreement may become effective. Accordingly, we cannot determine at this time what effect, if any, such a new contract and possible joint ownership of future power supply faciaties will have on the Authority's future power supply facilities and projected requirements and the attendant revenues and expenses attributable to Central. In our projection of future power requirements we have assumed that Central will continue to purchase all of its power supply requirements from the Authority pursuant to the terms of the F Power Contract (see also section captioned " Central Contract" in Official Statement).
The Authority presently receives approximately 105 MW of firm capacity and associated energy of approximately 300 million kWh annually from SEPA. Approximately 44 MW and 198 million kWh are I-13
' received for wheeling to SEPA preference customers. The balance (approximately 61 MW and 102 million kWh) is purchased by the Authority for its own use.
On June 29,1977, SEPA gave notice to the Authority that its contract will terminate effective June 30, 1981. In its notice of termination, SEPA advised the Authority that it ". . . has initiated the development of a new power allocation policy which is to be embodied in contracts as soon as possible after development, . . .". On October 16, 1979, SEPA announced in the Federal Register that it has developed a proposed power marketing policy for its Georgia-Alabama System of Projects which SEPA intends to implement as existing contracts expire. The proposed policy is anticipated by SEPA to be implemented through negotiated contracts for terms not to exceed ten years and addresses the following major areas: (i) market areas, (ii) allocations of power, (iii) energy from pumped water, (iv) utilization of utility systems, (v) wMsale rates, (si) resale rates and (vii) conservation measures. Pursuant to the proposed policy, the existing preference customers within the marketing area will be entitled to retain their present allocations of en:rgy and new preference customers located within the selected utility areas will be entitled to share equitably with existing preference customers in new power. The proposed policy indicates that wholesale rate schedules shall be drawn so as to recover all costs associated with producing and transmitting the power in accordance with then current repayment criteria and that production costs will be determined on a system basis. The proposed policy also contemplates that each customer purchasing SEPA power shall agree to finance and take reasonable measures to encourage the conservation of energy by ultimate consumers. In our projections of power and energy supply and operating results of the Authority, we have assumed that the Authority will continue to purchase the amounts of SEPA power provid for by the present contract The reserves and standbys for the Authority's generating plants have 'seen provided from the AuGoritfs generating capability in excess of its power requirements and through intercc wtions with others. The Author-ity presently purchases 50 MW of reserve capacity from SEPA under long-term contract. The Authority utilizes a planned reserve cri:erion of 20% of the projected peak demand less firm purchases for power supply planning purposes. The Authority has interchange agreements with SCEAG and CP&L whic! provide for certain reserve arrangements and power sales between the parties. The Virginia-Carolinas Reliability ("VACAR") Agreement which the Authority executed on March 26, 1961, and which has been executed by SCE&G, CP&L, Duke Power Company, SEPA, Yadkin, Inc., and Virginia Electric and Power Company, provides a basis which reasonably supports the assumption that pro-visions for limited term power purchases and sales among VACAR members will continue to be available in ! the area. In addition, the Authority is a member of the Southeastern Electric Reliability Council, an organiza-tion of all major utilities in the southeastern United States whose purpose, among others, is to study and coordinate the activities of its members with regard to reliability and continuity of power supply. The Cooper River Rediversion Project (the " Project") was authorized by the Rivers and Harbors Act of 1968 to permanently reduce shoaling in the Charleston, South Carolina harbor. The Project, currently schedcled for completion in December 1983, under the direction of the United States Army Corps of Engineers (the " Corps"), includes the construction of a canal to divert waters into the Santee River which would have otherwise flowed into the Cooper River and an 84 MW hydroelectric plant on the diversion canal near St. Stephen, South Carolina (the "St. Stephen Hydro Plant"). De reduced water flow in the Cooper River will limit the output of the Jefferies Hydroelectric Generating l Station to approximately 44 MW at its present capacity factor. De output of the 84 MW St. Stephen Hydro Plant, which will be made amlable to the Authority, will result in a total capacity available from the two plants being equal to the present capacity available from the Jefferies Hydroelectric Generating Station when ,
- operated at approximately the same capacity factor that exists today. Additional capacity of up to 84 MW !
will be available to the Authority when the plants are operated at a lower capacity factor. Energy generated from the combined operation of the two plants is expected to be less than that currently being generated at the Jefferies Hydroelectric Generating Station. l I-14 l
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r l 1 .
