ML20023B787

Annual Financial Rept 1982

ML20023B787
Person / Time
Site:	Cooper
Issue date:	05/03/1983
From:	Herrington F, Hill D, Kosman H NEBRASKA PUBLIC POWER DISTRICT
To:
Shared Package
ML20023B785	List: ML20023B784 ML20023B787
References
NUDOCS 8305060383
Download: ML20023B787 (43)

Text

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1982 I

nnualRooort Nebraska Public Power District l

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1

i Nebraska Public Power District Statement of Purpose

The Nebraska Public Power District is a public corporation and political l 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 chartered territory. These districts encompass 8S of the state's 93 counties and portions of two other counties. The District has the power, among other things, to acquire, construct, and operate generating plants, transmission lines, substations, and distribution 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 the District is accomplished with a staff of approximately l 2,000 persons.

OFFICERS Henry D. Kosman, President Durwood W. Hill, General Manager Fred A. Herrington, First Vice President Theodore M. Kyster, Assistant Treasurer Ralph J. Lubeck, Second Vice President Robert D. Malmstrom, Controller Leslie S. Taylor, Secretary Janet H. McQuistan, Assistant Secretary Ralph E. Holzfaster, Treasurer l 1

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Bernard M. Delay Alvie E. Payne George H. Barber' Norfolk, Banker Kearney, Businessman Beatrice Electrical Contra The Nebraska Public Power District's BOARD OF DIRECTORS Newly Elected Board Members in November,1982, two new members were elected to the Board of Directors.

Bruce W. Gustafson of Holdrege, a farmer-

- - T rancher, was elected to replace Ralph J.

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• Lubeck of Stamford Thomas O. Michels of

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Kearney, a professional engineer, was electec to replace Alvie E. Payne of Kearney. Both w new terms began in January,1983.

Bruce W. Gustafson Thomas O. Michels l

In Memoriam -

Jules W. Burbach of Hartington, a grain elevator owner-operator, began serving on the NPPD Board of

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Directors in January,1979. He died February 27,1982. Mr.

Burbach was a former speaker of the Nebraska Legislature, director of the State Fair Board and the Nebraska Water y g k_. -

Resources Association, and also a director of several p*,

l agricultural and civic groups. Nebraska Governor Charles Thone appointed Wayne E. Boyd, an attorney from South Sioux City, to complete Burbach's term.

Jules W. Burbach 2

Reference Guide Officers and S ta t e of Pu rpose . ... . . . . . . .. . .. . . . .. .. . ... . . . . . . . .. .. . . . . . .. . . . .. . ... Page 1 Boa rd of Directors .. ............... ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pa ges 2 -3 Message from the Board of Directors .............. .. .......... ........... Pages 4-5 Message from the General Manager ...... ................................ ... Pages 6-7 New General Manager ....... .. ........ ......................................Page8 198 2 i n R e view. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pa ges 9- 19 Financial Commeniary...... .. . ....... . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pa ge 2 0 Fina ncial Repo rt . . . . . .. .. . .. . . . . . . . .. . . . . . . . .... .......... . .. ........ Pages 21-37 Ma p o f S y s t em . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pages 3 8-3 9 5tatisticaI Review ...... . .. , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pa ges 4 0 -4 1 1

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Message from the Board of Directors Despite the sagging economy and low farm prices that prevailed during 1982, Nebraska Public Power District experienced a successful year.

Both electric sales and revenue showed increases from the preceding year and the District remains in a healthy financial situation.

During the year, the District,in conjunction with its financial advisor, completed a restructuring of an escrow agreement as well as purchasing outstanding bonds which saved the ratepayers nearly $3 million. The District called for and received tenders for $56.3 million of the 1976 Series A Power Supply System Revenue Bonds. Of the tenders received, $41.5 million were accepted and later delivered to the District. The savings results because the District was able to purchase the bonds at a discounted price and was able to purchase certain United States Treasury Securities which, together with interest income, generates cash surpluses of $2.9 million over the next ten years, over and above the amounts required to pay interest and principal.

In August, this Board approved an interim financing plan to pay for the construction costs of the Kingsley Hydroelectric Project. The 50,000 kilowatt facility is being built by the Central Nebraska Public Power and Irrigation District; however, NPPD will purchase the electrical output of the facility for use by our customers.

The Central Nebraska Board approved the sale of $75 million variable rate demand notes that will be used to pay for the construction of the facility including interest expense. Interest rates on the notes will be established on a weekly basis over a three-year period. During that time, the two Boards will consider issuing long-term bonds to replace the short-term notes based on the trend in interest rates.

In an effort to maintain the District's solid financial condition, this Board enacted a rate increase in late 1981 that became effective in the early part of 1982. The wholesale rate affected 71 municipalities and 26 public power districts and rural cooperatives. The retail rate affected approximately 107,000 customers.

The first full year of debt service and operating requirements for the Gerald Gentleman Station Unit 2 near Sutherland was the major ingredient causing the higher rates for 1982.

A two-year wholesale rate plan was based on total revenue requirements of

$301.6 million in 1982 and $329.4 million in 1983. The 1962 retail rate was established to raise approximately $120.9 million for our retail division.

l late in 1982, we approved a retail rate increase for 1983.This increase was, on the average, the smallest since 1974. The 1983 rate is based on retail revenue requirements of $126.1 million. We were also able to slightly reduce the wholesale rate increase for 1983 because the deficit from the 1980-81 rate period was not as large as had been originally estimated.

We also approved a new rate schedule for Nebraska entities receiving power from the Western Area Power Administration (WAPA) over our transmission lines.

The new rate, which is the first increase for the" wheeling" customers since 1954, 4

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reflects higher costs for building and maintaining lines and dispatching the flow of electricity over the lines.

There was encouraging news concerning fuel costs during the year. In August, this Board approved credits on the District's electric billings due to an excessive accumulation of money as a result of Production Cost Adjustment (PCA) account billings. The PCA credit was intended to refund $4.9 million to electric customers by June,1983. As a result, retail and wholesale customers' electric billings were reduced between one and two percent per month.

Excess collections from the PCA account again occurred at the end of the year and we were able to pass along an additional PCA credit to our customers to be effective during 1983. Lower than anticipated fuel costs used in the generation process and lower costs for certain other production items caused the excess collections in the PCA Fund.

Cost control and spending reductions are always a paramount consideration for this Board.

During the year, we approved a revised capital additions (construction) budget which represented an 18 percent reduction in planned construction for the District's electric system. The budget was revised downward from an original estimate of $22.2 million to $18.3 million.

Major reductions were in the areas of transmission and subtransmission lines.

Some projects in northeast Nebraska were delayed to 1983 because of the District's inability to complete the Hoskins to Raun, Iowa, 345,090 volt line due to litigation. One of the largest reductions, totaling nearly $2 million, was in the final cost of the 345,000 volt line between Axtell and Sweetwater in central Nebraska.

One of the most effective ways to reduce customer costs would be the improvement of our load factor. To help improve the system load factor, efforts to implement a systemwide load control program were accelerated during the year.

In addition, we approved funds in the budget for both 1982 and 1983 to encourage our customers to consider electric heat in their homes and businesses.

Nebraskans, similar to people in other parts of the nation, are faced with rapidly rising natural gas rates. Due to our ideal mix of generating fuels-including hydro-our winter rates can now place electric heat in a competitive position with natural gas.

None of us can predict the future, but we feel this utility is on a sound and progressive course to supply adequate electricity to our customers at the lowest practical cost through the decade.

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, w Message from the General Manager if history is to attach labels on a year-by-year basis for Nebraska Public Power District,1982 could well be remembered as an exciting and eventful year.

One of the highlights of the year certainly has to be the official dedication of our newest and largest power generating facility-the 1,300,000 kilowatt coal-fired i Gerald Gentleman Station near Sutherland. In his address at the dedication ceremony, Nebraska Governor Charles Thone summed up the thoughts of many of us when he said, " Eleven years ago there was an idea; now dreams of such an

' accomplishment have become a reality."

As we reported to you a year ago, Gentleman Station Unit 2 went into commercial operation January 1,1982, below budget. This accomplishment was particularly significant because the unit was being built during a period of rapidly rising inflation.

Having watched this plant grow from the first shovel of dirt back in 1973 to the dedication, no one could be prouder of this facility than I. Construction was not

, without its problems, but we worked through all of them and now have a power i

supply program second to none. As this utility continues to grow and expand, Gentleman Station will become a more valuable asset and we can continue to look ,

back with pride.

The turnout of nearly 4,000 people during the employee and public open house the day following the dedication far surpassed the expectations of any of us.

But certainly the year's excitement was not limited to Gentleman Station.

It was an eventful year at Cooper Nuclear Station, our 800,000 kilowatt nuclear facility on the banks of the Missouri River in southeast Nebraska. Although every event was not pleasant, we are able to report that it was a record-setting year for the facility. During the year, the plant generated a record 5,276,082,000 net kilowatt-hours, an increase of 5.6 percent over the previous high total set in 1979.

In August, the Nuclear Regulatory Commission (NRC) filed a Notice of Violation and Proposed imposition of Civil Penalty against the District, alleging violations involving the installation and operation of the Prompt Public Notification System for use in the event of an emergency, and charging" material false statements"were made by the District in regard to the installation and operability of the system.

Among sanctions proposed by the NRC were a $300,000 fine and a management 1 appraisal of the District's corporate functions which support Cooper Station 3 activities.

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Citing the excessive and unwarranted fine, our response requested the NRC to substantially reduce the civil penalties by giving proper consideration to the supportive facts we presented. A difference of opinion exists between the District and the NRC staff over interpretation of NRC regulations pertaining to the Prompt Public Notification System. We preserved our right to a hearing in the event the matter could not be resolved to the mutual satisfaction of both parties.Early in 1983, the NRC issued an order reducing the fine to $112,000.

In March,1983, the Board voted to pay the reduced fine as a matter of economics as opposed to an admission of guilt.

We made progress in our preliminary plans to transfer spent fuel rods from Cooper Station to the General Electric storage facility near Morris, Illinois, as was agreed upon in the interim settlement agreement of the nuclear fuel litigation with G.E.This subject, too, was not without controversy as several organizations and individuals focused their efforts on preventing these shipments of spent fuel.

