ML20036A212
| ML20036A212 | |
| Person / Time | |
|---|---|
| Site: | Crystal River  |
| Issue date: | 12/31/1992 |
| From: | Todd T ORLANDO UTILITIES COMMISSION |
| To: | |
| Shared Package | |
| ML20036A206 | List: |
| References | |
| NUDOCS 9305100220 | |
| Download: ML20036A212 (57) | |
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- thinking, to SetVO, to conserve.
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() bt h! es Conlnll%i()n duriII$
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m~c a: stoaashne-einmeco,on u oui m iolunseasonaw mad.
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-' 'l weader through(>ut the s(vr. su;)l>rt ssed sales zinci res enues l
a i aftene.m of imp:e-iw couth. Ako during wu, nuior 23 j (hances uere made in the organizational strut ture.
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i us,lh l nunag* TI Ill p!odult' ani.lNler Molk} s cai and OL.Cs strengths f
l T of l uere (oniumed by owrall simng pertornun(e. Near record 1
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interest and other i:n ome (oupled with prudent operating I
l l expense c onnos, generated a wn soca income suement.
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Renuinina in esuemeh sound financial (ondaion. OUC re d nel ll.' f()l) (IkiIIf f l illd (3 alIls' ( l'( f ( dnl ud e u IY l
in the nation l
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j j f!ct tric and u ater ( ustomers c ontinued to reap the loneists of y
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/ l rates that are among the lowest m the state. T he prik e at pow er, u hn h ha. renumed !es el for in e (()nsecutis e s ears.
j j was jouered. And while our rates renuined amona the l
l lou est. !wh ehi tric and u ater sen i(es ( ontmued to impros e !
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< " ~ "" ~" k e' he "* e l resuns onhe son es res e.
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querica sar Ot :t s o.oma a uood nh. T.h.,ewi or <ustomer is.
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%atisfat tion is I Tm hither dun last War and 1O p4 lints higher eL g
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h(T d{aln Ie((~ s e a f( dI le Y arQe
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l l dnidend theough OL C s contributions to the utv whit h help i
ld ( ( (Mrs n f dn( ! f )!(
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l NO a tnessed the (.'omm.wion mtina unan mousiv to i
pIo(eed u uh the (()nstfu( tion iIf a set.ond Mt/netatins unit a!
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( ustomers well into the nett (entun. As uith the first omt.
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evn effort uiU be nude to presene and proted the l
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j We beliese strongk that OUC must prepare to provide a j
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-~"-'--~~--~~~~~----""~-R j growing customer base w ith an adequate and reliable supply PROUD to serve
- of high quahtv water and ek ctriots. Ilowever, we are equally l
! strong in our beheithat OUC has a paramount responsibiht3 to !
j j minimize the impact o: our operations on the ensironment.
! When Hurrn are Andrew strut k South I h>rnia last summei l
l l the ( )rlando l!nhties ( omnussion and us emplovees j
l Determined to presene and protect the enuronment. ue are l msptx*d qua kh Witlun two davs volunteers had hlk d j
e
! plat ing a major emphasis on expand:ng our a!.eadv l 1Wm om-gallon bottles of pure ( M 4 uaici and sent them l
l impre3she tonsen ation pmgram and taking steps to insuhe j to the ds.wter area T he mf ) to (,Q pmn i u # tust the l
heginnmg o1 an outpounng o1 assstan< e f molovn s j customers in tha process. We has e formed a a
also rea< hed mtotheu in kets donahng l
I j Customer A<hison Committee on ll Consenation to make (ertain that all of our
,- % Won m rehet funds
' f "stakeho!ders~ are represented in our
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A week later nearh no hoemen
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l We are part culadv pmud of our
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l empiowe. this vear. ( onnonted wstem. The dm asianon shoi Led l with estraordinan chaNenaes. thev the workers v >me to the point or
! uorked men harder to maintain teat s But then thn got dow n to j and strengthen the irnage of OllC.
htonu"^ toihnu in in, dan n i< > dusk j
j lhis tact is sup;x>rted bs the sers and nentualk repl.n mt mom than l
j posith e earninas levef. hv ths
~ ~~ T m distuhunon poies and Jn nnhs or l
-7 l impmvements in quaht3 of sen i(e and power Inws 4
reliability. and bs out (ustomeri posithe
.l response to all surver "Ihe < om hhons ioi vour < reu s < ould not h.n e l Another bright point in OL ("s 1992 performanc e wnters j
heen mon. dinn uh ' onn ials of the ( in of lionw*ad j
l arom.a in > great (ontiibution oi the Commiwioners. In the j w rote latn ' I host of us who had the pm ileue ut u orknu
! iac e at unequaHed demands. they guided OUC through l with voor stan u ih alu avs n memler the detemunanon j
! resourwruimy. and minal < omnutment thn Itemonsnan d i
! d aHenging times u hile maintaining the quahty performant e j th it we haw ( ome to expect from the OUC team.
l in helptng us thniugh thesc < atasnophn innes ne thank v< >u j
l and salute vou h n v4iur suppon. "
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! Teamwork and quahtv are hvuords at OUC and 1W2 trulv I
l was a 3 ear n hen the team played together to u m. ( ontinuing a M dm ( X 4 eniplovns denwnsnate the same f
j traddion that has bec ome an inwgral part of thi3 fine
- comnutnx nt to the pn>ple thm serve. pros nhou ein o n and l
water sen u e of nu ompronused quahn and n habihn
' Conunission, I
l 1992. It u as truh a 3 ear ot grand performances by the l
g l OL'C "PROUD" team:
l Protect and Conserve
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Conservation a
l Power to Scave....
...... 1;
- Tmy W. imld l
Preview and Review.......... In 4
Lsecuth e Viw President and General Manaaer l
Managernent...................18 l
l Cornparative HighGghts..... \\n l
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FinancialSedian A \\
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l Protect and i Conserve l
l OL :C behes es in the cleanliness of the em ironment. We do
{ not behese that anyone has the right to make our
{ enuronment any less habitable.
! Not satisfied with merely meetina minimum state and federal
{ requirements, ne design and build our power and uatir
{ iac ilities to operate signiin antly (leaner and saier than j requaed by all gmernment standards l
! OLC is nationally rn ogni/WI as an em ironmental leader.
! When Neu su eek magazine ( hose ()rlando as one of
{ Ameri( a's best \\oung cit;es a few years ago, it < ited the euellent enuronmental performan(e of the ( urtis it Stanton j Energy Center.
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[xemphiying OUCi( ommI! ment to air p
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quality. Stanton 1 is one of the c leanest 7p coal-fired power plants in America. In operation since 19C, it operates far cleaner than the Clean Air At t hg'
.)pg requnes.
A' Mote than $100 milhon a as A
spent on environmental l
7 protection equipment and systems g~ Pf at the plant. 20"o of the total construc tion ( ost.
-a When it adds a 3a and unit at Stanton 2, OUC uill take its environmental commitment esen turther. T his umt will be the first pulverized < oal umt of its size in Americ a to use j Selectise Catalvtic Reduction equipment to reduc e nitrogen l oxides emissions. This is a big - and expensit e - step fora ard l toward maintaining superior enuronmental protection.
l
! In terms of water quality, no potable water is used for cooling.
l Both Stanton units are designed to protect and (onserve this
! pret ious resoun e by using "gre)" water. Like the first unit,
! the set ond u111 be a 'zero disc harge" fac ihty, meaning that j no uater used in plant operations w ill flou into the ground or natural k)o(be* ot u ater lnstead, it u i!! be rel y( lfMi and l
l reused.
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( )n the site are the neshng ---- ;
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uniunds of the Red 4 (x kaded
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A maintains a iorest 4
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4 proin t them and enhant e in addition, both units are designed to use treated wastewater for c ooling. Together, they then habitat. As a result. other l
will use up to 10 million gallons a day of treated sewage effluent.
wildline thoves in this pn nn 1ed em nonn ent. su( h l
)
The Stanton Energv Center is situatni on 1280 acres, some of them en ironmentally as the eagle shown at right l
fragile. In esers area. OUC has taken steps to mitigate the impact of its power plant. For instance, OUC has engineered its transmisuon lines to amid and minimize their effect on wetlands. To further m:tigate Stanton's impact on the wetlands and to emic h the emironment, OUC will plant 52.000 cy press and long-leaf pine seedhngs.
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indisputably a tec hnolouical at hiesement, Stanton 2 u ill again attract national attention to "L
- T Orlando. But the Stanton plant reflects just part of OUC's overall comnntment to environmental prote( tion.
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)l The same deda anon to protet ting and preserving the environment is evident at OUC's
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Indun River Power Plant. Sinc e it began operation in 1%0, it has ahvars operated well
's within federal and state air emieion limits. Annuad, OUC invests an additional 53 millior y
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to $4 million to huv cleaner iuch, and maintain the superior environmental performance of oc fxii.. noring m2. suiiur emissions at ire were epprosimatelv one.tourtn of the
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Customers inst,illing high ettit ient s elec tric heat pumps that meet ()lJC standards and also Iemoving ele ( tiit iesistant c heatmt; u ill rec eis e 5300 rebates. Commen ial ( ustomers installing ( )t:f-appros ed etiit ient lu;hting tet hnology will ret eis e $100 rebates for eat h kilowatt oiinetiioent lighting load remos ed The utilits has also ad ipted ( )ptional ~iime of Dat Rates as well as Optional Curtailable Rates to pros ide int entiws io: < ommen ial ele ( tric c ustomeis to shitt or ( urb their peak energy use. lo ( onsen e u ater, Ol:C has les elized rates for ( ommer(ial customers, eliminatina mlume dscount..
Two det ades ago, during the fitst "energv ( risis", OL :C responded with a free home energy audit program thJI hewne a model for the state. T he Ilotida Pubhc Servic e Commission lauded ( JUC as the on;;inal leader in energy consen ation.
OL;C still offers residential energy suney', gis ing ( ustomers $10 for has ing the audit, a free; uater heater insulation jat ket, and a ungen icpurt on energs-sasing rn ommendations.
The residential survey now includes a a ater use audit. and audited (ustomers recei,e rain gauges, leak detection products and water !
(on3en ing literature as w ell as a w ritten repmt.
in some cases, OUC ewn prosides financial assistance
["? for customers to make small home improwments
'% designed to ( onsen'e resoun es.
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}. o. ;p M.? filawis e natural lesen( Nr, and u ater ( onse!Lilion may seem unnect'ssary. [$ut el5eu hef e in I'lorida and around the nation. water is inneasingly s(an e. We rn ognize, therefore. that water is a y
prec ious (ommodity that must he used responsih!v.
In the coming vears. ()tlando's growth w ill require more power and u ater. OUC will meet those needs -
with an una awring (ommitment to (onsen e and protect our.
resourt es and the ens ironment.
hage B
O 5
,v l Electric 1
j l
l
. l f Competition is niming to the eht toc po,wr mdustry. And
~
j like the teln ommunication8 mdustr> befo'e it, elet tric j
Utilines uiH need h > prep.Mc themselws kir a highly l { c ompetinw, deregulated marketplaw - a m u ke l
) l ein trif its uill be sold hke any other'u,mmodits.
! ; o e c s ahead u n an c u enen n o m peno w pounon. u ah the
- l. hehesumna ranne of anv ch.on< unhtun the nanon. ihe thinLk> west electric rates anuing in nin olar Ih)rnia's 'liig s
~ '
7,
) {
ten" pou n prosiders. and the highest reliabihtv in the state
'e
- e -
j { tor the su ond war in a ron. Awrage annual ( ustomei
's (
outap,e ttrue dropped i 5"o to 4'i.H minutes for the year.
l 1he unw h sharpened s o,mpennw ese th,ough meidi
! strategic thinking and long-term planning for instanw. ()l C 1;.-
- l huilds pi>wer plants not only to moet projn ted ( dpa(ity N
needs, but also to ensure reliabihtv, uintain fuel ( osts, and k
! proside other n onomu benefits tor ( ustomms. After ihme
{ decades ot'such strategic pkinning. it ou ns a diwise mix of
- 'j o
generalM an It's()url t's.
l l At its Indian Riwr Generating Stanon in lirevard County, it
,gf l has three steam-generating and four joint!v-owned
~ '
( omhustion turbine units, all of u hi< h ( an burn either gas or i
ol. At the Stanton Energs Center, it has a i oahiired unit d
r -
l w ha b ( an he (ons erted to burn natural gas ( X C also ow ns
~
~;
kf
{ interest in iakeland s ( oal'oibetuse burning plant and ow ns g
an interest in two no(lear pkints.
sE l
8 lh ( is eIs v dof l esihlhf y end )!eb ( K. C b} kNke nldslmum adsaritage of fue! nlarkei(ond Nons through a4greniw, l
l innovatiw fuel ptor urement strategies.
~l he strategi( nming of eat h additionid unit has also enabled i ouC tm -,,0.. d
.h1 em N
L
{ markets, sut h as non esists, a hile its ow n demand grows j Such interim sales signiin antly help Ol:C otiset expenses and l save ( ustomer s money.
! A pawscuer in joint a( tion and interutility agreements. OUC l otten sells ounerslup interests in neu urnts to other municipal l utih!ies [)rfis i(bng a tu!1!)er saviflgN h)! (listoMH'rs.
l l
l l
Page 9 l.>
t
_J
OUC's strategic position was further improsed in 1992 w hen the governor and state cabinet unanimously appros ed adding a second unit at Stanton, and the Commission authorized funds to begin construc tion in the spring of 1993. T he plant is to be in operation by mid-1996.
The sec ond unit w ill take Central F lorida into the next centurv, providing abundant, reliable power for the entertainment and tourist industries, manufacturing and residential growth.
Without it, Central F londa (ould not meet its energy needs by the end of the decade, even taking slower growth in the 1990s into a((ount.
As part or the oserall Stanton plan, the second unit was designed to be nearly identical to the first. liy replicating the first unit, OUC analpts estimate they has e ( ut 20% from the cost of the semnd unit.
1 10 Lut costs further, OUC has sold a 28.4"~ interest in Stanton 2 to the florida Munic ipal Power Agen(v on behalf of 14 other municipal utilities. OUC, which ouns the site, will retairt a 71.6" ownership interest in the sewnd unit, and w ill be responsible for building and i operating it. It also retains a 6R5"h interest in the first unit.
