ML20049A356

Annual Financial Rept 1980

ML20049A356
Person / Time
Site:	Columbia, Washington Public Power Supply System, Satsop
Issue date:	12/11/1980
From:	WASHINGTON PUBLIC POWER SUPPLY SYSTEM
To:
Shared Package
ML17275A743	List: ML17275A742 ML20049A356
References
NUDOCS 8012160134
Download: ML20049A356 (23)

Text

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l Table of Contents Washington Public Power Financial Statements:

l Balance sheets /2 5u00 Y Statements of operations-Hanford and Packwood Projects /4 Statements of changes in financialposition-Hanford and Packwood Projects /5

$y$ tem Statements of source and use of funds-Nuclear Projects Nos.1 through 5/6 Notes to financial statements /7 Report of independent accountants /15 Statement of the state auditor /16 Financial Statements t i debt service requirements /17 7

Section Construction projects expenditures /19 June 30,1980 f

1

2 Balance Shz.ts is in anou,anssi tA COMBINED ASSETS M"c

"#85l^a N851^"

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.m,o,o PR OJ E CT PROJECT No.1 No. 2 No 3 NoS 4 & 5 FUND 1980 1979 CURRENT ASSETS-OPERATING FUND Cash and Investments.

3 9.515 S

168 $

390 S 20.049 S4,410 S 34,532 $

26.887 Accounts Receivable.

303 210 7

218 738 477 Prepaid and Other....

304 3

2,191 2.498 1,490 Advances to Internal Service Fund 197 7

Due from Other Funds 1.277 59 1,206 2,542 2.394 TOTAL CURRENT ASSETS-OPERATING FUND.

11.596 447 390 21,262 6.819 40,310 31.248 RESTRICTED ASSETS-NOTES B & C Special Funds (Primarily for Construction)

Cash and investments..

3,347 182 128,741 161.528 $181.815 $ 171,657 647,270 1.017.012 Receivable from Joint Owners and Other Assets.....

85 594 111 10.837 4,333 15,960 19.420 Due from Other Projects and internal Service Fund...

466 1,440 1,823 Due from Other Funds-Net.

13 3.728 4.055 19.725 27,521 19,184 3.347 280 133.529 161.639 198,147 197.538 690,751 1,055.616 Debt Service Funds Cash and Investments.

__ 7,098 719 71,679 4_2.422 __119.480 ___313.730

_ 555.128_ _ _493.411 TOTAL RESTRICTED ASSETS.

10.445 999 205.208 204.061 317.627 511.268 1,245,879 1.549.027 UTluTY PLANT AND EQUIPMENT-NOTE B in Service.

67.013 12.205 2,743 4,783 86,744 84,189 Improvements to U S Government Facilities 14.411 14,411 14,411 Less Allowance for Depreciation and

___ 50.90_5)._ (47,730)

Amortization.

(44.129)

(4.102)

__ (394)

_. (2.280)

(

37,295 8.103 2.349 2.503 50.250 50.870 Construction Work in Progress.

875.087 1.306.847 594.700 1.142.805 3,919.439 2,723.259 Nuclear Fuel and Prepaid Enrichment Services..

55,547 38.052 17,531 58,379 169,509 111,982 Less Amount Charged to Jo'nt Owners.

(172,049) _ J49._61_6)

._(221,665) _ (144.4_58) 930.634 1.344.899 440.182 1.151.568 3.867,283 2.690.783 TOTAL UTILITY PLANT AND EQUIPMENT.

37.295 8.103 930.634 1,347,248 440,182 1.151.568 2,50; 3.917.533 2.741.053 OTHER ASSETS AND DEFERRED CHARGES Unbilled Reimbursable Costs.

1.822 3.005 4.827 5.077 Preliminary Survey and Investigation Costs 10.550 10.550 7.503 Unan'ortized Debt Expense.

166 31 1.668 1,707 962 3.373 7,907 6.7G2 TOTAL OTHER ASSETS AND DEFERRED CHARGES.

1.988 3.036 1.668 1.707 962 13.923 23.284 19.282

$ 12.58_5 sp137.900 $1.574.278

$ 758.771 $ 1.676.759

$9.322 s5.227.006 $4.341.210

$ 61.324

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ y

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C LIABILITIES uwo o PaoJE CT PaoJE CT No 1 ho 2 No 3 hos 4 ai 5 Fuho 1980 1979 i

CURRENT LIABILITIES-OPERATING FUND Accounts Payable and Accrued Expenses...

S 8,096 S

331 S

18,262

$8,833 0 35,522 S 23.621 1

148 1

Due to Other Projects.

TOTAL CURRENT LIABILITIES-OPERATING FUND.

8.096 332 18,2_62 8.981 35,522 23.621 LIABILITIES-PAYABLE FROM RESTRICTED ASSETS-NOTES B 8 C Special Funds (Primarily for Construction)

Accounts Payable and Accrued Expenses....

S 30,678 25,332 $ 37,733 $

78,582 172,325 144,313 J

Retention Withheld from Contractors 30,160 32,450 19.459 34,152 116.221 80.496 Due to Other Projects and Internal 2.896 67 821 Service Fund..

Due to Other Funds-Net,

847 661 1,508 853 I

I 647 60,838 61,339 57,259 113,555 290,054 225,662

(

i 1

Debt Service Funds Accrued Bond Interest Payable.

518 146 34,088 21,642 49,680 106,074 86,911 l

Due to Other Funds-Net.

430 72 3,728 545 4,055 19,725 28,555 20,723 948 218 37,816 545 25,69'i 69,405 134,629 107,634 TOTAL LIABILITIES-PAYABLE FROM RESTRICTED ASSETS 1,795 218 98,654 61,884 82,956 182.960 424,683 333,296 LONG-TERM DEBT-NOTE C Revenue Bonds Payable.

48,855 12.028 1,045,000 1,265,500 680.000 1,517.400 4,568,783 3,848,933 Less Unamortized Discount on Bonds-Net (91_3)

(114)

(6,144)

(7.146) _L4d85)

[23,pO1)

_ j42,103)

(24,535)

TOTAL LONG-TERM DEBT.

47,942 11,914 1,038.856 1.258,354 675,815 1,493,799 4,526.6E0 3,824,398 OTHER LIABILITIES AND DEFERRED CREDITS 192,530 192,530 113.106 Unearned Revenue.

2,091 121 2,212 2,344 Deferred Gain on Revenue Bonds.

Advances from Members and Participants 1.400 390 43,248 341 45,379 44.445 TOTAL OTHER LIABILITIES AND DEFERRED CREDITS,

3,491 121 390 235,778 341 240,121 159,895 COMMITMENTS AND CONTINGENCIES

-NOTE D

$61}24 _s12 585_ __S1,137,900

$1,574,278 _$_758,771

$1_,676,759

$9,322 $_5,2_27,00_6 _S4 '341g10 See accompanying notes to financialstatements.

\\

4 Stat 2ments cf Operaticns is in enoussnssi COMBINED Hanford and Packwood Projects HANFORD PACKWOOD PROJECT PROJECT 1980 1979 OPER ATING REVEN UES........

$37,577

$ 864

$38,441

$36,650 OPERATING EXPENSES:

R eactor Availability.....................

32.063 32.063 29,695 Depreciation and Amortization...............

2,546 256 2,802 2,814 Power Production and Transmission...

1,184 143 1,327 1,265 l

M ai ntena nce...........................

865 101 966 883 Administrative and General................

566 48 614 963 37,224 548 37,772 35,620 Net Operating Revenue 353 316 669 1,030 OTHER INCOME AND EXPENSE:

Interest and Other income...........

1,357 161 1,518 1,130 Interest Expense and Discount Amortization.

(1,710)

(477)

(2,187)

(2,160)

(353)

(316)

(669)

(1,030)

NET R EVENUE........

$-O-

$ $ - 0__

$ -O-f See accompanying notes to financial statements.

Statem nts cf Changes in Financial Pssitizn (s in thous,na,>

Hanford and Packwood Projects AR 0

HANFORD PACKWOOD 1

PROJECT PROJECT 1980 1979 I

J SOURCE OF FUNDS:

Operations S-O-

$-O-S --O -

$--O -

Net Revenue..

Items Not Affecting Working Capital:

Depreciation and Amortization...

2.613 260 2.873 2.873 Decrease (Increase) in Costs Reimbursable from Power Purchasers...

309 (58) 251 147 Less Gain on Redemption of Revenue Bonds (129)

(65)

(194)

(193)

Total from Operations...

2,793 137 2,930 2.827 Contributions for Improvements..

149 149 4,214 Advances from Participants for Working Capital 500 500 618 Decrease in Unbilled Reimbersable Costs 434 increase in Liabilities Payable from Restricted 237 I

Assets.....

