ML20004E713

Annual Financial Rept,1980

ML20004E713
Person / Time
Site:	Cooper
Issue date:	06/09/1981
From:	NEBRASKA PUBLIC POWER DISTRICT
To:
Shared Package
ML20004E710	List: ML20004E709 ML20004E713
References
NUDOCS 8106150094
Download: ML20004E713 (42)

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.E-About the cover...

NPPD's generating capability has steadily been moving toward maximum use of coal, a low cost and available fuel source. The percentage of electricity that can be generated by coal on NPPD's system has increased from 70 percent in 1975 to 48 percent in 1980. The 650,000 kilowatt Gerald Gentleman Station Unit No.1 is Nebraska's largest coal-fired generating unit. Upon completion of Unit No. 2, the Station will be the state's largest producer of electric energy.

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! REFERENCE GUIDE f

Directors and Offic ers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2 l

l Message from the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 4 i

Message from the General Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6 19 8 0 in Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 8 f Financial Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 20 t

' Financ ial Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 21 ,

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Statistical Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 40 i

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The Nebraska Public Power District's l Board of Directors The Nebraska Public Power District is a public corporation and political subdivision of the State of Nebraska. Control of the District and its operations is vested in a Board of Directors, consisting of 11 members popularly elected from districts comprising subdivisions of the District's char'ered territory. These districts encompass 85 of the state's 93 counties and portions of two other counties. The District has the power, among other j things, to acquire, construct, and operate generating plants, transmission i lines, substations and distribu: ion systems and to purchase, generate, distribute, transmit and sell electric energy, both at wholesale and retail, for lighting, power, heating and other sources. Management and operation of l the District is accomplished with a staff of more than 2,000 persons. -

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OFFICERS:

Bernard M. Delay, President Durwood W. Hill, General Manager George H. Barber, First Vice President Theodore M. Kyster, Assistant Treasurer Henry D. Kosman, Second Vice President Robert D. Malmstrom, Controller James W. Orr, Secretary Janet H. Carmichael, Assistant Secretary Fred A. Herrington, Treasurer f .

9 H. Jackson Carv Ralph E. Holzfaster Newly Elected Board Members

In November,1980, two new members were elected to the Board of Directors succeeding Dr. R. A Gilmore of Kearney and James W. Orr of North Platte. The two new directors, whose terms began in January,1981, are H. Jac kson Cary of Kearney, a farmer-livestoc k feeder, and Ralph E. Holzfaster of Paxton, a farmer-agribusinessman.

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[v '& 'd g 3GM . A message from the Board of Directors Despite rising costs and continuing conservation efforts, we have every indication that energy loads and peak demands on our system are going to grow at a faster rate than that which is being projected by many electric utilities in our region and throughout the country. Primarily this is because Nebraska is an agricultural state where the effects of a recessionary period are not so severe, and where there is growth potential for irrigation and automated lalx>r-saving - livestock and grain' handling equipment. , Our Planning Department is projecting a weather normalized effective annual compound growth rate of 4.4 percent from 1980 through 1990 in the summer peak demand and an energy sales effective annual compound growth rate of 3.5 percent during the same time frame. Thus, we have had to concentrate much of our deliberation on a variety of options to meet future load growth requirements realizing that if our projections are accurate, we will continue to experience periodic deficiencies on our system without proper planning. Despite the fact that energy sales for the year were lower than anticipated, District customers recorded one of the largs st percentage increases in peak demand on record. Emphasizing the direct relationship betw een the weather and our power and energy sales, the unusually hot and dry summer resulted in a record native k>ad peak demand on our system of 1,719,800 kilowatts which was 9.7 percent higher than the previous peak of 1,567,300 kilowatts set in August of 1979. On the r>ther hand, unusually mild winter temperatures both in the early and latter parts of the year were re3ponsible for an increase in energy consumption of only seven tenths of one percent, for the year. The District announced during the year that our Gerald Gentleman Station Unit No. 2 generating plant near Sutherland is expected to begin operation in 1981 with more than $ 100 million remaining in the construction account, Current estimates indicate the plant will be constructed at approximately $52.7 million under the budget and there will be an additional 548.1 million due to a reduced cash flow and resulting interest income, and a determination that supplemental cooling costing $184 million will not be required. Knowing full well that u e will not need both the proposed MANDAN transmission line to Canada and the coal-fired Fossil Ill plant in Custer County for new major sources of power and energy in the 1980s, we continued side-b>-side planning for these two facilities until it could be determined which would be the most economical on a timely basis. Early in 1981 we agreed with management's recommendation that we delay activity on the coal plant and concentrate our efforts on MANDAN. Increasing electric rates is one of the least pleasant responsibilities of a utiluy and having to increase . rates beyond what had been expected is even more difficult. No one likes to pay higher prices for anything- even something as vital as elec tric energy. The fact is, however, a combination of unforeseen events happened to the District during 1980. In addition, the current inflationary spiral has and will continue to result in higher costs for fuel, labor, material and supplies. The combination of these factors forced us to raise rates effe(tive in 1981 in order to meet the District's financial obligations. a I V-4' Blade problems in the high pressure turbine at the Gerald Gentleman Station Unit No. I coal-fired generating plant near Sutherland and disc cracking in the low pressure turbine at the Cooper Nuclear Station near Brownville forced a reduction in the energy output of those two low-cost generating facilities and required us to make temporary modifications to certain plant equipment. We had to replace some lost generation from the Sheldon Station coal-fired plant near Hallam when one of that plant's units was forced off the line for a time due to the failure of a large transformer. There also was the cost of replacing the transformer. We purchase some electricity from the Omaha Public Power District's new Nebraska City coal-fired plant and our rate-making process failed to include all the costs which were incurred at that plant and at our new Gentleman Station Unit No.1. This failure was partially due to inexperience with the start-up of such large generating facilities. These costs included fuel oil for start-up of the boiler, operational costs and maintenance costs. In the aftermath of the Three Mile Island nuclear incident, we were required to spend additional dollars for safety features at our nuclear plant during the year. Unanticipated operation and maintenance costs to meet environmental standards, such as those for electrostatic precipitators at Gentleman and Sheldon Stations, continue to be a major drain on our revenue. Our retail and wholesale customers used less kilowatt-hours of electricity than had been anticipated 'due to the milder than normal weather. This resulted in our revenue being considerably below what had been budgeted. - All of these unusual events created the requirements for additional dollars but, unfortunately, no utility is n,nable of precise budgeting for the unexpected type of costs that beset us during 1980. Although inflation is continuing to make a shambles of the budget, we did make substantial cuts in the 1980 and 1981 budgets. This includes such areas as administration, transportation and construction and we are going to continue doing everything we can to offset the unexpected costs, short of losing reliability. We look to the future with confidence realizing that our decisions must be conscientiously scrutinized to assure that the tradition of adequate electric energy at the lowest possible cost will he p2rpetuated. M= ' d e n t-<r (A ) & Yh ,- Y4 . ~3KMM - g / Mb Board of Directors t 5 . - - - -- _ _ . _ _ _ _ _ - - , . . . ~ -.__ _ I i l D. W. Hill A message from the General Manager Often it takes a bad situation to bring a family closer together. Realizing that 1980 was not a l financially successful year for the District, this situation resulted, I believe, in a camaraderie among the management and staff that is unequalled in our history. Likewise, our utility has developed a closer working relationship with the wholesale customers through a sem of meetings and hearings during which we were able to detail our operational problems and our proposed solutions in an effort to prevent a repetition of our 1980 experiences. A look back through 1980, however, reveals that we indeed accomplished much although we may have allowed ourselves to become disappointed in the face of a series of events oser which we had little or no control. If we accentuate the positive it becomes readily apparent that 1980 was the ty, i of year in which a growing utility, like ours, can be proud. I am confident that we impro Mi the operations af the District during the year. We completed an in-depth restructuring of top management which will result in improved accountability and efficiency. We also tightened up on certain policies in an effort to curtail as much as practical the types of spending that do not have a direct effect on service or reliability. We are committed to operating a conservative but responsive utility and I am convinced that, in certain areas, we can still leam to get by with less during this continuing period of spiralling inflation. To help us overcome the effects of deficit spending during 1980, management requested and our Bocrd of Directors approved an "off-year" wholesale rate increase and a larger-than-anticipated retail rate increase to be effective January 1,1981. Hopefully, the new rate base will enable us to operate in the black during 1981 ind improve our overall f;nancial position as we plan ahead to mr et our obligations. Continuing financial discussions with our wholesale customers, productive dialogue conducted during the rate hearing and a series of meetings throughout the state to explain the reasons promptinF the rate increase certainly contributed to the widespread acceptance of the new rates. This is not to suggest that our customers liked the increase but at least they had a better understanding of the factors involved in setting rates. A long-standing customer rate dispute that resulted in years of litigation was finally brought to a successful conclusion during 1980. In the spirit of comor, mise, we were able to settle differences with the City of Lincoln and I have every confidence en a the decision to end the dispute made by l our Board of Directors and management was the right or e. There are always some who are l critical of compromise but further delays would have added to the already exorbitant costs of l negotiation, manpower and legal fees. i l P00R BR8 R l 6 Establishment of a statewide organization representing all electric utilities is an encouraging development that should result in cost savings for the utilities and their customers. Formation of the Nebraska Power Association (NPA) was accomplished in the spirit of cooperation befitting the - nation's only totally public power state. As one of the large key utilities in the new Association, we in NPPD management are excited about the renewed cooperative attitude among the large and small public entities. Major benefits include long and short term sales as well as exchanges of power and energy, participation in large . generating units, joint planning and dispatching and a generally renewed sense of togetherness for the benefit of all. NPPD has loi.g experienced the results of utility cooperation. We continue to emphasize joint planning of future transmission and subtransmission facilities with our rural electric utility neighbors to minimize cost, avoid duplication and provide a sound basis for budget preparation. Sixteen rural districts, who are also wholesale customers of NPPD, have formally agreed to perform long-range planning studies. During 1980, Seward County and Twin Valleys Rurs' Public Power Districts signed 10-year joint subtransmission plans, making a total of six rural districts that have formalized future plans with NPPD since 1977. Additional cooperative ventures during the year included a service area agreement with Midwest Electric Membership Corporation and a service agreement with the City of Crete. Of course, no summary of 1980 teamwork ventures would be complete without a mention of the fraternal partnership that surfaced following the devastating tornado that bombarded the Grand Is!and area in June. Our utility sustained nearly 5300,000 in damages from that storm but even before all of our transmission work was cleaned up we pitched in, with a host of other utilities, to lend a helping hand to Grand Island in restoring service. Almost before that job was finished we moved many of our personnel into the state's largest city i to help the Omaha Public Power District restore service that had been nterrupted by a series of wind and electrical storms. We vividly remember the assistance many of these same utilities gave us when a portion of our system crumbled under the weight of a devastatmg snow storm in 1976. After all, we feel that is what public power is all about. No review of 1980 would be complete wither a mention of the American Public Power Association (APPA) award we were fortunate to receive during the year. The E. F. Scattergood System Achievement Award was presented to NPPD recognizing that through the earnest, coordinated efforts of a great number of employees, we improved service to our customer-owners, enhanced the prestige of and made a substantial contribution to the Association and to the public power industry nationally. So, you can see that despite some problems during the year, we can temper those disappointments with pride. Without the support of the Board of Directors, we could not be doing the positive and constructive things we are doing. We are on a sound course for the future. Gener,t * - mer 7

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.-__-L._..__-___-_.._..---_--___._---_-_____-_-__--_-- --_l'J__L.__- l i ) - The year 1980 saw total kilowatt-hour ', ales of 8.32 1980 in Review mi' Son comPa'ed 'o 8.28 million la 1979. l However, customers set one of the largest summer- i time peak demand increases in the District's history. A Sales, Revenue and Expenses mid-summer hot and dry perirx! resulted in a peak de- i mand increase of 9.7 percent over 1979. Mild winter temperatures, a continuing program of The peak demand increase exueded the District,s urging energy conservation and increasing electric rates projected increase of 8.2 percent because of heavy irn- .. were primarily responsible for h.miting total kilowatt-gation and air conditioner use. hour sales of electncity during 1980 to an increase of only seven-tenths of one percent over 1979. The in- Electric system operating revenues in IS80 rose to a crease was considerably less than the 9.8 percent jump new high of $241.7 million which is an increase of 7.37 l from 1978 to 1979. percent over the 1979 figure of $224.7 million. An in-i crease in rates is primarily reflected in the larger operat-f ing revenues L- , Electric System operating expenses amounted to

i $249.9 million which represents an increase of 21.43 rm"

-- - percent over 1979's figure of $203.8 million.