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\ A contract executed by the Corps and the Authority provides for compensation to the Authority for the project's adverse effects such as the reduction in energy generated, the loss of future capability at the Jefferies Hydroelectric Generating Station, and the addition of cooling equiprnent required at the Jefferies Ste.m Plant due to the reduced water flow. The contract also provides for compensation to the United States Government for the Project's benefits such as increased generating capacity. Under the terms of the contract. the Authority is not required in the initial year to accept full capacity available as a result of the Project. but it must accept at least 20 MW. The assumptions utilized herein regarding the conditions resultin; trom the Project are outlined in the " Projected Operating Results" section of this report. Recent studies undertaken by the Authority indicate certain of the dams at the Authority's hydroelectric facility would probably not be adequate to meet the applicable design earthquake criteria. The Authority, in cooperation with the Federal Energ- Regulatory Commission, is continuing to study the matter and it is not possible at this time to determine what remedial measures, if any, may be required or what, if any, ccsts may be incurred in connection therewith (see section captioned " Regulatory Matters" in the Official Statement). Our projections assume continued operation of the Authority's hydroelectric plants under present conditions including arrangements relating to the St. Stephen Hydro Plant. The tabulation on the following page summarizes the projected loads and resources of the Author- e ity for the calendar years 1980 through 1985. Data in this table are presented on a calendar year basis rather than a fiscal year basis because the Authority's peak system demand occurs in the summer months and the Authority plans its power supply resources on that basis. The loads set forth therein assume that Central will continue to purchase its entire power supply requirements from the Authority in excess of amounts Central purchases from SEPA. See subsection captioned " Central Contracts" in Official Statement concerning discus-sions with Central regarding future power supply, r 8 I-15
. Projected Power Supply Resources and Loads (Amounts in MW, unless otherwise noted)
Calendar Year 1980 1981 1982 1983 ,19[4 1985 Power Supply Resources: Generatmg Capabiliti Existing (1) .. ..... . 1,736 1,736 1,736 1,736 1,736 1,736 Under Construct,on i (2) . Summer Nuclear Station - - 300(3) 300 300 300 Winyah No. 4 . 280(4) 280 280 280 280 Cross No. 2 - - - - 450 450 Planned (2) - - - _ _ Cross No.1 (5) . - Total Generating Capability (6). 1,736 2,016 2,316 2,316 2,766 2,766 SEPA Allocation . . . . . . ..... ... 105 105(7) 105(7) 105(7) 105(7) 105(7 St. Stephen Hydro Plant - - - - 20(8) 40(8 Total Power Supply Resources . . . . . 1,841 2,121 2,421 2,421 2,891 2,911 Maximum Annual Demand (luly-August) (9) 1,600 1,868 1,966 2,084 2,227 2,377 Less: Interruptible Demand 40 40 40 40 40 40 Net Maximum Annual Demand Re- 1,828 1,926 2,044 2,187 2,337 sponsibility ................ .. 1,560 Power Supply Resources Available for Reserves 281 293 495 377 704 574 Purchased Reserves 50 50 50 50 50 50 Total Purchased Reserves and Resources Available for Reserves ...... 331 343 545 427 754 624 Total Purchased Reserves and Resources Avail-able for Reserves as a Percent of Net Maximum Annual Demand Responsibility Less SEPA Allocation . . . 23 % 20 % 30 % 22 % 36% % (1) See tabulation in section captioned " Power Requirements and Supply." (2) Unit capabilities are shown in the first calendar year during which units under construction cr planned will be available to meet the summer peak demand, which normally occurs in August. (3) Summer Nuclear Station is presently assumed to be available for commercial operation in December 1981; however, the first calendar year during which un upbility will be available at the time of the Authority's prc,jected annual system peak demand will be 1982. The capability included for Summer Nuclear Station assumes that the NRC operating license will not restrict the output below full rated capability. (4) Winyah No. 4 is planned to commence initial operation temporarily in June 1981, during the time of the projected 1981 annual system peak demand. (5) Cross No. I is presently scheduled to be available for commercial operation in November 1986; however, the first calendar year during which its