1 TOTAL SOURCE OF FUNDS.

$3.442

$ 137

$3.579

$8.330 APPLICATION OF FUNDS:

$ 149 s 149

$4.214 Net Improvements.

Cost of Revenue Bonds Purchased and Retired 2.710

$ 137 2.847 2.774 l

Increase in Restricted Assets.........

83 83 724 2.942 137 3.079 7.712 i

Changes in Working Capital Cash and Investments.

3.541 11 3,552 (1,643) l I

Receivables and Other.

385 95 480 324 Payables and Other..

(3.426)

(106)

(3,5321 1,937 500 500 618 Net increase in Working Capital TOTAL APPLICATION OF FUNDS.

$3.442

$ 137

$3.579

$8.330 l

See accompanying notes to financial statements.

l

6 Statemants cf Source and Usa cf Funds ts in raou,,nas; Nuclear Projects Nos.1 through 5 NUCLEAR NUCLEAR NUCLEAR NUCLEAR YEAR NE 30 I

PROJECT PROJECT PROJECT PROJECTS NO.1 NO. 2 NO.3 NOS. 4 & 5 1980 1979 SOURCE OF FUNDS:

S 86,918 86,918 81,377 Collected Under Net Billing...

$149,884 122,700

$466,306 738,890 1.078,971 Bond Proceeds.

29,135 25,813

$ 30,310 47,085 132,343 104,573 Interest income.

Charged to Joint Dwners..

56,542 20,713 77,255 68,415 147,816 102,464 148,808 399,088 84,694 Decrease in Revricted Funds.

1,3til (369) 992 955 Revaluation of Investments.

3,590 3,590 3,439 Other...

TOTAL SOURCE OF FUNDS

$330,425

$339,256 S235,660 $533,735

$ 1,439,076

$ 1,422,424 USE OF FUNDS:

$257,439

$244,376

$192,307 $369,549

$1,063.671

$ 919,091 Construction Costs.........

68,177 79.899 43,285 89,192 280,553 217,838 Interest Expense......

4,036 69 42,874 46,979 16,297 Nuclear Fuel..

Financing Expense........

384 359 68 892 1,703 2,165 6,500 25,740 32,240 30,670

{

Bonds Redeemed..

2,853 2.853 229,360 Increase in Restricted Funds.

increase in Amounts Due Participants.

7,494 7.494 3,689 Preliminary Survey and investigation Costs (Energy and 2,635 2.635 3,233 Uranium Programs).

389 559 948 81 Other..........

$330,4_25

$339356

$_235.6_60

$533,735 81.439,07_6

$ 1_,422,424 TOTAL USE OF FUNDS......

\\

See accompanying notes to financial statements.

}

7 Nrtes to Financial Statements I

l I

Note A-Organization its ownership share of the projects' established for each of the projects.

capability.

The assets held in these funds are The Washington Public Power Sup-restricted for specific uses including ply System was organized in 1957 In accordance with the covenants construction, debt service and as a municipal corporation and of the bond resolutions, the Supply other special reserve requirements.

Joint operating agency of the State System is authorized to recover its Restricted funds currently include of Washington. Its membership cost of operation and debt service the following' consists of 19 public utility districts over the life of the plant or bonds and 4 municipalities that own and outstanding. Accordingly, the Sup-Special Funds operate electric systems within the ply System realizes no income or e Construction State of Washington. It js loss and equity is not accumulated.

e Construction Revolving or Trust e Construction Fuel empowered to acquire, construct Note B-Summary of e Fuel Development-Uranium l

and operate facilities for the Si i

i P&ies generation and transmission of Program electric power and energy.

The Supply System has adopted e Development-Energy Program accounting policies and practices e Reserve and Contingency The Supply System has constructed that are in accordance with gener-Debt Service Funds and is now operating the Packwood Ily a epted accounting principles e Bond Fund Principal Lake Hydroelectric Project (Pack-applicable to the utility industry' e Bond Fund Retirement wood) and the Hanford Generating Separ te books of account are e Bond Fund Reserve Project and has five nuclear elec-ntained for each project except e Bond Fund Interest m

tric generating plants under con-f r Nuclear Projects Nos. 4 and 5, o Construction Interest struction (Nuclear Projects Nos.1, which are accounted for as a single l

2, 3,4 and 5). In addition, the Sup-

'" 'Y' ply System has an Internal Service Current Assets and Current Fund (formerly General Fund) to Principles of Cornbination Liabilities account for the central procure-The individual and combined finan.

Assets and liabilities shown as ment of certain common goods and cial statements have been prepared current in the accompanying services for the projects on a cost-to facilitate an understanding of balance sheets exclude current reimbursement basis.

the financial position and results of maturities on revenue bonds and Nuclear Projects Nos.1,2, and 4 operations of each project, the accrued interest thereon because are owned by the Supply System.

Internal Service Fund and, because Debt Service Funds are provided f common management control, for their payment.

Nuclear Project No. 3 is jointly the Supply System as a whole. All owned by the Supply System (70%)

significant interproject due to and and four investor-owned utilities fr m balances have been el_imi-Investments include time certifi-(30%). Nuclear Project No. 5 is also nated from the combmed columns.

cates of deposit, repurchase agree-jointly owned by the Supply System ments (secured by U.S. Govern-(90%) and one investor-owr.ed Restricted Funds ment securities) and United States utility (10%).

in accordance with project bond Government and Government Each joint owner is responsible resolutions and certain related Agencies securities. Investments for its own financing costs, providing agreements, separate restricted are stated at cost or amortized cost its share of the costs of construction funds are required to be as appropriate and include accrued and operation and will be entitled to interest.

[.- ___ __

Nates ta Financial Statsmants < continued) 1 l

Investments held in the Bond Fund Nuclear Project No.1 at June 30, records these reimbursable annual Reserve Accounts (included in Debt 1979, has been retroactively costs as operating revenues for the j

Service Funds) and Reserve and reclassified to Construction Work in Hanford and Packwood Projects. In 1

Contingency Funds (included in Progress.

addition to recovery of project i

l Special Funds) are stated at the annual costs, the Supply System Utility Plant and Equipment-At records as revenue each year an lower of amortized cost or market amount equal to the provisions for as provided by their respective bond resolutions.

Provisions for deprec.iation are depreciation and amortization, less computed by the straight-line the recorded gains on bond re-1 The market values of investments method based on the estimated held in Debt Service and Special demption. This accounting policy is l

useful lives of the projects, which used in order to spread such Funds and in Current Assets (Oper-approximate the term of the related revenues equally over the full term ating Fund) approximate amortized revenue bonds.

cost as of June 30,1980 and June of the bonds.

Provisions for amortizaton of

(

30'1979' l

improvements to U.S. Government Cumulative reimbursable annual Income Earned on Investments owned facilities are being amortized costs, less payments by member Income earned on investments over the period covered by the purchasers for bond redemption, are reflected as Unbilled Reimburs-includes gains and losses from the contract for dual-purpose operation sale of investments. Income of the Department of Energy's New able Costs in the accompanying balance sheets.

earned on investments held by Production Reactor.

projects under construction is Contributions Used for Purchase For Project No. 2, payments recorded as a reduction in con-received from member purchasers of Equipment-Packwood and struction costs. Income earned on f r bond redemption and interest, Nanford Projects I

investments held by operating less the annual amortization of projects accrues to the applicable Monies provided by participants t debt discount, are shown as project's Operating Fund.

acquire equipment since comple-Unearned Revenue in the accom-tion of the Project are recorded and anying balance sheets.

Capitalization of Constructr,ots accounted for as a reduction of the Costs and Overhead Expenses carrying value of such equipment Retirement Plan During the construction phase of a included in Utility Plant.

The Supply System participates in project, the Supply System will Debt Discount, Premium and the Washington State Public capitalize all costs of the project Expenses Employees' Retirement System that including general, administrative, pr vides retirement benefits to interest, certairt depreciation and Debt discount or premium and other overhead expenses. The expenses relating to the issuance eligible employees. Cost of the plan overhead expenses of the Supply of revenue bonds are amortized by to the Supply System is determined he straight-line method over the by the Retirement System's Board.

Internal Service Fund to the terms of the respective issues.

The actuarially computed value of pension benefits exceeds the fund various project primarily on the Revenues assets for the Retirement System.

I basis of direct labor cost or direct Member purchasers of power are However, because the Retirement usage.

contractually obligated to pay proj-System is a multi-employer system, The cost of the abandoned plant ect annual costs including debt the amount of such excess, if any, site, carried as a deferred charge in service (excluding depreciation and that relates to the Supply System is amortization). The Supply System

not available. The Supply System's service on the bonds, whether or Advances from Members and required contributions were not the projects are completed.

