ML20044H384
| ML20044H384 | |
| Person / Time | |
|---|---|
| Site: | Duane Arnold  |
| Issue date: | 12/31/1992 |
| From: | Darrell Murdock, Wenstrand J CENTRAL IOWA POWER COOPERATIVE |
| To: | |
| Shared Package | |
| ML20044H376 | List: |
| References | |
| NUDOCS 9306080290 | |
| Download: ML20044H384 (33) | |
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{{#Wiki_filter:____ _ - _ _ _ _ _ _ _ _ _ _ _ . O ARTHUR - . - - - - - - - ANDERSEN ARTHUR ANDERSEN&CO SC
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CORN BELT POWER COOPERATIVE FINANCIAL STATEMENTS AS OF DECEMBER 31, 1992 AND 1991 TOGETHER WITH AUDITORS' REPORT i i 930528
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ARTHUR ANDERSEN &CQ REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Corn Belt Power Cooperative We have audited the accompanying balance sheets of CORN BELT POWER COOPERATIVE (a cooperative association incorporated in Iowa) as of December 31, 1992 and 1991, and the related statements of revenues and expenses, cash flows and deferred patrenage dividends and other equities for the years then ended. These financial statements are the responsibility of the Cooperative's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and the standards for financial audits contained in Govergment Auditina Standards (1988 revision), issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable l assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes - - - assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Corn Belt Power Cooperative as of December 31, 1932 and 1991, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. C - o Chicago, Illinois, February 19, 1993
ARTHUR ANDERSEN & CO. REPORT OF INDEEEND_ENT_FJLBLIC E ACCOUNIANTS ON C_OMPLLANCE WITH A.P_fLICABLE LAWS AND REGULATIOJjlS To the Board of Directors of Corn Belt Power Cooperative: We have audited the financial statements of CORN BELT POWER COOPERATIVE as of and for the year ended December 31, 1992, and have issued our report thereon dated February 19, 1993. , We conducted our audit in accordance with generally accepted auditing standards and the standards for financial audits contained in Gpvernment Auditina Standards (1988 revision), issued by the comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Compliance with laws, regulations and contracts applicable to Corn Belt Power Cooperative is the responsibility of Corn Belt Power Cooperative's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of Corn Belt Power Cooperative's compliance with certain provisions of laws, regulations and contracts. However, the objective of our audit of the financial statements was not to provide an opinion on overall ecmpliance with such provisions. Accordingly, we do not express such an opinien. 4 The results of our tests indicate that, with respect to the items tested, Corn Belt Power Cooperative complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that Corn Belt Power Cooperative had not complied, in all material respects, with those provisions. This report is intended solely for the information of the Board of Directors, g management and the Rural Electrification Administration (REA). However, upon receipt by the REA, this report is a matter of public record and its distribution is not limited. g Q - Chicago, Illinois, February 19, 1993
ARTHUR ANDERSEN & CO. REPORT OF INDEP_ENDENT PUBLIC ACCOUNTANTS ON INTERNAL CON 71tOL STRUCTURE To the Board of Directors of Corn Belt Power Cooperative: We have audited the financial statements of CORN BELT POWER COOPERATIVE as of and for the year ended December 31, 1992, and have issued our report thereon dated February 19, 1993. We conducted our audit in accordance with generally accepted auditing standards and the standards for financial audits contained in Government Auditina Standards (1988 Revision), issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audit also included the procedures specified in 7 CFR Part 1773.38 .45. In planning and perfonning our audit of the financial statements of Corn Belt Power Cooperative for the year ended December 31, 1992, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. The management of Corn Belt Power Cooperative is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errore or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. -- ________________m_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ .
For the purpose of this report, we have classified the significant internal control structure policies and procedures, including the controls established to ensure compliance with laws and regulations that have a material impact on Corn Belt Power Cooperative's financial statements and the results of the audit thereof, in the following categories: o Financial reporting cycle o Vendor / payroll expenditure cycle o Revenue cycle o Treasury cycle o Conversion (fixed assets / inventory) cycle For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of certified public Accountants. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters - involving the internal control structure and its operation that we consider to be material weaknesses as defined above. This report is intended solely for the information of the Board of Directors, management and the Rural Electrification Administration (REA). However, upon receipt by the REA, this report is a matter of public record and its distribution is not limited. Chicago Illinois February 19, 1993 ___-___m_ _ _ . - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ . _ _ _ _ - - - . - - - - - - -- . - - - - - - - - _ - - - - - - - _ - - - - - _ - - _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ---
b Balance Sheets December 31,1992 and 1991 ggg 1992 1991 ELECTRIC PLANT (Notes 2 and 6): In service . . S 193,997,854 S 187,933,510 Ixss-Accumulated depreciation . 91,259,084 84,504,575 102,738,770 103,428,935 Construction work in progress . 1,890,596 3,874,250 Nuclear fuel, net of amortization (Note 2) . 6.499.917 7.821.491 111.129.283 115.124.676 OTHER PROPER'IT AND INVESTMENTS: Nonutility property . 422,131 420,625 Investment in the National Rural Utilities Cooperative Finance Corporation . 2,516,418 2,533,226 Land held for future generating site (Note 8) . 3,856,509 3,856,509 Decommissioning fund (Note 2) . 5,669,878 4,606,159 Other investments and receivables (Notes 2 & 10) . 8,282,058 8.698.958 20,746,994 20.115.477 CURRENT ASSETS: Cash and cash equivalents . 7,948,509 8,975,788 Short term investments . 1,203,207 532,623 Member accounts recciable . 3,823,826 4,125,379 Other receivables.. 359,768 178,128 Inventories - Fuel, primarily coal, at last-in first-out cost . 1,831,013 1,896,895 Materials and supplies, at average cost . 1,951,564 1,852,001 Prepayments . 621,175 644,715 17.739.062 18,205,529 DEFERRED CHARGES: Deferred Department of Energy decommissioning costs (Note 12) 1,845,000 - Deferred spent nuclear fuel disposal costs (Note 9) . 880,968 1,041,144 Deferred refueling costs (Note 2) . 964,144 313,430 Unamortized refinancing cost (Note 4) . 487,960 - Other(Note 7) . 1,618,142 1,146,115 5,796,214 2,500.689
$ 155,411,553 $ 155.946,371 The accompanying notes to financial statements are an integral part of these balance sheets.
Balance Sheets December 31,1992 and 1991 MEMBERSHIP CAPITAL AND LIABILITIES 1992 1991 AIEA1BERSHIP CAPITAL: Alemberships, at $100 per membership . $ 1,400 5 1,400 Deferred patronage dividends, per accompanying statements (payment restricted as indicated in Note 3) . 6,367,255 5,867,255 Other equities, per accompanying statements . 13,191,158 12.067.833 19,559,813 17,936,488 LONG-TERAI DEBT (Note 4): Rural Electrification Administration . 45,146,498 47,309,400 Federal Financing Bank . 72,575,198 74,172,187 Capital lease obligations (Note 2).. 6,628,511 7,298,714 Pollution control revenue bonds . 2,855,000 2.975,000 127,205,207 131,755,301 less - Current maturities of long-term debt.. 4,619,832 4.488.530 122,585,375 127.266.771 OTHER LONG-TERAI LIABILITIES: Deferred Department of Energy decommissioning costs (Note 12) . 1,845,000 _ Deferred compensation . 297,853 343.789 2,142,853 343.789 CURlWNT LIABILITIES: Current maturities oflong-term debt 4,619,832 4,488,530 Accounts payable . 2,360,091 2,019,145 Accrued property and other taxes . 2,455,268 2,506,373 - Other . 394,894 405.279 9.830.085 9.419.327 DEFERRED CREDITS: Other(Note 7) . 1.293.4)), 979,996 S 155,411,553 S 155.946,371 The accompanying notes to Enancial statements are an integral part of these balance sheets.
5 Statements of Revenues and Expenses For the Years Ended December 31,1992 and 1991 1992 1991 OPERATING REVENUES: Sales of electric energy.. S 40,005,277 5 37,085,089 i Other . 2,451,271 2,404,645 l 42,456,548 39,489,734 s OPERATING EXPENSES: Operation - Steam and other power generation . 13,087,895 13,629,044 Purchased power, net 1,540,493 (99,575) Transmission . 1,292,479 1,261,880 Sales.. 335,237 287,757 Administrative and general . 3,491,794 3,383,878 Maintenance - Steam and other power generation . 3,920,450 3,681,482 Transmission . 523,064 528,799 General plant . 24,393 26,543 Depreciation and decommissioning (Note 2) . . 6,189,796 6,175,195 Property and other taxes.. 2,620,063 2,816.038 33,025,664 31.691.041 Net Operating Revenues. 9.430.884 7.798,693 INTEREST AND OTHER DEDUCTIONS: l Interest on long-term debt . 8,650,514 8,706,294 Other interest (Note 2) . 516,971 415,443 Interest during construction (Note 2) . (373,918) (362,113) Other deductions . 99,391 8,512 Amortization ofreacquired debt (Note 4) . 162,279 - Amortization ofloan expense . 21,194 11.104 9,076,431 8,779,320 NET OPERATING MARGIN (DEFICIT) . 354,453 (980,627) NON-OPERATING MARGIN: l Interest income . 1,087,813 1,076,818 Other, net (Note 6) . 409,984 892,858 1,497,797 1,969,676 NET MARGIN . $ 1,852,250 $ 989,049 The accompanying notes to Enancial statements are an integral part of these statements.
Statements of Cash Flows For the Years Ended December 31,1992 and 1991 (Note 2) 1992 1991 CASH FLOWS FROM OFERATTNG ACTIVITIES: Net margin . $ 1,852,250 S 989,049 Adjustments to reconcile net margin to cash provided by operations: Depreciation and amortization . 5,948,960 6,914,131 Amortization of nuclear fuel . 1,618,108 2,140,169 Amortization of deferred refueling costs . 1,378,502 1,654,543 Amortization of nuclear fuel disposal costs . 160,176 160,176 Amortization of refmancing cost . 162,279 - Gain on capacity sale . - (646,514) Changes in current assets and liabilities: Accounts receivable . 119,913 (268,354) Inventories . (33,681) 129,553 Prepayments . 23,540 124,298 Accounts payable . 340,946 (260,329) Accrued property and other taxes . (51,105) 171,702 Other liabilities . (10,385) (38,403) Decrease in deferred compensation.. (45,936) (13,502) Other .. (158,596) (113,000) Net cash provided by operating activities. 11,304,971 10.943,519 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long term debt . - 6,510,000 Repayment oflong-term debt . .. (4,550,094) (3,726,667) Deferred patronage dividends paid . (250,000) (250,000) Cost of refinancing.. (650,239) - Net cash used (provided) in financing activities . (5,450,333) 2,533,333 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to electric plant, net.. (3,398,837) (5,283,103) Additions to nuclear fuel . (296,534) (1,609,979) Additions to deferred refbeling costs . (2,029,216) (69,739) Disposal (additions) to nonutility property . (1,506) 38,030 Proceeds of capacity sale . - 1,632,154 , Decommissioning fund . (1,063,719) (907,932) Other investments . . (92,105) (2,365,739) Net cash used in investing activities . (6,881,917) I8.566.308) Net increase (decrease) in cash and cash equivalents . (1,027,279) 4,910,544 CASH AND CASH EQUIVALENTS AT: Beginning of year . 8.975.788 4,065.244 End of year . S 7,948,509 S 8,975,788 4 The accompanpng notes to financial statements are an integral part of these statements.
q l 1 Statements of Deferred Patronage Dividends and Other Equities For the Years Ended Decernber 31,1992 and 1991 1992 1991 DEFERRED PATRONAGE DIVIDENDS: Balance assigned beginning of year . S 5,867,255 $ 5,617,255 Net margin . 1,852,250 989,049 Lease revenue deferred patronage dividends . 21,075 15,150 7,740,580 6,621,454 Patronage dividends paid.. (250,000) (250,000) Appropriation of margin - Reserve for contingent losses . (873,325) (254,199) Statutory surplus . (250,000) (250.000') Balance assigned end of year.. S 6,367,255 5 5,867,255 OTHER EQUITIES: (Appropriated Margins) Reserve for Statutory Contingent Sum!ns losses Total Balance December 31,1990 . 5 2,099,484 5 9,464,150 S 11,563,634 Appropriation of margin . 250,000 254.199 504,199 Balance December 31,1991. 2,349,484 9,718,349 12,067,833 Appropriation of margin . 250,000 873,325 1,123,325 Balance December 31,1992 . 5 2,599.484 5 10,591,674 S 13,191,158 The accompanying notes to financial statements are an integral grart of these statements.
Notes to Financial Statements December 31,1992 and 1991 NOTE (1) OR.GANIZATION: Corn Belt Power Cooperauve (the Cooperative)is a Rural Dectnficauon Admimstration (REA) Snanced genera 6on and transmission cooperative created and owned by twelve distnbudon cooperatives and one murucipal cooperanve associauon. Dectricity supphed by the Cooperative serves farms, srnali towns and commercal and industrial businesses across 27 counties in north central Iowa. De Cooperanve's Board of Directors is compnsed of one representauve frorn each member cooperative and is responsible for establishing rates charged to the member cooperauves. NOTE (2) SIGNIFICANT ACCOUNTING POLICIES: The Cooperauve snaintains its accounurig records in accordance with the Uniform System ofAccounu as prescnbed by the REA. He significant accounung policies are described below. A. Dectric Plant . Dectric plant is stated at original cost wtuch includes certain pension costs, sales and use taxes, payroll taxes, property taxes and mterest dunng the penod of construcuon. Costs in connecuon with repairs of propernes and replacement ofitems less than a unit of property are charged to maintenance experne. Additions to and replacements of units of properry are charged to electnc plant accounts. B. Depreciation and Decommissioning - Depreciation is provded using straight-line methods and REA prescribed bves. These provisions, excluding nuclear facib6cs, were equivalent to a composite depreciauon rate on gross plant of 2.97% for 1992 and 1991. Under a joint-ownenhip agrectnent, the Cooperauve has a 10% urdivided interest in the Duane Arnold Energy Center (DAEC), a nuclear. fueled generating stauon, which was placed sn service in 1974, he Cooperauve is depreciaung its interest in the DAEC and each year's property additions subsequent to 1984 on a straight-bne basis over the remaining term of the imtial Nuclear Regulatory Commission hcense for DAEC (2014). The cornposite deprecation rate on gross plant for DAEC was 3.08% and 3.05% for 1992 and 1991, respecuvely. A site-sycific estimate of the decommmaaning costs of DAEC was updated in 1992. His report estimated the Cooperauve's share of the decommmioning costs of DAEC ta be apprunutely
$ 31,756,790 (in 1992 dollars). The Cooperauve is provichng for over411 nuclear decomnussioning costs using a funding rnethod which assumes a 5% rate ofirdlation and 3% real rate of return. The rnethod is designed to accumulate a decomrnissioning reserve suf5cient to cover the Cooperative's share of decommissioning costs by the year 2014.