capability will be available at the time of the Authority's projected annual system peak demand will be 1987. (6) Amounts shown assume all units will be available for service at the designated capability during the time of the annual system peak demand. (7) Assumes SEPA power equal to that provided under the present contract will continue to be available after June 30,1981, which includes approximately 44 MW of SEPA capacity wheeled to SEPA preference customers. (8) The Authority plans to purchase gradually increasing portions of the capacity which will be made available as a result of the St. Stephen Hydro Plant: 20 MW in 1984, and 40 MW in 19M. See section captioned " Future Power Supply Opera- [ tions of the Authority." (9) Projected maximum annual demands shown include projected interruptible loads. In 1981 acd dereafter the amounts shown include approximately 286 MW of demand associated with Alumax. PROJECTED OPERATING RESULTS We have prepared estimates and projections of the operations of th Authority for the period covering the fiscal years ending June 30,1981 through 1985 based upon our analyses of the Authority's retail and j wholesale operations and the loads and resources of the Authority as hereinbefore discussed. Our projections
- of operating results for the Authority are presented in Exhibit D to this Report. Our projections are based on the following principcl considerations and assumptions
- 1. Projected revenues from sales of electricity to customers other than Central have been based:
(i) for powr deliveries through April 1981, on rates presently in effect; (ii) for power deliveries during the period May 1981 through October 1982, on rates adopted by the Authority to become effective May 1981; (iii) for the period commencing with power deliveries in November 1982 through June 1984 on rates to be adopted by the Authority to become effective No. ember 1982; and (iv) for the period com nencing with power deliveries in July 1984 and continuing through the term of the projections on rates to be subsequently adopted to implement the :ste program adopted by the Authority to become effective July 1984, including in each case the fuel adjustment provisions of such rates. Revenues from I-16
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l . sales of electricity to commercial and large consumers, other than Central, reflect the terms of the Authority's contracts with such customers.
- 2. Revenues to be derived from sales of electricity to Central have been projected on the basis of the present terms of the F Power Contract, as amended, including adjustments computed in accordance with the contract. Revenues from Central for the fiscal year ending June 30,1981 reflect the 2.3 mills per kWh surcharge as provided for in the most recent amendment to the F Power Contract.
- 3. Projections of revenues and power supply expenses assume that Alumax will require and utilize power supply from the Authority with a build-up of loads to approximately 286 MW by November 1980 for the Srst and second potlines. These dates are based on the latest advice to the Authority from Alumax and reflect construction progress at the Alumax plant. If Alumax gives notice to proceed with additional potlines as provided in the Alumax contract, as c. mended, or if the operation dates of any or all potlines change from those stated above, the projected revenue and expenses could change significantly.
- 4. Genera 6on by the Jefferies Hydroelectric and Wilson Dam Generating Stations has been pro-jected for the fiscal years ending 1981 through 1983 at 628 million kWh annually. Completion of the Cooper River RLiiversion Project and subsequent commercial operation of the St. Stephen Hydro Plant, currently scheduled to begin in December 1983, are expected to reduce the output of the Jefferies Hydro-electric and Wilson Dam Generating Stations to approximately 129 million kWh annually. Generation from the St. St: phen Hydro Plant, which will be made available to the Authority, is projected to provide an additional 400 million kWh annually resulting in a combined output of $29 million kWh annually or net reduction in hydroelectric generation of approximately 99 million kWh annually. In our projection we have assumed that the aggregate amount of energy which the Authority will obtain from the Jefferies Hydroelectric and Wilson Dam Generating Stations and the St. Stephen Hydro Plant will be 568 million kWh in the fiscal year ending June 30,1984 and 529 million kWh in the fiscal year ending June 30,1985.