Participants and Unearned

$2,907,523 in 1980 and operable or operating and notwith-Revenue I

S1,847,063 in 1979.

standing the suspension, reduction As of Septemoer 1,1977, the parti-r an H n

he projects' cipants in Nuclear Project No. 2 Note C-Long-Term Debt output.

were required to fund debt service, Except for Nuclear Projects Nos. 4 The Supply System's Packwood working capital and reserve i

and 5, which are being financed Project revenue bonds are secured requirements as provided in the together as one utihty system, all by Power Sales Contracts between Net Billing Agreements.

Supply System projects are the Supply System and each of its The debt service portion of this financed separately. The revenue 12 member purchasers. Pursuant funding was previously recorded as bonds issued with respect to each to these agreements, member a reduction in Construction Work in project are payable solely from the purchasers pay for their percentage Progress. This portion of the revenues of that project.

allocation of power specified there-advance funding has been reclas-Outstanding revenue bonds of the in at rates sufficient to operate and sified as Unearned Revenue, a various projects as of June 30, maintain the project, including debt deferred credit, which will be I

1980 and 1979 are presented on service on the bonds. Such recognized as earned revenue Pages 11 through 14.

payments continue until the bonds during the operating period of the

(

are paid or provision is made for Security-Agreements and their payment or retirement.

Note D-Commitments and As security for the Generating The United States of America, Facilities revenue bonds for Contingencies Department of Energy (DOE), acting Nuclear Projects Nos. 4 and 5, the Contracts by and through the Bonneville Supply System has entered into The Supply System has entered Power Administration (BDA) has Participants' Agreements with 88 n o sMstandal contrads cwenng purchased the entire capability of utilities operating principally in the a p rtion of total estimated costs j

the Hanford Project and the Supply western United States. Pursuant to cMain maja muWem aM System's ownership share of the the Participants' Agreements, the m tsal, ad 6 sWees Wng projects' capability in Nuclear Proj-participants are obligated to pay to Mansg, des @ ad h su@

ects Nos.1,2 and 3 from its statu-their respective share of project r the projects tory preference customers and, in annual costs, including debt service i

under construction.

addition, with respect to Project No.

on the bonds, whether or not the 1, five of its private utility projects are completed, operable or Hanford Project and its Relation-customers. Each of these operating and notwithstanding the ship to Nuclear Project No.1 customers has, in turn, purchased suspension, reduction or curtail-The Department of Energy owns such capability from the Supply ment of the projects' output. Bill-and operates a nuclear reactor, the System, all under the Net Billing ings to the participants for Nuclear New Production Reactor. This reac-and Exchange Agreements. BPA is Projects Nos. 4 and 5 will begin on for provides by product neam to the obligated to pay the participants, July 1,1988 or the date of com-Hanford Project. The Supply and the participants are obligated mercial operation for the respective System's current agreement with to pay the Supply System its pro projects, whi@ever is earlier.

DOE provides for the continuation rata share of the total annual costs of this dual-purpose operation of of the projects including debt the reactor through June 1983.

(

10 N tes is Fin nci:1 Stct;monts < continued)

It was initially intended that The U.S. Government has an detailed environmental impact Nuclear Project No. I would be option to acquire ownership of the statements concerning each of its constructed adjacent to the Hanford Project upon obtaining Net Billing Agreements entered into Hanford Project and would provide Congressional approval. If the after NEPA became effective on l

the energy source to operate the Government exercises its option, it January 1.1970. The Supply Sys-

}

project when DOE ceased opera-must assume all rights and tem projects involved are Nuclear l

tion of the New Production Reactor.

obligations of the project, including Projects Nos.1,2 and 3. The com-1 l

Because studies indicated that the obligation to pay all revenue plaint seeks, among other things,

)

I generating resources in the Pacific bonds.

(1) a declaratory judgement declar-Northwest would be inadequate in ing the Net Billing Agreements null

1. 8N#"

8 and void; (2) an order enjoining the the late 1970's and early 1980's, the Supply System determined that The Supply System is involved in performance of the Net Billing j

the Hanford Project should be kept various legal actiors as both a Agreements; and, (3) an order available for power production.

plaintiff and a defendant and in requiring the defendants to prepare,

(

Therefore, the Nuclear Project No.

certain claims arising in the normal publicly circulate, file and consider 1 Net Billing, Exchange and Project course of business for a large con-a final and adequate environmental Agreements were amended to pro-struction program. Although some impact statement for each such Net f

vide for the separation of Nuclear suits and claims are significant in Billing Agreement.

Project No.1 from the Hanford amount, final disposition is not Legal counsel for the Supply Sys-Project and to provide that Hanford determinable. In the opinion of tem have advised that there is a Project costs, to the extent not management and legal counsel, the ossibility that the court might find otherwise provided for, will be outcome of any such litigation or noncompliance with NEPA in some treated as Nuclear Project No.1 claims will not have a material respect and that in such event the costs having a first claim on the effect on the financial positions of court might enter an order designed I

revenues of that project.

the projects. The estimated cost of to enforce compliance. However, the projects may either be counsel are of the opinion that The amended agreements provide increased or decreased as a result for the payment by Nuclear Project even if the court should decide that of the outcome of these matters.

No.1 participants of all debt service Bonneville has not fully complied costs of the Hanford Project, com-Net Bi#ing Agreements with the provisions of NEPA, undar mencing July 1,1980, regardless applicable legal principles the Net On November 14,1977, the City of Billing Agreements will not be of continued operation of the reactor. If the plant ceases opera.

Portland, Oregon and five residents declared null and void nor will tions, revenues arising from the of the City commenced a lawsuit performance of the obligations aforementioned payments will against Bonneville and the Secre-thereunder of the participants to nevertheless be recorded each year tary of the Department of Energy.

make payments and Bonneville to thereafter in amounts that will The Supply System and the partici-make credits or make payments be result in full realization of the pants have been added as defen-enjoined. Accordingly, legal counsel dants in this lawsuit. The action is carrying value of the plant.

are of the opinion that the lawsuit I

brought under the National Envi-is without substantial merit insofar ronmental Policy Act of 1969 as it deals with the Net Billing (NEPA) and alleges, among other Agreements.

things, that Bonneville did not pre-pare, publish, circulate and file

]

11 Outstanding 1.ong-Term Debt f, fo u,,,,cos,;

Effective Serial June 30 Date triterest Offering Coupon or Term Series of Sale Rate Prices Rate Maturities 1980 1979 Project Hanford Project Revenue Bonds ($2.810.000 and

$2.710.000 due within one year at June 30,1980 and 1979 respectively) 1963 5-8-63 3 26%

(A) 2.90 - 3.10%

9-1-80/1986 8 21.270

$ 23.980 98 3 25 9-1-1996 27.585 27.585

_$___ 4 8.,855

_s _ 51465 Packwood Lake Hydroelectric Project

($140.000 and $101.250 due within one year at June 30,1980 and 1979 respectively)

Revenue Bonds 1962 3-20-62 3.66 99 425 3.625 3-1-2012 S

9.153 s

9.278 l

Revenue Bonds 1965 11-4-65 3.76 100.5 3.75 3-1-2012 2.875 2.950 l

.12.02 8.

..$.- _ _12. 2 2 8 l

l WPPSS Nuclear Project No.1 Rever.ue Bonds 1975 9-18-75 7.73 (A) 5.75-7.40 7-1-81/2000

$ 42.000

$ 42.000 100 7.70 7-1-2010 58.300 58.300 100 7.75 7-1-2017 74.700 74.700 l

175.000 175.000 Revenue Bonds 1976A 2-4-76 6.84 (A) 6.00 - 6.25 7-1-81/1998 37.020 37.020 100 6 90 7-1-2010 66.485 66.485 100 7.00 7-1-2017 76.495 76.495 1

180.000 180.000 Revenue Bonds 1976B 8 31-76 6.37 (A) 5 00- 5.90 7-1-81/1998 41.825 41.825 100 6.50 7-1-2010 66.940 66.940 99.50 6.50 7-1-2017 71.235 71,235 180.000 180.000 Revenue Bonds 1978A 3 21-78 5.69 (A) 5.00- 5.50 7-1-84/2002 64.270 64.270 100 5.80 7-1-2010 50.920 50.920 100 5.875 7-1-2017 64.810 64.810 180.000 180.000

)

Revenue Bonds 19788 12-5-78 6.61 (A) 5.50 - 6.00 7-1-84/1998 38.355 38.355 100 6.35 7-1-2003 22.305 22.305 6

100 6 60 7-1-2009 38,190 38.190 99.50 6.80 7-1-2017 81.150 81.150 180.000 180.000 3evenue Bonds 1979 6-19-79 6.64 (A) 6.00 7-1-84/1998 29,385 100 6.40 7-1-2003 18.560 100 6.70 7-1-2009 32.370 100 6.80 7-1-2017 69.685 150.000