Successful operation of Cooper Station was supported by two documents released during the year. The " Nuclear Power Safety Report 1981" released by the NRC listed the Station "above average" in nuclear power safety. A report released by the Institute of Nuclear Power Operations UNPO) revealed that the man-rem (rems per individual) exposure at the Station was 58.6 percent of the exposure average for all boiling water reactors nationwide.

The 500,000 voit MANDAN Project transmission line to Manitoba, Canada, continued to progress during the year.

The North Dakota Public Service Commission has approved both line corridor and route permits. Upon appeal, the North Dakota Supreme Court affirmed the order issuing the corridor permit in February,1983. The South Dakota Public Utilities Commission denied a route permit in January,1982, but was reversed on appeal by the Circuit Court for Hughes County in November,1982. The Circuit Court decision is on apneal to the South Dakota Supreme Court. In Nebra.;ka, a permit was granted by the Nebraska Power Review Board in March,1982. This decision is on appeal to the Nebraska Supreme Court.

By the end of 1982, work on the powerhouse for the 50,000 kilowatt Kingsley Hydroelectric Project was 57 percent completed and modifications to the downstream Keystone Dam, required to handle fluctuations of water level during releases for generation, were 86 percent completed. Construction of this facility remains ahead of schedule.

Finally, because of my announced intention tc retire as general manager of this utility at the end of 1982, the Board of Directors selected Don Schaufelberger to assume the leadership role effective January 1,1983. Mr. Schaufelberger had been serving as deputy general manager, and my many years of association with him results in my complete confidence in his ability to guide this progressive utility.

It is with a complete sense of pride and satisfaction in the many accomplishments we have achieved that I leave NPPD after 19 years. I am content in the knowledge that the utility is thriving and will continue to be a dominant force, due primarily to the dedication of its employees and Board of Directors. NPPD's future is bright.

General Afanager 7

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y chief engineer in 1958.In 1964, he was pro-l moted to the position of operations director and in 1968 became assistant general 4W ,

manager.

When Consumers was merged to form the Nebraska Public Power District in 1970, l

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. Schaufelberger was retained as assistant gen-mj .a -

eral manager. He was promoted to deputy W <

general manager in 1972.

s E Schaufelberger acted as the senior man-h agement official coordinating the proposed

, a MANDAN Project. He was a leader in the i formation of the Mid-Continent Area Power ,

, Pool (MAPP) in 1972. He served as the first I chairman of the MAPP Management Com- l

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l mittee and has continued to serve on that and other MAPP committees. ,

s During the summer of 1982, Schaufelberger was the recipient of the highest honor l

s awarded by the Nebraska Society of l ,

Professional Engineers (NSPE). lhe Society's awarJ for Outstanding Engineering Achievement was presented to him at the NSPE annual meeting. Also in 1982, Schaufelberger was chosen to receive the prestigious Nikola Tesla Award, presented for '

meritorious service to the electric power industry by the Westinghouse Electric  ;

Corporation. He is the first Nebraskan to i receive the award in its 15-year history.

Schaufelberger is active in the National Society of Professional Engineers, the Profes-sional Engineers of Nebraska, the Institute of t Schaufelberger Succeeds Hill Electrical and Electronics Engineers, and the Illuminating Engineering Society. He is a The NPPD Board of Directors named member of the University of Nebraska Col-Don Schaufelberger as the new general lege of Engineering and Technology Advisory manager succeeding D. W. Hill who retired at Council. He participated in the formation of the end of 1982. Schaufelberger had been the Electric Information Council and served serving as deputy general manager. on that Board of Directors.

A native of Lincoln, Nebraska, Hill is being retained as a special assistant Schaufelberger is a graduate of the University to the general manager in order to accom- [

of Nebraska-Lincoln with a degree in electri- plish as smooth a transition as possible, and cal engineering. After serving in the U.S. Navy will serve in that capacity until June of 1983.

during World War ll, Schaufelberger joined A special Board committee was named to the former Consumers Public Power District assist Schaufelberger in outlining the goals of as an engineer in 1949. In 1952, he became the District. The committee will discuss or-system planning engineer and was named ganizational matters and long-range plans.

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5 1982 in Review  :-

Total kilowatt-hour sales during 1982 were 9 -

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up 8. I per( ent ( ompared to 198l. .

I lh ( ategors . there w as an 80.8 per( ent in- .

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( mase m non-tirm transa( tions, a 16. , per- q _

( ent innease in parti (Ipation power, and a d -

2 4 per( ent in( rease in u holesale purc hases n E hs public power distrk ts and rua! -

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lle(reases in kilowa t-hour sales were to w h<)lesale munk ipallties-d()w n I I gl m {

gr( ent -and to retail ( ustomers-dow n i b i-per( ent. lle( lines in retail sales were noted in k _

the ( ategones of irrigation power. industrial. g munn ipal street and highn as hghting, and munn ipal power In( reases in retail sales -

weie re( < >rded in resulential, rural resulential. _

rural ( ommert ial. ((immer( lal hght,ng and p<>w er and n's ellaneous munn ipal.

T roubled et onomu ( onmtions are be-l'esed pomarih responsible ter a 213

• per( ent de( hne m energs sales to retail in- -

dustrial ( u4 ne r s. .\hos e m ern sun mer the prin( ipal ta( tor ins ols ed in a h

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14.1 perc ent de( rease in sales to retail irriga-t u in ( ustomers N kih iw att-hi >ur sales totaled 4.1; billn >n DD *. .

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f air the sec ond ( onse( utne sear. the lhs-tru t s firm a hi >lesale and retail ( ustomers did p, r not set a new summer peak demand on tim ;g-ss ste .m T he summeri peak ( >t 1.h7 ) 11 .

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l-kih)w atts w as aly)niximatch 4 per( ent beh)w the m( ord peak demand of I~14.844 kili ,w att s set m 1980 l he ( < :oler and w etter

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summer weather pattem de( reased irngation and .ur ( < >n< hti >nt r uses and kept the '"

demand di >w n -

Ihstr u ! ( ustomers estabhshed a ret ord u mter peak demand on lanuars 2t > 1982

( )n that date the ss stem registered a oeak

< >ne-hi>u r k nui < >t 1. l 'h.414 kih >u atts l >< > t -

to u tng the ;>n's n >us u ints'r [>e'ak th man (I re( -

onl set m 1981 (it i 1 2 151 kih >w atts.

l le< tr u ss stem < yeratme ms enues in 1982 {

n ,se, ta i a nt w high < >t 5 il 4 1 qu lu>n abu h is an in( rea se < >t 14 1 peu ent os er the '4HI ( 1 n eu n <>t s f 4 o nulh< >n.

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of an increase in sales and an increase the smallest overall annual increase in rates. since 1974.

Electric system operating expenses The 1983 rates were set to provide a 2 per-amounted to $285.4 million which represents cent increase in revenues over what the 1982 an 11.4 percent increase over 1981's figure of rates would have provided-approximately

$256.1 million. $2.6 million.

The second part of the two-year wholesale Operations of the Electric System resulted ra e nce se, to krome e ct m, in M3, is in net revenues of $21.6 million for 1982 smaller than had been ant,@cipated i

which, when adjusted for non-cash items as provided in the District s revenue bond res- rate was set late in 1981. The 1983 revenue clution, results in a debt service coverag em me poNed to be of 1.84.

$329.4 million.

New 1983 rates are expected to translate Using the 1981 load statistics as a more into an average increased cost of $10 per normal basis than 1982, the District's Plan-year for each of the District's retail residential ning Department is projecting an effective customers.

annual compound growth rate of 4.1 percent Also approved during the year was a new through 1992 in the summer peak demand, rate schedule for Nebraska entities receiving and an energy sales effective annual com-power from the Western Area Power Admin-pound growth rate of 4.3 percent during the istration (WAPA) over NPPD's transmission same time frame. These projections regularly lines, the first for WAPA " wheeling" custom-are subject to routme re-evaluation.

ers since 1954. The new rate reflects the New rates for wholesale and retail electric current cost base for building and main-customers went into effect early in 1982. The taining lines and dispatching the flow of wholesale rate affected customers of 71 electricity over the lines.

municipalities and 26 public power districts This rate will remain in effect through the and cooperatives. The rate was set to raise 1983 rate period. Beginning with the 1984-85

$301.6 million in total revenue in 1982. rate period, the WAPA customers will pay the The new rates for NPPD's 107,376 retail same rate for" wheeling" power that the Dis-customers were set to supply revenues of trict's wholesale customers pay for transmis-

$120.9 million for the retail division in 1982. sion service under the wholesale rate The retail revenue requirements included charges.

nearly $3.3 million in deficits from the 1981 All the news on the rate front was not bad rate period which were carried forward and during the year.

collected during 1982. In July, the Board of Directors approved A retail customer consuming 750 additional credits on retail and wholesale kilowatt-hours per month paid approximately electric bills to reduce a $4.9 million excess

$7.90 more per month during the winter in the Production Cost Adjustment (PCA) months and approximately $9.70 more per account. When NPPD's fuel and purchased month during the summer months in 1982 energy costs vary from what had been antici-compared to 1981. pated during a current rate period, the deficit The first full year of debt service and or surplus funds are accumulated in the PCA operating requirements for the Gerald account. Agreements with firm wholesale Gentleman Station Unit 2 coal-fired plant near customers provide for a change in the PCA Sutherland was the major ingredient causing factor on electric bills when that account ex-the higher electric rates for 1982. ceeds $4 million-either positive or negative.

Late in the year, the Board of Directors ap- The PCA factor credit approved in July will proved new retail rates for 1983 that provide refund the $4.9 million by June,1983. The 10

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customers, NPPD equips its personnel with i -- y r.,odern, efficient machinery that results in low

;1 overall maintenance costs. At left, the bushings on

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O a power substation circuit breaker appear to give

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credit in the PCA factor has the effect of re- on those newly purchased securities and the docing electric bills. reinvestment of certain monies that cannot be Customers were already receiving a PCA withdrawn from the portfolio generate a total credit on their bills for 1982, reflecting an cash surplus of $2.9 million over the next excess in the PCA account at the end of the ten years.

