ML20052G207
| ML20052G207 | |
| Person / Time | |
|---|---|
| Site: | Cooper  |
| Issue date: | 05/05/1982 |
| From: | NEBRASKA PUBLIC POWER DISTRICT |
| To: | |
| Shared Package | |
| ML20052G206 | List: |
| References | |
| NUDOCS 8205140405 | |
| Download: ML20052G207 (42) | |
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58 b6 82051404 0 PDR i PDR ADOC 1
About the cover... NPPD's workforce is comprised of some 2,000 Nebraskans dedicated to serv-ing our customers with low cost, depend-able electricity- the energy of tomorrow, delivered today, so all may live, work and enjoy a more productive life. l
J i REFERENCE GUIDE Directors and Officers.. Page 2-3 Slessage from the Board of Directors. Page 1-5 Slessage from the General afanager. . . Page 6-7 i 1981 In Heview. . Page 8-19 Financial Commentary. Page 20 Financial Report.. . Page 21-37 Slap of System. . Page 38-39 Statistical Review. . Page .10-11 1
l The Nebraska Public Power District's Board of Directors l The Nebraska Public Power District is a public corporation and political subdivision of the State of Nebraska. Control of the District and its operations is vested in a Board of Directors, consisting of 11 members popularly elected from districts comprising subdivisions of the District's chartered territory. These districts encompass 85 of the state's 93 counties and l portions of two other counties. The District has the power, among l other things, to acquire, construct, and operate generating plar.ts, transmission lines, substations, and distribution systems and to [ purchase, generate, distribute, transmit and sell electr?c energy, both at wholesale and retail, for lighting, power, heating and other sources. Management and operation of the District is accomplished with a staff of approximately 2,000 persons. OFFICEFIS Geo.11. Barber. I' resident Durwood W. Ilill. General 31anager llenry D. Kosman. First Vice l' resident Themlore St. Kyster. Assistant Treasurer Fred A. lierrington. Second Vice l' resident Robert D. .\laimstrom. Controller Ralph J. Lubeck. Secretary Janet 11. AlcQuistan. Assistant Secretary leslie S. Taylor. Treasurer in Memoriam i l 11. Jackson Cary of Kearney, a farmer-livestock feeder, was elected to the p "m, ~mm Board of Directors in November,1980, and his T l l i term began in January,1981. He died July 24, 1981. Nebraska Governor Charles Thone p j
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appointed Alvie Payne, a Kearney business [ , executive, to succeed Cary. Payne had 1 previously served as a director of two s j predecessor utilities - Platte Valley Public Power and Irrigation District and Consumers Public Power District. On Feb. 27,1982, Director Jules W. Burbach of Ilartington died. Wayne E. Boyd of South Sioux City was appointed to complete II. Jackson cary Burbach's term. 2
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Geo. II. Ilarber Jules W. Burbach Bernard M. Delay David L. Duren Beatrice Hartington Northik Columbus Electrical Contractor Grain Elemfor Grener. Operator Banker Certified Public Accountant
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[ Fred A. IIerrington Ralph E. Holzfaster George W. Knight Henry D. Kosman Lincoln Paxton Lincoln Scottsbluff Businessman Farmer-Agribusinessman Businessman Banker
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l .- Ralph J. Lubeck Alvie E. Payne Leslie S. Taylor Stamfoni Kearney York Farmer-Lurstock Feeder Businessman Businessman-Salesman 3
A message from.the Board of Directors It is important that this Board, which directs the activities and policies of Nebraska Public Power District, continue to demonstrate its collective ability to operate the District in a businesslike manner for the benefit of all the state. The result will be a mutual trust and understanding between the - Board and the various publics that maintain an interest in our organization - such as financial institutions, the state legislature, other electric utilities - and our customers. Increasing electric rates is one of the least pleasant responsibilities of'a utility but a combination of factors forced us to enact a substantial rate - increase efTective in 1981 for the District to meet its financial obligations. Approved late in 1981 was another rate increase - effective in 1982 - that will enable the District to maintain its solid financial condition. Despite the 1981 increase, a survey we conducted during the year of nearly 100 utilities across the nation revealed that our rates were in the lower one-third for a customer with an electric water heater using 750 kilowatt-hours per month in communities relatively the same size as those served by our utility. Our efforts to seek out ways to improve efliciency and reduce costs must . not cease if we are to retain our position of providing electricity at rates that are below the national average. On the power supply scene, we feel our situation is one of the best in this region. We placed