• '*?"S0Q9

• 896 O %

(A) Various Prices

(_

Outstrnding Leng-Tcrm D;bt <continueo rs in en:ustnes>

Effective Serial June 30 Date Interest Offering Coupon or Term P_roject Series of Sale Rate Prices Rate Maturities 1980 1979 WPPSS Nuclear Project No. 2 Revenue Bonds (53.000.000 due July 1,1980 and 1979) 1973 6-26-73 5.6F%

(A) 5.00- 5.10%

7-1-80/2010

$ 16,600 S 19.600 100 5.70 7-1-2012 124,400 124.400 141,000 144.000 Revenue Bonds ($2.500.000 due July 1,1980 and 1979) 1974 7-2? 4 7.21 (A) 6.50-6.90 7-1-80/1994 20,500 23,000 100 7.00 7-1-1999 15.000 15.000 100 7.375 7-1-2012 37,000 37.000 72.500 75.000 Revenue Bonds ($1.000.000 due July 1,1980 and 1979) 1974A 11-26-74 7.67 (A) 7.20 7-1-80/1994 29,000 30.000 100 7.40 7-1-1999 15.000 15.000 100 7.75 7-1-2012 78.000 78.000 122_,000 123.000 Revenue Bonds 1975A 3 6-75 6.71 (A) 6.60 7-1 82/1994 32,000 32,000 100 6.60 7-1-1999 15,000 15.000 100 6.875 7-1-2012 78.000 78.000 l

125,000 125.000 Revenue Bonds 1976 6-3-76 6.63 (A) 5.40-6.25 7 1-82/1998 27,840 27.840 99.25 6 625 7-1-2006 42,300 42.300 J

100 6.75 7-1-2012 49.860 49.8_60 l

120.000 120.000 Revenue Bonds 1976A 11-18 76 5 87 (A) 5 50 - 5.875 7-1-82/2002 94.195 94,195 100 6.00 7-1-2007 44,815 44.815 99.50 6 00 7-1-2012 60,990 60,990 200,000 200.000 Revenue Bonds 1978 7-11-78 6.71 (A) 5.50 - 6.60 7-1-82/2000 68.250 68.250 100 6.80 7-1-2006 45,520 45.520

(

100 6.875 7-1-2012 66,230 66.230 l

180.000 180.000 Revenue Bonds 1979 3-13-79 6 49 (A) 550-600 7-1-82/1999 62.905 62.905 100 6.40 7-1-2004 33,490 33.490 100 6.75 7-1-2012 83.605 83.605 180.00_0 180.000 Revenue Bonds 1979A 10-17-79 7.69 (A) 6 40-7.30 7-1-82/1999 44.950 100 7.60 7-1-2004 23.050 100 7 75 7-1-2012 57.000 125.000

$ 1.265.500 S1,147.000 (Al Various Prices

Effective Senal June 30 Date Interest Offering Coupon or Term Project Series of Sale Rate Pnces Rate Matunties 1980 1979 i

WPPSS Nuclear Project No. 3 Revenue Bonds 1975 12-3-75 7.87 %

(A) 5.40-7.25%

7-1-83/1998

$ 26.145

$ 26.145 100 7.875 7-1-2010 52.695 52.695 100 7.875 7-1-2018 71.160 71.160 150.000 150.000 Revenue Bonos 1976 4-13-76 648 (A) 5.50- 6.00 7-1-83/1998 19.605 19.605 99.625 6.50 7-1-2010 35.100 35.100 100 6 60 7-1-2018 45.295 45.295 100.000 100.000 Revenue Bonds 1977 9-12 77 5.71 (A) 5.00-5.30 7-1-85/2000 59.305 59,305 99.50 5.70 7-1-2009 63.535 63.535 99.50 5.80 7-1-2018 107.160 107.160 230.000 230.000 Revenue Bonds 1978 9-12-78 6.27 (A) 5.90- 6.00 7-1-85/2004 66.385 66.385 l

100 6.375 7-1-2010 42.985 42.985 99 6.40 7-1-2018 90.630 90.630 200.000 200.000

$ 680.000

$ 680.000 l

l l

[

WPPSS Nuclear Projects Nos. 4 and 5 Revenue Bonds ($27.400,000 and

$25.740.000 due within one year at j

June 30,1980 and 1979) 1975 7-24-75 7.04 %

(A) 6.75-6.90 % 6-1-80/1981

$ 27.400 s 53.140 Revenue Bonds 1977A 2-3-77 5 93 (A) 5.50-5.75 7-1-89/2001 42.105 42.105 100 5.90 7-1-2008 40.605 40.605 100 6.00 7-1-2015 62.290 62.290 145.000 145.000 Revenue Bonds 19778 5-24-77 6.32 (A) 6.00-6.20 7-1-89/2001 33.485 33.485 100 6.40 7-1-2012 56.515 56.515 90.000 90.000 Revenue Bonds 1977C 9-13-77 5.96 (A) 5.20- 5.70 7-1-89/2C01 20.480 20.480 100 6.00 7-1-2018 109.520 109.520 130.000 130.000 Revenue Bonds 1978A 1-31-78 6.07 (A) 5.50- 5.75 7-1-89/2000 27.700 27.700 99.75 6.00 7-1-2010 43.900 43.900 100 6.125 7-1-2018 78.400 78.400 150.000 150.000 l

14 Outstanding Leng-Term Debt <c:ntinuea>

rs in rnous:oss>

Effective Serial -

June 30 Date Interest Offering Coupon or Term Project Series of Sale Rate Prices Rate Maturities 1980 1979 Revenue Bonds 19788 5-23-78 6.86 (A) 6.00 - 6.60 7-1-89/2003 37,785 37.785 100 6.80 7-1-2010 32,960 32.960 100 6.90 7-1-2018 79.255 79.255 150.000 150.000 Revenue Bonds 1978C 10-12-78 6.81 (A) 6.00 - 6.50 7-1-89/2003 45,225 45.226 99.50 6.75 7-1-2010 42,970 42.970 100 7.00 7-1-2018 81,805 81.805 170.000 170.000 Revenue Bonds 1979A 2-14-79 7.16 (A) 6.30- 6.90 7-1-89/2003 47.515 47.515 100 7.125 7-1-2010 43.140 43.140 100 7.25 7-1-2018 84.345 84,345 175,000 175.000 Revenue Bonds 1979B 8-28-79 7.69 (A) 7.00 -7.10 7-1-89/1999 25.505 100 7.40 7-1-2003 14,600 100 7.60 7-1-2010 37.425

{

99 7.625 7-1-2018 72.470 150.000 l

Revenue Bonds 1979C 12-11-79 8.30 (A) 7.90 - 8.75 7-1-89/2002 39,145 100 8.50 7-1-2010 54.020 99.50 8.50 7-1-2017 89.185 71.47 5.75 7-1-2018 17.650 l

200,000 Revenue Bonds 1980A 5-9-80 9.23 (A) 7.90 - 8.70 7-1-89/1995 7,000 100 9.30 7-1-2003 17.575 99.25 9.375 7-1-2010 75.425 93.50 8 50 7-1-2016 30.000 130.000 l

b:L:

l (A) Various Prices m___

_)

Repsrt cf Independant Acccuntants Board of Directors Washington Public Power Supply System Richland, Washington We have examined the individual and combined financial statements, as listed in the financial statements section of the table of contents, of Washington Public Power Supply System's Hanford Project, Packwood Lake Hydro-electric Project, Nuclear Project No.1, Nuclear Project No. 2, Nuclear Project No. 3, Nuclear Projects Nos. 4 and 5, and the Internal Service Fund for the years ended June 30,1980 and 1979. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the financial statements listed in the aforementioned table of contents present fairly the respective individual and combined financial positions of Washington Public Power Supply System's Hanford Project, Packwood Lake Hydroelectric Project, Nuclear Project No.1. Nuclear Project No. 2, Nuclear Project No. 3, Nuclear Projects Nos. 4 and 5, and the Internal Service Fund at June 30,1980 and 1979, and the respective individual and combined results of operations and changes in financial position of the operating projects and sources and uses of funds of the construction Projects Nos.1,2,3, and 4 an'd 5 for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.

Gwsd-Seattle, Washington August 29,1980 l

1

16 i

Statement of the State Auditor I

To Whom It May Concern:

The Washington State Auditor's Division of Mur.icipal Corporations conducts a continuous examination of all the operations of the Washington Public Power Su,sply System, including each and every project. Reports are issued covering each fiscal year and are pubisc documents.

On every such examination, state law requires that inquiry shall be made as to the financial condition and resources of the Supply System, whether the Censtitution and laws of the state, the resolutions and orders of the Supply System, and the requirements of the Division of Municipal Corporations have been properly complied with; and into the methods and accuracy of the accounts and reports.

Very truly yours.

