ML20043F210
| ML20043F210 | |
| Person / Time | |
|---|---|
| Site: | Grand Gulf  |
| Issue date: | 12/31/1989 |
| From: | Mckamy W SOUTH MISSISSIPPI ELECTRIC POWER ASSOCIATION |
| To: | |
| Shared Package | |
| ML20043F209 | List: |
| References | |
| NUDOCS 9006140257 | |
| Download: ML20043F210 (41) | |
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i I E J N-l. i y SMEPA P r o fil e L L South Mississippi Eleck!c Power Association (SMEPA)is a rural electric generation and transmission coop- l erotive (GS T), As the wholesale power supplier for eleven member distribution cooperatives throughout Mississippi. South Mississippi Electric serves as on economicalpower source for over 262.000 Mississippions. I f The employees of SMEPA number over 230 and work in four locations: the Headquarters Office - Highway 49 North in Hattiesburg: Plant Moselle - Jones County; Plant R. D. Morrow, Sr. - Lamar County; ; and Grand Gulf Nuclear Station - Claiborne County. (A map on the lost page of this report depicts l { these locations and those of SMEPA's generating units.) The dedication of each employee and his/her . { recognition ofinterdependence assures the successful accomplishment of our primary goal. the F generation and transmission of a reliable and economicalsource of wholesale power to our eleven [ member systems. f. j l l All associated with South Mississippi Electric Power Association uphold the beltet in exce!ence in service, I {' and we provide that service through cooperation - between and among SMEPA's member systems.
- l. employees, and directors.
E q lhroughout the years. South Mississippi Electric Power Association has become, and will remain. O highly progressive force in the electric utilityindustry. I l j f i i i I p ""P"'gW"O"'3"mTN "m3 f
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j3i-(irtiutesjfggg l i p' A JAd% M c .4 , , g@% R4WBoard'of DerectorsE . gr; ; l J M L . AW.WV%& L A n . CyiheJ989. Operating ReportW Q4 il
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6R JTheCoffporativeSumm%g aryS B i [ h( pp[J. 4 M$u.4 .,: f fl27hgThepuditors'Regrt h%y' %;&) ilyg ,g' Q. i 4 k T WMilm:ni$ h * *e'dJ V2CNIhe.hdoncpStisets($&c h ' $h@ s Jni ltementsjofMet Stc 3l$%%% Morgins g!$ W30@R ' $ Patronage Capiton.1)j .. ge s
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Executive Message l South Miss!ssippi Electric Power Association closed out the decode of the eighties with many positive changes. Stable energy costs continued with projections of stability wellinto the nineties which enable its members to molntain and expand their services. Many accomplishments occurred which are illustrated throughout this report, Departmental grmww mm N -
; goals were met or exceeded in every opera-T@D tional area. Construction of new knes and g
'. i facilities were at on all-time high in order to K{,i 4-
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meet members' growth and needs. Planned S .p.;4%,) p ' -
. Jwhh outages at both Plants Morrow and Moselle, e m 0 W z.. p qy { - and on unplanned, long-term outage at j 7g "[ Morrow, required cooperation and coordino-F{ N.hb;g37 'Npyh,h . ~ g[ ,.9 U tion within each area.
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.. A strategic plan was developed to provido t
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- y. orderly, planned, systematic approaches in
} *3js- ' j ,~. meeting the challenges of the future.
7 .. -[. . , j/ SMEPA experienced a net margin loss for 1989 J' - 2 l.- : . . .-- which was planned offer careful study and L 1.. ; _- -- deliberation by the Board of Directors. This loss
, ' 1gh.' tp ; s g was the result of the abandonment of SMEPA's j
1 40 8 1 ,. , ten percent interest in Unit 11 of Grand Gulf
' W ? ,; .. g"g ' , .; 4 Nuclear Station. The method used meets all a " ."
regulatory requirements and will not impact j f .., ( ., ,
; financial stability or future rate structures, j
, . , Several director changes were experienced
. due to retirement and to the untimely death of 7.' %. ~ '
Director Horace Twiford, Jr. All positions were Henry Thomas. GeneralMobogs cnd filled with highly quahtied and dedicated I W C. McKamy. Jr, President people. We look back to the eighties as a time of challenge and change which was met by the combined efforts of SMEPA employees; and as we look into the nineties with the many ( f unknowns of a changing future, we know that 7 , all events will be met with positive and profes-sional performances by employees dedicated W. C. McKomy. Jr., President to SMEPA, its cooperative philosophy, and its commitment to the future of our crea and State. 1iis a pleasure for us to provide you with this report which illustrates the continuing progress Henry Thomas GeneralManager of SMEPA. l l _ ~, _ ~ _.
Tribu1es - Ret;lremonfs _ W. W. Bond represented Peori River Valley EPA on SMEPA's Board of Directors for 19 years, retiring in June 1989. Mr. Bond held the office ' of President from 1980 until 1986, He has been Chairman of the Bid Jgc Committee and a member of the Budget and Finance Committee. Mr. Bond was elected to Pearl River Volley's Board on July 2.1964, and still actively serves the Cooperative's boord. - A-W. W. B o n d i l Floyd Lynk, Manager of Twin County EPA since September 1950 and s* ' member of SMEPA's Board since November 1980, retired as Director -; in March 1989 and as Manager on June 30,1989. Mr. Lynk was a member of the Fuel and Marketing Committee and had served on other committees during his tenure.
- :dk i l) ,ah Floyd L ynk s
E. C. Parker retired as Director on South Mississippi's Board in Septem- A ber 1989 after 11 years. He retired from Magnolia EPA on December 31,1989, after 22 years as Manager. Mr. Parker chaired SMEPA's '} Budget and Finance Committee for 10 years. l E. C. Park er I l In Memorlam Horace Twiford, a member of South Mississippi's
-' 'm Board of Directors and vice president of r- ' '
,, , ~ , -
% s Cochomo EPA, died lost September. Mr. Twiford -
!?: ' '[9;;# M ' T served on the Budget and Finance Committee $(3 ' ^{'
from September 1985 until his death and had -
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Mk j- been a member of other committees. In , I y , .~% 6' D. R. Ware, former member of SMEPA's Board and former director of Singing River EPA, died this past e Qplh l
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fall. Mr, Ware joined SMEPA's Board in May 1963. In December of 1966, he was elected to serve os HoreeerwIrord secretary-treasurer of the Association, a position D.R. Ware he held until his retirement in 1983. l
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-B o a r d o1 Directors i
W. C. McKamy. Jr. Naif Jordan Twin County EPA Singing River EPA President Vice President i Y jf
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de James Humber Coahoma EPA da Giles Bounds GeneralManager 4 Doug Mooney Coast EPA Coahoma EPA 111 Robert Graham Dixie EPA L. G. Pterce Dixie EPA Samuel Williams Manager Magnolia EPA Don Jordan Mary R. Jones Robert St. John Manager Southwest Mississippi EPA Manager Southern Pine EPA Southwest Mississippi EPA l l
Providing Excellence in Service and Service Through Cooperation l
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s Hollis Alford Magnolio EPA Jim W. T. Shows GeneroIMonager Secretary-Treasurer PearlRiver Va!Iey EPA Acting Secretary-Treasurer l ,c \-
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e , , Robert J. Occhi Henry C. Waterer, Jr. Harry Bonner GeneroIMonager 5 GenerolMonager Delta EPA Coast EPA DeltaEPA
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<w$aj Kelly Speights Jack Ware Horlon B. Rogers Pearl River Valley EPA GeneralManager Southern Pine EPA Singing River EPA
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g , h L P. Parker Vespor Bagley R. D. Hines Managar yazoo Valley EPA Manager Twin County EPA Yazoo Valley EPA e
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Ken Ezell. Electncian Plant Moselle 7 g t{ (- IE. 4 y'-- %,' e p . k - %. . ' i Q ;
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1989 Operating Report [ Plant Moselle Conducts Major Turbine-Generator Inspection: Replacement of Unit 2s Boiler q Waterwall Tubes Completed
,g As hos been experienced in recent years, the Moselle Generating Station was operated in on intermediate and peaking mode; and the three 59 megawatt units were cycled lnto service as needed to meet system demand with due consideration to economic bcfors and lood r control requirements.
Q Attractive natural gas prices during the mid year months p y 4} promoted the operation of the facility. This proved to be yf , d .- especially important as the units were called upon to assist
?- in meeting the demands of the summer load season.
(4 Higher fuel pricing during the winter months led to limited use of Plant Moselle. To counter the increased fuel costs,
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some supplemental boiler firing was accomplished with fuel oil; and additional power purchases were arranged. l Zeke Jordan. F4 ant Moselle Shift Supervisor, reviews operating data for one of Moselles inree 54MW The net generation during 1989 was 60% greater than in power units leke has been a South Mississippi 1988 due primarily to the spring refueling outage and employee for twenty years subsequent equipment problems at Grand Gulf, fail main-a tenance activity at Plant Morrow, and the availability of economically priced natural gas during the p myy summer months.