Decommissioning costs are included in deprecation and decommissioning expense in the S*atements of Revenues and Expenses. Such costs were $568,333 and $545,718 for 1992 and 1991, respectively, and were detemuned based on the previous decommissbning study.The 1992 study wi!! be used to deterrrune expense and funding beganing in 1993. The total decomnussioning funds accumulated at December 31,1992 were $5,669,878,of which
$2,703,024 has been placed in a fund legally restricted for use in decommissioning DAEC. The remaining
$2,966,854, wh;le not legally restncted, has been designated by the Cooperanvc for use in decomrrussion-ins DAEC. The interest component shown as other interest was $511,660 and $415,44 3 for 1992 and 1991, respecovely.
C. Nuclear Fuel - The cost of nuclear fuel is arnoruzed to steam and other power generation expenses based on the h i quanuty of heat pmdaced for the generad sn of electric energy. Such amortizauon was $1,618,108 and j $2,140,169 for 1992 and 1991, respecovely. l D. Deferred Refueling Costs - The Cooperanve defers extraordinary operauon and maintenance expenses incurred during refueling outages of DAEC. These costs are being amortned to cxpense based on the expected generauon of the next fuel cyde which corre. ponds with the period the Cooperative is recovenng these costs in its rates. Such amoruzation was $1,378,502 and $1,654,543 for 1992 and 1991, respecuvely.
a g Notes to Financial Statements December 31,1992 and 1991 E. Interest During Construction - Interest dunng construcuon represents the cost of funds used for construccon and nuclear fuel rennerrent. The average rate was 6.9% and 6.6% far 1992 and 1991, respecovely, and is based on the Cooperative's leveh and ccsts of Anancing. F. CapitalIease - he Cooperauve has a long-term lease agreement with the City ofWebster City (Webster City) under which Webster City has agreed to provide certain generation and transmission facilities to the Coopera. ove. In return, the Cooperative will pay a minimum charge wiuch a;proxirnates the debt service on these facihties. Le Cooperanve has capitalard this lease and reflected it m electrx plant and has reficcted the related obliganon as a capital lease obliganon. G. Inaarne Taacs - he Cooperative is exempt from federal and state income taxes under section 501(c)(12) c'f the Intemal Revenue Code. II. Statements of Cash Dows - For purposes of repomng cash flows, the Cooperanve considers temporary cash investments purchmed with a matunty of three months or less to be cash equivalents. Cash paid for interest, net ofinterest capitahzed, was58,277,145 and 58,377,509 for 1992 and 1991, respectively.
- 1. Cash and Investments -
he Cooperauve has cash and investments in the following: 1992 1991 Obligations of the U.S governrnent armiits agencies 5 4,489,811 5 5,027,109 Corporate Bonds 1,468,765 958,993 Common and preferred stock 1,467,689 1,021,849 National Rural Utihues Cooperauw Finance Corporauon commeroajpaper 7,375,931 8,465,960 Cash and CD's deposited math federally insured financial institunons 1,261,115 1,157,975 Funds hekiin trust invested pnmarity with Iowa Public Agency Investment Trust 5,680,385 4,939,656 Economic development investments 1,134,109 1,097,781 Other investments 225.847 144.205
$ 23.103.652 5 22.813,528 The above investments are induded as follows in the accompanying balance sheets:
Decomrnissiamng fur.d 5 5,669,878 5 4,606,159 Other investments and recembles 8,282,058 8,698,958 Cash and cash eqmvalents 7,948,509 8,975,788 Shon-term investrnents 1.203.207 532,623
$ 23,103.652 5 22.813.528 he above amounts inclMe $6,740,211 and $6,547,155, at December 31,1992 and 1991, respec-tively, which rnust be used to fund construccon of electnc plant. Le carrying arnounts of Caah and cash eqwvalents and Short-term investrnents of 39,151,716 at December 31,1992 approximate tie fair value because of the short matunty of these investments.
Le fair value of decommissoning fund investments and other investments and receivables are based on quoted market prxes for those or similar investments, where available. The fair value and carrying costs of these investnents were approximately 512,817,000 and 512,417,000, respectsvely, at December 31,1992.
Notes to FinancialStatement Decembef 31,1992 and 1991 For Other investrnenu and receivables of $1,535,000 at December 31,1992, for which there were no quoted market pnces, a reasonabic estimate of fair value could not be made without incurring excessive costs. 'Diese investments induded $1,000,000 invested in the preferred stock of the Iowa Capital Corporation (ICC). The ICC is a for-profit corporadon established for the plupose of advancing economic devebpment in the state ofIows After payment ofoperating costs and certain reserves, the net proceceds ofICC wiu be paid to the preferred stockholden, induang the Cooperative, until the preferred stock investment plus a 15% cumulative return has been returned. After which, any rernaming proceeds wiu be spilt 2/3 to the preferred stockholders and 1/3 to the common stockholders (the state ofIowa). Ad6tona!!y, at December 31,1992, the Cooperauve has on its balance shcet an investment of $2,516,418, with the National Rural Utilities Coopera6ve Financial Corporanon (CFC). This investment is required in order to allow the Cooperative to borrow funds from CFC. The investment earns interest of 5% on $2,195,507 which matures between 2070 and 2080 and 3% on $320,911 which matures between 2007 and 2025. __ NOTE (3) DEFERRED PATRONAGE DIVIDENDS AND OTHER EQUITIES: In accordance with the Iowa Code, the Board of Directors is required to aUocate a portion of the current year's net margm to statutory surplus until the statutory surplus equals 30% of total equiry. No addidons can be rnade to statutory surplus whenever it exceeds 50% of total equiry. The Board of Directors appropnated $250,000 of the 1992 net rnargin to statutory surplus. The equity designated " Reserve for contingent k>sses* in the Statements ofDeferred Patronage Dividends and Other hjuides is an appropriation of eqtuty by the Board of Directors. The Board of Ducctors appropriated
$873,325 of the 1992 r et margin to Reserve for contingent losses. There is no statutory restriction of this equity.
The Board of Directors is perr iitte d by the Iowa Code to allocate the current year's net rnargin to deferred patronage dmdends upon meeting certain requirements and is required to make such albcatons if the net margin for the year exceeds specified maxm.ums. The Board of Dire tors has appropnated $750,000 of the 1992 net margin to deferred patronage divalends. Deferred patronage dividends are to be paid in the future as determined by the Board ofDirecton. Under the conditions of the Cooperative's mortgages, deferred patronage dmdends cannot be retired without approval of the REA and the CFC unless the remaining equity mecu certain tests. The Cooperative does not rneet these tests at December 31,1992, llowever, the Cooperative received permission and retired $250,000 of the 1981 patronage cbvidends during 1992. NOTE (4) LONG TERM DEBT: long-term debt consists of rnortgage notes payable to the United States of Arnerica acting through the REA and the Federal Financirig Bank (ITB), capitri lease obligations, and notes issued in conjunction with the issuance of poUution control revenue bonds. SubstantiaDy all the assets and all rent, income, revenue and net rnargin of the Cooperauve are pledged as counteral for the long-terrn debt cof the Cooperanve. Long term debt is comprised of: 1992 1091 Mortgage notes due in quarterly installments - RFA 2%, due 1993-2008 . $ 17,115,904 5 18.536,453 REA 5%, due 1993-2019 . 28,030,594 28,772,947 ITE 7.3%.13.5%, due 1993 2019 72375 108 741721 P7 117.721 A96 1214 81M R7 Capital lease obligatiorts - Webster City Revenue Bonds 4.7%-7.5%, duc 1993 2002 6.62 U,11 7 ?98 714 PoUutmn control revenue bonds . 5%-6.25%, due senany 19931997 and term due 2007. 2 R55 000 2 975 000 5 127.205,2J17, 5 13] 755.301 _ , , _ , _ _ _ _ , , _ _ _ _ _ , . , _ _ , _ _ _ , _ _ _ _ . _ _ _ _ _ . - - - - - _ _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ' ^ ^ - ' ^ - ^ -
c. Notes to Financial Statements December 31,1992 and 1991 Maturites dlong-term debt for the nen five years are as follows: Yr.u Natunty 1993 ...$ 4,619,832 199 4 .. ... .. 4,649,104 1995 . 4,774,553 1996. 5,015,061 1997- 5,222,918 In connection with the mortgage notes, the Cooperative had available at December 31,1992, $3,882,000 from CFC to nect future borrowing needs. Currently, the Cooperative is awaiting final approval ofloan docurnents for
$12,011,000 from the FFB to be used for quahfymg construction projects.De Cooperative has $1,514,323 of .
unreimbursed capital adidons which it anticipates will be funded by the new FFB loan in 1993. The Cooperadve had available at December 31,1992, an unused $12,000,000 line of credit with CFC of which 51,000,000 is available only in the event ofdsaster at DAEC. Based on the borrowing rates currently availabic to the Cooperative for debt with sirnilar terms and matundes, the fair value oflong-term debt is $129,730,335 at December 31,1992. In 1992, the Cooperadve paid the FFB $650,239 to reduce the interest rate on a number ofits FFB debt issues. The fee has been deferred and is being amortized over five years which corresponds with the period the Cooperative is recovenng the fee in rates. The present value savings as a result of the interest rate reduction, less the fee, was
$ 1,484,669.
NOTE (5) CONSTRUCTION COMMITMENTS: Total construction expen6tures for 1993, including exgnditures for the jointly-owned units, are estimated to be
$9,377,270 of which $174,560 is for the purchase of nuckar faci at DAEC. >
In 1991, a severe ice storm resuhed in $760,883 of damage to the Cooperative's system, of which $644,747 was capitalized in 1992 and $45,902 and $70,234 was expensed to rnaintenance in 1992 and 1991, respectively. NOTE (6) JOINT PLANT OWNERSHIP: Under joint. ownership agreements with other Iowa utilities, the Cooperadve had univided interests at December 31,1992 in three electnc generating units as shown below: Duane Council Amold Nea! Blufh Energy Urdt a4 Unit #3 cm-r Total electnc plant . . . . . . . $ 44,234,086 $ 13,590,711 $ 64,217,734 Accumulated deprecianon $ 18,419,893 $ 5,712,078 $ 21,236,707 Unit accre6ted capacity . MW . 610 674 540 Cooperauve's share-percent ... ... I1.30% 3.8% 10.0% Capital cost per KW . $ 642 3 531 3 1,189 Each participant provided its own Anancing for its share of the unit. The Cooperative's share of arect expenses of the jointly. owned units is included in the operaung and maintenance expenses on the Statements of hvenues armi Erpenses. Dunng 1991, the Cooperauve, one ofits members, North lowa Murucipal Electric Cooperadve Associanon (NIMECA), and the City of Grundy Center (the City), a NIMECA member, entered into a long term lease agreement for the use by the City of two rnegawatts of the Cooperative's capacity in the Neal #4 generation facihties.The agreement resulted in the Coopernove record 2ng a sale of approximately $985,640 of electric plant net of accumulated depreciation and recognizing a gain of approximately $646,514. The Cooperanvc wul continue to act as the Neal #4 partner on behalf of the City.'Ihe agrectnent has been accounted for as a sale. The above plant statistics have been reduced to reflect the sale. E_____ ._ - - _ _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _ . _ _ _ _ - _ _ _ _ . _ _ -
s r Notes to FinancialStatements December 31,1992 and 1991 NOTE (7) PENSION PIAN: The Cooperauve has a deposit administration defined beneSt plan which covers substantially all employees. The plan is funded jointly by contributions from the Cooperadve and all parucipants. Assets are held on deposit by an insurance company in its general account. Benefits paid to retired employees are equal to 21/4% of the average monthly earnings muJtiphed by the years of service since January 1,1973. The Cooperanve has recorded pension expense equal to its funding contnbution in its Statements of Revenues and Expenses consistent with the rate treatment allowed this ccat. Net penocbc pension cost for the years ended 1992 and 1991 includes the following components: 1992 1991 Service cost-benefits earned during the pericxi $ 312,437 $ 355,298 Interest cost on projected benent obhgation .. 358,167 373,575 Reducuan in pension cost from actual return on assets .. (436,225) (541,808) Net amortizatmn and deferral - 79,052 189,617 Net penodic pension cost - employees .. . . . . (94,029) fi13005) Net penodic pension cost emp4ayer 219,402 263,677 Change in expenses due to rate regula6on . (219.402) (263,677) Total pension cost .. ...~... $ - 5 - 1992 1991 Assumptions used were: Discount rate 6.50% 6.50% Rate ofincrease in cornpensation levels .. 5.50% 5.50% Expected long-term rate of return on assets ... 8.00% 8.00% The following table presenu the plan's funding status and amounu recognized in the Cooperanve's balance sheets as of December 31,1992 and 1991: 1992 1991 Actuarial present value of benefit obhgations: Vested benefit obhgation .. $ 3,631,411 $ 3,668,338 Nonvested benefit obbganon .. 281,785 241,374 Accumulated benefit obligation 3,913,196 3,909,712 Provision for future pay increases .. 1,975.404 179 787 Projected benefit obbgatson .. . . . . . 5,888,000 5,665,499 Plan assets at fair value .. 4,640,142 4 144.703 Projected bene. fit obligation grea:er than plan assets.. (1,248,458) (920,796) Unrecognized net loss . 68,112 84,865 Unrecognized pnor service cost - 22,628 25,030 Unrecognized net transition obligation . . . . . . . . . . 515 635 Accrued pension cost recogmzed in the balance sheets S(1,293,427) $ (979,996) The Cooperative anticipates rnakmg a funding contribution in 1993. The Cooperative also provides a 401(k) plan which is available to all employees with the Cooperative matching 50% of the employees' contnbution up to 4% of the employees' wiges. In addition, the Cooperative provides certain health and hfe insurance benefits to acuve emgdoyees. Retired employees may contmue medicalinsurance coverage at their own cost.