Robert V. Graham, State Auditor

,y l

Richard L. Husk l

Chief Examiner Division of Municipal Corporations i

l

17 Statements of Debt Service Requirements uneac.1sao is in thousanss) l Hanford Packwood WN P-1 Annual Annual Annual Debt Debt Debt Year Principal Interest R equirements Principal Interest Requirements Pnncipal Interest Requirements 1981 S 2,810

$ 1.483 S 4,293 140

$ 440

$ 580 S

3.695 S 68.177 S 71.872 1982 2,915 1,393 4,308 145 434 579 3.815 67,972 71.787 1983 2,915 1,303 4,218 155 429 584 4.045 67,761 71.806 1984 3,010 1,210 4,220 160 424 584 9.245 67,537 76,782 1985 3.125 1,114 4.239 170 418 588 9.785 67,032 76,817 1986 3,240 1,014 4,254 175 411 586 10,355 66.495 76.850 1987 3,255 913 4.168 180 405 585 10,970 65.923 76.893 1988 3,360 806 4.166 190 398 588 11.615 65.315 76,930 1989 3.485 693 4,178 195 391 586 12.310 64.668 76.978 1990 3,455 580 4,035 265 384 649 13.045 63.977 77.022 1991 5.065 425 5.490 275 375 650 13,835 63,238 77.073 1992 5,585 246 5,831 290 365 655 14.675 62.449 77.124 i

1993 5,835 58 5.893 300 354 654 15,575 61,605 77.180 1994 800 4

804 315 343 658 16.535 60.700 77.235 l

1995 330 332 662 17.560 59.726 77.286 1996 340 319 659 18.665 58.681 77.346 1997 360 307 667 19.845 57,559 77.404 1998 380 294 674 21,110 56,358 77.468 1999 400 280 680 22.455 55.075 77.530 2000 465 265 730 23,940 53.630 77.570 2001 490 248 738 25.530 52,084 77,614 2002 515 230 745 27.235 50.422 77.657 2003 540 212 752 29.065 48.643 77.708 2004 565 192 757 31.030 46,726 77.756 2005 590 171 761 33.135 44.652 77,787 2006 615 150 765 35.380 42.435 77,815 2007 640 127 767 37.780 40.068 77.848 2008 665 104 769 40,345 37,537 77.882 2009 690 80 770 43,085 34.834 77,919 2010 715 55 770 46.015 31.945 77.960 2011 618 28 646 49.145 28.836 77.981 2012 155 6

161 52.505 25.494 77.999 56.100 21.923 78,023 2013 59.940 18.104 78.044 2014 64.050 14.021 78.071 2015 68.445 9.656 78,101 2016 73.140 4,989 78.129 2017 2018

$48.855

$11,242

$ 60.097

$12,028

$8,971

$20,999

$1,045,05 $1.806.247 $2.851.247

18 Statsmants cf Dabt Servica Requiramants <continuea>

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1 Financial Highlights of 1980 ts in uinions; Construction Projects Long-Term Revenue Bond Sales WNP-1 WNP-2 WNP-3 WNP-4/5 Total Par Values

$ 150 S 125 S 480

$ 755 Number of Issues 1

1 3

5 Borrowing Cost (%)

6.57 7.41 8.29 7.77 Total Long-Term Revenue Bonds Outstanding Outstanding as of June 30

$1,045

$1,266

$ 680

$1.490

$4,481 Annualized Interest Expense 68 84 43

$ 104 S 299 Borrowing Cost (%)

6.52 6.52 6.37 6.99 6.60 Interest Earned interest on Investments 29 26 30 47

$ 132 Annual Rate of Return (%)

9.71 9.06 8.85 10.72 9.71

,.9 h

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Board of Directors /

2 Executive Committee Report "The most ne of the industry: schedule delays and cost also will assess the adequacy of CConomic thermal fundamentals increases.

emergency contingency plans and I

of the District interaction with public safety and plants are large Power Law, Our analysis shows that the aver-community groups.

units, those of enacted by age cost of all nuclear power plants

)

1-million kilowatts the State of has more than doubled and Another step taken by the Board and larger. N Washin ton construction time has doubled was the appointment of an inde-in 1930-since the late 1960s.

pendent Administrative Auditor to single utility or conduct continuous performance authorizing the formation of pubh.c Even so, this board has taken steps audits. The Administrative Auditor sma group o utility districts, is:

to strengthen its ability to ensure is responsible to the Board of utilities can absorb Cooperation by mutual agreement that these plants are completed as Directors and communicates a plant of such size between districts on utin.ty opera-soon and as economically as regularly with the State Legislature.

he benefit of the individual in its normal load-possible. Three permanent board The Board also receives direct cornnMuees wem appointed and reports from its own internal inde-growth pattern."

Since it was organized in 1957, the given specific responsibilities pendent financial auditor.

Joint Power Washington Public Power Supply related to costs, schedules, emer-P/anning Council System has been an extension of genc planning and external urth r strengthening of the a

Statement, this concept of cooperation. In Administration was the adoption of October 1968.

addition to the 23 members of the A Committee on Budget, Finance a working agreement known as the 1

Supply System, there are 87 other and Audit was assigned responsi-

" Memorandum of Understanding"

{

consumer-owned utilities, for a bility for review of all financial which clarifies the roles and I

total of 110, which are financial matters that may affect cost and responsibilities of each party in

'{

participants in one or more of the schedule. Additiona:ly, the com-activities related to Projects WNP-1, S apply System s five large nuclear mittee will participate with outside 2 and 3, for which BPA purchases projects now under construction-agencies which have oversight all, or most of the output through As a joint operating agency, the responsibility in reviewing pro-

" net-billing" agreements.

Supply System provides the cedures pertaining to budgets, cost mechanism for the utihties to act estimates and issues concerning Robert L. Ferguson, a Deputy as a single entity to meet their bonds and investments.

Assistant Secretary of the Depart-individual needs. In addition, four ment of Energy, was selected June investor-owned utilities own A Committee on Corporate Perfor-27 to be the Supply System's new portions of two plants.

mance was appointed to review Managing Director, succeeding data pertaining to organization and N. O. Strand who resigned in The Supply System,s financing and management, contracting proce-February.

l l

construction program is one of the dures, construction and plant I

largest of any consumer-owned management.

Mr. Ferguson, who was in charge

{

utihty in the nation.

of the Energy Department's nuclear Attendant to programs of this A Committee on External Relations reactor program since 1978, also scope are the challenges of direc-was appointed to work with the had been Director of the Fast Flux tion and management to meet the State Legislature, Bonneville Power Test Facihty (FFTF) project office for problems which are common Administration and other public the Energy Department from 1973 throughout the nuclear energy groups and government agencies. It to 1978 and was credited with the

Managing Director's a

Statement successful completion of its con-This is my first opportunity to communicate with the more than 10,000 "1. To serve all struction within the final schedule people who receive the Supply System annual report. Since my who co and budget.

appointment as Managing Director in June, I have received many expressions of support from the Northwest public power community 1 with adequate f

His appointment was effective and others. I appreciate that support and I welcome this opportunity to IaCIIIties, August 1.1980' share my initial thoughts on this appointment with you.

3. At reasonable Some changes took place on the i took the assignment of Managing Director of the Supply System rates, and Board of Directors and in manage-because I believe in your commitment to sound and prudent economic

1. Without ment. During the year. Donald development in this region and to the need for the energy supplies that

-U"'

""U Clayhold was appcir.ted to repre-will make this possible.

sent the Benton County Public Utility District and Larry Nickel to I want you to know that I have a commitment also, not only to serve p#

1. f represent the City of Ellensburg on the growing needs of public power in the Northwest. but to the belief the Board. A. E. Fletcher, Clallam that our nuclear projects are the best energy option available at this p

County Public Utility District repre.

time. While we all look forward to the development of alternativ Districts' sentative, was elected Vice Chair.

energy sources in the future, we have an obligation to the citizens of man of the Executive Committee.

the Northwest to meet their current and near-term energy needs with Hal Norman, Pacific County Public power generation systems using proven technologies which are safe, Utility District, was elected Vice reliable, and economically acceptable.

President of the Board of Directors The Supply System has taken on a great responsibility to the ratepayers and Howard Prey, Douglas County of the member and participating utilities, it is imperative that the five Public Utility District, was elected projects now under construction be completed successfully, for their to the membership on the total output will equal about 20 percent of the total energy resources in Executive Committee.

the Northwest.

I I

We begin a new decade on a note I believe we can meet this responsibility. The Supply System has an

[

of hope, recognizing the critical outstanding and dedicated staff and I plan to supplement this staff with l

importance of energy and our additional proven management leadership to coordinate and direct their responsibility as energy suppliers efforts. The tasks before us are formidable and they will require our best to the people of the Pacific efforts if we are to overcome the very real problems we face in com-Northwest and in the belief that pleting the projects. But we already the Supply System is a strong have our most important resource in j

organization, and the right organ-place-talented people. With that ization for meeting our future talent and with your continued i

needs-support, I am confident that we can i

build safe and economic power pSh plants that will serve the Northwest f r many years in the future.

