ML20041G384
| ML20041G384 | |
| Person / Time | |
|---|---|
| Site: | Marble Hill |
| Issue date: | 03/17/1982 |
| From: | Shields S PSI ENERGY, INC. A/K/A PUBLIC SERVICE CO. OF INDIANA |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML20041G385 | List: |
| References | |
| NUDOCS 8203220185 | |
| Download: ML20041G384 (5) | |
Text
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4 PUBLIC Recsm 3 ';
e-1 SERVICE M/!R 1 3 199 5 INDIANA
( "21?'Qey='
March 17, 1982
'si S. W. Shields
'g Senior Vice President -
iJ Nuclear Division Mr. Ilarold R. Denton Docket Nos.: STN 50-546 Director of Nuclear Reactor Regulation STN 50-547 U. S. Nuclear Regulatory Commission Construction Permit Nos.:
Washington, DC 20555 CPPR - 170 CPPR - 171 Marble 11111 Nuclear Generating Station - Unis 1 and 2
Dear Mr. Denton:
In accordance with 10 CFR 50.71(b), we are filing one (1) copy of the annual financial reports for 1981 for Public Service Company of Indiana, Inc. (PSI) and Wabash Valley Power Association, Inc. (WPA).
These annual reports contain nuditors reports by Arthur Anderson and Company for PSI at page 25 of its report and for WPA at page 1 of its report. Please advise if you have questions.
Sincerely,
/h ju'&
S. W. Shields SWS/JUB/bak Enclosures cc:
Director of Inspection and Enforcement U. S. Nuclear Regulatory Commission Washington, D. C.
20555 J. E. Konklin J. J. Ilarrison E. P. Martin 1ON b \\
$$S22jgcpogggg g
I P. O. Box 190, New Washington, Indiana 47162 812. 289.1000
g, EI WABASH VALLEY POWER ASSOCIATION, INC.
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FINANCIAL STATEMENTS
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AS OF DECEMBER 31, 1981 AND 1980 TOGETHER WITH AUDITORS' REPORT o
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AlcT11Un ANDERSEN & CO.
INDI ANAPOLIN, INDIANA m
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To the Board of Directors of
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Wabash Valley Power Association, Inc.:
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We have examined the balance sheets of WABASH VALLEY i,
POWER ASSOCIATION, INC. (an Indiana not-for-profit corporation) as of December 31, 1981, and 1980, and the related statements of revenues and expenses, patronage capital and sources Of funds tis ed for utility plant additions for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the l
accounting records and such other auditing procedures as we
-7 considered necessary in the circumstances.
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In our opinion, the financial statements referred to above present fairly the financial position of Wabash Valley 1
i Power Association, Inc. as of December 31, 1981, and 1980, and f-"
the results of its operations and the sources of its funds used l
for utility plant additions for the years then ended, in conformity
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with generally accepted accounting principles applied on a consistent basis.
<d February ll, 1982.
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WABASH VALLEY PO'
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1 BALANj I'l L_.J DECEMBER 31,.
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ASSET 3 1981 1980 UTILITY PLA"T at original cost r-"
(Notes 2, 3 and 4):
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In service-Transmission
$ 15,286,268 Distribution 3,830,058 L~q General 3,684,408 118,226 J
22,800,734 118,226 Less-Accumulated depreciation 4,441,359 28,926 18,359,375 89,300
_,j Construction work in progress-Marble Hill Nuclear Station 215,885,774 156,820,769 Nuclear fuel 30,839,279 15,300,088 q
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Headquarters building 1,316,413 Load Management system 4,890,839 877,476 Transmission system 17,319,472 73,760
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,J 268,935,364 174,388,506 c3 287,294,739 174,477,806
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CURRENT ASSETS:
Cash 16,221 14,412
,_ q Temporary cash investments 490,000
"-J Headquarters building bond construction fund 10,000 1,284,503 E
Accounts receivable-Power 7,115,720 7,224,084 Other 42,479 50,738 Unbilled fuel cost 319,190 32,534 Prepayments 11,673 4,608 Total current assets 8,005,283 8,610,879 OTHER:
Deferred charges 1,132,168 589,147 Other investments 1,046,432 510,669 E
2,178,600 1,099,816 l
The accompanying notes are an int 1
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3ER ASSOCIATION, INC.
