ML20045H707
| ML20045H707 | |
| Person / Time | |
|---|---|
| Site: | Grand Gulf  |
| Issue date: | 12/31/1992 |
| From: | Mckamy W, Thomas H SOUTH MISSISSIPPI ELECTRIC POWER ASSOCIATION |
| To: | |
| Shared Package | |
| ML20045H705 | List: |
| References | |
| NUDOCS 9307210160 | |
| Download: ML20045H707 (110) | |
Text
ollill Mississippi Electric Power Association S
1992 Anntial Report 9307210160 930713 PDR ADOCK 05000416
[
1 PDR i:
Outl1 Mississippi
- Electric Power Association o
r-1992 Annual Report 4
.3 g
n ud 9307210160 930713 PDR ADOCK 05000416 I
Contents 2
Executive Alessage e
4 Board of Dimctors e
7 About SMEPA Alember Cooperatives,3f ap South Niississippi l'lectric Power Association (SMEPA)is a rural electric generation and transmission cooperative (GMTL SMEPA serves as an economical power source for eleven member-owner distribution cooperatis es which provide electricity to more than 2R1,000 Mississippians.
Through committed leadership and committed employees, SMEPA is able, year after year, to fulfill this mission.
4 1992 Operating Report x.
w
> -:t g;N Rp
^f T!
lM :
- 9 yfi[r q:
, <g^
- yp 7/ IMP 20
'1992 Financial Report
- o.
30 r 2pj
+
W
+; J, m.t
%kp e
+
x nn P
(
fi@ !4y
-g g4 biw ~%gje n
- '0').
y :..
7 e~s
. SR pyh?
n.
x v kb(N Yb -
h,'( [
C, -k%n[jf E;;f;E..
'?
"'w#
B
-e w'y.,.:
\\,
@(%*
- f f &; _ '
Message o
h $:. f mee r
Wi
,3. ). $iq 7-m.
p 73.
$b b"
)
a..
Au-A
' 5 k%.
eliable and responsible employees,
, "%{
working together for common goals, allowed South Mississippi Electric Power Association to j
g.
continue its comnutment to stability in rates and t
j
.yw -
n
{. g_,.
l$2 sh growth during 1992. Milestones were teached l
'" ^ -
7[
individually and by department.s with positive
+
and professional resuhs i
i se i-SMEPA achieved rate decreases for the fifth consecutive year while meeting all operational and financial responsibilities. It also became the first G&T to exercise the right to refinance W. C. McKAMY,JR., PRESIDENT i of dM n'im h Federal Financing Itank. Refinancing approximately 5-16 million upon payment of 54.8 million in prepayment penahies resuhed in initial net annual sacings for its members of more than 52 million.
South Mississippi Electric Power also successfully negotiated a long-term power supply contract w ith Cajun Electnc, a neighboring G&T, which will benefit members and delay plant additions.
The Engineering, Construction & Maintenance Department and Production Department completed all planned-and some unplanned-work within or under budget. Reviews of each department are presented elsewhere in this report.
2
New inventory pnxedures provided a high i
degree of accuracy and accountability with measurable cost effecth eness.
M1 EPA's employees continued acth e participa-tion in professional and comrnunity service acth ities, reDecting SMEPNs continued commit-ment to its members and to the area it serves.
The challenges and changes of 1993 will be many and varied, but it is our belief that SMEPA's employees will meet and exceed the require-ments of an es er-(hanging industry.
1 f
W.C. m KA%fY,JR.
t itLNRY T110M A4
- l (I{7$.
.r g4.c?.g. -
r, C"'
., I:4@.,1 t..
3,f 8
a:sy]
p' p[ :.
-!)$ ~
f
.j.
j-
'4 m e
+
-$b l
. L' ItLNRY 1110 MAS, GI.NERAL MANAGER i
Jarnes llumler Giles llounds, Manager g
7,!.
~
w Coahoma I:lectric Power Awociation
~
Lyon liolwert J. Ou hi, General Manager 9
ltichard Dossett
[:
Coast Ilectric Power Association f-
't p
~
luy 5t. Iouis i
s d
Ifenry Water (T Jr.
~
h og llarry 11. Ik>nner, General Manager j
q a
1 Delta Electric Power Association y-
. ~
Greenwood s
'-i*WWyi I..G. Pierce jjf I. T. Dudley. Jr., General Manager j
g,
- .4 jj 6
- .3 e
Dixie Electric Power Assouation W'
I Laurel
( -l g-: -
g.
b jy.
no:.
/
.s ]
.. s v.
I Ifollis Alford. Secretary-Treasurer j
,I(4 T;l
% R$
Sainrny Williams, Manager pr 7 s
1 7
4 16 t) %
Magnolia 1:lectrit Power Association L%
McComb J
r e c hh i /
.s.
)
%A 23 4
Morris flowell x
~
. d(l W. T. Shows, General Manager and 4
Acting Secretary-Treasurer i
Q jj q,
r
.p
~
Pearl Ris er Valley Electric Power j
i Association - Columbia I
Naif Jordan. Vice President Ej
., {v. A j
Jack Ware, General Manager
-g.
f
{
.'v
~j Singing Rh er Electric Power Association ~ Lucedale i
a^
ilarlan IL Rogers l
f:f Don Jordan General Manager y-j e
a 7=")
Southern l'ine Electric Power n-M cc
~I
$^
-.5-J.
\\'j j) %glg
~
- Robert St. John, General Manager 1
e a
Southwest Mi sissippi Electric Power Association ~ lorman WTM?W"mVQ
- c. ;,.
W. C. Mdamy., Jr., President L
.,Q g
Vesper llagley, Manager l
^*
Twin County Flettric Power As5 ociation - 1lolla ndale r
p-w l
e
... ;4 I
i l(. ]), j jines g
5)g f
1 C.11. shchon, General Manager p.
j, 4, +
7 1
f s
Yaino \\ aney Elearic Power g
i Asv(iation - Yazoo City 1
Board Officers
(,ewn-wp y
~)
[ ] jf3 ]
w:
W. C. McKamy, Jr. - President p.
NaifJordan
' ice President
~
~7; llollis Alford - Secretary-Treasurer
..jl
,f*
- 3 L
?
t W. T. Shows ~ Acting Secretary-. r ";..
/
Treasurer A'
l I
l 1
Conunittee Membership j
l I?ul Co:nnunce lludget and Iinance Comnunce l'nel and Marketing Comminee 1
e e
e ll.n!.an 11.1:oger s. th;urman Giles liounds, Chairman J.1.1)udley, Jr., Chainnan R.1). Iline, 1follis Alford Vesper llagley I r in Jordan liairy llonner Ric hard Dossen L G. hen e lames Ilumber C. J 1. Shelton 16,bert st. i< ihn Naif Jordan Virgil Smith
(
lx k Ware 10 ibert i. Occhi Morris llowell l
Ilenry Lierer. Jr.
W. T. Shows Sammy Williams W. C % K.uny. Jr.
W. C. Sk Kamy Jr.
W. C. Nk Kamy. Jr.
l I
6 I
Mennber
,Cooperatiyes l
1 Miles Date of Number of MWh Energized Line Meters Purchased Coahoma EPA Giles bounds, Manager 1/18/38 1,431 6,030 89,130 Coast EPA Robert Occhi, General Manager 5/20/38 3,912 ~
45,183 823,751 Delta EPA liarry H. Bonner, General Manager 1/30/39 5,192 20.911 367,242 Dixie EPA J. T. Dudley,Jr., General Manager 7/28/39 3,825 26,994 491,085 Magnolla EPA Sammy Williams, Manager 9/19/39 4,467-21,507_.
380,878 Pearl River Valley EPA W.' T Shows, General Manager 5/19/39 4,791 27,601 440,102 Singing River EPA -
)
Jack Ware, General Manager 12/5/39 4,712 46.062 847,965 Southern Pine EPA Don Jordan, General Manager 5/13/39 8.944 48,272 1,267,927 Southwest Mississippi EPA Robert St. John, General h*anager 3/27/38 3,795 20,807 348,734 Twin County EPA l
Vesper Bagley, Manager 12/24/38 2,177 12,128 204,507 l
l Yamo Valley EPA C.11. Shehon, General Manager 3/23/38 2/s4 8,59) 219,443 7
\\
Locations o
I s
]
I 4
3_
l a
f f
i b
)7f/
i f
Paulding Unit y Conunercial Operation: 1972-'
Location:' Jasper County j
Capacity: 20MW u
Fuel: Diesel Fuel / Natural Ga3 j
/
, _s
' Moselle Generating Station
~
~~~'
Commercial Operation: 19-'O
/
J
_ location: Jones County
/
Capacity: 177MW g
[v g
o Fuel: Natural Gas Tuel Oil
}
/
j Employees: 28 1
)
v
- /
a' Grand Gulf Nuclear Station i
+
nadale Unit (Imo Undidded Imerest in Unit D
'h Commercial Operation: 1969
)
<> /}
Commercial Operation: 1985 L cation: George County l
Location: Port Gibson i
(Claiborne County) i Capacity: 16MW Capacity timA 125MW
,/
Fuel: Natural Gas Tucl: Nuclear
,/,/
SMEPA IIcadquarters Employees: 1 Location: llattiesburg
,/
(Forrest County) j/
Employees: 111 R. D Morrow. Sr. Generating Station Commercial Operation: 19"8 location: Lamar County Capacity: M fW j
Fuel: itituminous Coal l'mployee3: 94 d
8 e
.. ~. _... - - -,,,,,
^
. perating Report 1Q Constrt ction on SMEPA's second 230kV intenonnection with Alabarna Electric Cooperative was ahnost completed by year-end 1992. Contrac-Production Department for cwws had to fight boggy conditions to ertrt this structure in (wx>rge county.
I 14 I
Corporate Planning &
Operations Department 5
1 l
1
- "?,
16 J
Engineering, Construction &
- V[
l g
?g Maintenance Department 6
af
- 1 5
.j[
' ~ -
y
~.
~
18 1
.((
Iluman Resources &
Development Department T
s e
l
m a
- ~ y p r~
.r N
4 f
,g g N
h f
I'()dllCl5()H g
f b
~
$ g 3lC;@ Q i[
lQL,.
Ghjg [
l Moselle Generating Station Safety Record A chemical cleaning process was implemented to remove tenacious Net C,enmtion. 4%167 S!Ui s the y ear ended, employees deposits from the internal surface had worked in excess of five of the condenser tubes on Unit 2.
i t
11 years without experiencing a lost-The deposits, consisting primarily operations time accident. In addition, only of zine and silica, hampered the three relatively minor accidents heat transfer capability of the lant Moselle was again operated with injury were incurred during condenser.The procedures proved in an intermediate and peaking the year.
to be successful and have resuhed mode for the entire year. Units were in improved unit perfomiance.
cycled into sen ice as needed to meet system generation demand.
Projects / Preventive Maintenance The Unit 2 A boiler feedwater pump 1he number of units in service varied was disassembled for inspection, according to load requirements.
[/ / arious projects and preventive and the plant's spare pump internals economic considerations, and the
(/ maintenance activities contin-were installed. The procedure i
need for had regulation suppon. A ued throughout the year to ensure successfully restored pump capacity minimum c f one unit was in opera-optimum operating efficiency and and enhanced the operation of the tion at all ti nes during the year. In reliability.
unit. The removed internals will be tne s,mme r peak period, all three restored to design conditions and units were actively providing energy 1he natural gas and fuel oil burner will be placed in inventory for use to meet demand.
valves were replaced on each of the in future inspections of the six three boilers.1he existing valves identical feedwater pumps.
Natural gas remained available in were pan of the original equipment sufficient quantities to suppon placed in service in 1970. The old The heat transfer elements in the operation except for a I,rief period s alves were hydraulically operated hot end of the air preheater on the in late August due to die effects and required an extensive amount Unit 2 boiler were replaced. The ofIlurricane Andrew. Favorable of maintenance attention. The new elements reduce the heat loss in pricing in the first half of the year electro-pneumatic valves have the boiler exit gases and improve promoted operation of the facility.
improved the availability and overall unit performance.
1hereafter, gas pnces finned.
operability of the three boilers.
ads ersely altecting the et onomics The following instruments were of operating the Moselle units.