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__ i Notes to Financial Statements December 31,1992 and 1991 NOTE (8) LAND HELD FOR FUTURE GENERATING SITE: The Cooperanve is a parucipant in Allied Power Cooperative ofIowa (Allied). Albed was organized for the purpose of buildmg a generation plant and related transmission facihties to provide for the future power needs of its member coopera6ves. During 1980, Allied determined that the estimated future power needs ofits member cooperatives had dechned and that the conunued developrnent ofits plant site was not feasible. It is contemplated that the plant site will be developed in the future as the needs for power increase. NOTE (9) LIABILITY FOR SPENT NUCLEAR FUEL DISPOSAL COSTS: The Nuclear Waste Disposal Act of1982 gave approval to the federal government to construct a repository for the r: anon's civihan spent nuclear fuel. The Act stated that funding for this repository would be provided by assessing nuclear generaung unit owners a one-time fee for spent nuclear fuel bein8 atored on-stte at each nudear facility in Apnl 1983, and by assessing all future energy generated by nuclear facihties at a rate of1.0 mil per kilowatt hour. The Cooperauve is paying the post 198 3 fees on a current basis and such fees are being charged to steam and other power generation expenses. He Cooperative has previously paid the one-time fee and is amortizing it to expense over a thirteen year penod ending in 1998 which corresponds with the period the Cooperuuve is recovenng these cosu in its rates. In both 1992 and 1991,5160,176 was amortszed to steam and other power generacon expenses. NOTE (10) NIMECA COMBINED TRANSMISSION SYSTEM: In 1989, the Cooperauve and one ofits mernbers, NIMECA, entered into a joint transmission agreement which albws several members of NIMECA an indmdual undivided ownership interest in and access to the Cooperative's transtmssion system. Corn Belt has a receivable of 54,762,963 from a trust estabhshed by NIMECA for ultimate payment to Corn Belt, These funds can only be used to fund REA approved transmission projects. The Coopera-tive will continue to operate and snaintain the system. NIMECA members will reimbune the Cooperative for the proportionate share ofoperating czpenses of the system and will contribute proportionately for all future capital addiuons of the system. He reimbursernent of the 1992 and 1991 operating expenses were 5499,217 and 5479,135 respectively, and were recorded as operating revenues. Addinonally, the Cooperanve and NIMECA entered into a capacity sharing agrectnent which provides for the sharing of generating resources for the next twenty years. NOTE (l1) CLEAN AIR ACT: De Clean Air Act (Act) ns amended on November 15,1990. The amendment made significant changes in the nation's clean air laws. The Act's specific amendments to acid deposition control (acid rain) make significant reductions in the arnounts of su! fur dzoride and nitrous oxide errussions allowed on an annual basis na6 onside. l The Cooperative's coabftred generating stauons are in compliance with the standards established by phase I of the l Act and management is evaluating the provisions and comphance requirements of phase II which will be effective in the year 2000. NOTE (12) NATIONAL ENERGY POLICY ACT: The Federal National Energy Policy Act of 1992 requires owners of nuclear power plants to pay a special assessment into a " Uranium Ennchment Decontaminauon and Decomnussioning Fund." The assessment is based upon prior nuclear fuel purchases and for the DAEC approximates 51,230,000 annually through 2007, of which the Cooperative's 10% stwe is $123,000. The Cooperauve's total assessment, of $1,845,000, payable over 15 years, has been recorded in other long-term liabiliues in the balance sheet with a corresponding deferred charge. The deferred charge will be recovered in rates over 15 years.
Notes to Financial Statements December 31,1992 and 1991 NOTE (13) NUCIIAR INSURANCE PROGRAM: The Cooperative, under the provnions of the Price-Anderson Amendments Act of1988 (the 1988 Act), has the benefit of
$7.8 bilhon of pubbe hability coverage. The coverage consists of $200,000,000 ofinsurance and $7.6 billion of potential retroacove assessrnents from the owners of each commercial nucicar power plant. Under the 1988 Act for losses relating to nuclear accidents in excess of $200,000,000 each nuclear reactor rnay be assessed a maximum of $66,000,000 per nuclear incident, payable in annual installments of not rnow than $10,000,000. The Cooperative's assessment on its 10% ownershp in DAEC may be up to $6,600,000 per nuclear inadent with a rnarimum of $1,000,000 per year. In addition, an additional surcharge, of up to 5% of the retroactive assessment, rnay be payable if the public liability clairns and legal costs arismg from a nuclear incident at a commercial nuclear power plant exceed the Price-Anderson 6nancial protection.
In addition, the Cooperauve could be assessed $571,000 and 3143,000 related to coverages for excess pmperty damage and replacement power, respectively,if the insurer's losses relating to an accident exceeds its reserves. No such assessments have been made. l 9 e
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, ARTHUR ANDERSEN ArrHUR ANDERSEN&CQ SC February 19, 1993 Arthur Andersen & Cu Board of Directors of 33 West Monroe Street Corn Belt Power Cooperative Chicago lL 6t%03-5385 1300 Thirteenth Street North Post Office Box 508 Humboldt, Iowa 50548-0508
Dear Sirs:
We have audited the financial statements of Corn Belt Power Cooperative for the year ended December 31, 1992 and have issued our report thereon dated February 19, 1993. We conducted our audit in accordance with generally , accepted auditing standards, Government Auditina Standards issued by the { Comptroller General of the United States, and 7 CFR Part 1773, Policy on . Audits of Rural Electrification Association (REA) Borrowers. Those standards ' require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. In planning and performing our audit of the financial statements of Corn Belt Power Cooperative for the year ended December 31, 1992, we considered its ' internal control structure in order to determine our auditing procedures for. the purpose of expressing an opinion on the financial statements and not to provide assurance on the internal control structure. A description of the responsibility of management for establishing and -I maintaining the internal control structure and the objectives of and the inherent limitations in such a structure is set forth in our Report of Independent Public Accountants on Internal Control Structure dated February 19, 1993, and should be read in conjunction with this report. I l l Our consideration of the internal r.ontrol structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of the-specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation of the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. However, we noted no matters involving the internal control structure and its operation that we consider to be a material weakness as defined above. a
ARTHUR ANDERSEN Arnfua ANDERSEN&CO SC 1 Board of Directors of l Corn Belt Power Cooperative l Page 2 ' February 19, 1993 7 CFR Part 1773.34 requires comments on specific aspects of the internal control structure, compliance with specific REA loan and security instrument : provisions, and other additional matters. We have grouped our comments { accordingly. In addition to obtaining reasonable assurance about whether the j financial statements are free from material misstatements, at your request, we i performed tests of specific aspects of the internal control structure, of compliance with specific REA loan and security instrument provisions, and of additional matters. The specific aspects of the internal control structure, compliance with specific REA loan and security instrument provisions, and additional matters tested include, among other things, the accounting procedures and records, materials control, compliance with specific REA loan and security instrument provisions set forth in 7 CFR Part 1773.34 (e) (1) , related party transactione, and depreciation rates. The additional matters , tested also include a schedule of deferred debits and credits, upon which we express an opinion. In addition, our audit of the financial statements also included the procedures specified in 7 CFR Part 1773.38 .45. Our objective was not to provide an opinion on these specific aspects of the internal 3 control structure, compliance with specific REA loan and security instrument provisions, or additional matters, and accordingly, we express no opinion , thereon. No reports (other than our Report of Independent Public Accountants,-our Report of Independent Public Accountants on Compliance with Applicable Laws and Regulations, and our Report of Independent Public Accountants on Internal i Control Structure, all dated February 19, 1993) or summary of recommendations I related to our audit have been furnished to management. l l l Our comments on specific aspects of the internal control structure, compliance 1 with specific REA loan and security instrument provisions, and other additional matters as required by 7 CFR Part 1773.34 are presented below.
- i COMMENTS ON CERTAIN SPECIFIC ASPECTS OF TlIE INTEPRAL CONTROL STRUCTURE
'We noted no matters regarding Corn Belt Power Cocperative's-internal control structure and its operation that we consider to be a material weakness as-
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previously defined with respect to: o the accounting procedures and records; o the process of accumulating and recording labor, material, and overhead costs, and the distribution of these' costs to construction, retirement, and maintenance or other expense accounts; and, o the materials control. l
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. ARTHUR ANDERSEN ARTilUR ANDLRSEN &CQ SC -
l Board of Directors of ] Corn Belt Power Cooperative Page 3 February 19, 1993 s _QOMMENTS ON COMPLIANCE WITH SPECIFIC REA LOAN AND SECURITY INSTRUMENT i PROVIS~ONS i Management's responsibility for compliance with laws, regulations,. contracts, , and grants is set forth in our Report of Independent Public Accountants on Compliance with Applicable Laws and Regulations dated February 19, 1993, and should be read in conjunction with this report. At your request, we have performed the procedures enumerated below with respect to compliance with certain provisions of laws, regulations, and contracts. The procedures we performed are summarized as follows: o Procedures performed with respect to the procurement and maintenance of borrower insurance and insurance for contractors, engineers and architects performing work under contracts with borrowers in ' accordance with 7 CFR Part 1788 as of December 31, 1992 of Corn Belt Power Cooperative oo Obtained and read the borrower's annual celuification of insurance coverage, which stated that during 1992 all insurance ' required by 7 CFR Part 1788 was in force and renewals had been obtained for all policies. oo Obtained and read a borrower prepared schedule of insurance policies in force and agreed the name of the insurance company, specific type of policy, policy number, expiration date, and the amounts of coverage to corresponding insurance policies. oo Compared the borrower prepared schedule of insurance policies in force with the specific REA minimum requirements as enumerated in Subpart B of 7 CFR Part 1788 for each required , type of coverage and noted REA required coverage had been met. oo We were informed by the borrower that as of December 31, 1992 there were no written centracts with contractors, engineers or architects performing capital asset-related construction work + for the borrower. oo Reviewed Board of Director minutes to ascertain whether there ' were board-approved written contracts as of December 31, 1992 with contractors, engineers or architects performing capital asset related construction. , F 4 J w ew
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. ARTHUR -
ANDERSEN . ArmuR ANDERSEN&CO SC Board of Directors of Corn Belt Power Cooperative Page 4 February 19, 1993 ! o We were informed by the borrower that there were no insurance proceeds for the year ended December 31, 1992. o Procedure performed with respect to the requirement to maintain all funds in institutions whose accounts are insured by any agency of i the Federal government: oo obtained information from financial institutions with which Corn Belt Power Cooperative maintains funds that indicated that l the institutions are insured by an agency of the Federal government. o Procedures performed with respect to the requirement for a borrower to obtain written approval of the mortgagee to enter into any contract for the operation or maintenance of all or any part of its property, or for the use by others of its property for the year ended December 31, 1992 of Corn Belt Power Cooperative: oo obtained a statement from the borrower which indicated that no new written contracts were entered into during the year for the operation or maintenance of all or any part of its property, or i for the use of its property by others. oo Reviewed Board of Director minutes to ascertain whether there , were board-approved written contracts entered into during the year for the operation or maintenance of all or any part of the , borrower's property, or for the use of its property by others. o Procedure performed with respect to the requirement to submit REA Form 7 or Form 12 to the REA: J I oo Agreed amounts reported in Form 12 to Corn Belt Power ' Cooperative's records. 1 The results of our tests indicate that, with respect to the items tested, ! Corn Felt Power Cooperative complied in all material respects,.with'the ~f specific REA loan and security instrument provisions referred to below. With ; respect to items not tested, nothing came to our attention that caused us to believe that Corn Belt Power Cooperative had not complied, in all material : respects, with those provisions. The specific provisions tested include the I requirements that: l l L
ARTHUR s ANDERSEN AnmUR ANDLR5EN &CQ SC Board of Directors of Corn Belt Pcwer Cooperative i Page 5 l February 19, 1993 o the borrower's insarance coverage in force as of December 31, 1992, and the application of insurance proceeds received during the year ended December 31, 1992 are in accordance with 7 CFR Part 1788; o the borrower has obtained a certificate of insurance from contractors, architects and engineers performing in capital asset-related construction work in progress as of December 31, 1992; o the borrower maintains all funds in institutions whose accounts are , insured by an Agency of the Federal government; o the borrower has obtained written approval of the REA to enter into any contract for the operation of maintenance of all or any part of . I its property, or for the use by others of its property; and, o the borrower has submitted its Form 7 or Form 12 to the REA and the Form 7 or Form 12, Financial and Statistical Report as of December 31, 1992, as submitted to the REA is in agreement with 4 Corn Belt Power Cooperative's records in all material-respects. i COMMENTS ON OTHER ADDITIONAL MATTERS ; In connection with our audit of the financial statements of Corn Belt Power Cooperative, nothing came to our attention that caused us to believe that Corn Belt Power Cooperative failed to comply with respect to: o the reconciliation of subsidiary plant records to the. controlling general ledger plant accounts addressed at 7 CFR Part 1773.34 (c) (1) ; o the clearing of construction accounts and the accrual of ; depreciation on completed construction addressed at 7 CFR Part 1773.34 (c) (2) ; o the retirement of plant addressed at 7 CFR Part 1773.34 (c) (3) and-(4); o sales of plant, material, or scrap addressed at 7 CFR Part 1773,34 (c) (5) ; t
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ARniUR ANDE RSLN & CO SC Board of Directors of Corn Belt Power Cooperative ; Page 6 February 19, 1993 9 e o the disclosure of material related party transactions', in accordance -' with Statement of Financial Accounting Standard (SEAS) No. 57, "Related Party Transactions", for the year ended December 31, 1992 ! in the financial statements referenced in the first paragraph of this report addressed at 7 CFR part 1773.34 (f) ; and, o depreciation rates addressed at 7 CFR Part 1773.34 (g) . s DETAILED SCHEDULE OF INVENTORY DIFFERENCES A detailed schedule of differences between physical inventory, perpetual inventory records, and the general ledger (identifying gross overages and gross shortages) is provided below. This schedule is not a required part of the basic financial statements, but is supplementary information required by 7 CFR Part 1773. 34 (d) . We have applied certain limited procedures, which consisted principally of inquiries of management regarding the method of measurement and presentation of the supplementary information. However, we did not audit the information and therefore express no opinion on it. The differences noted below were adjusted during 1992 with an offsetting adjustment to Account 186, " Miscellaneous Deferred Debits. " Balance at Date of Physical Count (unaudited) Overage / General Perpetual Physical Ledoer Records Count (Shortactl Total of inventory counts $1,228,400 $1,228,400 $1,227,725 ($675) in which dollars related to the physical count was less than the general ledger and perpetual inventory records
- Total of inventory counts S 750,980 $ 750,980 S 751,966 $986 ,
in which dollars related to the physical count $311-exceeded the general ====== i ledger and perpetual inventory records i l l l
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. NDERSEN ARTHUR ANDERSEN & CQ SC Board of Directors of Corn Belt Power Cooperative Page 7 .