E SHEETS i
1981 AND 1980 CAPITALIZATION AND LIABILITIES 1981 1980 MEMBERS' EQUITY AND PATRONAGE CAPITAL:
M:mbership certificates, 24 outstanding 120 120 Patronage capital (Note 4) 1,516,649 1,958,409 Total members' equity and patronage capital 1,516,769 1 158,529 LONG-TERM DEBT, net of current maturities:
Rural Electrification Administration Mortgage Notes (Note 4) 240,734,000 167,067,000 Economic Development Revenue Bonds (Note 4) 2,720,000 2,750,000 Total capitalization 244,970,769 171,775,529 CURRENT LIABILITIES:
Current maturities of long-term debt (Note 4) 20,000 Notes payable 375,000 100,000 Accounts payable-l Purchased power 7,856,729 6,863,831 Trade 311,836 111,647 Unbilled construction costs payable 43,119,875 4,849,511 Contract retainages payable 338,736 176,447 Accrued liabilities 485,677 311,536 Total current liabilities 52,507,853 12,412,972
. COMMITMENTS (Notes 3 and 7)
$297,478,622
$184,188,501
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egral part of these statements.
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J WABASH VALLEY POWER ASSOCIATION, INC.
STATEMENTS OF REVENUES AND EXPENSES r~
b-w FOR THE YEARS ENDED DECEMBER 31, 1981 AND 1980 n
E,j 1981 1980 OPERATING REVENUES (Notes 1, 2 and 5)
$84,299,694
$78,661,709 l
OPERATING EXPENSES:
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Purchased power (Notes 2 and 5) 83,071,535 77,083,262 F~^
Administrative and general 1,518,872 965,545 Depreciation (Note 2) 53,326 15,139 Total operating expenses 84,643,733 78,063,946
~l ELECTRIC OPERATING MARGIN (LOSS)
(344,039) 597,763
,J I_'Jrl INTEREST EXPENSE:
Interest incurred 21,476,354 12,939,229 Interest charged to construction (Note 2)
(21,285,459) (12,939,229)
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Net interest expense 190,895 NET OPERATING MARGIN (LOSS)
(534,934) 597,763 ml l
NONOPERATING MARGIN - Interest income 91,984 85,729
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PATRONAGE CAPITAL ALLOCATIONS 1,190 440 l
NET MARGIN (LOSS)
(441,760) $
683,932 Ul
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The accompanying notes 're an integral part
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pa WABASH VALLEY POWER ASSOCIATION, INC.
Im STATEMENTS OF PATRONAGE CAPITAL m
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FOR THE YEARS ENDED DECEMBER 31, 1981 AND 1980 r
1981 1980 BALANCE, beginning of year
$1,958,409
$1,274,477 Net margin (loss)
(441,760) 683,932 BALANCE, end of year (Nate 4)
$1,516,649
$1,958,409
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The accompanying notes are an integral part of these statements.
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1 WABASH VALLEY POWER ASSOCIATION, INC.