Planned equipment repair and installed as replacements:
replacement efforts were completed
- Three turbine supenisory record-The net generation during 1992 on the plant cooling towers as pan ers to provide more accurate and amounted to 9%16-' MWll. This is of a multi-year facility upgrade reliable indication of turbine operat-30% less than the 1991 production program. In selected cells of the ing parameters
- A pli meter for and represents the lowest production towers, new fiberglass fan stacks.
The lab
- An electronic balance since 1988. The decline in output can fan blade assemblies, and reduaion for the lab to replace mechanical be attributed to a number of factors, gears were installed. The re'pective balance scales which had been in(luding a wcather-related dec rease motors were cleaned and recoated.
used since 19-'O in system demand during late The new fan assemblies are lighter samrner, an mcrease in fuel pric e than the original equipment and are during the latter part of the year. and more efficient. In addition. the the availability of energy from the decking on the Marley "A" and "If' grid at e(onomically atuactive prit e towers was replaced, leveb 10-
=
1 t
"l Plant R. D. Morrow, Sr.
stainless steel to assure longer life Fewer incidences of coal bkxkage and to prevent funher development have been experienced, thus of c pper deposits in the Imiler from prolonging the life of the feeder Net Geneanon: 1.5M70 MW11 Gal %nd 7%781wm this source.
belts and reducing the time spent cal U,d 6scs m by operation personnelin clearing A new 834B Caterpillar tractor was the bk>ckages. The microprocessor 4
Operations bought to mplace the original coal controls on the new equipment dozer which was purchased before
- simplifies calibration and provides he plant was primarily operated dw plam began operation in 1978.
for greater accuracy in the measure- -
in an intenuediate and base A larger blade was specified for the
~ ment of coal flow to the boiler.
load mode during the year. The rept cement dozer to pennit more Similar modifications were corn-number of units in service and the efficient handling of coal and coal pleted on Unit 2 in 1991,
- loading on the unia were cycled as waw pr ducts at the facility.
necessary to meet system load The Unit 2 boiler was chemically demand requirements.
For the third consecutive year.
cleaned to remove deposits which contract painting projects have been had accumulated on the intemal
[
Simuhaneous operation of the two completed at Plant Morrow for the surfaces of the boiler tubes. The Morrow units was experienced only purpow of pmsers ing the integrity process was successfully completed duringJanuary and the summer load and appearance of selected struc-with the combined efTort of mainte-season (May-July). Sinule-unit rures nd equipment. The 1992 nance, operations, and lab personnel operation was obsem d for the pr bus included ash handling, raw working with contract personnel.
I remaining months due in part to water and fuel oil storage tanks, fly seasonal system demand variations, a*,h amilimestone silos, ash-handling other upgrades and preventive purchased energy commitments, structural members and conveyor maintenance measureu Plant the continued successful operation covers, recirculating water system Chimney Maintenance covered of Grand Gulf 1. and equipment pumps and piping. and the rotary inspection and repair of the chimney problems which developed with distributor in the coal-handling and brick liners; replacement of 400L l' nit 1 turbine in August.
g e m.
of the stack elevator's structural mast and rack sections; replacement of the Construction was completed on a chimney's eight high-intensity strobe Psujects/ Preventive Maintenance new multi-purpose facility for the lights, wiring, and control devices.
mechanical maintenance group. ~
. Six expansion joints were replaced The new building adjoins the in the boiler exit gas ductwork of any projects and preventive maintenance activities were existing maintenance shop and Unit 2.
- Railroad loop mainte-completed during the year.
includes a fabrication shop with nance included replacement of 1,100 material storage space. an employee crossties in the two miles of raihuad The No. 5 and No. 6 feedwater break area and locker room, and track at the Plant and routine grade
+
heaters were replaced on Unit 1 omce space for superdsmy pmin-ami baHast cormnions made.
""E and Unit 2 because of repeated tube failures in the original components.
Although total ash sales during Hw six coal feeders on Unit 1 1992 were almost 18% less than The new heaters have improved unit wem c nvened fran mechanical in 1991, the volume of goal quality reliability and performance and have reduced maintenance demands on gmvi etric-type feeders to an dry ash sold increased by 28% This the units. The tube material was electronic load cell weighing improvement was the result of changed from copper-nkkel to 304N sheme. Mw new gem has enhancements made in the coal reduced maintenance requirements combustion process.
by eliminating the complex weigh lever and leveling har mechanism.
11 k
)
q(
. /).
O ;44y nr 1
2 r
Terry Johnson,
< [. _.%lf '
[d[:
/.
Mechanic 11 at i
^
Plant Mormw, welds part of a
+-
platform for a
(( ',
i new air pirheater i
h hoot blower on g -
Y[,N
' i-i Grand Gulf Nuclear Station y'
. pt ]pa?l No Generan.in te SMEl'A:
.; s 820,W5 MTI{
.c verall.1992 was a very good year for Grand Gulf Nuclear Station. The plant operated continu-i ously at full power throughout seven months of the year except for short-j J
duration power reductions. The plant availabihts factor was S1.5%
and plant (apactly f.lctor w as 74.2%,
this compares with 74.5% and 69.8%,
)
respecovely, for all nuclear plants m
)
1992.
1 i
i Kentucky Coal Property i
nJalex Resources continueJ j
to decelop the coal reserve,s on SMEPA's property in eastern Kentucky under the provisions of a i
property lease arrangement. Clean i
coal proJuction during 1992 amounteJ in approxinutely 480,000 tons from both surface and Jeep-2 mine operations.
4 y~
u, q
Royalty payments were received for sf f7g7 coal produced from cert.un isolated tracts of SMEPA's property unJer two separate sublease arrangements.
l *[
A total of 299,564 tons of coal were a
~
mined.
fil lw "
n
- ia ty I
~
Timber marketing from the pg
.g4[
~ Kentucky property cominueJ y
y A,
.}
[,,.-m'g' %.-.4
%w <
throughout the year.
' 'i{
d s
, / %..,. ' " NN}
- N. -
- s p.
j.b[
T 'l 2,
ij k
E,hrwL.0L& %..
hfwMu%blbb5b%u2$k z'A.c e a E$sen ik.an liig Tn, a Caterpillar 834-11 coal dorer, was added to Plant Morrow's mobile equip-l ment 11cet in 1992.
f d
12 6
W
\\\\
4 N\\
s k
/
\\
1,
'i ll 4
(,
t j
%(
-d f our feedwater heaters were replaced at Plant Morn >w during the 3 rar. Contrac-tors reintn ed this one through the gwmer station's rmf with a 200 ton (rane.
on l
l 4
84
}
% tike M ek h, a lb rar ut! PA irteran, has
}f worked for the past right 3 cars at Plant
~
Mostlic% lab.111% rrsponsibilities as ( hemist intlude analping boiler water content and stcain purity.
l T
f
- I w
..; % A
(
il l
4
- { 2 h
? 4 *.t?
)
4
=h
_..',*Q y
,; ; w u.Q
),
[f
/
Itale Itounsasille. Plant Operator II at Plant 31owlle,
(. 'g'
~
f
^'
adjusts a rbrostat on one of the wis ignitor (inuits g
" +.,
'J on t nit 2. 't he s isible piping carrie natural gas and 39 fuel oil to the lw eiler.
p.-, ;gg m
.l' 1
3 13
orporate 3 - 3+ 00 lO
+
Planning &
4 78
- e 47/
Operations,
ew
+
+
uring 1992, an appreciable Operations Recorder PCs at remote sites and amount of tiine was spent with three Off-System Telemetering the Entergy Transmission A((ess
$1 EPA again enjoyed a suc(ess-Receivers at lleadquaners. At the filing and the Entergy, GSl merger, ful year in the purchase of same time, the section was assuming l
both f ded with the 1 ederal Energy economy energy and good fuel maintenance for 28 additional PCs Regulatory Conunission. These prices, allowing a reduction in and la additional printers.
filings significantly affect the way energy costs to its members. In SatEPA does business with Entergy December, a l' nit Power Sale To guarantee reli.1ble transfer of l
and other sunounding utilities. It Agreement was signed with Cajun data from remote stations back to was. therefore, incumbent upon Electric Power Cooperative. This the Control Center, the Electronic s SMEPA to intervene. At the end of fifteen-year agreement provMes group and the Engineering Depart-l the year. the cases had not been for the purchase of 7 megawatts ment replaced obsolete Remote resoh ed. and may well go on for of capacity in one of Cajunilarge Tenninal l' nits at Plant Moselle.
most of 199.5 and possibly beyond.
(oal-fired units at f.n orable prites State Line, lloy, and Waldrup.
and conditions. This (ontract should be of tremendous benefit Engineering Services to both GMTs. The existing Reser e Starketing r:apacity Agreement with Cajun he I ngineering Sen-i(es was amended at the same time to AIEPA% heat pump rebate gn eup is responsible for rate increase its benefit to SMEPA for program recorded a $1%
design, engineering (ec onomic) the Scar and one-half remaining increase in the number of qualified studies. load f orecasting. and on the contrad.
installations over last years figmes.
maintenante of comrol(otuputer The Good Cents Program and the sof tware. In a joint elfon between SMEPA signed an inten hange Comfort liume Program, both of this group and the Operations group.
agreement with 1:ast Kentucky which encourage the construction PROMOD (a PC-based production Power Cooperative that allowed of energy efficient homes. have modch was installed. This program for the purtbase of economy gained momentum in participating will assist CP&O and other depan-energy. Pow er was purchased from member system territories.
ments in budgeting, f uel prit ing, etc.
East Kentok Power Cooperative and Arkarmas Eleuric Cooperative A Commercial! Industrial Relations A PC Im kup for the Control System for the first time dudng 1992.
workshop was conducted that was designed, tested, and installed.
targeted member system managers, This program will be shared with The Association maintained a strong engineers, and industrial des elopers.
other utilities in the l'.S. and abroad position on the Nonh American The purpose of the workshop was A te.st progr;un for Remote Tenmnal Electric Reliability Council % Control to promote strong relations with this l' nits was developed and u ill be llonor Roll, in keeping with the class of customers to entourage both shared also through the Ilarris l'sers' Association % commitment to its load retention and economic devel-Group with other utihties, members to provide reliable setrice, opment efforts. In this same atea, training was provided for system In a continuing effon, remote engineers and marketing employees metering capabdity was incorporated Electronic Support to calculate heating and cooling at 51 member delivery points.
loads for commercial structures.
bringing the total to 95 stations with he Electronic s seuion worked Member employees also des eloped this featute. 'lhis is a joint effon with (losely with the Engineering, skills to evaluate building materials the meter design sec tion. with an Construcnon & Maintenance Depan-and practices for reductions in sizing uhimate goal to hat e all dehs en ment on the installation and t bec k-points with this capabihty.
out of f n e 5equen( e of Es ents N
.-----,iw----
e,-
h9 4
1
.j 1
i
?
iIVAC equipment. This sen ice s
a should help control the system peak load and reduce the con-d b
sumers' equipment cost and s#
M
'd
.\\
cost of operation.
. q The Assoetation purchased Elite j
software for active marketing members and provided installation and training for marketing employ-Y ces.
A new brochure, entitled " Energy Saver's Checklist." was developed to provide energy usage information to New itI3 AdministratorJames Iluff paid a visit to SMEPA in 1992.
the residential con;umer and to aid in the O>ntrul Center, he talks with Charles IIollhnan, Senior 5 stcru Dispatcher.
the marketing representative in 3
handling high bill inquiries. Supplie.
of the publication were provided to member systems on request.
i 1
l i
v.mygvensytyn=~cg.
- '=wrqi== * = y y pr I
v
. j,a.
+
,. :: q 4k
- K.
4.,
n bep
-D l
j es Y s y
_ M,)
u~
. h.
+
p.
2 y
- y>
g h-'
's s
I l
l l
.L W.
Tommy Clark (far right), Director of T.ngineering $ stems discussed his job and 3
SMr.PA's computer system for a class of students from North Forrest Illgh School.
Tommy designed the PC backup for the Control System refermd to in the text.