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u.: . w.mm. . _ - , ~ . . There were s.ignificant increases .in the cost of pur- " * _ ' ' Jr_ (hased power and suc h production costs as fuel, opera-E t - e=T3-4~- tion and maintenante. m s - ~ r .] Approximately 26.2 penent of the total kilowatt-hour ~ d w ' - sales of electric energy in 1980 was to retail customers s ,_ and 73.8 percent was to wholesale customers. t'ir;] d - 4 g

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f"" The District is the largest elec tric utility in Nebraska. ..L , >> + ~ , , .y . ;L ~ w - g _,; '.. % . , , , ( Financing , M. .f . _ , - ,'. ~ The District issued $80 million in notes for the power .,.g g _ , ' . 7;.: - supply development program during the year. Auepted w '. p.2#*

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' if . I ' ' ' [' '[ New York and its managers of a coupon rate of 8.25 , percent and a net interest cost to NPPD and its ', [ } J, - ratepayers of 8.73 percent. The notes carry a two-year

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= maturity date to May 1, 7982. ~ ~ - ~,; . . . . The notes will supply money for the District's ongoing $ ', 4 ' ' power supply activities including the proposed coal-6% ~ ) .-/ fired generating facility in Eastern Custer County and the MANDAN interconnection transmission line between s- ,' ' Nebraska and Manitoba, Canada. l . .~ & Q, , 7-\ )y%kp In August, the Distnct approved a $30 milhon revolv-m - k ' ing credit plan with Morgan Guaranty Trust Company of ,

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New York to provide working capital. l , s l l

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A. .. n.=- . f, : ~~a l-Gerald Gentleman Station Units No.1 and 2 A financial analysis completed in September revealed approximately 650,000 kilowatts is pmsible and would that Gerald Gentleman Station Unit No. 2 near Suther. result in the lower wst per kilowatt. land will begin operation in 1981 with more than $100 million remaining in the construction account. Data compiled by the Dec tric Utihty Cost Group (EUCG) rescals that esen with the more wnservatise Estimates indicate that the 650.000 kilowatt coal-fired figure, the Unit will hase a per kilowatt wst below the power plant will be wnstructed at approximately $52.7 aserage of )ther similar plants constructed in the same million under the budget and there will be an additional time frame in this $ region. $4d.1 million due to a reduced cash flow and resulting NPPD cooperated with the Nebraska Legislature in interest income. The financing surplus is a result of drafting legislation that is beliesed to remme the wn-additional interest income dve to high interest rates and stitutional objections in allowing the District to assist it appears supplemental cooling costing 518.6 million public schools in alleviating the financial impac t attnb-included in the financing figures will not be required-uted to employment in wonection with power plant Gentleman Unit No. 2 is now expected to cost $287.9 construction. The Legislature approsed the measure million wmpared to the budgeted (ost of $340.6 mil. early in 1981. lion. Included in the revised cost is a (ontingency of $16 Not inc luded in the new estimate for Unit No. 2 is the million not only to (os er unexpec red expenditures for all wst of supplemental woling whit h. if required. is esti-items but also to wser a payment to public schools to mated to cost $18.6 million. The determ; nation bs the alleviate finantial impact. Nebraska Departo ent of Eraironmental Control as to the Construc tion costs per kilowatt s d be between $458 need for additional woling fac ilities will be made af ter and $480 depending on the final g( ierating capability of the Unit goes into operation. the fat ihts. The Distric t belieses a 620,000 kilowatt net Temperature measurements taken during the opera-rating for the plant is consersatise and a net output of tion of Unit N I mt i Im that the ..,..-m....,__-_.._.-----._---------------------------~----- --~~ - - - ~ ' - ' - . = - . . actual impact of the heated water from the plant is less Federal District Court relating to the construction of Unit than predicted and, therefore, it is considered unlikely No.1. The suit was filed against National Industrial Con-that additional cooling facilities will be required for structors, Inc. (NIC), Austin Industries, Inc., both of Dal- . Unit No. 2. las, Texas, and Federal Insurance Company of New York City seeking damages to NPPD in an amount in excess of NPPD is officially looking toward a November 1, $50 million plus interest and costs of the action. 1981, commercial operation date for Unit No. 2. In late 1979, Unit No. I was taken out of service when The suit alleges that NPPD and its ratepayers were damaged by cost overruns, extra costs and the cost of unusually high vibrations were detected in the high replacement power due to the delay in the timely com- ! pressure turbine. After the turbine was dismantled, it was pletion of Unit No.1. . discovered that approximately half of the first row of rotating blades were gone and the second and third rows NIC is charged with breach of contra (t, negligence were significantly damaged. and misrepresentation and Austin Industries with failure The turbine was shipped to Richmond, Virginia, to honor its guarantee, negligence and misrepresenta-where the manufacturer, Brown Boveri Corporation, tion. Federal Insurance was the bonding company for removed the first three rows of rotating blades and the the Unit's general constructor which was NIC. NIC is a first three rows of stationary blades. A pressure plate was wholly owned subsidiary of Austin industries. installed as a temporary fix and the repaired turbine was Almost immediately thereafter, NIC filed suit against retumed to the plant site where itwas put back in ser* NPPD in Nebraska's Lancaster County District Court vice. The temporary repairs caused a reduction in the asking about $33 million in compensation for lowes in-output of the unit. curred during the delay which the suit contends was Dunng the fall outage of 1980, the turbine was again caused by NPPD's mismanagement. That action has returned to the manufacturer where the blades were since twen stayed by court order. j reinstalled. At year's end, the Unit was operating at nor-The Unit began commercial operation April 2,1979,

• 1. I C#P#CIIY" several months behind its originally scheduled opera-In February, the District initiated legal proceedings in tional date.

4 The MANDAN Project The District, as the lead U.S. utility in the MANDAN Substations are planned in South Dakota and North Project, moved ahead during 1980 to build the Dakota and terminals will be built near Winnipeg 500,000 volt AC transmission line which will link the and Hoskins. Upper Midwest with Manitoba'; hydro power resources. Routing for the line had not been fully determined by NPPD filed a MANDAN Project corridor application early 1981, but a sivmile-wide " preferred" corridor has with the North Dakota Pt blic Service Commission in been selected in North Dakota and in northeastern Ne-1980, and in early 1981 fled a route application for the braska. A proposed route has been selected for South Project with the Souta Dakota Public Utilities Commis- Dakota. Line rou'ing approval must be secured from sion. Project staff members also took part in a number of both the South Dakota Public Utilities Commission and public meetings and hearings across the Dakotas and in the South Dakota State Legislature. Hearings on the northeastern Nebraska to testify before regulatory agen. North Dakota corridor application were held in late cies and to answer the public's questions about the Proi- 1980, with additional hearings to continue in Marc h of ect. Landowners' comments obtained during the meet. 1981. Applications will also be filed in 1981 with the ings are being used in routing the 600-mile line through Nebraska Power Review Board and the Nebraska Public the three states. Service Commission. M:emate routes within the Ne-MANDAN (Manitoba, Dakota, Nebraska) will ev meetings, and a preferred route willidentified then be .N P" tend from near Winnipeg, Manitoba, to Hoskins, Ne- for the Nebraska segment. braska. Participating summer and winter peaking utilities i would benefit primarily from a seasonal exchange of The two utilities actively participating in the power to meet the summer peak demands in the south- MANDAN Project planning are NPPD and Manitoba em portion of the area and the winter peak loads in the Hydro Electric Board. Minnkota Power Co-Operative of - northern areas. By using surplus generation in the off Grand Forks, North Dakota,and Otter Tail Power Com-season for seasonal diversity exchanges, the need for pany of Fergus Falls, Minnesota, have c!so indicated new generating stations will be reduced. Utilities in interest in the project and have viven their support. A North Dakota and South Dakota are studying the pmie(t number of other utilities have expressed interest, and to determine their_ interest in participating in the line. discussions are underway with several of them. 1I ~ r --< - .- ~ w-~,m--,e,,,e,, e-,w4,sm,.w .,--m-o-,.,,w-------~w - --,v- .--~m we--p.,,-,,-,w,--.-,-m .- - - a -- - - - - - - - - - - - -p,-. - - - - , l I j The Project, in addition to the seasonal diversity es. Manitoba Hylro is presently capable of generating l (hange rapability, will provide the means for other about 1.600 megawatts of electrical power from 15 transactions between participants, including economy esisting hydro dam sites in the Nelson River watershed, energy, emergenc y energy, scheduled outage energy, one of the largest watershed systems in North America. l energy storage, firm power and energy, and participation The hydro power resource is so vast that this capability . ! power an'd energy. The Project will utilize renewable can be exp.inded by as much as 6.000 additional l hydroelectric resources, aid utilities to reduce oil and megawatts wnh the construction of more dams. For natural gas consumption, and allow utilities to make comparison, the existing gene;atmg capacity of just tao more efficient use of existing facilities and defer (on- of the larger Manitoba Hydro generating stations is about struction of new fa(ilities. equal to the total capacity of all the hpfro ele (inc dams on the Missouri River. Storage capacity is immense; by  ; i The MANDAN Project is less costly than an regulating the water level of Lake Winnipeg by four feet. I l equivalent-sized coal-fired power plant. Overall, the the Manitoba H fro system can store water volume suf- l l MANDAN Project will cost less to build and operate ficient to generate all the electricity used in South i { than any other alternative open to the District. Dakota in a sear. l l -- m*> 611 q -- r* tm - > - < ps p+ # ,- y . .

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) p 12 A Manitoba Hydro Dam on the Nelson Rirer i f& UUR pj igj  ; l I on a completion timetable that would supply that . source. Foss.l i HI Generating Plant NPPD's summer season demand, winter season de-mand and annual energy usage are projected to increase in the future, but generally at lower growth rates than in May, the Cistrict's Board gave its approval to a have historically occurred over the past several years. specific site in eastem Custer County for the planned construction of the Fossil til 650,000 kilowatt coal-fired The weather normalized summer peak demand is pro-jected to have an annual compound growth rate of 4.4 generating plant. percent from 1980 through 1990, while the District is Approval of the site came upon the recommendation forecasting an annual compound growth rate of 3.5 per-of management following an updated report received in cent in its annual energy sales through the same time March from the consulting firm of R.W. Beck and As- frame. sociates conceming the feasibility of the plant. The loca-tion is east of Highway 183, southeast of the community of Sargent. The site is approximately 1,400 acres. Cooper Station Studies stretching back several years focused on the The 800,000 kilowatt Cooper Nuclear Station near eastern portion of Custer County as a recommended area Br wnville, the largest generating facility on the NPPD for the coal-fired facility. The Beck report to the Board noted that the District was continuing to pursue both the 'YS'"*' *d* ""' af service f r a little m re than three m nths during H80. generating plant and the MANDAN interconnection to Manitoba, Canada, for several months before a final de- The plant was shut down for inspection March I after cision is to be made as to which one may be postponed NPPD had learned that some cracking had occurred in for a period of time. The District has repeatedly said it rotor discs in some Westinghouse turbines at other would not need both resources in the same time frame. plants. That cracking problem was also found in Cooper Station's low-pressure Westinghouse turbines. Turbine-generator and boiler bids had been received by the District and an application had been made to the Six of the 24 discs in the two low-pressure turbines Nebraska Power Review Board for the Fossillil plant were removed and specially manufactured baffle plates before it was decided in early 1981 to delay construction were installed to accomplish proper steam flow regula-of the project for approximately three years in favor of tion. Annual refueling and other modifications required the MANDAN line. by the Nuclear Regulatory Commission were also ac-c mplished during the shutdown. Management then detailed to the Board plans for re-ducing activities associated with construction of the coal Turbine modifications, costing more than $1 million, plant and severely limiting expcnditures for the project reduced the maximum output of the plant to approxi-for about three years. Certain activities will be continued mately 632,000 kilowatts. Cooper Station went back to allow the District to retain the site for a future project. into service as a totally safe unit and the reduced load configuration will continue until the District is able to No further consideration was given to the turbine-btain two new low-pressure rotors. Westinghouse has generator and boiler bids that had been submitted. said it expects delivery to NPPD in late summer or early The $6.7 million already expended for the plant will fall. not be lost to the District and its ratepayers because the Efforts by the District to secure an earlier fabrication money had been spent on such necessary preliminary and delivery schedule were not successful. activities as siting, environmental studies and engineer, ing, and these expenditures would not be necessary in addition to the estimated $1 million cost to fabri-again when the District decides in the future to build cate and install the baffle plates, the loss of plant output a plant- until the fall of 1981 will cost the District's ratepayers millions of dollars more. The higher costs are a result of if current power use forecasts hold true, NPPD will not the necessity to generate the lost output from other more need the resources of Fossil ill for its customers until the expensim units or purchase the makeup power from 1990s, but if joint studies within the Nebraska Power other utilities. Cooper Station is the lowest cost generat-Association (NPA) indicate that other utilities could ing unit ori the NPPD system with the cueption of hydro utilize that source of power with the District, a comple. plants. tion schedule could proceed that would meet the needs of the District and other participants in an earlier time Cost of the two new low-pressure rotors is estimated at frame. $13.5 million. NPPD*s planning forecasts of future electrical demand in addition, the District finalized an agreement with indicate that the District will need its next major source Westinghouse for the refurbishment of the existing rotors of power supply in the mid to late 1980s. MANDAN is when the new ones are installed. Following the refur-13 i i i bishment and rebuilding, the rotors would be returned to part of the plant causing any serious damage to the nu. Cooper Station as spares. This process is expected to be clear part of the ;)lant has always been considered to le completed in mid 1983. Estimated cost of the refurbish- extremely low. ment is $10.5 million including escalation. Half of the energy generated at Cooper Station is con-The spare rotors on hand would minimize outage time tracted to lowa Power and Light Company and 12% for future turbine overhauls and provide backup for percent is contracted to the City of Lincoln. These two emergencies which may be caused by failure in the in- utilities will share with NPPD on the same percentage 1 stalled rotors, basis the cost of the repairs. The turbine is outside and separate from the nuclear Despite experiencing the rotor difficulties, Cooper containment structure. There has never been an instance Station had a succes 5ful generating year. The power cost ( where any part of a Westinghouse nuclear turbine has per kilowatt-hour r.et generation was 2.031 cents com-fractured and caused a metal fragment to be thrown out- pared to 2.160 cents during 1979. The facility operated side the turbine. Should this have occurred, howeser, 6,242 hours0.0028 days <br />0.0672 hours <br />4.001323e-4 weeks <br />9.2081e-5 months <br /> and generated 3.8 billion kilowatt-hours of l the probabilities of the piece of metal from the turbine electricity for the system. l l