February 19, 1993 [ DETAILED SCHEDULE OF DEFERRED DEBITS AND DEFERRED CREDITS Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The detailed schedule of deferred debits and deferred credits required by 7 CFR Part 1773. 34 (h) and provided below is presented for purposes of additional analysis and is not a required part of the basic financial statements. This information has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Deferred debits-As of December 31, 1992 Deferred spent nuclear fuel disposal costs $ 880,968* Deferred refueling costs 964,144* Deferred pension costs 1,293,427* Unamortized loss on reacquired debt 487,960* Deferred Department of Energy decommissioning costs 1,845,000** Other (miscellaneous nonconcurrent assets) 324,715
$5,796,214
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Deferred credits-Accrued pension liability $1,293,427
==========
- Item has received REA written approval.
**We have been informed that Corn Belt Power Cooperative intends to request REA approval.
This report is solely for the information and use of the board of directors, ! management, and the Rural Electrification Administration and supplemental lenders. However, this report is a matter of public record and'its distribution is not limited. ! Very truly yours, (I ARTHUR ANDERSEN & CO. 84360
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s. l W0rt r011111e ieSilent Iowa is a great place to lis e. We have The Rural Electrification Administration p four seasons to enjoy, each with its own (REA) which is part of the Department of om i charm and beauty. Driving through the Agriculture has recently been under fire. countryside, there are scenes that cannot be Some of the most biased and subjective seen in a city of steel and concrete. We see media misrepresentation in years has been miles of crops that wd! help feed the nation dropped on the American public about REA and world, sunrises and sunsets that are clear They contend that the job of electnfying and pollution free, deer and other wddhfe rural America is finished. running free, and friendly people that reflect One of the specific charges is that the the Midwestern lifestyle-this is lowa. rural electrics are now being subsidized There are other things that reflect the unnecessarily. What you do not hear is that quahty of life that lowans has e come to investor-owned utdities and municipals are enjoy. One of these is rural electrification. also being subsidized in the form of tax Since 1946 CIPCO has been mvolved in the benefits. According to an analysis of the development of rural lowa. Working with Economics Division of the National Rural the member distribution cooperatives, we Electric Cooperative Association (NRECA), have made an impact on rural America. federal assistance to the rural electric However, there have been changes sint e program in 1991 was $51.28 per consumer those first electric lines were strung. in the form oflow interest loans. In recent years we have seen the Government subsidies in the form of tax population decrease as the farm economy benefits to the investor-owned utihties were slipped The last census showed that lowa's $64 73 per consumer and for municipal population was down enough to dec rease utilities 590.71 per consumer. our representation in Congress by one We at CIPCO feel there is still a need member. This has also eaten into the electric for the rural electric program. The job may sales of the member systems. be different than it was in the 1950s, but CIPCO and the CIPCO Systems have there stdlis work to be done. Lines and joined together with other RECS across Iowa stations must be maintained. Even though to combat these problems of erodmg load. new loads may not be the traditional farm Through economic development and operations, small industry, urban housing, marketing incentives, we have encouraged and tourist attractions are only a few of the growth and are bringing people back to rural types of new loads that rural America can Iowa. Also, urban housing developments are expect. Future power supply responsibilities on the increase in the Iowa countryside. are still a concern of the G&Ts across the CIPCO is meeting the challenge of these country. I changes by looking for new opportunities for CIPCO has the responsibility of its members and their consumers. continuing support to its member systems One example is the Lake Panorama area who serve rural lowa. We pledge to remain served by Guthrie County REC. The lake loyal to our members and their consumers in initially was pun hased out of bankruptcy in our efforts to supply their electrical needs at the late 1970 s as a water source for a a reasonable cost. We have a dedicated board proposed power plant. It continues to be a of directors, management and staff. We are valued asset for future power supply working together with the member systems expansion. This investment also solidified to adapt to change and to meet the the interest of potential home budders and challenges ahead. opened the door for growth of residential housing on Guthrie County REC lines. Additional investments in the lake area will allow for continued growth which has been ,, at a rate of 30-40 new homes each year. The f growth at I.ake Panorama, or any growth on ef James Wenstrand the system, is good for the local REC, and it . President E is good for the other members of the CIPCO Systems.
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1992 was again a successful year for and implementation process which will insure our success through the next several
-g CIPCO. Although energy sales decreased shghtly from the previous period, our margin years.
for the year is (onsistent with the target The success of our previous planning established by Board Pohey and reflected in efforts is demonstrated by positive results our Equity Plan. During the year we from our current programs. CIPCO completed the documentation and guarantee recognized that the erosion of sales needed agreements necessary to facihtate the to be reversed and initiated marketing and execution of our long-term debt contract economic development programs to improve with R EA. Improvement in our operations is the outcome for the members. In 1992 the evidenced by the decrease in outage hours. CIPCO Systems divided over $1,375,000 in As we pause to reflect on these power bill credits and rebates. These auomphshments, we need to be mindful programs generated over 80,000,000 kWhs that future successes wdl require our insales. continued dedication and focused efforts. It Since 1985 the Iowa Area Development is becoming increasingly difficult to achieve Group (IADG), the Cooperative's economic our goals in today's business climate. The development organization, has been decisions we make are tested almost daily by responsible for bringing $550 million of new rules and regulations, by changes in our capital investment and 14,000 jobs to Iowa. financing options, as well as in the operation Knowing that the business and expectations of our member environment of utilities is changing, we are cooperatives. constantly reviewing our options. The path , CIPCO is prepared to meet these to the future will be different than the road j ihallenges through a system for planning and of the past, but CIPCO is prepared to deal 1 program review developed in recent years. with each new situation as it develops. We began this process in 1985 and Another year has passed. We talk continued with refinements which have constantly about change. We spend a lot of enabled us to respond to these new and time looking into the future, but there are no changing influences in a timely manner. In crystal balls. Meeting the challenges of 1988 our planning focus was on marketing change and seizing the opportunities as they and economic development. More recently are presented keeps us moving forward with our efforts have been directed to program a purpose. Creating an envimnment for the implementation and policy refinement. future that builds on our past promises During 1992 we initiated our evaluation of continued success for CIPCO and its the current issues and outlined the timetable member systems. for completion of the various studies necessary to begin the next planning phase. The proc ess is continuing as we identify traditional solutions to our power supply needs in adJition to making an assessment of AM gy the demand-side opportunities which may Dennis I.. Murdock prove cost effective. We are concurrently Executive Vice President reviewing our capital requirements, available and General Manager resources and our investment strategies. These evaluations will be completed by June 1993. It is our intention to then kick-oft a series of joint planning sessions with the CIPCO Board and participants fmm each of the member systems. We expect to document our vision and draft a program
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3 The environment in which a business ClPCO cannot maintain its level of success by renuining stagnant. The goal must be to operates is af fet ted by nuny fa< tors. Creatinn an environment that is progressise, move ahead and create an environment that
? adapts well to change, is fmancially sound, nurtures the success of the past and assures -p ,,, .
fosters commitment among employees, is that the business remains sound in the z mwmme not afraid of risk, enjoys uood working future. relationships with affiliates, satisfies the ClPCO is the power supplier for its needs of the ownership, and ultimately is a member systems However, it is also in succ ess, does not happen by chant c. partnership with these members-always Partnerships are developed through trust and supporting them in their efforts to serve the confidence over periods of time during member consumers CIPCO supports its whith confhct and compromise cultivate members with expertise on environmental decisions that serve the good of all. Such is issues, marketing, communications, safety, the history of CIPCO and its member economic development, employee training, distnbution cooperatives. data systems, planning and more. CIPCO The board of directors and management and the CIPCO Systems move ahead of CIPCO have created a successful business confident that together they have created an environment that positions CIPCO wellin environment for a future that ensures the industry. Planning and pruJent risk- reliable, economically priced electricity for taking go hand-in-hand with success. The the membership. electric utility industry is chancing, and
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l t;.. CIPCO's Executive Committee includes, bac k row (1-r): Secretary-Treasurer Dale Newman, President James Wenstrand, and Vice President FranMin 11' alter. Front row (1-r): Assistant Seactarv-Treasurer Eldo higer and Execmive Vice Presidem Dennis Aiurdock.
4 i Franklin G. Walter
$th Eldo 11. Meyer Tk Melvin W. Neil Adams County Cooperatne Benton County Electnt Buchanan County Rural Elecint Cornpany Cooperative Asssociation Electric Cooperatwe
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James W. Van Rysw3k Lawrente L Quinn Ray liitchcock Clarke Ehtric Eastern Iowa Light and Farmers Electnc Cooperatn e, Inc Power Cooperative Cooperative, Inc. f . .. s; l j.3 . Keith D. Wirt Ph311is J. Iloge Dale R. Newman James H. Paper Alvin D. Lund Guthne County Rural Electric Lmn County Rural hiaquoketa Valley Rural klarshall County Rural hhdland Power Cooperative Association Electnc Cmperatwe Electric Cooperatne Electric Cooperatne Cooperative I
, J , rf ,
dmu ,tt ti James P. Wenstrand Norman L Van Zante 1 Richard G. Mi(kelson Duane R. Armstead
<t Wayne R. Wik ox Nyman Electnc Pella Cooperatae Rideta Elettnc South lowa Aluniapal Electnc T.I.P. Rural Cooperatn e Electric Association Cooper atwe, Inc . Cooperatne Assouation Electnt Cooperative
People and Facilities decades. Title VH of the Civil Rights Act of l f CIPCO has ahvays put a great deal of 1964 requires emphiyers to ensme that all V value in its employees. Their expenence, personnel actions, such as compensation, expertise, loyalty, dihgence and day-to-day benefits, promotions, training and education, attention to their responsibihties leave a trad and social / recreational programs are of success os er the past 46 years. Creating an administered without regard to race, color, environment that ensures that this continues religion, age, sex, or national origin. Further, is becoming more and more somplicated for employment constraints are imposed by the CIPCO's human resources professionals. Age Discrimination in Employment Act, j Attention to rules and regulations has Vietnam Era Veteran's Readjustment Act l j 1 l become a very time intensive task as the and Rehabilitation Act of 1973.
; rules can change daily. The Clarence Thomas confirmation Traditionally. employees have had the hearings brought to the forefmnt the right to quit or iesign whenever they significance of the issue of sexual wanted. Simdarly, employers have had the harassment. Defined as a form of sex I
nght to terminate employees not subject to discrimination, sexual harassment is an an employment contract at any time and for unlawful employment practice in violation any reason not prohibited by statute. This of Title Vil of the Civil Rights Act of 1964. i relationship is referred to as employment-at. An employer is liable for sexual harassment will. However, over time, the employer's when it fails to take "immediate and rights have eroded, appropriate corrective action " An employer is responsible for acts of sexual harassment when it knows, or should have known, of the
,, . ? conduct. Thus, employers may be subject to g
N suit and monetary damages if they fail to remedy even unreported cases of sexual 3 s y harassment. y Two legislative mandates more recently enacted have placed additional restraints on
. b, {.. g ..
employers. The Americans With Disabilities
-1~ ,b g Act ( AD A) of 1990 became effective July
.j;.M -
V 26,1992. Title I of the law prohibits
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; employers from discriminating in hiring and f' ' -
promoting based on physical or mental CIPCO's operating grcmps are led imp irment, and requires employers to Iy Richard Anderson (above) % . explore possible " reasonable
^
Director of Utility Operations- accommodations" to adjust the work. Dwayne Augtpurger (above-right) g 7 . ..- environment, job tasks or work schedule to Director of Corporate Operations;
,,} enable employees to perform a job.
and Craug Fride [nght) Director of . The Civil Rights Act of 1991 Business Operations. i' significantly changed the enforcement structure of the various anti-discrimination laws. Possibly the Act's most significant change is the addition of the right to demand a jury trial and the ability to receive damage aw ards. Plaintiffs proving intentional acts of discrimination may recover compensatory Legal prohibitions of discriminatory (e.g., pain, suffering, loss of enjoyment) and en ployment practices have been in effect for punitive damages in addition to the
tradmonal temedies of back pay and Public policy and tort law further reinstatement. Jurors, with a tendency of deteriorate the at-will relationship. Public l sympathizing with employees, consciously or pobey protects employees from termination
""""i""sl Y sh2ft the burden of proof to for exercising a legally protected nght such l Id3D1IDVCSiment employers. As a result, juries are as filing a workers' compensation claim or hkely to award damages to serving on a jury. Additionally, public policy employees if any unfairness or protects " whistle blowers" who refuse to employer misconduct, no matter break the law. A tort action usually follows i** how negligible, is perceived. from a wrongful act resulting in injury. In L .