15
(
- .a msn a
. Ea
$\\hh[
o g.
n,; tl
,; p m [
y M M k g:
j
. -m flM HCCrillM, p
E
.f & _
A W y
%x\\
'(N)llSITHCli()O N p '
?
h, m ns g-~
Maintenance 9 %;m-W
.. m k;
7'i aC
- am l
l l
Planning and Protection Design Engineering System Constmetion 992 was another y car of he Design Engineering section MEPA crews had a very busy significant accomplishments in administered consimction of construction year. New 69kV system planning and prciect on.
the new Benndale 230kV Substa-lines and three-way GOAH towers tion and additions to the Benndale were buih to serve Southern Pine e second fn e-year construction 161kV Substatio!.. When placed in EPA's Stringer Substation and Dixie work plan was completed. This service in 1993, these facilities will EPA's Hurr Creek Substation.
work plan consisted of an existing greatly improve the transmission SMEPA crews also completed system analysis with SMEPA sen ing reliability in the southeastern part reconductoring of 9.04 mdes of a 1991 GNT coincident peak load of of our system. finn up our existing 69kV hnes. including changing 386 MW and future system anah sis intertie with AEC, and eliminate out 36 poles, with SMEPA serving a projected some maior transmission construc-1996 GKr coincident peak load of tion projects.
Contract crews completed the j
+i4 MWs-a 15% increase. The load reconductoring of 69kV Lines 61 is based on projections from the De. sign Engineering also accom-and 61H, totaling 14.2 miles.
1990 Paw er itequirements Study.
plished the following during 1992:
L'pon completion of the construc-
+ Supervi. sed replacement of Line Maintenance tion projects identified in this Harris Remote Termirial l' nits work plan. SMEPA will be able to (RTils) with Westronics RTits at urricane Andrew in August provide adequate and dependable three substations.. Designed and a tomado in December sen ice to the member c ooperatis es and supervised installation of a wreaked their special brands of and satisfy the planning criteria set a.S MVAR capacitor bank at the hat oc on SMEPNs and member j
forth in thejoint Planning Guide-Prentiss Substation.. Designed co-ops' systems lines.
and supervised construction for switc h motor operator replace-SMEPA assisted Southwest Missis-The electronic metering replace-ment at SyIvarena and Hotky sippi EPA in sen ice restoration ment program was continued. As Creek Switching Stations.
on its system after Andrew and of December 1992. there were 100
. Designed the Eon Bay ou and restored service to five lines on remotely accessible w holesale Lonnan-Alcorn 115kV lines The3e the Association's system interrupted meters at 95 sites on the system.
lines will pros ide servke to new by the hurricane.
Eighty-nine h> cations use (ellular substation for Singing River EPA telephones. two use power line and Southwest Mississippi EPA.
SMEPA crews restored service to c arriers. and four use South Central
. Hegan engineering for the Southern Pine EPA after a tomado Bell phone cin uits. InstaHation Refuge 115kV Tap Clwin County struck in the Sylvarena area causing figures for 1992 are 52 meters at il EPA, Progress 115kV Tie Line.
widespread damage. All three 69kV sites with 51 cellular phones.
Magnolia EPA) and West Waynes-transmission lines into Sylvarena boro-South Waynesboro Tie Line and SMEPNs swit(hing station were The Planning section administered for Dixie EPA.
+ Initiated design extensively damaged by the installation of the 100n. stator for replacement of obsolete power tomado.
ground lauh proicction s< hemes for line carrier communications Plant Morrow and also impros ed equipment with microwas e SMEPA crew s completed installation the reliability of senice at the communication at South Conc of ground rods on 72.M8 miles of Magee and Columbia substations by switching station and Magee 69kV line in the somheast portion removing the 69kV bus ditferential Interconnection Substation.
of our system. This improved reclosing s hetne and instauing a grounding of our transmission bus differentiallockout scheme.
system and is already reducing the number of breaker operations and 16
ouuges experienced during extreme land Section Infrared sutveys were completed on weather conditions.
substation facilities belonging to ight of way for three trans-SMEPA, Dixie, Pearl River Valley, Climbing inspections were per-mission lines, totaling 38 miles, Twin County, Yazoo Valley, and formed by SMEPA crews on 254.13 was acquired. Also abstracted and Southern Pine EPAs.
miles of transmission lines; 35 poles pemiitted were three other trans-were changed out. Association crews mission projects totaling 12 miles.
'lhe relay technicians modified bus also performed maintenance on differential and breaker failure Coast EPA and Pearl River Valley The Izand section also assisted in schemes at three substations. They EPA transmission lines. u hk h negotiating timber and gas leases completed calibration of off-system included changing out 20 poles.
on SMEPA's Kentucky property and underfrequency relaying and annual was responsible for marking and relay calibration and trip checks at The annual right-of-way redearing purchasing 3,705 danger trees.
six stations.
progtam invoh ed the clearing of 36i miles of transmission lines H290 Substation Maintenance The meter technicians installed 52 line-acres). A total of 1750 danger electronic meter packages. Of these, trees w cre temoved along critical MEPA substation crew four were off-system telemetering transmis' ion line sections.
completed maintenance on packages. Annual meter calibrations all load tap changers on system on all member substations (180)
Five aerial line inspections were transformers. The crew also com-were perfonned.
completed on the total transmission pleted the three-year maintenance system on 69kV SF-6 Gas lireakers at the Additional work involved replacing 15enndale 161kV Substation.
all defectis e Westinghouse current Pole p
'd line inspection and transfomaers and completing civil treatmem by Osmose nened 150 Construction of the capacitor bank site maintenance of all substation, miles of transmission line or 10.5%
at Prentiss Sui > station and installa-GOAIL and microwave / radio tower of the system.
tion of matar operators at three locations. Fifty-one cellular tele-dehrery points were perfomied by phones were installed at selected substation personnel.
meter locations.
v.
7 j
h f' lloby Spiers, Electnmics f
A Te(hnician I, programs a Jf l5 j
- y new ch'otronic tueter package, j5
,j New meter. reading technology
, Ik
P' v
was installed at 52 suitstations
) {h
[
anmnd Mil PYs system.
[
?}
jP f
h
?I i
2M-
[
f,,
o a
s fA I"!
f 1
f.
O
}
5 n
e a
\\
w t
.c h;;L
" N $1}R*eg %;d.,g [ ~
hg 6,
W6g-
% W.
}fi Y
T'
?
z
-),
~^
i,
- , s l-m Y
Yh 0
17
- g..
- w yQ4 w
~
y( ;.
uman Resources
?
- +
g f, by
- - m m
m i
!3
~~
& Development 6
~m
.yj,4% p pi
+
M
.;m,,D:%gyn f ~ ^
.L y
Safety The fleet teplacement program was surrounding electric and magnetic revised in 1992, allowing for more fields (EMF). The Association xcellence in safety awareness cost-effertive disposal of replaced has maintained a policy of and accident prevention was vehicles through public auction.
communicating openly and achieved in 1992, resuhing in the honestly regarding the issue, best safety record in the Associa-providing infonnation, making tion's history. Employee commit-Information Services presentations, and taking EMF ment and involvement have been measurements for employees, the key to program successes, as oblic and member relations members, and interested civic well as the ability of the Association efforts continued throughout groups or consumers.
to provide a safe work environment.
1992. Employees participated in community-oriented projects in addition to providing in-house ranging from Adopt-a-School to communications support for all the annual United Way Corporate departments, the Infonnation Personnel Administration challenge to teaching the services section continued to
" Choices" program to ninth produce all intemal and external n 1992, the Assoc iation con-graders. Other activities that publications, including a monthly tinued to aggressively address helped promote SMEPA's standing newslener, SMEPA's annual control of fringe benefit costs.
in the community included power report, a bi-weekly employee Specific focus has been in the area plant tours, the Adopt-a-Family publication, and numerous of health care cost-containment. Plan program (a Christmas event), and brochures. 'lhe section also design c hanges and the implementa-employees working with local continued production of newslet-non of managed health care con-charitable organizations, ters for four member systems, as cepts in 1992 resulted in substantial well as other member-related savings to the Association and SMEPA also assumed a leadership publications such as annual employ ees. Existing cost manage-role in addressing the controversy reports and brochures ment arrangements enhanced in 1992 will provide increased savings wE> mus a
m 199.t m.
Since the intn> duction of a self-in3ured medical plan in 1989, South Mississippi has not incurred an increee in medical plan funding U
Ili for three consecutis e years.
k, n f.
a, Transportation aintenance and icplac ement
.v g
programs were continued 3 -
W '
[~
w during the year for a flect consisting 5
hf[ M t' h:.
W L
of % t chic les.
^
, 3;f m
L
,n~_
hw mu
+
,w y
sammy Odom, storekeeper, inspects a set of dies used in line construction.
lleadquarterr warehouse stocks morr than 1,000 inventory it(ms used by line crews, substation maintenance employees, and ciectrunics personnel.
18
.;p ; ;.
.,yf. y,M.
- f y
m%
t j
.. a-p...
- 1. Each new Asunciation
.,j ' !{
'}k; h
, h employee undergoes a sgwcial I
chk c -
- -jg(MQ qQ
,. p* ' e
-?
orientation on his or her first
.K
'r f" pj day of work. lierr, Tom 54s f
.. #g%('%f![
- t Callahan (center) Dirrdor of k W$.tt%
IVrsonnel, and NetticJones
).Tf':.
.,M
, lh.[{ (left), Benefits Specialist, 4
_ m:$ explain 5MEPNs employee
. cf f -
' l[??^
" benefits to new Receptionist f,.
'7 4
'. ' '"9q
{g ii; Debbie Woullard.
1 2;q
${
?
g-
- .y I
k:
[
i n
i I
i 4
i i
l sMEPA employees distinguished j
themselves in wveral community activiti w in 1992, raising the most i
money in the American Cancer y
j N>ciety's 24-hour Relay and finish-3 ing third in the United Way's
{
Corporate Challenge.
i
'i, r
j s
l r
l g.
NE F o.
i
% M.
3, T't4.
4.,
<,k l
T amo mm l
l 19 j
1
\\
inanClal e
e Report i
I l
l l
1 i
frorn left, Presiden* W. C. McKamy,Jr., General CounselJohn K. Keyes, and Secretary-Treasurer Ilotlis Alfoni, sign the snany documents which allourd SMEPA to refinance a portion of its debt with the Federal financing Ilank. The Association became the first GMT to exercise the right to refinance. The activity
' took place at a special snecting of the Ikaard held in February 1992.
g
.- an
,., " ifc-j<g;6p,.
9nE qigy 8 ',
a
^ @g t,
f.:j] ;ly b '-
jf;
f
-.za.w; y
gg
[.;.[ 4 ' '
>T-
- 8 Z
k am!.
y,$r y,
. ~.
.,r...
g,
w
.:.,~-
~ _
inartclaf Review SMEPA recorded net margins of in the absence of this one-time of 54,844,537 was required.
54,467,904 in 1992. This repre-adjustment, the increase in This premium was financed sented an increase of approxi-energy sales to members would from SMEPA's internally gener-mately 51,430,000 over net have been 2AR ated funds, imd the amount is margins achieved in 1991.
being amortized over the Operating margins contributed Equity and margins as a percent remaining life of the debt.
51,629,775 to the Association's net of total assets increased from margins. This marked a rerum to 3.96% at December 31,1991, to Total long-term debt (including a pattem of positive operating 4.56% at December 31,1992.
current maturities) at December margins in line with SMEPA's This increase is consistent with 31,1992, was $701 A19,676, a -
financial goals and was a signifi-SMEPNs goal of increasing its decrease of $6,173,532 from cant change from the operating financial strength and continu-similar debt at the close of 1991.
~
loss of approximately 5836.000 ally increasing equity while The average cost oflongaerm sustained in 1991.
maintaining or improving its debt also decreased, falling from wholesale power rates and its 8.85% at the close of 1991 to The net margin achieved ex-competitive position.
8Al% at the end of 1992.
ceeded that necessary to meet j
targets established by SMEPNs The average cost of wholesale SMEPA maintained a strong cash
~
I financial policies, as well as power billed to SMEPA mem-flow throughout 1992 and did g
~
commitments to its mortgagees.
bers in 1992 declined to 45.32 not use its 525,000,000 line of The times interest earned ratio mills per KW11 from 46.12 mills credit with CFC other than for i
fTIEIO of 1.07 compare.s to a TIER per KW11 in 1991. The average the convenience of making of 1.05 for 1991. The debt service cost of power to SMEPA mem-certain debt service payments.
coverage ratio of 1.17 was un-bers has now declined for fis e The decrease of approximately l
changed from the previous year.
consecutive years. Lower costs
$10,000,000 in year-end cash l
resulted from savings achieved and investments to $36,028,000 -
.l Total revenues from sales of in a number of areas. Most at December 31,1992, was due j
electric energy increased to notable was the substantial primarily to the premium.