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' ./ g Plant Moselle's preventive maintenance projects included y
)(, completion of a major inspection on the Unit 1 turbine and gC generator during a planned fall outage, which was per-Qlh fm
' je formed by the plant maintenance staff. The inspection began in early October, and the unit was returned to l
1, service on December 7,1989. Contract personnel were
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used to conduct certain field and shop repairs. In other areas, replacement parts were installed and repairs were made as necessary to correct normal wear and typical defect conditions. Highlights of other 1989 preventive maintenance activities 3 include: . Replacement of Unit 2's boiler waterwall
, tubes completed in April 1989. This was begun in Novem-
- ber 1988 by contract personnel. . Instrumentation up-grading with installation of final steam temperature con-trollers for each unit and a spectrophotometer for use in the plant lab for monitoring and maintaining proper water chemistry . Disassembly of Unit 1 'B' boiler feedwater up re$r I$t e pto e s a an Mosetle. perform routine cotibration on a feed.
pump for inspection during a planned outage. Except for some weld repairs and field machining in the pump water flow transmitter to ensure mammum housing, no major attention was required. accuracy of this rmportantinstrument.
Providing Excellence in Service and Service Through Cooperation Plant Morrow Generation Up in I989: Preventive
' Maintenance Program Continues :
b During the year,731,345 tons of cool were delivered to the 400-megawatt R. D. Morrow, Sr., Generating Station. The M shipments originated from Pike County, Kentucky, under 5 d:1i SMEPA's Cool Supply Agreement with Addington,Inc. %.s With the assistance of a consultant, SMEPA was successful x
.s in securing significant rate concessions from Norfolk South- ,
ern for the movement of spot-market coal deliveries under 63_ o revised Spot Coal Transportation Agreement. In the jy g Agreemer.t. rates are specified for shipments from o num- N # ber of origins. The magnitude of the rate reductions V%$<[#- m
,b !1 ranged from $1.00/ ton from one location to $5.04/ ton from another origin point. Since no spot purchases were made J qdh , k t in 1989, no direct sovings were experienced: however, YUM M M SMEPA stands to benefit from the arrangement in the future
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as the need for coal arises. Roy (bchardson. Utility Operator at Plant Morrow.
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Cool usage during 1989 omounted to 808,014 tons, which Big Mama is the larger of two bulldozers residing represents the greatest annual coal consumption since at the coa! yard The utility operators and heavy 1985. In conjunction with a desired goal, the coal stockpile equipment operators must know how to operate p was reduced by 79,849 tons during the year. This lowered ten different pieces of heavy equipment.
- SMEPA's inventory investment and resulted in significant savings for the organization. With the smaller stockpile, coal-handling costs were lower since mobile cool-moving equipment traveled shorter distances to store or retrieve coolin the designated storage area.
mm - Morrow's two cool-fired units were cycled into service and < WM , operated at varying load levels as needed to assist in ,k' i meeting the load requirements of SMEPA's system. With the n - j "y d@h-nuclear unit at the Grand Gulf Station base loaded, and + o ,- considering the varloble nature of the system load pottern, , I the production from the Morrow units was forced to cover o broad range on a seasonal basis. Only during periods of high load demand were the units allowed to maintain relatively stable operation. ..- b With this mode of operation, the plant staff faced addi- kV tional challenges in operating and maintaining plant
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( l systems and equipment. However, operation during most eth of 1989 proved to be quite successful. The annual net y" g' % .,> 4 ' ' generoflon was above 1988 figures by 2.7%.
- Clay Rood. Scrubber Operator, and Wayne Williams.
Auxiliorv Scrubber Operator, study recaangs from the An extended outage began on Unit 1 in late October atter computer-controIIed Transformer Rectitier Energy the discovery of a failed section in the first-stage nozzle of Management System which was installed in the tall the turbine. The finding was made while the plant staff was or 1989 The systom controis the amount of power
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conducting a planned inspection of the turbine valves. opo$ e sta to w t Eb 5 Av t Tbe unit was disassembled; damage assessments were other information regarding the precipitators is also provided.
1989 Operafing Report l Pr yp -
# made and repair plans were developed and imple-i'f mented. Repair parts were ordered but were unavolloble for installation in 1989. The generator and other auxiliary s equipment will be inspected while awaiting parts delivery, and unit reassembly and start up are planned for the spring of 1990.
In the volley periods when only one of the units was er- required for operation, maintenance activities were under-G s % taken and modification projects were completed on the D, idle unit. Essentiol!y all of the planned outage work was
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j conducted by plant personnel.
? e General improvements, some additions, and preventive M' ...-Y' mc!ntenance activities continued throughout 1989.
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.o w -- The original, outdated analog automatic voltage controls y on the Unit 2 precipitator were replaced with a state-of-i,b the-art microprocessor voltage control system. The new Ed Clinton. !nstrument Mochonic at Plant Morrow, system is more OffiClent beCouse of enhanced features is shown installing the electrical components for and versatility. The modification improved precipitator the leeds & Northrup Data ACQuisltion System performance and resulted in lower power requirements for operations.
10 A Leeds & Northrup Data Acquisition System was I
,, installed on the Unit 1 control board to replace outdated instrumentation. The new system monitors critical tempero-
, tures on various pumps, motors. and other related plant equipment: has the capability of real time monitoring; and provides reports of boiler and turbine efficiency. The device now serves os a tool to assist in optimizing plant operation. Similar equipment was installed on Unit 2 during 1988.
l ! , , - Additions in personnel and facilities were made to the
? railcor maintenance shop. . The railcar maintenance 1
- b g; staff was increased to accommodate the increased main-4
.* g*%+ g - tenance demand on SMEPA's aging 160-railcar fleet used in the transportation of coal. . Floor space was doubled
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to allow simultaneous repairs on two of SMEPA's coal cars. ;
/ / . The ends of the building were enclosed to provide better s
( 3 working conditions during inclement weather, b ' New coolyard crew quarters, nicknamed the ' Depot' by I (,"3
- coolyard personnel, were completed in 1989 and provide Larry mas. Monow Control Room operator. coils a lunch area, locker / shower areo, and sanitary facilities for up unit I boiler temperature intorrnation using tho the ten man crew which operates cool-bandling and Leeds & Northrup Data Acquisition System rho Waste-disposal eqUlpment. l system ss benefictat in both controtting and moni-tonng unit performance l Preventive maintenance highlights include: . Replace- i
, ment of 4,500 feet of conveyor belting in the coal transport ) l system . Installation of redundant drum-level monitonng , i l
l l Providing Exce!Ience in Sen' ice and Service Through Cooperation y m -w .
- and alarm equipment on both boilers to aid in operation of units and reduction of erroneous boiler trips . Installo-E*
j,% Aj 7 3(,#. - tion of a new Westinghouse oxygen analyzer on Unit l's ,f ( scrubber and stock to improve reliobility of emissions monl- p ,,L(Qto toring . Purchase of a new 28-ton-capacity mobile crane used for maintenance and other purposes . y' i 9
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Installation of a dust-scrubbing unit on the pug mil! ' '
- conveying system to reduce the amount of airborne fly Fs ash . Installation of a new Gardner-Denver rotary screw air compressor, on ultro air dryer, and associated piping to provide dry air in all of the plant air systems to eliminate moisture and reduce maintenance required on the com-pressed air system . Reclassification of grinding balls in Unit l's three ball tube mills to improve the operating char-l acteristics of the mills and to produce pulverized coal of proper gradation for more efficient combustion Grand Gulf Nuclear Station Given High Rating, by INPO and NRC; Other Goals Achieved This photo captures the immensity ofitems in the railcar maintenance shop. Thomas EzeII. .
Grand Gulf was awarded the highest rating provided by Mechanic. nd Randy Smith. Helper, repair part of
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the Institute of Nuclear Power Operations (INPO) following #0* , $*f3[d nd ly ca eormaIYg"te on extensive evaluation by INPO's stoff, . Another signifi- majority of repairs on the lwrailcar fleet. retyrna lI cant accomplishment was receiving the highest roting, a very mie on contract personnet,
'1," in five of seven categories evaluated by the Nuclear Regulatory Commission (NRC) during the Systematic Assessment of Licensee Performance review. The other two categories were rated a '2." . The plant staff met the established 1989 goals in six of the ' Top Ten Performance Indicators' used by the nuclear industry. The performance goals which were met or exceeded were: lost time acci-dent rate; volume of low-level waste generated; fuel i, -
reliability; collective radiation exposure of plant personnel, 1 . , including contractors; number of unplanned safety system . h actuations; and safety system performance. 4 1h vf
- The third refueling outage, a planned 45-day process, f Jr
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started on March 18,1989, and was completed two days V d, j . ahead of schedule. This was the shortest refueling outage @ ever among the domestic plants of the same type as ,4 Grand Gulf (BWR6). During the outage, one-third of the fuel in the core was replaced; and many plant compo-nents and systems were repaired, modified, inspected, and tested. The fourth refueling outage is scheduled for g Make McCrary is Stoft Auditor. and among his duties is to conduct an ongoing contract compliance SMEPA received a total of 784,784 MWH of generation from audit of the Operating Agreement between SMEPA Grand Gulf during the year. As a result of the planned and Entergy operations. Inc., the majority owner "d P*' # ' /Ge nd GuuNucle rSt ti n unn refueling outage and other unscheduled outages, the Auditing provodes assurance that allcontract production from the facility was about 23% less than was specifications are being met in regard to SMEPA's provided in 1988, share of 10% of the operating costs of GGNS=
l 1989 Operafing ReporI wm7Wy ~ Monitanng of Eastern Konfucky Property Continued C . w' f, 9,. g $r3% 7 4'l $ Monitoring continued on activities related to SMEPA's SQ property in eastern Kentucky, Under a long term lease g;irh(fC j 4 [# yj 79 arrangement Andolex Resources,Inc. presently controls the cool reserves and is actively developing the property i ( d [fa% by producing cool from both surface and underground mining operations. Also, SMEPA initiated efforts to identify the marketable timber on the property and has arranged M; . for the sale of timber from a number of tracts. Additional
- cruises are underway, and other soles are anticipated as s_( r SMEPA attempts to take prudent advantage of the ossets on the property. As in the past, SMEPA representatives made periodic visits to the site to meet with Andalex
,~ personnel and to attend to other matters related to the q ownership and monogement of the property.