Courts bas e further restricted the employment context, a tort liability e . - the at-will employment relationship often involves conduct by the employer that through the apphcation of contract leads to such claims as intentional infhetion m . ,m E.E , .,, ~ *e.,*i law. Exceptions to the at-wdl of emotional distress, defamation, invasion of i_a , relationship have been based on privacy and negligence. These claims often express or implied promises of job security result from theft investigations, public made in written and verba} communications Confrontations, searcbes, and drug of alcohol to employees Court decisions such as these testing. have necessitated the (lose scrutiny of every Given this legal framework and the . communication made to employees litigmus society in which we find ourselves. includmg recruitment materials, it has become increasingly necessary that l j employment applications, statements made human resources professionals focus on the in interviews, employment offer letters, legal ramifications of employment activities. ] Afa pmicera l'allev RliC policy manuals, employee handbooks and This trend is expected to continue as the crews tighten hanheare on CipCO's Badlw performance evaluations. What used to be AIDS epidemic progresses and issues such as . 34.5 IN Tap. y considered an employer's standard health care reform, family leave, and ! cmployee off the-job activities further define
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//? employee and employer rights.
yy . / //. / / All of these issues affect the i
.[/ / environment in which ClPCO's employees
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work, and efforts to comply comprise a 4'/pj
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major portion of day-to-day activities of the Human Resources I)epartment . i R !!, The physical environment of CIPCO's i
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// . headquarters building changed in 1992 with l
.. .i < s , ,g the completion of.an11,806 square foot l
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, c', addition and the remodeling of the existing i / ;
c - - , .. N structure. As services and responsibilities to
/ m r ,
q r the members have increased, so has the need
.,, e - for additional staff and equipment. These
- new and refurbished facihties are another 9 = step in (reating an environment allowing CIPCO to continue to serve its members
.c,..$ well.
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.~ . % 39, [,g, g g The board of directors and staff are communication may now be an expensive (ommitted to keeping CIPCO in a strong piece of evidente used against them in a financial position. Total assets as of wrongful dist harge suit. December 31,1992, were
h $2R8 mdhon with net utility plant standmg at $215 o mdlion members. Member equity stands at $3&O mdlion which represents 13% of total p lovestments of $10 5 mdlion were made assets. d m utihty plant, all of whith were finanted g y G gl with internally generated funds No long. },hnn,g u sawee term funds were expended in 1992. CIPCO c ontinues to expand its planning CIPCO must prepare for dismantling its prot ess to evaluate the wide range of nuticar fatihty, the Duane Arnold Energy emerging issues which will af fect business for Center (DAEC). in the future. A nudcar CIPCO and its members in the future. The i dec onunissioning fund has been established lowa legislature has adopted a requirement bilffgV b,315 for this purpose. Investments in this fund for integrated resource planning and for had a market ulue of $4.0 electric and gas utihties to file energy gg million at year end. Of this efficiency plans with the Iowa Utilities lloard i ; { amount,55 0 mdlion is held (lull _). An Integrated Resource Plan (IRP)is 1 e directly by CIPCO in U.S. the wmbming of resources to satisfy energy
=!
o Treasury bonds and $10 million requirements for the lowest cost to the by a trustee on behalf of CIPCO utihties and the consumers.
~
l in wnform;ty with the Nuclear An IRP is currently being developed so
. Regulatory Commissien (NRC) that CIPCO can provide its customers with
"~'1^, ~, g. . reymrements the most cost effective and efficient means Under a mutually beneficial for generating and transmitting energy. The
[m l l 'l pow er bill prepayment program, plan will consider supply-side options, member thstnbution systems had demand-side options, extemal factors, and advant ed prepayments of $2 9 mdhon to nsk. To date, a planning methodology has CIPCO as of Detember 31,1992. been defmed, a computer model of the Total long-term debt as of Det ember CIPCO and lowa Electric systems has been 31,1992, was $2014 milhon. This is a net estabbshed, and staff have been trained in deucase of $5 5 mdlion due primanly to pow er supply planning techniques. Several puntipal repayments during the year. issues facmg CIPCO has e been evaluated, CIPCO owes $1729 mdlion of this debt to and the direction for future study has been the REA and the Federal Financing I3ank identified. , (ITli). The IRP process will provide a I No short term debt was outstandmg at framework that will allow these planning year end under a $12 mdlion line of credit efforts to be integrated into CIPCO's routine
. with the National Rural Utilities business plans. A vision of the quantity and 0- peralllig b,Xpelbe Cooperative Emance Corporation (CFC). types of CIPCO's future power supply Megawatt-hour sales decreased requirements is provided so that CIPCO's slightly in 1992 from the previous resources can be focused on investigating o,, mmm s. .w.. m u,,3 n n.,m, s year by 2% Revenue from sales of only the types of generatin.; options likely to is mm , ,, n n elet tric pow er and energy was $80 meet its needs over the next 20 years.
nullion Revenue per kilowatt-hour Direction for further study has been 2^ to CIPCO's member systems identified to allow a more focused planning i,a ~ ,, m- averaged 51.5 mills. effort. CIPCO property tnes on Many factors affect future planning and
% osu m utihty property in 49 co mGes in are part of IRP. CIPCO has historically been m,.. ,..,osu m
. lowa inacased 19% to $5 2 a winter peaking system; however, in the last mdlion. few years its summer peak has equalled or Net margin of $2 6 mdhon in 1992 exceeded the winter peak. It is anticipated p,rg.y.7 9 reflects a wntinuing history of positise that this recent trend will continue into the f operating results for CIPCO and its future.
CIPCO's energy is met pruuanly with identify the approximate quantity and types nutlear and wal luch I air Statmn provides of supply-side resources that would be Peak Demand 1hmest te1auemi am aramty sim ,cquita Duane Arnold Energy Center. A wmputer program, LNPRO, Mw.ats m nousanJs u hile harmg the lowest energy simulates generation operations and power mst,is one of the most expensive requirements on an hour-by-hour basis. I k sourtes of power available to ENPRO readily provides estimates of future CIPCO due to its high fixed generation system performance. It provides llIllIllI~llp- capauty wst. The total cost of eath of CIPCO's umts wdl change mer the 20 year penod due to differmg fuel mst esalators and quak and accurate analysis of future plans, includmg thermal resources, demand-side alternatives, dynamic load management and fum sales / purchases. the need to make capital The IRP will support the needs of expenditures for hfe extension and CIPCO and its member systems in business modihcation of the older plants. and marketing planning, and will satisfy the Estimates of the wst of hfe extensmn ll!!rs energy efficiency mandates, REA work wdl be nude and integrated mto the resoun es plannmg requiiements, and IRP. A resicw of the impact of the Clean Air Western Area Power Admmistration's Att on CIPCO's esisting facihties also needs (WAPA) 1RP mandates. With the inclusion to be wmpleted and mmtporated into the of the IRP process in the planning cycle IRP. The total wst of a umt is important in CIPCO wdl be better prepared to make the planning and in power marketing dcasions detisions that are in the best interest of its even though dispatt hmg tonsiders only members in the future. energy wsts. l'nder forecasted wnditions, alhtional Marketing and Emnoniic Desclopnient t apacity w dl be required in the summer of CIPCO continues its efforts on behalf of 19% to serve the wmbmed the members in marketing. Because weather ClPCO/SlhlECA systems Additional affetts how our customers use elettriuty, the (apacity will not be required m the wmter hlarketing Department has expanded the 5,0UTCCS 00,.11ergV season untd 2003. temperature summary informatmn w hic h on , , Varying resourt e options are as ailable to appears monthly in CIPCO's marketing j M m .;sas CIPCO for meeting its futme needs These asu ity and operatine reports. Graphs I Ira criu oi= highlight daily temperature ranges from nalude. wounn1.m 1-
. Budh nm wneng faohties around the state and compare monthly I aa s me H :- . Partisipatme in iomtly owned generating results with the previous year and 30-year faahties nont.al temperature readmns. This enables
= increasing the capabdity of existing cooperatnes to inform their members of the generating facihties varying monthly and seasonal electncal use una iu n; . Purchasme from independent power patterns.
F produs ers New rebates now paid to customers for
. Punhasing from the power market installing energy efficient elettric space (short-or long-term) heating and conhng equipment blend well
- Implementing load management or with objectives of demand-side management.
interruptible wntras ts Rebates for wntrollable rate classes, 1
- Implementine Demand-Side premium quahty storage water heaters, ultra i Alanagement ( DShl) progr ams efhcient ground soone heat pumps and e Purchasma customer owned stand.by efhsient air wnditionmg offer CIPCO generation. eu ellent options for the I nnaar The study to clate has not attempted to future.
es aluate these options. Rather, the goal is to
The CIPCO Systems divided over CIPCO's Model Housing Program i y
$1,(K)O,(K)O in pow er bill credits in 1992. supports the promotion of all-electric L These credits w cre allocated according to homes. Twenty model homes were added to their participation in the controllable load the system in 1992. Eastem lowa Light and symmmmmmm Q programs For some member distribution systems this amounted to over 5"u of their Power Cooperative, Wilton; Midland Power Cooperative, Jefferson; Guthrie County annual power c ost. Rural Electric Cooperative Association, There are os er 10,000 controllable loads Guthrie Center; and Lenox Municipal, a
- on the CIPCO Systems. This program member of South lowa Municipal Electric encourancs consumers to sign agreements Cooperative Association (SIMECA) allowing for future load control. As CIPCO participated in the program in 1992.
ClpCO's 1992 entry in the annual Gocernor's Chanty nmves closer to a point at which aJequate Each model housing project fosters Steer Sh,nc icon the grand reserves become tight, these controllable improved awareness of the benefits of all-pnre and brought an loads provide additional options. electric hving by establishing relatmnships auctwn pnce of $RJC0 ichi< h seas dmated to tin, During 1992 ClPCO issued nearly among consumers, developers, builders, Ronald Mcdonald llouses $375,000 for marketing program rebates. realtors and contractors. It also creates a oflora. Shou n bebne uith Over half of this total represented electric positive image of energy efficient all-electric Ronald Mi Donald are Iowa Bee / nincess f(aren water heater incentives. Rate and appliance living in the minds of members and trade Marshch, Anca Beef Queen programs each accounted for ten percent of allies. Homes exhibit apphcation of state-of-Sarah Dooby, Celehnty the total. Ileat pumps gathered twenty-two the-art technology in environment, indoor Showman Senator Charles
- Grasshy and Chip Schult:, percent, and the balance was paid for energy air quahty, energy efficiency, and quality of l
rho rai3ed the steer. y efficient cooling equipment. h fe. The Technical Assistance Program supported contractors, cooperatives and homeowners in ground source heat pump (GSHP) design, layout, application, servicing 0$ and on site commercial installations. Several
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Jl contractor training workshops during 1992 4' educated installers in the GSHP technology.
-
- Y# CIPCO's Marketing Department supports cooperative efforts of computerized h
Q' - Q ! heat loss and heat gain evaluation for residential and commercial buildings. This
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assisted the members greatly in making F ! y ; g. . efficient electric heating and cooling Q~p f
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/ .j l I % 'E t The Iowa Area Development Group
- r. ik E ,5 ' ,. f (IADG) supports ongoing CIPCO staff Q + \t
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14 4 $ g' g s ' J , 'M " g-development efforts impacting the CIPCO
.. Systems. Under Jack Bailey's leadership a
IADG is responsible for 248 business start-The CIPCO marketing and economic ups and/or expansions since 1985. This development programs generated sales of represents a total capitalinvestment of $550 nearly 80,000,000 kWhs during the calendar million and more than 14,000 jobs in Iowa. year 1992. Sales contributed over
$1,000,000 net towards CIPCO's fixed CIECO t osts. Overall program benefits include During 1992 Central lowa Energy stabilized rates, increased load factor and Cooperative (ClECO), an affiliated improved member satisfaction cooperative, proceeded with the sale and
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f y -. NW ~ Afidu est hiold and Engineering supplies dies and molds for Pella Plastics, as urli as other ccnnpanies such as hiaytag and Oral B Company. Ilans Grob, President, came to Pella in i992 and staned his ccnnpany adjacent to Pella Plastics. Ile has six full. time and one pan-time employee, plus a great deal of high precision equipment necessary to produce intricate dies and molds. Kevin Roller, mold malcer, attends one of these high tech machines in the photo abotv. i
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y ( ; y . Pella Plastics uses Hans Gn>b's dies and molds to manufacture Cindy Blom, operatorfor Enduro, stamps and inspects plastic products. Don hiertha, Plant hianager, employs 42 crafts- plastic cylinders as part of thefmalprocess in an order men and paluces esvrything) rom insbees to the pill dispenser for advertising specialties Roger stall, President, held ly Shen!a Cunningham above. hiany of his products go just oversees the printmg, assembly and shipping of Jou n the street m Fella to Enduro, Inc., forfunher handhng. advertising specialties all over the country. s
salvage of 13.1 mdes of railroad right-of-way improved. Certain labor intensive tasks are in Greene and Guthrie Counties. George now automated. There is more on-line data Ohm, Manager of CIECO Operations at available which is now accessible to more Panora, worked with the County people than ever before. This new j h
.. n. mm Conservation Boards and the Commercial Metals Railroad Salvage Company of Dallas, environment in the Computer Department speeds up the availability of data to the Texas, to dear the rails. This is the first step member sptems and gives staff additional in converting the radroad right-of-way to time for other duties.