1 5267.897,826. a 2.3% increase decrease in the cost of pur-associated with the FF11 refi-over electric energy revenues chased and interchanged power nancing and to somewhat recorded in 1991. Electric energy from almost 30 mills per KWII higher levels ciinternal front-revenues from sales to Association in 1991 to 28.1 mills per KWil end financing for transmission members increased 1.7% to in 1992 and a reduction in projects as the pace of construc.
5248c408,620, while revenues interest expense of approxi-tion retivity increased from from sales to non-member Ala-mately $3,717,000.
1991.
bama Electric Cooperative under a long-tenn contract increased in February 1992, SMEPA Amonization of abandonment 3
9.7% to 519As9,206, the highest refirianced $45,932,722 oflong-costs of the Grand Gulf Nuclear level attained since the inception term REA-guaranteed debt to Station Unit 11(whi h was of the contract in 1988.
the Federal Financing llank abandoned in 1989 while under (FFID. The refinanced notes, construction) amounted to j
Energy sales to members in-maturing from December 31, approximately 52,605,000 in creased 3.5"b from the previous 2009 through December 31, 1992. The unamortized balance year. reaching 5380.% MWII.
2013. carried a weighted aver-of such costs at year-end was
)
Included in this figure were sales age interest rate of 12a9% prior approximately 583A89,000.
l totaling 58.551 MWil which were to the refinancing which was Amortization of abandonment 2
the result of a mid-year (hange by effected through and with the costs will continue through the Mississippi Power Company to a FFI). The nominal weighted year 2016 in accoidance with a full calendar month billing cycle average rate ofinterest on the predetermined schedule.
for power himished for resale in notes after the refinancing was SMEPNs borderline system area.
7AHE A prepayment premium a
a 21 l
he Elements of Cost 1988 1989 1990 1991 1992 1.
SMTPA'S OWN GENEllA110N & TItANSMISSION SY' ' M l
Cost of fuel Burned in 5%1 EPA's Plants - </31MIITU 181.64 176.72 175.77 160.03 162.64 Production Costs and Purcha. sed Power-Interchanged Pow er - Milh kWh 25.27 25 94 26.02 23.55 24.37 Transmission O&M - Md!s,kWh 2.46 2.38 2.3S 2.20 2.10 A&G I.xpense - Mills 'kWh 1.09 1.12 1.10 1.02 1.00 Deprecution and Amonization - Miih.KWh 5.41 5.08 5.39 a 93 4.87 Interest - MiihekWh 17.80 16.50 15.22 13.38 12.28 Taxes and Other-Milk kV h 22 2.T'
.22
.19
.27 52.25 53.79 50.33 45.27 44.89 ypTAL - 3py M M}I OIlSAU3 II. BORDER!lNE SYS1131 1Nu hased Power. Interchanged Power - Milb kWh 34.31 34.H5 33.08 34.93 32.28 I repretiation and Amonization - Mdh kWh
.02
.02
.02
.02
.02
. erest - Milb kWh
.03
.03
.03
.03
.03 34.39 34.90 33.13 34.98 32.33 TOTAI. - MIIIS/KM}i OF SAII.S_
III. TOTAL SYSTDI Pu > duction Costs and Pun hased Pun er-Imen. hanged Pow er - Mdk kw h 27.59 2H.14 27 72 26.14 26.24
~Ir.msmistion ONM - Milh kWh 1.83 179 1.81 1.70 1.60 A&G Expense - Mdb kWh
.H1
.H5
.83
'9 T6 1)epreciation arid Amoniu:on - Milh 'kWh 4.03 3.83
+10 3.H1 3.~2 Interest - MJh kw h (Net) 13.25 12 -13 11.56 10.31 9.37 Taxes and Other - Milb kWh
.17 2.10+
.16
.14
.21 TOTAL - MIIJNKWII Ol' SAI.E5 47.68 49.14 46.18 42.92 41.90
% lab nim! wrac off of (ou et dundonmem of t nn II of the Grand Guif Nudcar % don 51R13Nm L92 mills per LWH of sales.
22 I
@omparative Operating Statements 1988 1989 1990 1991 1992 REVENUE Sales of Energy 5237,797,763 5251,362,947 5264,325A07 5261,907,622 5267,897,826
)
Other (230,848)
(474,686)
(209,843) 231,995 22,272 TOTAL REVENUE
$237,566,915
$250,888,261
$264,115,564
$262,139,617
$267.920,098 EXPENSE Operation Expense:
l'roduction-Fuel Cost 62,232,299 62,868,651 60,782,368
' 55,049,192 52,148,821-Other Itoduction Expenses 11,138,366 12,241,178 13,201,932 12,278,297 13,999,532 Pun based Power 57,526A67 66,361,893 74,296,846 86.613,715 93.881a78 Transmission
'?,454,432 7,721,419 8,458,919 8,763,606 8,587,069 Consumer Atrounts 40,144 41,798 40,185 51,942 54,931 Sales Expense 11,522 95,612 83,529 93,023 121,332 Administrative & General 3,390,732 3,850,741 3,980,047 4 055,849 4,085,883 Total Operation Expense 141,793,962 153,181,292 160,843,826 166.905,624 172,879,046 I
Mamtenance Expense:
l Production 4,872,231 6,641,474 7,268,466 6.079,990 6,723,742 Transmission 1,553,780 1,721,705 1.696,906 1,629,329 1,593,121 General Plant 525,626 470,433 561,611 637,168 568,713 Total Maintenance Expense 6,951,637 8,833,612 9,526,983 8,346387 8,885,576 1
Depreciation and Amonization 19.846,754 19,782 095 22,989,653 23,329,781 23,614,585 i
Taxes 754,38a 765,595 836,436 791,058 1,031,531 4
l Interest Expense (Net) ant!
Other Deductions 65,585,509 75,931,84 P^'
65,182,661 63,603,175 59,879,585 J
l 10TAL EXPENSE 234,932,246 258,494,435 259.374,559 262,976,125 266,290,323 J
i OPERATING MARGINS 2.634,669 (7,606,174)
4,741,005 (836,508) 1,629,775 NON-Ol'ERN11NG MARGINS 2,221,756 3,900,861 3,961,238 3,874,208 2,838,129 NET MARGINS
$ 4,856,425
($ 4,205,313)
$8,702,243
$3,037,700
$4,467,904
- Initial write-off of unrecoverable expenses of $10,130,000 upon abandonment of GGNS Unit II is included in "Other Deductionsf M
1 l
4 e
1
. ~,.,,
n.-
ai hamparative Summary: Enetyy Sources and Sales-Demand 1988 1989 1990 1991 1992-ENERGY SOURCES - MW11 Generated:
Steam 3,135,747 3.218.046 3,168,406 3,070,210 2,891;783' Oiher Generation 1,595 348 3,584 1,642
-766-i
~
3,137,342 3.218,394 3,171,990 3,071,853 2.892,049 -
Pun based; c;
Direct Purchase 562,736 726,824 982,926 1.629,558-1,854,658' Borderline -(SEPA)
_ 60,316_
b7,190 106.668 96,148 103,570 623,082-814.014 1,089.574 1,725,706 1,958,228 Interchanged Power-(Net) 1,263.398 1,345,741
'1,457,712 1,434,367 1.597,162 =
TOTAL ENERGY AVAIIABLE FOR SALE - MWII 5,023,822 5,378,149 5,719,276 6,231,926' 6447,439 6
SAII.S - MWil Southwest MississippiIPA 304,212 329,52M 337,582 336,997 348,734 Dixie EPA 411.036 425.274 436,878 462,245 491,085 Pearl ltiver Valley EPA 414,742 427,557 440,644 445.467 440,102 Singing River EPA 738,911 758,895 786,146 808A34 -
847,965-Southern Pine EPA 982.333 1,128.945 1,183.249 1,215,764 L 1,267,927 Magnolla EPA 337,915 369,027 378,111 375,319
.380,8'8 Coast EPA 673,761 701,440 731,342 -
743,020 823.751 Yazoo Valley EPA 203.508 201,968 201,657 232,134 219,443 Coahoma EPA 90.108 86,583 88,763 90,591 89,130 Delta EPA 334,935 332,986 367,305 3 %.018' 367,242 Twin County EPA 187,272 184,@)
215,478 217,231l 206.50?
Alabama Electric Cooperative 239,851 316,902 444,355 828,500 h73.955 Southeastern Power Administration
_ 3416 TOTAI. SALES - MWII 4,922,090 5,263,214 5,611,510 6,121,720 6,354,719 l-l l
TOTAL SYSTD1 DDtAND - kW 1,290,464 1,448,259 1,332,901 1,380,688 l
[
, (Billing Denuind) -
_ 1,248,607 i
i 24-
he Auditors' Report FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT OF DELOITTE AND TOUCllE 1
Board of Directors South Mississippi Electric Power Association Ilattiesburg, Mississippi We have audited the accompanying b;. lance sheets of South Mississippi Electric Power Association as of December 31,1992 and 1991, and the related statements of net margins and patronage capital and aish flows for the years then ended. These fina ncial statements are the responsibility of the Association'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 Govemment Auditing Standards issued by the Comptroller General of the United States. 'Ihose standards require that we plan and perfomi the audit to obtain reasonable assurance
+
about whether the financial statements are free of material misstatement. An audit includes examining. on a test basis, es idence supporting the amounts and disclosmes in the financial statements An audit also indudes 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.
i In our opinion, such financial statements present fairly, in all material respects, the financial position of South Mississippi Electric Power Association as of December 31,1992 and 1991, and the results ofits operations and its cash flows for the 5 ears then ended in conformity with generally accepted accounting 1
principles.
i t
e i)oOAOCGL+,0uck.e.,
Q es==
6 f
February % 1993 l
4 I
1 I
25 I
1 he Balance Sheets ASSETS l
i'l i
Decernher 31 1992 1991 i-F.LECTRIC UTILITY PIANT (Notes la, Ib, Ic, 2, and 3):
In service - at cost 5 733,881,617 -
5 731,831,767 7,604.965
- {
Construnion work in process 16,987,6_54
, 739,436,732.
.)
750,869,271 1.ess allowance for depreciation 199,257,160 182,674,721 551,612,111 556,762,011 OTilER ASSETS AND INVTSTMINIS l
1 Unrecovered plant cost - at cost (Notes 1b and 3) 83,488.841 86.095,731 '
investments in associated organizations (Notes 4 and 9) 11,258,543 11,265A03 Debt service reserve (Note 9) 9,108,431 4A62A30 i
i Decommissioning trust - at cost (Notes 3 and 9) 2,229,632 1,652, @ 0.
Other noncurrent assets 3,670 3,375 -
106,089,117 303,479,339.
CURRENT ASSETS l
l General fund cash and temporary cash equivalent i
investments (Notes li and 9) 21,990.248 25,571,433-Other invested funds (Note 9) 14,038.072 20,991,553 i
Accounts receivable (including receivables from members of approximately 519.631JK)0119921 l
and 518.957,00011991])(no allowance for doubtful accounts deemed necessary) 21,480,255 20,767,662 inventories (Note Idh Coal 18.602.647 14,910.323 Other fuel 893,199 821,115 -
Material and supplies 13.072.129 12,502413 i
32,567,975 28,233,851 Other 1,134,298 1,289,982
-.-. 210.,8. 4 8 9.6,854,481-.- - -
91,-
DEIIRRED C11 ARGTS (Notes le, 5, and 8)
_ 7,695.615
_ 1,931,644 TOFAL ASSETS
$ 756,607,691
$ 759,027,475 See ' Notes to Tsnancial Statements
- 26 d
r.s
-,,---.-1 r--
l l
l' 9he Balance sheets-continued i
i i
IQUITlr3 AND LIABILITILS l
__.__ _ __._ December 31,__
1992 1991 EQtTI1FS (Notes If and 6):
Membershijw s
55 5
55 Donated capital 535A36 535A36 Patronage capital 34,020.217 29.552,313 34,555,708 30,087,804 l
IONG-1T.RM DI.HT, enluding current maturitics (Notes 8 and 9) 686,045,406 693,319,139 ACCRUI:D I>ECOMMISSIONING OHLIGNIlON (Notes 1b and 3) 2,229,632 1,652,203 OTIIER IDNG-TERM I.IABIIITII3 (Note 10) 629,322 699,247 1
CURRENT I.I AllHITII3:
An ounts payable 15,823,6/a 16J#il,623 Accrued interest 6 4,994 773,375 Other an rued expenses 1,305.195 1,340.015 i
Current maturities of long term debt 15.374.2'_O 14,274JM9 33,147,623 33,269,082 COMMITMENTS AND CONTINGENCII S (Notes 3 and 11) 5 4
19 9
g 27
$tatements of Net Margins and Patronage' Capital i
Years Ended December 31, j
1992 1991 l
. OPI RATING REVENUE:
Electric energy revenue 5 267,R97,H26 5 261,907,622 Other - net 22.272 231,995 i
267,920,098 262,139,617
.1 OPERATING EXPENSES:
J Operation exIrnses:
l'uel 52,148,821 55,049,192 Produulon 13,999,532 12,278,297 Pur hased power 93,881478 86.613,715 Transmiwion 8,587,069 8,763,606 Adrninistratis e and general 4,262,146 4,200,814 172,879,046 166,905,624 Maintenanw expenses:
Production 6,723,742 6.0'9,990 Transtnission 1,593,121 1.629,329 General 56K713 637,168 8.885,576 8,346.487 Depreciation and amortization (Notes la and Ib.)