NPPD Crews Assist in Tornado Aftermath I

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,. l\ \ -$ i ., / \ f t< ) . 1 - _ . - - - _ v " ._ O l_ . e , ,, ~ -G \ b \  ;  ! / \ i / \ 1 \\ i Mother Nature played a significant role in the Grand $ 300,000. However, our crews and crews from many Island area in June. other public electric utilities in the state came to the aid of the Grand Island utility in an effort to restore power as A devastating tornado - actually it has been deter- quickly as humanly possible. mined that there were several tornadoes - hit the vicin-Our crews had barely completed their efforts in Grand  : ity over a three-hour period causing millions of dol. Island when high winds hit the state's largest city. We , lars in damage to the state's third largest city. Electrical facihties were literally ripped apart. then came to the aid of the Omaha Public Power District i to help restore service to thousands of their customers NPPD's damage was limited mostly to subtransmis- who were without electricity over a period ranging from sion and transmission lines on the out'.kirts of Grand Is- hours to days. Our system was spared any damage in the land and our system suffered damages of approximately Omaha storm. ! P r; pie g p go ! LES/NPPD Sign Agreement ' I  ; N.hi I f f' p Q; August 7,1980, was an historic day for NPPD and e' r 4 . J4 j the City of Lincoln (LES). A rate dispute that spanned I 4w YlQ , j several years, resulted in costly legal fees, reached the  %% d state's highest court and had repercussions far beyond l the obvious, came to an end. , . D i - i Final documents completing the settlement of the rate , 7 7 I litigation were signed in Lincoln and the signing in-  !' f / volved members of the Imards of directors and top man- ' l agement of both utilities. NPPD Board President Bernard M. Delay and Keith ? Newhouse, chairman of the LES Board, both said that ' the settlement established a new relationship between the utilities - one that will benefit all Nebraskans. One of the major benefits will be an improved Principals in the long sought agn ement turh the City of Lin-financing position since the utilities will no longer haw coin gathered for a news conference folkming the signing iett to carry the burden of ongoing litigation as they seek tu to nght are Don Sc haufelberger, NPPD deputt general man-ager; [1 W. Hill, NPPD gene?al manager; Bernard M. [)elar . issue bonds for system improvements. president of the NPPD board of dire ( tors; Waher Canney, ad-ministrator of the Lincoln fle(tric System; and Acith Max Kiburz, president of the Board of Directors of the Neuhouse, Chairman of the Lls administr: lite hoard. new Nebraska Power Association (NPA), which repre. sents all segments of the Nebraska power industry, re- , marked that one of the objectives of NPA is to encourage settlement of disputes within the industry. He praised the Irrigation agreement saving that the Association "is happy to have this issue settled so that we can all give our attention to the primary responsibility of providing reliable service at Tuo interrelated functions of hydroele(tric generation the lowest possible cost." and irrigation are headquartered at the District's North PI tte regional office. Management and Board members of both utilities were repeatedly commended for their diligent efforts in The h3 draulic division consists of two diversion dams, culminating the agreement that ended the strife. 62 miles of large canals, and a hydroelectric power plant. During 1980, about 992.400 ac re-feet of water was diverted into the system. Major items of the agreement were: The irrigation divici.., is made up of the Gothenburg. , - A $28 million plus interest payment by LES to Dawson County and Kecrney canals. There are three L NPPD for past billing disputes and LES's acqui<ition of diversion dams and about 500 miles of canals and later-als. The three irrigation canals diverted a total of some transmission facilities in the Lincoln area. 137,325 acre-feet of water during the summer of 1980. - Cancellation of the contract that required NPPD This water was distributed to 615 farms and applied to to furnish LES 175,000 kilowatts of power and energy 32,800 acres of crops. > through 1992. The three irrigation canals owned by NPPD and the - LES w.lli be 30 percent participation purchaser .in four non-owned canals that receive supplemental stor-the output of NPPD's Sheldon Station near Hallam and age water from the District received a full supply for the an eight percent participation purchaser in the output of y;,ar. The year-end reservoir storage was at lower than 4 NPPD's Gerald GenHeman Station near Sutherland. normal capacity due to below normal precipitation and - An LES option to participate in the proposed a low river flow. MANDAN transmission line to Canada or NPPD's sub- The Board of Directors appromi in 1979 an aserage stitute project if MANDAN is not built. rate increase of about 7.5 percent per Sear for 1980 and The existing litigation was dismissed and the power 1981 for the District's surfa(e irrigation (ustomers. The i new rates are estimated to provide resenue of S353h42 and energy agreements became effective January 1. 1981. in 1981. P00R ORSNa m _ .. . , ,. ~- . m<w ~em me,fm r ,'

• 1 Total Energy Consumption Encrgy Use in the Nation in the Home - Leundry. TV a ui.e. tos p t ,,

L g tan [2 x e . / I Transportation 25% h . {i b" Food Preperatton N Q. Water Heating 15*. f & Preservation 13*. i, rd G ' s m,*J 'S , v f < v _g)p. (m. f . ' (._ h* ~ kl .A t industrial 41** fti l pC " ' , Heating & Cooling 60 . 4 i* N %[ nesident at 19 . ~ Commerceat industnal 15' . &-~ , . _ _ ;.Lai _ &._ Customer Conservation Nebraskans are spending increasing sums of money in 69.3 percent of homes which are fise years old or for home energy conservation measures according to a newer and in only 20.9 percent of homes more than 20 residential customer sursey the District conducted dur- 3 ears old. ing the 3 ear. During the period 1973 to 1979, more than half of the Central and window air (onditioners are found in 76.6 District's retail residential customers added insulation, pacent of all dwellings in the service area, but it was storm windows, we.:therstripping or other conservation also n ted that in the West"rn Region, primarily the measures. The addition of ceiling insulation has been the Panh:ndle area, only 55.5 percent of the dwellings have an c nditioning. most popular, with 31.5 percent of the households tak-ing this conservation <"p. Other common emenditures included storm windows,22 percent; weatherstripping, Electricity is the most popular source of energy for 21.8 percent and wall insulation,18.6 percent. kitchen ranges and clothes dryers, the study showeo. The survey revealed that an estimated 12,850 house. More than 75 percent of the customers receiving ques-holds (15.6 percent) took one or more conservation tionnaires completed and returned them. measures in 1979, a significant increase over the 8.9 percent in 1978, and an even more dramatic increase The Board of Directors approsed the District's partici-oser the 1975 proport;on of 3.3 percent. More than 18 pation in the Nebraska Residential Consavation Service percent of the customers surveyed indicated they Program uhich is designed to aid residential customers planned to add ceiling insulation during 1980. in energy conservation. The survey showed that dwellings heated with elec-tricity represent 12.2 percent of all housing in NPPD's The program provides for conservation audits of i homes as well as other services upon request of resi-retail service area. However,42.2 per(ent of the apart-men.s are heated electrically. dents Customers asking for an energy audit uill be gisen an estimate of the cost of energy-saving measures u hic h The type of heating system varies with the age of the may be recommended, an estimate of the savings in dwelling. Electric heating is used in 38.3 percent of energy costs, possible economic benefits to the customer dwe? lings which are fise years old or less, but ek'ctric in the way of ta incentives and other information. heat is found in only 5.8 percent of homes which are over 20 years old. Homes more than 20 years old repre- NPPD and eight other participating utihties will also sent 65.3 percent of the total housing in NPPD's ser. arrange for installation and financing of (onservation vice area. measures if requested by (ustomers, or the (ustomers j may make their own arrangements. Newer homes are also more likely to hase central a.ir conditioning. Central electric air conditioners are found An energy audit fe( of $13 will be (harged. I6 - - - - ~ . . _ _ - - _ - . - _ Peak Demand - Its impact is Basic Kilowatt-Hour Peaks on NPPD System Demand in Megawatts . 1,719.9 , . . ,/, , W l^ ~ ' ~ _ .. , 1,554.9 _ ,,,,,,,,,,,,,,, \1 1 1 1,389.9 a i _ ,,,,,,, I I 1,224.9 _, ,,,, I I 1,059.8 , , / ~ . 894.8 \ 729.8 975 g 3 / j 39.8 1970 / l / lAN FEB MAR APR MAY JUN JUL AUG %EP OCT NOV DEC in planning generation and transmission capacity to for ekctricity during the summer months be ignored meet the needs for electric energy, electric utilities, such when it is used to irrigate vitally neeckd agricultural as Nebraska Public Power District, must first look to products and provide air conditioning that improses the peak demand. Peak demand represents the amount of efficiency of people at work and at home,in addition to electricity we must be prepared to supply our customers other applications. w hen their totai requirements for electricity are the high-est. In Nebraska, the peak demand occurs m June, July, So, our challenge is to encourage the wise use of August and September, when irngation pumps and air ekmi@- @@ dW grioA d gA w n'c-

n. fitioners are working at full force.

,g, , gg, educating our customers on the deferred use of electric-As a result, we have had to provide the generation and ity from periods of peak demand to periods of reduced transmission capacity to fulfill the peak requirements of demand. our customers even thcugh we knew full well there are Progress is being made in the area of improved system periods of the year and times of the day when customer load factor. One indication is an increasing number of demand for electricity is far below w hat it is at the r,eak. customers switching to electric heat. There are now The difference between the capacity needed to meet more than 14,000 electric heat customers on NPPD's peak demand and the demand at other seasons of the retail system. It should be noted that as people switc h to year and times of the day is something we have been electricheat, it not only helps make more efficient use of trying to correct for several years. To make the most our power plants and transmission lines during the efficient use of generation and transmission cap > cities, winter months, it also helps conserve petroleum-based and indeed of our nation s resources, we must close the f h M ue in short supply. gap between the extremes in demand for ele (tric energy. By shaving peak demand and improving the system If electricity could be stored, the situation would be dif. load factor, our customers can save money on their ferent. But it can't. Neither can the eser increasing need electric bills. 17 ) NPPD Senior Management This chart of NPPD senior management was prepared to visually present the restructuring of positions reporting directly to t the general manager and deputy general manager that occurred DEPUTY GENERAL MANAGER Don Schaufelberger is a native of Lincoln and a 1949 gracNate of the University of Nebraska-Lincoln with a degree in electrical i engineering. A U.S. Navy veteran, Schaufelberger began his pub!ic power career as an engineer for Consumers Public Power District in Beatrice in 1949. In 1952, he transfmed to Lincoln as - I System planning engineer. In 1958, he was named chief enginee and in 1964, he moved to Columbus in the position of operations ,, director. Schaufelberger was promoted to assistant general manager at Columbus in 1968, a position he retained following the merger in 1970 which formed NPPD, rad in 1972, he , advanced to his current post as deputy general manager. Don E. Schaufelberger \ l I I i First Assistant General Manager First Assistant General Manager  ! ENGINEERING & CONSTRUCTION OPERATIONS u m ~ w A e ( i g e - A ~; y '  ; ' ~ Frank C. Whitney Cecil R. Jones The newest NPPD assistant general manager is Cecil Jones is a native of Arcadia, Nebraska, and a ' Frank Whitney. Whitney holds a bachelor of science 26-year employee of NPPD and a predecessor utility. degree in engineering from Brown University and a { Jones started his career in the public power industry as ' master's degree in business administration from a lineman for the former Consumers Public Power l Northeastern University. Following five years of active District in Loup City in 1954. In 1958, he transferred duty as a navy pilot, Whitney broaght to NPPD twenty to the Scottsbluff system office as a dispatcher and in years of experience with an investor owned utility, 1966, he was promoted to Western System power consulting engineering firms and a municipal system. supply supervisor. In 1968, Jones was promoted to immediately prior to joining NPPD, Whitney was power system supervisor in the Columbus General general manager of the Holland Board of Public Office in 1971, he advanced to director of operations. 3 Works, which was responsible for operation of the j and in 1974 he was made assistant general manager. ' electric water and waste water utilities of the city of in his capacity as first assistant general manager. Jones Holland, Michigan, and was at the same time directs the activities of the following areas: chairman of the Michigan Public Power Agency. As

• Power Production first assistant general manager for NPPD, Whitney

• Fuel Management ovr sees the following areas:

• System Dispatching o Transmission & Distribution Engineering & Construction

• Licensing & Quality Assurance I o Generation Engineering & Construction

• Environmental Affairs o Special Projects

• System Operations & Maintenance o Engineering Services

• Regional Operations & Maintenance

• Legislative Affairs

• Hydraulic System & Irrigation Facilities P00RBR M.