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wx hd System Planning and Protection Terry Lee. Derector of Planning and Protectron. and MAe Collum. Aanning Engineer. look at a 1989 was a year for signifiCont accomplishments in system bound Power Requirements Study as Frances planning and profeClion. Bynum. Engineenng Secretary, binds the remain-12 The first Five-Year Construction Work Plan was completed;it developed from member systems' input and will support a M9155W5 new transmission loan application and REA's required Three-EE.~EE!E_E55_ w 4 _ Year Construction Work Plan. r.= mc: = _ ~
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The first O&M Survey since 1985 was completed. The purpose of the Electric System Review and Evoluotion is to g? :9= sEF5 provide criteria and procedures for REA electric borrowers
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to use in reviewing the effectiveness of their programs for jf~555f%5Ej k' electric system operation and maintenance and plans for 50%i'EE ,gE3G the future. The Survey also provides program evoluotion NEi;5 data for REA. Joint transmission studies with sister G&T's - Alabama Elec-tric Cooperative (AEC) and Cojun Electric Power Co, pero- ) tive - have been completed, resulting in initiation of a new c 161/230-kV interconnection with AEC Approximately sixty miles of 230-kV transmission line will be constructed: SMEPA 7 will build a 230/161-kV primary bulk station at Benndale and V f" 30 miles of 230-kV line from Benndale to the Mississippi / g~
~ / Alabama state line, and AEC will construct 30 miles of line and a 230/115-kV substotion at their Combustion Air Energy 1 Bs!!ing is a hectic trne for Nedra usovicz work Storage (CAES) generating plant. All construction work will Order /B#ng Specialist. and Henry Badey. Engineer' improve service to members in the southeast portion of ong Ana!yst. Use of elect.'onic metering willnot ... ,
lessen their workload but the advantage of taster, South Mississippi Electric's system. more !! moly and accurate readings wrl! be an advantage to erriciency and cost-ettectiveness Other projects incluaed. . Completion of the electronic , meter pilot program . Updating of Power Requirements Studies for all eleven member systems . Installation of new (
Providing hcollence in Service and Service Through Cooperation metering equipment to begin a catfish farming load survey " project. The goalis to better understand the characteristics of this type of load.
- System Design and Construction b .
& i; South Mississippi Electric completed its largest transmission V F
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line and substation construction program during any one- d@M # year period since late 1969 and early 1970. Forty-two miles ,
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of line were built, six substations and switching stations modified, and one new substation constructed. SMEPA crews built four new lines for its member systems: a . 115-kV tap at Lamey and at Spence for Coast EPA: a 69-kV ?N top at North Hattiesburg for Southern Pine EPA; and a 69-kV N line relocation to serve o new station at South Hoy for Dixie - EPA. The crews also performed all of the work on the 69-kV x lines at the Benndole 161/69-kV Substation and rerouted didy;dsh Line 32-A to Singing River EPA's new station at Leakesville from ideas on paper to actual construction. and Line 16-A crossing Highway 84, interdepartmentat teamwork built the new .' Benndale 16l/69-kVSubstation. Drafters Tommy Contract crews constructed 30 miles of 161-kV transmission H 5 "d R D'O H "* *d Di'*C' ' f De8'90 line from Hintonville to Benndale and rerouted Line 89 #"9 **'1#[g'7,M[p*[7fs'ofinN#[ g ya crossing the Pascagoulo River. Substation design and construction projects concluded during the year were the completion of additions to the Moselle 69-kV switchyard, Hintonville 161-KV switchyard, Florence ll5-kV switchyard, State Line and Taylorsville 69-kV switching stations, and construction of the Benndale 161/69- , kV Substotion. Relay panel additions at the Benndale gas turbine were designed and installed to coordinate with the Benndale Substation. i l To provide quick access to data and to properly switch .
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and maintain the system, design and construction were d ] !t completed on the microwave system expansions at the 4 i Benndale Substation, Hintonville microwave station, McLain *
, y, microwave station, and Benndale gas turbine, f,qgp s ,, j
- a s j System Maintenance Programs p.
' In March 1989, SMEPA began its annual right-of-way bU"* " 1 L reclearing program which involved the reclearing of 342 unemen Jim Evans and Matt Ready tie in alumper miles of right-of-way covering approximately 25% of the tem a 69 kV transmission line to one of South transmission system. Competitively bid contracts were "###8'###8 8*##^#"9 ## #
- awarded for this work. Danger trees were cut on 100 miles of critical transmission line, totaling approximately 4200 trees.
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1 1989 Operating Report 5 w qL, yI g4g@aisii;;;;;;;;p s gspir j SMEPA s pole maintenance progrom began in September 1989 Approximately 1583 poles were ground-line inspected
- f Mgg g@ f' and treated with zero pole rEyects Pole-climbing inspec-ypM@ tions were conducted which covered over 300 miles of the 8, - 7QM mp t transmission system 2n4h@wQ.sj.*
l Aerial kne inspections were performed on SMEPA s 1357
' 3 miles of transmission lines on a bimonthly basis !n 1989 which help South Mississippe Electric personnel identify and correct 4 problems before outoges occur j y in continuing the aggressive substation maintenance l j . . .
program begun in 1987 SMEPA s substation personnel i g supervised contract maintenance on 44 out of 53161-kV
~ oil circuit breakers (OCB s) SMEPA s substation crew hf performed annuoi maintenance and testing on fifteen
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transformer load top changers (LTC st seven generator I
, steptp transformers two generator start-up transformers ;
# s s % fifteen autotransformers and four step down fronsformers l The retavung ana meter,ng tecnniaans ensare l tnat the relays popei6 operate the oil evcus' In addition to the above maintenance. SMEPA s substation I tveoxers c' 2o Sourn Mississro, fiectric substat.ons maintenance crew relocated three 161/69-kV transformers 14 b r r$se equipment to ca/norate relavs o' toe Bennaaie o Et s Homewood Unit 1. Benndale Unit 1 and Lumberton Unit 2 This crew also relocated seven OCB s one 115-kV OCB at I suos+ation Siiver Creek. one 161-kv OCB at Hintonville and at Lumber- ,
.,s., ton one 69-kV OCB at Lumberton and at Taylorsville. and two 69-kV OCB s at State une
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,jfPj four substations and recaliorated and tested 463 meters I
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- f yf F - J and 1757 relays on and off-system
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i hu .~ $ ll Introred surveys were completed on substation focihtles h,:. . ". i 7' ~ t: i belonging to SMEPA Dixie EPA. Pearl River Volley EPA. (~ Southern Pir,e EPA Twin County EPA and Yozco Volley EPA 4 f $.- T . 'M..p
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k' , k k- V ' J , YsJ o l g .. , " . - Mr, k R}l[%+ M 7- j O SMEPA continued in 1989 to develop rates that help O +A% d +.p i-g~p 7 g mernbers meet demont
- an increasingly competitive market A new Rural Development (RD) rate was designed to encourage economic development in member system g- territories The ED Rote Off-Peak Rider was especially successfu! in 1989 in improving system load f actor and The marketing field consists or many segments anc orrentation tra<ning sesstubs are a mov , tv ever expancing area inis is sus one at many sa:
sessions coordina'ea cy Man : ou Da weH %rk e r erg Speaahs* Or memoer system mawog emprovees wo,ch um enante toem
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of current techneiopes ana anoa me f m 3 t , a The Good Cents Home Progr JT Contract with $authern compe w e Electric Internationa' inc (SF. ) for SMEPA and ten partici-
,,, ,, . ,e s. > :,m . y g < g,c,p pating member systems become finalin April before then SMEPA s marketing area worked closely with SEI in develop-ment of thermal and equipment stanaards for member service terntones Marketing personnel from SMEPA and the o member systems attended several onentation/ training .
meetings covenng aspects of the Good Cents Program the - j Residential Building Energy Program, and Heat Pump System e, . Analysis - all aimed at preparing market!ng personnel to better communicate with Consumers builders and heat pump dealers g w a n, , , s, , s ; e s SMEPA continued to display strength in the area of system rehabikty by maintaining first place among power compa-nies in the Southeastern United States The 99 5% rehabikty
- rating was given by the North Amencan Elecinc Rehabikty -
-s Council (NERC). which is responsible for measunng rehabikty -
among 250 interconnected power companies throughout Pavuones Sntem Dispatener (seated) ano the United States and Canada . In addition to member- vernon Sowhng cn'et nspa'cher are control ship in the Southeastern Rehability Council (SERC) SMEPA C eP' *'e' 'S Me" d"'*S'N ""e Corde"'o'd became on associate member of the Southwest Power [ ],$7$[g"[Q[,[([,[,$7[S 7 , i Pool to oetter serve member systems located on the MP&L c,at,on remon has t>een an emp,cvee tar almost 15 transtnission syst9m N voors
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Profile Pricing was the latest effort in 1989 to streamhne t3 ' 4 ) ge Control Center operation The program consokdates data . . 'l s f8 input for both power supply scheduhng and reporting in+o one procedure Dispatchers now have more immediate .