1980-81 rate period. NPPD distributed more than $10.6 million At the end of 1982, the Board approved to cities, towns, counties, and school districts another PCA factor credit to be applied to in its service area during 1982. County trea-billings during 1983 that will refund a surplus surers in 70 counties in which NPPD has of approximately $13million in the property received in-lieu-of-tax payments PCA account. totaling $205,318. In addition $3,093,188 in The Board gave its approval during the gross revenue payments was distributed to year to an interim financing plan to pay for county treasurers in 64 Nebraska counties the construction costs of the Kingsley Hydro- where there are cities or villages served electric Project below Lake McConaughy. under lease agreement or at retail by NPPD.

The 50,000 kilowatt facility is being con- Money from the payments is distributed by structed by Central Nebraska Public Power county treasurers to the counties, cities, vil-and irrigation District, but NPPD will pur- lages, and school districts according to a pre-chase the electrical output of the facility for scribed formula relating to mill levies.

use by NPPD's customers. Two hundred eighteen Nebraska cities and The Central Nebraska Board approved the villages received $7,360,601 as a result of sale of $75 million in variable rate demand agreements leasing their electrical distribu-notes that will be used to pay for the con- tion systems to the District, struction of the facility including interest ex- Cooper Nuclear Station, which supplied pense. Interest rates on the notes will be es- approximately 27 percent of the electrical re-tablished on a weekly basis over a three-year quirements of the District's customers during period. During that time, NPPD and Central 1982, set a generating record during the year.

will consider issuinF lond-term bonds to re- The plant generated a total of 5,276,082,000 place the short-term notes based on the trend net kilowatt-hours, an increase of 5.6 percent in interest rates. over the previous high total set in 1979.

Savings to ratepayers will be the result of Cooper Station, which is Nebraska's largest outstanding bonds being purchased and the nuclear generating facility, was capable of restructuring of an escrow agreement estab- operating at its nominal net capability 77.4 lished in 1976 when a bond issue was re- percent of the Mme during the year. The plant funded. NPPD worked through its financial went into commercial operation July 1,1974, consultant, Smith Barney, Harris Upham & and its output is shared by NPPD, Iowa Company, Inc., who requested that tenders Power and Light Company, and tincoln for the outstanding bonds be made to the Electric System.

District. The District received tenders for A report released during the year by the In-

$56.3 million of its 1976 Series A Power stitute of Nuclear Power Operations (INPO)

Supply System Revenue Bonds. Of the ten- revealed that the employees at Cooper Sta-ders received, 541.5 million were accepted tion experience less radiation exposure than and delivered to the District. employees of other large, fully operational in crder to pay for the bonds and generate boiling water reactor (BWR) plants in the na-surpluses, certain United States Treasury Se- tion. The report noted that the man-rems curities held in escrow were redeemed. The (rems per individual) exposure taken at proceeds were used to pay for the tendered Cooper Station was 58.6 percent of the evo-bonds and buy open-market United States sure average for all BWR's and was 20 per-Treasury Securities. The investment income cent lower than the next lowest BWR. The 12

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average exposure for BWR's nationwide de- matter of economics as opposed to an admis-l creased from 1,136 rems to 988 rems during sion of guilt.

the study period. Cooper Station's man-rems The original Notice of Violation and Pro-were 579. posed imposition of Civil Penalties from the During 1982, the District and General NRC in August,1982, proposed a fine of Electric continued making plans to transfer $300,000. In the District's response to the spent nuclear fuel from Cooper Nuclear Sta- NRC, it was the District's position that the tion to General Electric's storage facility near civil penalties imposed, including the pro-Morris, Illinois. The proposed shipments are posed $300,000 fine, were excessive and related to an interim settlement agreement unwarranted.

between the District and General Electric The NRC ordered the District to conduct which deferred a lawsuit against General a management appraisal of the corporate Electric regarding, among other things, buy- functions which support the activities at back payments and removal from Cooper Cooper Station.

Nuclear Station of spent fuel supplied by NPPD had asked the NRC to give consid-General Electric under a nuclear fuel supply eration to the facts as presented by the Dis-contract. The parties reached this interim set- trict which supported a substantial reduction tiement ayeement in June of 1981; however, in the civil penalty. NPPD reserved the right both parties have a full reservation of rights if to a hearing on the matter in the event it the niatter is litigated again in the future. could not be resolved to the mutual satisfac-The District and General Electric contem- tion of both entities.

plate approximately 30 rail shipments will he Although acknowledging that a statement made over a five- or sin ear period in order to made to the NRC was later determined to be transfer the fuel from Cooper Station to inaccurate, NPPD contended that there was General Electric's storage facility. no evidence that false information was de-At a hearing before the Nebraska Legisla. liberately transmitted or that a material false ture's Agriculture and Environment Commit. sutement was made.

tee, NPPD testified that customers of the Dis. The consensus of the Board and manage-trict and other participants in Cooper Station ment was that NPPD pay the reduced fine would have to pay upwards of $30 million rather than subject ratepayers to potentially more in electric bills if the spent fuel is not large staff and consultant costs that could ex-ceed the size of the fine if a hearing and liti-shipped to the Morris facility. By shipping the gation were pursued.

spent fuel, there would be sufficient storage The matter mvolved the distribution and on site for the remainder of the plant's peration of mobile sirens in the area of operating license period. Proposed city ordi-Cooper Station as part of the Prompt Pubh,c nances that would have made shipments ex-tremely difficult, if not impossibfe, were Ge n [n Power Station, the Dis-defeated in Burlington, Iowa, and Lmcoln' trict's newest and largest commitment to the Nebraska. .

energy needs of the c.tizens i of Nebraska, was in March,1983, the Board and manage- officially dedicated to the state and to the re-ment agreed to pay a $112,000 fine assessed gion in ceiemonies held at the plant by the Nuclear Regulatory Commission June 25,1982.

(NRC) which alleged the District violated Located on the south shore of Sutherland certain NRC regulations and made material Reservoir in west central Nebraska, the plant false statements regarding the operability and consists of twin 650,000 kilowatt units.

installation of the Prompt Public Notification The ceremony completed more than ten System at Cooper Station. years of planning, negotiations, and con-The decision to pay the fine was made as a struction. Although the District experienced 15 L _ _ _ _ _ _ _ _ _ _ _ _ ___._ . _ ___ _ _____ _______________ _ _____ __

problems during construction, completion of Mr. Gentleman took an active part in the the coal-fired facility provided NPPD with a formation and statewide expansion of the sound power supply program. Nebraska Public Power System and Consum-Following a noon luncheon, NPPD Board ers Public Power District. After his retirement, President Henry Kosman, of Scottsbluff, he assisted in the merger of Platte, Consum-addressed the some 280 dignitaries and ers, and NPPS properties into the Nebraska media personnel in attendance. Kosman said Public Power District.

when people look at Gerald Gentleman Sta- On the day following the dedication, nearly tion today, many see " bricks and mortar, 4,000 people toured the plant during an open steel and concrete, large machinery and house held for employees and the general equipment. But to those close to the project, public. Nebraskans came from more than it represents many years of planning, far- 100 miles away and several out-of-staters reaching decisions, financing, building and. came to visit the generating complex.

a commitment in energy to the future pros- Gerald Gentleman Station Unit 1 went into perity of this state." commercial operation on April 2,1979. Unit Nebraska Governor Charles Thone was the 2 began commercial operation on featured speaker of the day. Thone said the January 1,1982.

dedication ceremony had "special meaning The MANDAN Project reached several im-in these fiscally-troubled times when we portant milestones during 1982.

realize that this modern coal-fired facility will The MANDAN Project is a 600-mile, help to provide not only an adequate electri- 500,000 volt transmission line which will cal supply for Nebraska, but also a vital new link summer-peaking utilities, such as NPPD, industry for the surrounding area." with winter-peaking utilities in Manitoba, Not only does Gentleman Station supply Canada, and North Dakota. The primary pur-NPPD's customers, it supplies Omaha Public pose of the line is to allow cooperating Power District and Lincoln Electric System utilities to exchange seasonally surplus with additional capacity. electricity.

The plant's location in the western part of The North Dakota Public Service Commis-the state is strategic for stabilizing the trans- sion (PSC) and the Nebraska Power Review mission system and has provided NPPD cus- Board (PRB) both approved line route permits tomers with 1,300 megawatts of coa genera- for their respective states during 1982. The tion. It is among the least expensive of its Nebraska permit has been appealed to the type in the region. Nebraska Supreme Court and the time for During construction, the plant provided appeal of the order in North Dakota has not

$135 million in wages for 1,800 employees, yet expired.

a significant economic boost for the area. The North Dakota PSC, in granting NPPD a The use of low sulfur coal from Wyoming route permit, said that the MANDAN Project as fuel for the plant has greatly reduced dis- will alleviate the need to build additional charges of sulfur-dioxide gases to meet air generating units by providing for seasonal di-quality standards and has reduced the need versity exchange of power between summer to use costly natural gas and oil. and winter-peaking utilities.

Thone called the naming of the plant after "The MANDAN Project will provide for the late Gerald Gentleman a fitting tribute to additional power now and in the future, and a great Nebraskan. Gerald Gentleman aided it helps stabilize the regional power capacity in the initial organization of the Platte Valley with reliable and economical service with Public Power and irrigation District and very few adverse environmental effects," the served that District for 36 years. During his North Dakota commission said.

service as general manager of Platte Valley, The North Dakota PSC,in H81, approved a 16

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corridor for the line. A landowners' group utilities serving those states to interconnect.

appealed this action to a North Dakota Dis- Otter Tail Power Company of Fergus Falls, trict Court, which upheld the PSC's action. Minnesota, and Minnkota Power Cooperative The opponents then appealed to the North of Grand Forks, North Dakota, which serve Dakota Supreme Court. The Supreme Court areas in the Dakotas, are interested in the early in 1983 affirmed the action of the PSC project as are other utilities in Iowa, Missouri, in approving the corridor and upheld the and Kansas.

lower court's ruling. A computerized data system which will The Nebraska Power Review Board early link District field offices with the General Of-in 1982 approved an application by NPPD to fice in Columbus was approved by the Board build the Nebraska segment of the line. The of Directors in 1982.