I Ed Fischer Chairman. Executive Committee

\\

C.y Glenn C. Wa!kley Robert L. Ferguson h

h.

• NO President. Board of Directors Managing Director

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The Pacific Rim is Next Door Newcomers Keep Arriving Comparisons of forecasts since

",,,lt is Certain...

1977 reveal some serious trends h

I "S

The Pacific Northwest is the gate-The region's population increased Since the 1977 forecasts, the to Cont,mue to be a way to the Pacific Rim nations and at a more rapid pace than other maximum energy deficit for any Alaska, with its untold wealth of regions. As an example, new-one year has grown steadily to an demand IOr energy, the Northwest Slope oil and other comers entered the state of Wash-amount equal to two large thermal and growing natural resources. The increased ington at a rate of more than power plants. Deficits of more than g"*'"g #

n use of large shipping containers 100,000 a year in 1978 and 1979.

3,000 average megawatts are ex-and the development of inland The visible growth that contributes pected in five of the next 11 years Dr. Paul Raver, navigation facilities on the major to the strength of the economy also and there is a high probability that BPA Administrator, the available energy will be in-1954.

rivers bring landlocked interior s contributing to possible energy states within reach of the Pacific sufficient to meet the firm loads shortages in the years ahead, even Ocean for shipment of agricultural w th completion of the Supply now forecast.

products, a process already well System's 6-million kilowatts of Despite the possibility of an energy begun.

generating capacity.

shortage, economists foresee growth at a more rapid pace than Agriculture: A Growth industry The Pacific Northwest Utilities Con-the national economy, with in-Agriculture-now more correctly ference Committee (PNUCC),

creased concentration on the agribusiness, with the inclusion of consisting of essentially all elec-quality rather than the quantity of food processing-is the traditional trical power generating interests in growth.

heart of the economy. More than the region, makes an annual load one half million acres of the and resource analysis, projecting Columbia Basin south of Grand both ten years into the future.

PACIFIC NORTHWEST LOADS Coulee Dam have had irrigation The Pacific Northwest has the most AND RESOURCES w ter avadaNe for many years, highly developed hydroelectric j

while another half million acres in system in the nation, producing PNUCC

" *rsTIMiTrD riccin/C load (DrMANo)

WPPss NucirAn PLANrs (supply /

the eastern part of the irrigation more than 80 percent of the energy West Group Forecast E wme.2 E wura E wSr.3 M wses Ewme-s project were dependent upon th used in the region. However, the (May 1980)

M orutantsouncestsuretre vagaries of the nature s weather amount of energy which can be I'a =dhaas a' *da-*"$/

a uronorarcruic assounces (suret ri patterns to grow crops.

generated in the powerhouses 25 uo rr: c,,,,,,,,o or neo,i,c,nc Major facilities to bring water to along the rivers depends upon the

?

these dry lands were completed amount of rain and snow which g,g.',,'7,,c.,

'"[,$"

g 20 during the fiscal year. The invest-falls in the mountains of the ment in the huge, energy intensive Columbia River drainage.

E 15 irrigation system is now nearly When precipitation is lower than g

$1.4 billion and eventually will aver ge, the water flow in the g

increase. Expanding farm output rivers drops and the amount of.

g10 also has attracted many food pro-v il ble is reduced. Th.is is g

energy cessing firms to the area, creating known as " adverse water conds-I5 many new jobs.

tions" and is the basis for the x

regional forecast.

(

t FY 80 81 82 83 84 8s 86 87 88 89

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o Generating Energy Gives 7

Meaning & Purpose to the Supply System 1

I he Hanford Packwood: Hydro Energy The simulator looks exactly like the Now...on this site...

T completeu pl nt control room and to the oper-a nation dedicated Generating The 27,500-kilowatt Packwood tors, it " feels" hke the plant by Project (HGP)

Hydroelectric Project operated at pr ducing the same instrument less than full capacity during most indications as the real control room is orging, not a n ther of the year, primarily because of instruments.

Sword, but a successful low water levels in Packwood Lake Scheduled retraining of licensed plowshare, the n

y 5,

Electrical energy from Packwood is per tors enables them to maintain Hanford steam 1980, when the Department of distributed by Bonneville Power their skills in recognizing any electric generating Energy shut down its N Reactor for Administration to Clark, Lewis and bnormal snuanon quWy, for the scheduled summer refueling Snohomish County Public Utility plant."

safety, more efficient plant opera-and maintenance program.

Districts which are among the 12 tion and more reliable electric project participants. The three President p wer production.

John F. Kennedy, The 860.000-kilowatt HGP again PUDS are expected to purchase proved its reliabihty by maintaining about 27,500,000 kilowatt hours of The WNP-1 and WNP-4 simulator September 26, 100 percent availability during the the project output in fiscal year was installed, tested and placed in 1963 at the time that steam was available from 1981. The remainder, about service in the fall of 1979 groundbreaking.

N Reactor. The Supply System paid 62,500,000 kilowatt hours, will be A simulator for WNP-2 was

$32.3 milhon to the Department of exchanged with BPA for demand ordered so that operators might Energy for steam during the fiscal bilkng capacity.

also benefit from training under year.

conditions which exactly duplicate Total electrical generation for the Realistic Training Builds Skills per tional conditions. Other simu-operating year was 3,795,606.000 cc&nt at he We Island lators for training MN and l

kilowatt hours, the equivalent of six f cused attention on the need for WNP-5 operators were expected.

million barrels of oil.

extensive training and more Each of the simulators will be Since it began operating in 1966, frequent retraining of reactor oper-installed in facihties near the HGP has generated more than 48 ators, with new standards for respective plant.

bilhon kilowatt hours, or the realism.

equivalent of the electrical energy At the time of the accident, the available from burning about 75 Supply System's WNP-1/4 control-Photos:

million barrels of oil.

rom siMator was in final

(/ acing page) A control assembly and was utihzed by the r rn sunulator provides Nuclear Regulatory Commission to

• "'"9' study certain Three Mile Island

(/e/t) Gauges are checked operations.

[

regularly at the Packwood The computer-directed simulator i

Hydroelectric plant.

can provide realistic training by allowing operators to practice for hundreds of expected, or unex-pected conditions or events which might be met in plant operations.

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9 Construction Requires Human Skill & Ingenuity he Supply Sys-for which it is named and which Satsop

"... utilities...have an T

tem has five seals the wetwelljlower portion)

The projects being built near obligation to supply large nuclear from the "drywell (upper portion)

Satsop are twin 1,240,000-kilo-Eower that is electric gener-of the containment vessel. The w it, pressurized water plants needed by a ating facilities stainless steel ring.12 inches in designated WNP-3 and WNP-5.

under construc-diameter, extends around the 335-tion. Three are foot circumference of the structure-At WNP-3, a major accomplish-and a technological on the federal it is capable of maintaining a seal ment of the year was the post-weld Society that is highly Hanford Reservation near Richland, despite a possible 25 pound per heat treatment of the large steel Washington, a historic center of square inch pressure differential containment vessel. The entire dependent upon energy research and development, between the building sections.

steel structure-150 feet in energy."

and two are in Grays Harbor mew nd em g ws At WNP-1' a 1'250,000-kilowatt heated through pipe openings on Alex Radin, County, Washington, near the town pressurized water plant, the start of the sides with 10 forced-air, oil Executive Director, of Satsop. The projects are the turbine-generator assembly burners. The inside temperature American Public identified with the initials WNP, m rked a start of the mechanical followed by a number.

was raised to about 1100'F to Power Association, installation phase.

relieve any stress in the field 1980.

Hanford Utilizing the world's largest land welds. It is the largest containment transportable mobile crane, known vessel ever to be field stress During fiscal year 1980, the work s the %ansMt,, wodmen whM, a tmatment mquM of aH at WNP-2, a 1,100,000-kilowatt pl ced the 387-ton pressure vessel welds greater than 1% inches I

l boiling water plant and the one and two 500-ton steam generators thick.

l l

nearest completion, entered a new inside the containment.

phase, characterized by inspection, Above-ground work began on the testing and making necessary The system of lifting heavy com-500-foot-high natural draft cooling adjustments to ensure performance ponents "over the top" and down tower which will be the dominant reliability when the plant goes into into place contrasts with the visible structure on the site. Instal-operation. All primary buildings conventional method of skidding lation of pipe began in the reactor were completed, major piping and the heavy materials into place from auxiliary and turbine buildings, the principal control systems were the side, and leaves the work areas installed.

clear for other work for a longer Photos:

q.

i '{ !f

(/acingpage)WNP-2 rises

j[ 3 A number of separate systems j{f

_, ]' k ! tU'.,{.