BOARD OF DIRECTORS i GENERAL MANAGER A native of Prague, Oklahoma, D. W. Hill is a long-time public power leader in the nation. Following college and service in the U.S. Coast Guard during World War ll, he began teashing as a principal and head football coach. He later became associated with the Grand River Dam Authority of OI.lahoma, where he advanced to the position of assistant general manager. In 1956, Hill moved to Tillamook, Oregon, where he was made general manager of Tillamook Oregon Public Utility District. In 1961, he accepted the position as general manager of Clark County Public Utility District in Vancouver. Washington Hill began employment with the former Ccasumers Public Power District in May,1964, as assistant general manager and on Aug.1,1964, was named Durwood W. Hill general manager. I i i First Assistant General Manager First Assistant General Manager CORPORATE SERVICES FINANCE & ADMINISTRATION p m ~ ,m, l* f I w w d r- ~ W ;i h ~ i !' ~ Ol Dil A. Blatchford I Ted M. Kyster A native of Maskell, Nebraska, Dil Biatchford has A native of Council Bluffs, Iowa, Ted Kyster became been an assistant general manager since joining NPPD an NPPD assistant general manager in 1977. Kyster in November,1975. After serving four years in the holds a degree in business administration from the U.S. Army Air Force, Blatchford graduated from the University of Nebraska-Omaha, and served two years University of Nebraska-Lincoln in 1950 with a degree in the U.S. Navy. K, ster started his career with the in electrical engineering. Blatchford came to NPPD District as chief clerk in O'Neill in 1961. In 1963, he from the Nebraska Electric Generation & Transmission transferred to Sheldon Station as plant accountant, and Cooperative, where he served as general manager. in 1966 he moved to Lincoln in the position of assistant Prior utility experience includes service with the accountant. Kyster transferred to Columbus as general Franklin County Rural Public Power District, the records supervisor in 1957, and in 1972 he was Hastings Utilities and as an eng.ineering consultant. In promoted to assistant treasurer. In 1974 Kyster assumed his position as first assistant general manager, the additional duties of controller and he was appointed Blatchford oversees the following areas: treasurer in 1975. In Kyster's post as first assistant l

• Planning general manager, his primary responsibilities include l overseeing the activities of the following areas:

'

• Rates & Contracts

• Customer Relations

• Treasury

• Research & Deselopment

• Accounting

• Data Processing

• Budget & Statistical

• Administrative Services

• Public Affairs

• Purc hasing

• Energy Applications ,

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FINANCIAL COMMENTARY Nebraska Public Power District had an eventful year Operating Expenses in 1980. Of the many events that occurred, the most Operating expenses of the Electric System of the Dis-signif,i cant were: the setting of a new peak demand for trict totaled $249.9 million in 1980, an increase of $44 native load (native load excludes non-firm and participa- mi! lion over 1979. Production and purchased power tion tales) which was nearly 10% higher than any pre- expenses accounted for $40 million of this increase. viously recorded; the increase in revenues of over 12% Much of this increase car: be attributed to the purchase from native load sales in comparison to the previous of more power than anticipated due to unplanned out-year; the 5% increase H aative load MWH sales from ages caused by equipment failure, increased mainte-the prior year; the imp ct of weather and economic con- nance costs, and reduced operating levels at Cooper ditions on total revenues; the impact on the District's , , Nuclear Station and Gerald Gentleman Station Unit operating expenses from unanticipated increases in No. 1 ' costs and extended unschedukd maintenance outag: s; the settlement of a long-standing rate dispute between Other operation and maintenance expenses, includ-NPPD and the City of i.incoln; and a deficiency in net ing labor, materials, supplies, and services, amountml revenues which resulted in the establishment of new to $22.4 million compared to $20.9 million in 1979. rate schedules for 1981.- These events are reflected in Net Revenues the financial statements of the District and are described The Electric System operations resulted in a net loss in more detail in the following commentary. , of $10.2 million in 1980. The loss reflects a decrease in Operating Revenues and MWH Sales net revenues of $4.7 million as a result of the settlement In 1980, total operating revenues for the Electric Sys-4mn and h W d Uncdn. tem of the District were $241.7 million which is an in- General crease of 7.69 or approximately $17.1 million from in 1980, the Electric System's revenues were not suffi-1979. Excluding non-firm, participation, and non-elec- cient to provide for all of the payments and to meet all tric sales, the total operating revenues increased 12.1% the requirements specified in the Di<trict's Electric Sys-over the previous year. tem Revenue Bond Resolution. Tnat deficiency was Of the total electric operating revenues in 1980, $86.9 caused by the combination of wer s and economic million were classified as retail revenues and reflected conditions and the factors discusu previously in this c mmentary. an increase of $10.7 million (14.1%) over 1979. This increase was due to a 4.0% KWH growth and to higher in order to recover this deficiency, the NPPD Board of rates placed in effect in 1980. Directors authorized increased rates for 1981, to provide wholesale revenues, derived from sales to municipali. funds for all necessary payments and other require-ments for 1981 and to recover the 1980 deficiency at ties, public power districts, and cooperatives having contracts with the District, increased $13.1 million the earliest practical time. (11.49 ) over 1979 l', $128.2 million. A 5.9% KWH Another significant event occurred in 1980 when the growth over 1979 and higher rates placed in effect Jan- District and the City of Lincoln reached a settlement uary 1,1930, caused the increase. agreement regarding a long-standing dispute pertaining Revenues from sales to other wholesale customers to billings for electric service. The settlement also pro-classified as non-firm or participation sales decreased vided, effective January 1,1981, for the cancellation of a firm power agreemem and the initiation of participa- $7.4 million (24.6%) from 1979. This decrease occurred primarily because of the curtailment of generation at the tion agreements. District's two major generating plants. Such curtailment is explained later in this commentary. ' The District's 1980 peak demand for its native load was 1,719,800 kilowatts. This is 9.79 higher than the T. M. Kyster previous record peak demand set in 1979. First Assistant General Mar 6ger & Assistant Treasurer 20 - . .. _~ _. - ~ i Nebraska Public Power District ELECTRIC SYSTEM Report of Independent Public Accountants To the Board of Directors of Nebraska Public Power District: We have examined the balance sheets of the ELECTRIC SYSTEM of NEBRASKA PUBLIC POWER DISTRICT (a public corporation and political sulxlivision of the State of Nebraska) as of December 31,1980 and 1979, and the I related statements of revenues and expenses, accumulated net revenues and changes in financial position for each of the three years in the period ended December 31,1980. We have also examined the suppleraental schalutes of the calculation of the debt service ratios for each of the three years in the period ended December 31,1980. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other aucating procedures as we considered necessary in the circumstances. In our auditors' report dated April 2,1980, our opinion on the 1978 and . 1 1979 financial statements was qualified as being subject to the collection of the receivable from the City of Lincoln. As explained in Note (4), the litigation related to the billings for wholesale electric service to the City has been wttled and $4,714,000 has been recorded as a reduction of net revenues in the current year, in accordance with generally accepted accounting principles. Accordingly, our present opinion on the 1978 and 1979 financial statements, as presented herein, I_ is no longer subject to the outcome of :his matter, in our opinion, the financial statements referred to above present fairly the financial position of the Electric System of Nebraska Public Power District as of December 31,1980 and 1979, and the results of its operations and changes in its financial position for each of the three years in the period ended December 31, 1980, and the supplemental schedules of the calculation of the debt service ratios for each of the three years in the period ended December 31,1980,. present fairly the information set forth therein, all in conformity with generally accepted accounting principles applied on a consistent basis. i i- Arthur Andersen & Co. Omaha, Nebraska, March 10,1981. 21 Nebraska Public Power District ELECTRIC SYSTEM Balance Sheets December 31,1980 and 1979 1980 1979 ASSETS mw = = k aspon w Utility Plant, at Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4 8 9,94 9 $452,615 Less - Reserve for depreciation and amortization . . . . . . . . . . . . . . . . . . . . 140,853 129,468 $349,096 $323,147 Debt Reserve Account: Cash .................... .............. .................... .........$ 4 $ - Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,738 30,703 $ 30,742 $ 30,703 Receivables from Sale of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......$ 2,611 $ 2,979 Current Assets: Cash and investment securities (Note 7) . . . . . . . ...... . . . . . . . . . . . . . . . .$ 121,981 $137,823 Receivables, less reserves (Note 4) . . . . . . . . . . . . ..... .......... ........... 30,336 60,488 Materials and supplies, at average cost . . . . . . . . . . ................... .. . 20,293 14,055 Prepayments and other assets (Note 1.H) . .... ... . .... .... .. .. .. 266 15,354 $172,876 $227,726 Deferred Charges: Advance payments to Nuclear Facility for nuclear fuel (Note 1) . . . . . . . . . . . . . . . . . . . . .. ......... . ..... . . .$ 24,314 $ 21,806 Unamortized financing costs . . . . . . . . . . . . . . . . . . . . . . . ...... .. . 3,584 3,808 Oth er . . . . . . . . . . . . . ...... . .. . .. . .. . . .. . 3,904 2,626 $ 31,802 $ 28,240 $587,127 $612,795 LIABILITIES AND CAPITAL Long-Term Debt (Note 6) . .. ... . . .. .... .. .. .... .. . . .$391,528 $398,142 Less - Current maturities . ...... . . ... . ...... .. . . .. . 7,031 6,760 $384,497 $391,382 Accumulated Net Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1,4 7 9 121,635 $495,976 $513,017 Notes Payable: 52%% of prime, due 1982 ... ... ........ ...... . ... . . . . . ...$ 1,320 $ - 65% of prime, due 1982 to 1984 (Note 8) . .... . ... ..... . . ....... 15,000 - 57% of prime, due 1982 to 1984 (Note 4) .. ...... ..... . . . ... ... 4,447 29,247 72%% of prime, due 1982 to 1986 . . . . . . .. . .. . .... ... 30,000 30,000 $ 50,767 $ 59,247 Current Liabilities: Current maturities of long-term debt .. ........ . .. ....... . .$ 7,031 $ 6,760 Accounts payable . . . . . . . . . ..... . .. .. .. .. ..... .. ... . . 22,831 23,292 Accrued lease payments . . . . .. .. . .... . ... .. .. . .. 3,053 2,564 Accrued interest . . . . . ..... .. .. ... ... ... . .. . 66 1,052 Other . . .... .. . .. . . . ... ... ... . . .. . .. 4,007 3,208 $ 36,988 $ 36,876 Unamortized Payment Received for Refinancing Costs . . . . . . .. .$ 3,396 $ 3,655 $587,127 $612,795 The accompanyung notes to financial statements are an integral part of these balance sheets. 22 Nebraska Public Power District ELECTRIC SYSTEM Statements of llevenues and Expenses and Accumulated Net Revenues for each of the Three Years in the Period Ended December 31,1980 1980 1979 1978 (Thouunds of Dollm) Revenues and Expenses: Operating Revenues (Notes 3 and 4) . . . . . . . . . . .. . . . . . . . .$241,712 $224,662 $199,177 Operating Expenses: Power purchased - Nuclear Facility and Power Supply System . . . . . . . . . . . . . . . .$ 96,055 $ 76,412 $ 29,456 Other . . . . . . . ..... .. .. . . . . . . . . . . . . . 59,767 64,174 66,615 Production - Fuel .. . .. . . . . . . . . . . . . . . . . . . 23,611 25,944 30,079 Operation and maintenance . . . . . . . . . . . . . 6,965 6,409 6,130 Deferred production cost, net (Note 1.H) . . . . . . . .. . 15,094 (11,588) (2,947) Other operation ..... ..... . . . . 17,435 16,450 15,603 Other maintenance .. ...... . . . . . . . . . . . . . . 4,952 4,431 3,694 Leased plant payments (Note 1) . . . . . . . . . . . . . . . . 5,678 4,953 4,486 Depreciation and amortization . . . . . . . . . . . 15,956 14,715 15,288 Payroll taxes and payments in lieu of taxes . . . . . . . . . . . . 4,430 3,954 3,523 Total operating expenses . . . . . . . . . . . . . . . .$249,943 $205,854 $171,927 Net operating revenues (expenses) . . . . . . . . $ (8,231) $ 18,808 $ 27,250 Interest and Other Revenues: Allowance for funds used during construction . . . . . . .$ 2,047 $ 1,462 $ 1,655 Interest and other . . . . . . . . . . . . . . . . . . . . . . 23,648 15,759 8,838 Total interest and other revenues . . . . . . . .$ 25,695 $ 17,221 5 10,493 Net revenues before other deductions . . . . . . . . . . . 5 17,464 $ 36,029 $ 37,743 Other Deductions: Bond interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 23,157 $ 21,449 $ 19,096 Other interest ... . .... . . . . . . . . . . 3,853 3,767 1,844 Miscellaneous, net . . .. .. .. .... ..... . . . . . . 610 98 128 Total other deductions. . . . . . . . . . . . . . . . . .$ 27,620 $ 25,314 5 21,068 Net Revenues (Expenses) (Notes 3 and 4) . . . . . . . . .$ (10,156) $ 10,715 $ 16,675 Accumulated Ne* Revenues: Beginning balance . ... ... .. . . . . . . . . 121,635 110,920 95,065 Charges in connection with property sold . . . . . - - (820) Ending Balance . . . .. . . . . . . . . . . . . . . . . . .$ ? 11,479 $121.635 $110,920 The accompanying notes to financial statements are an integr3l part of these statements. 23 v -: m i = - _ , Nebraska Public Power District ELECTRIC SYSTEM Supplemental Schedules - Cakulation of Debt Service Ratios for each of the Three Years in the Period Ended December 31,1980 1980 1979 1978 (Thoubands of Dollars) Oper;. ting revenues ................. ........... . . . . . . . . . . .$241,712 $224,662 $199,177 Operating expenses, excluding depreciation and amortization of $16,458,000, $15,364,000 and $15,851,000 ...... . . . . . . . . . . . . 2 3 3,4 8 5 190,490 156,076 $ 8,227 $ 34,172 $ 43,101 Interest and other revenues, excluding interest on construction funds of $9,639,000, $7,642,000 and $5,449,000 . . . . . . . .. ........ 14,009 8,117 3,389 Net revenues available for debt service .. ... ... . . . . . . . . . . . . . . . . .g $ 4 2.2 89 $ 46,490