PRB rejected arguments by a group opposing The " Customer Information System" (CIS) the line, who said that Nebraska should be is expected to result in net annual savings of bound by a South Dakota Public Utilities about $100,000,while providing immediate Commission (PUC) ruling which denied a customer information to NPPD offices around route application for the line in that state. the state. Such a system had been recom-Speaking in support of the MANDAN Proj. mended in a managemer t study by an out-ect at the PRB hearing,were representatives of side consulting firm.

several other Nebraska utilities. The opposi. District personnel examined a number of tion group appealed the line approval to the systems and recommended that the TRES Nebraska Supreme Court, where the matter system, designed specifically for utilities and is pending. used by about 40 utilitie, he acquircJ In South Dakota, the District in 1982 ap- by NPPD.

pealed to the Circuit Court at Pierre the Pub- 1he system will benefit the District and its lic Utilities Commission's denial of a permit. customers in a number of ways, including The court reversed the PUC and ordered it to providing nearly instantaneous customer in-approve the line permit. However, the court formation to local offices and allowing upheld the PUC on several construction monthly billing for all customers, many of provisions set by the PUC. The PUC and which are now billed bimonthly. It will also NPPD both appealed portions of the ruling to free local office personnel from much pa-the South Dakota Supreme Court; the PUC is perwork so they may attend to customers' appealing the order that it must grant the needs and will provide management with an permit and NPPD is appealing other portions, improved information base regarding cash including construction provisions which flow, revenue forecasting, and analysis data.

NPPD feels would substantially increase The District's communications capabilities costs without commensurate benetits. The will be expanded to accommodate the new case is pending. ,

information system.

The MANDAN Project, which is the Dis- The District's present customer billing sys-trict's next major power supply resource, is tem, which is several decades old, requires scheduled to be in service in 1988. Negotia- extensive field office paperwork which must tions are nearing finalizationletween the - be mailed to the General Office for process-District and Manitoba Hydro, the Canadian ing. Customer information requests, which utility cooperating'in the Project, on details of have been steadily increasing, often require a contract? ,

record searches which result in a delay in MANDAN is an anonym for Manitoba,' providing the information to customers.

Dakotas, and Nebraska. The line will ion System design will begin early in 1983, between substations nea(Ooskins, Nebraska, followed by installation and testing of the and Winnipeg, Manitoba, with substations in initial pilot. Conversion to the new system

- North Dakota and South Dakota to allow is scheduled to be completed in 1984.

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a

FINANGAL COMMENTARY Review of the District's financial statements for the Operating Expenses year 1982 reveals an increase in operating revenue The major components of operating expenses are of S39.3 million or 14.3% over 1981.These revenues, power purchased and power production. Power after deducting operating expenses and taking into purchased expense amounted to $209.9 million consideration interest income, provided net reve- which is an increase of $34.3 million or 19.5% over nues of $21.6 million, an increase of $12.8 million 1981. The increase reflects the first full year of debt over 1981 or 145.5%. The year 1982 could be con- service payments from revenues on bonds attributa-sidered as a rather une,entful year from the financial ble to Gerald Gentleman Station Unit No. 2. Power standpoint; however, the following items are worth production costs decreased $9.6 million or 36.19c noting: (1) There were no major or extraordinary due to a decrease in generating costs attributable to operating failures which required large expendi- fuel.

tures, (2) revenues were adequate, although im- Debt Service Coverage pacted some by weather conditions, (3) there were Revenues under the Electric System Bond Resolu-no requirements for short or long term financing. tion provide 1.84 times the debt service require-The year 1982 can be termed a success. Various por- ments.

tiens of the District's financial statement are sum- Net Revenues marized below. Net revenues from the Electric System total $21.6 million which is an increase from $8.8 million dur-Operating Revenues and KWH Sales ing 1981. The increase is a result of increased rates The 1982 operating revenues reflect an increase of and increased sales during the year.

$39.3 million or 14.37c over the year 1981. The General exclusion of non-firm, participation and non-Continued improvement in the District's net reve-electric sales indicate that operating revenues from nues and debt service coverage is a result of good the District s retail and wholesale customers in-creased $33.1 million or 15.3% from 1981. Reve- paa ns and a w.@ngness f h Boad of Nec-nues from the retail, wholesale and non-firm / tors to adjust rates which will satisfy the revenue requirements of the District. The District has com-participation. sales are 34.6% , 46.9r4 and 18.57c pleted all major construction, and debt service costs respectively of total sales.

related to such construction are in the rates. Debt The KWH sales increased 8.1% over the year 1981. service is a major component of expenses, and since The increase is primarily associated with increases debt service is not expected to increase substantially in sales to non-firm and participation customers in the near future, rate increases should be minimal since the retail and wholesale sales increased only allowing only for a normal increase in expenses.

0.59. This increase for retail and wholesale cus-tomers was minimal and can be attributed to ab- - '

normal weather conditions which continue to have an unfavorable impact on electric energy consump- T. M. Kyster tion by the District's customers. Assistant General Afanager a Assistant Treasurer l

20

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 sulxiivision of the State of Nebraska) as of December 31,1982 and 1981, and the 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 31,1982. We have also examined the supplemental schedules of the calculation of the debt service ratios for each of the three years in the period ended December 31,1982.

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.

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 31,1982 and 1981, and the results of its operations and changes in its financial position for each of the three years in the period ended December 31, 1982, and the supplemental schedules of the calculation of the debt service ratios for each of the three years in the period ended December 31,1982, present fairly the information set forth therein, all in conformity with generally accepted accounting principles applied on a consistent basis.

Arthur Andersen & Co.

Omaha, Nebraska, March 14,1983.

21 Y _ _ - _ _ - _ _ - - _ - _ _ - _ _ - - - _ _ _ _ _ _ _ _ _ _ - _ _ _ - _ _ _ _ _

Nebraska Public Power District ELECTRIC SYSTEM Balance Sheets December 31,1982 and 1981 1982 1981 ASSETS Ghousands of DoHm)

Utility Plant, at Cost . . . . .$583,260 $549,013 Less-Reserve for depreciation and amortization (Note 1) . . . . .. 195,234 177,304

$388,026 $371,709 Debt Resewe Account:

Cash... . . . . . .$ 4 $ 2 investment securities . . .. . . 30,834 30,730

$ 30,838 $ 30,732 Receivables from Sale of Property.. . .. .. .... . . ..$ 2,356 $ 2,575 Current Assets:

Cash and investment securities (Note 5) . . . .. . .$ 96,282 $105,888 Receivables, less reserves . . . . . ... 40,324 34,062 Materials and supplies, at average cost .. . . . .. . 17,166 15,278 Prepayments and other assets . .. . . 288 294

$ 154,060 $ 155,522 Deferred Charges:

Nuclear fuel (Note 1) . . . . . . ... .. . .$ 29,641 $ 31,844 Replacement rotors (Note 1) . . . . . . . 4,507 5,021 Unamortized financing costs ... .. . . . .. 3,147 3,363 Other . .. . .. . . . .. . . 8,157 2,746

$ 45,452 $ 42,974

$620,732 $603,512 LIABILITIES AND CAPITAL Accumulated Net Revenues . . . ... .. . , . . . . .$141,859 $120,234 Long-Term Debt (Note 4) . .. ... . .$376,560 $384,640 Notes Payable:

52%% of prime, due 198' 1,320 57% of prime, due 1982 to 1984 - . . . . 2,546 4,447 72%% of prime, due 1982 to 1986 . ... . . . 24,000 30,000 Line of credit (Note 7) . . . 24,636 30,000

$427,742 $450,407 Less-Current maturities . .. . . . 26,454 28,458

$401,288 $421,949

$543,147 $542,183 Current Liabilities:

Current maturities . . . . . .$ 26,454 $ 28,458 Accounts payable . . . . 20,168 17,784 Accrued lease payments . . . . . . . 10,079 3,587 Accrued interest . . . .. . . , 608 -

Other . . . . . .. 17,379 8,35/

(

$ 74,688 $ 58,186 Unamortized Payment Received for Refinancing Costs . . ..$ 2,897 $ 3,143

$620,732 $603,512 22 The accompanying notes to financial statements are an integral part of these balance sheets.

l

Nebraska Public Power District ELECTRIC SYSTEM Statements of Revenues and Expenses and Accumulated Net Revenues for each of the Three Years in the Period Ended December 31,1982 1982 1981 1980 Revenues and Expenses; mx=and of nonno Operating Revenues (Note 2) . . . . . .

. .$313,119

$ $273,886 $241,712 Operating Expenses:

Power purchased-Nuclear Facility and Power Supply System .. . .$ 173,014 $126,738 $ 96,055 Other .. .. . . . 36,883 48,858 59,767 Production-Fuel .. . . .. . . . . 11,132 19,506 23,611 Operation and maintenance . . . . 5,835 7,064 6,965 Deferred production cost, net (Note 1) . ..

- ~ 15,094 Other operation ... . .

20,239 19,634 17,435 Other maintenance .. . . . . 6,387 5,776 4,952 Leased plant payments (Note 1) . . .. .. . .. 8,028 6,696 5,678 Depreciation and amortization . . . .. . . .. 18,217 16,789 15,956 Payroll taxes and payments in lieu of taxes . . . . 5,701 5,004 4,430 Total operating expenses . . . . . . .$285,436 $256,065 $249,943 Net operating revenues (expenses) . .. .$ 27,683 $ 17,821 5 (8,231)

Interest and Other Revenues:

Allowance for funds used during construction . . .$ 2,160 $ 2,003 $ 2,047 Interest and other . . . . . .

18,498 16,745 23,648 Total interest and other revenues . . .

. . .$ 20,658 5 18,748 $ 25,695 Net revenues before other deductions . . .

.$ 48,341 $ 36,569 $ 17,464 Other Deductions:

Bond interest . .. .. . . . . . . .$ 22,582 $ 22,878 $ 23,157 Other interest . . . . 3,910 4,810 3,853 Miscellaneous, net . . . . . . 224 126 610 Total other deductions . . . . . . .5 26,716 $ 27,814 5 27,620 Net Revenues (Expenses) (Note 2) . . . . .. .$ 21,625 $ 8,755 $ (10,156)

Accumulated Net Revenues:

Beginning balance . . .. .. . .. 120,234 111,479 121,635 Ending balance . .. . .5141,859 $120,234 $ 111,479 The accompanying notes to financial statements are an integral part of these statements.