Ahhough a replica of the first coa!. fired unit, Stanton Unit 2 will feature hundreds of impros ements. inc luding state-of-the-art technology that w ill maintain air quahty far beyond the toughest standards.
Stanton was not the only electric a(tivity of note in 1992, however.
Tm tointly owned, gavoil-fueled (ombustion turbine units were installed at Indian River. A se(ood transmission line was added from Indian River to Stanton. A portion of another one uas need to make way for a fourth runway at Orlando international Airport.
e,
,3
+
w A new energy control ( enter went into operation in June, pros iding enhanced
(_
O Y.
l load dispalt hing sers it e for OLtc and the florida Municipal Power Pool.
m.
wm x QGS Efy[. ;g Two new substations were mmpleted, one to serse O
'e
[
]
b Airport and one to serve the growing southwest area includmg Unisersal Studios. Their ( ombined ( apat ity is enough to serve the equis alent of 20,000 s
h< >mes.
e When it mmes to aesthetics, OUC is the state's most aggressive utihty. New substations, for instanc e, are designed to blend into the neighborhood. Decoratise, protective walls and attrac tive lands aping surround them.
When it comes to undergrounding power lines, OL:C al,so leads the state. Approximately 40% of its system is now buried and out of sight. In the heart of Downtown Orlando, more than 80"w of the power hoes are underground lhe benefits at this practic e are practical as well as aesthetic. Undergrounding enhances system reliab;lity.
With suc h a tradition of strategic planning and responsiveness to the community and custorners' needs. OLC is well positioned for a more (ompetitise ensironment.
Page 10 s
l M
=
l Water
. r dn I b f s d (}l)
N' II ( n / lu *, IIne k le olIIN l abundant - and purest - sourt es at drinking water in the nurid.
l.
sf)ent nK)n' flme ln i99 ' !hdn e\\e[ ile ore btkNivlng e
l meth:KL to make (ertain that the a ater it deliters "is better j than it has to be.
It's all part of Ol fs " water quahtv master plan,' a strategy
! that pushes ()UCi water (;uahty standards far beyond state l and federal requirements.
l l At its Nter Quahts I ab, OUC ( hemists and te( hnic ians m()n IiJr the u ater sti;);dv t'r()ni rt1(>re !!ian (irie liundr(x!
(k d (Ins.
ley d sII((In( u( l k 'sI 'd r ( i I'. (I neU wel e
! treatment prot esses that may be n.quwd as environmental
{ requirements and ( ustomer espectations int rease.
l
!. Working with a top (onsulting firm. OUC's water quality l experts are studying new and advanced treatnient methods.
f for instan(e, OUC developed a patented method using
{ at tiv'ated carbon to remove hydrogen sulfide from the water.
l T he process is now used in tuo plants.
l
! Now its iescar( hers are experimenting n ith using ozone, air
' l stripping and ( ombinations of these and other methods to l enhance the taste and quality ot drinking water. In the future,
{ OUC plans to be prepared to use the best treatnient.niethods l as ailable to keep its u ater "better than it has to be.'
- M. ;
r(MM s ear
( a\\ s. (.)(!C llas l)(M.'rl a j)TC)gre5siW* u at('r utildy
{ that planned ahead.
l
! In the 19503, it turned to the lower f loridan Aquifer for water, e
t y
rl rlN s Ue s nl(II(' t do k t'ek )k )w k Ie huI d(e, j
plunging right to the heart of this underground supply where l water is (leanest and most protec led.
M I
- s.l
<l
- The Water Qua!ity laboratory was among the ihst to be state y
V4
.ft
{ (ertified and ( onsistently re(eives the state's highest
,e-g,
-l (ertification for testing dn. king nater.
n M
l A
l L,.
,~
f Q ff E
j
,(
- P 1
k I arger pijpes than required were ilbtalled. The pi;us ast more at the tinn., but prepared (X C for futme grouth. Similaih, OUC designed its 10 watei pl ants for eass expansion and high teliabihty. They are interronnet !cd. li sine plant is taken out of sen it e for maintenanc e and repairs, the remaining plants are designed to
( an y the load. without any in(orn enieru e to consumers.
Currenth, thanks to its network of intcu onne(led w ater plants, servi (e and transmssion mains. ouC hauhe capa(itpo handle the peatest peaks of demand u ll!niut ( utll!!g u ati'r ()tessiHe.
Re(ent studies hase also reconfirmed that the dunking water OL!C delisers to
( ustomers is tree of unsate les els of l cad ( )ur water mains are lead free and our u ater soun e, the Iluridarl Agtnier, (ontains onh tu e amt punts oithe metal.
Hou es er, ( )UC partic ipates in prograns to inform ( ustomers of ways to present lead ( ontamination that may he ( aused by in-home plunihing and tistures.
()l/( ( unlinues to loisk ahead and plan to meet anti (ipated needs lothe 7
( -l next ine vea!s OUc his ( ontingen( 3 plans to rep!;u e two older plants and N
ij aaa an eievenih plant to the smem. n aim pianao inatsse capac itv at its b
y other plants hv adamg wens. high sen ice pumps and storage tanks.
In addition, it plans to virn ert exi ting treatment plants to new or tuore s
advan( ed pn a ewes.
y<r' n
/
In 19V oUC lx gan the modemi/ation and expansion of its E-vear-old Pint k,
s fg
.d E
r j j.
but also add a nell, high servi < e pumping equipment and a ground storage tank to sianitic antly inue.ne ( apac ity.
~~
f.
- (
j lhe nniderninyl p! ant uill haast new irstrumentation and treatment
( apain htiet To the c redit ( t its plannets, the new fac ihties will be htnit w hile s
- ;' _ ~
y q4.,
f the o!d fa( ihties ( outinue to tunt tion T he sw itc hover, u hen it no ors, will 4<
7.,
without interruption of senic e.
A.
y dpe lilis pl8)j(T t epih soll/es ()U( s inini(in as a u ater (Ir(h id('r and a nt'igb!M)r, eb
- +.
- /
jg The plant is designed to reliably prodm e water of eu eptional quality, under all
/
~
%m% [,y' P lueyu,pmenm d-gned to ha (on ne 1-u,o_ noth pom o,ndmons e
n u,
o.
and uJh*T-drid profe(I tht? erls ininnlent.
0,,- -
- ~~ g dhe1 JL
,it99
~
~, %ps overall, the ta(ilits is designed to blend into the neighluhood, w ith hip-roofed
~v y
I)uil(lings, $tu(( fl w alb, arl(I a b)n --l.trofi!c w ater f arlk llarily flulie(l fo fililliTnile It' w.
1.
s of.
visual impa( l.
m q
c}.
\\
~
v ~, f.l l hr(lughoo! the J rkinning st.lges, ()UC stati un olved rieigh!x >rs in the l> roc ess, meeting with residents or the area and keeping them abreast of developments.
, 4 o, m.
p i
$I
,e Page 12
l l
r, s i The Power m~ J A P;
+ ?Q l to Serve y$.. O l [;g l
"3:
m m.
- g l After hours, OUC emplogvs show as mut h unnantment to
[
7 j their ( ommunits as they do to their jobs.
'E,
- p
{ ;
- g. _
s i :m N
[
in 1WJ that meant organving and helping olher volunkvrs Qv t.y
-o c
j:P y
< Imn.md rebuild Odando's (;ilbm u Queen PA in all.
- %A l
140 (orporate and neighlxnhood volunkvrs pik hed in to b
j nstore lite to the ohl park.
D y
()n another dav. two dozen OUC emplosees took up brushes x~
- h. j,.
t() j)aint tht h(Ime ()f a 90-yeaf-O!d (hiandt) residt'nt. lilis
.V.
t rHalked the th;rd ( ensec utive year that OUC employees have hf j partkipahd in the i ommunittwde Paint Udando lleautiful j program.
Q l
During the holiday season saares of OUC
~
y, solunteers gase up their lunc h hours to K serve hundnds of me< Is to the
?,
,F
.%s needv and homeless. Others s
[R A3 n
S,Q (k>nahd gifts to lovs for lots.
N, he.',
g
(.
~ "
l OUC's PROUD volunteers marc hed wl s.gli
~en masse" to benefit F
Crimeline. More than 240 employees and family l
members joined in the walk at iake Lola raising 54,000 for the ( ause from ( o-w orkers and friends.
@gs
~
A few necks later, OUC ernployees gave 3,
fy another $4,000 in llunic ane Relicii unds to the j sictims of Hunicane Andren. They also bottled 10,000 X
l gallons of drinking water and delivered them to South Horida.
- 9
N(>r di<l thev stint w hen autumris Uriited Way fund drive f
l rolled around, pledging a near ret ord 596,500.
^
}
4e l
yy Q j Sino 1WU. u hen OL:C launt hed its innas ative PROUD Q~ ~
i Community Volunk ers program, employees have logged N,.
- 9,600 hours0.00694 days <br />0.167 hours <br />9.920635e-4 weeks <br />2.283e-4 months <br /> of (ommunity servic e and earned neady $7,000
' i I,
j in cash ( ontributions fr0m OUC for the organizations they a
,; serve.
yj i:
l Vj l Page 13
.i
e*
lk Ief Nl ll N N} }k's ()[ lk ' )( In )f, k'%s IN dlI )It ll4.
O fd d('
games. OUC solunteen nurk atter hours to make a dnieren(e. In rewgnition of that. the 1,700. member Amerit an Public Power AssrK iatu)n last sumnier presentc<l()l-f with its Communit)>
,3?
Sen K e An ard. I or ( A 'C has (learly demonstrated it has the powt p$a to wrye the (onununity as good (iti/em too.
On The job i
- OUCs en1;>lthyees alvi wort a;);)lcitise at u< nk. While ( ustomers '
gas e OUC.i 91.5"., overall satisfaction rating in 1992, they gase esen higher m uks to ernployn s for (ourtesy and providing helpful w3 s y
information. ( her not also said emp!ovees seem well-.tramed and I
seem to nurk produc tisely.
The 41 V., oserall sathfat tion ratmg is f ar better than the national (ustonier satistalIltin raling as(' rap'()! 80"n ln addttion, customel gase ()lT es en higher marks in a separate quality arurant e surst.
3 of customers ( unta ting ( )! (., 'l hose resp! nndents gave OUC a
[\\
94.2% sa!!staltilin fating OUCs ;> hone st rs it es ati a l>artit ular sourte <if (ust<>nier satisfac tion, in all. ( JUC in cimi 7,11,000 ( ustomer ( alls in '19W hased on 24-hour, idapa-wock totals. ( )t these, 97",, w ere (onll)leted f)n the first try.
(
4 b
trainirig, emp[o)ce t'ntJM)Wernk'Ut and tlte additN)n of st)nte partlirj
,,f, s
o g
', W g orke jijr peg ( pgqi,3dy it represents a drarnatic improsement from semal tears ago when N
grow 1h temporanIV outstripped OUCs ( a!Lin response ( apabilitici Ioday, a vert user-triend!v ( omputerized iok e response ss stem pros ides customers u nh a new les el of ( ons enient e. T hey ( an now ( all atter hours, u eekends, and holidays for hill balant es and short tredit extensions.
As is esident, the t oniputerized system is not designed to repla(e personal servic e. I)uring business hours. ( allers are automatic ally put through to a personal representative: they are never " loc ked" into the (omputer menu.
T he system also helps OLT nieet the extraordinars peak in phone ( alls th, ou urs espe (ially after holidays.
Page 14
l
. New Facilities l
OUC also uses a mit e response syMem at as troub!e ( all (enter with a similar rate of suu ess. There, the wstem otiers j
other advantaues, tm. It logs ( alls and helps sern e l
- in 194J ( )l 4 reh x ated hundnsis of emplovees to its new dispatchers loc ate outage area. immedutelv. It also i
automatic alls lets callers know if an outage has alread\\ been
! 48 a( re Pershing ( );w iatnins ( i nter. Ilus ((jmsk x < (intains
( )l J(.s < omputer "nerw ( enters" toi the eks in< and l
reported in the.ir neighborhoiid. This awures u atei wstems all 14 hour1.62037e-4 days <br />0.00389 hours <br />2.314815e-5 weeks <br />5.327e-6 months <br /> operations eu ept (allers that ()Lt. ( ren s are on their u a3-l thi he at lx swer plants. and fleet ser\\ n e nelt ome nt'n 5 during skirms weather l
e r
tg ihtes lhs s a mator stagrna ama it the lights d< > go (>ut.
d i
ta n eks fr a a rew s ti x i p
4J OL'C meter readers are
..e 9 I
in addition. the utihts s thod l (ommitted to ser\\ K e, hio.
I
( uslomer sen u e ( enter is f
' at hiesing an e!!-time h.,inti s.
hx ated at Pershing it 1N.< O, s, au ura( s rate in m,.y. < u.
lealutes thhM drn(- thn; l
.u
/
14W. More and more
,. xg ~
~ ~
J.V U lanes as u ell as rulP' are achies ing 109" a( C uraC) !e\\ Pis. Su(h ser\\ k i insidelier l '
.- <- j-
- f.,-
MNHlenflal an<l snhill ac curan (an pros ;de f
L hthnkNs i Uslami r5 unewied benehts to
..v'--
~ l
.. M
( us unlers.
g i
8 l(n l) \\ f ars ( ll '(
has l
l E ! sk b
k t! II II)s t lh Meter reading data is w archousing 1.n thties ar I ake-processed eac h ny. ht. The l
Highland a h n ation eme ene' next movning any extraordinary l
as the Norther n (.atew.n b i in( rease in water or lron er use is C.../
in i
4 I h tw liti >w n ( )ilan(It > ( f ts [s),Huu rs l
repoth d. ()l,(. lCr%onnel immediately k- "
W i ' A e
a qvg A. - - -
contact the customer and...n u arranted.
- M?gl.s.
< in suin ths area be< (> mum a nu dd e
resulential and ( ornnu u i.il area AnatnnLYi personalh visit to tind the ( ause.
l l search n alreads i,n i< n de\\ ek y ers l
n ()nC su( } lt}s dn( e, {) (jnl } n j ( ]rIhl2(' % a5 (fis( os er(- that.
l l
Neadn. ( ll 4 's ongnial I ake h anhoc Walei and Power Plant lett undetet ted. ( ould ha\\ e ( ost a 41.s cavo!d ( uqomer l -was n*lw >rn in t 9n) - as the I)r. Philhps Pertorming Arts l i
hunr1('ds (4 (follan Center leased for 51 a vear in ( )Uf to lhe h anhoe l
1 fDurKlatH an, the hsta n n liuilding has iniclerg(in(-( xte rnit.