Generating capacity provided by the Jefferies Hydroelectric and Wilson Dam Generating Stations has been projected at 130 hiW through fiscal year 1985. In addition, the Authority currently plans to purchase 20 htW of the capacity provided by St. Stephen Hydro Plant in fiscal year 1984 and 40 hfW in fiscal year 1985. The estimated contractual costs associated with the anticipated benefits and adverse effects of the Project have been netted and included as a purchased power expense. It is not possible at this time to estimate what costs, if any, or other measures, if any, may be required in connection with the dams of the Authority's hydroelectric facilities. Our projections assume continued operation at the Authority's hydroelectric facilities including arrangements relating to the St. Stephen Hydro Project.
- 5. Purchases and wheeling of power and energy from SEPA have been projected for the period shown on the basis that the Authority and SEPA will execute a new contract containing terms and con-ditions, including the power allocated to the Authority, which will be substantially the same as the present
, contract as to which SEPA has served notice of termination effective June 30,1981. Such assumption reflects the average energy available for wheeling and direct use of the Authority's system of approximately 300 million kWh annually of which approximately 198 millien kWh are wheeled for Central and municipal customers. The costs of purchases of power and energy from SEPA reflect the wholesale power rate schedules applicable to the Authority which became effective for the billing month beginning October 1, 1979.
- 6. The cost of coal has been projected using as the base the Authority's budget estimate for fiscal years ending June 30,1981,1982 and 1983 and escalated at the rate of approximately 8.0% per year throughout the remaining portion of the projection.
- 7. Upon advice of the Authority, we have assumed that no sales of surplus energy would be made to SCE&G or CP&L.
- 8. Power costs used herein are predicated in part on the availability of the following new generation resources in addition to the Authority's present resources: (i) 300 hiW-Summer Nuclear Station in December 1981; (ii) 280 htW-Winyah No. 4 in hiay 1982 with temporary initiai soeration in June 1981; and (iii) 450 htW--Cross No. 2 in hiay 1984. The Summer Nuclear Station is projected to operate at an average monthly plant factor of approximately 60% during the first two years of operation and a 70% monthly plant factor for subsequent years with two-month refueling periods annually. (A 70%
I-17
monthly plant factor with annual refueling period of two months is equivalent to approximately annual plant factor.)
- 9. The Authority has or will obtain all licenses and permits required for all fossil fueled generation and transmission facilities included in its 1981-1985 capitalimprovement prograra on a schedule commen snrate with construction needs, and SCE&G has or will obtain all licenses and permits required for Summer Nuclear Station on a schedule to permit commercial operation of the station no later than December 1,1981. The capability available from Summer Nuclear Station is predicated on the assump-tion that the NRC operating license will not include provisions restricting operations below full rated capability.
- 10. Nuclear fuel costs for Sammer Nuclear Station are estimated on the basis th initial fuel core uranium already delivered will be at the costs provided in the Westinghouse contract an the remaining 18% of the initial fuel core uranium at the spot market price paid therefor. All reload f uranium will be purchased on the open market at costs based on price levels of approximately $44 per pound escalated at 5% per year. Our projections do not reflect any credits or other bene may result from the settlement with Westinghouse except as stated above.
I1. The total amount of Bonds required to be issued to pay the costs of Summer Nuclear Station was estimated based upon construction costs as presently estimated by SCE&G and reflect an amount of $17,000,000 for contingencies for the Authority's one-third ownership share as hereinbefore dis-cussed and the Authority's purchasing its ownership share of the initial nuclear fuel under the terms at the costs set forth in the Westinghouse contract, with the exception of the approximately 18% of the initial core uranium concentrates purchased by SCE&G on the spot market. Based on such costs on an assumed commercial operation date of December 1,1981 as heretofore discussed, we have es that the total amount of Bonds which will be required to be issued to pay the costs of construction of t Summer Nuclear Station including the funding of interest requirements to June 1,1982 is $386,000,000 of which $284,600,000 of Bonds have been heretofore issued. We have assumed that the Authority authorize and issue the remaining amount of such Bonds following commercial operation of Summer Nuclear Station (assumed to be December 1,1981) with interim financing provided by outstanding short-term borrowings.