• Amounts deposited in the Electric System Debt Service Account -

Pri nc i pa l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........$ 6,505 5 5,025 $ 4,395 19,385 15,602 14,639 Interest . .. .. ......... . .. .... ....... ... . ........... $ 25,890 $ 20.627 $ 19.034 Ratio of net revenues available for debi ' service to debt service deposits . . . . ...... .... ... .. .. . .86 2.05 2.44 The accompanying notes to financial statements are an integral part of these statements. 24 Nebraska Public Power District ELECTRIC SYSTEM Statements of Changes in Financial Position for each of the Three Years in the Period Ended December 31,198'4 1980 1979 1978 (Thouunds of Dollm) Funds Provided by Operations: Net revenues (expenses) . . . . . . . . . . . . . .... ...... . . . . . . . . .$ (10,156) $ 10,715 $ 16,675 Add items which require no current outlay of working capital-Depreciation and amortization ....... . . .... . .. . . 15,956 14,715 15,288 Other . . . . . . . . . . . . . . . . . . . . . ....... . . ... . .... 502 649 563 Total funds pr'o vided by operations . .. ... .. . . .$ 6,302 $ 26,079 $ 32,526 Other Sources of Funds: Sale of revenue bonds . . . . . . . . . . . . . . . . . . . . . . .. ... .... - 60,893 71,244 Proceeds from notes payable ....... . . . ..... . . .. . ... 19,520 5,600 33,647 Contribution from Basin Electric (Note 9) .. ............... 11,868 32,601 6,702 Federal Disaster Assistance for storm damage . . . ...... ...... .. - - 1,954 (Increase) decrease in fund balances . . . . . . . . . . . . . . . . . . . . . . . . . 15,809 (3,306) (67,087) Proceeds from sales of property . .. ..... .. . .. . ........... 698 225 1,049 Total funds provided . . . . . . . . . . . . . . . . . . . . . . . $ 5 4,197 $122,092 $ 80,035 Funds Applied: Utility plant additions . . . . . . . . . . . . . . . . . . . . . . . . .. . .$ 55,449 $ 77,285 $ 54,422 Decrease in receivables from sales of property . ... . .... ... . . (368) (359) (2,220) increase (decrease) in receivables . . . . . . .... .. ......... (30,152) 11,134 7,355 Increase (decrease) in materials and supplies . . . . . . . . . . . . . . . . . . . . 6,238 1,803 (863) Advance payments to Nuclear Facility for nuclear fuel (Note 1) . . . . ...... . ... . .. . ... . . .... 2,508 19,% 6 900 Repayment of notes payable . . . . . . . . . . . . . . ......... ... 28,000 - 8,909 Retirements of long-term debt . . . ... ... .......... ... . 6,760 5,275 4,641 (Increase) decrease in accounts payable . . . . . . . . . . . . . . . . . . . . 461 (4,985) 4,857 Other working capital changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,390) 11,032 2,569 Other ...... . .. . .. ..... ..... ..... . ... . .... 691 941 (535) Total funds applied . . . . . . . . . . . . . . . . . . . . . . . .$ 54,197 $122,092 $ 80,035 The accompanying notes to financial statements are an integral part of these statements. 25 based on a projected rate for short. term borrowing. For the periods presented herein, the rates vary from 6.1% to 7.75%. D. Unamortized financing Costs - These costs represent issuance expenses on all bonds and the premium to retire the Electric System Revenue Bonds,1975 Series, prior to their maturity date and are bring amortized over the life of the respective bonds using the bonds outstand-ing method. E. Advance Payments to the Nuclear Facility for Nuclear Fuel-In December, 1978, $30 million intermediate term notes were issued and the proceeds deposited in the General Reserve Fund to finance the Electric System's obligation to the Nuclear Facility for working capital for nuclear fuel. Payments to the Nuclear Facility for these obligations and carrying costs are reflected in the balance sheet as a deferred charge. Nebraska PubliC Power District F. unamortized Payment Received for Refinancing Costs - This payment represents a reimbursement from the Nu-ELECTRIC SYSTEM clear Facility for certain refinancing costs of the Electric System incurred in 1968 and is being amortized over the life of the 1968 Revenue Bond issue using the bonds outstanding method. G. Investment Securities - Investments are made in U.S. Govemment securities, Notes to Financial Statements Federal Agency obligations, and bank certificates of deposit. (1)

SUMMARY

OF SIGNIFICANT ACCOUNTING POUCIES: The Debt Reserve Account in the Debt Service Fund is valued semi-annually at January 1 and July 1 at the lower of cost or A. Organization - market in accordance with requirements of the Electric System The District has three separate divisions for accounting Revenue Bond Resolution (Electric Resolution). As a result of purposes as follows: such valuation, the carrying value of the securities decreased Electric System

$1,169,000 on January 1,1981. The securities in the remain-Nuclear Facility ing funds are valued at the lower of cost or prinopal amount in Power Supply System accordance with requirements of the Electric Resolution.

As required by Bond Resolutions, separate records are maintained for each division. The Electric System financial H. Deferred Production Costs -

statements exclude the Nuclear Facility and Power Supply Estimated fuel costs in excess of those incieded in basic System, for which financial statements are presented separately rates are recovered by a Production Cost Adjustment (PCA) herein. The Electric System financial statements should be read which is billed to all customers. When PCA billings do not in conjunction with such other financial catements. recover the applicable actual costs, the excess cost is deferred.

When PCA billings exceed applicable actual costs and prior

8. Depreciation, Amortization and Maintenance ~ deferred costs, the excess is not reported in revenues in the in 1980 the District began using separate depreciation current perind. Present District policy requires that billing; for rates for each major classification of plant. Depreciation was the PCA shall be made using rates adjusted from time to time

, approximately 3.0% of Utility Plant in Service. During 1979 so that all actual costs incurred by the District which are to be and 1978, 2.5% was used to calculate the provision for recovered by the PCA shall be recovered from PCA billings depreciation. either in the current rate period or future rate periods.

The District has signed long-term lease agreements with approximately 250 municipalities. These lease agreements 1. Revenue Recognition -

obligate the District to pay for normal property additions in accordance with industry practice, the District recog-during the term of the lease. The District has recorded a nises revenues for retail service in the month the meters are provision for amortization of $4,323,000 in 1980, $4,215,000 read.

in 1979 and $3,307,000 in 1978, which is approximately equal to its obligatic,n for additions to properties leased from (2) 1980 RATE STUDY:

. municipalities. Pursuant to the Electric Resolution, the Board of Directors The District charges maintenance and repairs, including of the District directed that, in light of the District's financial the cost of renewals and replacements of minor items of corJition, an interim rate study be made. The study resulted in rate increases for 1981, to provide funds for all payments and property, to maintenance expense accounts. Renewals and replacements of property (exclusive of minor items of property, other requirements for 1981 and for the 1980 deficiency, as set forth above) are charged to utility plant accounts. Upon excluding the Lincoln settlement as discussed in Note (4).

retirement of property subject to depreciation, the cost of Rate adjustments for wholesale and retail service, includ-property is removed from the plant accounts and charged to ing the PCA rate, which were placed in effect in 1981, a e the reserve for depreciation, along with the removal costs, net expected to increase revenues by approximately $24 million of salvage. for the year.

C. Allowance for funds Used During Construction - The 1980 deficiency was caused by a combination of This allowance, representing the cost of funds used to weather and economic conditions plus unanticipatW in-finance construction, is capitalized as a component of the cost creases in costs and extended unschedukd maintenance of utility plant and is credited to Interest and Other Revenues. outages. KWH sales for 1980 increased only 0.7% over 1979, The capitalization rates for construction financed with revenue while operating expenses significantly exceWed estimates.

bonds are based on the interest cost of each issue less interest Cooper Nuciear Station and Gerald Gentleman Station Unit I income. Tne rate for construction financed by revenues is No.1 both incurred extended outages, increased maintenance 26 i

costs, and rufuced operating levels. See Notes (4) tr. l (6) for (6) LONG-TERM DEBT:

the Power Supply System and the Nuclear Facility, respec. Onember is, tively, for a discussion of operational problems. 1980 8979 (Thomands of Donare O) RATES: Revenue Bonds:

The District designs its wholesale electric service rates Serial Bonds -

(which are orcinarily adjusted every two years) to cover 2.00% , due 1980 to 1990. . . . . . .$ 6,925 $ 7,875 amounts allocated to wholesale cost of service, including: 1) 4.20% .S.00% , due 1980 . . . . .. - 5,555 operating expenses other than depreciation,2) debt service, 4.30%-6.00%, due 1981 to 1985 36,745 36,745 and 3) certain capital additions. All costs allocated to 4.75%-6.30%, due 1986 to 1990 . 44,465 44,465 wholesale service (including amounts applicable to retail sales 4.90%-6.40%, due 1991 to 1995 34,010 34,010 of the District are recovered from customers in the current rate 5.00%-6.10%, due 1996 to 2000 39,850 39,850 period or in future rate periods by increasing or reducing 5.00%-6.30%, due 2001 to 2005 . 49,740 49,740 revenue requirements in such future rate periods. The follow. 5.75%-6.40%, due 2006 to 2009 27,820 27,820 8

ng table illustrates the effect of these adjustments in revenue requirements on the Statements of Revenues and Expenses. Term Bonds, with annual sinking fund requirements -

Adjustments of Revenue Requirements 5.104, due 1987 to 2002. .. ... 41,000 41,000 6.60%, due 1993 to 2003. . . 33,200 33,200 Rate Periorfs 6.75%, due 1991 to 1995. . .. 17,100 17,100 Effect on 1980 7.00%, due 1996 to 2005. . . . . . 57,250 57,250 Statements of im.im imwr im.ing heimmal MNm of DoNare

$388,105 $394'610 Revenues & Expenses Lease Purchase Payables -

1974 1975 $(7.3) 2.00%, due 1980 to 1992. . . . 5,790 6,046 1976-1977 5.9 $(2.1) Unamortized Bond Discount .. . (2,367) (2,514) 1978 1979 1.4 .6 $9.4 $391,528 $ 398,142 1980 Estimated .3 (5.7) $(7.8) 1981 Projected .3 (3.7) 7.8 (7) CASH AND INVESTMENT SECURITIES:

1982 1983 Projected .9 - -

%,,6,, 3,,

As provided in the Electric Resolution, the District cove- s,no 197, nants to charge rates for electric and other services so that tiho. ands of oonaro revenues will be sufficient to pay annual operating expenses, . . . .$ 15,502 $ 10,390 Revenue Fund . . . . . . .

including Nuclear Facility and Power Supply System charges, Operating Fund . . . . . . . .. 7,039 3,583 debt service and other charges payable out of Electric System Construction Funds -

'""" 1975 Project ... . . 5,474 6,856 1976 Project . . . . . ... .. ... 3,034 5,407 (4) LINCOLN SETTLEMENT:

1977 Project 6,271 5,809 in April,1980, the District and the City of Lincoln 1978 Project . .

25,401 32,660 approved the general terms of a proposed settlement concern- 42,879 1979 Project .. ... .. . .. 45.574 ing a rate dispute. Final agreements were signed by the parties Merger Propert,ies . . . . . . . 953 907 on August 7,1980. The settlement included, among other Bu " "" $ "^ ""

things, the payment by Lincoln of $28,000,000 as payment in e9 ~ ' 1278 3'239 full of all disputes relating to billings fcr electric service '

7,858 Debt Service Acc$nt ....... 4[086 through December 31,1979, the transfer tc Lincoln of certain 1,133 1,203 Reserve and Contingency Fund . ..

substation fac,ities u and associated equipment, and the 8,931 General Reserse Fund . . .... 14.343 cmendment of the firm power agreement with respect to billings and scheduling of power thereunder. Effective January $g $137,829 1,1981, the firm power agreement between the parties was czncellal and participation agreements, which provide a Funds consist of $102,905,000 of investm. tnt secunties portion of the City's electric service requirements, were signed. and $19,076,000 of cash at December 31, 1980, ar'd Net revenues for 1980 were decreased by $4,714,000 due to $122,061,000 of investment securities and $15,76E,000 of the settlement. This effect was not included in the 1980 cash at December 31,1979.

deficiency discussed in Note (2) above, but will be included in (8) REVOLVING CREDIT AGREEMENT:

the 19821983 rates.

A revolving credit agreement, dated in September,1980, As a result of the settlement, the District paid all but allows the District to borrow up to $30 million for working

$4,447,000 of the $32,447,000 borrowed under a credit capital at a rate of 65% of the prime interest rate. It is agreement secured by the receivable from Lincoln. The anticipated that the notes will be repaid from revenues of the remaining balance will be paid in 24 monthly mstallments District in eight equal quarterly installments beginr<ng in beginning in April,1982.

April,1982.

(5) PENSION PLAN: (9) CONSTRUCTION AND FINANCING:

The District has a retirement income plan covering The 1981 construction plan for the Electric System substantiatly 211 of its full-time employees. Employee's con. provides for estimated expenditures of $35.9 million. These tributions to the plan are based on salary, and the District's expenditures will not require the issuance of long-term debt.

contributions are allocated to employee's trust accounts based in 1977, the District entered into a long-term transmission partially on the employee's contributions and partially on years service contract with Basin Electric Power Cooperative (Basin of service and annual salary. The plan provides for retirement Electric) which provides, among other things, that the District income equal to the total of the employee's trust account, receive an amount, estimated at $53 million, which will be including trust earnings. The cost of the plan was $2,834,000 applied by the District to the cost of construction of certab for 1980. 52,489,000 for 1979 and $2,115,000 for 1978. additions to the Distnct's bulk transmission system.

27 l - . - - _ . . . _ . - .

Supplementary information To Disclose The Effects Of Changing Prices (Unaudited)

The following supplementary information is supplied in accordance with the requirements of FASB Statement No. 33, " Financial Reporting and Changing Prices", for the purpose of providing certain information about the effects of changing prices. It should be viewed as an estimate of the approximate effect of inflation, rather than as a precise measure.

Constant dollar amounts represent historical costs stated in terms of dollars of equal purchasing power, as measured by the Consumer Price Index for All Urban Consumers (CPI-U). Current cost amounts reflut the changes in specific prices of plant from the date the plant was a,.,uired to the present, and differ from constant dollar amounts to the extent that specific Aes have increased more or less rapidly than prices in general.

The current cost of property, plant, and equipment, represents the estimated cost of replacing existing plant assets and was determined by indexing the surviving plant by the Pandy-Whitman index of Public Utility Construction Costs. The current year's provision for depreciation on the constant dollar and current cost amounts of property, plant, and equipment was determined by applying the District's depreciation rates to the indexed plant amounts.

Fuel inventoriet and the cost of fuel used in production have not been restated from their historical cost in nominal dollars. Wholesale power contracts limit the recovery of fuel costs through the operation of adjustment clauses or adjustments in basic rate schedules te actual costs. For this reason, fuel inventories are effectively monetary assets.

Charnes to the District's customers are based on historical cost. Consequently, '

the excess of the cost of plant stated in terms of constant dollars or current cost over the historical cost of pl >nt is reflected as a reduction to net recoverable cost.

To properly reflect the economics of historical cost rate methodology in the Statement of Revenues and Ecoenses, the reduction of net property, plant, and equipment should be offset by ti.e gain from the decline in purchasing power of net amounts owed. During a period oi inflation, holders of monetary assets suffer a loss of general purchasing power while holders of monetary liabilities experience a gain.

The gain from the decline in purchasing power of net amounts owed is primarily attributable to the substantial amount of debt which has been used to finance property, plant, and equipment. Since the District is limited to the recovery of historical costs, the District does not realize a holding gain on debt. The benefit of any holding gain on debt accrues to the customers.

28

Nebraska Public Power District ELECTRIC SYSTEM corntant current contentional Doliar cost Historic al Average Aberanc Statement of Revenues and Expenses Adjusted for co t i9eo tu,it,. 1980 u.,iin.

Changion Prices for the Year Ended December 31,1980 nhousand of pollar >

Operating Revenues .... .. . .. .. .. . . ...... . .$241,712 $241,712 $241.712 Purc hased Power . . . . . . . . . . . . . . . . . . . . . .. ..... ... . .$155,822 $155,822 $155,822 Fuel Used in Production . . . . . . . .. ..... ... . . 23,611 23,611 23,611 Amortization of lease-Operated Plant ..... ...... . . 4,323 4,323 4,321 Depreciation Expense .. ... .... .... .. . . . ... ... 11,633 17,653 18,939 Other Operating and Maintenance Expense .. . .. .. . . . 54,554 54,554 54,554 Other Deductions .. . .. ... .. ..... ... . . .. 27,620 27,620 27,620 Interest and Other Resenues .. . ... . .. .. . . (25.695) (25,695) (25.695)

$251,868 $257.888 $259.194 Net Revenues (Expenses) from Continuing Operations (Excluding Reduction to Net Recoverable Cost) .. . . . .5 (10,156) $ (16,176)* $ (17,482)

Increase in Specific Prices (Current Cost) of Preperty, Plant, and Equipment Held During the Year" . . .. .. .. 5 44,818 Reduction to Net Recoverable Cost . . . . . .

$ (18,381) (14.693)

Effect of increase in General Price Level . . . . . . .. .

(47,200i Excess of increase in General Price Level Over increase in Specific Prices After Reduction to Net Recoverable Cost .

$ (17,075)

Gain from Decline in Purchasing Power of Net Amounts Owed . . 25,480 25,480 Net . .. . . .. . . . . . . .. .. .. $ 7.099 $ 8.401

• Including the reduction to net recoverable cost, the net revenues (expenses) from continuing operations on a constant dollar basis would have twen $(34,557) for 1980.

"At December 31,1980, current cost of property, plant, and equipment, excluding construction work in progress, net of accumulated depreciation, was $441,130, w hile historical c ost or net (ost recoverable through depreciation was $218,362.

• r ive Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices 4

tears Ended December 31, 19?fi 1977 1978 1979 1980 _

dn thousands of Ascrage 1980 Dollar 4 Operating Revenues . $217,646 $216.381 $251,571 $255.044 $241.712 Historical Cost Infarmation Adjusted for Genera! Inflation:

Net Revenue (Espenses) from Continuing Operations (Euluding ; eductin to Net Recoverable Cosu . $ 6.626 $ (16.176)

Net Assets at iear-end d Net Recoverable Cost $130.577 $106.474 Current Cost Information:

Net Revenues (E spenses) from Continuing Operations (Euluding Reduction to Net Recoverable Cosu . $ 5.1 to $ (17.482)

Excess of increase in General Price Level Oser increase in Specific Prices After Reduction to Net

$ 19,6 58 $ 17.075 Recoserable Cost

$110.577 $ 106.474 Net Assets at Year-end at Net Recoverable Cost General Information:

Gain from Daline ,, Purchasing Power of Net Amounts Omss $ 27.272 $ 23.480 Average Conwmer Pnce indes . 170.5 181.5 195.4 217.4 24fr8 29

Nebraska Public Power District POWER SUPPLY SYSTEM Report of Independent Public Accountants To the Board of Directors of Nebraska Public Power District:

We have examined the speciabpurpose statements of assets and liabilities of the POWER SUPPLY SYSTEM of NEBRASKA PUBLIC POWER DISTRICT (a public corporation and political subdivision of the State of Nebraska) as of December 31, 1980 and 1979, and the related sp?cial purpose statements of revenues and costs for each of the three years in the period endW December 31,1980. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

The accompanying special-purpose financial statements have been prepared for the purpose of complying with, and on the basis of, accounting requirements specified in the Power Supply System Revenue Bond Resolbtion adopted by the District on September 29,1972, as supplemented, securing the revenue bonds issued thereunder. As described in Note 1(B), these requirements differ from generally accepted accounting principles. Accordingly, the financial statements are not intended to present and, in our opinion, do not present the financial position and results of operations of the Power Supply System of Nebraska Public Power Dis;rict in conformity with generally accepted accounting principles.

In our opinion, however, the special-purpose financial statements of the Power Supply System of Nebraska Public Power District referred to above are presented fairly pursuant to the requirements of the Power Supply System Revenue Bond Resolution described in Note 1(B), applied on a consistent basis.

Arthur Andersen & Co.

Omaha, Nebraska, March 10,1981.

30

Nebraska Public Power District POWER SUPPLY SYSTEM Statements of Assets and Liabilities December 31,1980 and 1979 Prepared Pursuant to Requirements of the Power Supply System Revenue Bond Resolution ASSETS nhouund of oonw

. . . $ 410,971 $409,320 Utility Plant in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,549 9,719 Less - Reserve for depreciation (Note 1) . . . . . .... .... ... . . .. ......

$ 401,252 $404,771 Construction Work in Progress (Note 2) ...... . ......... .. ... .... . . $ 260,800 $207.406 Special Funds:

Debt service - 25,195 5 54,601 Debt service account . . . . . . . . . . . 56,295 57,908 Debt reserve account . . . . . . ............ ............... ...........

2,016 4,879 Reserve and contingency fund . . . . . . . ... ...... .... .. .... . ... ...

162,681 186,237 Con st ru ct ion fu nd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Development Notes - 1980 Series -

53,263 -

Development fund ... .. ... ....... . .... ..... ... .. ......

... ... . 9,900 -

Interest fund . . .. ..... . .. .. . . ....

38,258 35,615 Power note fund .. .. ..

2,468

.. . ... ... 2,149 Revenue fund . , .. ...... .... .... . .. .. . ....

1,016 1,264 Operating fund ... ...... .. . . . ..... ....... .... ... .

$ 349,743 $344,002

...............$ 2,045 5 -._

Accounts Receivable, insurance claim (Note 5). . . ...

...$ 4,098 $ 29 Accounts Receivable, primarily from Electric System . . . . . . . . . . .

.....$ 8,562 $ 6,149 Interest Peceivable . .. ... . .. . .. ....... . ..... ... .. .

...............$ 10,446 $ 12,509 Fuel l'nvertory, at average cost . ... . .... ... ....

... .... $ 983 $ 672 Frepaymend and Other Assets . .. ... ... . ..... . .

$1,037,929 $975_.538 LIABILITIES Revenue Bonds (Note 2):

Sedal Bonds - $ 48,830 4.0005.60% , due 1980 to 1985 . . . . . . . . . . . . . . . . . . . . . . . .$ 43,660

... .. .. 66,780 66,780 4.909-6.00% , due 1986 to 1990. . .. .........

87,775 87,775 5.5006.40% , due 1991 to 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . ..

74,050 74.050 5.7006.60% , due 1996 to 2001. . ...... .. ...... ... ..... ..

Term Bonds, with annual sinking fund requirements -

168,930 168,930 5.80'7., due 1998 to 2012 . . . . . . . .. . ... . ...... . .. .. .