N Ird!H IfI dnf n'lN n diH jrI.
( nl N ' t()l l()(jr r( *sH ( rl!
kollnN dU s Qr(Illlh j h t w. Insi hirit <): witit tiiis 0
Enk< In rl Qdki'n d\\ ( (lll (
M -( ( Pr l)( '
g t
t l
' f iiQ )ldr)f f ( ()(l{lJl( \\ W fill('
Oi < ()flflf)(H ' tl I t ht - lts l d se( ond ( enter s hush know n e the (.ardenia ( 1perhtn ins
{
l (. enter.11 b s( lw yluh vi tr > l H * ( < >mphied and re<H l\\ 1( n l
(M'('llf)dn( \\ l}l l*
e 6
8 e
6 t
~
t 0
I%
~
Page is l
.....+-*...........
.s.............................
Preview and Review u.. + rm an( e ( e, hoc..d,( e,m m,u s myennum e aumish n momi( (hnuman.n.orem + mad n
j weather. (heraU. (om!uned o;> crating rewnues arul mterest l int ome rose 1.31", to $ W 68 nullion.
Ils Yt *(lI k dl( f N' Qf(MNM M'lif lf N i$ f all !ll IiNNldIh. ('
and none <ner hah a bdhon <kdiars m (k bt. 1 he plan w ah I UM int re\\enu.'s da hned 1.1",, due to the nuld weather, but j MH ( e%%lu in
('oh'nkn in
% l'n )li
\\rh InQ he[(* d slI()nN 1 b nhli Iln. Wd!('I n'vt'nlR S r(N.' 5.ff" r !o
'f nun,on e n q ean a h,ghn Nauntihan ong, nan \\
- sm mahon: in,en.e in, ome n ~. mm to s m. ; mdhon.
anf H ydfl4 o f)f f *%f'nl \\ d u(' lI *II@
IM Is
\\tn Inns II! 51.b
- (omhjned (yleIdI n dnd In!crehk e\\ enbesirh'n'dhed 3 h r
nllhM MI. l 10 totJl b $3C3 nldlon. /b anIK llhlk(l, nel in((anle \\\\ Js le%s 8
than the pre \\ ious year SN.') nnHrun ( omp ned to 510. I
{j in ()n ember MJ ( M 4 %
- ge l
- N
_..,.~-.__...~..~.,~.--_%.,.~~
l l
l l
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' ; Page 16 4
c Rate Resiew i Finance Resiew Unchanged for five years, the price of power was n duced in j In December 1991. OUC issued $100 million in five-year June for the balance of Fiscal '92. That reduction will remain j Bond Anticipation Notes (BANS) to partially fund capital in effect through most of 1993. As a result, residents are j props. It soon " swapped" the variable interest rate on these paying 51.47 less a month for 1,000 kilowatt hours of,powerf l BANS for a two-year fixed 3.57% rate. In August, OUC
~ j for a total of 572.97. With this price, OUC is expected to j is' sued 575 million in long-term subordinated bonds to refund _ j
.j rank second lowest among peer utilities in 1993.
j its 1990 variable rate BANS at a 6.16% interest rate.
j i
! Water rates will increase slightly but remain the lowest among ! Expense Reifew 1
! j peer utilities. In 1993. an Orlando resident will pay 58.63 a
! The cost of fuel and purchased power declined 53.79 million j 1 j month for 10,000 gallons of water. In February 1992, that j to a four-year low of 599A million, down 3.7%. This was j
]
' cost was $7.98, up 22 cents from the preceding 12 months.
j due to a weak energy market,0UC's fuel purchasing j'
strategies, and the reliability of its own generation resources.
l
! l OperationsResiew j
j l Total ek ctric use declined 1.8% to 5 million megawatt hours.
j interest and other expenses rose 57.9 million to 592 million; j
2 j This is primarily because interchange sales dropped 5.8% to j however, this was nearly offset by a 57 A million increase in' j
l 1.5 million MWH due to the extremely mild weather and intenst and other income.
.j
' 'l economic conditions around the state. Local retail sak s l
l
' ! remained level with the previous year at 3.5 million MWH.
! Other combined operating and maintenance expensesc i, j j however, rose 54 million, to 586.2 million. These include j
I l Power sales to other utilities remained strong because of the j costs awociated with ekttric and water production, j
! j state's tight energy market. The net revenues they produced j transmission, distribution, support and customer service j
j j also remained on a par whh last year's because of firm power j systems and saks taxes. General and administrative costs j
'l agreements. Growth in electric customers began to pick up;
- declined slightly.
l-
. ! total active electric sersices inc reased 2.2% to 120,891. The j
j l. peak demand for the year was 810 gross megawatts which j Some of the increase in operating expenses and an increase j
i j j occurred July 9. This was the highest summer peak OUC has j in depreciation was due to OUC's placing new facilities in j
-l
. j experienced.
j service including two combustion turbine units, two major
-l I
l
-; substations, a second major transmission line, the 48-acre l
! ' Because of a sharp drop in rainfall, water saks rose 3.6% to l Pershing Operations Center and a driteihru customer service j l l 25A billion gallons. Peak water demand was 146.7 million j center. Thus, stafi now operates three customer service j
j gallons a day, up 16.7% over the previous year However, j (enters and two warehousing - operations centers, l
4 j l ' 1990 was the benchmark year: annual use hit 26.1 billion j
l Annual Water Sams 4
gallons, and peak pumping h.it an all-time high 01162.8 l
x 1
i j million gallons. Active services increased at approximately l
} t6e same rate as the previous year, gaining 1.6% to reach a j
j 25
] 'I total of 101,983.
3 7
.9 j
Annual clectre sas 15 _
00 l }
l
% 10 _
s.O g
l g _
,l S 40 l
~
1 l
30
{
j g
1982 1963 1964 1985 19b6 1987 195tB 1969 1990 1991 1992 j
j
~
Watm Sales
.g _
e p
t0 _
0 l
1982 1983 1964 1985 1986 1987 1988 1989 19ic 1991 1992 e
E Eieche Saies l Page U
\\
l
)
I
Preview and Review... continued l
l l
l On the Horizon In the preud.ng (ks ade. OL C experienud extraordinar) l path. It rebounded early nom the ut e'sionan period of j
l l the e.alv ms and berneen 1082 and 1991 it experient ed l
g aserage annual inc reases 01 ;.1". in retail eledri( sales and l 4.;9. a sem on aseiage in uater sales. I or the next da ade it l
l anta ipates strong nrmth again. thouah at a shahtiv lower i
~
j annual as eragt rate.
l l
j Organizational Changes l
n-
.e A ( hanging or the ned and regru( tuona took plac e in I isc al :
l 1492 u hi( h me espm :ed to resu!t in esen hmher !ctek of g
fg l penorman(e m ine ruture.
l 1,g
! Tror it Todd nas omned I xe(utne \\h e President and L
l General Manager. liefore joining Ol'C he sened 10 ears as !
3
{ President and ( luci [ xe( utis e ( hiit er iit l'ruted ll lephone j ( ornpans of Ilonda. A graduate ot \\'irginia Polvtet hnit j
j inst;tute. he hone os er m scars management experient e in j
l the te!ctommuni(ations indu4rs to ( JL C.
l l
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l lormer nas utne vn e Pres, dent and cenera! Manager l
l mmm-1 d._ e., d l
T l sen ic e to the utihts. the ( onununitv. and the indusin.
l l
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l Tao major depanments bn ame the Ilet in( ilusinms L : nit
{ and the Wer l!uunew linit and the:r managers promoted to l \\h e Preudens. A sepmate Customer Senites Denartment l
! u as ( rcated io m( rease responsh eness to ( uston r nn ds. It
! en(ompues an dnicons and p noam, deahna diteuh uith W
( us ()!) d'{ s.
le Ilnltl!dn i si I frls !\\ !s (III H.I tlIn(' d g
g Department md its c ommunih re!ations ro!c expanded.
o_ _,_(_
j next tist al sear. I1 Pike leinert was na.ned manager of the l
1 rien' bus l(Uller bt'rs R es ( h])arlnHfnl eIN T IIt e ()c( en t!b'r l
u ds { } rill ('I ( ( oIf If fIdff' ( (js (III}e[ s(*Is' ( (*
{ (unsultant for Texas l'ti!ities f.le(In( Co. Virr, inia Botts l
j Rutledne was named manager of the f mant ia! Senic es j
l Department enet th e Januan 1941 She c omes to OL'C from l
4 d4s d luN('ts.\\ LNI(Ifbl \\
If} esa e
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KDD IN Report Comp.[E))its
% increase Enimumzu (Dollars in Thousands) 1992 1991 (Decrease) 1982.
mg
. Operating Revenues 5 307,359 5 309,452
-0.7%
$ 155,618 Total Operating Expenses 5 228,672 5 226,136 1.1%
5 133,148 Interest and Other income (1) 5 38,321 5 30,954 23.8 %
5 13,995 Interest and Other Expensts 5 92,073 5 84,181 9.4 %
5 24,623 Net income
$ 24,933 5 30.089
-17.1 %
5 11,841 Payments to City of Orlando 5 28,057 5 28,200 0.5%
$ 12.623 Utility Plant (Net book value) 51,081,618
$1,024,585 5.6%
$ 391,395 Equity 5 371,583 5 360,126 3.2%
5 153,820 Long-term Debt (2) 51,207,387
$1,108,788
' 8.9%
5 343,294 Total Assets
$1,756,303.
51,605,308 9.4%
5 533,193 Debt Sen k e Cowrage - Senior Lien 2.67x 2.68x
-1.1 %
2.57x Senior Bond Ratings 0)
AAA, Aal, AA AAA, Aal, AA Aa, AA
.......x....
mii Operating Revenues 5 286,781 5 289,962
-1.1%
$ 145,188 Total Operating Expens(s 5 211.660 5 209,997 0.8%
$ 125,397 fuel and Purchased Power 5 99,445 5 103.233
-3.7%
5 94,900 Departmental Operations 5 112,215 5 106,765 5.1%
5 30,497 Total Saks (MWH) 5,022,271 5,115.557
-1.8%
2,510,245 Total Retail Sales lMWH) 3,543,506 3,546,436
-0.1 %
2,260,678
. Commercial / Industrial Saks 2,331,349 2,339,469
-0.3%
1,374,953 Residential Saks 1,212,157 '
1,'206,967 0.4%
885,725 Sak s for Resales (MWH) 1,478,765-1,569.121
-5.8%
249,567 Total Active Senices 1.'0,891 118,273 2.2%
87,728 Residential 104,309 102,033 2.2%
76,723 Commercial,' industrial 16,582 16,240 2.1%
11,005 Average Annual Residential Use (KWH) 11.621 11,829
-1.8%
11,544, Average Revenue per KWiI Residential Saks 7.42 c 7.56 c
-1.9%
6.30 c Heating Degree Days 503 304 66.1 %
545 Cooling Degree Days 3,403 3,875
-12.2%
3,552 Gross Peak Demand (MW) 810 779 4.0%
573 me Operating Revenues 5 20,578 5 19,490 5.6%
5 10,429 Total Operating Expenses 5 17,012
$ 16,139 5.4%
5 7,752
{
Saks (Million Gallong 25 387,719 24,498,992 3.6%
16,493,415 l
Total ActiveSenices 101,985 100,352 1.6%
70,310
~
Residential 85,423 84,276 1.4%
61,383 Commercial 1ndustnal 10,155 10,073 0.8%
7,207 trrigation 6,407 6,003 6.7%
1,720 Average Annual Residential Usage (Gal.)
159,000
'151.000 5.3%
'150,000 Aterage Revenue per 1000 gallons Residential Sak s 83.79 c 83.53 c 0.3%
67.58 c Rainfall (inthes) 49.30 59.60
-17.2%
57.90 Peak Pumping (Million Gallons per Day).
146.70 125.70 16.7%
104.80
- 1. Certain redawin ahons were made to cmiorrn to the 1%1 presentation, gg 2.' int ludes 1WOA Bond Ants ipanon Notes; eu lades the runent portion.
)
- 3. Bond Rating AgerK:ies Dutt & Phelps. inc., Moody's Investors Sen k e, and Standard & Pcu's, respectimly.
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e Mel R. Martinei i
5econd Vite President a
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- Mar' int / A ihdtiin, Mr! Martar/
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has hehl mam h a&rsh,p posmons
( ommission heln u h<s thod reim l
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m the At adorin (d ilonda Inal as Pi esu k-i' At (n u un in er w w )
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i 'm enih in f h e nia a lth a ! Wn n Husore
,: l N Im p thlt ahi in l
f Ray mond D. WCh ese l
Commiwioner l
A reteni nd tary man Ray 11 l
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e' and c ommunes an.urs -\\nct First Vke President
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l of( enttal i h inna he earned a Pas, ha n man oi ib. i ma idi.
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has lai-a!h twen teh m. The < 4 l
has eqienen, ni a renarsanc e that has plu "d a among the best p!.u es j
m the nats n to be and to b et ate a l
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I Orlando Utilities Commission
-l September 30,1992
.}
a i
audited
^
i IndMCldl j
1 i
i statements i
~
1
's w '
Commission Management Consultants,~
Contents l
Members & Officers 1
Troy W Todd Black G Veatch BalanceShuts >
l lerry Chicone, fr.
Exauhw Vice President Orlando, Florida l
Presiknt and General Manayr Consutting Engmars - Electnc g,g
,l CH M Hill-.
Richard L Fletcher,1r William H Herrington 2
First Vice Presiknt Vice Presihnt. Electri Basiness Orlando, Florida Statements ofIncome and Unst Censulting Enginwes - Water Accumulated Retamed Earnings gg y y,7, Semnd Vice President A Raymond Boyd. lr Capital Market Vke Presihnt. Water Business Consultants, Inc.
A4 Ray D. McCleese Umt Orlando, F.:>rida 1
I Commissiimn Financialadvisor John E. Heam Statements of Cash F10ws
?