23,614,585 23,329,781 Taxes 1,031,531 791,058 206,410,738 199,372,950 P
OPERATING MARGINS BEIORE INIT. REST AND OTilER DEDUCTIONS 61,509,360 62,766,667 INTERI3T AND OTIIER DEDUCTIONSi Interest 59,956,732 63,673.417 Allowance for funds uvd during construction (Ntne Ic)
(385,140)
(153.342) l Other deductions 307,993 83,100 59,879,585 63,603,175 OPERATING MARGINS 1,629,7*5 (836,508)
NON-OPERATING MARGINS - PRINCIPAILY INTERTST INCOME 2,838,129 3,874,208 I
NET MARGINS 4,467,904 3,037,700 PATRONAGE CAPITAL AT ITEGINNING OF YEAR 29,552,313 26,514,613 P_.ATRONAGE CAPI.TAL AT END OF YE_AR.. _ _ _. _ _ _.. _ _...
.. _ _ _. _..... _.. _... _ _ _.$ 34,020,217 5 29,552,313 See " Notes to financial Statements' 28 i
v- - - -
[tatements of Cash Flows
. - -. -. Years Endt-d December 31, CAMI 11.OWS 1ItOM OPERATING ACIIVITILS:
Wt margin +,
5 4,167,904 3,037.700 Adjustments ne(essary to recon (ile net margins to net cash provided by oirrating actis ities:
Depreciation. amortization, and depletion 25.746,149 24 110.245 Gain on sale of ins estment (123,481)
(Inuease) decreaw in ac counts rec eis able (712,593) 6HOA72 Increase in inventon ies (4,334,124')
(5,884,590)
(Increaw) decrea se in other assets (7,04619) 371,950 im rease (decrease) in accounts payable and other liabilities (1.162,7N )
3.262,560 s
Decrease in aurued interest payable (128.881)
(60 209) increase in act rued decommiwoning payable 577A29 525.251 Net Cash Pruvided by Operating Activities 17,366,561 25,919,898 CASII ll.OWS I ROM INVLSTING ACTITTilLS:
Construc tion and a<.quisitions of elettric utility plant (17 142,053)
()3.058.142)
Cost of ienrcments of electrk utthty plant (net) 626,386 852,41H inucase in debt senke reserve (4.643,361) 294,932 ha rease in de< ommissioning trust (577,232)
(1,652,400)
(Increase) det rease in other ins ested funds 6,953,981 (13.363,827)
( )ther 6.565 77,766 Net Cash t' sed in Investing Activities (14,774,214)
(26,849,253)
I CASil IIDWS I ROM 11NANCING ACll)TrlES:
Payment of debt (14.850,532)
(13.207,402)
Prot ceds f rom debt 8.67?.(00 1,524300 Net Cash 14ed in Financing Activities (6,173,532)
(11,683,402)
NTT DILRIASE IN CA%II AND CAS11 EQUIVAILNTS (3,581,185)
(12,612,757)
CASII AND CAS11 I QUIVAI.INTS AT IIEGINNING Of YEAR 25,571,433 38,184,190 l
I CASil AND CASil IQl'IVALINTS AT END 01 ITAR- - -
$ 21,990,248
$ 25,571,433 1
CASti AND CASil FQl'IVA1.LNTS AT END Of ITAR:
j i
Cash 5
140.248 5
5f6 420 C< immercul paper 21,850J 0) 25.0[6013
_$ 21,990,248
$ 25,571,433 h
5cc 'N ces to Iin. n; tal Simemenh 29 s
i
/otes to Financial Statementsfor the Years Ended December 31,1992 and 1991 NOIF.1 - $UN1NIAltY OIP SIGNII'lCANT ACCOUNTING POLICIIM South Mississippi Electric Power Association (SMEPA)is a rural electric cooperative established under the laws of the State of Mississippi. SMEPA is a generation and transmission cooperative which provides electric power to eleven owner-members which are sural electric distribution cooperatis es providing electric power to consumers in certain areas of Mississippi. Financing assistance is provided by the United States Jepartment of Agriculture, Rural Electrifica-tion Administration iREAL in addition to being subjed to regulation by its own governing board of directors SMEPA is subject to (ertain rules and regulations promulgated for rural elecric borrowers by REA. SMEPA maintains its acc ounnng records in accordance with the Federal Energy Regulatory Commission's Chart of Accounts as modified and adopted by REA. As a regulated utility, the methods of allocating costs and revenue to time periods may differ from those principles generally applied by nonregulated companies. The more significant accounting policies are generally desenbed as follows:
a.
Ellectric Utility Plarat and Depreciation Electric utihty plant is stated at cost, w hich indudes contract work, materials and direct labor, allowance for funds I
used during construction, and allocable overhead costs. %e cost of electric generating stations and related facihties l
also includes t osts of training and production incurred. less res enue earned, prior to the date of commercial opera-l tion.
Depreciation is provided on the straight-line method for utility plant at the following annual composite rates:
i i
j Nuclear plant 2.85 %
j Non-nudear plant 3.00% to 3.10%
i Transmission plant 2,75 %
l General plant and transportation equipment 2feb to 25.0mv 1
At the time units of electric utility plant are retired, their original cost and cost of removal,less net sah age value, are charged to the allowance for depreciation. Replacements of electric utdity plant involving less than a designated unit value of property are charged to maintenance expense.
Coal reserves are stated at cost. Depletion is provided by the units mined method.
e to. Cmt of Deconernluloning Nudcar Plant and Annorth.ation of' Unrecoverwl Plant Costs SMI.PNs portion of the estimated decommissioning co t of Grand Gulf Nuclear Station (GGN5) Unit I is tharged to operating expenses os er the service life of Unit I of approximately 35 years.
SMEPAN portion of the unrecovered plant costs of GGNS Unit 11 of approximately 583.-iS9JYo and 586,096.000 at December 31,1992 and 199L resperth ely, is being amortized over the rem.nning life of the related debt of approxi-j mateh 27 y ears, and approxunated 52.005J)oo and 52.506.000 in 1992 and 1991, respectively.
l I
i c.
Allowanec for runde Uhed During ConMruction l
Allow ance for funds used during constmetion represents the (ost of directly related borrowed funds used for construction of the elcaric plant. where applicable, and an allowance based on the average cost of appropriate i
borrowings when general funds are used to fund construction. The allowance is capitalized as a c omponent of I
the c ost of the electric plant w bde it is under construction.
Capitahzation (cases when the electric plant is placed in service, or in the case of clearic generating stations and rela:ed faciliues at the date of commercial operation.
i I
d.
IHWeDtor$ch lth entories are 'tated at as erage costs.
30 t
c.
Deterred charges Cost of preliminary. surveys for development of possible methals to obtain and deliver energy to fulfill members' future requirements, including feasibility studies leading to financing necessary plant expenditures, are recorded as deferred charges. If construction of a project results from such surveys, the deferred charges are transferred to the cost of the facilities. If a preliminary survey is abandoned, the costs incurred are written off, i
ikind issue costs are being amortized by the straight-line method, which does not differ materially from the interest method, over the tenn of the related debt. The amortization during the period of construction is capitalized.
O Patronage Capital
.j The bylaws of SMFPA provide that any excess of revenue over expenses and accumulated prior y ear deficits shall be
'i treated as advances of capital by the member patrons and credited to them on the basis of their patronage.
a l
g.
Innen hange Power 4
M1 EPA records the electrical power received or provided on an interchange basis at its cost as detennined under various contractual arrangements.
)
l In. Inconw Taxes SMFPA is exempt from l'nited States income taxes pursuant to Section 501 (c)(12) of the Internal Revenue Code, which l
recluires that at least 85% of SMEPVs gross income be deris ed from its memlus.
k I
I 1.
Cash and Cash fiptivalents i
I or purposes of reporting cash flows. all temporary investments with maturities of three months or le.ss when purchased I
are deemed to be cash equivalents.
1
- j. Iteclautikations Certain reclassifications have been made to the 1991 finanual statements to conform to the 1992 method of presenta-l tion.
1 AOTI: 2 - 11Irl hlC triII.IIT 3*1 ANT 1
Electric utility plant consisted of the following:
1992 1991 Nu&ar proxluction plant 5394.139,724 5394,983,346 Non-nuclear production plant 211 531,114 210,546.218 1
Transmission plant 76,710,747 75,518,204 Coal properties and preparation plant 24,603.321 24 /201,851 i
Land and land rights 12,591,949 12,454,744 General plant and transportation equipment
_1. _4.204_,762
_13,727A04 d
i Electric plant in service 733,881,617 731,831,767 Lonstruchon work in process
_16.98-'/M4
__7fj4f]6_i 5750,869 271 573_9,13_6 73.2
= _ = _.
i a
Noar 3 - CONsTuticTsoN wonK IN Puocrss AND Costur Ms:NsN RI.GAltDING GRAND GUIE l
NUCIJAH %TATION SMI PA owns a 1(N undivided interest in a nuclear generating station known as " Grand Gulf Nuclear Station" (GGNS).
I whic h consisted of tw o 1250-megawan generating units. Commercial operation for Frut I began on July 1,1985. In September 1985. the construaion of Unit II was suspended by regulatory authonties.
i i
i l
i 31
In September 1989, the majority owner elected to abandon Unit II, SMEPA's accumulated cost in Unit II was approxi-mately 5104,00(),000, including allowance for funds used during construaion of approximately 542,000,000. At the date -
of abandonment, SMFPA made a determination as to the cost that could be recovered through future rate increases and charged the remaining cost to expense. After transfers to GGNS Unit I inventories of approximately 52,085,000 and propeny accounts of approximately 5605,000, approximately 591,180,000 was transferred to unrecovered plant cost on the balance sheet during 1989; and the unrecoverable cost approximating 510.130,000 was included as a loss in the statement of net margins and patronage capital for 1989. This accounting for Unit 11 has been reviewed and appros ed by REA (see Note Ib).
In 1990, SMEPA submitted a formal plan to the Nuclear Regulatory Commission (NRC) that demonstrated assurance that sufficient financial resources would le available at the time it lecomes necessary to decommission Unit 1. In addition, SMEPA received approval from the Intemal Revenue Service to establish a " tax-free" grantor trust as a vehicle to fund the estimated decommissioning costs.
]
I SMEPA has contributed to the trust amounts sufficient to fund the estimated accrued decomrmssioning obligation that existed at December 31,1992 and 1991. SMEPA estimates that the funding requirement will approximate 5439,000 annually through 2022. the expected date of decommissioning. The estimated funding requirement will be recalculated and adjusted periodically.
i NOI E 4 - INVINI %f EN'Ih IN AS%OCIATI D ORGANIZ.A'IION%
im estments in associated organizations are stated at cost and consisted of the following:
1992 1991 National Rural Utilities Cooperath e Iinarne Corporation (CFC) Capital Tenn Certificates 5 8,414,533 5 8A14,533 i
CI C Sulurdinated Term Certificates 2A90,000 2,490,000 Other 354,010 360,870 1
511,258,543 511,265,403 Capital Term Certificates bear interest at 3% and 5% and mature in 2007 through 2080. The subordinated Term j
Cenihcates bear interest at 9.873% and mature in 2u15.