- 12. Operation and maintenance expenses, exclusive of fuel, have been based on the Authorit 30,1981,1982 and 1983 and increased each year thereafter budget estimate for fiscal years ending June to reflect increased expenses required for projected growth and escalation based on inflation rate other conditions prevailing in the present economy.
- 13. Payments in lieu of taxes reflect present levels of such payments and are projected to increas approximately in proportion to increases in sales to certain classes of customers.
- 14. Revenues which are expected from rentals of land owned by the Authority, wheeling of SEPA and municipalities, and miscellaneous revenues including power for the account of the cooperativessales of timber harvested from Authorit
- 15. Investment income has been forecasted utilizing as a base the Authority's budget estimate for fiscal years ending June 30,1981,1982 and 1983 with adjustrr.ents calculated on the basis o an 8%% annual investment earnings rate to expected increases in the level of funds available for investment in accordance with the Resolution.
- 16. Debt service requirements for the period shown have been projected utilizing the following criteria: (i) the acual debt service schedules on outstanding priority obligations and on the Bonds heretofore issued; (ii) the estimated debt service requirements at an annual interest rate of 8%% as provided by the Authority's Financial Advisor c., $150,000,000 of 1980B Bonds with intere funded from bond proceeds to August I,198i, (iii) the estimated debt service on the $459,300,000 of additional Bonds authorized to be issued to pay the costs of construction of Cross No. 2 at an annualinterest rate of 8% % with interest requirements funded an all Bonds authorized for Cross N to November 1,1984; (iv) the estimated debt service requirements at an annual interest rate of 8M%
on $101,400,000 of Bonds which have been assumed to be authorized but not yet issued for the I-18
t
- completion of Summer Nuclear Station with interest requirements funded from Bond proceeds to June 1,1982 on said Bonds and Bonds heretofore issued allocable to Summer Nuclear Station; (v) the estimated debt senice requirements at an annual interest rate of 8%% on 530,000,000 of Bonds assumed to be issued in the spring of 1981 to fund general improvements; (vi) the estimated debt senice requirements at an annualinterest rate of 8% % on $536,000,000 of Bonds assumed to be issued to fund the construction of Cross No. I with interest requirements funded from Bond proceeds to hiay 1, ! 1987 which is beyond the period of the projection shown; and (vii) the payment of principal and l interest requirements associated with short-term borrowings utilized by the Authority for interim l
financing of capital improvements is assumed to be paid from the proceeds of future Bond issues. Escalation rates other than for fuel have been based upon current inflation rates and other conditions I prevailing in the present economy and, in our opinion, are reasonable for the purposes of the projection se6 forth herein. However, we can give no assurance that such rates will not be exceeded. Due to uncertainties caused by variable factors including labor disputes and other factors which influence the cost of all energy sources, we can give no assurance as to the reasonableness of the rate of escalation used herein with respect to fuel and construction costs. Since at the present time it is not possible to predict what additional costs or delay. if any, may be experienced as a result of the Three hiite Island accident, we can give no assurance as to the estimates used herein with respect to the Summer Nuclear Station. OPINION Based upon our studies, investigations and analyses as summarized herein and the considerations and assumptions as set forth above, we are of the opinion that:
- 1. The Authority's proposal to construct and operate Winyah No. 4 having a net generating capa-bility of approximately 280 htW with commercial operation scheduled in hiay 1982, the Authority's ownership of a one-third interest (equal to approximately 300 htW) in the Summer Nuclear Station with commercial operation assumed in December 1981 and Cross No. 2 having a net capability of approximately 450 htW with commercial operation scheduled for hiay 19e.4, all of wl.ich have here-tofore been authorized by the Authority, together with the Authority's existing power supply resources are necessary in order to produce additional power supply needed to meet the projected power require-ments of the Authority for the period shown including the power supply requirements which will result from or be attributable to Alumax in accordance with the terms of the Alumax cor. tract.
- 2. The construction, operation and ownership by the Authority of Cross E. 2 as presently being designed by Burns and Roe, Inc. are economically feasible.