23

\

Nebraska Public Power District '

ELECTRIC SYSTEM Statements of Changes in Financial Position for each of the Three Years in the Period Ended December 31,1982 1982 1981 1980 (Thousands et DollarO Funds Provided by Operations:

Net revenues (expenses) .. .. . . .$ 21,625 $ 8,755 $ (10,156)

Add items which require no current outlay of working capital-Depreciation and amortization . . . . ... .. 18,217 16,789 15,956 Amortization of deferred charges (Note 1) . .. . 6,514 1,500 -

Other .. . .. . . .. . . . .. .. 550 588 502 Total funds provided by operations . .. .. . . 5 46,906 $ 27,632 $ 6,302 Other Sources of Funds:

Proceeds from notes payable . . . . .. .

- 15,000 19,520 Contribution from Basin Electric . . .. .. . . 12 82 11,868 Decrease in fund balances . . . . .. .. . . ... .. .. 9,500 16,102 15,809 Proceeds from sale of property . . .. 1,233 569 698 Total funds provided .. .. . .$ 57,651 $ 59,385 $ 54,197 Funds Applied:

Utility plant additions . . . . . .5 36,880 $ 40,057 $ 55,449 Decrease in receivables from sale of property . . . . . . .. . (219) (36) (368)

Increase (decrease) in receivables .. . . . 6,262 3,726 (30,152)

Increase (decrease) in materials and supplies . . .. . 1,888 (5,015) 6,238 Additions to deferred charges for Nuclear Facility (Note 1)-

Nuclear fuel . ... 3,797 9,030 2,508 Replacement rotors ... . . . . - 4,139 882

. Repayment of notes payable . 14,585 - 28,000 Retirements of long-term debt . . .. . . 8,221 7,031 6,760 (Increase) decrease in accounts payable . . . ... . (2,384) 5,047 461 Other working capital changes . (16,128) (4,788) (15,390)

Other . .. . . . . . .. 4,749 194 (191)

Total funds applied . .. .$ 57,651 $ 59,385 5 54,197 The accompanying notes to financial statements are an integral part of these statements.

24 I

Nebraska Public Power District

' ELECTRIC SYSTEM Supplemental Schedules-Calculation of Debt Service Ratios for each of the Three Y ars in the Period Ended December 31,1982 1982 1981 1980 (Thousands of Dollars)

Operating revenues . .. . . . . . . .. . . . . .$ 313,119 $273,886 $241,712 Operating expenses, excluding depreciation and amortization of

$18,767,000, $17,377,000 and $16,458,000 . . . . . .. 266,669 238,688 233,485

$ 46,450 $ 35,198 $ 8,227 Interest and other revenues, excluding interest on construction funds of

$8,989,000, $10,378,000 and $9,639,000 . .. . .. . 9,509 6,367 14,009 Net revenues available for debt service .. . . . . . . .$ 55,959 $ 41,565 $ 22,236 Amounts deposited in the Electric System Debt Service Account-Principal . .. . . . . . . .. .$ 7,955 $ 6,770 $ 6,505 Interest . . . . . 22.422 18,952 19,385

$ 30,377 $ 25,722 $ 25,890 Ratio of net revenues available for debt service to debt service deposits . . 1.84 1.62 .86 The accompanying notes to financial statements are an integral part of these statements.

25

\ __. _

C. AHowance for Funds Used During Construction-This allowance, representing the cost of funds used to finance construction, is capitalized as a component of the cost of utility plant and is credited to Interest and Other Revenues.

The capitalization rates for construction financed with revenue bonds are based on the interest cost of each issue less interest income. The rate for construction financed by revenues is based on a projected rate for short-term Imrrowing. For the periods presented herein, the rates vary from 6.19 to 9.54.

D. Deferred Charges-Deferred charges include amounts paid to the Nuclear Facility for working capital for nuclear fuel and replacement rotors. The carry ing costs of the nuclear fuel advances are also inc luded.

The deferred charges are being amortized to Power pur-chased - Nuclear Facility as follows:

Monthly Nebraska Pubh.c Power District oe* ription Amortiution comme, ming Fuel costs of $30.000,000. $500,000 October,1981 ELECTRIC SYSTEM Fuel costs of $11,100,000. $185,000 April,1984 Replacement rotor costs of $1,032,000 . $ 43,000 January,1982 Notes to Financial Statements Replacement rotor (1)

SUMMARY

OF SIGNIFICANT ACCOUNTING POUCIES: costs of $4,068,000 . $ 86,000 January,1984 A. Organization- E. Unamortized Financing Costs-The District has thne separate disisions for accounting These co ts represent issuance expenses on all bonds and purposes as follows: the premium to retire the Electric System Res enue Bonds,1975 Electric System Series, prior to their maturity date and are being amortized Nuclear Fadlity oser the life of the respective bonds using the Ix>nds outstand-Power Supply System ing method.

As required by Bond Resolutions, separate records are

, F. Unamortized Payment Received for Refinancing Costs-maintamed for each division. The Electric System financial This reimbursement from the Nuclear Facility was for statements exclude the Nuclear Facdity and Power Supply certain refinancing costs of the Electric System incurred in System, for w hic h financial statements are presented separately 1968 and is being amortized over the life of the 1968 Revenue herem. The Electric System tinancial statements should be read Bond issue using the bonds outstanding method.

in conjunct on with such other financial statements.

G. Investment Securities-B. Depreciation, Amortization and Afaintenance- Investments are made in U.S. Gosernment securities, Fed-The District records depreciation over the estimated useful eral Agency obligations, and bank certificates of deposit. The hre of the property. Depreciation on Utility Plant in Serv,ce ,

i Debt Reserve Account in the Debt Service Fund is valued was approximately 3.0% in each of the years 1982, 1981, semi-annually at January I and July I at the lower of cost or and 1980. . market in accordance with requirements of the Electric System The District has signed long-term lease agreements with approximately 215 municipalities. These lease agreements ob- Reveaue Bond Resolution (Electnc Resolution). The securities ligate the District to pay for normal property additions during in the remaining funds are valued at the lower of cost or prin-the term of the lease. The District has recorded provisions for cipal amount m accordance with requirements of the Electric amortization of $3,712,000 in 1982, $3,796,000 in 1981, and RMution.

$4,323,000 in 1980. Leased plant additions, which are fully H. Deferred Production Costs-resened, totaled $29,528,000 at December 31,1982, and Actual energy (fuel) costs in excess of those included in

$26.529,000 at December 31,1981. the basic rates are recovered by a Pr(xtuction Cost Adjustment Certain of the lease agreements include an obligation (PCA) which is billed to all customers except non-firm and which requires the District to make property additions associ- participation customers. When the basic rates do not provide ated with the elettric service being provided to such sufficient revenues to recover the energy costs, the excess cost municipalities in an amount equal to a percentage of revenues is deferred. When the basic rates provide revenues in excess of of the respective leased sistems. The District has been the energy costs, the excess is excluded from resenues. Present negotiating with such municipalities to, among other things, District policy requires that billings for the PCA be made using extend the term of the leases and to modify its obligation to rates adjusted from time to time so that the variations in actual make such improvements. The District could be obligated to energy costs from energy revenues to be deris ed from the basic pay approximately $5.0 million with respect to such lease rates are recosered by PCA bilkn",s either in the current rate agreements. period or future rate periods.

The District charges maintenance and repairs, including the cost of renewals and repla(ements of minor items of prop- 1. Revenue Recognition-erty, to maintenance expense acwunts. Renewals and re- In accordance with industry practice, the District remg- {

placements of property (exclusise of minor items of property, nizes revenues for retail service in the month the meters are j as set forth atxne) are c harged to utility plant accounts. Upon road. Since retail meters are read on a cycle basis, substantial r retirement of property subject to depreciation, the cost of revenues applicable to service rendered between the last bill-property is removed from the plant accounts and c harged to ing and the end of the year are not recorded. Substantially all the resene for depreciation, along with the removal costs, net wholesale revenues are re< orded in the period in whi(h ser-26 of sahage. vice is rendenxi.

/

- - . _ .. . . . _~~ - ~ - _ . _ _ ._

t l

(2) RATES: (5) CASH AND INVESTMENT SECURITIES: i The District designs its wholesale and retail electric ser- om her n, vice rates to cover cost of service, including; 1) operating ex- 19s2 _ 198: i

pen >es other than depreciation,2) debt service, and 3) certain (Thomandsof Dollare capital additions. All costs are recovered from customers in the Revenue Fund . .$ 16,594 $ 16,321 4 current rate period or in future rate periods by increasing or Operating Fund . . . . 11,525 3,539 i reducing revenue requirements in such future rate periods. The Construction Funds . . 59,192 76,099 following table illustrates the effect of these adjustments in Debt Service Account . . . - 160

1 revenue requirements on the Statements of Revenues and Reserve and Contingency Fund . . 1,236 1,200 Expenses. General Ressve Fund . 7,735 8,569

}- .

i Adjustments in Rever.ue Requirements $ 96,282 $105,888

"'" Funds consist of $79,257,000 of investment securities and 1976-1977 1978-1979 _1930-19a1 $17,025,000 of cash at December 31,1982, and $86,494,000

, Surplus or (Deficit) in (WEms of Dollar 9 of investment secunties and $19,394,000 of cash at December Rate Period . . . $(2.1) $ 9.4 $(10.7) 31,1981.

Adjustment in Subsequent Rate Periods: (6) LONG-TERM OBLIGATIONS:

1978-1979 0.6 - - The District has an agreement for the purchase of the 1980-1981 .... 0.6 (9.4) - entire output of a 100 MW steam electric generating plant 1982-1983 (Projected) 0.9 -

10.7 through 1991. Under the agreement, the District must (with As provided in the Electric Resolution, the District cov. limited exceptions) make minimum payments monthly. The i enants to charge rates for electric and other services so that aggregate amount of such required payments at December 31, revenues will be sufficient to pay annual operating expenses, 1982, is as follows:

i

, including Nuclear Facility and Power Supply System charges, 1983 . $ 968,000 debt service and other charges payable out of Electric System 1984 - . . 968,000 1985 968,000 revenues.