%g gM access to current data and a more efficient method of 4
entering or modifying new schedu!es for purchased power
. Satellite weather service is now provided at SMEPA s Control Center The upgraded service provides detailed F weather data for use in projecting daily load requirements and for hurncane tracking Degree data from the new f service is otso being compiled for marketing purposes l
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Throughout 1989. the electronics group provided direct technical support to various departments within SMEPA and indirect support to companies involved in SMEPA efforts . j]"S((, , , [7f' [g((,C" ,((CS The electronics group worked closely with Hewlett-Packard e.am,ne tw wesnan,cs , emete computer (HP) field engineers in the testing and installotron e: the new si'u 1' ', N s arv** replaced the Hams 5RU 1 HP Business Computer System a The group. v .rn Motorola "" D'"deF ' o""3 '"d'"ohon ond a"o'o9
'" "#"" "' S"# ""5 l field engineers. also carcied out testing of a now microwave l
installation at Hintonville. McLain Benndale Substation and l l l
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Benndole turbine. The microwave installotion allows computer control of the new Benndole Substation. Up-j . 3ij ..'w
$* ~ M/C grading of the communication link at the Benndole turbine ! ", a F) provides capability of processing more detailed informa-tion concerning the status of turbine operations.
- The
-^q, electronics group worked closely with engineering in upgrading remote terminal units for substations at Lumber-ton, Columbia, Benndole, and Toylorsville and for the 'i Benndale turbine.
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.s . 7} Employoo Orientation Program Implemented
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An employee orientation program was implemented in s n. . ..a 9~.
'. O: '. - .+ 1989 which recognized the diversity of SMEPA's operations
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' J '4 edge of the Association's history, accomplishments, and goals. Employee tours and presentations were conducted to better inform all employees of the complexity of the Reno /ating this house into a headquarters Conference Center was a tremendous under. total business and the required interaction of all depart-taksng. The Center now has a large mooting ments.
- room, a smo!Ier conference room. a kitchen.
and adequate storage space for audso-vtsuat
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Benefit Program Rovamped
~ P fj,j ,', The notional dilemma of controlling medicat insurance costs while providing quality health core coverage was
,; addressed in 1989. The implementation of a self insured c health benefit plan resulted in cost savings and contain-ment while continuing to offer employees and their families quality medical care coverage. Although the new program is self-insured, risks are limited due to reinsurance contracts which cover cotostrophic and aggregate claims during each contract year, s
M aW ? r f:$P,'%, Safety Record Improved t -/ w
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. 1 SMEPA employees continued to achieve on excellent MANf[F 4 safety record during 1989, which was one of the Assocla-
/ tion's best years in terms of lost-time accidents and lost-time
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. 4meadJdyukQ ho e days. The Association is accredited through the NRECA Safety Program and is one of the few G&T's in the nation to consistently achieve this honor.
Howard Hensarling, Plant Superintendent at Plant Moselle, celebrated his twenheth anniversary at SMEPA with a perfect safety record Howards facilities Upgraded grandfather. H. C. Shoemake helped incorporate Dirle EPA and SMEPA. The renovation of a residential dwelling adjacent to head-quarters was completed to provide o conference center 1
A? 4 ,f' /i% e i e , , ( J ') ' ,) # t } *' ) } )g > () * ( PI for the Association lhe conference center will be used for [ Board of Directors meetings and as on employee training j a[N gMy1 facihty As a community service. SMEPA will also make the . M gg new center avoilable to the local pubhc as a meeting i y ;yg -9 place for various civic organizations V ,m ,jyc 3 g;p
- w, s Due to new EPA regulations concerning underground fuel , 4'eq f storage tanks. the gasokne and diesel fuel storage and p N'N dispersing focility at headquarters was upgraded and <
brought into comphonce This was accomphshed by g/ g replacing all underground fuel tanks and knes with two Q , new above-ground storage tanks (each having a capo-city of 10.000 gallons each) and instolkng fibergloss knes
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; > ;nw Expansion of South Mississippi s member service and eners sanoa commvoicatms specianst tones on in-house support systems continued throughout the year timelv inta<mahon tram all aepartments for vanous with the upgrading of one of the Association s desktop DuNeo60"S *'e Je") N'ce construction l pubkshing systems and the renovation of video production #],' ,[,',n s$, ,[p, $7 gy, facihties . The Association also acquired new video pro- ompievee newsietter tne sura scANNro l?
duction capobikties in 1989. Chief among which was the j obikty to create in-house graphics making video production more economical and versatile . In addition to SMEPA s monthly newsletter,in house communication programs were expondeo to include a weekly pubkcation for employees For the benefit of internal and external pubkcs akke. SMEPA D ' ' "( produced on annuot report video covering the years 1986 ,
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through the current year as o permanent visuol history to be kept in the Association s recorda 1 i South Mississippi also completed o pubkc education pro. ; , gram deakng with the controversialissue of acid rain Addi- ; I tional educationa! programs such as this are planned for j l the near future i l y ." *
- in the area of community support programs SMEPA began y I its porticipation in the University of Southern Mississippis '
Foreign Student Exchange Program in which the G&T nosted groups of foreign students presenting lectures ona (gy fl , i I fours of SMEPA facihties a I j A plan' 'mr t an erehen ana escthng way tc ! irlUn f* >e k a4?US DJf300 wh0' We dO Ihe PJuf5 ont: nut > y var rxna ana are g yen 10 sctwoi ! , , wre- ment?er sv 5'er' empio> ees and orne-
'43r g yfgf;ye r p3 q
- g yrj, n
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( a* WS up an e n m toe w ora ,og3 , s *ne Ine development of a Strategic Plan for SMEPA was com , ,n
, , , , , , , , , , ,g7,,g . m ,g,, gng,ngg,s pleted in 1989 The document which covers a ten-year . . j, ,,e, +
,,,Jffs ogfy,ga, ,
planning honzon resulteo af ter recognition of a need to vue"" ) l
1989 Operafing Repori formalize planning processes and to develop a long-range
+ g~ 4.. strategic plan to best position SMEPA and its member 4 i systems for their future.
ir , , , , 47 m .e -- 1, ;, strategy group staffed by members of the Assoclotion's management team and other employees; after lengthy
-1 meetings and careful determination of present and future
- b. * * '
W key issues facing the Association, the Plan was compiled.
/4 Strategies to secure desired objectives were laid out as % W action plans, comp!ete with specific time fromes and W ,
accountability for implementation and completion of
- g. plonned action. Progress made toward attainment of goals will be measured continuously. The Plan will be
'. reviewed annually to address new issues and changes in SMEPA's operating environment.
Dav'd Holland. Vehicle Serviceman. and Jody NOW General Purpose Computer Dnckinson. Helper, have in their care 56 vehicles and orner types of rolling-stock equipment. When The computer system presently used for business and other We take our Vehicles on the road, We do so With the assurance that these men have our safety and general purpose applications was purchased in 1981. 18 comfort in mind. Although the system has served well the Association's needs with minimal upgrades, it is technically outmoded.
.7 .,r .
will not have the availability of continuing enhancements
, ,P s . ..<. . of the newer systems, and cannot be expected to y 1.,.g.i1.
. c. .
. , ,. ;...- erie @ W N M d a pN wim b me f . " j ( ; y 74 j.
'= .. future.
- f. ((.LiC.$) E { After consideration of various alternatives, o decision was 1 ,A .; 4. made to solicit quotations for a new system. Subsequently, g_ f:4~R .f
; E the Board of Directors awarded contracts for a new f, ? .9.c. .- # ,:r Hewlett-Packard/ Oracle system. In September 1989, the p
'y- T*ygh, h.h
.g Association took delivery of the Hewlett-Pockard 9000 S/835SE computer with Oracle relational database oad
- h. j f,?-3fM 1
a{ - h. s. X yt).: networking capabilities. Although conversion of existing 31,5 (y
- ~
opplications to the new system is a somewhat lengthy
~-
?- . (.~ process, system users will be reworded with on up-to-date
- installation which is f aster and provides greatly increased i y. . . 37 ' . .
- 1. f . 4a . '; -
capacity and flexibility. The feature providing networking
- (.-
f h:.1 v - .- - of personal computers will provide many advantages, M S h(, }y )s .- l , 2.f ' . including the ability of users to share information through y j [ ' f gf R n ' the computer and to utilize its expanded capabilities. The t? J $ h .o / dnd i .. new system is expected to meet the needs of SMEPA for YY 0 # 0' Pam Eavenson and John DeLancey are SMEPA s Systems Analysts. Their services are very much in demand as they maintarn 49 PCs throughout the Association In I989. Iney began converting from the Harris business system using a TOTAL database to the Hewlett-Packard 9000 S/635SE With on Oracle database. This conversionincludes networking the 49 PCs. t
Membei Sysiems f [} TerritoriesSorved
. . . . . . - . - . . -COAHOMA EPA Lyon
' Energeod. 1/18/38 -
1 Consumers: 6.190 , Miles of Line. I A29? L
~
-DEil5ENA~ ,
Greenwood e" '
,y Energized.1/30/39 Consumers: 20.138 F#@s.of
- . . . - Line:
- w 5. ,009
-1
- o
. . . . . . . . . . . . A, u - >
' inw COUNTY EPA , <
' Hollandole . (,
Energized: 1/1/39 ,
..-- r 2 L A - - -. - - - - . . -- ,
Consumers: 11.573 L "if , ' H e --f YAZOO VALLEYEPA l
-Md.es of Line- -
w 2.112h -t i~ -
< fi" ?)fYcuooCity 4:
Energized: 3/23/38 ' i 4: ' M 3 s 1]1Consumers: Mites of Unet_2.592. 8.451ji l
- , e'
'SOlllHEliN PINE $Ps'
'Toylorsvillo Energized: 5/13/39
~
Consumers: 45458
.a Mfes of Linet8 695. ,
.n .