NOTE 5 - der > turn CinAnci.s 1he following is a summary of amounts recorded as deferred charges as of December 31,1992 and 199h 1992 1991 Unamortized premiums on reacquired debt 54,619,682 5
(~namortized debt discount 1,118.060 1,201,160 Past servke retirement benefit cost 559,395 649,678 Nudear fuel costs 30,208 80,806 Deferred parchased power cost - net of amortization
_ 1,368.27_(J l
57,695,615
_ _ _51,931 M 4
==
~ = =
l Deferred purchased power t ost is the re3 ult of a change in the billing cycle of a power supplier. The accelerated charges u ere prorated and are being billed to cooperative members in 1992 and 1993 based on megawatt hour usage.
i NO'IT. 6 - I*ATRON AGE cal'ITA1.
At December 31,1992 and 1991, patronage capital consisted of:
1992 1991 Assignable 5 4d67,90i 5 3.037 700 Assigned to date 35 A06 071 32,36&371 39.873.975 35A06.071 Less: Rentements to date 5.853,758
__529,552,313 5.853 75R
_534.02n.217
.=.:
. = = = =. _,
32
.1
Under the provisions of the Mortgage Agreement, until the equities and margins equal or exceed forty percent of the total assets of SMEPA, the return to patrons of contributed capital is generally limited to twenty-five percent of the patronage t ap:tal or nurgins recen ed by SMEPA in the prior (alendar y ear. The equities and rnargins of SMEPA represent 4.56% and 3.96%. of the total assets at December 31,1992 and 1991, respedively.
son. ? - unont Trust nonutowsN<;s l
SMLPA has a 525.000,000 short-tenn hne of credit available with National Rural Utilities Cooperative 1"inance Corpo-ration (CI'CL At December 31,1992 and 1991, SMEPA had no borrowings against this line of credit. Interest rates on shon-term introwings with CI'C as eraged approximately 5.a(r'o and 7.43% for 1992 and 1991, respectively. Capital Tenn Cernficates in CI'C. w hich are included in other assets and investments. cannot be redeemed so long as the line I
of t redit is in plac e.
So n s: H - IowTrust on:n 1.onwtenn debt tonsisted of the following:
l 1992 1991 25 itEA mortgage notes pa3 able, due in yunerly mstalbnents through 20(N 5 2t91(389
$ 26.715.'06 r"o RFA mongage notes payable, due in i
quarterly instalknents through 2015 19,372.703 20.004.391 5% IRA mortgage notes payable, due in 4
monthly instalhnents through 2019 t',654.530 9.149,-"72 Mortgage notes payable to Federal linancing ILtnk (ITII) at interest rates s arymg from -i.035% to i1 "94'o. due in quanerly installments through 2020 565,218.610 56' 974,555 Notes payable to National llank for Cooperatn es at interest rates s aryng fioin aI % to 6.10%. due in quarterly instalbnents through 2022 3.038Maa 3,152, 84 Lamar Count). Mississippi. Pollution Cont rol llonds.
19-~ Series, 5 25% to 6.125n, due senn annually through 200 8.615.000 29,780.000 19 H A Series,5.40% to 6125% due semi-annually through 2008 2.060.000 2.110.000 19 8 A-1 Series. 6.2% due semi-annually through 2008 45.000
~~7 5.000 Claitorne County %ssissippi, Pollution Contru lionds - 1985 G Series variable iritelest IJttfs (2.50'o to 2.95"O at Dec ember 31, lW2), due annualk through 2015 47.000.000 4 7h00.000 975% note payable to National Rural Utihties 0 operain e Finant e Lorporation. due in quarterl3 installments through 2022 801.000 801.000 01 A19.6 6 07,593,208
- 1. css t urrent nutunties 15.374.2 0 14 274.069 3 686.015.406 5 693.319.139 33
l
'i
~l i
Substantially all assets of SMEPA were pledged as collateral on long-term debt i
SMEPA has the option on FFli promissory note advances to elect (subject to REA approval) interim maturity dates of -
approximately two years after the date of the advance or a long-term maturity ranging from approximately 27 to 34 years (depending on the terms of the panicular note) after the end of the calendar year in which the advance was made. If the long-term maturity date is not selected, then on subsequent interim maturity dates, SMEPA may designate that it desires either another shon-term maturity or the long-tenn maturity date as specified in' the note.
Approximate annual maturities (scheduled periodic principal payments) of long-term debt for the next five years are as l1 j
follows:
1993
. $ 15.37-i,000 1994 16,301,000 1995 17,511,000 i
1996 18,644,000 1997 19,849,000 The above maturity schedule reflects management's prerogative of converting FFB advances at interim maturity dates from 1993 through 1997 to long-term maturities. SMEPA has used a rate it estimates to be an appropriate long-term rate, '
based on the December 31,1992 interest rates, to compute the annual principal requirement for FFU advances on which long-temi maturity dates have not been selected at December 31,1992. These advances totalled approximately-53,988,000 at December 31,1992.
At December 31,1992, SMEPA had unfunded loan commitments from CFC and REA of*51,505 000 and $3,674,000, respectis ely.
SMEPA paid approximately 560,086,000 in 1992 and 563,734,000 in 1991 in interest on long-tenn debt.
SMEPA is required 15 mortgage covenants to maintain renain average levels of interest coverage and annual debt service coverage. SMEPA was in compliance with such requirements at December 31,1992.
I During 1992, SMEPA agreed with FFB and REA to amend two promissory notes effecting a refinancing of approximately 5 6 933 000. A prepayment penalty of approximately $4,845,000 was paid upon execution and was deferred and will be i
amortized over the remaining hfe of the affected loans using a method which approximates the interest method. Amoni-zation of the prepayment penalty approximated $225,000 in 1992.
4 NOTE 9 - FAllt VAI(II3 OF I'INANCI AL INSTHUNIENTS
- -l In December 1991, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No.107 (FAS 107) relative to disclosures about fair values of financial instruments. FAS 107 requires disclosure of values and is effecth e for 1992 year-end reporting for calendar year companies.
~
financial instruments' fair values, as well as the methodology and significant assumptions used in estimating fair The following methods and assumptions were used by SMEPA in estimating its fair value disclosures for financial instruments:
Cash and cash equivalents: The carrying amount reported in the balance sheet for cash and cash equivalent.s approxi-mates its fair value.
Investment securities: The fair values for marketable debt and equity securities are based on quoted market prices j
i and the present value of future cash flows discounted at a mmmensurate market rate.
j Long-term debt: The fair values of SMEPA's long-term debt are estimated using discounted cash flow analyses, based on SMEPA's current incremental borrowing rates for similar types of borrowing arrangements and rates which would be 1
charged by the appheable issuer where appropriate.
l i
i l
l 34
The carrying amounts and a;, proximate fair vahies of S\\1FPA's financial instruments at December 31,1992 are as follows:
Carry ing Estimated Amount Fair Value Cash and cash equivalents s21,990,248 521,990JN)0 Investments; in associated organizations 11,258,593 7,890f00 Debt service resen e 9,108.431 9,391,000 Decommissioning trust 2,229,632 2,301,000 Other ins ested funds 14 038.072 14,254,000 j
1 i
9 6,634.678 533,836.000 Carrying Estimated Amount Fair Value Long-tenn debt, including current maturities:
Federal Financing Hank 5565,218.610 5667,530,000 Rural Flectrifkation Administration 53.941,622 50.207,000 4
Pollution Control Bonds 78,420.000 79,254.000 Other 3.839.4 H 3.834,000 5701 A_19_.6_76 5_WR8_2_5._00.._0 There w as no material difference between the mntract or notional amount and the estimated fair value of loan commitments.
l The aggregate estimated fair value amounts presented do not represent the underlying value of SMEPA and may not he indicative of amounts that might ultimately be reahzed upon disposition or settlement of these assets and liabili-ties.
I a
NOTE lo - PENMON PIAN
'i Substantially all of SMEPA's empk>yees participate in the National Rural 1]ectric Cooperative Association (NRECA)
Retirement and Security Program, a defined benefit pension plan qualified under Section 401 and tax-exempt under Section 501ta) of the Internal Revenue Code. SMEPA makes annual contributions to the program equal to the -
amounts aurued for pension expense except for the perirxl sinceJuly 1,1987 when a moratorium on contributions was placed in effect due to reaching full funding limitation. In this multiemployer plan, which is available to all member cooperatives of NRECA, the accumulated benefits and plan assets are not determined or allocated separately by individual employer. SMEPA had no pension expense for this plan in 1992 or 1991. In 1990, SMEPA amended its retirement plan to provide for an earlier retirement. The amendment became effectiveJanuary 1,1991. SMEPA clected to amonize prior senice costs created by the amendment over ten years. The effect of the amendment is not material to the financial statements, in addition to providing pension benefits, SMEPA provides certain health care insurance benefits for retired empkiy-ces. Substantially all of SMEPA's employees may become chgible for those trnefits if they reach nonnal tetirement j
age while working for SMI PA. SMEPA recognizes the cost of providing these benellts by expensing the annual insurance premiums, which were not material for 1992 or 1991.
In 1990 the Financial Accounting 5tandards Ikurd issued Statement No.106. " Employers' Accounting for Postretirement lienefits Other Than Pensions," which is generally ef fective for calendar year 1995, Management is currently es aluating the effects of the application of Statement No.106, which are not presently known.
B 7
d 35 l
I i
e.
.c
~.
~
NOTE 11 - COMAf fTMENTS AND CONTWGENCIES 2
in March 1988, SMEPA began reteiving its n;al supply under an agreement with a new supplier. This agreement ptuvides that renain conditions is met including, among other things, minimum annual delivery requirements, and does not require -
the coal produced for SMEPA's consumption be taken from SMEPNs coal reserves, so long as the coal meet. the quality requirement 3 of the agreement.
SMLPA has construction conunittnents for various non-nuclear utibty projet.ts totaling approximately $3,070,000 at December 31,1992.
SMEPA is defendant in certain litigation incurred in the normal course of bus: ness. Management, based on achice of legal counsel, is of the opinion thht the uhimate resolution of the litigation will not have a material adverse effect on 5MEPNs financial condition.
+
t i
Y d
d i
A di t'--s v}V South Mississippi F 1 -
Electric Power Association
The Cooperative's Cooperative" Post Office Box 15849 Hattiesburg, Mississippi 39404-5849 601*268*2083 36
fDeloittea Touche LN L
ENTERGY OPERATIONS, INC.
i.
FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31,1992 j
+
+
i-L DelatteTouche Tohmatsu international
TABLE OF CONTENTS DESCRIPTION PAGE NO.
Independent Auditors' Report 1
Balance Sheets 2-3 Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6 - 12 Supplemental Schedules:
Analysis of Charges for Service Associate and 13 Nonassociate Companies Schedule of Expense Distribution by Department 14 - 15 or Service Function
q 1
Deloitte&
Touche Suite 3700 Telephone:(504) 5812727 One Shell Square Facsimile:(504) 561-7293 701 Fbydras Street New Orleans. Louisiana 70139-3700 1
1 INDEPENDENT AUDITORS' REPORT To the Board of Directors of Entergy Operations Inc.
We have audited the accom anying balance sheets of Entergy Operations, Inc. as of December 31,1992 and 19f/1, and the related statements of operations and cash flows for th years ended December 31,1992 and 1991, and for the period from June 6,1990 (date of meeption) to December 31,1990. These financial statements are the responsibility of the -
Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence 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, such financial statements present fairly, in all material respects, the financial-position of the Company at December 31,1992 and 1991, and the results ofits operations and its cash flows for the years ended December 31,1992 and 1991 and for the period from June 6, i
1990 (date ofinception) to December 31,1990 in conformity with generally accepted '
accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules - analysis of charges for service associate and nonassociate companies (page 13) and schedule of expense distribution by department or service function (pages 14 and 15) for the year ended December 31,1992 are presented for the purpose of additional analysis and are not a required part of the basic financial statements. These schedules are the responsibility of the Company's management. Such schedules have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
y&eM February 12,1993 DeloitteTouche i
Tohmstsu international
ENTERGY OPERATIONS,INC.