I in the parched desert land received provisional acceptance At WNP-4, a twin of WNP-1, work l

1l' ii i

of eastern Washington.

I and were placed in service. These continued in the civil and structural 4

included the major electrical and construction phase. A major

-[

+

(/e/t) The cooling l

water systems used to provide milestone was the completion of tower nses.

building power and water and also the nuclear steam supply system construction water to the neigh-support slab which cleared the way boring sites of WNP-1 and WNP-4.

for construction of interior building W Hs.

One important task completed was the installation of the " Omega" seal, shaped hke the Greek letter

10 mar king the beginning < >f a t r.in sition to the mechaeucal aruf elec trical installati(in phiise A nulestone at WNP S was the non stop slipform constr uction of the 212 foot tugh 64 f oot diameto reactor shield wall in the record time of 15 days T total of 11000 m-cub c yards of concrete and 2 985 Y

I tons of reinforcing steel were 4

j-placed to complete the wall i

f- / %'?

\\'

Schedules Reassessed

,b s*

- \\v An assessment of project

/

schedules rnade dur ing the s e,ir

./

D^1.

indicated that extensu ns rangrnq a

/

t f rom 12 months for WNP 4,uut g.

Q, WNP 5 to 16 months for WNP 2 and 18 months for WNP 1 and gf[

WNP 3 wer e nece',arv Commer l}

cial operation dates are now D

scheduled to be Januar y 1983 f < a k

WNP 2 June 1985 for WNP 1 June 1986 for WNP 3.ind WNF 4 e

w nec s

• N. 't ~ r.. ;is.u2;;Cp-and June 198 7 for WNP 5 3

'#4 w_d 7

. ig' The new schedules reflect a reductuin of six n u >n t tis in t ti+ > l iq g

t i rT i t

• f )t

• t W + ++ 'r i t Iit' I!r st <irlf f '.*(

(,rit j

• h unit s i n ear n (if t 'io dt j al pl.in t j)r ()J t'C t s rTh t k t fl(; t ! 1+' s+ *[ hi r rit it ir ' l2 rTiont tis nstead (if 18 I l i e, n.. r i L eepmq w:t t o + mfustr3 e=pe n >nce rn ( < >n st r i n tu a; r >f d u a'

., h $

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ig' rierr-ck, m r uu arid M

i g - yg W op.. rated n,cm,aue 8odo, mo w n; Ir nr- (,

o,ua;, rd at WNP 14 Mas 2 0 Pr, to n*

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11 ing There were no serious injuries, also disrupted other contractors for q

but there was damage to the a short period during this strike.

s building which was in the early This action was the result of break-i stages of construction The derrick down of negotiations for a new was demolished in the collapse and collective bargaining agreement to wa. removed after thorough replace one which had expired on i

j inspection by several investigating May 31. At one time, over 1.500

,h teams. The effects on cost and contractor employees were affected.

'b i

/

schedule had not been determined Such complete work stoppages by the end of the fiscal year.

affect project completion schedules n d y-f r-day basis.

Disputes Impede Progress Labor disputes impaired progress at The Mountain Erupts Bk i

all sites, but most severely at the The awesome eruptions of the T-Hanford locations volcano Mount St. Helens in south-

~

A major jurisdictional dispute in western Washington on May 18

~

March resulted in over two weeks' and 25 also affected construction I 1~[-

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+[

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suspension of work on two major of all projects to some degree. A contracts at WNP-1 and WNP-4.

third eruption on June 13 had no

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were affected tions of the volcano in 123 years.

s.

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}

ments between contractors and mountain were devastated in the F bT1; 7 is*

- ~';

Many collective bargaining agree-Areas within a few miles of the

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their craft unions expired on May explosions, but damage became

31. In some cases contractors and less severe with distance. Chemical i

4 unions failed to reach agreements analysis of the ash proved it did not il,i. - J - -[ q ;

,:)

7 for new contracts at the Hanford contain any corrosive elements and Reservation. Some of the unions that only clean-up would be withdrew their services, resulting required.

Photo:

in large reduction in forces by con-

// acing page) Fog tends an tractors due to their inability t Reservation near Richland were at ethereat quahty to a function efficiently and safely with-e edge of he ash pine h he heavy hft.

s out the support of these crafts.

18 gim W redd pe-b Approximately 5.300 craft workers eighth to one-quarter inch of ash.

4 were affected out of a total There was minor impact on WNP-2 contractors' work force of about which is completely enclosed.

5,950.

Clean-up was completed within A strike by Cement Masons at three days. The impact on WNP-1 WNP-3 and WNP-5 against several and WNP-4 was slightly greater, contractors in June resulted in the although the amount of ash was loss of seven work days by the the same as at WNP-2, because affected contractors. Picket lines much of the work is not enclosed.

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13 Work did not return to normal for enclosing the reactor. The work was At the same time, the Supply about a week.

done several years a.io.

System filed a legal action seeking

$120 million from five construction Ash from the May 25 explosion The Supply system ciinsidered the contractors, one material supply firm f

was carried westerly by an unusual penalty severe and the situation as and two bonding firms associated wind pattern and was deposited to serious and took immediate action I with the work criticized by the NRC.

a depth of three-eighths to one-half avoid future occurren:es by be-inch at the Satsop site. Clean-up coming more deeply involved in day-was a major activity for about five to-day construction ard quality con-days.

trol activities and to develop an action plan for repairing defective Three Mile Island: Its impact work.

The accident at Three Mile Island in March 1979 has had a contin-

^ 4%

Photos:

uing impact on the entire nuclear industry. Numerous design and operating changes are being

g. Y at the Satsop site permit

\\

k' non-stop work.

incorporated into all Supply System g

projects.

(/e/t) Engineers check work against the The Supply System is continuing its participation with industry s:

J blueprints.

groups in reviewing information derived from the TMI " Lessons Learned" to make certain that the f

essential changes in design or operation are included in the l

Supply System plants.

The Nuclear Regulatory Commis-sion also served notice of its rededication to enforcing its regula-tions concerning quality assurance since TMI with a $61,000 civil

'i penalty against the Supply System for work which did not meet NRC

a.,

quality assurance standards at

1. 9

~d i

WNP-2.

Primarily the violations concerned faulty documentation, but a more serious circumstance was the dis-covery of faulty welding and concrete work on the sacrificial shield which is a thick concrete and steel cylinder

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15 Technology: A System for Simple Order x

~... s ur world A Search for Fuel Technical support and guidance

" Tech-no-lo-gy O

todayisa during startup and engineering gg gg The Supply System is one of many testing is being given by the partic-utilities actively engaged in explor-cipating utilities under a contract means emp oye( to 9Y ing for uranium reserves in the with the federal Department of provide ob_ects j

P"'

west. The goal of the Supply Energy.

necessary for System exploration program is to identify 10 million pounds of ura-human sustenance atell es transistors, nium reserves to supplement the and comfort."

microcircuits, lasers, nuclear power supply already purchased under and dozens of other applications of Webster's New contract previously.

recently developed technologies.

Exploration continued in four states o ar r To many, high technology means during fiscal 1980 with some complexity. With about 50,000 encouraging indications of the components, such as valves, presence of uranium at some pumps, motors and control instru-locations.

7 ments, a nuclear generating station N

is considered complex.

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A Search for Energy

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l But, simple order is being brought

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to the complex array of mechanical The Supply System is participating h

and electrical components through on behalf of Northwest public util-an extensive plant reliability ities in a joint venture with other regional utilities: The Raft River

,).

program.

Geothermal Project in southern A complete history of each compo-Idaho.

nent, starting with its manufacture and continuing through installation.

The five megawatt project is a pro-g operation, in-service inspection, totype to determine the feasibility

_.r maintenance, repair and f ailure is and economics of generating elec-p

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recorded and stored in a computer.

tric power from the moderate This will make easier the task of temperature geothermal resource Photos:

keeping the plants operating safely with a binary system using low-and reliably.

boiling isobutane as the heat-(/ acing page) A scale transfer medium. It is expected to sl model is useful in The Supply System's plant reli-go into operation in 1980 and the N

preventing interferences.

production testing and economic 6

4 (f09 e/t/ Instruments are

/

national data system through.

assessment to be completed in fine tuned in a calibration i

Ms which utilities may share their 1983.

laboratory.

<4 reliability information.

(bottom le/t) Atmospheric sampling devices are aligned precisely.

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17 Management Services: People Helping People he concentra-A Wealth of Talent closely with federal, state and local "Who befriends T

workersat tion of thou-agencies.

h.is neighbor Supply System projects provide thousands of job opportunities for Professional fire marshalls were befriends himself."

sands of skilled craftsmen and create new designated at three of the sites and Supply System jobs in secondary support service fire brigade training was conducted Sophoc/es, activities. Apart from this, the for all 195 security force members.