$r I
'E?' "' "'
S.""""'
Hoffman, Uboff. Rosen asioner r
emces A5 GeorgeM Standridge p
Troy W. Todd Manager. Customer and Bond Counsef
. Notes to financial Statements -
snretary Support Servkrs '
' Emst 6 Young
. Tracy L. Smith
. Orlandoc Florida A4 lohn E. Hearn Betty l. Perrow Managn, Comma mcan.-ons '
,,,m,,3,,q (,,,;g,,3.
- Sylvia A Waldo Thomas B Tart, Esq Pubhc Accountants '
Resort of Indmendent Certpied Assistant Secretants Genera! Counsel Pubik Accountants Donald E. Moore Stratepk trsues Ahisor
")
l l
j J
Baltnco Sh:ets Orlando Utilities Commission September 30 ASSETS 1992 _ _..
1991 Utility Plant - Note F In Service.
Elect ric -- Notes C and I.
$ 1J48.525.549
$ l.080.538,953 Water 140.041.492 132.I99.521 Common 42.987.591 36.894.224 Allowances for depreciation and amortization (deduction)
(335.503.700)
(307.-263.705)
~
906.050,932 -
942.368.993 i
85.566.879 82.216.447 Construction work in progress 1.081.617,811 1.024.585.440 Restricted Assets - Notes B and D Debt service and related accounts.
228.116.988 220.945.471 Construction and related accounts.
I16.239.857 137.224.598 Renewal and replacement account 30,932.909 30.158.057 Customer meter deposits...
I1.776.598 11.072.143 _
387.066.352 399.405.269 l
Current Assets l
Cash and investments - Note D.
27.960.088 20.985.112 Customer accounts receivable. less allowance j
for doubtful accounts (l992 -- $806.768.I99I ~ $758,940),
29,658,629 30.573,877
-l Accrued utility revenue.
15.606.389 16.522.645 fuel for generation.
7.688.519 9.330.554
.l Margin deposit on futures contracts.
40.502 Materials and supplies.
25.824.287
.24.197.644 Accrued interest receivable.
580,446 513.365 -
Miscellaneous receivables and prepaid expenses 1.855.689 3,434 878 109.174,047 105.5987>77 i
Other Assets and Deferred Charges Self-insurance account - Notes C and D.
6,055.132 6.182,885 Investment fund -- Note A 122.052.339 32.168.609 3
fuel stabilization account 33,556.274 28,154.801 Rate stabilization account.
8.320.071 2.427.010 Unamortized debt expenses 2.692.111 2.283,642 Deferred compensation plan investments -- Note 11 5.768.550 4.501,922 178,444.477 75.718.869 Total Assets
$ 1.756.302.687
$ 1.605.308.155 See notes to the financial statements.
4
=
A-2
Crpitaliz: tion 7-and Liabilities September 30 CAPITALIZATION
- 1992, 1991 Equity:
Accumulated retained eamings:
Reserved for debt service.
182.224,709 175.874.922 Reserved for renewal and replacement.
30.932,909 30,158,057 Unreserved -- invested in or designated for i
93 481.078 91.643.623
_ plant and working capital -
306.638.696 297,676.602 Contributed capital 64.944.196 62,449.781 t
371.582.892 360.I26,383 i
long-Term Debt -- Note E Bond and note principal.
1.281.580.800 1,I82,043.016 2
Unamortized discount (deduction).
(74.193,619) _
(73,259,038)
~
1.207,387,181 1,108,787.978 Total Capitalization 1,578.970 073 1.468.914.361 Current Liabilities-- payable from restricted assets Accrued interest payable on notes and bonds 40.297.279 39,775.549 Current portion of long-term debt--Note E' 5.595,000 5.295,000 Customer meter deposits and interest thereon.
1 L776,598 11.072.143 57.668.877 56 142.692 Current Liabilities-- payable from current assets t
Accounts payable and accrued expenses.
25.655.999 27,181,636 Billings on behalf of state and local govemmenis.
8.227,539 6.670.091 i
Accrued payments to the General Fund of the City of Orlando -- Note 1.
1.612,620 3,851,410 35,496.I58 37.703,I37 Other Liabilities and Deferred Credits
~ 28,210.651 Fuel stabilization account.
33,556.274 Rate stabilization account.
8.320,071 2,427.010 Water and electric construction deposits 33,826.55I 4,036.250 Deferred materials and supplies 2,696.133 3,372,132 Defened compensation plan liability - Note H 5,768.550 4.501.922 s
84,167.579-42.547.965 Total Liabilities and Deferred Credits 177,332.614 136.393.794 ~
Total Capitalization and Liabilities S 1.756.302.687 S 1.605.308.155 See' notes to t he financial statements.
2 o
. A+ 3 c
r
i St:t:m:nts cf incoma cnd Accumulated Retained Earnings-Year Ended September 30 1992 1991 t
Operatirig Revenues 307.358.507 309.451.974' Operating Expenses:
Fuel for generation and purchased power.
99 444.938 103.232.578 Production.
37.823.886 35.291,046 Transmission and distribution 12.262.464 11.907A63 Depr'eciation and amortization '.
32.571.942 30.393.304
.[
Customer services.
9.252.832 8.357.556 General and administrative.
21.738.778 21.742.368 State utilities gross receipts and property 1 axes.
5.123.303 4.803.302.
Revenue based payment to the General Fund i
of the City of Orlando-- Notel 10 453.968 10.408.434 Total Operating Expenses 228.672.1 I i 226.136.051 I
Operating Income 78.686,396 83.315.923 Non-Operating income (Expense):
'}
Interest income.
37.250.737 29.452.062 Other income.
1.069.875 1.501.651 Interest expense.
(87.722.913)
(80.280,635)
Of her expenses.
(4.350.584)
(3.900.425)
Net income 24.933.511 30.088.576 Accumulated retained earnings at beginning of year.
297.676.602 283.792.978 Dividend payment to the General Fund of the City of Orlando -- Note i.
(17.603.000)
(17.792,000)
Depreciation of contributed utility plant.
1.631.583 1.587.048 i
Accumulated Retained Earnings at End of Year' S
306.638.696 297.676.602 See notes to the financial statements.
?
e l
P
.t A-4
-Statements of Cash Flows Year Ended September 30 1992 1991 Cash Flows from Operating Activities Operating income.
78.686.396 83.315.923 Adjustments to reconcile operating income to net cash provided by operating activities:
Deprecation and amortization of plant charged to. operations.
32.571.942--
30.393.304 Depreciation and amortization charged 1o fuel costs.
2.588.465 2.969.194 Deprecialion of vehicles and equipmerit charged to general and administrative costs.
1.458.637 1.256.129 l
Provision for bad debts.
47.828 50.623 l
Oth rexpenses t 2,565.219)
(2.324.303)
Changes.o oprating assets and liabilities:
Decre se in accounts receivable and accruals.
1.095.620 1,727,209 Decn ase in fuel, margin deposit on futures and materials and supplies 55 844 1.172.298 increase in accounts payable and accruals.
8.354.784 17.681.135 Increase in deposits payable 29.818.757 2.401.605 Net cash provided by operating actkities 152,113.104 138.643.122 Cash Flows from Non-Capital Financing Activities Dividend payment to the General Fund of the City of Orlando.
(19.792.0001 *
(17.480.000)
Net cash used in non-capital financing activities t 19.792.000)
(17.480.000)
Cash Flows from Capital and Related Financing Activities Debt interest expense.
(84.593.044)
(70.780.245)
Principal payments on long-term debt.
(75.324.213)
(4.955.000)
Debt issuances 170.749.927 212.503.750 Debt issuance expenses paid (547.326)
(631.465)
Construction and acquisition of utility plant t 131.426.978)
(106.789.831)
Proceeds from sale of utihty plant 40.930.201 9.805 621 Contributed capital.
3.806.664 2.933.144 Net cash provided by lused in) capital and related financing activities (76.314.769) 42.145.9'74 Cash Flows from Investing Activities Nei purchases of investments.
(81.488.090)
(154.012.566)
Investment income.
39.680.234 26.435.754 Net cash used in investing activities (41.807.856)
(127.576.812)
Increase in Cash and Cash Equivalents
- 14. 48.479 35,732.284 Cash and Cash Equivalents at Beginning of Year 82.418.276 46,685.992 Cash and Cash Equivalents at End of Year S
96.616.755 82.418.276 See notes to the financial statements.
A-5
Notes To Financial' Statements September 30,1992 i
NOTE A-
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES 1
The financial statements of the Orlando Utilities Commission are presented in conformity with generally accepted accounting principles as applicable to governmentt The existing hierarchy provides that accou'nting guidance should first be sought in statements of the Governmental Accounting Standards Board (CASB) If the CASB has not issued a standard applicable to a situation, then pronouncements of the Financial Accounting Standards Board are presumed to apply. Additionally. the financial stafements are '
presented substantially in conformity with accounting principles and met hods prescribed by the Federal Energy Regulatory Commission (FERC) and other regulatory authorities except for the method of accounting i
for contributed capital described in the notes to financial statements.
The following is a summary of the more significant accounting policies:
Reporting Entity: The Orlando Utilities Commission (the Commission) was created in 1923 by a Special Act of the Florida Legislature as a statutory commission of the State of Florida. The Commission consists of five members, including the Mayor of the City of Orlando Members, with the exception of the Mayor who is I
an ex-officio member of 1he Commission, serve without compensation. may serve no more than two consecutive four year terms and new members are selected in the following manner. The Nominating Board -
of the City of Orlando. which for this purpose functions only as a screening committee. submits the names of three persons to the Commission for consideration. The Commission may nominate one of these persons l
or reject all three The nominee is then subject to election or rejection by the Orlando City Council. Once elected. Commission members cannot be removed for any reason by the City Council.
j The Commission meets the criteria of an ~other stand-alone covernment" as defined in Statement 14 of the Governmental Accounting Standards Board No component units exist as delmed in Statement 14.
Measurement Focus: The Commission operates the efectric and water system in a manner similar to private business: therefore. operations are accounted for as an enterprise fund where costs (expenses, i
including depreciationi of providing services to customers on a continuing basis are recovered through user i
charges.
Basis of Accounting: The Commission s financial statements are prepared on an accrual basis of l
accountmg with revenues being recognized when camed and expenses recognized when incurred l
Budgets: Revenue and expense budgets are prepared on an annual basis in accordance with the Commission's bond indentures and submitted to the Commission for approval prior to October i of the
.i fiscal year. Legal adoption of budgets is not required. Actual revenues and expenses are compared to the l
budgets on a line item basis within departments and an analysis of tariances report is prepared and submitted to the Commission each month as required by bond indentures j
Utility Plant: Utility plant is stated at historical cost which includes cost of contract work labor, materials and allocated indirect charges for equipment, supervision and engineering and labor related costs. Donated assets are recorded at the cost provided by the developer which approumates fair market value at date of i
' donation. The Commission charges the cost of repairs and minor replacements to maintenance expense.The cost of eled ric or water plant retired or otherwise disposed of, together with removal costs less salvage. is l
charged to accumulated depreciation at such time as propert) is removed from service.
6 I
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'A-6 l
m
. i NOTE A-
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES--Continued i
l The following is a summary of utihty plant at September 30.1992. by major classes:
i Electric Water.
Common '
Total i
Land 18.409.550 838.508
$ l.730,508
$ 20,978.566 i
Electric generating plant
. 751.608.024,
751,608,024 4
Water wells 13.951.231 13.951.231 Structures and improvements.
64.744.899 4.742.311 15,793.595 85.280.805
+
Equipment 313,763.076 120.509,442 25,463,488 459.736.006
[
1.148.525.549 140.041.492 42,987.591 Allowances for depreciation 1,331,554.632 and amortization (283.821.344) t 32,791,023) i18.891.333)
(335.503.700)
Construction work in progress 57.357,757 3.419.073 24.790,049 85,566.879 Net utility plant
$ 922.061.962
$1.10.669.542
$48,886.307
$1,081.617,811 The following is a summary of changes in utility plant-.
Balances Balances September 30 September 30 1991 Additions Deletions 1992 Land 21.007,585 496.555 S
(525,574)
$ 20.978.566 E!ectric generating p' ant 742.737,621 54 524.550 (45.654.147) 751.608.024.
Water wells 13.664.161 287.070 13,951,231 ~
Structures and improvements.
56,581.949 28,698.856 85.280.805 Equipment 415,641.382 52.920.593 (8.825.069) 459,736,006 1,249.632.698 136.927.624 155.005.690) 1.331.554.632 Allowances for depreciation and amortization i307,263,705)
(36,619,045)..
8 379.050 (335,503,700)
Construction work in progress
. 82,216.447 130.928.422 (127,577.990)
'85,566.879 Net utility plant
$ 1,024.585.440
$ 231,237.001 - $(174.204.630)
$1.081.617,81 l '
s O
J 4
4 4
A-7
NOTE A-
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES--Continued Depreciation: Utihty plant is depreciated using the straight-line method for each of the various plant dassifications at rates which will amortize the costs over the estimated economic useful lives of the assets.
Depreciation of vehides and other construction equipment is charged to departmental operating expenses or construction work in progress. Amounts for all other assets are charged to depreciation expense. The estimated useful lives of utility plant are as follows:
Electric Plant:
Generating Plant:
Fossil 30 - 40 years Nudear 30 - 36 years Structures and improvements 30 - 50 years Equipment 6 28 - 50 years Water Plant:
Water wells.
25 - 50 years Structures and improvements 50 years Equipment 6 28 - 50 years Common Plant:
Structures and improvements
,50 years Office equipment 14 IS years Vehicles and other construction equipment 5 - 30 years,
Cash and Investments: The Commission maintains cash in demand accounts. Investments are recorded at cost. Florida statutes and applicable debt resolutions authorize the Commission to invest in obligations -
of the US. Treasury and various agencies of the United States government. The Commission is also authorized to invest in state and local govemment tax-exempt debt _ in addition, the Commission may invest in interest bearing time deposits or savings accounts of banks and savings and loan associations provided the deposits are collateralized by federal government securities.