New rates for firm wholesale and retail sersice, including 1986 968,000 the PCA rate, which were placed in effect in 1983, are ex. 1987. 968,000 j

L pected to increase revenues by approximately 58.0 million for 1988-1991 3,872,000 the year. Total . . $8,712,000 Preliminary estimates indicate that approximately $3.9 The minimum payments will be reduced in 1988-19'91 by million of revenue requirements, after considering the effects of the above adjustments, were not recovered during 1982 and payments made from reserve funds of the owner. In addition, the District ,si required to pay the variable operating expenses will increase revenue requirements in future rate periods.

of the plant. The District's total payments under the agreement (3) PENSION PLAN: were $2,172,000 in 1982, $5,041,000 in 1981, and The District has a retirement income plan covering sub- $11,981,000 in 1980.

stantially all of its full-time employees. Employee's contribu- The District has entered into an agreement to purchase all tions to the plan are based on salary, and the District's con- the output of a 30 MW hydroelectric generating facility. The tributions are allocated to employee's trust accounts based District is obligated to pay all costs of operating and maintain-

partially on the employee's contributions and partially on years ing the plant plus a management fee. The plant is currently of service and annual salary. The plan provides for retirement under construction by another utihty and long-term financing

, income equal to the total of the employee's trust account, has not yet been arranged. The plant is estimated to cost ap-including trust earnings. The District's contribution was proximately $51.7 million excluding interest during construc-

$3,453,000 for 1982, $3,166,000 for 1981, and $2,834,000 tion and financing costs. Short-term indebtedness in the for 1980, amount of $75 million has been issued in connet tion with the hydroelectric generating facility.

j (4) LONG-TERM DEBT:

(  % g ,, (7) CONSTRUCTION AND FINANCING:

i9a2 19s1 The 1983 construction plan for the Electric System

, Revenue Bonds.  %%%i,o provides for estimated expenditures of $39 million. These ex-Serial Bonds- penditures will not require the issuance of long-term debt.

2.004,due 1982 to 1990 . .$ 4,960 $ 5,955 The $30,000,000 line of credit was renegotiated in 1982.

4.50%-6.00%, due 1982 to 1985 , . 23,985 30,945 Principal payments will be made in varying amounts to April 1, 4.754-6.30%, due 1986 to 1990 44,465 44,465 1989. The payments in 1983 total $9.5 million. The largest 4.90%-6.404,due 1991 to 1995 34,010 34,010 total payment in any subsequent year is $3.2 million. The 5.00% -6.109 , due 1996 to 2000 39,850 39,850 interest rate has been set at 659 of prime through December 5.0006.30%, due 2001 to 2005 49,740 49.740 31,1983, and 67% of prime thereafter.

5.75% -6.404, due 2006 to 2009 27,820 27,820 Term Bonds, with annual sinking fund requirements-5.10%,due 1987 to 2002. . 41,000 41.000 6.60%, due 1993 to 2003. 33,200 33,200 6.75% , due 1991 to 1995. 17,100 17,100 7.00% , due 1996 to 2005 . . 57,250 57,250

$ 373,380 $ 381,3 35 Lease Purchase Payables-2.00%, due 1982 to 1992 . 5,263 5,530 Unamortized Bond Discount . (2,083) (2,225)

$3761 569 $384.6S . 27

\

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

The following supplementary information is supplied in accordance with the requirements of the Financial Accounting Standards Board (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 terras of dollars of equal purchasing power, as measured by the Consumer Price Index for All Urban Consumers (CPI-U). Current cost amounts reflect the changes in specific prices of plant from the date the plant was acquired to the present, and differ from constant dollar amounts to the extent that specific prices 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 Handy-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 inventories and the cost of fuel used in production have not been restated from the:r 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 to actual costs. For this reason, fuel inventories are effectively monetary assets.

Charges 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 plant is reflected as a reduction to net recoverable cost.

l To properly reflect the economics of historical cost rate methodology in the l Statement of Revenues and Expenses, the reduction of net property, plant, and I equipment should be offset by the gain from the decline in purchasing power of net amounts owed. During a period of 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 l recovery of historical costs, the District does not realize a holding gain on debt.

l The benefit of any holding gain on debt accrues to the customers.

l i

28 l

/

i Nebraska PubliC Power District ELECTRIC SYSTEM Statement of Revenues and Expenses Adjusted for com,,,;oo,i T$',7 '"c[',"'

H A A Changing Prices for the Year Ended December 31,1982 fal ,9 je a ,, ,9g;er ,,

(Thousands of Dollars)

Operating Revenues. . .. . .$313,119 $313,119 $313,119 Power Purchased .. . . . .. .$209,897 $209,897 $209,897 Fuel Used in Production . . . 11,132 11,132 11,132 Amortization of Lease-Operated Plant . . 3,712 3,712 3,712 Depreciation Expense . .. . 14,505 25,670 27,239 Other Operating and Maintenance Expense . . . 46,190 46,190 46,190 Other Deductions . . . . 26,716 26,716 26,716 Interest and Other Revenues (20,658) (20,658) (20,658)

$291,494 $302,659 $ 304,228 Net Revenues from Continuing Operation; (Excluding Reduction to Net Recoverable Cost) .5 21,625 _$__10,460* $ 8,891 increase in Specific Prices (Current Cost) of Property, Plant, and Equipment Held During the Year ** . . $ 26,360 Reduction to Net Recoverable Cost . . . $ (618) (4,507)

Effect of Increase in General Price Lesel . . (20,902)

Excess of increase in Specific Prices After Reduction to Net Recoverable Cost Over increase in General Price Level . . $ 951 Gain from Decline in Purchasing Power of Net Amounts Owed . . . 9,567 9,567 Net . . . . . . $ 8,949 $ 10,518

• including the recluction to net recoverable cost, the net revenues from continuing operations on a constant dollar basis would have been $9,842 for 1982.

• • At December 31,1982, current cost of property, plant, and equipment, excluding construction work in progress, net of accumulated depreciation, was $629,128, while historical cost or net cost recoverable through depreciation was $356,612.

Five-Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices Year Ended December 31, 1982 1981 1980 1979 1978 (In Thousands of Aserage 1982 Dollars)

Operating Revenues . .$313,119 $290,677 $283,140 $198,757 $294,688 Historical Cost Information Adjusted for General inflation:

Net Revenues (Expenses) from Continuing Operations (Excluding Reduction to Net Recoverable Cost) . .$ 10,460 $ 671 $ (18,949) $ 7,761 ...

! Net Assets at Year.end at Net Recoverable Cost .5140,258 $124,344 $124,723 $152,957 ...

Current Cost Information:

Net Revenues (Expenses) from Continuing Operations (Excluding Reduction to Net Recoverable Cost) . ..$ 8 891 $ (474) $ (20,478) $ 6,009 ...

Excess of increase in General Price level Over increase in Specific Prices After Reduction to Net Recoverable Cost . ..$ (951) $ 13,243 $ 20,001 $ 23,004 ...

Net Assets at Year.end at Net Recoverable Cost .$ 140,258 $ 124,344 $124,723 $ 152,957 "+

General Infom1ation:

Gain from Decline in Purc hasing Power of

' Net Amounts Owed ..$ 9,567 $ 22,291 $ 29,847 $ 31,946 *"

Aserage Consumer Price index . 289.1 272.4 246.8 217.4 195.4 29

• "This supplementary information disclosing the effects of changing prices was not required by the FASB until 1979.

\

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

We base examined the special-purpose 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, 1982 and 1981, and the related special-purrx>se statements of revenues and costs for each of the three years in the period ended December 31,1982. 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 Resolution 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 District in conformity with generally accepted accounting principles.

In our opinion, howeser, 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.

l Arthur Andersen & Co. i l

Omaha, Nebraska, March 14,1983.

30

/

Nebraska Public Power District i POWER SUPPLY SYSTEM Statements of Assets and Liabilities December 31,1982 and 1981 Prepa' red Pursuant to Requirements of the Power Supply System Revenue Bond Resolution 1982 1988 ASSETS ahouunds of DuHue Utility Plant in Service (Note 2) . . . . .$691,761 $698,610 Less-Reserve for depreciation (Note 1) . . . .. 20,780 15,116 Amounts funded from revenue (Note 1) . .. . ... . 380 107

$670.601 $683,387 Construction Work in Progress (Note 2) . .. $ 31,359 $ 24,621 Less-Amounts funded from revenue (Note 1) . . . 1,288 596

$ 30,071 $ 24,025 Spcial Funds:

Debt reserve account . . .$ 57,247 $ 56,219 Reserve and contingency fund . . . 8,122 6,692 Construction funds . . .. . . .. 66,556 138,043 Development funds . . . .. .. 15,776 58,680 Revenue fund . . . 845 1,713 Oprating fund . . . . . . .. . . . . 12,934 9,313 General reserve fund . . . . . . 32,166 -

$ 193,646 $270,660 Accounts Receivable, insurance claim (Note 4) . . .$ - $ 2,045 Accounts Receivable . . .. . ..$ 554 $ 1,885 Interest Receivable . . . . . . . .$ 3,611 $ 9,075 Fuel inventory, at average cost . .. . .5 17,092 5 7,752 Prepayments and Other Assets . . .5 898 $ 452

$916,473 $999,281 LIABILITIES Revenue Bonds:

Serial Bonds-4.40%-5.60%, due 1982 to 1985 . . . .5 32,595 $ 38,255 4.90%-6.00%, due 1986 to 1990 . . .. . . . . 66,780 66,780 5.509-6.40%, due 1991 to 1995 . . . 87,775 87,775 5.70%-6.60%, due 1996 to 2001 . . . 74,050 74,050 Term Bonds, with annual sinking fund requirements-5.80%, due 1998 to 2012 . ... 168,930 168,930 6.13% , due 1999 to 2016 .. 239,635 239,635 6.75%, due 1999 to 2001 . 23,025 23,025

- 6.90%, due 2002 to 2008 . . 75,345 ,75,345 7.109, due 2009 to 2016 129,005 129,005

$897,140 $902,800 Development Notes,8.25%, due 1982 . .

- 80,000 Accrued Interest . .