- 3. The net operating revenues of the Authority, after giving effect to the rate increases adopted by the Authority to become effective beginning hiay 1981 and November 1982, will be cdequate to meet all estimated debt service on all priority obligations and authorized Bonds, including 578,400,000 of Bonds to be authorized but not yet issued to pay the costs of construction of Summer Nuclear Station, and lease payment requirements for the periods shown and to make payments into the Capital Improvement Fund established pursuant to the Resolution, in amounts at least equal to the minimum requirement therefor, to provide foi needed renewals, replacements and additions to the Authority's facilities.
The additional revenues to be derived from such rates sre estimated to be adequate to meet the additional debt service requirements on Bonds not now authorized but estimated to be required for the completion of the Summer Nuclear Station based on an assumed commercial operation date of December 1,1981.
- 4. The Consulting Engineer's CertiScates required under the Authority's Resolution to issue the 1980B Bonds can be furnished.
We have reviewed the Official Statement to which this Consulting Er.gineer's Report is appended and, in our opinion, the data presented therein which is taken from our report is accurately represented. Respectfully submitted, R.W. BECK AND AssoctATES I-19 l . -
1
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I APPENDIX I n hlhit A CAPITAL IMPROVEMENT PROGRAM (1) Fiscal Years 19811985 ($000) Estimated CapitalCosts(2): Cross No. 2(3) . . ............ . .
$ 408,500 Completion of Winyah No. 4(3) ...... ..... 83,200 Completion of Summer Nuclear Station-Authority's Share (3)..... 49,600 Cross No.1 .... . . . 351,400 Future Generating Units 15,500 General System Improvements Generation System Improvements . . .. $ 38,700 Transmission and Distribution System Improvements (4) 119,000 General Plant Improvements (5) 41,600 Future Site Studies and Acquisitions 8,000 Total General System Improvemea 207,300 Total Estimated Cost of Capital Improvement Program $1,115,500 Expected Sources of Funds:
Proceeds of Bonds: Cross No. 2 1980B Bonds . . .. . .. $108,800 Future Bonds . ... . 285,500 Winyah No. 4 - 1980A Bonds 31,700 1979A Bonds 68,700 Summer Nuclear Station (Authority's Share) 1973 Bonds,1976 Bonds and 1977 Bonds (6) 179,900 Future Bonds (7) 57,300 Additional Bonds Expected to be Authorized but not yet Issued Cross No.1 Bonds (8) . . . . . . . . 295,700 General Improvements Bonds (9) 26,900 Total Proceeds of Bonds 1,054,500 Investment Earnings (10) 218,600 Revenues (11) . 152,800 Total Expected Sources of Funds . . ... ... $1,425,900 Less: Amounts Expended at June 30,1980(12) 310,400 Total Funds . $1,115,500 l (1) All amounts rounded to the nearest $100,000. The capital improvement program excludes approximately $4.000.000 of facilities to be constructed and funded from REA loans to Central. Under the existing lease agreements, the facihties are to be leased and operated by the Authority. (2) The estimated capital costs shown are exclusive of funded interest, r.scrves and financing costs. (3) Balance of estimated construction costs remaining as of July 1,1"e0. (4) Amount shown includes the following costs for transmission and distribution system improvements: (i) substations
$34,000,000; (ii) equipment, betterments and customer facilities $25,400,000; and (iii) lines $59,600,000.
(5) Amount shown includes a net amount of $12,700.000 for the completion of a new office facility. (6) The 1976 Bonds were defensed on March 10,1977, through the issuance of the 1977 Refunding Series Bonds. (7) Amount shown assumes the issuance in June 1982 of $101,400,000 of Bonds assumed to be authorized but not yet issued to pay the costs of construction to complete the Authority's ownership share of Summer Nuclear Station. (8) Amount shown assumes the authorization and issuance of an aggregate of 5536,000,000 principal amount of Bonds to fund the construction of Cross No. I with the initial series of said Bonds assumed to be issued in mid.1981. l (9) Amount shown assumes the authorization of General Improvement Bonds in the principal amount of $30,000,000 to be issued in 1981. l (10) Amount shown includes accrued interest resulting from the difference in the date of th', %nds and the date of closing, actual investment earnings to May 31,1980 on funds which are retained in the varicus c >nstruction and improvement funds and estimated future investment earnings on the: (i) Winyah No. 4 Construction Fund, (r.) Winyah No. 3 Construction Fund, (iii) Winyah No. 2 Construction Fund, (iv) Summer Nuclear Station Construction Fund, tv) Cross No. 2 Construction Fund, planned Cross No. I Construction Fund, and (vi) General Improvements Fund. (11) Amount shown includes anticipated payments into the Capital Improvements Fund from revenues. (12) Amount shown includes actual expenditures through May 31, 1980 and estimated expenditures for the month of June 1980. for construction, exclusive of funded interest, reserves, and financing costs, rounded as follows: (i) Winyah No. 4--
$56,000,000. (ii) Summer Nuclear Station (Authority's Share)-5224,000,000, and (iii) Cross No. 2 - 530,400,000.