Additionally. Florida statutes and applicable debt resolutions permit the Commission's in' vestments to indude repurchase agreements. that is, a purchase bf securities from authorized dealers or banking institutions, with a simultaneous agreement that the dealers or banking institutions will repurchase them in the future at the same price plus a contract rate ef interest.The market value of the securities underlying repurchase agreements normally exceeds the cash received. providing a margin against a decline in market '
value of the securities. Except for ovemight repurchase agreements with our depository bank, securities :
underlying repurchase agreements are held in our accounts by a third party. If the dealers default on their -
~
. obligations to repurchase these securities from the Commission, the Commission would suffer an economic loss eq.ual to the difference between the market value plus accrued interest of the underlying securities and the agreement obligation, including accrued interest The Commission has established that authorized dealers are primary dealers as defined by the Federal Reserve Bank and report to the Securities and Exchange Commission and authorized banking institutions are limited to the fiheen largest tLS. banks.
Statement of Cash Flows: For purposes of the Statement of Cash Flows, cash and cash equivalents -
indudes all cash accounts and investments (induding restricted assetp with a maturity of three months or less when purchased.
Customer Accounts Receivable: The. Commission bills customers monthly on a cyclical basis and accrues revenues at 1he end of the fiscal year for electric and water consumed but not billed. See " Rates and Revenues" below.
The customer accounts receivable balance of $29.658.629 indudes billings done on behalf of state and -
other local govemments. The net liability of $8.227,539 (billings on behalf of state and local governments less expensesJ represents the September billings of these governments.
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NOTE A-
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES--Continued Fuel for Generation and Materials and Supplies: Fuel oil, coal and rnaterials and supplies inventories are stated at average cost Nuclear f uel is included in electric utility plant and amortized to fuel expense as it
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is used.
Futures Contracts: Since 1986 the Commission has entered into energy futures contracts to offset the price fluctuations of anticipated future acquisitions of fossil fuel The Commission had no open energy futures contracts at September 30,1992 or 1991.
During 1991 the Commission began using natural gas futures contracts in lieu of energy future contracts.
At September 30.1991 the Commission had a S40.502 margin deposit on open natural gas futures contracts with an original cost of $834.150 and a market value of $890.000. The difference between the original cost and market value of $55.850 as well as realized gains of $447 have been recognized through the stabilization ij account See ~ Rates and Revenues' below.
At September 30.1992, all natural gas contracts had been closed and a total gain in the amount of
$204.501 has been recognized through the fuel stabilization account. See ~ Rates and Revenues" below.
j The dif ferential to be paid or received is accrued as interest rat'es Interest Rate Swap Agreement:
change and is recognized over the life of the agreement.
i Investment Fund: In fiscal year 1991. the Commission embarked upon a plan to accumulate resources to be used for the retirement of outstanding debt or for payment of future capital expenditures. The plan calls
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for the investment of approximately $30.000.000 per year for each of the next five years Additionally in 199I, l
$55.674,854 was deposited into the fund from a participation fee and the sale of a portion of the common facilities at SEC l to minority owners
]
Contribu'ted Capital: The Commission considers amounts received for construction of utility plant and i
utility plant contributed by developers as capital contributions Accordingly these capital contributions are added to plant assets and are treated as a separate component of Commission capitalization. Depreciation applicable to contributed utility plant is included as an operating expense in determining n'et income and is.
subsequently charged against contributed capital from accumulated retained earnings.
'l Debt Discount and Expenses Debt discount and issue expenses are deferred and amortized to operations over the lives of the related issues using the bonds outstanding method of a'mortization.
Rates and Revenues: Each year, the Commission's stafI performs a rate adequacy study to determine i
the electric and water revenue requirements. Based on this study. current cost of service studies. and -
l regulations of the Florida Public Service Commission regarding electnc
- rate structure", the Commission's staff develops its electric and water rate schedules which are presented to the Commission at a public workshop and then presented for their appro, val at a public hearing.
j The Commission staff makes its determination of revenue requhements using the rat'e base method and includes construction work in progress in the rate base. Therefore, in accordance with proper ratemaking i
7 theory, the Commission does not use an allowance for funds used during construction ( ATUDC) in 4
i determining revenue requirements. Since the Commission's level of revenue requirements and subsequent.
I revenue is determined without regard to AFUDC, the Commission does nat capitalize interest on construction work in progress.
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Operating revenues are record,ed based on actual billings to customers plus an estimate for accrued unbilled electric and water consumption at the end of each fiscal yearc l:i h
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f NOTE A-
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES-Continued t
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The Commission has established a pohcy on recovery of fuel costs in accordance with guidelines from the Public Utilities' Regulatory Policies Act of 1978 (PURPA). Under PURPA only fuel costs incurred are to be
[
recovered The Commission estimates on an annual basis a fuel component charge to be applied during the I
next fiscal year The difference between the fuel costs actually charged to the customers and t he fuel cost actually incurred is applied to the f uel stabihzation account During the process of determining the fuel-component the Commission determines what portion of the fuel stabilization account will be utilized.
s Effective in fiscal year 1989, costs (revenues) which are to be recovered by tused to reduce) rates in periods other than when incurred trealized) are deferred until the periods in which the Cort > mission recognizes them in utility rates. These items are included in t he rate stabilization account. Specific Commission approval is required for all increases or decreases to this account.
The balances in the fuel stabilization account and the rate stabilization account are funded by internally.
restricted cash accounts and earn the same interest rate as the Commission's operating investment [xntfolio.
i Compensated Absences: The Commission records compensation for unused vacation and sick leave as an expense in the year in which the vacation and sick leave is earned in accordance with National Council on
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Governmental Accounting Statement 4. At September 30.J 992, annual vacation leave earned but not taken was $1.026 033 and sick leave accumulated but not taken was 52.353.662,
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When operations and scheduling permit. compensatory time Io offset overtime hours on an hour for hour basis may be granted through mutual agreement between the employees and their supervisor. A maximum l
of 40 hours4.62963e-4 days <br />0.0111 hours <br />6.613757e-5 weeks <br />1.522e-5 months <br /> compensatory time may be accrued and carned over from pay period to pay period.
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Compensatory t tme is expensed in the period camed At September 30.1992. t he liability was $75,459 l
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. NOTE B-RESTRICTED ASSETS L
Certain assets are restricted by bond resolution; additionally, some assets have been classified as l
restricted in accordance with govemmental accounting standards for enterprise funds and utihty industry j
accounting practices. The Commission's restricted assets consist of the following accounts:
l' September 30.
1992 1991 Debt service and related accounts--Note E:
l Investment account S 36.250.739
$ ' 29.918443 Principal and interest accounts 46.474,685 45,070.549 Debt service reserve accounts 122,568 449 112,966.155 Capitalized interest
.22,822,915 32.990.124 l
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Total debt service and related accounts 228.116.988 220.945.471 Construction and related accounts.
N uclear generation facihty decommissioning 3.678.723 accounts 4,399.701 Bond construction accounts
!I1,840,156 133;550.875
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Total construction and related accounts i16.239.857 137,229.598 i
Renewal and replacement accourtt 30.932.909 30.158.057 Customer deposits and interest thereon i1;776.598 11.072.143 q
Total restricted assets S 387.066352
$ 399A05.269 j
The accounts consist of S
716.395 Cash 7.288,855 Investments 372.757.729 389,666,885 Accrued interest receivable 7.019.768 9.021,989 I
.$ 387,066.352
$ 399A05.269 I
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f NOTE C-SELF INSURANCE ACCOUNT.
4 The Commission's self-insurance program covers a portion of its workers' compensation, general liability j
and automobile liabihty exposures. During 1992 S464.600 was expended for claims and S336.847 of interest
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income was added to the account. Claims expense and interest income for 1991 were $285,426 and $444.912, t
, respectively. Under the'self-insurance program the Commission is liable for all claims up to certain maximum amounts. Claims in excess of the maximum amounts are covered by insurance. The maximum
~
amounts are as follows.
i 1
Workers' compensation
$350.000 I
Ceneral liabihty 500.000 Automobileliability 500,000
'i Total claims incurred but not reported at year end are estimated to be less than $25.000. It is the opinion,
of general counsel that the Orlando Utilities Commission. as a statutory Commission may enjoy sovereign immunity in the same manner as a municipahty. as allowed by recent florida Courts of Appeals rulings.
Under said rulings. Florida Statutes limit liability for claims or judgements by one person to $100.000 or a total of $200.000 for the same incident or occurrence, greater liability can result only through an act of the j
Florida Legislature. Furthermore, any defense of sovereign immunity shall not be deemed to have been
' waived or the limits of liability increased as a result of obtaining or providing insurance in excess of statutory limitations it is also the opinion of general counsel that the Commission. as a municipal utility, j
is statutorily immune from suit for mahcious prosecution 2
I NOTE D-CASH AND INVESTMENTS 1
-I At September 30.1992 and 1991. the carrying amount of the Commission's cash was $1.285,100 and S586.181. respectively. and the bank balances were $1.087.995 and $262.398, respectively. The bank balances were covered by federal depository insurance or collateralized by a pool of U.S Govemment securities held 1
in trust by a third party bank in the name of the Commission's banking institution.
i in the following schedule the Commission's investments are summarized and categorized to give an indication of the level of risk assumed by the Commission at September 30.'1992 and 1991, Category 1 l
includes mvestments that are insured or registered or for which the securities are held by the Commission or a
its agent in the Commission's name. Category 2 includes uninsured and unregistered investments for which '
I the securities are held by the bank's trust department or agent in the Commission's name. Category 3 j
includes uninsured and unregistered investments for which the securities are held by the bank's trust i
department or agent but not in the Commission's name.
jr Margin deposit on futures contracts and deferred compensation plan benefit investments are not
- categorized because they are not evidenced by securities that exist in phys!<al or book entry form.
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- NOTE D-CASH AND INVESTMENTS -Continued j
d Category Carryin,g Market
- a Investments 1
2 3
Amount Value i
September 30l1992 i
Repurchase agreements
$190.852.435 $
$10.800,000
$201,652,435.$201652,435 U S. Government securities 340.056.296 340,056,296 354.271,657 Other U.S. and agency backed securities 17,233.770 17,233,770 17,675.511-State and local govemment securities 10.000.041 10,000.041 10.121,650
$558,142,542 $
$10.800.000
$568.942,542 $583,721.253 September 30.1991-Repurchase agreements
$i 75,535.266 $
$ 9.600.000
$!85,135,266 $185,135,266 U.S Govemment securities 213.419,930 213.419.930 220,680,654 Other U.S.
backed securities 29.091,669 29.091.669 29.598.857-State and local govemment securities 50,383,008 50,383.908 52,450.354 i
$468,430,773 $
$ 9.600,000
$478.030.773 $487.865.131 s
These investments are held in the following accounts-September 30.
1992 1991-
.i Restricted assets
.$387,066,352
$399,405,269 -
Cash and investments 27.,960 088
.20.985.112 i
Accrued interest receivable 580.446
-513,365-
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Self-insurance account 6.055,132 6.182.885 Investment fund
-122.052,339 32,168,609 Fuel stabihzation account 33.556.274 28,154,801; Rate stabihzation account 8.320.071.
.-2,427,010-585.590,702 489.837,051 ~
Cash apd accrued interest receivable from restricted assets I 14.308,623 9,738,384 l
Less:
Cash from cash and investments 1.285,100 586.181 Accrued interest receivable 580.446 513.365 -
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' Accrued interest receivable from investment fund 473,99i
~ 968.348 '
Total investments '
$568.942.542
$478,030.773 s
Cash and cash equivalents
- $. 96,616,755 -
$ 82,418.276.
Investments.
480,899.742 l
' 3 %.915.073;
.j Accrued ' nterest
- 8.074.205 10.503.702 I
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$585,590.702
$489,837,051 s
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i NOTE E-LONG-TERM DEBT i
During 1978, the Commission provided for the advance refunding of all of its $123.325.000 water and electric revenue bonds (Refunded Bonds) outstanding at April 1.1978 by 1he sale of $110,330,000 Water and Electric Revenue Refunding and improvement Bonds. Series 1978 and $94.650.000 Special Obligation Bonds. Series 1978 The Refunding and improvement Bonds were subsequently advance refunded in December 1985 From the proceeds of the sale of the two 1978 issues monies were invested in United States obligations in an irrevocable Escrow Deposit Trust Fund. Such United States obligations mature at such
'f time so as to provide sufhcient funds for the payment of maturing principal and interest on the Refunded Bonds All interest camed or accrued on 1he United States obligations has been pledged and will be used for i
1he payment of the principal and interest on the Special obligation Bonds. Series 1978. The Refunded Bonds are treated as extinguished debt for financial reporting purposes. were rernoved from the balance sheet and -.
have a remaining principal balance of $54.910.000 at September 30.1992.
l In December 1985, the Commission provided for the advance refunding of all of its water and electric revenue bonds then outstanding in the aggregate principal amount pf $577.730.000 (Refunded Bonds) by the j
sale of $565.040.000 Water and Electric Refunding Bonds Series 1985 t$950 million authorized and validated
'and confirmed by the Supreme Court of Florida) Sale proceeds were invested in United States obligations in
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an inevocable Escrow Deposit Trust Fund. Such United States obligations will mature at such time and in such amounts so as to provide sufficient funds for the payment of maturing principal and interest on the Ref unded Bonds The Refunded Bonds are treated as extinguished debt.for financial reporting purposes.
l were removed from the balance sheet and have a remaining principal balance of $545.880.000 at September,
30.1992 The 1985 senior hen revenue bonds are payable and secured by a first lien upon and pledge of the net revenues derived by the Commission from the operation of the water and electric system and from investment income earned on monies and obligations in certain sinking fund accounts -
The Commission has covenanted in the senior bond resolution to fix, establish a'nd maintain rates and,
collect fees. rentals or other charges for the services and facilities as will always provide in each fiscal year net revenues which shall be adequate at all times to pay in each fiscal year the surn of at least one hundred i
twenty-five, percent (125M of the annual debt sersice requirement on the outstanding bonds and that net revenues shall be sufficient to make all other payments required by the terms of the senior bond resolution,
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L The senior bond resolution estabhshes the Revenue Fund Account. Renewal and Replacement fund Account and Sinking Fund Account. which is comprised of the Interest. Principal, investment. Bond Redemption Debt Service Reserve and Demand Charge Component accounts.