. . c. 6 -
g 5. 4 1 ,v-i. ,-- i' SOUTHWEST MISSISSIPPI >
, . l [ DIXIT EPA ~ '}
! EPA - Lormon .! . 7" ;alourel }
{ Energized. 3/27/38 # X, v-~ 1
, n ; , HEnergized. 7/28/39i
{ Consumers: 20.167 t} Consumers: 25A75' [ Miles of,Line;3201,, . , i 7.4 3 = , q l QMdes of line: 3.718! v , y.
,)
\
'? J
.1 PEARL RIVER VALLEY .
'm.., .' { EPA - Columbio
' MAGNOUA EPA ?E nergtzed 5/19/39 SINGING RIVEREPA McComb Consumers: 25.657 s Lucedale Energized. 9/19/39 Energized. 12/5/39 I? 3~Mit6s
' ~~ of Line 4.609 i Consumers. 20,550, 43,181
[ Miles of Line 4.358j , 1)Mdes Consumers: of Line: 4.505 l , . . . . . . . . . . .a \
' COAST EPA l Boy St. Louis
!Energaed. 5/20/38 l Consumers: 41 A48;
!Mdes of Line: 3.727i
_ .. ._~ ._. _.. _. - _ . _ . . -
l The Financial Soction W O' t
@T*#
~ @Mp 'I . Vd NO f.gi t .
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' ip s Index t Fin ncI I Sec tion
$ l L $l
.. x '
~
1989 Financial Report Page 21 1 The Elements of Cost Page 23
#g .
Comparative Operating Cost Page 24 The areas of responsibilities attended to by the accounhng clerks include data entry, general and accounts payable, inventory / work orders, The Comparative Summa (Y Po9e 26 and property / budgets. In this photo. Kathy Mcdonald. Accounting Oork, itemizes a property The Auditors' Report Page 27 20 listing computer pnntout. 7 The Balance Sheets Page 28 w
- f ,
.?pj Statements of Net Margins
'Lil and Patronage Capital Page 30
.,l nHd 0
+, i,om;(wyy , . . q Statement of Cash Flows Page 32
'% l Ql}yi/
yw l 9p;:u , j Notes to Financial Statements Page 33 J'y&% 1 ($, ' p' Q ;
, .; f y v
-a .
A E I);,j = " .<.' 3'7)h .:
?% 4 f.
u w tl~ WMtB Frances Williams attended the groundbreaking at Plant Moselle in 1969, one year after beginning work - at SMEPA Frances is responsible forpayroll and the calculation of the cost of benefits to employees on an individualbasis.
p
^
L- - l989 Financial I? o p o i t
~. increase in Gross revenues from sales of electricity of $251,362,947 were recorded in 1989
' Gross I?evenues and represented a 5.70% increase over similar revenues in 1988.. Revenues 1
, from sales of electricity to SMEPA's members totaled $241,622,895, on increase of $10,709,125 or 4.64% from the previous year. The Increased member revenue i reflected a 5.72% increase in energy sales to members as these sales rose from 4.678.823 megawatt hours in 1988 to 4,946,312 megawatt hours in 1989. Sales of electricity to Alabama Electric Cooperative under the terms of a con-troct entered into in 1988 increased from 239,851 megawatt hours to 316,902 , megawatt hours and produced gross revenues of $9,740,052 during the first full ! year's operoflon under the contract, There were no other sales of electricity to non members in 1989. Decrease in wholesale Although gross electric energy revenues from members increased, the overage Power Costs to - wholesale cost of electricity charged to members again decreased from the Members previous year. The average cost of electricity to members was 48.85 mills per kilowatt hour and represented a reduction of approximately 1% from the 49.35 - mills per kilowatt hour charged to members in 1988. Net faarp:n3 The Association experienced a net loss of $4,205,313 in 1989. Included in the determination of the loss was on unusual charge of $10,130,000 related to the 21 abandonment of Grand Gulf Nuclear Station (GGNS) Unit ll. In the obsence of this charge, net margins would have been $5,924.687 which compares to net margins of $4,856,425 achieved in 1988. The Times Interest Earned Ratio (TIER) fell below the targeted level of 1.00 to 0.94. Exclusive of the Grand Gulf Unit li expense, the TIER would have been 1.09. The Debt Service Coverage ratio (DSC) obtained was 1.02. This ratio would have been 1,15 exclusive of the Grand Gulf item.
~
Aboocfonment of After prolonged study of the alternatives, and as the result of a settlement Grand Gulf Nuclear involving the majority owners of the Grand Gulf Nuclear Station (GGNS), the Stoflon Unt? I! Federal Energy Regulatory Commission, and other necessary parties, it was agreed that GGNS Unit 11 would be abandoned effective September 1,1989. Construction of the Unit had been suspended since September 1985 under an 1 order of the Mississippl Public Service Commission. At the time of concellation, [ the unit was approximately 29% complete based on estimated manhours to '
; complete construction. SMEPA's investment as owner of ten percent of the unit was approximately $104.443,000. Approximately $3,133,000 of the invest- ,
ment was determined to be usable for GGNS Unit I or for other use in the future. Under on acccunting methodology approved by the Association's Board of Directors and accepted by the Rural Electrification Administration (REA) and by SMEPA's independent auditors, the unrecoverable portion of the abandon-ment loss recognized in 1989 was $10,130,000. The remolning abandonment loss of approximately $91,180,000 will be amortized ratably each year through 2016 based on projected sales . The annual amortization charges are ex-pected to have minimal effect upon SMEPA's wholesale power rates in future years.
r,
- - - i
, e >
tl WB 9 'F'I nIa n c l a l' R o 'p o r t - 1 .cr. - _ _ _ _ __ ~ _ _ # " Long term Debt Totallong-term debt outstanding at December 31,1988, decreased by
$10,121,312 to $727,456,619 of December 31,1989, Retirements of long-term -
debt in 1989 totaled $13,654,632 including $3,150,631 of Federal Financing Bank' (FFB) debt repaid as required by the REA as the result of the prior year's receipt of the final tax refund from SERI,Inc related to o not operating loss carry-over during the construction period of GGNS. i Advances during 1989 against existing loan commitments totaled only
$3,533,320c $2,125,000 was advanced from the FFB at a long-term rate of 8.082%; $918,000 was received from the FFB of a short term rote of 8.312% while .
the remaining $490,320 consisted of concurrent loan advances from the REA ' ! and CoBonk at a blended rate of 6.45%. The Association did not apply for any-new loan commitments in 1989, 1 The average cost of totallong term debt at December 31,1989, was 8.98% l' compared to 8.94% at December 31,1988. Loans from the FFB comprised 80%. of the totallong-term debt at year end, a percentage unchanged from j December 31,1988. Approximately $53,609,000 or 7.4% of the total debt at December 31,1989, was composed of financing in variable role and/or short-term rate modes with $48.600,000 of this figure composed of debt represented l
- 23 by the 1985 G Series Pollution Control Bonds issued in connection with GGNS. .
These bonds continued in the flexible-rate mode during 1989 at an average interest rate of 6.50%. j
+
Cosh Posihon As forecast, the Association's cash position continued to improve, increasing j to approximately $25,350,000 (os adjusted for a fourth quarter 1989 FFB debt service payment made January 2,1990) from a similarly adjusted cash and . temporary Investment total of approximately $19,500,000 at the end of the l. previous yeari i i k 2 i' l _______.m._c. __2 _ m m__x_._.__,::m_.._.m_.__ _m_m,_,.mm.,_.__ _ ,
r.- 1 T h' e Elements o f C'o s t _ . . _ . , -_ , -- . _ . _ . . _ . - . .~ k 1985 1986 1987 1988 1989 i
- l. SMEPA s Own Generation & Transnussion System
.\
Cost of Fuel Burned in SMEPA's Plants - c/MMBTU 214.54 195.27 176.38 181.64 176.72 4 Production Costs and Purchased Power / . Interchanged Power - Mills /kWh 28.09 27.66 25.49 25.27 25.94 Transmission O&M - Mills /kWh 2.44 2.50- 2.77 2.46 ~ 2.38 1 A&G Expense - Mills /kWh 1.12 1.14 1.25 1.09 1.12 Depreclotion and Amortization - Mills /kWh 4.30 4.79 6.16 5.41 5.08 Interest - Mills /kWh 12.77 21.23 20.81 17.80 16.50 Taxes and Other Mills /kWh .19 .88 .41 .22 2.77 Total- Mdis/kWh of Sales 48 91 58 20 S$89 52 25 53 79 l ll. Borderline System 1 3 Purchased Power / interchanged Power - Mills /kWh 41.62 40.12 38.91 34.34 34.85 i Depreciationand Amorttzotion Mills /kWh .03 .02 .02 .02 .02 23 - Interest Mills /kWh .04 .03 .05 .03 .03 ; Total- Mills /kWh of Sales , 4I.69 40.17 38.98 34 39 34 .l l Ill TotalSystem i Production Costs and Purchased Power / Interchanged Power - Mills /kWh 31.79 31.08 29.23 27.59 28,14 j Transmission O&M - Mills /kWh 1.77 1.81 2.00 1.83 1.79 A&G Expense - Mills /kWh .82 .83 .90 .81 .85 Depreclotion and Amortization - Mills /kWh 3.13 3.48 4.46 4.03 3.83 , Interest - Mills /kWh 9.29 15.41 15.04 13.25 12.43 Taxes and Other - Mills /kWh .13 .64 .29 .17 2.10 7 Total - th!is/kWh of Sales 46 93 53.25
- 5l.92 47.68 49.14 l
I l 2
- (A) Excludes Kentucky cool operations.