239,635 239,635 6.13% , due 1999 to 2016 . . . . . . . . . . .. ... ...... . ...... ...

23,025 23,025 6.754, due 1999 to 2001. . . . . .. .... . . ... ... . . ... . .

75,345 75,345 6.909, due 2002 to 2008 . . . . . . . . . . ..... .... .. ...... .. .. .

129,005 129,005 7.10% , due 2009 to 2016 . . . . . . . .. ... ... ... ... ..

$ 908,205 $913,375

.. .. . . 80,000 -

Development Notes,8.25%, due 1982. . . .. . .. .

35,500 45,000 Power Note,66%% of prime, due 1981. . .. ...... .... . . .. . . ...

660 1,640 Accrued Interest .... .. .... ... ...

8,814 13,948 Accounts Payable and Other Accrued Liabilities . . .

l Openting Reserves (Note 1)- 2,452 1,433 Renewals and Replacement . . . . . .

1,318 1,122 Coal Car Maintenance . . .. . .. .

$975,538

$1,037,929 The accompanying notes to financial statements are an integral part of these statements. 3g

Nebraska PubliC Power District POWER SUPPLY SYSTEM Statements of Revenues and Costs for each of the Three Years in the Period Ended December 31,1980 Prepared Pursuant to Requi ements of the Power Supply System Revenue Bond Resolut*Nm isso is7, 197s (Thoutaruls of Dollars)

Revenues (Notes 1 and O.

Sales to the Electric System . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 58,467 $ 40,835 $ 2,836 investment and other income (Note 5) . .. .... ........ .... . 5,691 4,148 237 Total revenues . . . . . . . . . . ..... .... . . .$ 64,158 $ 44,983 $ 3,073 Costs:

Operating expenses -

Production -

Fuel... ... . .... . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 2 1,3 9 2 $ 13,092 $ 1,673 Operation and maintenance . .... .. .. .. .... 8,068 5,041 282 Insurance . . . . . . . . ........ . .. .... ........ .. 989 800 98 Provisions for operating reserves (Note 1) . .. .... .. .. . 695 540 75 General and administrative . . . . . .. .. . . .. ..... . 1,212 579 35

$ 32,356 $ 20,052 $ 2,163 Debt service (Note 1)-

Principal . . . . . . . . . .. .............. .. ... .... 5,170 4,550 -

Interest . . . . . . ........... . ... ... . . . .. .. . 26,632 20,381 910 Total costs . . . . . . . . . .. . .... . . . . . . .$ 64,158 g $ 3,073 The accompanying entes to financial statements are an integral part of these statements.

Nebraska PubliC Power District POWER SUPPLY SYSTEM As required by Bond Resolutions separate records are maintained for each division. The Power Supply System Notes to Financial Statements financial statements exclude the Electric System and Nu(! ear (1)

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES:

Facility, for which financial statements are presented wpa-rately herein. The Power Supply System financial statements A. Organization - shou!d be read in conjunction with such other financial The District has three separate divisions for accounting statements.

purposes as follows:

Electric System B. Basis of Accounting -

Nuclear Facihty Revenues are recognized and billai at an arnount mual to Power Supply System costs as defined by the Power Supply System Revenue Bond 32

Resolution tPower Supply Resolution) which include operating The District estimates that Gcrald Gentleman Station Unit expenses (excluding depreciation), and debt service on the No. 2, a 650 MW (oal fired generating unit will be completed revenue bonds, less insestment income. Revenues are com- in late 1981. The original estimated costs of $354,000,000 puted and billal so that no equity is accumulated in the Power include initial fuel inventory and working capital, but ex-Supply System. clude interest during construction, financing expenses, and

. reserve funds. Indications are that the actual costs will be Costs as defined by the Power Supply Resolution differ in substantially less. The total costs of the plant, as originally the following respects from eenerally accep'ed accounting estimated, have been financal by the issuance of Revenue principles: Bonds.

(1) Amortization of the debt principal is inc!ud(d as a in June,1980, the Board of Directors of the District cost in the accompanying Statements of Revenues and authorized the execution of a Letter of Intent between Man-Costs as Debt service Principal. itoba Hydro Electric Board of Winnipeg. Manitoba, Canada, Depreciation is not recorded as a cost. Had the and the District relating to the construction and placing in District provided straight-line depreciation over a 40-year service in the late 1980's of transmission facilities to intercort-life rather than including amortization of debt principal nect Manitoba Hydro and the District for, among other things, over the same period, costs would base increased the seasonal exchange of power and associated energy. The

$5,100.000 in 1980, $3,200,000 in 1979 and $370,000 Letter of Intent contemplates the development of definitive in 1978. Accumulated depreciation through December contracts.

31, 1980, would have increased costs approximately in February,1981, the Board of Directors dnided to

$ 10,300,000. The reserve for depreciation shown on the proccal first with the interconnection with Manitoba Hydro Statements of Assets and Liabilities was providal by and ta dder fossil Unit 3, a 650 MW coal-fired generating recording amounts equal to repayment of debt. plant, previously having an estimated in-service date of 1987.

(2) Billings to provide working capital for renewals Substantially all of the preliminary costs incurred to date, and replacements of property are included in the accom- associated with these and other studies, hase been funded by panying Statements of Revenues and Costs as " Provisions the issuance of $80 million of Development Notes Ae in for operating reserves /' Under generally accepte 4 ar. 1982. Such borrowings are expected to be repaid from (ounting pnnciples, prosisions for renewals and replace- proceals of future Revenue Bond issues.

ments are not expenses but renewals and replacements of (3) LITIGATION:

property (exclusive of minor items of property) are On February 15,1980, the L : strict filai suit to recover charged to utility plant accounts.

amounts totaling in euess of $30 million from various J Interest income on construction fund investments c ntractors. The suit alleges damages from delays, cost over-for Gerald Gentleman Station Unit No. I is capitalized runs, and other damages and expenses associated with the although commercial operation began in April,1979.

Such income would be included in income of the period construction of Gerald Gentleman Station Unit N'x 1. The general contractor, National Industrial Constructors, Inc.,

under generally accepted accounting principles. (NIC), counter-daimed against the District to recover amounts (4) Charges for Power Supply System services are totaling in excess of $32 million as a result, among other based on cost and facihties are financed with debt things, of the alleged failure of the District to effectively co-securities. Therefore, there are no significant unrecordai ordinate and administer the construction of Unit No.1. The costs of intiation in the financial statements. parties are currently engaged in discovery proceedings.

The suit filed by NIC against the District in District Court C. Utility Plant - of Lancaster County, Nebrask.1, has been stayed, pending the Amounts borrowed for interest eg. nse, less interest outcome of the suit described in the precuiing paragraph.

earned on investment securities, all financing costs and all (4) OPERATIONS:

other costs related to construction projects are capitalized.

In early December,1979, Gerald Gentleman Station Unit No. I was taken out of service for eight weeks due to excessise D. Special funds - vibration in the turbine generator. Temporary repairs were Special funds consist of $346'140 000 of investment made and the unit was retumed to service m late January, securities and $3,603.000 of cash as of ecember 31,1980, 1980, at approximately 95% of its rated capacity. In Sep-and $339,942,000 of investment securities and $4,060,000 of tember,1980, permanent repa:rs were made, under warranty, cash at December 31, 1979- by the manufacturer during an extended regularly schedulai investments are made in U.S. Government securities, maintenance outage.

Federal Agency obligations, and bank certificates of deposit. (5) INSURANCE CLAIM:

The Debt Reserve Account in the Debt Service Fund and the As a result of the December,1979, outage discussed in Reserve Account in the Reserve and Contingency Fund are Note (4) above, the District filed a claim against an insurance valued semi-annually at January 1 and July 1 at the lower of carrier for additional expense associated with the outage. The cost or market in acNdance with requirements of the Power claim is being contested and legal action is pending. The Dis-Supply Resolution. A, a result of such valuation, the carrying trict recorded a $2.045,000 claim receivable and reduced value of the securities decreased $3,941,000 on January 1, billings to the Electric System by the same amount in 1980.

1921. Gains or losses on valuations are included in investment income. The securities in the remaining funds are valued at the (6) RATE COVENANT:

lower of cost or principal amount in accordance with require. The District is required under the Power Supply Resolu-ments of the Power Supply Re<.olutior,. tion to charge rates for electric power and energy from the Power Supply System so that revenues will be at lea <.t sufficient (2) CONSTRUCTION AND FINANCING: to pay operating expenses, aggregate debt service on the The District formed the Power Supply System in 1972 to Power Supply System Revenue Bonds, amounts to be paid into finance, construct, and operate additional power generation, the Debt Reserve Account and Rewrve and Contingency Fund, transmission and relatni facilities. The entire output of the and all other liens payable out ar resenues of the Power Supply Power Supply System is sold to the Electric System. System.

33

Nebraska Public Power District NUCLEAR FACILITY Report of In&pcr. dent Public Accountants To the Board of Directors of

- Nebraska Public Power District:

We have examined the special-purpose statements of assets and liabilities of the NUCLEAR FACILITY of NEBRASKA PUBLIC POWER DISTRICT (a public corporation and political subdivision of the State of Nebraska) as of December 31,1980 and 1979, and the related special-purpose statements of revenues and costs (or each of the three years in the period ended December 31,1980. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

The accompanying special-purpose financial statements han been prepared for the purpose of complying with, and on the basis of, accounting rquirements specified in the Nuclear Facility Revenue Bond Resolution adopted by the District on August 22,1968, as supplemented, securing the revenue bonds issued thereunder.

As described in Note 1(B). these requirements differ from generally accepted accounting principles. Accordingly, the financial statements are not intended to present ard, in our opinion, do not present the financial position and results of operations of the Nuclear Facility of Nebraska Public Power District in conformity with generally accepted accounting principles.

In our opinion, however, the s,rrial-purpose financial statements of the Nuclear Facility of Nebraska Public Power District referred to above are presented fairly pursuant to the requirements of the Nuclear Facility Revenue Bond Resolution described in Note 1(B), applied on a consistent basis.

Arthur Andersen & Co.

Omaha, Nebraska, March 10,1981.

l-1 34

. . _ . _.. . _ . L _ . _ . _ .

Nebraska Public Power District NUCLEAR FACILITY Statements of A3 sets and Liabilities December 31,1980 and 1979 Prepared Pursuant to Requirements of the Nuclear Facihty Revenue Bond Resolution ASSETS "" ""

ohouw k at con =>

Utility Plant in Service . . .......... .. ... ..... . . . . . . . . . . . . . . . . $ 3 84,5 6 9 $384,570 Less - Reserve for depreciation (Note 1) . . . . .... .... ...... .. 46,227 37,082

$338,342 $347,488 Construction Work in Progress .. .... .. . .. . . . . . . . . . . . . . .$ 2 2,4 75 5 13,922 Nuclear Fuel- Net of Amortization (Notes 1 and 2) . ... .. .... . . .$ 96,557 $100,787 Special Funds:

Debt reserve account . ... . .. . ..... . . .. . .. . . . .$ 26,249 $ 26,251 Reserve and contingency fund . . . ... ... .. . . 4,617 5,973 Construction fund . . . . . . . . . . .. .. ..... .. . 297 8,259 Fuel reserve account . . .... ... .. . . . . ... . . .. 4,161 1,883 Operating fund ... . .. . . .. . .. .. .. .. .. 1,235 756 Revenue fund . . . . .. . .. ... . .. ....... .. .. ... . . . . 931 619

$ 37,490 $ 43,741 Accounts Receivable . . . . . . . . . .. . .. . . .. ... .. .. ..... . .$ 3,665 $ 2,875 Interest Receivable . . .... . . .. .. .. .. . ... ..........$ 324 $ 582 Prepayments and Other Assets .. . . . . .... ...... . .. . .$ 864 $ 501

$499,717 {509,896 LIABILITIES Revenue Bonds:

Serial Bonds -

4.55%-7.13%, due 1980 . . .. .. .. ...... . ...... . . .$ - $ 9,145 4.55%-7.20%, due 1981 to 1985. . . ... . . . . ... . .. . 52,980 52,980 4.80%-7.20%, due 1986 to 1990. . . .. .. .. ...... 45,685 45,685 6.00%-7.30%, due 1W to 1995 . . . ....... ... ...... .... .... 18,780 18,780 7.38%, due 1996 to 2003 . .. . . .... ... ... .. ... . 11,745 11,745 Term Bonds, wi1 annual sinking fund requirements-5.10%, due 1987 to 2002 . .... ... ........ .... . . 155,000 155,000 6.30%, due 1993 to 2003 . . ..... . .. .. .. . . ..... 68,430 68,430 6.60%, due 1992 to 2003 . .. ... ..... ..... ........ . . 67,200 67,200

$419,820 $428,965 Accounts Payable and Other Accrued Liabilities . .. .. ..... .. . .. 1,870 3,465 Operating Reserves (Note 1) .. . . ....... . ..... 78,027 77,466

$499,717 $509,896 The accompanying notes to financial '.tatements :.e an integral part of these statements.