- 1,100 Accounts Payable and Other Accrued Liabilities 10,576 9,511 Operating Reserves (Note 1)-

Renewals and Replacements .. .. 6,899 4,443 Coal Car Maintenance . 1,858 1,427

$916,473 $999,281 The accompanying notes to financial statements are an integral part of these statements. bb 4

Nebraska Public Power District POWER SUPPLY SYSTEM Statements of Revenues and Costs for each of the Three Years in the Period Ended December 31,1982 frepared Pursuant to Requirements of the Power Supply System Revenue Bond Resolution 1982 1981 1980 (Thouunds of Di&re Resenues (Notes 1 and 5):

Sales to the Electric System .. . .. .. . .5113,676 $ 72,825 $ 58,467 Investment and other income (Note 4) .. 14,866 4,555 5,691 Total revenues . . ... . .$ 128,542 $ 77,380 $ 64,158 Costs:

Operating expenses-Production-fuel . . . .$ 47,795 $ 28,338 $ 21,392 Operation and maintenance . .. . 14,990 8,207 8,068 Insurance . . . 851 873 989 Provisions for operating reserves (Note 1) 2,374 1,712 695 General and administrative . . 2,597 1,547 1,212

$ 68,607 $ 40,677 $ 32,356 Debt service (Note 1)-

Principal . . 5,660 5,405 5,170 Interest . . 54,275 31,298 26,632 Total costs . .5128,542 $ 77,380 $ 64,158 The Jt companying noten to financial <>tJtements an' an integral part of these statements.

32

D. Special Funds -

Nebraska Pubh.C Power Distnct Special funds consist of $W2,481,000 of investmeni se-POWER SUPPLY SYSTEM curities and $1,165,0m of cash as of December 31,1982, and

$267,780,000 of investment securities and $2,880,000 of cash Notes to Financial Statements at December 31,1981.

0)

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES: Im estments are made in U.S. Gosemment securities, Fed-A. Organization- eral Agency obligations, and bank certificates of deposit. The The District has three separate divisions for accounting Debt Reserve Account in the Debt Service Fund and the Re-purposes as follows: serse Acc unt m the Reserve and Contingency Fund are val.

Electric System ual wmi-annually at January I and July I at the bwer of wst Nuclear Facility or market in accordant e with requirements of the Power Sup-ply Resolution. Gains or losses on valuations are included in Power Supply System ,

investment income. The securities in the remaining funds are As required by Bond Resolutions, separate records are maintained for each division. The Power Supply System finan- valued at the lower of cost or principal amount in accordance cial statements exclude the Electric System and Nuclear Facil- with requirements of the Power Supply Resolution.

ity, for which financial statements are presented separately (2) CONSTRUCTION AND FINANCING:

herein. The Power Supply System financial statements should The District formed the Power Supply System in 1972 to be read in conjunction with such other financial statements. finance, construct, and operate additional power genuation, transmission and related facilities. The entire output of the B. Basis of Accour g-Revenues are raognized and billed at an amount equal to Power Supply System is sold to the Electnc System.

Throughout 1982, work has continued on the MANDAN (osts as defined by the Power Supply System Revenue Bond Resolution (Power Supply Resolution) whic h inc lude operating Project which is a high voltage transmission line plannat for, expenses (excluding depreciation), and debt service on the anmng ther things, the seasonal exchange of power and asso-revenue bonds, less insestment income. Resenues are com- atM enagw htings with The Manitoba Hydro-Elatric puted and billed so that no equity is accumulated in the Power Board of Winnipeg, Mamtoba, C_anada are being held to de-selop a seasonal exchange agreement. The in-service date has Supply System.

Costs as defined by the Power Supply Resolution differ in n defenal kmn W86 to 1988. Applications for > tate and the following respects from generally accepted accounting

'" "I P"*N* d'" I" P*F*

principles: 0) LITIGATION:

In 1980, the District tiled suit to remver amounts totaling (1) Amortization of the debt principal is included as a in excess of $50 million from National Industrial Constructors, cost .in the accompanying Statements or Revenues and Inc. (NIC), Austin Industries, Inc. and Federal Insurance Com-Costs as ' Debt service-Principal .

pany. The suit alleges damages from delays, cost os erruns, and Depreaation is not recordal as a cost. Had the D.i s-

, for other damages and expenses associated with the construc-trict provided straight-line deprec,ation i over a 40-year life tion of Gerald Gentleman Station Unit No.1. The general con-rather than including amortization of debt principal over tractor, NIC, counter-claimal against the Distric t to recoser the same period, costs would have increased $8,100,000 amounts totaling in excess of $32 million as a result, among for 1982, $4,900,000 for 1981, and $5,100,000 for 1980.

other things, of the alleged failure of the District to effe(tively Accumulated deprea,ation through December 31,1982, coordinate and administer the construction of Unit No.1. The would have mcreased costs approximately $23,300,000.. Min se currently engaged in diw osery procealmgs.

The reserse for depreaation shown on the Statements of Assets and Liabilities was provided by recording amounts The suit fikd by NIC against the District in District Court equal to repayment of debt. of Lancaster County, Nebraska, has been stayed, pending the outcome of the suit descnlel in the preceding paragraph..

(2) Billings to provide capital for renewals and re-placements of property and capital additions are included (4) INSURANCE CLAIM:

in the accompanying Staternents of Revenues and Costs as in April,1982, an agreement was reached by the District

" Provisions for operating reserves". Under generally ac. and its insurance carrier for the recovery of additional ex.

cepted accounting principles, capital additions and penses totaling $2,522,000 associated with the Daember, provisions for renewals anc' replacements are not ex. W79 outage of Gerald Gentleman Station Unit No. I. A (laim penses but feulusive of minor items of property) are rneivable of $2,045,000 was recorded in 1980, reducing bill-charged to utility plant. ings to the Electric System by the same amount. The balanc e of the settlement t$477,000) was recorded as revenue in 1982,

0) Interest income on (onstru(tion fund insestments also reducing the billings to the Elec tric System.

for Gerald Gentleman Station Unit No.1 and Unit No. 2 is capitalized although commercial operation began in (5) RATE COVENANT:

April,1979 and lanuary,1982 respa tively. Such income The District is required under the Power Supply Resolu-would be included in income of the period under gen. tion to (harge rates for ekstric power and energy from the l erally auepted accounting principles. Power Supply System so that revenues will be at least sufficient to pay operating expenses, aggregate debt service on the (4) Charges for Power Supply S) stem services are Power Supply System Revenue Bonds, amounts to be paid into based on cost and facilities are financed with debt securi- the Debt Reserve Auount and Rese se and Contmgen(y fund, ties. Therefore, there are no significant unrecorded msts and all other liens payable out of resenues of the Power Supply of inflation in the financial statements. System. The debt service payments are $65.6 million per year C. Utihty Plant- through 2012 and a total of $135 3 million for the period 2013 Amounts borrowed for interest expense, less interest through 2017.

earned on insestment securities, all financing msts and all other msts related to construc tion projats are capitalized.

33 L

Nebraska Public Power District NUCLEAR FACILITY Report of Independent 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 sulxlivision of the State of Nebraska) as of December 31, 1982 and 1981, and the related special-purpose statements of revenues and costs for each of the three 3 ears in the period ended December 31,1982. Our examinations were made in accordance with generally accepted auditing standards and, auordingly, included such tests of the accounting records and suc h other auditing procedures as we considered necessary in the circumstances.

The accompanying special purp<ne financial statements base been prepared for the purpose of complying with, and on the basis of, accounting requirements specified in the Nuclear Facility Resenue Bond Resolution adopted by the District on August 22,1%8, 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 Nuclear Facility of Nebraska Public Power District in conformity with generally accepted accounting principles.

In our opinion, however, the special-purpose financial statements of the Nuclear Facihty of Nebraska Public Power District referred to abose 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 14,198 L 34

Nebraska Public Power District NUCLEAR FACIUTY Statements of Assets and Liabilities December 31,1982 and 1981 Prepared Pursuant to Requirements of the Nuclcar Facility Revenue Bond Resolution ASSETS "82 "8 8 .__.

(Thout.nds of Doll. irs)

Utility Plant in Service . . . . . . . . .5392,029 $390,350 Less-Reserve for depreciation (Note 1) . . 64,581 54,977 Amounts funded from revenue (Note 1) . . 7,671 6,602

$319,777 $323,771 Construction Work in Progress .. . . .$ 52,895 $ 40,455 Less-Amounts funded from revenue (Note 1) . . . 27,329 20.846 5 25,566 $ 19,609 Nuclear Fuel-Net of Amortization (Note 1) . . .$110,454 $116,680 Special Funds:

Debt reserve account .

.$ 26,250 $ 26,529 Reserve and contingency fund . . . . . 6,248 5,63'6 Additions and improvements . . . . . 2,831 2,451 Construction fund . . .. . .. . . . 8,255 196 Bond anticipation notes . . . 5,001 18,350 Fuel reserve account . . 8,175 77 Fuel disposal fund (Note 2) . . . . 20,263 6,928 Operating fund . . . . . . . . . . 1,980 2,969 Revenue fund . . .. . .. .. 793 1,101 General reserve fund . . . . . . 589 -

S 80,3fl5 $ 64,237 Accounts Receivable . . . . . . . . .$ 10,532 $ 8,571 Interest Receivable . .. . .. . .. . . .5 1,732 $ 1,121 Deferred Charges and Other Assets (Note 2) . ... .

.$ 16,483 $ 1,392

$564,929 $540,381 LIABILITIES Revenue Bonds:

Serial Bonds-4.659-7.20%, due 1982 to 1985 . . .5 33,325 $ 43,385 4.80%-7.20%, due 1986 to 1990 . . . .. 45,685 45,685 6.00%-7.30%, due 1991 to 1995 . . 18,780 18,780 7.38%, due 1996 to 2003 .