(B) Extraordinary item excluded. l
.g r
f
'C o m p a r a t i v e' O p e r a t i n g Cost
,r 1985* 1986 1987 19H8 1989 REVENUE Sales of Energy $192.307266 $225201.107 $231.025.124 $237,797,763 $251.362,947 Other 697.964 249.449 138.691 (230.848) (474.686)
_ _ _ . _ _ = _ . _ . _ _ _ _ _ 101alRevenue 193.005.230 225A50.556 23 I. I63.815 237.566.915 250.888.261. EXPENSE Operation Expense: Production-Fuel Cost 61.653 239 57,970.573 57.521,531 62232299 62.868.651 Other Production Expenses 7,038.621 11.324.392 10.270.142 11,138.366 12241.178 Purchosed Power 55.137.353 60,107A47 53.892,164 57,526A67 66,361.893 Transmission 6.002A02 6.912.131 7 269,310 7,454 432 7,721 A19 Consumer Accounts 47.527 53,964 56.447 40,144 41,798 Sales 11.522 95.612 Administrative & General 2,849A02 3 211.115 3.468 286 3,390.732 3.850,741 Total Operation Expense 132.728.544 139,579,622 132A77.880 141,793,962 153.181 292 24 Maintenance Expense:
. Production 4278A23 6.579.862 6.525.996 - 4.872 231 6.641,474
. Transmission 1.130.358 1.030.377- 1.509,539 1.553.780 1,721,705 General Plant 3%A59 358.880 433,135 525,626 470.433 Total Maintenance Expense 5.805.240 7.969,119 8A68.670 6.951,637 8.833.612
- Depreclotion 12.626.522 15233.182 19.559,144 19.846.754 19,782,095 Taxes- 515.171 649,579 q:720 754,384 765.595 Interest Expense (Net) and Other Deductions 41,302,119 61.870,198 66,902.644 65.585.509 76A46.250
- 234.932,246 259,008.844
' TotalExpense 192.977.596 225.301.700 228.059.058 (A) The financlot statements for year ended December 31.1985, have been restated to correct the recording of cllowor.;e for funds used dunng construction of Grand Gulf Nuclear Station Unit 11. The effect of the restatement was to decrease net margins for 1985 ond patronage capitol ond construction work in progress at December 31.1985. by $3.366.841.
(B) Wnte-off of unrocoverable expenses upon abondonment of GGNS Unit 11 is included in "Other Deductk>ns' ($ 10.130.000).
l ccontinvoc) Comparative Oporating Cos1 L , ..- - - ~ . . . _ _ . 1985 1986 1987 1988 1989 OPERATING MARGINS $ 27434 $ 148.856 $ 3 W 757 $ 2.634.669 ($ 8.120.5b3) NON-OPERATING MARGINS 681.947 2,026.816 2.043.929 2221,756 3,915 270
- - . . . . , . . - . . . . . . - . - . - ~ . . . . . - - . - . . . . . . - . , _ . . . -
NET MARGINS BEFOli (X1RAODIN ARY ITEM $ 709,58i S 2,175s72 $ b.148.69$ $ 4.856,425 ($ J205 313) EXTRAORDINARY ITEM
- 2.074.712 ;
i
. NET mal? GINS S 709.581 S 100 900 S5.14S.056 $ 4.Bbb 42b ($ 4205.313) t 1
1 25 ' l r s (C) No* loss on early extingubhment of debt.
pr The C o'm p a'r a t i v e Summory f 1985 1986 1987 1988 1989 LNERGY SOURCES - MWh Generated. Stoom 2.625.376 2.686.598 2.953.615 3.135,747 3 218.046 Other Genoration 505 1.010 1,322 1,595- 348
- 2.625.881 2.688.508 2.954.937 3.137.342 3 218,394 f
Putchosed. Direct Purchase 197.317 519.003 298,487 562,736 726.824 s Bordorline -(SEPA) 73236 61.120 72.098 60.346 87.190 l-270.553 580.123 370.585 623.082 814.014 Interchanced Power -(Not) 1215A90 1200A97 1,163,930 1 263.398 1,345,741 TotalEnergySources MWh 4,1 I l.924 4A69. l?B 4 499A52 5.023.822 & 378.149 26 e SALES - MWh
, Southwest Mississippl EPA 270.005 290.948 287278 304212 329.528' Dix!e EPA 392.633 413,306. 400.435 411.036 425274 Poort River Volley EPA 401,597 415A42 410.533 414,742 427.557 Singing River EPA 675.179 710.062 716.158 738.911 758,895 Southern Pine EPA 796,395 911,339 946 401 982.333 1,128.945 Magnolio EPA 251,781 276 749 301.036 337.915 369,027 Coast EPA 563.372 630.812 645AIO 673.761 701A40 Yozoo Volley EPA 181,129 123.316 118.094 203.598 201A68
- Cochomo EPA 79219 81.165 83.143 90.108 86,583 Dotto EPA 269.004 297.388 305.681 334.935 332.986
- . Tv'in County EPA 149,521 162A73 169,734 187 272 184.609
~ aloborno Electric Cooperottvo -
62285 3.015 239.851 316.902 i Southeostern Power Administratioq - - - 3A16 - TotalSales - Mhth 4.029.925 4.375285 4.386.018 4.922,090 6263214
=== T :=.:==:= :== - =: ===:- 2:=::~ =:====. ::=:- -
101AL SYSTEM (XMAND kW l.To.570 1211.133 ilb7.396 1248,607 1290464
=::= ==~ = === = = = = = - = - :.== === ==: . _ _ . ~ . . . =
Jit l
W Ihe A u d i t o r s' R e p o r t r i financlotStatements and i Independent Auditors' Report }. of Deloitte & Touche Board of Directors South Mississipol Electric Power Association ' Hottiesburg, Mississippi We have oudited the accompanying balonce shoots of South Mississippi Electric Power Association as of December 31,1989 and 1988, and the rolotod statements of nel margins and potronage capitol and cash flows for the years then endod. These financlo! statements are the responsibility of the Association's monogement. Our responsibility is to express on opinion on these financial statements based on our oudits. We conducted our oudits in occordance with generally accepted auditing stondords. , Those stondords require that we plon and poiorm the audit to obtain reasonable assurance i' about whether the financial siotoments cro free of materlo! missiotoment. An Oudit includes examining. on o test basis, evidence supporting the amounts and disclosures in the financial 27 statoments. An audit also includes ossow.ng the occounting principios used and significant estimates mode by monogoment, os well os evoluoting the overoll tinonclo! statement presentation. We believe thof our audits provide o roosonoble basis for our opinion. In out opinion, such finoncial statements present fairly. in oil motorial respects, the financial position of South Mississippi Electric Power Assoclotion as of December 31,1989 and 1988, and the results of its operations and its cash flows for the years then ended in Conformity with generally accepted accounting principles, h dsC.,. Jackson, M ssissippi February 7,1990
Ihe B a l a n . C e. S h o o t S December 31. _. -___1309 . _ . _ _ . ..I9$0 ASCE7S i ElECIRIC UT!UTYPlANT(Notos A l. A-2. A 3 B. and C) In service $ 713.896.656 $ 705.806.158 Construction work in process 13.937.773 115.160.337 727.834A29 820.966A95 Less ollowance for depreciation 147A06.120 129.602A12 5804?S.33 691,364.083 OTHER ASSI15 AND INVESIMENIS Unrecovered plant cost (Note C) 91.179.513 , investments in associated organizations (Note D) 11.307.719 11.287 221 Debt service reserve for pollution control bonds 4A53A27 4A57285 Other noncurrent assets 45.912 23.727 28 1CC.9Eab71 15.768 233 CURRENT ASSEIS Generoi fund cash and temporoy cash oQuivalent investnsents(Note A-9) 41.755.331 35.943.224 Construction fund cosh 1.964 2.106 Accounts receivable (including receivables from members of opproximately $22.390.000 (1989) and $18.515.000 (1988D (no allowance for doubtful occounts deemed necessory) 24A03A84 18.963.975 Inventories (Note A 4) Cool 8.976.026 12.648 268 Other fuel 842.098 1 272.682 Materlot and supplies 12.340.654 9.584.015 22.158.778 23.504.965 Other 1.954.577 4219A66 90.274.134 82 633.736 DEFEQRED CHARGES (Noto A-5) I,581. I 14 L561.0JB S 779270 128 $ N 1.327. LOO
= :: : ::- =7 =.;
See Wolos to hnancb! Statements *
(Cminuow The BaIance S h e e i s. __b' Comber 3,1.