In accordance with the senior bond resolution gross revenues derived from the operation bf the water and electric system are to be deposited in the Revenue Fund and shall be applied only in the following 7
manner:
1 Revenues are hrst to be used to pay the current operating expenscs of the water and electric system and then all Sinking Fund and Renewal and Replacement Fund requirements.
2.
The balance of any revenues remaming in the Revenue Fund shall at the option of the Commission, be
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used ti) for any lawful purpose in connection with the water and electric system and (ii) to make any
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payments of funds Io the City of Orlando, provided however, that none of the revenues is ever to be i
used for the purposes described in (i) and (ii) unless all payments required in.t 1) above. including any deficiencies for prior payments. have been made in full to the date of such use, and the Commission -
shall have fully complied with all covenants and agreements contained in the bond resolution.
1 Also in December 1985 the Commission issued $294.600 000 Series 1985B Water and Electric Revenue Bond Anticipation Notes iBAN's) Proceeds of the Series 1985B BAN's together with other available funds.
were used to refund the principal and accrued interest of the Series 1985A BAN's, to fund all the interest f
i requirements on the Series 1985B BAN's and to establish a debt service reserve fund for the Series 1985B l
BAN's The 1985B BAN's matured on May 31.1989.The Series 1485B BAN's were paid by the proceeds of the l
Water and Elect ric Subordinated Revenue Bonds Series 1989A and f rom the Series 1985B BAN's Capitalized Interest Account and Dbbt Service Reserve Account.
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NOTE E-LONG-TERM DEBT--Continued in March 1989. the Commission issued the Water and Electric Subordinated Revenue Bonds Series.1989A (Series 1989Al in the amount of $241905.000 to pay a portion of the Series 1985B BAN's which matured in May 1989 The balance of the Series 1985B BAN's was paid off usmg funds remaining in the 1985B BAN's Capitahzed Interest and Debt Service Reserve Accounts. In May 1989, the Commission issued the Water and Electric Subordinated Revenue Bonds Series 1989B (Series 1989B1 in the amount of $241.905.000 to pay the principal portion of the Water and Electric Subordinated Revenue Bonds Series 1989A in August 1989 the Commission issued the Water and Electric Subordinated Revenue Bonds Series 1989C (Series 1989C) in the amount of $75.000.000 tv refund $46.500.000'of the Series 1989B and to undertake certain capital improvements to the water and elect ric system. From the proceeds an amount sufficient to pay the principal and related interest of the refunded portion of the Series 1989B Bonds was -
mvested in United States obligations and urevocably deposited into an escrow account. All of the
$46.500 000 in 1989B Bonds refunded were redeemed in October and November 1989. The purpose of the ref unding was to reduce t he Commission's exposure to interest rate fluctuations by reducing t he amount of variable rate debt outstanding The remaining portion of the Suies 1989C Bonds are payable from and secured by a lien upon and a pledge of the net reventas derived by the Commission from the operation of the water and electric system and certain mvestment income. subject to the prior lien thereon of the Commission's outstanding senior debt obligations (Water and Electric Refundmg Bonds. Series 1985)
The Commission has covenanted in the junior lien bond resolution to fix establish and maintain such rates and collect such fees, rentals or et her charges for the services and facilities as will always provide in each fiscal year. net revenues which will be adequate after4he deduction of amounts required to be deposited from net revenues in each fiscal year to provide for the annual debt service requirement for senior debt obligations. to fund any debt service reserve requirement for such senior debt obligat:ons and to make any required deposit to other funds and accounts established under documents evidencing or securing senior debt obligations at all times to pay in each fiscal year the sum of at least (il one hundred percent (100%) of the annual debt service requirement for the bonds issued pursuant to the resolution and any pari passu additional bonds hereafter issued for the then current fiscal year and (ii) one hundred percent (100%)
of Ihe amount required to be deposited into the Demand Charge Component Account for the then current fiscal year and that such net revenues will be sufficient to make all other payments required by the terms of the resolution and that such rates, fees. rentals or other charges shall not be reduced so as to be insufficient to provide adequate revenues for such purposes.
The junior lien bond resolution estabhshes the Sinking Fund which includes the Interest. principal. Bond Redemption and Demand Charge Component Accounts. In,accordan with the resolution gross revenues are to be applied in accordance with the senior bond resolution and then to be applied to the Junior Lien Sinking Fund accounts.
10 lanuary 1990. the Commission issued the Water and Electric Subordinated Revenue Bonds. Series 1989D in the amount of $253.945J00 to pay the redemption price of the remaining Series 1989B Bonds.
Consequently, the redeemed Series 1989B Bonds have been removed from the balance sheet. None of the Series 1989B Bonds are outstanding. The Series 1969D Bonds have coupon rates of 6.75% 5 50% and 5.00%
due in term form on October 1. in the years 2017. 2020. and 2023, respectively. The Series 1989D Bonds are secured by a lien upon and a pledge of the net revenues derived from the Commission upon the operation of the water and electric system and on certain investment income. as provided in the resolution and are.
further secured by a Debt Service Reserve Account established by the resolution. The lien of the Series 1989D Bonds is junior to the Series 1985 issue but on a parity with the Series 1989C issue, e
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t NOTE E-LONG TERM DEBT--Continued j
in 1 sarch 1990. the Commission issued the Water and Electric Subordinated Revenue Bonds. Ser.ies i
lo90AA (Minibonds) in the amount of $8.082.000 to pay for capital improvements to the water and electric system The Minibonds are issued as fully registered capital appreciation bonds in the initial principal a' mount of $250 and integral multiples thereof, and mature on February 8. 2000.
The Minibonds bear interest at 710% per annum compounded semi-annually, and are not subject to j
redemption pnor to rnaturity. The Minibonds are payable solely from and secured by a lien upon the net revenues derived by the Commission from the operation of the water and electric system and of certain I
investment income, as provided in the Minibcmd Resolution The lien of the Minibonds upon the net revenues is junior and subordinate to the prior lien thereon of the Commission's outstanding debt obligations The Minibonds have an accreted value of $9,580.800 at September 30.1992, i
in February 1991. the Commission issued Water and Electric Subordinated Revenue Bonds. Series 1991 A
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(Series 1991 A) in the amount of $235.820.000 to pay for capital improvements of the water and electric
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system The Senes 1991 A Bonds are term bonds due in 2020 and 2026 and have coupon rates of 6 5% and i
5.5%. respectively The Senes 1991 A Bonds are junior to the Eeries 1985 Bonds but on a parity with the Series 1989C and Series 1989D bonds. The Series 1991 A Bonds are secured by the same sources as the 1980C and Series 1989D Bonds-in December 1991, the Commission issued $99.995.000 Variable Rate Demand Water and Electric Revenue Bond Anticipation Notes Series 1991 (Series 1991 Notes). The purpose of this series is to provide for the payment of costs relating to the acquisition and construction of improvements to the water and electric
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system 1
The Series 1991 Notes are due December 10.1996 and were issued in the weekly pricing mode. On January 8.1992 the Commission and a commercial bank entered into a two year swap agreement on the notional amount of $99 095,000. The agreement will guarantee the Commission a fixed rate of 3 57% until lanuary 10.1994, at which time.the Series 1991 Notes will revert to the weekly pricing mode.The Corrlmission is exposed to credit loss in the event of nonperformance by the other party to the interest rate l
swap agreement. However, the Commission does not anticipate nonperformance by the counter party.
The Series 1991 Notes are payable from and secured ratably by a lien on and pledge of (i) the proceeds of Bonds to be issued by the Commission to pay the principal of and accrued and unpaid interest on the Series i
1991 Notes iother than proceeds of Bonds deposited in a reserve fund or funded interest accounts therefore or used to pay costs of issuance thereofi. which lien and pledge are superior to all other liens thereon, (ii) i the moneys on deposit in the Note Debt Service Reserve Account, which lien and pledge are supprior to all i
other liens thereon and tliil the moneys on deposit in the Construction Account, which lien and pledge are superior to all other liens thereon In addition to the s'ources described in clauses (ii) and (iii) above.
I payment of interest on the Series 1991 Notes is payable from and secured by a lien on and pledge of Net l
Revenues
' i in addition to the remainder of the authorized but unissued 1985 Bonds of $384,960.000. the Commission i
has a!so been authorized to issue an additional $955.000,000 of senior fien bonds for a total of l
$1.339.960.000 to be used for refunding or other designated purpopes.
i in August 1992. the Commission refunded the $70.000.000 Unit priced Demand Adjustable Water and Electric Revenue Bond Anticipation Notes. Series 1990A (1990A Notes) with theWater and Electric Subordinated Revenue Bonds Series 1992A (the " Series 1992A Bonds"). The Series 1992A Bonds are term bonds due in 2020 and 2027 and have coupon rates of 6 0% and 5 5% respectively. The Series 1992A Bonds j
are junies to the Series 1985 Bonds but on a parity with the Series 1989C, Series 1989D, and Series 1991 A i
bonds The Series 1992A Bonds are secured by the same sources as the 1989C,1989D and Series 1991 A Bonds in December 1992 it is anticipated that the Commission will authorize approximately $450.000.000 in bonds to defease the Series 1985 Bonds.
The Cornmission has no material operating or capital leases w
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1 NOTE E-LONG-TERM DEBT-Continued Bonds and Bond Anticipation Notes (BANS) principal outstanding is as follows-September 30 1992 1991 BONDS:
Series 1985,5.25% to 8 625% due serially 1986 to 2000 and in term form from 2000 to 2010
$ 538,315,000
$ 543,610,000 Less current portion of Series 1985 5,595,000 5.295.000, Long-term portion of Series 1985 532,720,000 538,315.000-Series 1989C,7.00% due serially 2011 to 2015 and in term form in 2023.
75,000,000 75,000,000 Series 1089D,5.00% to 6 75% due in term form in years 2017,2020. and 2023 253.945,000 253.945,000 Series 1990AA,7.10% Capital Appreciation *Minibonds" maturing February 8,2000.
9.580.800 '
8,963.016' Series 1991 A. 5.50% to 6.50% due in term form in years 2020 and 2026 235,820.000 235,820,000 Series 1992A. 6 00% and 5 50% due in term form in yeats 2020 and 2027.
74,520,000 1,181,585.800 1.112.043,016 BANS:
Series 1990A Unit Priced Demand Adjustable Bond Anticipation Notes, maturing September 1,1995.
.70,000,000 Series 1991 Variable Rate Demand Bond Anticipation Notes, maturing December 10,1996 99.995,000 S 1.281.580:8(>0 S 1,182.043 016 A.
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NOTE E-LONG-TERM DEBT" Continued Following is a schedule of annual principaf and interest sinking fund requirements on the revenue bonds and notes outstanding at September 30.1992.
Fiscal Debt Senice for Debt Service for Debt Service for Year Series 1985 Bonds Series 1989C Bonds Series 1989D Bonds Ending_
Principal Interest Principal
_. _Inte rest _
Principal interest _
1993 S 10.105.000
$ 44.343 903 S 5.250.000 S 14.987.425
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I994 13.895.000 43.575.923 5.250.000 l4,987.425 1995 14.975.000 42.499.060 5.250.000 14.987.425 1990 16.150.000 41.316.035 5.250.000 14.987.425 1997 17.465 000 40.007 885 5.250.000 14.987,425 1908 18.910.000 38 558.290 5.250.000 14.987.425 1999 20.495.000 36.909.850 5.250.000 14.987.425 2000 22.245.000 35.227,775 5.250.000 14.987.425 2001 24.135.000 33 336.950 5.250.000 14.987.425' 2002 26.210.000 31 255.306 5,250.000 14.987.425 2003 28.480.000 28 994.694 5.250 000 14.987.425 2004 30 930.000
, 26.538.294 5.250.000 14.987,425 2005 71.655.OrX) 23.870,581 5.250,000 14.987.425 2006 36.640 000 17.687.750 5.250.000 14.987.425 2007 39.755 000 14.573.350 5.250,000 14.987.425 l
2008 43.135.000 11,104.175 5.250 000 14.987.425 -
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2009 46.800 000 7.527,7u0 5.250.000 14.987.425 2010 50.710 000 _
3.549.700 5.250,000 14,987.425 h
2011
$ 3.725.000 5.250.000
'S 13,065.000 '
I4.987.425 2012 3,985 000 4.989.250 13.945.000 14.105.537 2013 4.265.000 4,710.300 14.885.000 13.164.250 2014 4,560,000 4.411.750 15.890.000 12.159.513 j
20l5 g 4.680 000 4.092,550 16.965.000 11.086.937 2016 5.225.000 3,750.950 18.110.000 9.941.800 2017 5.590 000 3.385.200 19,330 000 8.719.375 2018 5.980.000 2.993.900 20.635,000 7.414.600 2019 6.400 000 2.575,300 21.770.000 6,279.675 2020 6 845.000 2.I27,300 22.965.000 5.082.325 2021 7.325.000 1.648 150 24.230.000 3.819,250 2022 7,840.000 1.135.400 ~
25.440 000 2.607.750 2023 8.380.000 586h00 26.715.000 1.335.750 2024 2025 2026 i
_2027 S532.720.000
$521.027.221 S75.000.000
$136.156450 S 253.945,000 i
$380.477.837
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i forthe 1985.1989C,1989D.1991 A. and 1992A Bonds. interest is payable on April 1 and October 1, with principal payments due on October 1.
I (l} Represents actreted value of the Minibonds due and payable at their maturity on February 8,2000.
I (2) The Series 1991 Notes are variable rate. A swap rate of 3.57% was used to determine interest through i
january 10.1994: an estimated rate of 5 5% was used thereafter.
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Series Debt Sen' ice for Debt Sen' ice for Debt Sen' ice for 1990AA Series 1991 A Bonds Series 1991 Notes (2)
Series 1992A Bonds Minibondsfl)
Principal Interest Prin_cipal 1nterest Principal Interest Total
$ 14.174.500
$3.569.822
$ 4.986.450 $ 97,417.100 14.174.500 4.964.002 4,274.100 101.I25.950 14.I74.500 5.499.725 4,274.100 101.659,810 14.174.500
$99.W5000 1.069,391 4 2 74.100 197216.451 14.174.500 4 274,100 96.158.910
,i 14.174.500 4.274,100
%.154.315 14.174.500 4.274,100
' %.150.875,
$16 000 000 14.174.500 4 274.100 - 112.158.800 14.174.500 4 274.100 96.157,975 14.174.500 4 274.100
%.151.331 14.!74.500 4 274.100
%.160.719 14.174,500 4 274.100 96 154.319 14 174,500 4 274.100 134241.606 14.174.500 4.274.I00.