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STATEMEN[S OF SOURCES OF FUNDS USED FOR UTILITY PLANT ADDITIONS L])
FOR THE YEARS ENDED DECEMBER 31, 1981 AND 1980 1981 1980 W
FUNDS GENERATED (USED) INTERNALLY:
Net margin (loss)
(441,760) $
683,932 Depreciation 53,326 15,139 Amortization 128,178 204,734 u_,
(260,256) 903,805 FUNDS FROM DEBT FINANCING AND OTHER SOURCES:
Long-term debt 73,637,000 69,694,000
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Net change in working capital E
and other items-Deferred charges and other investments (1,206,962)
(732,327)
Cash (1,809)
(1,224)
M Temporary cash investments (490,000) 522,000 I
Headquarters building bond construction fund 1,274,503 (1,284,503)
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Accounts receivable 116,623 (76,707)
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Unbilled fuel cost (286,656) 11,139 Prepayments (7,065)
(1,508) r ~-~
Current maturities of long-term debt 20,000 p
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Notes payable 275,000 100,000 l
Accounts payable 1,193,087 (318,723)
E3 Unbilled construction costs payable 38,270,364 (3,153,570)
J Contract retainages payable 162,289 176,447 Accrued liabilities 174,141 81,435 Cl
$112,870,259
$65,920,264 t*)
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ADDITIONS TO UTILITY PLANT AND CONSTRUCTION WORK IN PP0GRESS:
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l Utility plant
$ 18,323,401 50,181 Construction work in progress 94,546,858 65,870,083
$112,870,259
$65,920,264
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WABASH VALLEY POWER ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS j
DECEMBER 31, 1981 AND 1980 l
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NATURE OF OPERATIONS Wabash Valley Power Association, Inc. is an association E
of 24 member Rural Electric Membership Cooperatives.
In January, 1978, the Association received a certificate of convenience and necessity from the Public Service Commission of Indiana authorizing
~l it, among other things, to be the power supplier and to conduct LJ related activities for its memom 3.
All of the Association's operating revenues are derived from sales to members.
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2.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
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Basis of Accounting i
The Association maintains its accounting recoads s
substantially in accordance with the Uniform System of Accounts i
M of the Rural Electrification Ac'9 nistration.
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Utility Plant i
Construction costs include allocations for payroll r
related costs and adminstrative and general expenses as well as
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interest on borrowed funds used during construction.
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Depreciation
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The Association provides depreciation on utility
,_,j property on a straight-line basis over the estimated service l
lives of the depreciable property.
Depreciation rates are as H
follows:
{W General Plant Load management equipment 6.7%
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Structures and improvemente 2.5%
~J Transportation equipment 20.0%
Office furniture 10.0%
m Other general plant 6.0%
3 d.
Federal Income Taxes The Association is exempt from Federal and state income I
taxes pursuant to the provisions of Section 501(c)(12) of the 1
Internal Revenue Code.
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Pension Plan
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Certain employees of the Association are members of and contribute to a pension plan administered by Indiana Statewide Rural Electric Cooperative, Inc.
The Association's pension expense was $22,027 for the year ended December 31, 1981 and
$10,223 for the year ended December 31, 1980.
f.
Operating Revenue and Purchased Power The Association records sales and purchases of power from suppliers based on billing dates prior to the end of each month.
Revenue and purchased power expense are not recorded for energy unbilled at the end of each month.
3.
CONSTRUCTION COMMITMENT The Association has a 17 percent ownership interest in the Marble Hill Nuclear Station, which is being constructed by Public Service Company of Indiana, Inc. (PSI).
The ownership agreement between the Association and PSI provides that each party shall be responsible for the financing of its ownership share of the project costs.
The in-service dates for the two Marble Hill units are scheduled for late 1986 and 1987.
The Association estimates its l
share of the total costs of the Marble Hill Project to be approxi-mately $801 million.
l Due to certain construction problems at the Marble Hill h
project, all safety-related work was suspended in August, 1979.
l In response to a Nuclear Regulatory Commission (NRC) confirming order, outlining necessary steps to resume safety-related work, PSI has restructured its project management and quality assurance staffs and added a substantial number of personnel with extensive commercial nuclear experience.
Safety-related work was resumed on March 27, 1981, and the 1979 confirming order was rescinded by the NRC on February 12, 1982.
WVPA was billed by PSI for transmission and distribution facilities under provisions of agreements pertaining to proportionate ownership of such facilities.
The assets purchased were comprised of both in-service and construction work in progress facilities.
The original cost of the facilities in-service amounted to $18.9 million with accumulated depreciation of $4.4 million.
The amount purchased as construction work in progress was $17 3 million.
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LONG-TERM DEBT
_U On September 4, 1981, a loan guarantee commitment in
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the amount of $673 million was approved for the Association by the Rural Electrification Administration (REA) of the U.S. Dept.
of Agriculture.