.._ 1989 _ .._ _ _.1988 (Obtili$ AND tlAEUltit!S
[QulitiS (Note M) Memberships S 55 $ 55 Donated copitol 535,436 535.436 Patronoge capitol 17,812.370 22h17.683 18.3J7.861 22.b53,174 L ONG lERM Di Bl. escludng cunent matuntios (Nato I) 715 3)?, ??5 726.696M2 CU!d?ENI UABiUillS 29 Accounts payable 16,956.027 14,195.407 > Accrued intorest 15,565,027 15.817,3CL5 Other ocerued expenses 9M.594 1,183,283 Current moturities of long term debt 12,118.8M 10 381.839 45.5%1 a?? 42.077.834 COMM11MENTS AND CONilNG'E NCIES (Notos C wu1 H) S 77Q2?O.128 $ 791,327. llD
. =:==:= : .,
See " Notes to fnanck)IStatements'
O S t a t 'e m o n t s of Not M a r gin s and Patronope Capital f [ Yoors Ended December 31
._1989. _ . . . . _ - . - - . . . . ._1988
. OPERAllNG REVENUE
( Electric energy revenue Other (expenses) income - not
$ 251,362,947 (474.686)
$ 237,707,763 r L (230.848) 2ECB88.261 237.566.915 V OPERATING EXPENSES Operation orpensos:
Fuel 62.868.651 62232299 Production 12241,178 11,138.366 Purchased Power 66.361.893 57,526A67 1 Transmission 7.72i A19 7AS4A32 Administrativo and general 3,988,151 3A42,398 e 153.181 292 141,793.962 Molntononce expenses: Production 6.641 A74 4.872 231 1ronsmission 1.721,705 1.553.780 l- . General 470.433 525.626 8.833.612 6.951,637 Depreclotion and omortization (Note A-1) 10 82.095 19,846,754 i Taxes 765.595 754,3B4 IBYS625 1 16f.. 7 OPER A HNG MARG lNS BEFOi?E IN1ERESI AND OTHER DEDUCTION i 68.325.667 68.220.17B INTEREST AND O1HER DEDUCHONS Interest 66215295 66,087297 .i F Allowanco for funds used during construction (Noto A-3) (514A09) (584.902) Other deductions -- nel 100,955 83,114 l 65 301 841 65 585.509
. . ~ - . . . .,......m-,..
OPERATING MARGINS 2.523.826 2.634 669
L (Contnuoc) Statements of Not MatgIns and Patronogo Capital Yoors Ended December 31, 1069 1988 NON OPERATING MARGINS - PRINCIPAL.l V NIERE S11NCOME $ 3 400 861 $ 2221.7b6 L OSS ON AMNDONMENi OF NUCLEAR POWER PLAN 1 (NOTE C) (l0.130.000) Idihf ARGINS (4205.313) 4 8b6%425 PATRONAGE CArslAl Al BEGINNING Of YEAR 22.017,683 17,161258 i PATRONAGE CAPilAl AT END OF YEAll S I7 612.370 $ 22.017.683 ) I i . 1 31 \ 1 - i l ( See Wotes to (trg,ncbt Statements'
, . . . ~ . ... ...,...n.- ,,w~.,,
Statomeni oi Cash Flows .. Yeors Ended December 31,
.._ _ _198.9- -
1988 OPf RATING ACITVillLS Net margins ($ 4.205.313) $ 4.856A25 Adjustment necessory to reconcile not margins to net cosh provided by operating OctMtos: Depreciation, amortization. and depletion 20.982.839 21.034.651 Abondonment of nuclear power plant 10.130.000 increase in occounts recolvoble (SA39.500) (460.021) Decreose in inventories 3 A31.662 2.517,346 Decrease (lncrease)in other ossets 2.147.126 (2.058.179) Increase (decrease) in occounts payable and occrued expenses 2.521.930 (2A59.283) (Decrease) increase in occrued interest payable (252.278) 14.726 201 NET CASH TROM OPERAi!NG ACilvillFS 29.316 457 38.157.140 i INVESTING ACIMillS Acquisttions of electric utility plant (13.570.167) (9.545.315) i Tot refund cred:ted to utility plant 3A60.686 Other 187.128 (663.298) 32 . , - . . . - . . NE I CASH USED IN INVESTING ACTIVillES (13 383 U39) (6,741.V27) FINANCING ACTIVI"lS Payment of d3bt (15.792.228) (13.949.817) Proceeds from debt 5.670.917 11 A78.697 NEi CASH USFD IN fin ANCING ACIMilE S (10.121 31 O (2 471.I20) ; NE1 INCREASE IN CASH AND CASH EQUiVAlENIS b.B 12.107 28 938.093 CASH AND CASH EQUIVALENTS Al BEGINNING O' YEAR 35 943224 7505.131 END OF YEAR $ 41.755 331 S 35 943 224 \ _ n_- _ur c I CASH AND CASH EQU: val 1N!S Al YEAR END Cosh $ 289.515 $ 434.925 Commercial paper 41 A65.8 i6 35.508299 5 4 UFb.33 I $ 3b.9432?4 See " Notes to F6nanc6al statements' . _
I L Notes to Financial Statements for the Years Ended December 31 1o89 and 198S NOTEA- South Mississippi Electric Power Association is a rural electric cooperative established Summary of Sign:ficant under the laws of the Stato of Mississippi. SMEPA is a generation and transmission coop-Accounting Po6ces orotive which provides electric power to eleven owner-members which ore rural electric distribution cooperativos providing electric power to consumers in certoin oreos of Missis-sippi. Financing ossistance is provided by the United States Department of Agriculture, Rural Electrification Ad: histration (REA). In oddition to being subject to regulation by its own governing boord of directors, SMEPA is subject to cortoln rules and regulations
, promulgated for rural oloctric borrowers by REA, SMEPA molntoins its accounting records r in occordonce with the Federal Energy Regulatory Commission's Chart of Accounts os modified and odopted by REA. As o regulated utility, the methods of allocating costs and revenue to timo periods moy differ from those principles gonorolly opplied by non-regulated componies. The more significant occounting policies are gonoroliy described ,
as follows: I. Dectnc twy nant Electric utility plant is stated at cost, which includes controct work, motorlois and direct and Detvecatal labor, allowance for funds used during construction and allocoble overhood costs. The cost of electric generating stations and related facilities also includes costs of training and production incurrod,less revenue earned, prior to the date of commerclot opero-tion. Depreciation is provided on the stroight line method for utility plant of the following annual composite rotos: Nuclear plant 2.8b% 33 Non-nucleor plant 300% t0 310% Transmission plant 2?S% Generalplant and transportation equipment 2.00% to 25.00% At the timo units of electric utility plant are retired, their original cost and cost of removal, less nel salvogo value, ore charged to the allowance for doproclotion. Replacements of electric utility plant involving less than a designated unit of property are charged to maintenance expense.
; Cool reserves oro stated at cost. Depletion is provided by the units mined method.
I 2 cost or Dnomeening SMEPA's portion of the estimated decommissioning cost of Grand Gulf Nucloor Station M e m nanta,d (GGNS) Unit I is charged to operating expenses over the service life of Unit 1. Amortvow or unmconed nant I SMEPA's portion of the unrecovered plant costs of GGNS Unit 11 will be amortized over the j remaining life of the roloted debt of opproximately 27 years. i 3 Arowance ta rues l Allowance for funds used during construction represents the cost of directy related bor-Usod Dunna ; towed funds used for construction of the electric plant, where opplicoble, and on Construcfon l ollowonce based on the overage cost of oppropriate borrowings when general funds l ore used to fund construction. The allowance is capitollzed as a component of the cost
! of the electric plant while it is under construction.
l Copitollzotion cooses when the electric plant is plocod in service, or in the cose of electric generating statiorn and related facilities, of the date of commerclot operation. J rove %w.rs ! Inventories are stated at overage costs.
0 Notes to Financial Statements
- 6. Defened Cha pes Costs of prehminary surveys for development of possible methods to obtain and deliver energy to futfill members' future roquirements, including feasibility studies looding to financing necessory plant expenditures.are recorded os deferred chorges. If construc-tion of a project resutts from such surveys, the deferred Chorges cre transferred to the cost of the toCilities. If o preliminary survey is abandoned, the Costs incurred are written off.
Bond issue costs are being omortized by the strolght-line method, which does not differ materiolly from the interest method, over the term of the related debt. The amortization during the period of construction is capitolized. 6- Patronago C ap>fal The bylows of SMEPA provide that any excess of revenue over expensos and occumu-lated prior year deficits shall be trooted os advances of capitol by the member patrons and credited to them on the basis of their potronoge.
- 7. Interctmgo Power SMEPA records the electrical power received or provided on on interchange bosis of its cost os determined under various contractual arrangements.
& income 70=o; SMEPA is exempt from United States income taxes pursuant to Section 501 (c)(12) of the Interno! Revenue Code, which requires that of loost 85% of SMEPA's gross income come from its members, ya 0. Cosh and Cash Costiin excess of doity requirements is invested in marketoble securities consisting of fav'vaients commercloi paper and repurchase ogreements. Investments with maturities of three months or less when purchosed ore deemed to be cosh equivalents for purposes of the stoiement of cash flows.
- 10. I?ecweations Certain reclassifications have been mode to the 1988 financiol statements to conform to the 1989 method of presentation.