408 BC.

construction sites puts heavy Supply System has its own staff of more than 60 persons on the oper-demands on persons with specialized technical ations staff, and enough contractor neighboring communities.

employees to maintain a qualified and construction management To assist these communities in skills to keep pace with its need.

fire brigade of at least 20 members at each site.

coping with increased demand on The Supply System has a technical the available public and social The value of the fire-fighting train-staff of about 570 persons who services, the Supply System com.

ing w s underscored when security pensates them for the impact represent some 4,600 man-years (ficers saved permanent plant arising out of its projects. The pay-of experience in the nuclear field equipment valued at about ments began in 1976 in the and 2,700 man-years of non_

$100,000 from a fire at WNP-1 in Hanford region and in 1978 in the nuclear experience.

April.

Grays Harbor area.

l A Concern for All Durmg the year, the securitv force At the end of fiscal year 1980, the was expanded to 195 officers to in addition to the need for improve, Supply System had made payments meet increasing needs during con-ment in design, instrumentation totaling more than $11 million to struction activities. In addition to and operator training, the Three

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school districts, cities and other the fire training, all were trained in Mile Island accident indicated a first aid, safety, security procedures, taxing districts.

need for realistic and functional law, communications and loss in addition to these payments, the emergency plans.

prevention.

Supply System, by state law, must pay sales or use tax on materials Supply System plans were being and equipment purchased for con.

developed before Three Mile Island, but the work was accelerated and struction. Most of the tax money goes into the state general fund, given more emphasis, particularly

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Photos:

in the areas of health physics l

but a percentage is also returned to monitoring, radiation dose assess-I#

I the counties in which the construe.

ment capability, emergency re e

e tion is taking place.

response and communications area en*9ency #anNng.

At the end of the fiscal year, tax facilities and ten-mile resident payments by the Supply System warning systems. The offsite emer-

//e/r/ Word processing l

machines speed totaled more than S97 million gency plan was expanded to meet communications.

new requirements for capability to assess conditions in the event of h

an accident within a 50-mile radius f

and to take whatever actions are g

necessary for protection of the 4

public. Planning was coordinated

Finance Gmup 18 Act..t.ivi ies Supply System ssential to the Supply System s Fund.mg Requirements p r,ma,y task __ _

t construct the (s in Mi// ions)

June 30,1980 five nuclear P"*

r""'""~'"8.5%] $ 1,04 5 7

14 successful WNP-1 } ;

capital financing

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$2,155 program. Our success in the capital

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financial markets is measured by our ability to issue revenue bonds.

7'.

...., -164.7%q $ 1,285 at the lowest possible cost J

E WNP-2 '

hw...

The Supply System's financial

$ 1,986

.w strength hes in its project partic-a.'

capants who provide electrical

['"P'"* ~7 service to the broad and diverse p f 37.3% ! $ 680 economic base of the Pacific North-WNP-3

.c..

west T s helps make the Supply b-System s revenue bonds one of the most secure investments one can

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'1 20.6%

$ 1,490 WN P-4/ 5 i m-cw Fiscal year 1980 was another A --

q.

.... h(,...... ' "

$ 7,231 successful year for the Supply S

em's finang mogram DesWe the economic pessimism prevailing in the capital markets. the Supply T'"7 System's long-term tax-exempt

{j financing Complete revenue bonds continued ta main-tain their excellent ratings A total 9

of $755 million of long-term O Supply System Funding Requirements revenue bonds were sold in five separate trips to the municipal bond market. These sales increased the Supply System's total revenue bonds issued to approximately $4 5 billion at an average weighted bor-rowing cost of 6 6 percent Of the S755 milhon. two issues totalling $275 milhon were sold for the net-billed projects (WNP Nos 1.

2. and 3i bringing our financing program for these projects to

19 approximately 50.5 percent com-the many financing mechanisms programs increased to S15.95 billion plete on June 30,1980. Three analyzed, the Board of Directors from $11.75 billion a year earlier.

issues totalling S480 million were approved the use of short-term and The amount which the Supply Sys-sold for WNP-4/5 bringing the intermediate-term debt, in conjunc-tem will be required to finance is financing program for these projects tion with the long-term financing

$13.19 billion.

to approximately 20 6 percent com-schedule.

d mase mM 6 plete on June 30,1980.

The Supply System staff is develop-the increases, including higher The financing highlight for the ing the necessary legal documents than anticipated inflation, Supply System during fiscal year to implement the short-term (2-7 additional regulatory requirements, 1980 was its first negotiated public year maturities) bond issue seg-and plant delays from various offering of revenue bonds in the ment of the Program. These docu-causes.

Supply System's history. The ments will require the consent of Higher plant costs will influence record high interest rates prevailing the WNP-4/5 Participants prior t e a of pt n M all in the bond market during the implementation.

other increases related to the scheuuled sale for WNP-4/5 in Next in importance to the acquisi-delivered cost of power. Similar to April 1980 created a situation in tion of funds is the management recent past and expected future which the Supply System chose to and control of expenditures. This cost of other forms of energy, all reject the single bid and enter into control includes the annual up-phases of electric power are pro-a negotiated public offering. This dating of detailed construction, jected to continue to increase.

decision and negotiated effort per ting, administrative and Operating and maintenance costs resulted in $3.8 million of addi-special program budgets based on have steadily advanced, cost of f

tional bond proceeds and $27.5 established goals and action plans, new transmission and distribution l

million in interest cost savings over foll wed by issuance of periodic facilities has escalated very rapidly, the life of the issue.

financial measurement reports.

and cost of money has substantially increased.

The Supply System's financing There are numerous approval and schedule for fiscal year 1981 calls concurrence steps and interactions Analysis based on present project l

for the issuance of approximately in this total process. The integrated budgets and projects by the pub-

$1.5 billion of revenue bonds.

l planning, budgeting and reporting licly-owned project participants, in an effort to protect and enhance sequence, for which the Finance indicate that in 1990:

Fifty percent more customers l

the Supply System's access to the Group has a key role, together with a

municipal revenue bond market the many accompanying interrela-will be served, representing an l

and to facilitate the completion of tionships is depicted on the chart annual increase of 3.9 percent.

l the financing program at the on page 21.

• Even after conservation efforts, lowest possible cost, the Board of The extensive annual budgeting the average customer (includes Directors approved the concept of a cycle ended in late July 1980 with industrial and commercial) will Balanced Financing Program for appr v i by the Board of Directors use 10 percent more electricity.

Nuclear Projects No. 4 and 5. This action culminated many months of

• The Supply System projects will ar 91 concerted effort by the staff of the provide about one third of their Supply System, the Financial The combined project construction power sales.

Advisor, Consulting Engineer, Bond budgets, including all overheads, Counsel and Special Counsel. Of fuel, cost of financing, and special

20

• The cost per kwh will increase The steadily expanded scope of The average daily investment 4.4 percent a year to 1.9 cents in responsibilities and influence of the balance of $1.17 billion earned an 1980 constant dollars.

Finance Group included the forma-average return of 9.72 percent.

tion of a Financial Management This compares with an average cost

• The cost per kwh, in terms of the

(' ntrols staff charged with of 7.77 percent for new funds inflated 1990 dollars, will be 4.2 independent review, analysis and acquired during the year.

cents, which is less than the evaluation of project estimating, The reader is invited to examine average residential cost of elec-cost, and schedule performance; the following financial statements.

tricity in the United States today.

the placing of accounting personnel We also welcome requests for of the Construction Manager firms copies of recent financing official Another princ.ipal accomplishment under Supply System financial statements, which present addi-was the effective implementation management control, to improve of several check-and-balance func-tional information about the Supply efficiency and cost control; the System s projects and financial tions to improve the level of finan-formation of a Financial Studies cial involvement in each of the ff irs.

and Analysis Staff to concentrate construction projects. These efforts, the capabihties of broadly experi-initiated in August 1979, included enced senior staff members on the establishment of a Budget emerging financially related issues Review Group, consisting of repre-throughout the Supply System; and sentatives of the Participants assigning Financial Representatives Review Board, Participants Com-to each major functional organiza-mittee, Investor-Owned Utilities, I

tion to assist managers in budget-ng, cost control and financial f

BPA and the Board of Directors Budget Committee. This group met analysis of the operations.

approximately once a month during the year to review present con-Also particularly noteworthy is the i

struction progress and budget vari-Treasury Division's sophisticated I

ances, and other related Supply investment program. Through System activities.

efforts of the investment staff, who assured that all available funds were continuously invested in authorized money market instru-ments, approximately $133 million I

was earned in fiscal year 1980.

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The Budget Planning Process 21 n.; ~ y.y <r J.g:jcyg;,, ;,,x -

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Director GOALS TO BOARD ESTIMATES:

AND ISSUE BUDGETS

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BUDGET Director OWNERS' COSTS, DOCUMENTS Managing Director NUCLEAR FUEL l

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