11,745 11,745 Term Bonds, with 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

$400,165 $410,225 Bond Anticipation Notes of 1981,10%, due April 1,1983 . 22,800 22,800 Operating Reserves (Note 1) . . 102,967 97,226 Reserve for Nuclear Fuel Disposal Costs (Note 2) 35,964 6,853 Accounts Payable and Other Accrued Liabilities . 3,033 3,277

$564,929 $540,381 The accompanying notes to financial statements are an integral part of these statements. 35 t

- - - - - - - -.-.,n., ., , , - , . , -n. - . . . ,,, , -- - - - - - .-. ,- - ,-- - - . - - , ,

e Nebraska PubliC Power District NUCLEAR FACILITY Statements of Revenues and Costs for each of the Three Years in the Period Ended December 31,1982 Prepared Pursuant to Requirements of the Nuclear Facility Revenue Bond Resolution 1982 1981 1980 Ghousands of Dollars)

Resenues (Notes 1 and 3):

Sales-Electric System .5 53,563 $ 55,033 $ 38,470 lowa Power and Light Company . 53,549 55,042 38,480 Insestment income . 7,907 5,683 4,608 Total revenues . .$ 115,019 $115,758 $ 81,558 Costs:

Operating expenses-Production-Fuel . . .. .$ 38,957 $ 20,556 $ 1o,891 Operation and maintenance . 21,330 18,054 16,222 losurance . . . . . . . 3,656 3,167 2,281 Provisions for operating reserves (Note 1) . 13,319 36,190 8,352 Technical and administrative 4,147 4,173 4,173

$ 81,409 $ 82,140 $ 47,919 Debt service (Note 1)-

Principal . . 10,060 9,595 9,145 Interest . . . . 23,550 24,023 24,494 Total costs .5115,019 $115,758 $ 81,558 The an ompanying notes to financial statements are an integral part of these statements.

Nebraska Public Power District NUCLEAR FACILITY Notes to Financial Statements (excluding depreciation), and debt service on the revenue (1)

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES:

>n , metnwnt inmnw. Rmnues am wmputed and billed so that no equity is accumulated in the Nuclear Facility.

A. Organu.ation -

Costs as defined by the Nuclear Resolution differ in the The Distrid has three separate divisions for accounting following respects from generally accepted accounting purposes as follows:

principles:

Electric System Nuclear Facility (1) Amortization of the debt principal is included as a Power Supply System cost in the accompanying Statements of Revenues and As required by Bond Resolutions, separate records are Costs as " Debt service-Principal" maintained for eath division. The Nuclear Facility financial Depreciation is not recorded as a cost. Had the Dis-statements eu lude the Elec tric System and Power Supply Sys- trict provided straight-line depreciation over a 30-year life j

tem, for which financial statements are presented separately rother than including amortization of debt principal oser herein. The Nuclear Facility financial statements should be b -

Wd Mi hm d MMO read in conjunction with such other financial statement >. for 1982, $3,200,000 for 1981,and $3,700,000 for 1980.

Accumulated depreciation through December 31,1982, l B. Basis of Ac counting- would have increased costs approximately $39,900,000.

Resenues are recognized and hilled at an amount equal to The reserve for depreciation shown on the Statements of (osts as defined by the Nuclear Facility Revenue Bond Resolu- Assets and liabilities was provided by recording amounts tion (Nuclear Resolution) whic h include operating eywnses equal to repayment of debt.

36 l

(2) Billings to provide capital for renewals and re- the District, until approximately 1990. The cost of disposal of placements of property, capital additions, and nuclear fuel spent fuel and fuel in the reactor is being provided as part of are included in the accompanying Statements of Reverues the fuel cost of the Nuclear Facility. The disposal cost esti-and Costs as " Provisions for operating reserves", Under mated under provisions of the Nuclear Waste Policy Act of generally accepted accounting principles, capital 1982 as of December 31,1982 ($36 million), has tren re-additions and provisions for renewals and replacements corded as an operating reserse. A portion of the disposal cost are not expenses but (exclusive of minor items of propertyr ($21 million) has been bilkd and deposited in the fuel disposal are charged to utility plant. Provisions for working capital fund. The portion of the disposal cost ($15 million) which has for nuclear fuel are not expenses under generally accepted not been billed is recorded as a deferred charge and will be accounting principles until the fuel is used. billed in 1983 through 1985. Some of these costs may ulti-mately be the responsibility of GE under the nuclear fuel sup-(3) Interest income on construction fund investments ply contract for the mitial fuel. GE has agreed to commence the is capitalized although commercial operation began in July,1974. Such income would be included in income of m o w al f spent fuel related to the GE contratt from Cooper the period under generally accepted accounting Nuclear Station to GE,s storage facihties at Morn,s, Illinois, as soon as legally possible and practicable, and wilI share certain principles. ,

costs associated with removal. Each party has a tull reservation (4) Charges for Nuclear Facility services are based on of rights with respect to buyback payments, all shared costs, cost and facilities are financed with debt securities. and ultimate responsibility for disposition of the spent fuel and Therefore, there are no significant unrecorded costs of attendant costs.

, inflation in the financial statements.

(3) RATE COVENANT:

Nu a u in the reactor is twing amortized on the basis N" " #'

charge rates for electnc power and energy fmm the Nuclear of energy produced as a percentage of total energy expected to Facility so that resenues will be at least sufficient to pay twpmd e t operating expenses, aggregate debt service on the Nuclear D. Special f unds- Faciiity Resenue Bonds, amounts to be paid into the Debt Special funds consist of $79,171,000 of investment secu- Reserve Account and Reserve and Contingency Fund, and all rities and $1,214,000 of cash as of December 31,1982,and other charges or liens payable out of revenues of the Nuclear

'j $62,743,000 of investment securities and $1,494,000 of cash Facility. The debt service included ahme is payable at ap-at December 31,1981. proximately $33.6 million annually until 2003. This will be Investments are made in U.S. Government securities, Fed- increased about $2.7 million with the 1983 Series.

eral Agency obligations, and bank certificates of deposit. The Under terms of a power sales contract with lowa Power Debt Reserve Account in the Debt Service Fund and the Re- and Light Company (lowa Power), the District makes available serve Account in the Reserve and Contingency Fund are val- one-half of the prmfuction to lowa Power with the balance

! ued semi-annually at January 1 and July 1 at the lower of cost available to the District's Electric System. Iowa Power and the or market in accordance with requirements of the Nuclear District's Ek ctric System each pay a proportionate share of the Resolution. Gains or losses on valuations are included in in- nuclear fuel costs (based on energy actually delisered) plus vestment income. The securities in the remaining funds are one-half of all other costs of the facility.

valued at the lower of cost or principal amount in accordance The District has also agreed to make available, through its with requirements of the Nuclear Resolution. Ekctric System,12h9 of the output of the Cooper Nuclear E. Reclassification- Station to the City of Lincoln.

Certain amounts were reclassified in the December 31, H) PLANT DECOMMISSIONING COSTS:

1981, financial statements for consistency with the presenta- Reserve funds established under the Nuclear Facility Rev-tion in the December 31,1982, financial statements. enue Bond Resolution,together withany surplus funds derived (2) NUCLEAR FUEL: from the ownership and operation of the Nuclear Facility, are The District has entered into contracts for various nuclear eyrcted to be available for payment of decommissioning fuel components for fuel h>adings as follows: costs. As a result of changing conditions and requirements for icar ihrough decommissioning, the District in: ends to continue reviewing Nutlear Fuel w hit h Requiremenis decommissioning costs and funding mquirements in the future.

component Suppliers Are Prmided Uranium Concentrates . Various 1986 (Estimated)

(5) CONSTRUCTION AND FINANCING:

Conversion . . Allied Chemical As a result f certain additions and modifications to Corporation 1987 , "N d'. Station required by the Nuclear Regulatory Commission, it is estimated that the remaining (ost to com-

! Enrichment . , . U.S. Department plete the facility will approximate $10.1 million. The District of Energy 2007 intends to finance such requirements from the prmeeds of Fabrication . . General Electnc 1988 Nuclear Facility Revenue Bonds,1981 Series and other avail-The District has expanded its capacity for storage of spent able funds.

fuel and it is estimated that such capacity will be adequate for storage of spent fuel, including the fuel which General Ele (tric Company 1GE) is responsible for removing under contract uith 37

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Power District 39

STATISTICAL REVIEW l Nebraska Public Power District Electric System, Nuclear Fac Aserage Number of Revenue Customers kwH sales 4 f rom Sales 9 (Ihousamh) (T housaruh)

SALES Retalk Residential . 81,066 691,315 7.6 $ 40,598 13.0 Rural & Farm 5,722 83,661 0.9 5,496 1.7 Commer( ul 17,383 540,242 5.9 30,912 9.9 Industrial . 100 554,109 6.1 21,387 6.8 Municipal & federal 3,105 138,965 1.5 7,279 2.3 Total Retail . 107,376 2,008,29' 72.0 $ 105.672 33.7 Wholesale:

53 Municipalities l Total Requirements) 1,063.948 11.6 $ 35,714 11.4 18 MuniOpalities tinterconnection-Partial Requirements), 374,012 4.1 8,439 2.7 26 I Iuhlic Power Distn(ts & Cooperatives l Total Requirement 3l 3,108.626 34.0 99,206 31.7 Other Utilities-Non. firm & Participation . .. 2,595,310 28.3 56,384 18.0 Total Whok sale 7,141,896 78.0 $ 199,741 63.8 Total Electric Resenues . 9,150,188 1(p.0 $305,415 97.5 Other Operating Resenues . 7,704 2.5 Total Electric S)shm Operating Revenues . . $ 113,1_1!) _100.0 Produc tion GENERATION kwH  % Cosu 4 (Thousamh) (T housands)

Production:

Flectric System tinduding Interchange) 453,068 4.7 $ 16,967 7.5 l Pur(hased:  !

Power Supply System"' 4,585,313 47.5 $113,676 30.1 Nut lear facility

• 2,638,997 27.4 59,338 26.2 Other . 1,966,369 20.4 16.883 16.2 Total Power Purchased 9,190,679 95.3 $209,897 92.5 Total Power Produ(ed and Purchased 9,643,74_7 _1_00 0 $2_26,864 100.0 (1) The Ile(toc System punhases 1001 of the net generation of the Power Supply System and 50% of the net generation of the Nuclear Facility bawd upon the total costs of the respettise systems. Pursuant to the Power Sak's Contra (t, Iowa Power and licht Company pun based 2,617,085,000 KWils. towa Power and Light participation is not induded in the table.

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NPPD's dollar comes from NPPD's dollar was used for MUNIOPAL & OTHE R OP[R Aik)N AND MAINT[N AN([

()THt R ()l'IR ATING ilNCLUlXS ADMINISTRAllVl, RgytNets ] w flDIR AL SALIS-2.Vi NEi FOR tlOND RtTIREMENTS.

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General Offices Columbus, Nebraska

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