NOTE B- Electric utility plant consisted of the following: Electric Utihty Piont
..- . December 3I. __
_ _ 1969 ._ _ _ _ 1988..__ Nuclear production plant $ 393.716.672 $ 390.154.146 Non-nuclear production plant 208.626.420 209.198.609 Transmission plant 63.373.049 60260.362 Cool properties and preparation plant 24.601.851 24.687.603 Land and land rights 11.62I.309 1I.242.918 General plant and transportation equipment I l.957.355 11262.520 ELECTRIC PLANTIN SERVICE 713.896.656 705.806.158 Construction work in process 13.937.773 115,160.337 S 727.83A429 $ 820.9M495
p I For the Years Ended December 3 1. I989 and 1988 ! NOTE C - SMEPA is a 10% porticipont in a nuclear generating station known as
- Grand Gulf Nuclear
!' Construction Work in Station * (GGNS), which consisted of two 1250-megowott generating units. Commercial Process and Cnmm!1- oporotion for Unit I begon on Juty 1.1985. In September 1985. the construction of Unit ll ,
ments Regarding was suspended by regulatory authorilles. Grand Gu!f Nucloor r Staben in September 1989, the majority owner elected to obondon Untt ll. At December 31,
! 1988, SMEPA's occumulated cost in Unit 11, which was included in construction work in , process, was opproximotoly $ 104.000,000, including allowance for funds used durtng l- construction of opproximototy S42.000,000. At the date of obondonment, SMEPA mode o f' determination os to the cost that could be recovered through future rote increosos and '
charged off the remaining cost to expense. After transfers to GGNS Unit Iinventories of opproximately $2,085. COO ond property occounts of opproximotely $605.000, opproxi. motely $91.180.000 was transferred to unrocovered plant cost on the balonco sheet during 1989 ond the unrecoverablo cost opproximating $10,130.000 was included os a loss in the statomont of not morgins and patronogo capital for 1989. This occounting for Unit ll has boon reviewed and opproved by REA. During 1990. SMEPA must submit a formal plan to the Nuc!oor Regulatory Commission : ('NRC") to demonstrate financial ossurance that sufficient financial resources will be l ovoiloble of the timo it becomes necessory to decommission Unit 1. SMEPA is presently j reviewing estimated costs of decommissioning and the commensuroto funding require-monts for Unit 1. SMEPA hos boon accruing on estimate of decomm:ssioning costs for soveral yoors. During 1990, once o final dotormination is modo, SMEPA will adjust the estimate of decommissioning costs and will begin funding such costs over the remaining , life of Unit I to provide the amount necessary to occomplish decommissioning. 35 Prior to SMEPA's entry as a participant in GGNS, the construction of GGNS generated tax not oporoting losses for tho majority porticipant. The majority porticipant hos utilized all of
-- those losses and hos refunded opproximately $3,461.000 to SMEPA in 1988. This amount was credited to utility plant.
NOTE D- Investments in associofod organizations are stated at cost and consisted of the following: Investments in
- Associated Docember 31, Organizations ;pgp lpgg _
National Rural Utilitios Cooporative Finance Corporation (CFC) Capital Term Cortificates S 8.414.533 $ 8,414.533 CFC Subordinated Term Certificatos 2.490.000 2.490.000
'"o' . 'o' '*? '8'"8
$ 11.307.7l9 $ 11.287,22l l ,
I
- Capitol Term Cortificates bear interest at 3% and 4% and moture in 2007 through 2080.
The Subordinated Term Certificatos bear interest at 9.873% ond moture in 2015. 4 NOTE E - SMEPA has o $25.000.000 short term line of credit ovalloble with National Rural Utilities Short term Dorrowings Cooperative Finance Corporation (CFC). At December 31.1989 and 1988. SMEPA had no borrowings against this line of credit. Interest rates on short-term borrowings with CEC overogod approximately 10 50% and 8.32% for 1989 and 1988, respectively, Capital Term Certificates in CFC, which aro included in other ossets and investments connot be todoomed so long os the line of credit is in ploco.
Notes to FinanClol Statements NOTE F- Long-term oebt consisted of the following: Long-Term Debt December 31, 1989 1988 2% REA mortgage notes payable, due in quarterly instollments through 2009 $ 30212.815 $ 31.910.CO1 5% REA mortgage notes payable. due in quarterly installments through 2015 2I. I78.320 2I.723.429 5% REA mortgage notes payable duein month!yinstallments through 2019 5.748.172 5.462,196 Mortgage notes payable to federal Financing Bank (FFB) at Interest rates varying from 7.160% to 14 512%. due in quarterly installments through 2019 583.349.246 590.074255 Notes payable to NationalBank for Cooperatives at Interest rates vorying from 8.5% to 10.35%. due in quarterly installments through 2022 3.323.066 3.278.050 lamor County. Mississippi. Pollution 36 ControlBonds: 1977 Series. 5.25% to 6.125%. due semiannuoIIy through 2007 31.930.000 32.925.000 1978 A Series. 5.40% to 6.125%. dce semiannually through 2008 2.285.000 2.355.0C0 1978 A-1 Series. 6.25% due semi-annually through 2008 830.000 850.000 Claiborne County. MasissIppi, Pollution Control Bonds - 1985 G Series. variable interest rates (6.10% to 6.30% at December 31 I989) due onnvoIIy through 2Ol5 48.oGO. m 49.002000 727.456.619 737.577.93I less current maturities 12,118.844 10.881.839
$ 715.337.775 S 726.6 %.092 Substantiolly oil ossets of SMEPA were pledged as colloterol on long-term debt.
SMEPA hos the option on FFB promissory note advances to elect (subject to REA op-provol) interim maturity dotes of opproximately two years offer the date of the odvance or o long-term maturity tonging from opproximately 27 to 34 years (depending on the terms of the porticutor note) otter the end of the calendor year in which the odvance
k L 1 For fhe Years Ended December 31, I989 and 1988
.. . - - ._ ~ - - ! Continued was mode. If the long-term moturity dote is not selected, then on subsequent interim NOTE F - moturtty dotes. SMEPA may designote that it desires either another short-term maturity or i long Tem Debt the long-term moturity date os specified in the note.
Approximate onnual moturities of long-term debt for the next five years are os follows: i 1990 S I2,119.000 1991 13.43I.0 1) l992 14.581.000 1993 16.589,000 1994 16.643,0K1 The obove moturity schedule reflects monogement's prerogotive of converting FFB odvances at Interim moturity dotes from 1990 through 1994 to long term maturities.
' SMEPA hos used a tote it estimates to be on oppropriate long term rate, based on the December 31,1989 Interest rotes, to compute the annual principci requirements.
A December 31,1989. SMEPA had unfunded loon commitments from FFB. CFC, and REA of $49.997.000, $2,306.000, and $7.929,000, respectively, included in the commitment from FFB is $34287.000 which is restricted Ior use in funding GGNS. Of this commitment, S19287,000 expires in March 1990,if not used. SMEPA poid approximately S66.335.000 in 1989 and $51258.000 in 1988 in interest on long-term debt. SMEPA is required by mortgage covenants to maintain certain overage levels of interest 37 coverage and annual debt service coverage. SMEPA was in compliance with such tequirements at December 31,1989. NOTE G- Substantially oil of SMEPA's employees participate in the National Rural Electric Coopero. Pension Plan five Assoclotion (NRECA) Retirement and Security Program, o defined benefit pension plan quollfied under Section 401 ond tox exempt under Section 501(c) of the Internal Revenue Code. SMEPA makes annual contributions to the program equal to the amounts accrued for pension expense except for the period since July 1,1987 when o
= moratorium on contribution was ploced in effect due to reaching full funding limitation.
In this muttiemployer plon, which is ovollable to all member cooperatives of NRECA, the occumulated benefits and plan ossets are not determined or allocated separately by individuol employer. SMEPA had no pension expense for this plan in 1989 and 1988. In oddition to providing pension benefits, SMEPA providos certain hoolth core insurance benefits for retired employees. Substantially oli of SMEPA's employees may become eligible for those benefits if they reoch normal retirement age whlis working for SMEPA. SMEPA recogn12es the cost of providing these benefits by expensing the annuoiinsurance premlums. which were opproximotely $29.000 ond $20.000 fo,1989 and 1988. respec-tively. NOTE H- In March 1980. SMEr>A begon receiving its cool supply under on ogreement with a new Commitments and supplier. This agreement provides that certain conditions be met including, among other Contingencies things, minimum annual delivery requirements, and does not require the cool produced r' for SMEPA's consumption be token from SMEPA's cool reserves so long as the cool meets the quellty requirements of the ogreement, i SMEPA has construction commitments for various non-nuclear utility projects fotoling j opp *oximately $3.587.000 of December 31.1989. l
E h i f j Notes to Finonclal Statements l ? -L ._ _ _ _ . Confinvod SMEPA is defendant in certain litigotion incurred in tne normol course of business. Mon- -f' NOTE H - ogement. based on advice of legal counsel. ls of the opinion that the ultimate resolution Commitments and of the llfigotion will not have a motoriot odverse effect on SMEPA s finonclo! condition. , Conhngencies
+
[ r i
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h i 38 i 5 1
i locations & Moselle Generating Station CommercialOpe.'ation: 1970 location: Jones County Capacity: 177MW Fuel: NaturalGas/fuelOil Employees: 27 &. R. D. Monow, Sr. Generating Plant
~
b ] CommercialOperation: 1976 1 - l , location: iamat County Capacity: 400MW ~ f Fuel: Bituminous Coal Employees: 94 + N SMEPA Headquarters location: Hattiesburg
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(Forrest County) r- D Employees: 113 ) } Gas Turbine Units Unmannedstations remotely 39 b operated by SMEPA's Control Center located at the head- t quarters (c.mility: Cla!Mne Jasper .2 t & 6enndale Unil ~ E CommercialOperation: 1969 location: George County I g Capacity: 16MW 'v~ ~ M fuel: NaturalGas 4 &est
" l 3
& Pauldsng Unit CorrvnercialOperation: 1972 Cp i : M Fuel: Dieselfuel/NaturalGas h GrandGullNuclearStation (10% UndividedInterestin Unit 0 CommercialOperation: 1985 Location: Port Gibson (Claiborne County) Capacity at 10%: 12SMW , Fuel: Nuclear Employees: 1
l l South Mississippi ; Electric Power Association i i Post Office Box 15849 Hattiesburg, Mississippi 39402}}