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APPENDIX I Exhibit B SOUTH CAROLINA PUBLIC SERVICE AUTHORITY Comparison of TypicalMonthly Bills , (As of June,1980) Roidential Electric Service Rate 300 500 700 1,000 Schedule kWh kWh kMb kWh Authority (1) (S) RS-79R $15.21 $22.66
$29.76 $40.42 (W) RS-79R 14.46 21.11 27.11 36.12 Carolina Power & Light Company (2) (S) RES-18 17.99 25.98 33.97 45.96 (W) RES-18 17.99 25.98 33.97 44.46 Duke Power Company (2) R 16.46 24.45 32.44 44.42 South Carolina Electric & Gas Company (3) 8 19.38 % 30 37.21 50.59 Conamercial Service (300 Hours of kW Demand)
Rate 3,000 5,000 7,500 Schedule kWh kWh k%h Authority (1) (S) GS-79R $123.66
$201.70 $299.25 (W) GS-79R 105.46 171.50 254.05 Carolina Power & Light Company (2) SGS-18 124.79 204.80 292.83 Duke Power Company (2) G 148.05 237.56 335.25 South Carolina Electric & Gas Company (3) 9 165.48 275.80 381.70 Industrial Service Rate 1,000 kW 2,000 kW 9,000 kW 40,000 kW Schedule 500,000 kWh 1,000,000 kWh 5,000,000 kMt 25,000,000 kWh Authority (4) I-79R $12,793.00 $23,918.00 $109,868.00 $527,418.00 Carolina Power & Light Company (2) LGS-18 14,610.00 29,010.00 138,810.00 666,210.00 Duke Power Company (2) . I 13,621.71 25,651.21 119,522.21 573,192.21 South Carolina Electric & Gas Com-pany(3) 23 15,600.00 30,550.00 144,900.00 695,650.00 Summer rate schedule designated (S); Winter rate schedule designated (W).
(1) Includes fuel adjustment credit of $0.00298/kWh. (2) Rates in efect are applicable in the State of South Carolina and are under bond subject to refund. (3) Rates in efect are applicable in the State of South Carolina and are under bond subject to refund. The South Carolina Public Service Commission has recently approved rates to become effective in July 1980 which, among other things, should reduce slightly the charges shown for residential service. (4) Includes fuel adjustment credit of $0.00285/kWh. I-21 c-
~ ~
W
a
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APPENDIX I , . Exhibit C SOUTH CAROLINA PUBLIC SERVICE AUTIIORITY Summary of IIistorical Operating Results Fiscal Year Ended June 30(1) Twelve Months Ended May 31, 1980 1975 1976 1977 1978 1979 (Unaudited) Total System Requirements: 1,241 1,352 911 943 1,089 1,231 Demand-MW . . . . . . . . . . . . 4,975,457 5,666,005 6,391,880 6,508,421 7,070,140 Energy Supply-MWh (2) 4,736,277 Less 53,654 318,773 50,104 299,892 46.520 25,710 Non-Territorial Sales (2) .. 197,865 198,407 197,865 197,865 197,865 198,407 Wheeling Deliveries (3) 4,491,892 4,751,340 5,414,486 5,875,242 6,260,452 6,571,84I Net System Energy Supply Sales-MWh 2,240,698 2,265,356 2,527,592 2,717,611 3,071,019 3,173,441 To Ultimate Customers (4) . 2,220,560 2,576,795 2,843,955 2,881,781 3.049,365 2,018,602 For Resale (5) .. . 4,259,300 4,485,916 5,104,3 A7 5,561,566 5,952,800 6.222,806 Total Sales 232,592 265,424 310,0 313,676 307,652 349,035 Losses-MWh , Operating Revenues: A Sales of Electricity- $50,268,249 $ 63,642,932 $ 74,320,502 $ 82,983,433 N $43,767,696 $44,348,866 Sales to Ultimate Customers (4) .. 36,215,359 42,2M,846 54,101,024 59,975,290 64,998,746 Sales for Resale (5) . . . . 32,038,490 1,021,682 506,960 s75,255 149(6) 280(6) 453(6) Non-Territorial Sales (2) .