additional recreational trail in the Panora The Computer Department has area. standardized CIPCO s operating Beginning Arnl 1,1992 Lake Panorama environment on DOS 5.0. The convenient National, Inc. (LPN), a subsidiary of CIECO, man / machine interface supports a variety of acqu red operating responsibilities for the hardware platforms and improved hardware Conferent e Center, restaurant, lounge, and performance.1992 saw the wide scale Acmss the CIPCO yvstem assotiated motel and condo rental units at introduction of the "diskless" or palmtop are a iefde nmery of small Lake Panorama. On July 2 the bankruptcy computer. The palmtop indudes a fding bsu-inesses. One nonque example is a saiemill wurt ordered certain properties transferred system, communication capabilities, operated hy lohn Palmquitt, to CIECO, including the Conference Center appointment calendar, phone book, memo a member of Nyinan and driving range. The golf course operation pad, Lotus 123 and a business calculator. Electric Cooperatn e, Stanton. John and one pan. was assumed by LPN in 1991. The Engineering Department plans to run time emphryce cut, dry and diagnostics on relay equipment in the field 3 ell hanber for hohlyists Computer Systems vi,13c paimtop. and crafismen. filhng a need veerlooked by larger C.IPCO's computer operations are state- The dotking station is a new 3atemills. y of.the-art and are constantly being upgraded mmputational environment for CIPCO's
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traseling executis es. The heart of this system am J- ,
- + .# 4 is the notebook computer. This portable 41 ( 'g computer can be docked in a holding station which has a variety of peripheral j 3I attachments giving it the capability of a full
. e e site computer. This system reduces costs
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because it is no longer necessary for these h, ' S$ i employees to have two computers-one that N[
+ .f'. [ travels and one in the office. They are one in !
i[ 7 g e. - 5! the same. j\ E . The local area computer network was muQ % ,- ' expanded in 1992 to indude engineering and g' resource planning. This gives quick access to
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a large amount of data from each of our
'D substation metering points which is helpful is' - E. -
m completing a variety of studies. This arrangement also allows for the sharing of
-{~ some very desirable attachments, namely a
,,, . high speed laser printer and a high speed dot matrix printer.
to remain current. The migration from the CIPCO has entered the optical age with Hewlett Packard 1000 computer to a a compact disk (CD) installation on a personal computer-based system for mmputer in the Environmental and Safety translation of member system substation Department. By subscribing to a federal meters is one such upgrade. The monthly government service, this system provides a translation / billing process takes less time, " shelf full" of manuals from the and quality control of translation is Ouupational Safety & Health Act (OSHA)
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,e on a single CD. Staff un complete lengthy run during periods of high loads or in case of search proic(ts in a fraction of the time. emergent y.
- Also, with the system there is the assurance During 1992 the DAEC was refueled that all references are explored. for the eleventh time sim e it went into hj All of these ad litions to CIPCO's commer cial operation in 1974. The plant Egggg;lElgggglgg computer environment give users more time shutdown offered an opportunity to perform to accomphsh their goals and objec tives. testing, inspections, preventive maintenance, Efficiencies of time and riroject completions and correttive action items required at the enable CIPCO to provide better service to nudear facility. Five major and 19 minor its member systems. design c hange pac kages were also installed.
The ref ueling and associated projects are Generation and Operations xcry i,3or intensitc_i7oo wo,ters,1,o 30 Through ownership, puu hase, lease and hour shifts daily, six days a week for 59 days. interchange CIPCO has c reated an The refueling w as completed on schedule l environment of confident e in its ability to and under budget, marking the first time in supply sufficient generating capacity to meet the history of the plant that this was l the demand and energy needs of the CIPCO accomplished. Systems. Mamtaining a high level of reliabihty fiase load units indude the Duane and service is a priority of CIPCO. All Arnold Energy Center (DAEC). Council imprmements to the system assure these liluffs Unit No. 3, Fair Station Umt No. 2, goals are attained. Creating an environment and the WAPA hydro-electric allotment. for carrying out an aggressive maintenance and construction plan promises :ontinued good service to the members. During the first few months of 1992
% CIPCO concentrated on making repairs on parts of the transmission system that were affected by the severe ice storm on Halloween 1991. Extra efforts during patrols by maintenance crews were helpful in gys(gJ14 % determining the extent of the damage with
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[o'UyjiW,4' s emphasis on restoring the lines to a reliable operating status. CIPCO was able to work with the Disaster Services Division of the Federal Emergency Management Agency to obtain funds to help defray damage expense
, caused by this storm.
4
'V Several line construction projects were completed this past year. Through a joint project with Maquoketa Valley Rural Electric Cooperative, Anamosa; interstate Power Company, Dubuque; and CIPCO, three substations in the northeast area of the system were converted to 69 kV service. fly Intermediate units, Louisa Generating constructing approximately -1.94 miles of 69 Station and Fair Station Unit No.1, are more kV line to the Interstate system, CIPCO was costly to run and are backed down to able to retire approximately 24 miles of minimum output or taken off-line on older 34 5 kV line.
weekends and dunng times oflight loads. During 1992,44.70 miles of new line The peaking units at Summit I,ake and were completed and put into service as part I all diesel capacity owned by municipals are of the new-to-replace-old (NTRO) program.
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j 7 . i l Some of the most beautifid and energy ejficient homes in Iowa are served by the CIPCO Systems. ~ W. President of the Iowa Sorbean Assonation, Chfford Goecker, and his u ife, Virginia, have a n; - panoramic viewfrom the windows of their new log home near Clarinda. Chflord took 110,000 pounds oflogs and 3,200 pounds of synkes dumped ; on his lawn and built their home with the help of family and friends. The albelectric home is smred l'y Nyman Electric Cooperative.
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I l Several of these projects were carried over outage hours in 1992 are down from i I from 1991. This line replac ement program is previous years to 0.58 hours per consumer. an annual program with the goal of CIPCO experienced a smoky fire in the l improving the les el of reliabihty and service control house at the Murray Junction Q
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on the aging CIPCO system. However, two damaging storms in 1991 delayed the NTRO Substation in late August. The substation is located between Creston and Osceola in projects. southwest Iowa. The fire caused extensive
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CIPCO also has a NTRO program on oil damage to all the electrical equipment , circuit breakers. During 1992 one circuit includmg controls for three 69,000 volt l breaker was changed out by the Creston transmission hnes and microwave radio j transmission crew at the Murray Junction equipment for four radio links. Final repair Substation. In addition to the routine and replacement will be finished in early maintenance projects performed by the 1993. Creston and Wilton crews, they often assist in keeping with CIPCO's objective for in other projects across the system as service excellence and system reliability, needed. installation of" smart" relays continues. CIPCO is continuing to change its These relays sense short circuits on the magnetic tape metering system to electronic transmission lines and determine the To att.un ormphance with metering at the distnbution cooperative distance from the substation to the problem EPA orders reganling PCBs. metering points. Of a total of over 360 with considerable accuracy. Operators and contract crews below are meters on the system, to date 205 have been engineers can call the relay on the phone and retmb!!mg transfanners at the Dundee 7'ra'nunissmn converted. These installations are completed obtain the necessary information quickly and Suh3ratwn.y by the Wilton and Creston substation crews. without leaving the office. j I There are many rules and regulations
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f I [ regarding the environment that affect the operations of CIPCO. One such ruling under
,/ an Environmental Protection Agency Order
,/ is that the transmission system will be free of i
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PCBs by January 1,1995. CIPCO began a i program in 1985 to attain compliance and is l 1 in the final stages of completion. l- , p
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4" The Clean Air Act will affect CIPCO 3 a ,. - through its power plants and automobiles. No one has assessed the cost at this time, but 1.s w"' it will be a factor in the future. Every phase of CIPCO's business 1; environment is in a mode of change. We struggle with new legislation, the uncertain future of the REA, technological advances, long-range planning, future power supply, business development, diversification w_a . opportunities, and more All of these things During 1992 ClPCO worked with lowa do not spell "husiness-as-usual," but rather a Electric 1.ight and Power Company, Cedar directive to CIPCO's board of directors, Rapids, on a joint project to install motor- management and staff to meet the challenges operated sectionalizing switches. With the of change and create an environment for the installation of these switches, line sections future which will assure a secure financial can be opened and (losed remotely, position with positive results for the CIPCO therefore reducing outage time. Total system Systems and their members.
Peat Marwick Certified Public Accountants 2500 Ruan Center P.O. Box 772 Des Moines, IA 50303 The Board of Directors Central lowa Power Cooperative We have audited the accompanying balance sheet of Centrallowa Power Cooperative as of December 31,1992, and the related statements of revenue and expenses, mernbers' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Cooperative's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Central lowa Power Cooperative for the year ended December 31,1991, were audited by other auditors whose report, dated February 27,1992, expressed an unqualified opinion on those statements. We conducted our audit in accordance with generally accepted auditing standards. Those j standards require that we plan and perform the audit to obtain reasonable assurance about l whether the financial statements are free of material misstatement. An audit also includes l examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit includes assessing the accounting principles used and significant estimates made by management, as well as the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the 1992 financial statements referred to above present fairly, in all material respects, the financial position of Central lowa Power Cooperative as of December 31,1992, and the results ofits operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. February 26,1993 KPMG Pea sua l Memte Fum at Klynveld Peat MarwnA 00erdew
( ;3a ance Sleets December 31,1992 and 1991 V w ..s, . :.. v.s 1992 1991 Assets Ein tric utility plani, at cost (noies 2 and 7) : 1 (Le 4) In service $ 313,043,924 302,603,469 1 Less accumulated depreciation 116,254,751 107,869,491 ; 196,789,173 194,733,978 Construction work in progress 4,680,598 5,668,373 Nuclear fuel, at cost less accumulated amortization of S 40,675,447 in 1992 and
$37,302,278 in 1991 13,482,134 16,320,005 i Net electric utility plant ?l4,951,905 216,722,356 l Im estments:
Invest,ents in associated organizations 9,164,785 9,171,834 Marketab 2 securities-Jecommissioning fund 7,886,949 7,237,474 Other investn. ants (note 8) 8,080,789 6,733,074 Total investr.'ents 25,132,523 23,142,382 Current assets: Cash and cash equiva:ents: Cash, general 740,707 774,521 ; Cash, construction 72,607 72,607 , Temporary investments 1,623,987 4,576,955 ) Accounts receivable, members 7,621,611 6,953,879 l Other receivables 99,529 286,325 Fossil fuel, materials and supplies 5,417,958 5,191,880 Prepaid expenses 481,391 957,606 Interest receivable 56,924 60,741 1 Deferred charges 2,394,095 1,025,670 l Total current assets 18,508,809 19,900,184 Deferred (harges 5,197,969 3.986,348
$ 263,791,206 263,751,270 Capitalization and Capitanzation:
Liabilities Members' equity: Membership fees $ 1,700 1,700 Patronage capital 14,724,266 12,724,266 Other equities (note 3) 21,300,381 20,692,363 Total members' equity 36,026,347 33,418,329 Lone-term debt, less current maturities (note 4) 198,631,029 204,381.424 Total capitalization 234,657,376 237,799.753 Current liabilities. j Current maturities oflong-term debt (note 4) 5,793,248 5,580,791 1 Accounts payable 3,974,251 3,146,263 i Accrued property taxes 5,106,848 4,937,427 Other accrued expenses 204,383 423,134 Advances from members 2,947,064 4,514,032 Special assessment 118,330 - Total current liabilities 18,144,124 18,601.647_ Other liabilities: Decommissioning reserves 8,554,640 7,349,870 Spenal assessment 2,435,066 - Commitments and contingent liabilities (note 8)
$ 263,791,206 263,751,270 See Accompanying Notes to FinancialStatements.
l 1
Statementilevenueanc haenses Years Ended December 31,1992 and 1991 1992 1991 Operating revenue: Electric energy sales 5 80,002,781 79,485,447 Rent of electric propeny 743,442 S64,108 h1iscellaneous electric revenue 435,100 433,468 Total operating revenue 81,181,323 80.783,023 Operating expenses: Purchased power 6,238,944 5,093,377 Operations: Production plant - fuel 13,682,452 14,771,567 Production plant - other 13,808,609 12,618,583 Transmission plant 1,556,802 1,530,649 Maintenance: Production plant 5,505,267 6,127,536 i Transmission plant 1,229,561 2,111,910 Administrative and general 6,976,305 6,775,318 i Depreciation and amortization 9,954,526 9,398,207 I Decommissioning provision 1,204,770 1,069,870 ) Property and other taxes 5,464,034 5,211,472 l Total operating expenses 65,621,270 64,708,489 l Net operating margin 15,560,053 16,074,534 Other revenue: Interest income 1,323,459 1,328,045 Patronage capital allocations 145,008 178,299 Miscellaneous income - principally from affiliated cooperative 711,015 583,662 Total other revenue 2,179,482 2,090,006 Net margin before interest charges 17,739,535 18,164,540 Interest charges: Interest on long-term debt 15,488,268 15,971,183 Allowance for borrowed funds used ; during construction (356,751) (517,691) Net interest charges 15,131,517 15,453,492 Net margin S 2,608,018 2,711,048 See Accompanying Notes to FinancialStatements.