93.013.775 14.174.500 4 274.100 93,014.375 14.174.500 4 274.100 93.015 200 l
14.174.500 4 274.100 93.013.725 14.174,500 4 274,100 92.445.725
$ 8 925 000 I4.174 500
$ 2.665.000 4.274.100 67.0 % 025 9,505.000 13.594.375 2.825.000 4.114 200 67.063.362 10.120.000 12.976.550
, 2.990.000 3.944.700 67.055.800 10,780,000 12.318,750 3.170.000 3.765.300 67.055.313 l
11.485 000 11.618.050 3.3m000 3.575.100 67.062.637 12 230.000 10.871.525 3.565.000 3.373,500 67.067,775 -
,13.025.000 10.076,575 3.s75.000 3.159.600 67,060.750 l
13 870.000 9 229.950 4.005.000 2.933,100 67.001.550 14.770 000 8.328.400 4 245.000.
2,692.800 '
67.061.175 l
15.730 000 7.368.350 4.500.000 2.438.100 67.056.075 II750000 6 345.000 4.770 000 2.168.100' 67.056.400 17.670.000 5 424.650 5.030.000 1,905,750 67,053,550 I8.645 OCO 4 452.800 5.310JK)0
-I.629,100 67.054 250 19 670 000 3.427.325 5.600,000
.l.337.050 30.034.375 20,750 000 2.345.475 5.905.000 1;029.050 30,029.525 21 895 000 1204225 6 230,050 704 275 30.033.500 6.575.000 361.625 6 936.625
$ 16.000.000
$235.820.000
$388.898.400 $99.995 000 $15.107.940 $74.520 000 '.$121.051.600 $2.850.719 648 i
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NOTE F-PARTICIPATION AGREEMENTS in 1980 the Commission entered into a Participation Agreement with Florida Power and Light Company l'
(FPL) to purchase a 6.08951% (52 net megawatts) undivided ownership interest in St. Lucie Unit No. 2 nuclear powered electric generating facility constructed by FPL. This unit is presently rated at 853 net megawatts t MW) and commenced commercial operation in 1983 The Commission has also entered into a 4 -
Reliability Ekchange Agreement with FPL The Reliability Exchange Agreement results in the Commission exchanging 50% of its share of the output from St Lucie Unit No. 2 for a like amount from St. Lucie Unit No.
- l. a nuclear powered electnc generating facility. FPL has operational control of both projects, j
The Commission also has a Participation Agreement with the City of Lakeland. Florida dated April 4.1978.
Under the terms of this Agreement the Commission has a 40% (136 net MW) undivided ownership interest in a 340 net MW refuse and coal-bred steam generating unit (McIntosh Unit Noi 3) owned by the City 1
of Lakeland. The City of Lakeland has operational control of this project l
Since 1975, the Commission has owned a 16015% (13 net MW) undivided ownership interest in Florida Power Corporation's 835 net MW nuclear powered electric generating plant designated Crystal River Unit No..
3.This ownership interest was acquired under the terms of a single Participation Agreement with Florida Power Corporation and ten Florida municipal utilities Florida Power Corporation has operational control of -
l this project.
,j In 1984 and 1985, the Commission entered into Participation Agreements with Florida Municipal Power l
Agency (FMPA) and the Kissimmee Utility Authonty IKUAi to sell a portion of Stanton Energy Center Unit #1 '
(SEC 1) excluding common and extemal facilities SEC 1 is rated at 440 net MW. Under the terms of these agreements. FMPA has a 266265% undivided ownership interest and KUA has a 4 8193% undivided l
ownership interest The Commission which has retained a 68 5542% undivided ownership interest. has j
operational control of this project In 1991, the Participation Agreement,s for SEC i were amended to sell to FMPA and KUA their ownership j
share of the common and extemal facilities, excluding the external land railroad tracks scale and switch engine. This sale closed in June 1902. with the exception of the wastewater treatment plant and the raifroad coal cars sale, which was completed in 1991 in 1988. the Commission entered into Participation Agreements with FMPA and KUA to sell a portion of l
the Commission's Indian River Plant Combustion Turbine Project for units A and D excluding common l
facilities The Commission's Combustion Turbine Project for units A and B includes two 48 MW combustion l
turbines which can generate electricity utilizing natural gas or light diesel oil. Under the terms of these agreements. FMPA has a 39% undivided ownership interest and KUA has a 12.2% undivided ownership interest The Commission, which has retained a 48 8% undivided ownership interest, has operational control of this project.
l In 1990, the Commission entered into a Participation Agreernent with FMPA to sell a portion of the
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Commission's indian River Plant Combustion Turbine Project for Units C and D excluding common facilities.
The Commission's Combustion Turbine Project for Units C and D includes two 118 MW combustion l
turbines which can generate electricit'y utilizing natural gas and light' diesel oil. Unit C was placed in commercial operation in August 1992, with Unit D placed in service in October 1992. Under the terms of this
.j agreement. FMPA has a 21% undivided ownership interest.The Commission, which has retained a 79% (93 nel megawatts per unit) undivided ownership interest; has operational control of this projectc l
In 1991. the Commission entered.into a participation agreement with FMPA to sell a portion of Stanton l
Energy Center Unit #2 which is yet to be constructed Under the terms of this agreement. FMPA has an l
undivided ownership interest of 28 4091%. The Commission, which has retained a 71.5909% undivided j
ownership interest, will have operational control of this project The closing on this sale took place in June i
1492. Construction in progress at September 30.1992 was $18.750,525-
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NOTE F-PARTICIPATION AGREEMENTS--Continued Following is a summary of the Commission's proportionate share of each jointly owned plant. SEC 1.
McIntosh Unit No. 3 and the indian River Plant Combustion Turbine Projects include the cost of common and/or external facihties. The other plants do not, but the participants pay user charges to the operating entity. According to the participation agreements. each participant must provide its own financing and each participant's share of expenses for the operations of the plants are included in the corresponding operating
.i expenses ofits own income statement Allowance for depreciation and amortization on utility plant in service is determined by each participant based on their depreciation methods and rates relating to their share of the plant.
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.i Plants as of September 30,1992 '
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Stanton Stanton Energy Energy Indian River St. Lucie McIntosh Crystal River Center Center Combustion Unit No. 2 Unit No. 3 Unit No. 3 Unit No. I Unit No. 2 Turbines Utility plant in service
$104.638.016 $104.301.693 516.030.821 $374,363,264
$51.432.474 l
Allowance for deprecation 6 amortization.
133 333.2131 (32.765,119)-
(8,720.754)
(48.365,3461
{l.851.159) i Construction work in progress 70,309
$18 750.525 1.590,018 f
i Commission's net share
$ 71,304 805 $ 71.536 574
$ 7.310.067 $326 068.227
$ 18.750.525
$51,171.333 I
it has been determined that none of the participation agreements to which the Commission is a party -
meet the criteria of a joint venture as specif ed in Statement 14 of the Governmental Accou'nting Standards Board The Commission lacks operational control over the St Lucie Unit No. 2. Crystal River Unit No. 3 and i
McIntosh Unit No 3 plants. SEC 1 and Indian River Combustion Turbine Projects are controlled by the
. Commission. Fiscal and budgetary control of SEC I and the Combustion Turbine Projects remains with the Commission. No separate governing authority exists for any of the partidpation plants The Commission also has an agreement with Orange Crc nty, Florida to share operating costs of a waste u
water treatment facility at the SEC 1 site The Commission operates the facility. Effective luly 1.1992, the j
County s annual fee for t he operation and maintenance ohhe facility is $598,128 The fee is subject to annual increases based upon inflationary factors and is subject to renegotiation within the form of the contract. The annual fee is classified as a reduction to SEC 1 operating and maintenance expenses.
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NOTE G-ELECTRIC SUPPLY AGREEMENTS 1
I Capacity Commitment:In 1985, the Commission entered into an agreement with the Florida Municipal i
Power Agency (FMP' ) to provide FMPA with a total of 130 MW of the Commission's 619 MW of Units I,2.
A and 3 generating capacity of the hidian River plant on a take or pay basise Payment to the Commission is based upon a demand charge plus 2165% share of thc cost of operation and maintenance of the oil / gas fired l
steam turbine uriits plus the fuel cost for any power used. The contract's. initial term began during 1986 and extends to 2001. FMPA has an option to extend the contract for a five-year ramp down.
t in 1989. the Commission also entered into capacity commitment contracts with FMPA and KUA for each
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to receive 20 MW cf generating capacity of the Commission's system generating capacity for 15 years.
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in September 1989, the Commission entered into two capacity commitments with Reedy Creek l
Improvement District for 15MW of generating capacity of the Commission's system generating capacity for j
10 years plus a two-year Tamp down, and to receive 6MW of reserve capacity of the Commission's system
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generating capacity for 10 years.
j In 1990. the Commission entered into capacity commitments wirh FMPA and KUA. FMPA will receive an additional 20MW of generating capacity of the Commission's system generating capacity for 1991 to 1994 i
and 10MW for 1995. KUA received an additional 25MW of generating capacity of the Commission's system I
generating capacity in 1991 and 20MW in 1992.
On August 13.1992, the Commission entered into a contract with the City of St. Cloud. Florida (Si u
whereby the Commission will supply STC SMW of generating capacity and associated energy from the
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Commission's ownership sh'are of SEC 2 for a period of 10 years. beginning on the date of commercial j
operation of SEC 2.
l Florida Municipal Power Pooh in May 1988. an agreement was entered into between the Commission.
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the City of Lakeland. Florida, and the FMPA's All-Requirements Project to cooperate in the interconnected l
j operation of the respective electnc supply systems, so as to obtain the fullest advantage of each systems' generating resources.
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A management committee consisting of a representative from each organization supervises the operation l'
of this Pool. The Commission operates the dispatching service and administers the Pool. Production cost i
savings due to the operation of the Pool are accounted for and allocated to each organization by individual l
poc>l participation j
. The term of the agreement is for one year. to be automatically renewed from year to year until terminated
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by the consent of all participants, however, any one participant may withdraw at any time upon one year's j
written notice.
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I NOTE H-DEFERRED COMPENSATION PLAN I
1 The Commission offers its employees a deferred compensation plan created in acco'rdance with Internal Revenue Code Section 457 The plan available to all Commission employees, permits employees to j
contribute 25% of their base salary exclusive of total pension and dependent medical care contributions up.
to $7,500 per year. Assets and liabilities of the plan are recorded at market. The deferred compensation is not available to emplo>ees until termination retirement, death, or unforeseeable emergency.
amounts, and all income att ributable to those amounts. are (until paid or made available to the employee or
~ j All amounts of compensation deferred under the plan, all property and rights purchased with those other beneficiary) solely the property of the Commission (wit hout being restricted to the provisions of benehts under the plan), subject only to the clairns of the Commission s general creditors Participants' rights under the plan are equal to those of general creditors of the Commission in an amount equal to the l.
fair market value of the deferred account for each participant.
It is the opinion of the Commission's legal counsel that the Commission has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The Commission beheves that it is unlilely that it will use the assets to satisfy the claims of general creditors in 1he future NOTE l-PAYMENTS TO THE CITY OF ORLANDO AND ORANGE COUNTY Two types of payments are madeio the General Fund of tbe City of Orlando.a revenue based payment and an income based payment. The revenue based payment is calculated at six percent of gross retai!
l electric and water billings to customers within t he City. This payment is classified as an operating expense.
The income-based dividend payment is calculated at 50% of a rolling five year average of net income, with certain exclusions. For income-based dividend payment calculations involving fisail years 1991 through 1994 only. 60% of net income will be used This payment is recorded as a reduction of retained earnings and is not considered an expense for rate making purposes j.
payments are made to Orange County based on one percent of gross retail electric billings within the County but outside the city hmits of 1he City of Orlando. This payment which was $594.499 and $634,568 for fiscal years ended September 30,1992 and 1991, respectively, is classified as an operating fgeneral and
- j admmistrative) expense All payments are made pursuant to a unilateral pohcy established by the Commission l-i l
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NOTE J-COMMITl4ENTS AND CONTINGENT LIABILITIES 1.
The Commission and the other participants in SEC 1 have a coal supply contract with a term that ends 1
on December 31.1999 with the option of two successive five year terms The contract requires at least 950,000 tons in 1993 and 850.000 tons per year thereaf ter. The usage is estimated at 6.050.000 tons from j
191 through 1999.
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The Commission and the other participants in SEC 1 have also agreed to a contract that expires on December 31,2007 for rail delivery of the umt's coal purchasns l
3, in 1989 the Commission was informed by the Property Appraiser of Brevard County, that the i
Commission's property in that county is no longer exempt from certain real and tangible personal.
I property taxes and should be removed from it's previous tax exempt status. The Commission has filed a Complaint for Declaratory and injunctive Relief in Brevard County Circuit Court asking the Court to
'l declare said assessment and levy of taxes unconstitutional and void under the Constitution and Statutes of Florida. The Commission believes that the Florida Constitution exempts such facilities from taxation The case has been tried. The trial judge entered a final judgment in favor of the Commission that the property in question is exempt from taxation. The Brevard County Property Appraiser is appealing this judgment. If the Indian River plant and associated facilities a're allowed by the Appellate Court to remain on the tax rolls of Brevard County, the 1989 tbrough 1992 taxes will amount to
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$3.190.294 in the aggregate. The property in Brevard County in question is owned exclusively by the
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Commission and used in the production and transmission of electricity.
4.
In September 1942, the Commission approved construction of a second coal fired generating unit, The f
unit is a 440 net MW unit that will supply 302 MW to the systemL The Commission will pay an estimated
.I S350,000.000 for its 7159% ownership of the unit with an estimated completion date of June 1996 At t
September 30.1992 the Commission has entered into contracts totaling $220.382.115.
NOTE K-PENSION PLAN i
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The Orlando Utilities Commission has a single employer defined benefit pension plan covering all 1
employees who regularly work 20 or more hours per week, Employees participate in the plan immediately-l upon employment.
l The pension plan approved by the Orlando Utilities Commission states that the Commission shall make i
such contributions to the retirement fund as shall be required under accepted actuarial principles to at least i
be sufficient to maintain the plan as a qualified employee defined benefit plan meeting the minimum l
funding standard requirements of the intemal Revenue Code with respect to its members, as shall be determined f rom time to time by the actuary.