This loan guarantee commitment will provide the
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Association with $588 million to finance the increased costs E
of its participation in the Marble Hill Nuclear Generating Station, $72.5 million for the purchase and construction of transmission and distribution facilities, and $12.5 million for
~7 the construction of a' radio-controlled load management system.
_J Mortgage notes are payable to the Federal Financing Bank irith interest rates ranging from 8.418 percent to 16.725 perceat.
The notes have maturities through December 2014, interest payable quarterly, with quarterly principal payments commencing in 1985.
Under the terms of the loan agreement, l7 unadvanced loan funds of $792,950,000 are currently available to uJ the Association to cover future construction expenditures.
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Under terms of the mortgage agreement, the Association
_J is restricted from making distributions of patronage capital so long as the Association's equity is less than 40 percent of total assets.
As of December 31, 1981, equity was less than 1 percent y
1 of total assets, w
Financing for construction of a headquarters building R
was obtained through the issuance of City of Indianapolis Economic EJ Development Revenue Bonds at a rate of 8.875 percent, interest payable semiannually, with semiannual principal payments from November 1981 through May 2010.
Payment is guaranteed by the j
National Rural Utilities Cooperative Finance Corporation.
The notes and the bonds are secured by all property of the Association.
The estimated principal payments commencing in 1982
~7 through 1986 for the REA mortgage notes and the Economic Develop-
._.J ment Revenue Bonds are as follows:
I Economic REA Development I~j Mortgage Revenue l
Notes Bonds
$20,000 1982 l
1983 20,000 1984 20,000 1985 345,000 30,000 1986 787,000 30,000 a
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RATES a.
Association
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The Association had approved by the Public Service I
Commission of Indiana on December 30, 1981, a new Schedule of Rates which will generate an approximate 2% increase in revenues from electric sales, annually.
These rates were approved on an emergency, temporary basis to be effective January 1,
- 1982, subject to refund pending a final Public Service Commission ruling.
The purpose of this increase is to provide the Association with sufficient revenues to recover the costs of ownership of certain transmission and distribution facilities acquired from Public Service Company of Indiana, Inc. on December 31, 1981,.and to be j
constructed during 1982; and to recover the costs of ownership of load management facilities which will become used and useful during 1982.
The Association has requested an additional increase of approximately 1.38%, making a total requested permanent rate increase of 3.38%.
A public hearing on the 1.38% additional increase was held on January 15, 1982.
Final Public Service Commission approval of the 2% emergency increase and the 1.38%
additional increase is still pending.
Since 1978, the Association has pooled the costs of power purchased from its four power suppliers, and billed the sales of power to its member systems using a pooling rate.
In conjunction with the aforementioned requested rate increases, the Board of Directors of the Association has directed management to seek approval from the Public Service Commission for modification of the pooling rate to reduce the impact to the member systems of the difference in power and energy cost between the pooling rate and the rates charged by each member system's area power supplier.
Such a modification would result in a change of the cost of power billed by the Association to each of its member systems, but would not significantly affect the power sales revenues of the Association.
A public hearing on this request is scheduled for February 16, 1982.
The final outcome of this request is uncertain at this time, b.
Power Supplier The Association has been charged rates prior to 1981 by one of its power suppliers which are subject to retroactive adjustment based on final disposition of a pending rate increase request filed with the Federal Energy Regulatory Commission (FERC).
Refunds, if any, will be passed on to the member REMC's and will be reflected in the financial statements as reductions in revenues and purchased power.
These refunds will not impact the Association's operating margin.
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LINE OF CREDIT
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The Association has a short-term line of credit available in the amount of $21,000,000, which may be used for general corporate purposes as determined by the Board of Directors.
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Borrowings bear interest at the prevailing prime commercial rate I
+ 1/2%.
There were no outstanding borrowings under this line at December 31, 1981.
7.
LEASE COMMITMENTS Future rental commitments under existing leases are not
__s significant.
Total rental expense was $36,280 and $35,798 for the years 1981 and 1980, respectively.
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