Statements ol, em3ers auity C$J Years Ended December 31,1992 and 1991 l U ml
.,<..,....,.e Membership Patronage Other members' fees capital equities equity i
Balance at December 31,1990 $ 1,700 11,224,266 19,481,315 30,707,281 Net margin - - 2,711,048 2,711,048 Patronage capital allocateJ - 1,500,000 (1,500,000) - Balance at December 31,1991 1,700 12,724,266 20,692,363 33,418,329 Net margin - - 2,608,018 2,608,018 Patronage capital allocated - 2,000,000 (2,000,000) - Balance at Dec ember 31,1992 $ 1,700 14,724,266 21,300,381 36,026,347 See Accompanying Notes to Financial Statements, l l l l ! l l
,, i Statements o!CasF ows Years Ended December 31,1992 and 1991 1992 1991 Cash flows from operating activities:
Net margin $ 2,608,018 2,711,048 Adjustments to reconcile net margin to net cash provided by operating activities: Depreciation and amortization of electric utility plant 9,454,963 8,899,008 Amortization of deferred charges 3,735,116 4,960,993 Amortization of nuclear fuel 3,373,169 4,342,589 Decommissioning provision 1,264,770 1,069,870 Patronage capital allocations not received in cash (145,008) (178,299) Amortization ofinvestment premium 15,840 15,840 l Changes in assets and liabilities: l Incicase in receivables (1,828,651) (590,660) l (Increase) decrease in fossil fuel, materials and supplies (226,078) 386,343 l Decrease (increase)in prepayments and interest receivable 480,032 (7,323) l Refueling outage and other costs deferred (G,315,162) - Increase in accounts payable and accrued liabilities 778,658 32,553 Increase in spec;al assessment 2,553,396 - Net cash provided by operating activities 15.689,063 21,641,962 Cash flows from investing activities: i Additions to electnc utility plant, net (10,522,383) (11,088,449) l Purchases of nuclear fuel (535'!98) (3,271,688) Increase in decommissioning fund ( X 315) (622,000) Purchase of other investments - (1,650,000) Receipt of prior years' patronage capital allocation 152,057 242,630 Net cash used in investing activities (11.570,939) (16,389,507) Cash flows from financing activities: (Decrease) increase in advances from members (1,566,968) 2,354,032 Principal payments on long-term debt (5,537,938) (5,254,389) Proceeds from long-term I orrowings - 749,000 Net cash used in financing activities (7,104,906) (2,151,357) ! Net (decreaw) increase in cash and cash equivalents (2,986,782) 3,101,098 Cash and cash equivalents at beginning of year 5,424,083 2,322,985 Cash and cash equivalents at end of year $ 2,437,301 5,424,083 Supplemental disdosure of cash flow information: Cash payments fer interest (net of allowance for honowed funds used during construction) $ 15,137,598 15,452,704
)
l See Accompanying Notes to FinancialStatements.
np . . L i I0tes to 41nancia Statements {Y December 31,1992 and 1991 VE Note 1 (a) iiasi or Au eun1;ng Smnwy W Sia un The aaountmg records of Central lowa Power Cooperative (the Cooperative) are main +ained in accordance with the Uniform System of Accounts prest nbed by the Rural a cmr q E 6 a A Mnhmm WW Tlw CM* n an cIm pmtim md transmission cooperative providing wholesale electric service to its 16 members. The Cooperative is not subject to external rate regulation other than by the REA. Distnbution of maigms of the Cooperative is made in accordance with the provisions of the Code of lowa. (b) Electric l'tility Plant Depreciation of electric utility plant in service is provided over the estimated usefullives of the respective assets on the straight-hne basis. The Cooperatn e is recovenng its portion of the present value of the estimated future costs to decommissmn the Duane Arnold Energy Center (DAEC) over the remaining hfe of the DAEC using the sinking fund method. The estimated costs of demmmissioning DAEC, which is proiccted to begin in 2010, is based on studies performed in 19R5 and 1989. Ilased on the most retent study, the Cooperative estimates that its portion of the costs to decommission DAEC wdl be approximately 559.000,000. Maintenance and repair of property and replacements and renewals ofitems determined to be less than units of property are < harged to expense. Replacements and renewals ofitems (onsidered to be units of property are (harged to the property accounts. At the time properties are disposed of, the onginal cost. plus cost of removal less salvage of sush propeny, is charged to aaumulated depretiation. (c) Allowame for i unds tJsed During Construction The allowant e for funds used durmg construction represents the estimated cost, dunng the penod of construction, of borrowed fundr used for construction purposes. The composite rates used to cakulate the allowance for 1992 and 1991 approximated 5.7 percent and 7.2 percent, respectively (d) Nmlear i uel The cost of nusicar fuel, includmg capitah7ed interest and taxes, is being amortized to fuel expense on the basis of the number of units of thermal energy produced in relationship to the total thermal uruts expectcJ to be produced over the hfe of the fuel. Nudear fuel expense indudes a pmvision for estimated spent nuclear fuel disposal cost which is being wilected l t unently from members. (c) I ossil Fuel, Materials and Supplies Iossil fuel, materials and supplies are stated at moving at erage cost. (f) Investments Investments in assotiated organizations consist pnmarily of approximately $5,100,000 in capital term (crtificates issued by National Rural Utihties Cooperative Financ e Corporation (CI C) and mernberships in other cooperatives. The investments are stated at wst and adjusted for patronage capital allocations. Marketable set unties and temporary investments wnsist of U.S. Government securities, money market funds and CFC commercial paper and are stated at cost. , Other investments consist pnmanly of investments in and advances to affihated i organizations in whkh the Cooperative owns 20 to 50 percent of the voting shares and are ac countcJ for on the equity method. (g) Pension Plan The Cooperative's pohcy is to fund pension costs accrued. (h) Deferred Charges Deferred charges wnsist prinopally of cancelled pmiett wsts, a one time fee for spent nudear fud used to generate electricity prior to April,1983, and a special assessment estabbshed bv the Energy Policy Act of 1992 for decontamination and demmmissioning of the Department of Energy enrichment faolities. These costs are being recovered through rates over vanous E l
/.
Note I amortization periods as follows: cancelled proicct c >sts.10 years ending in 1995; the one time Sum: arm Sgmficant fee for spent nudear fuel,13 years ending in 1998; and the special assessment,15 years ending in A5;mtid Ibhdn 2007 The amount of these costs to be amonized in 1993 has been reflected as a current asset in the balance sheet. (catunnal) (i) Cash Equivalents Cash equivalents of $1,623,987 and $4,576,955 at December 31,1992 and 1991, respectively, consist of CFC commercial paper. For purposes of the statement of cash flows, the Cooperative considers all highly liquid investmcnts with original maturities of three months or less to be cash equivalents. (j) Fair Value of Financial Instruments Statement of Financial Accounting Standards No.107 (SFAS No.107), " Disclosures about Fair Value of Fmancial Instruments," requires that the Cooperative disclose estimated fair values for its financial instruments. Fair value estimates, methods, and assumptions are set forth below. Cash and Cash Equivalents, Auounts and Other Receivables, Interest Receivable, Auounts Payable and Advames from Members The carrying amount approximates fair value because of the short-term nature of these instruments. Investments 11 was not pradicable to estimate the fair value ofinvestments in associated organizations. The investments are carried at their original cost adjusted for patronage capital allocations. The untraded capital term (ertificates currently bear interest at 3% - 5% and primarily mature in 2020 through 2080. The patronage capital allocations are non interest. bearing and mature based upon the granting cooperatives' policies. The fair value of marketab!c securities-decommissioning fund is based on quoted market prices published in financial newspapers or quotations recened from securities dealers. At December 31,1992, the estimated market value of marketable securities-decommissioning fund was $9,000,000. Long Term Debt The fair value oflong-term debt is calculated by discounting scheduled cash flows through maturity using estimated market discount rates. The discount rate is estimated using the rates currently offered for long-term debt of sunilar remaining maturities. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the fmancial instrument. Because no market custs for a portion of the Cooperative's fmancial instruments, fair value estimates are based on judgments regardmg current economic conchtions, risk characteristics of various fmancial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. k) Redassifications Certain 1991 amounts have been redassified to conform to the 1992 presentation. N0le2 The maior dasses of electric utility plant in service at December 31,1992 and 1991 and E!Mric Unlar lin:t dermaation and amortization for 1992 and 1991 are as follows: cost at Depreciation and Composite vISenu amoitization 1)ecember 31 rates 1992 1991 1992 1991 percentane intangible plant $ 281,647 279,487 7,721 5,656 4.00 Production plant 224,159,881 217,921,525 6,970,453 6,658,589 3.10 Transmission plant 81,584,063 78,518,844 2,051,302 1,870,280 2.75 Distribution plant 454,256 454,256 12,914 12,914 2.75 General plant 6,564,077 5,429,357 412,573 351,569 3.00-16.00 Electric utihty plant in service $ 313.043,924 302.603,469 9.454,963 8,899,008 l l _ _ . _ _ _ _ _ _ _ - __ ___-____- ________-_-__---____ __________________ - ____ ____ .__ ___ _-_ _ U
n . lotes to ,1nanaa Statements Y December 31,1992 and 1991 Note 3 At December 31,1992. and 1991, other equities consist of the following: December 31, Oser Equities 1992 1991 Unallocated margm 5 2,608,018 2,711,048 Reserve for contingent losses 12,727,630 12,727,630 Surplus 5,964,733 5,253,685 5 21,300,381 20,692.363 The reserve for contingent losses is a discretionary reserve established by the Cooperative for unevpetted future losses. Note 4 long-term debt consists of the following: December 31, lu g lerm Dcht 1992 1991 REA,2% and 5% mortgage notes payable, due in quarterly installments approximating $1,327,000, includmg interest, maturing through June 2019 $ 61,173,647 63,904,391 Federal Finanang Bank (ITB), 7.319% - 14.043% mortgage notes payable, guaranteed by the REA, due m quarterly installments approximating $3,023,000, including interest, maturmg from December 2010 through 2021 111,756,109 113,165,218 CFC, 7% and 8% mortgage notes payable, due in quarterly installments approximating $297,000, including interest, maturing horn Detember 2006 through December 2015 10,784,529 11,195,282 CFC, variable interest rate (4.87 5% at December 31,1992) notes payable, due in quarterly installments appmximating
$205,000, including interest, maturing on March 31,2020 8,634,954 8,709,715 Cooperative members, 7% unsecured notes payable, due in quarterly installments approximating $56,000, includmg mterest, maturing on December 31,2008 1,907,975 1,995,350 City of Counal Bluffs, Iowa 5.5% - 6.125% Pollutic n Control Revenue Bonds guaranteed by CFC, due in semi-annual installments ranging from $75,000 to $165,000, maturing on December 1,2007 3,390,000 3,530,000 louisa County, Iowa 9.6% - 10.625% Pollution Control Revenue Bonds guaranteed by CFC, due in annual mstallments ranging from $170,000 to $415,000, maturing on December 15,2003 3,110,000 3,265,000 Eastern Iowa Light and Power Cooperative,3% - 7% capital lease obligations due in quarterly installments appmximating
$ 170,000 through 1993, S 109,000 through 1998, and S50.000 thereafter thmuch 2013 3,667,063 4,197,259 Totallong-term debt 204,424,277 209,962,215 Less current maturities 5,793.248 5,580,791 Total long-term debt, excludine current maturities 5 198,631,029 204,381,424 The aggregate maturities oflong-term debt for each of the five years subsequent to December 31,1992 are as follows: 1993, $5,793,248; 1994, $5,977,504; ~1995, $6,252,368; 1996, $6,628,234; and 1997, $7,031,278.
As of December 31,1992, the Cooperative had $12,000,000 of unadvanced funds available under a short-term line of credit agrerment with CFC whith expires in November,1993. All assets of the Cooperative are pledged to secure the long-term debt to REA, FFB and CFC. At December 31,1992, the Cooperative estimated the fair value of its long-term debt (as destribed in Note 1) as $219,000,000.
Note 5 The Coor(rain e partionates in a multi-employer pension plan which cmers substantially all emphiyeet The accumulated benefits and net assets of the plan are not determined or allocated N m fl.m separately by individual employer. Pension expense for the years ended December 31,1992 and 1991 amounted to $298,0(K) and $276,000, respectis ely. Note 6 The Cooperative is a nonprofit (orporation under the laws ofIowa and is exempt from federal lume Ten Suru, and state income taxes under applicable tax laws. Note J' The Cooperatn c's share of pintly owned generating fanhties as of December 31,1992, is 1.>mily Oml flatnc raetted in the following table. These facdities provide appmximately 50% of the Cooperative's ('g_" pj'y'",, total generating capacity. The Looperative is required to provide financmg for its share of the umts. The Cooperative's share of expenses a,sociated with these units is induded with the appropriate operating expenses in the statements of revenue and expenses. Pen entage Capacity Electric Unit Ownenhip MW Utility Plant, Net Duane Arnold Energy Center 20 0% 108 $S3,554,045 Councd Bluffs Unit #3 11.5 78 24,606,640 1.ouisa Generatmg Station 4.6 30 22,139,537 Note 8 The Cooperative has entered into an agreement to guarantee all costs associated with the payable to the Cl C for loans made to an afbliated cooperative. As of December 31,1992, the affiliated l "mmumnue al (ooperative had outstanding loans of approximately $3,986,000 ($3,847 000 long-term. (h:ngaa fin ( , ta
$139,000 short-term) which are secured by real estate of the affdiated cooperative. Summarized anaudited fmancial information of the affiliated cooperative as of and for the year ended December 31,1992, is as follows:
Finam ial Pmition Resuhs of Operatiom Current assets $ 242,474 Operating revenue $ 2,489,350 Noncurrent assets 9,569,233 Operating (expenses) (2,287,542) Other income
$ 4 811'707 --
(expenses), net (468,308) Cunent liabdities $ 267,105 Noncurrent habdities 7,788,816 Net (loss) $ (266.500) Members' equity 1,755.786
$ 9,811,707 The Cooperatise is c ommitted under a subscription agreement with an afbliated senture capital corporation to purchase the remaining one half of their subscnbed preferred shares at a price of
$1,650.000 on a dosing date that wdl otcur by December 31,1993.