BALANCE SHEETS ASSETS December 31, 1992 1991 PROPERTYAND FACILITIES-at cost:
Service company property (including household improvements)....
10,110,666 $
8,416,662 Constmetion work in progress......
992,366 1,281,587 Total.
I1,103,032 9,698,249 Less - accumulated depreciation and amortuation....
2,415.812 1,339,672 Property and facilities - net..
8,687,220 8.358,577 CURRENTASSETS:
Cash 51,923 Accounts receivable:
Associated companies......
3,634,734 7,750,806 Other.....
15,087 Other.
43,099 Total.
3,692,920 7,802,729 DEFERRED DEBITS:
Other...
321,235 249,035 TOTAL.
12,701,375 $
16,410,341 2
ENTERGY OPERATIONS,INC.
BALANCE SIIEETS CAPITALIZ4 TIONAND LIABILITIES December 31, 1992 1991 CAPITALIZA TION:
Common stock, $5 par value, authorized 1.000 shares; 5,000 $
5,000 issued and outstanding 1,000 shares (Note 3)..
Paid in capital.
995,000 995,000 l
l Total 1,000,000 1,000,000 l
CURRENT LIABILITIES:
Notes payable to associated companies (Note 2).
4.390,000 7,410,000 Accounts payable:
Associated companies.
818,106 2,144,937 3,613,484 5,042,742 Other.
205,686 521,972 Other.
Total 9,027,276 15,119,651 DEFERRED CREDITS:
Accumulated deferred income. taxes.
206,862 140,864 2,467,237 149,826 Other.
Total.
2,674,099 290,690 CO.1L111TMEN15 (Note 4) 12,701,375 $
16,410,341 TOTAL.
T j
See Notes to Financial Statements.
3
l l
ENTERGY OPERATIONS,INC.
STATEMENTS OF OPERATIONS For the Years Ended December 31, 1992 1991 1990 (1)
RESENUES:
$ 623,455.962 5 535,669,594 $ 414,167,018 Senices rendered to associated companies.
53.844 98.156 Miscellaneous income................
623,455.962 535.723,438 414.265.174 I
Total I
EXPENSES:
Salaries and wages 194,986.082 173,866,951 105,202,775 152,247,748 156,997,285 106,763,525
.l Other general and administrative.
Outside senices employed.
242,227,636 176,392,048 190,771,421 17,836,664 14,539,616 6,227,806-Rent expense.
Depreciation and amortization...
1,082,579 898,825 453,715 Taxes other than income taxes..
14,675,614 12,446,790 4,596,620 Interest expense.......
242,994 394,224 249,312 Income tax expense 156.645 187.699 Total..
623.455.962 535,723.438 414.265.174 NONE NONE NONE NETINCOME I
(1) For the period from June 6,1990 (date ofinception) to December 31,1990.
l l
See Notes to Financial Statements.
4
4 i-ENTERGY OPERATIONS,INC.
STATEMENTS OF CASH FLOWS
- For the Years Ended December 31, 1992 1991 1990 (1)
OPERATINGACTIVITIES:
Net income.......
NONE NONE NONE Non. cash stems included in net income:
Depreciation and. amortization.....
1,082,579 898,825 453,715 Changes in:
Accounts receivable....
4,100,985 (2,518,290)
(5,232,516)
Accounts payable...
(2,756,089) 1,588,620 5,599,059 Other current assets andliabilities......
(359,385) 489,573 32,399 Other deferred credits...
2,247,846 Other..
56.924 105.544 (76.757)
Net Cash Flow Provided By Operating Activitaes....
4.372.860 564.272 775.900 INVESTINGACTIVITIES:
Construction and acquisition af. plant.......
(1,404.783)
(2.686.034)
(7,012.215)
Net Cash Flow Used By Investing. Activities....
(1,404.783)
(2.686/)34)
(7.012.215)
FINANCINGACTIVITIES:
Proceeds from issuance of conunon. stock....
1,000,000 Notes payable to associated companies..............
(3,020.000) 2.140.000 5.270.000 Net Cash Flow (Used) Provided By. Financing.Actirities...
(3.020.000) 2,140.000 6.270.000 Net Change in Cash,.
($1,923) 18,238 33,685 Cash at Begirming.of Period...
51.923 33.685 CAS!! AT END OF. PERIOD.
0$
51,923 $
33.685 SUPPLEMENTAL DISCLOSURES OF CASif FLOW INFORMA TION:
Cash paid (received) during the period for:
l Interes!....
258.343 $
397,375 $
215,453 income Taxes......
(2,099,000) $
(1) For the period from June 6,1990 (date ofinception) to December 31,1990.
See Notes to Financial Statements.
5
ENTERGY OPERATIONS, INC.
NOTES TO FINANCIAL STATEMENTS NOTE 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES Organi:ation In June 1990, Entergy Operations, Inc. (Entergy Operations), a nuclear management senice company wholly owned by Entergy Corporation (Entergy), assumed operating responsibility for Arkansas Power & Light Company's (AP&L) Arkansas Nuclear One Genertting Station Units 1 and 2 (ANO), Louisiana Power & Light Company's (LP&L)
Waterford Steam Electric Generating Station Unit No. 3 (Waterford 3), and System Energy Resources, Inc.'s (System Energy) Grand Gulf Nuclear Station Unit 1 (Grand Gulf 1), subject, respectively, to AP&L's, LP&L's, and System Energy's oversight. AP&L, LP&L, System Energy and the other Grand Gulf I and Waterford 3 co-owners retained their ownership interests in their respective nuclear generating units. Further, AP&L, LP&L, and System E rgy retained their associated capacity and energy entitlements and pay directly or reimbw. Entergy Operations for the costs associated with the operation and maintenance of these units. Entergy entered into separate guarantee agreements with l
AP&L, LP&L, and System Energy whereby Entergy ra aranteed the financial ability of Entergy Operations to meet its various financial obligations to AP&L, LP&L, and System Energy under the operating agreements, as long as AP&L, LP&L and System Energy continue to meet their payment obligations to Entergy Operations under the applicable operating agreements.
APSCAudit The Arkansas Public Senice Commission (APSC) order approving the nuclear management consolidation included a provision whereby the APSC staff and AP&L would designate an independent consultant to audit Entergy Operations to determine the extent of savings achieved as a result of the consolidation. The APSC staff agreed to the consolidation on the basis that the independent evaluation would be performed and that the APSC could cause AP&L to terminate the operating agreement with Entergy Operations if the APSC determined that the agreement was not in the public interest (the LPSC also reserved this right). The APSC staff and AP&L selected an independent consultant to perform the audit, which was conducted in two phases, an initial phase to evaluate the projected benefits of consolidation and a follow-up phase to determine the progress of the consolidation savings. The auditors completed the majority of Phase I fieldwork in December 1991 and issued a final report thereon in April 1992 that indicated the decision to consolidate was rational, savings were reasonable, implementation actions were appropriate, and savings are being achieved. Phase II began at the end of the first 6
ENTERGY OPERATIONS,INC.
NOTES TO FLNANCIAL STATEMENTS (Continued) full year of operation under consolidation and will resume each year following if deemed necessary. The first follow-up review was completed in October 1992 and again showed overall performance improvement and continued consolidation savings.
System ofAccounts Entergy Operations maintains its accounts in accordance with the system of accounts prescribed by the Securities and Exchange Commission (SEC).
Depreciation and Amorti:ation Depreciation is computed on a straight-line basis at rates based on the estimated 1
I service lives of the various classes of property. Amonization ofleasehold improvements is computed on a straight-line basis over the lease terms.
Income Taxes Entergy Operations, its parent, and affiliates file a consolidated federal income tax retum. Income taxes are allocated to Entergy Operations in proportion to its contribution to consolidated taxable income. SEC regulations require that no System company pay more income taxes than it would have paid had a separate income tax return been filed.
Deferred income taxes are recorded based on differences between book and taxable income. In addition, Entergy Operations files a consolidated Mississippi income tax return with certain other System companies. In December 1992, Entergy Operations received a credit of 52.2 million in conjunction with its consolidated state income tax return, which has been deferred until the ultimate resolution of the allocation method.
1 i
Entergy Operations' federal tax net operating loss carryforward as of December 31, i
1992 is approximately 580 thousand and may be utilized in the future to offset federal taxable income. If not utilized, the carryforward will expire in the year 2007.
In February 1992, the FASB issued Statement of Financial-Accounting Standards (SFAS) No.109, " Accounting for Income Taxes," which is generally effective for fiscal years beginning after December 15, 1992. The new standard requires that. deferred income taxes be recorded for all. temporary differences and carryforwards, and that deferred tax balances be based on enacted tax laws at tax rates that are expected to be in effect when the temporary differences reverse. The new standard was adopted by Entergy Operations effective January P,1993.
7
ENTERGY OPERATIONS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
Fair Value Disclosure SFAS No.107, which is effective for fiscal years ending afler December 15,1992,.
requires disclosure of the fair value of all significant financial instruments. However, because of the related party nature of Entergy Operations' financial instruments, determination of the fair value is not considered practicable.
NOTE 2. LINES OF CREDIT AND RELATED BORROWINGS Entergy Operations, through a line of credit (at an interest rate of prime), has SEC authorization, through November 30,1994, to effect short-term borrowings with Entergy in an aggregate amount outstanding at any one time of up to $15 million. This line of j
credit was not used during 1992.
J l
Entergy Operations participates with certain other System companies in the System Money Pool (Money Pool), an intra-system borrowing arrangement designed to reduce the System's dependence on external shon-term borrowings. As authorized by the SEC, the borrowings by Entergy Operations from the Money Pool may not exceed the amount of the unused portion of the line of credit discussed above.
The borrowings from the Money Pool and applicable interest rates for 1992,1991, and i
1990 were as follows:
l 1992 1991 1990 Average borrowing...
$6,459,071 $6,409,096 55,367,000 Maximum borrowing at any month end.......
56,970,000 $7,410,000 $5,740,000 Average interest rate:
During the year..
3.7%
6.1%
8.0%
At year end.
3.3%
5.2%
.8.1%
NOTE 3. COMMON STOCK There was no change in the number of shares of Entergy Operations' common stock f
during 1992 or 1991. On June 6,1990, Entergy Operations issued 1000 shares of $5 par l
value common stock to Entergy Corporation for an aggregate consideration of $1 million.
l l
8
ENTERGY OPERATIONS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 4. COMMITMENTS Entergy has entered into a Reorganization Agreement (Agreement) with Gulf States Utilities Company (Gulf States), which sets forth the terms and conditions for a merger of the two companies. In connection with the merger, it is currently contemplated that, subject to the receipt of necessary regulatory approvals and any other approvals or consents required by law or contract, Gulf States would enter into agreements with Entergy Operations in order to consolidate the operations of Gulf States' River Bend Station, a nuclear generating facility, with those of the nuclear generating units in the Entergy System. The merger is subject to the approval of the Federal Energy Regulatory Commission (FERC), the SEC, the Nuclear Regulatory Commission (NRC), the Louisiana Public Service Commission (LPSC), and the Public Utilities Commission of Texas (PUCT). The SEC, the NRC, and the LPSC have also been asked to approve the proposed arrangements between Entergy Operations and Gulf States for the operation of.
River Bend by Entergy Operations. Various parties have intervened in these proceedings.
i On January 13,1993, Gulf States filed two applications with the NRC relating to the merger. One application requests the NRC's consent to the change in ownership of Gulf States that would result from the merger. The other application requests the NRC to amend the River Bend Operating License to substitute Entergy Operations for Gulf States as the licensed operator of the facility. Also, on August 28, 1992, Entergy, Entergy Operations, and Entergy Services filed a joint application with the SEC under the Holding Company Act requesting approval of the Agreement and certain proposed transactions relating to the merger, including the proposed Operating Agreement for the River Bend Station to be entered into between Gulf States and Entergy Operations.
Hearings before the LPSC began in October 1992. Hearings are scheduled to begin before the PUCT in March 1993 and the FERC in May 1993. Entergy anticipates that final regniatory approvals, including the LPSC, the PUCT, the FERC, the NRC, and the SEC approvals, for the completion of the merger and the operation of the River Bend Station by Entergy Operations will be obtained by year end 1993.
NOTE 5. OPERATING LEASES Upon formation of Entergy Operations, certain operating leases were either assigned to Entergy Operations by System Energy, or entered into directly by Entergy Operations.