35

Nebraska Public Power District NUCLEAR FACILITY Statements of Revenues and Costs for each of the Three Years in the Period Ended December 31,1980 Prepared Pursuant to Requirements of the 1979 t,7s Nuclear Facility Revenue Bond Resolution 1***

tmuund. a owino Revenues (Notes I and 4):

Sales -

Electric System . . . . . . . .. . . .. .. . . . . . . . . . . . . . $ 3 8,4 70 $ 53,946 $ 27,502 lowa Power and Light Company . . . . . . .. . ... . . 38,480 53,948 27,509 inves' ment income .. ...... .... .... ... ..... . .. 4,608 4,374 3,287 Total revenues . .... ..... ... .. . . . . .$ 81,558 $112,268 $ 58,298 Costs:

Operating expenses -

Production -

Fuel ... . .. .. .... . .... .. . . ... .... . .$ 16,891 $ 14,467 $ 10,365 Operation and maintenance . .. ... ... .. . .. .. 16,222 9,454 7,938 Insurance . . . . . . . . . .. . .. ... . . . ... . . 2,281 1,563 1,361 Provisions for operating reserves (Note 1) . .... . .... .. 8,352 51,375 3,767 Technical and administrative . . . . . .. . .. .. .. 4,173 1,792 1,250

$ 47,919 $ 78,651 5 24,681 Debt service (Note 1)-

Principal . ... .. . . .. . ..... . ... 9,145 8,730 8,335 Interest . . . .. . .. . . .. 24,494 24,887 25,2 B2 Total costs .. . ... .. . ... . . . .$ 81,558 $112,268 5 58,298 The accompanying notes to financial statements are an integral part of these statements.

Nebraska Public Power District penses (excluding depreciation), and debt service on the

'"""' b '""*"'**"'i"'""""""""''"'"-

NUCLEAR FACILITY puted and "d billed so that no equity is accumulated m the Nuclear Facility.

Costs as defined Ly the Nuclear Resolution differ in the following respects from generally accept (d accounting princi-ples:

(1) Amortization of thedebt principalis included as a Notes to Financial Statements cost in the accompanying Statements of Revences and Costs as " Debt service-Principal."

(1)

SUMMARY

OF SIGNIFICANT ACCOUNTING POUCIES: Depreciation is not recorded as a cost. Had the A. Organization - District provided straight-line depreciation over a 30-year The District has three separate divisions for account:ng life rather than including amortization of debt principal purposes as follows: over the same period, costs would .have increased Electric System $3,700.000 for 1980, $4,100,000 for 1979 and Nuclear Facility $4,100 000 for 1978. Accumulated depreciation through Power Supply System Dece .iber 31, 1980, would have increased costs ap-As required by Bond Resolutions, separate records are proximately $33,700,000. The reserve for depreciation maintain <d for each division. The Nuclear Facility financial shown on the Statements of Assets and Liabilities was statements exclude the Electric System and Power Supply provided by recording amounts equal to repayment of System, for which financial statements are presented separately debt.

herein. The Nuclear Facility financial statements should be (2) Billings to provide working capital for renewals read in conjunction with such other financial statements. and seplacements of property and nuclear fuel are in-

8. Basis of Accounting- ciuded in the accompanying Statements of Revenues and Revenues are recognized and billed at an amount equal to Costs as " Provisions for operating reserves." Under gen-costs as defined by the Nuclear Facility Revenue Bond erally accepted accounting principles, provisions for re-Resolution (Nuclear Resolution) which include operating ex- newals and replacements are not expenses but renewals 36

I and replacements of property (exclusise of minor items of The nuclear fuel supply contract with General Electric property) are charged to utility plant accounts. Provisions Company discussed in Note (2) provides for buyback and for working capital for nuclear fuel a e not expenses under removal of spent nuclear fuel supplied by General Electric generally accepted accounting principles until the fuel Company pursuant to such contract. General Electric Com-is used.

pany has failed to remove such spent nuclear fuel. In October,

0) Interest income on construction fund investments 1978, the District commenced litigation against General is capitalized although commercial operation began in Electric Company in connection with the failure to perform July,1974. Such income would be included in income of with respect to such contract. General Electric has filW an the period under generally accepted accounting princi- answer denying liability and counterclaiming for return of ples. payments allegedly made under a reservation of rights. The I,

(4) Charges for Nuclear Facility services are based on District has filed a reply to the counterclaim denying liability.

ccst and facilities are financed with debt securities. The parties are currently engaged in discovery proceedings.

Therefore, there are no significant unrecorded costs of (4) RATES:

) inflation in the financial statements.

The District is required under the Nuclear Resolution to

! C. NucIcar fuel- charge rates for electric power and energy from the Nuclear

, Nuclear fuel in the reactor is being amortized on the basis Facility so that revenues will be at least sufficient to pay operating expenses, aggregate debt service on the Nuclear of energy produced as a percentage of total energy expected to be produced. Facility Revenue Bonds, amounts to be paid into the Debt Reserve Account and Reserve and Contingency Fund, and all D. Special funds -

(h r charges or liens payable out of revenues of the Nuclear

,, Special funds consist of $35,403,000 of insestment secu.

nties and S2,087,000 of cash as of December 31,1980,and Under terms of a power sales contract with lowa Power

$43,116,000 of ins estment securities and $625,000 of cash at and Light Company (lowa Power), the District will make i December 31,1979. available one-half of the production to lowa Power with the balance available to the District's Electric System. Iowa Power Investments are made in U.S. Government securities, and the District's Electric System each pay a proportionate Federal Agency obligations, and bank certificates of deposit. share of the nuclear fuel costs (based on energy actually The Debt Reserve Account in the Debt Senice Fund and the delivered) plus one-half of all other costs of the facihty.

Reserve Account in the Reserve and Contingency Fund are salued semi-annually at January 1 and July 1 at the lower of The District has also agreed to make available, through its cost or market in accordance with requirements of the Nuclear Electric System,12%9 of the output of the Cooper Nuclear Station to the City of Lincoln.

Resolution. As a result of such valuation, the carrying value of the securities decreased $805,000 on January 1,1981. Gains (5) PLANT DECOMMISSIONING COSTS:

or losses on valuations are included in investment income.

The securities i, the remaining funds are valued at the lower The funds for decommissioning are anticipated to be provided by the reserve fends accumulated in connection with of cost or p'ncipal amount in accordance with requirements of the Nuclear Resolution. the operation of the Nuclear Facility. These resen e funds, plus any other excess funds including funds received from the sale (2) NUCLEAR FUEL: of equipment and supplies, will be available for payment of decommissioning costs. As a result of changing conditions and The District has entered into contracts for various serv!ce requirements for decommissioning, the District intends to components for fuel loadings as follows:

continue resiewing decommissioning costs and funding re-quirements in the future, service 5ersi< e Provided

""""" (6) OPERATIONS:

in March,1980, during the scheduled refueling outage of Uranium 1983 (Estimated) Cooper Nuclear Station, cracks were discovered 5 certain Conversion 1988 discs of the two low pressuie rotors of the main turbine-Enrichment 2007 generator. Temporary modificatiora were made to the rotors Fabrication 1988 and the plant returned to service on June 4, 1980, at The District has expanded its capacity for storage of spent approximately 80% of its rated capacity. New replacement i rotors at a cost of approximately $13.5 million are on order fuel and it is estimated that such capacity will be adequate for j and are to be delivered during the summer of 1981. The plant

. storage of spent fuel through 1990. Due to General Electric is scheduled to be shut down April 26,1981, for a four-week j . Company's failure to perform with respect to buyback and refueling outage and again September 15, 1981, for seven removal of fuel provided under the nuclear fuel supply weeks to install the new rotors and complete certain modifica-contract, and the related litigation, as discussed in Note (3) tions required by the Nuclear Regulatory Commission. The aelow, the District is providing for the cost of disposal of said District is also planning to have the damaged rotors repaired fuel as part of :he fuel cost of the Nuclear Facility.

during 1982 for use as spare parts at a cost of approximately

$10.5 million.

O) LITIGATION:

In September,1975, the District filed sGt in the United (7) CONSTRUCTION AND FINANCE:

i - States District Co.,rt for the District of Nebraska to recoser As a result of certain additions and modifications to amounts totaling $150 million, plus additional amounts to be Cooper Nuclear Station (CNS) required by the Nuclear Reg-determined by the Court, from various contractors. The suit ulatory Commission, it is estimated that the cost of completing concerns damages and expenses associated with the design, CNS will be increased approximately $33 million over pre-construction and operation of Cooper Nuclear Station. Certain vious cost estimates. The District intends to finance suc h re-counterciaims base been filed seeking approximately quirements from the issuance of short-term notes and from i

$8.763.000 and litigation expenses. The parties are currently other asailable funds. The notes would be repaid with pro- i engaged in discovery proceedings. ceeds of future Revenue Bond issues. '

1 37

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STATISTICAL REVIEW Nebraska Public Power District Electric System, Nuclear Facility, and Pom AberJge Numbe r of Resenue

( ustomers kwH sales 4 f rom bles '4 (Thouu mfo trhouw mfo SALES Retail:

80.579 693,757 8.3 5 32.068 11.3 Residential 5,849 91.621 1.1 4,477 1.9 Rur:! A Farm 96 17,844 523,288 6.3 23.116 Commercial 108 732,217 8.8 21,164 8.9 Industrial 3.078 141.901 1.7 5,326 2.1 Muniopal A fuletal 107,438 2,182,786 26.2 5 86.971 16.0 Total Retait Wholesale:

1,127,541 13.6 5 12.322 1L4 56 Muni(ipalities iTotal Requirements) 644,471 7.7 7.290 3.0 City of Lin(oln iPartial Requirements) 199,192 2.4 4.131 1.8 18 Muni(ipahties alnter(onne(tion - Partial Requirement 4 3.150,782 37.9 84,264 14 8 26 Publi< Power Distri(ts & Cooperatives (Total Requirements)

(lther Utilities - Non. firm & Participation 1.015.856 12.2 2 2.6~ 8 94 6.137.848 73.8 _5110.881 62 4 Total Whelesale 8.120.634 100.0 5237.836 48.4 Total Ele (tn( Resenues. =~

1.816  !.6 Other Operating Revenues .

Total llet tri( 5ptem Operating Resenues . _5241_.712 y(13.jj Prmlut thm kwn 9 (oe ',

GENERATION (thouwmii ithouw mfu Produc tion:

Elet tric System . 798.527 9.6 5 10.576 Ii.2 Purthased Power m: 29.0 Poner Supph 5ptem 2.1I 5.57i 27.8 5 58.46-'

1,892,619 22.8 37,588 18.7 Nuclear Fatihts 17,1 1.115.891 59.8 74.861 Other 7.522.107 90.4 5170.916 84 8 Total Part hased Power .

8.420.614 100.0 5201.492 10n 0 Total An H sold - Ele (tri( 5ptem = -- - -

(1) The ilet tri< Sntem purc hases 109'4 of the net generation of the Power Supph 5ptem and 509 of the net generation of the Nutlear f a(ihty baul upon the total (osts of the re pet tise wstems. Pursuant to the Power Sales Contratt, lowa Power and iight Company purchael 1,895.414.000 KWHs. Iowa Power and Light padi(ipation is not includof in the table.

Cents / A% H 2.7% 12.6 D i l

2.1% u,ny-Total Operating hpenses Per KWH Sold itnt lueles Purt hasnt ther and Proclut tion) / (.39) itu lusles irngation anel Noot ash licmq 2.3 %

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Purchased Power & Production Only = = = = - - = = - . g i

All Other Operating E spenses c - 0.s g 37'

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i,33 11.ill _8Q# .J um The inflationars spiral is really quite esicient in this .y bm graph. Sin (e 1972 our operating expenses per KWil ,

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over 2114, while the remaining operating expenses 0.7% J 4' hase gone up onh IW; in (omparison.

o.51 ? ,

77 78 79 80

• 71 74 71 76 4()

SuppIy 5ystem Year Lnded Dec ember 3 I.1(18u 1980 19 9 in< reau GEN 1RAL '""*'""'""H""

Utility Plant (at (osth

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nut ItNir I at illts 4!)I t l44 l'f 8 4'f j X >>

Tolai l'hhts Plant $ l ih8 'h4 il an' 8 4 5 51 t n i o i Number of At i reshlett Planh ( apabibh + ku .

Production Plant Fa(ilities:

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• i li Peakmg Turbmc 1 149 . i i

}(ila! Pr(HIUt tid ln Plant k at tlltit's 54 2 2 li 'l $1

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wies of T ransnus ,n in t me in sersn e o UH Personnel:

Number of Permanent I mplos ecs 2 09,

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