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,The Commission shall not have any right, title, or interest in'the contributions made to the retirement lund under the plan, and no part of the retirement fund shall revert to the Commission, except that:
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a.
Upon complete termination of the plan and the allocation and distribution of the retirement fund as l
provided herein.any funds remaining in the retirement fund because of an actuarial computation after -
the satisfaction of all fixed and contingent liabilities under the plan with respect to the Commission may revert to the Commission.
b.
If an excess contribution is made to the retirement fund by the Commission, then such contribution may.
be returned to the Commission within one year after the payment of the contribution.
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If the Internal Revenue Service determines that the plan does not meet the requirements of Code I
section 401(a), the plan shall be null and void. and any contributions shall be returned to the ;
Commission within one year following the determination that the plan does not meet such '
requirements, unless the Commission elects to make the changes to the plan nscessary to receive a determination from the internal Revenue Service that the requirements of Code section 40lla) are met.
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t NOTE K-PENSION PLAN-Continued L
Each participant contributes weekly to the plan four percent of earnings until the completion of 20 years of service. After completion of 20 years of service, each member shall contribute weekly to the plan two percent of earnings. Such required contributions shall cease upon a member s completion of 30 years of j
sertice l
The Commission's contribution is determined using the actuarial cost method. The actuarial pension plan obligations were used as a basis for calculating the determined contribution requirements for the fund.
pension expense for the fiscal years 1992 and 1991 was $3.483,906 and $2.671.836 respectively, which includes normal costs plus amortization of past service costs. The assumed rate of retum used in determining the actuarial present value of accumulated plan benefits was 7.5% The method used to determine the normal cost and actuarial liability is the Projected Unit Credit Actuarial Cost Method.
1 The participant's pension beneht is 2 / % of the highest tbree consecutive years base ear,nings times 2
years employment. A maximum of 30 years of service is credited. Benefits are vested after 5 years of service, Investment earnings for the plan years 1991 and 1990 were 15 3% and 2.3% respectively. The overall cumulative average annual rate of return for the plan has been 13.9% since October 1.1984.
The pension benefit obligation presented as the actuarial present value of accumulated plan benefits is a standard measure of the present value of pension benefits, adjusted for the elfects of projected salary.
increases of 6% estimated to be payable in the future as a result of employee service to_date.
The pension plan's assets are administered by The Mutual Life Insurance Company of New York IMONYL The pension plan's funds may be invested in money market accounts. bonds. and stocks and are presented at market value -
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1 NOTE K-PENSION PLAN--Continued Plan data as of October 1,1991 (latest actuarial valuation) as developed by consulting actuaries is as follows:
Actuarial present value of accumulated plan benefits:
Present value of vested benefits..
$ 69.415,163 Present value of non-vested benefits 1.153,287 j
Total present value of all accumulated benefits
$ 70,568.450 Projected benefit funded status:
Vested:
Retirees and beneficiaries currently receiving benefits.
terminated & disabled employees not yet receiving benefits
$ 36.210.833 Current employees-Accurnulated ernp!mee contributions 11.557.222 Employer-finance 4 21.647.108 Non-Vested.
Employer-financed 21,727.01i Total pension benefit obilgation
$ 91.142.174.
Net assets available for benefits ~
$ 101.441,727 Net assets in excess of pension benefit obligations
$ 10.299,553 i
The plan activity for fiscal year 1991 is as follows:
Asset value as of October 1,1990.
$ 87.835,044
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contributions for 1990-91:
i 1.109,255 Paid during the year - Employee Paid during the year - Commission 2.671.836 Total contributions
$ 3,781.091 Contributions receivable at beginning of year 0
Contributions receivable at end of plan year 0
Contributions for 1990-91 plan year
$ 3,781,091 l
Disbursements for 1990-91:
Benefit paym6nts
$ 3.658,562 0
Expenses and fees Total disbursements for 1990-91
$ 3.658,562 Investment return for 1990-91
$ i3,484,154 Actuarial asset value as of October 1.1991
- $ 101.441.727 I
Approximate rate of return after expenses and fees 15 34 %
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' NOTE K-PENSION PLAN--Continued Contribution and payroll information for the year ended September 30,1992 follows:
t Contributions.
Employer.
$ 3,483.906 Employee 1,076,026 -
Total contributions S 4.559,932 Total payroll
$42,143.467
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Covered payroll.
$36,966.061 Contributions as a percent of covered payroll 12.34 %
Actuary recommended contribution for fiscal year 1992:
Employer.
.$ 3.062.095 Employee 1,253.667
$ 4,315,762 Recommended contributions as a percent of covered payroll 11.67 %
i Trend information for the preceding five yeais follows:
Net Assets Available
. Unfunded Contributions,
.j Year Ended for Benefits as a Percentage Pension Benefit as a Percentage l
September 30 of Pension Benefit Obligation Ob!!gation of Covered Payroll 1991 111.3 %
10.1% -
i 1990 104 8 11.6
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1989 119 6 l1.6 ~
1988 120 4 l l.6 1987 l16 5
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NOTE L-PENSION PLAN SUPPLEMENTARY INFORMATION (UN AUDITED)
I This schedule presents required supplemental historical pension benefit information for the last ten years currently available.
(6)
(1)
(4)
Overfunded Net Overfunded Pension Assets (2) l-ension
, (5)
Obligation as Year Available Pension (3)
Benefit Annual a Percentage Ended for Benefit Percentage
' Obligation Covered of Annual i
September Benefits Obligation Funded (2)-(l)
Payroll Covered Payroll 30 (Millions)
(Millions)
(1)/(2)
(Millions)
(Millions) -
(4)/(5).
1991
$101.44
$91. I4 111.30 %
$(10.30)
$36.97 (27.86)%
1940 87.84 83 80 104 82 (4.04 )
32.43 (12.46) 1989 85.68 71 64 119 60 (l4 04) 30.43 (46 14);
1988 74.58 61.95 120.39 (12.63) 28.33 144.58) 1987 (A) 70.74 60.72 116.50 (10.02) 28,04 (35.73) -
1986 42 57 24.90 170.96 (17.67) 19.72 (89.60) -
1985 33 79 24.36 138 7l
- (9.43) 18.23 (51.73) 1934 28 92 22.09 130.92 (6 83) 17_00 (40.18) 1983 2813 22.14 127.06 (5 99) 16 24 (36 88)'
1982 22.40 19.63 114 11 (2.77) 14.70 (18 84)
Anafysis of the dollar amounts of net assets available for benefits, pension benefit obligation, and -
onfunded pension benefit obhgation in isolation can be misleading. Expressing the net assets available for benefits as a percentage of the pension benefit obligation provides one indication of pension funding status on a going-concern basis Analysis of this percentage over time indicates whether the system is becoming financially stronger or weaker. Generally, the greater this percentage. the stronger the pension plan. Trends in unfunded pension benefit obligation and annual covered payroll are both affected by inflation. Expressing the unfunded pension benefit obligation as a percentage of annual covered payroll approximately adjusts for the ef fects of inflation and aids analysis of the Commission's progress made in accumulating sufficient assets to pay benefits when due. Generally. the smaller this percentage, the stronger the pension plan.
(A) The pension benefit obligation was valued by the actuary (Hewitt Associates) as prescribed by'the l
Governmental Accounting Standards Board Statement 5 in 1987. This method differs fron) prior years in that projected benefits are allocated on a level basis to employee's years of service. This resulted in a 39.2% increase. Contract amendments increased the pension benefit obligation by 68 8% and net assets available for benefits by 44.3%
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'p NOTE M-0THER POST EMPLOYMENT BENEFITS t
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In addition to the pension benefits described in Note K. health care benefits and hfe insurance coverage is provid6d to all employees who retire on or after attaining age 55 with at least to years of service or at any age after completing 25 years of service Currently 253 retirees meet the eligibility requirements. Retirees may also elect to provide health care insurance for their qualifying dependents by paying 35 percent of the calculated premium. The Commission is a secondary provider for those retirees and/or their dependents who are eligible for Medicare benefits.
The' Commission's health care plan is administered through an insurance company on a Minimum j
Payment Plan but operates as a self-insurance program with an additional purchased insurance policy to i
cover those claims over $100.000 in this plan the insurance company administers the plan and processes the claims according to insurance coverage with the Commission reimbursing the insurance company for it's
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payouts. Expenses are recorded by the Commission when paid to the insprance company. Total.
postemployment health care costs recognized by the Commission for the years ended September 30,1992 and 1991, were $795,767 and $793.020 respectively; postemployment life insurance costs during the same periods were $100.121 and $95,834.
Health care coverage is offered to former employees who voluntarily terminate and certain dependents l
who are no longer fligible for employee dependent coverage in accordance with federal law ICOBRA).
Currently there are i1 COBRA participants. All participants are responsible for 100 percent of their insurance premiums l
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i According to existing laws of the State of Florida, the five board members of the Orlando Utilities
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Commission act as the regulatory authority for the establishment of electric and water rates. The Florida 4
Public Service Commission iFPSC) has authority to regulate the electric rate structures' of municipal utilities in Florida. It is believed that " rate structures" are clearly distinguishable from the total amount of revenues which a particular utility may rec'eive from rates: and that distinction has thus far been carefully made by the FPSC.
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Prior to implementation of any rate change, the Commission files the proposed tariff with the Florida Public Seme Commission and has established the prerequisite of a Public Notice and the holding of a Public Hearing.
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Florida Public Service Commission: As noted above. the FPSC has jurisdiction to regulate electric
- rate structures;o! municipal utilities. In addition the Florida Electric Power Plant Siting Act and the.
- l Transmission Line Siting Act have given the FPSC exclusive authority to approve the need for new power j
plants and transmission lines. The FPSC also exercises jurisdiction under the Florida Energy Efficiency and Conservation Act as related to electric use conservation programs and prescribes conformance to the Federal Energy Regulatory Commission's Uniform System of Accounts. The FPSC also approves territorial dgreements and settles territerial disputes.
Environmental and Other Regulations: Operations of the Cornmission are subject to environmental regulation by Federal. State and local authorities and to zoning regulations by local authorities. The
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Commission's interconnection agreements with investor owned utilities are subject to review and approval
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by the FERC. FERC also exercises jurisdiction over the Commissio.n under the Public Utihty Regulatory Policies Act of 1978 Federal and State standards and procedures that govern control of the environment can change. These changes can arise from continuing legislative, regulatory, and judicial action respecting the standards and procedures. Therefore there is no assurance that the electric and water plants in operation.
under construction. or conternplated will always remain subject to the regulations currently in etfect or will j
always be in compliance with future regulations.
An inabihty to comply with environmental standards or deadlines could result in reduced operating' levels j
or complete shutdown of individual electric generating units or water plant facilities not in compliance, j
Furthermore compliance with emironmental standards or deadlines may substantially increase capital and j
operating costs.
NOTE O-INCOME TAXES l
It is the opinion of the Commission and its counsel. that the Orlando Utilities Commission is exempt from federal and state income taxes
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NOTE P-BUSINESS SEGfAENTS The Commission operates in two business segments -- the generation, transmission and distribution of electricity and the production. treatment, and distribution of water. A summary of the segment information follows:
I Electric Water Total '
Year Ended September 30.1992:
Operating revenues
$ 286.780.569
$ 20,577.938 307,358.507 Depreciation and amortization.
29,537.599 3.034.343 32,571.942 Operating income 75.120.768 3.565.628 78.686,396 Net income 21.344.028 3,589.483
'24.933.511-Dividend payment to the General Fund of the City of Orlando 14.610.490 2.992,510 17,603.000 Contributed capita! -
15.163.477 49.780.719 64,944,196 Utility plant additions 129.345.717
-10,932,339 140.278,056 Utility plant deletions.
46.473.295 153.345 46.626.640 Net working capital 72,305.520 I 372.359 73 677.889
'i Totai assets 1.584,541.479 171.761.208 1.756.302.687-6 Long-term. debt - net 1,151,045,780 56 341.401 1.207,387.181 Total equity (accumulated retained earnings s
and contributed planti.
265.430.503 106,152.389 371,582.892 Year Ended September 30,1991.
Operating revenues
$ 289.961.819 ' $ 19A90.155 309.451.974 Depreciation and amortization.
27.579.027 2.814,277 30,393,304
'i Operating income 79,964.422 3.351,501 83.315.923 -
i Net income 25.830.552 4.258.024 30.088.576 Dividend payment to the General fund of the City of 0rlando 14.945.280 2.846,720 17,792,000 Contobuted capital 15.310.868 47,138.913 62.449.781 Utility plant additions 105.927.476 9,789.4'01 115.716.877 Utility plant deletions.
19.354.984 90.410
-19.445.'394' l
Net working capital 65.014,960 2,880l480 67.895.440 Total assets 1.445,755.217 159.552,938 1,605.308.155 f
Long-term debt - net 1 % I,599.810 47.188.168 1.108,787,978 c Total equity (accumulated retained earrungs and contributed plant!.
258.211,989 101.914,394
- - 360.126,383 j
r There were no sales to any single customer in excess of 10% of operating revenues for the fiscal years 1992 l
and 199!
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i Report of Independent Certified Public Accountants i
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Commissioners of the Orlando Utilities Commission We have audited the accompanying balance sheets of Orlando Utilities Commission as of September 30, 1992 and 1991, and the related statements of income and accumulated retained earnings and cash flows for the years then ended.These financial statements are the responsibility of the Commission's management.
Our responsibility is to express an opinion on these financial statements based on our audits We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.' An audit includes examining, on a test basis, evidence l
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountmg principles used and significant estimates made by rnanagement, as well as evaluating the overall financial statement presentation We believe that our audits provide a reasonable basis for our opinion, in our opinion, t he financial statements referredto above present fairly <in all material respects. the i
financial position of Orlando Utilities Commission at Septernber 30,1992 and 1991 and the results of its operations and its cash flows for the years Ihen ended in conformity with generally accepted accounting principles t
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Novemtgr 25.1992 -
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The Centraf Florida Sheltemd Workshop, inc;, a non-piofit organization, provided mail handling savices kw this public,ation.-
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