$76,827,868 $81,071,185 $93,508,35') $117,744,105 $134,296,072 $147,982,632 Total Sales of Electricity Other Operating Revenues: 654,600 446,964 449,548 459,311 481,393 642,866 Land Rentals 321,272 322,420 322,264 322,107 32'.,887 322,699 SEPA Transmission (7)..... 210,111 395,808 437,068 432,572 436,601 408,992 I Miscellaneous .
$77,806,215 $82,238,961 $94,726,993 $118,980,177 $135 'A7,426 $149,368,923 Total Operating Revenues .
Operating Expenses: Production- $ 873,173 $ 1,187,721 $ 1,398,102 $ 1,711,304 $ I,893,283 Ilydro .......... ...... ... ..... $ 816,028 Steam and Combustion Turbine (excluding 5,785,867 7,486.113 9,540,080 10,722,248 2,740,028 3,603,055 fuel) . 37,704,204 42,716,672 46,848,296 76,168,515 81,056,669 86,827,037 Fuct (8) .. 83,368 162.935 165,973 227,631 372,592 428,500 Other ...... 13,679,493 2,213,916 8.331,935 (4,748,340)(6) 2,109,654(6) (2,134,756) Purchased Power .
$55,023,121 $49,569,751 $62,319,792 $ 80,532,021 $ 94,790,299 $ 97,736.312 Total Power Supply Expense 1,922,761 2,237,102 2,591.969 2,827,169 1,241,540 1,525,484 Transmission Expense . 817,709 920,531 960,885 1,12; 415 1,331,543 Distribution Expense 714,509 625,503 748,615 895,972(9) 1,277,390(9) 1,27lldI(9) 1,289,958(9)
Customer Accounts 147,538 156,473 194,593 230,987 214,227 236,480 Sales Expense ..... . 1,659,906 1,890,723 2,562,405 2.905.443 3,935,495 4,785,904 Administrative and General... 404,528 550,482 734,278 658,417 381,034(11) 507,202(11) In Lieu of Taxes (10) ..
$$9,816,645 $55,259,237 $69,550,332 $ 88,802,245 $104,309,170 $108,714,568 Total Operating Expenses . ,
$ 30,177,932 $ 31,388,256 $ 40,654,355
$17,989,570 $26,979,724 $25,176,661 Net Operating Revenues Other Income: 2,806,586 2,806,184 3,481,324 4,782,578 5,671,569 Omvestment income (12) I,864,052
-' t'o'r1- IL1DR 10MMM) O M Q30 _ l32.397_ _ J 29.580) ____
we f t>cbt Seresce (IJ); i
. - . , .. . ,1, 3co p Priority Obligations .. . . ... . . $ 4,317,573 $ 4.323,527 $ 4,317,371 $ 4,319,365 $ 4,319,070 $ 4,321,310 1971 Bonds (14) . .. 3.460,216 7.123,251 3.066,951 1073 Bonds. . . .. . . ... . '01,700 701,700 701,701 701,701 I,457,C50 1974 Bonds. . . . . .. - - 496,138 5,138,299 7,21I,310 7.302,977 ' .
1977 Bonds ....... .. - - - - - - 425.038 1977 Refunding Bonds . . . . . .. . - - 2.844,978 6,921,786 6,9M,346 6,970,003 1979A Bonds}}