9
ENTERGY OPERATIONS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
Total rental charges to expense for 1992,1991 and 1990 were approximately $17.8 million, $14.5 million, and $6.2 million respectively, of which approximately $14.0 million,
$10.6 million, and 55.0 million, respectively, related to rent expense associated directly with AP&L, LP&L, or System Energy leases and approximately S3.8 million, $3.9 million, and $1.2 million, respectively, related to rent expense associated with Entergy Operations leases discussed above.
As of December 31, 1992, Entergy Operations had non cancelable operating leases with future minimum rental commitments on building space, vehicles, computer equipment and other ofIice equipment as follows:
Minimum Lease Payments (in Thousands) 1993.
.5 3,121 1994.
2,226 1995.
2,008 1996.
2,008 1997.
2,008 For years thereafler.
12.283 TOTAL.
.S 23.654 NOTE 6. POSTRETIREMENT BENEFITS Pension Plans Effective June 1990, all of System Energy's employees became employees of Entergy Operations. Ilowever, the employees still remain under System Energy's postretirement benefit plan, and no transfers of related pension liabilities and assets have been made. In addition, ANO and Waterford 3 employees who transferred to Entergy Operations in June 1990, remain under AP&L's and LP&L's plans, respectively, and no transfers of related pension liabilities and assets have been made.
Entergy Operations' employees, not formerly in the Entergy System, participate in the postretirement plans of either AP&L, LP&L, or System Energy, depending upon their work location. The System's policy is to ftmd pension costs in accordance with contribution guidelines established by the Employee Retirement income Security Act of 1974, as amended, and the Internal Revenue Code of 1986.
10
l 1
ENTERGY OPERATIONS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
Other Postretirement Benefits
/
Entergy Operations provides certain health care and life insurance benefits for retired employees. Substantially all employees may become eligible for these benefits if they reach retirement age while still working for the Entergy System. Entergy Operations recognizes the cost of providing these benefits by expensing the amounts as incurred and is then reimbursed by AP&L, LP&L, and System Energy for their share of these expenses.
Entergy Operations reimbursement for the cost of providing these benefits to retirees in 1992 was approximately $35 thousand for AP&L, $22 thousand for LP&L, and $24 thousand for System Energy. Prior to 1992, the cost of providing these benefits for retirees was not separable from the cost of providing benefits for active employees. In 1991 and 1990, Entergy Operations received reimbursements for such costs of approximately $5.9 million and $1.6 million for AP&L, $3,9 million and $1.9 million for LP&L, and $2.5 million and $1.9 million for System Energy, respectively.
Effective January 1,1993, Entergy Operations must implement SFAS No.106,
" Employers' Accounting for Postretirement Benefits Other Than Pensions." The new standard requires a change from a cash method to an accmal method in accounting for these benefits.
As of January 1, 1993, the actuarially determined accumulated postretirement benefit obligation earned by retirees and active employees was estimated to be approximately $5.2 million. This obligation will be amortized over a 20-year period beginning in 1993. Adoption of the new standard is expected to increase annual expense associated with these benefits by approximately $1.2 million for Entergy Operations, including the effects of the amortization of the transition obligation. However, Entergy j
Operations will be reimbursed by AP&L, LP&L and System Energy to the extent of such j
increased costs.
Postemployment Benefits In November 1992, the FASB issued SFAS No. I12, " Employers' Accounting for Postemployment Benefits," that is effective for fiscal years beginning after December 15, 1993. The new accounting standard requires a change from a cash method to an accrual method in accounting for benefits paid to employees after employment, but before retirement, when cenain conditions exist. The impact of this new standard has not been fully determined.
l l
1 11 l
Ws-
.i =
ENTERGY OPERATIONS, INC.
NOTES TO FINANCIAL STATEMENTS (Concluded)
NOTE 7. TRANSACTIONS WITH AFFILIATES Entergy Operations has been authorized, pursuant to certain operating agreements, to act as an agent for AP&L, LP&L, and System Energy in the operations, but not ownership, of ANO, Waterford 3, and Grand Gulf 1, respectively. In return, AP&L, LP&L, and System Energy pay directly or reimburse Entergy Operations for the costs associated with operating those units.
Upon its formation on June 6,1990, Entergy Operations purchased approximately 55.9 million of corporate assets at net book value from System Energy.
Entergy Operations receives, pursuant to a service agreement, technical and advisory l
services from Entergy Services, Inc. These charges amounted to approximately $16.5 million in 1992, $12.4 million in 1991, and $11.6 million in 1990 with AP&L, LP&L, and System Energy reimbursing Entergy Operations for their respective portions.
l l
12
ANNUAL REPORT OF ENTERGY OPERATIONS, INC.
For the Year Ended December 31.1992 Schedule XVI-Analysis Of Charges for Service Associate arxl Nonassociate Companies I
Instruction:
Total cost of service will equal for associate and nonassociate companies the total amount billed under their sepante analysis of billing schedules, Associate Company Charges Nonassociate Company Charges Tctal Charges for Service l Indirect Direct Indirect Direct Direct Indirect Account DescriNion of items Cost Coq Tcnal Cost Coat Tcmal Cost Cost Tctal 920 Salaries and Weges
$171,594.497
$23,391,585
$194,986,082
$171,544,497
$23,391.585
$194.986,082 921 Office Supplies and Expenses 121,097,667 15,164,413 136,262.080 121.097,667 15,164,413 136,262,080 922 Administrative Expense Transferred - Credit 0
0 0
0 0
0 923 Outside Services Employed 230,159.312 12.068,324 242,227,636 230.159,312 12.068.324 242.227.636 924 Property lasurance 1,484,809 1,005.250 2,490.059 1,484,809 1,005,250 2,490,059 925 injuries and Damages 0
213.517 213.517 0
213.517 213.517 926 Employee Pensions and Benefits (90,463) 12.353,761 12.263,298 (90,463) 12.353,761 12.263,298 928 Regulatory Commission Expense 0
258.096 258.096 0
258,096 258,096 930.1 General Advertising Expenses 0
0 0
0 0
0 930.2 Miscellaneous General Expenses 0
446,768 446,768 0
446,768 446,768 931 Rents 13,995,639 3,841.025 17,836,664 13,995,639 3,841,025 17,836,664 932 Maintenance of Structures and Equipment 0
0 0
0 0
0 403 Depreciation and A-,eh Expense 0
1.082,579 1,082,579 0
1.082,579 1,082.579 408 Taxes Other Than locome Taxes 14.482.871 192,743 14.675,614 14.482.871 192.743 14,675,614 4(r)
Income Taxes 0
90,647 90.647 0
90.657 90.647 410 Provision for Deferred Income Taxes 0
100,320 100,320 0
100.320 100.320 411 Provision for Defermi income Taxes - Credit 0
(34,322)
(34.322) 0 (34,322)
(34,322)
I 411.5 Invedment Tax Crofit 0
0 0
0 0
0 426.1 Donations 125.839 0
125.839 125,839 0
125.839 i
426.5 other Deductions 188,091 0
188.091 188,091 0
188,091 427 Intered on long-Term Debt 0
0 0
0 0
0 431 Other Interest Expense ~
0 242.994 242,994 0
242.994 242,994 TOTAL EXPENSES 553,038,262 70,417,700 623.455.% 2 553.038,262 70.417,700 623.455,% 2 Compensatke for use of Equity Capital 3
430 Interest on Debt to Associate Companice TOTAL COST OF SERVICE 1553,038.262 370,417.700 3623.455,% 2
$553,038.262
$70.417.700
$623.455.%2 t
4
ANNUAL REPORT OF ENTERGY OPERATIONS, INC, l
For the Year Ended December 31,1992 Schedule XVII-Schedule of Expense Distribution by Department or Service Function Instruction:
\\
Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Accounts).
l DEPARTMENT OR SERVIQ FUNCTION Arkansas Grand Gulf Admin Sves Chief Legal and Planning Accosm Description of items Total Overhead Nuclear Nuclear Waterford 3 and Executive External and Number Amount One Station Reg Affairs Officer Affairs Assurance 920 Salaries and Weges 194,986,082 0
$76,062,879
$50,132,085
$45,399,532
$3,907,127
$364,791
$1,575,225
$2,410.998 l
921 Office Supplies tad Expenses 136,262,080 0
60,725.M7 32,662,800 27,709,520 2,694.597 151,100 2,957,560 1,080,895 922 Administrative Expense Transferred - Credit 0
0 0
0 0
0 0
0 0
923 Outside Services Employed 242,227,636 0
117,441,147 57,345,520 55,372,645 1,289,479 0
620.235 2,305 924 Property Insurance 2,490,059 0
0 1,484,792 17 0
0 593.181 0
925 Injuries and Damages 213,517 0
0 0
0 805 0
203,539 0
926 Employee Pensions and Benefits 12,263,298 0
0 (90,475) 12 0
0 0
0 928 Regulatory Commission Expense 258,096 0
0 0
0 0
0 51,114 0
930.1 General Advertising Expense 0
0 0
0 0
0 0
0 0
930.2 Miscellaneous General Espense 446.768 0
0 0
0 0
0 1,999 0
l 931 Rents 17,836,664 0
9,196,471 3,018,709 1,780,460 3,109,486 3,463 45,021 33,197 l
932 Maintenance of Structures and Equipment 0
0 0
0 0
0 0
0 0
l 403 Depreciation and Amortization Expense 1,082,579 1,082,579 0
0 0
0 0
0 0
408 Taxes Other Than income Taxes 14,675,614 192,743 5.695,683 4.845,952 3,941,236 0
0 0
0 409 income Taxes 90,647 90,647 0
0 0
0 0
0 0
410 Provision for Deferred Income Taxes 100,320 100,320 0
0 0
0 0
0 0
411 Provision for Deferred Income Taxes - Credit C4,322)
(34,322) 0 0
0 0
0 0
0 411.5 Investment Tax Credit 0
0 0
0 0
0 0
0 0
426.1 Donations 125,139 0
4,182 108.205 13,452 0
0 0
0 426.5 Other Deductions 188,0 1 0
66,280 80.977 40,834 0
0 0
0 427 Interest on l'ong-Term kbt 0
0 0
0 0
0 0
0 0
430 Interest on Debt to Associate Companies 0
0 0
0
-0 0
0 0
0 431 Other Interest Expense 242,994 242,994 0
0 0
0 0
0 0
TOTAL EXPENSES
$623.455,962
$1,674,961
$269.191,989
$149,588.565
$1M,257,708
$11,001,494
$519,354
$6,047,874
$3,527,395 1
ANNUAL REPORT OF ENTERGY OPERATIONS, INC.
For the Year Ended December 31,1992 Schedule XVII-Schedule of Expense Distnbution by Department Or Service Function I
l DEPARTMENT OR SERVICE FUNCTION Nuclear Chief Entergy Account Fuel Central Operating Operations Business General Corporate Purchasing Number Procurement Engineering Officer Support Services Office 920
$215.269
$2,317.636
$207,996
$1.787.429 13.979,386 15.912.772
$0
$712 957 921 158.149 904,332 42.098 734.666 3.836.575 2.359.411 91,312 153.718 922 0
0 0
0 0
0 0
0 923 734 135.694 (100.012) 8.337 9.907,779 4.813 183.473 15,487 924 0
0 0
0 155.279 0
256,790 0
925 0
201 0
624 8,348 0
0 0
926 0
0 0
0 2,329.512 9,997,383 26.866 0
928 0
0 0
0 0
0 206.982 0
930.1 0
0 0
0 0
0 0
0 930.2 0
0 0
0 226.051 0
218,718 0
93*
2.369 114.035 2.112 7,435 51I,754 0
0 12.152 932 0
0 0
0 0
0 0
0 l
403 0
0 0
0 0
0 0
0 408 0
0 0
0 0
0 0
0 409 0
0 0
0 0
0 0
0 410 0
0 0
0 0
0 0
0 411 0
0 0
0 0
0 0
0 411.5 0
0 0
0 0
0 0
0 426.1 0
0 0
0 0
0
.0 0
426.5 0
0 0
0 0
0 0
0 427 0
0 0
0 0
0 0
0 4x) 0 0
0 0
0 0
0 0
431 0
0 0
0 0
0 0
0 1376.521
$3.471.898
$152.194
$2.538.491
$20.954.684
$18,274,379
$984.141
$394.314 I.i
-