The Cooperative has entered into a coal supply contract that requires the annual purchase of 85,000 tons of coal (at $24 per ton) through 1995. The Cooperative's operations and activities with respect to its coal-fired facilities are subject to developing environmentallegislation and regulations by Federal and State authonties. Recent amendments to the Federal Clean Air Act require utihties, indudmg the Cooperatis e, to comply with more restnctive emissions standards commencing in l995. The Cooperative will recover any inacased costs resulting from comphance with the environmental legislation through int reased rates. The Pnte-AnJerson Amendments Act of 1988 (1988 Act) provides DAEC with the benefit of $7.4 bdhon of public liability cm crage consistmg of $200 mdlion ofinsurance and $7.2 bdlion of potential retroactive assessments from the owners of nuclear power plants. Under the 1988 Act, DAEC could be assessed a maximum of $63 milhon per nudear incident, with a maximum of $10 milhon per year (of which the Cooperative's 20% ownerslup portion would be $12.6 milhon and $2 milhon, respectively), if losses relating to the accidents exceeded $200 million. Pursuant to prousions in s arious nudcar insurance policies, DAEC could be assessed retroactive premiums m tennection with a future acadent at a nudear facihty owned by a utility participating in the particular insurance plan With respect to excess property damage and replacement power coverages, DAEC could be assessed a maximum of $4.5 nulhon and $ 1.0 milhon, respect vely, if the insurer's losses relatma to an accident extceded its reserves.
I I 7h r, . . ei1 Year iilaixia Summary l 1 O ! (Unaudited) 1 V 1992 1991 1990 , 1 SDNARY OF OPERATIONS Operating revenue S 81,181,323 80,783,023 76,062,827 ' Operating expenses and interest: Purchased power 6,238,944 5.093,377 6,994,000 i Operations and maintenance 35,782,691 37,160,245 32,720,503 Administrative and general 6,976,305 6,775,318 5,758,753 Depreciation and amortizzion 9,954,526 9,398,207 10,788,846 Dec ommissioning provision 1,204,770 1,069,870 1,725,699 : Property and other taxes 5,464,034 5,211,472 4,971,856 Net interest charges 15,131,517 15,453,492 15,237,629 i Total operating expenses and interest 80,752,787 80,161,981 78,197,286 Operating margin (loss) 428,536 621,042 (2,134,459) j Other revenue 2,179,482 2,090,006 4,098,528 Net margin $ 2,608,018 2,711.048 1,964,069 l l ASSETS Electric ut:lity plant S 371,882,103 361,894,125 348,703,621 I ess accumulated depreciation and amortization 156.930,198 145,171,769 133,099,805 Net electric utihty plant 214,951,905 216,722,356 215,603,816 Investments 25,132,523 23,142,382 18,448,543 Current assets 18,508,809 19,900,184 23,024,779 Deferred charges 5,197,969 3,986,348 5,012,018 Total assets $ 263,791,206 263,751,270 262.089,156 l I CAPITALIZATION AND LIAlilLITIES hiembers' equity $ 36,026,347 33,418,329 30,707,281 l one-term debt 198,631,029 204,381,424 209,197,377 Spent nuclear fuel disposal hability - - - Current liabihties 18,144,124 18,601,647 15,904,498 Decommissionmg resen es 8,554,640 7,349,870 6,280,000 Special assessment 2,435,066 - - Total capitalization and liabihties $ 263,791,206 263,751,270 262,089,156 l l 1 1 ,' 7 :,
C r. 1989 1988 1987 1986 1985 1984 1983 74,003,293 73,190,171 68,805,228 67,660,629 71,132,939 64,242,148 58,643,815 4,596,355 3,549,839 4,511,217 3,228,972 10,651,421 9.310,487 5,354,110 33,383,176 34,725,741 31,144,655 29,793,316 27,569,688 26,630.591 30,392,265 5,140,751 4,357,809 3,787,341 3,231,141 3,073,865 2,592,445 2,602,144 9,400,390 9,377,277 8,910,470 8,546,967 7,253,123 7,698,875 6,484,118 1,001,790 1,028,832 929,960 838,831 754,887 - - 4,710,889 4,364,878 4,243,785 4,222,102 3,994,490 4,206,417 3,815,460 15,283,640 14,830,577 15,323,888 15,769,131 14,500,285 13,496,8 % 9,873,776 73,516,991 72,234,953 68,851,316 65,630,460 67,797,759 63,935,690 58,521,873 486,302 955,218 (46,088) 2,030,169 3,335,180 306,458 121,942 2,093,041 1,744,943 1,713,438 1,726,608 1,034,308 809,938 534,427 2,579,343 2,700,161 1,667,350 3,756,777 4,369,488 1,116,396 656,369 351,945,766 339,859,546 315,296,237 305,693,465 295,189,519 293,659,876 280,635,043 137,980,323 127,792,910 117,308,959 107,009,719 96,551,822 87,457,382 77,433,944 213,965,443 212,066,636 197,987,278 198,683,746 198,637,697 206,202,494 203,201,099 16,234,231 16,301,544 14,016,197 11,290,315 9,341,109 9,290,756 8,730,5S5 22,686,762 19,708,998 29,492,565 29,299,708 25,142,825 15,022,757 17,319,460 7,537,685 9,343,599 10,335,627 11,591,849 12,522,126 6,835,981 7,978,297 260,424,121 257,420,777 251,831,667 250,865,618 245,643,757 237,351,988 237,229,441 28,743,212 26,163,869 23,495,994 21,828,644 18,071,867 13,702,379 13,126,587 213,767,922 212,957,991 213,794,778 215,331,259 213,309,618 202,731,539 203,720,613 4,735,981 4,735,981 13,358,686 14,746,407 12,017,216 12,111,996 13,507,385 16,182,089 15,646,260 4,554,301 3,552,510 2,523,679 1,593,719 754,887 - - 260,424,121 257,420,777 251,831,667 250,865,618 245,643,757 237,351,988 237,229,441
i fP kem)er C00 )erative 03erating Statistics ([naudHed) l
! Adams llenton lluthanan Clarke Eastern l Vq
SUMMARY
OF OPERATIONS l Emm2 Emm2 Operating Res enue $ 2.324.837 4,446,998 6,026,927 5,139,330 24,749,769 ! Purchased Power 1,287,813 2,977,557 3,967,459 2,677,758 16,107,985 l Operatmg Expenses 497,417 813,613 982,781 1,356,312 3,755,144 i Depreciation 172,295 189,147 301,206 394,045 1,496,040 i Tax Expense 56,859 90,161 124,806 177,067 481,482 Interest Expense 178,175 250,906 450,228 393,734 1,268,171 Total Cost - Electric Service 2,192,559 4,321.384 5,826,4S0 4,998,916 23,108,822 i Operatmg Margms 132,278 125,614 200,447 140,414 1,640,947 Non-operating Margms
)
J
& Capital Credits 78,933 122,369 216.904 133,01 R 988,399 )
Patronage Capital or Margins $ 211,211 247,983 417,351 273,432 2,629,346 l l System Managers ASSETS AND OTHER DEBITS Total Utihty Plant $ 5,944,593 8,713,082 12,289,234 14,549,656 51,683,721 s ~; Accumulated Depreciation
# 1,796,370 2.290,533 3,059,181 4,792,244 14,006,220
& Amortization 1
. ott Utihty Plant 4.148,223 6 422,549 9,230.053 9.757,412 37,677,501 4
~
Property & Investments 916,138 1,362,828 1,604,155 1,311,335 9,462,650 I Current & Accrued Assets 619,452 534,391 2,025,614 1,689,199 10,654,408 l
* '.- Deferred Debits 14.854 360,300 20.277 46,622 197,705 i
. . q Total Assets S 5.698,667 8,680,068 12,880,099 12,804,568 57,992,264 Kenneth Stone Manin Gardner LIABILITIES AND OTHER CREDITS Co ; I tnc Ile ikp ive Matgins & Equities $ 1,927,902 4,158,408 4,993,717 3,828,414 25,480,266 Cu af Nvman Assotianon and Long Term Debt 3,528,038 4,103,041 7,533,446 8,305,347 29,689,833 l'lettnc Cooperaute Bu< hanan Cotmty Current & Accrued Liabihties 239.081 406,551 330,161 621,023 2,683,626 )
Rural Electn< Deferred Credits & Cooperat ve Misc. Oper. Reserves 3,646 12.068 22,775 49,784 138,539 Total Liabihties $ 5,698,667 8,680,068 12,880,099 12,804,568 57,992,264 l OTIIER STATISTICS L.
. ". 1 hhles of tine 790 943 1,219 1,738 4,408 Consumers Served 1,716 3,422 3,475 4,205 19,515
~
- Li . ~ .
Consumers Per Mile 2.2 3.6 2.9 2.4 4.4 l .. S .. kWhs sold per consumer 13,893 15,743 21,271 11,266 15,018 7 MWh Sales 23,841 53,874 73,915 47,375 293,068 Annual Revenue per Consumer 1,355 1,300 1,734 1,222 1,268 Tom Idliebrew Melvin Nic holas Plant Investment per Consumer 3,464 2,546 3,536 3,460 2,648 l Clarke Electnc Eastern Imva laght j Cm perain e, Ine and Power
- This data represents the combined service terntones of Greene County Rural Electric Cooperative and .
Cmperatn e liardm County Rural Electric Cooperative
)
l
.1 John Wietzke Frank Mains Kim Colberg Dorothy Postel Dan Ilohlke !
Farmers Llectrk Guthne County Rural Lmn County Rural Maquoketa Wl ley Marshall County Rural Cmpera n e,1nt . Elettnc Cooperative Electnc Co<peratne Rural Electnc Electric Cocperauve Associauon Cooperat ve
o a r. 1: armers Guthrie I inn Ataquoketa N1arshall SliJland' Nyman Pella 1(ideta T.1. P, Total 7.429,229 5.145.5"1 13.005,139 15.707,520 5,458,678 12.894,257 1,894,627 2,891,685 3,017,384 7,474,074 117,606.045 4,818,070 2.891,4x2 x.s l l ,153 I I ,K4 8,595 3.514.788 8,195.684 1,052.689 1,846,850 1,621,107 4,707,826 76,329,816 1,041,644 1,148,710 2,413,835 2,235,358 1,054.344 2,070,239 520.921 567,910 650,079 1,550,474 20,667,829 454,722 305.418 550,177 600.605 30S,112 SK3.130 104.007 135,298 240,065 356,705 6,620,872 151,522 122,600 250,434 296,437 116,006 275,607 49,761 61,$03 84,387 148,313 2,517,461 495,711 350.9n0 N6,199 b27.309 306.667 1,026.478 120,153 129,972 263,919 375.352 7,033,934 6.961,709 4,814.266 12,881.501 15.W 9,304 5.299.482 12,454,19s 1,847,531 2,741,833 2,869,457 7,147.670 113.169,912 467,520 326,325 123,338 9,216 15S,646 440.059 47.096 149,$52 147,927 326,404 4,436,133 141,304 203.5~8 294.164 60I,184 196,351 3m.574 50.000 113.928 74.513 226,312 3,755,601 608,S24 529.403 422,506 610,400 355,047 749.633 97,162 263,780 222,440 552,716 8,191,734 15.345,906 11,318.701 24,135,552 25,842,651 10,452,704 30,552,615 3,468,920 5,300.074 S,561,623 14,082,831 243,092,018 4.269.105 4.243.834 5.707,021 9,522.546 3,768.023 8,381,561 1,339,772 1,978,789 2,531,245 4,024,896 71,772,240 11.076,801 7,074,927 18.367,631 16.370.135 R68 4.741 22.171.054 2,629,148 3,321,290 6,330,378 10,057,935 171,319,778 ! 1,824,756 1,253,357 3,005.130 4,369.645 1.413,317 3,359,059 516.244 1,335,982 768,073 1,862,997 34,455,702 1,708,148 3,511,'99 2,776,943 4,834,749 1,954,376 2,790.542 474,038 847,454 640.622 3,075 997 38,167,772 (51.459) 40,383 274,404 52,263 35.274 95,927 28.923 16,975 34,522 27,747 1,149,717 14.55 i 276 I I ,910,4 b6 24,459,164 25,626,'92 10,117,708 28.416,5S2 3,648.353 5,521,701 7,773,595 15,024,666 245,142,969 l 5,440,333 4,541,371 ,567,815 14,643,768 4,327,801 10,628,S05 1,217,625 2,571,291 2,250,616 7,128,590 100,706,782 7,890,596 R831,525 15,437,297 10,128,512 5,242,069 15,136,461 2,047,012 2,673,390 5,034,506 7,046,113 130,667,186 1,213,757 '3R44 8 1,356,933 V 776 545,671 2,631,145 352,284 265.503 437,673 790.830 13,208,962 13,590 622 127.11 u S6,736 2,107 20.171 1,432 11,517 50,800 19,133 560,039 14,558,27h I I ,910,4 n6 24,454,164 2 5,626,~ 92 10.117,70S 28,416,582 3,648.353 5,521,701 7,773,595 15,024,666 245,142,969 1,744 1,385 1,065 2.975 1,063 2.790 592 553 1,247 1,722 24,869 4.672 4 441 11,142 11,447 3.941 8,073 1,431 1,995 2.610 5,366 87,453 2.7 32 6.7 38 3.7 2.9 2.4 34 2.1 3.1 3.5 20,732 12,145 13,450 17,453 15,947 19,470 13,708 16,525 llh44 16,053 15,871 90,8 4 53,961 150,190 205,510 62,846 157,155 19,702 32,968 30,521 86,143 1,387,957 1,500 1,158 1,167 1,372 1,355 1,597 1,324 1,449 1,156 1,393 1,345 3,285 2,548 2,166 2,262 2.652 3,785 2,774 2,657 3,395 2,624 2,780 Don Seserson John Smith Mk hael Greene Dave Ferris Darrel Hectland
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