Gerald Gentleman Station Unit No. 2 into commercial operation on Jan.1,1982, joining with Unit No. I to provide our customers with 1,300 megawatts of coal generation that is among the least expensive ofits type in this region. With the installation'of the new low pressure rotors at Cooper Nuclear Station, that facility has returned to full generating capability and continues to operate at a per kilowatt-hour cost that is below the national average for similar boiling water reactor plants. This Board approved a contr'act with Central Nebraska Public Power and Irrigation District for the construction of the 50 megawatt Kingsley Ilydro* generating facility below Lake McConaughy that will commence providing power to our customers during the mid-1980s. Under terms of the contract, Central Nebraska will own and operate the hydro unit but NPPD will purchase the output for resale. 1 Although we currently have excess generating capacity on our system, the abundance of coal, nuclear and hydro power available will enable us to drastically reduce our dependence on oil and diesel fuels which are costly l and in short supply. We instructed management to continue negotiating with other utilities for short-_ term sales of power and energy that would result in further financial benefits for the District's customers. Payments in excess of $2.5 million were made during the year to school districts that sustained additional financial burdens due to the influx of workers and their families during the construction of Gentleman Station. Although the payments were not mandatory under the enabling legislation, ! we realized that all of our customers benefit from Gentleman Station and
- voluntary payments to the school districts were important in maintaining
! quality education and alleviating the financial burden. f 4 __g,y,e.__._.m ... _ _ . , ~ , , - e m ., , r,__. , . . . . . , _ ,-, ,m,,.-._,,o .-
i With no major construction projects in progress, this is one of the quietest times this utility has experienzl for many years. This period of reduced activity is welcomed from a business standpoint. It gives this Board an opportunity to reassess our overall approach to existing policies and procedures. With the announced retirement of our veteran General Manager D. W. Ilill at the end of 1982, this inert time in our growth will afford the new general manajer an opportunity to more leisurely complete the transition period. We are certainly not implying that this is a completely inactive time for this District. On the c<mtrary, there is much to be done as we strive to maintain a utility that is responsive to the needs of its customers. We will concentrate much of our efforts during 1982 on completing the contractual arrangements and licensing activities on the MANDAN transmission project to Manitoba, Canada. We have directed management to continue with the process of renewing and extending contracts with our full-requirements wholesale customers and to begin planning for the eventual extension of the leases with our retail communitien There are other activities of importance. Management has been requested to determine the need for and interest in an innovative program to make the temporary excess of summer energy available to our wholesale customers for such uses as irrigation and industrial growth, without the normal minimum billing associated with having capacity available in order to meet high peak demands. It is presently contemplated that the program would be coincident with systemwide summer controls to eventually moderate the peak demand. An improved system load factor would be beneficial to all customers so we will accelerate efTorts toward such load balancing programs as electric heat. We were gratified with the financial results of 1981 compared to the disappointing results of 1980. But 1981 is history. We face 1982 with enthusiasm, confident that this utility is on a sound course for the future. f S ' mWlW 9wdh- A y
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+ n-1 A message from the General Manager A I am pleased to report 1981 was a good year for Nebraska Public Pmver District.
A host of people contributed significantly to this dramatic development following a year that was disappointing to us. Much of the credit for the drastic turnaround goes to our employees who were willing to tighten their belts by cutting back on some existing programs and reducing expenses throughout the organization. Concurrently, our Board of Directors approved a retail rate increase and an oft-year wholesale rate increase which certainly were instrumental in our recovery. We had net revenues in 1981 of $8.8 million. These revenues less i expenses provided funds which were sufficient to cover debt service requirements 1.61 times. This is not unusual. The unusual year was 1980 when we experienced negative net revenues in excess of $10 million. Over the years we have had to do a significant amount of short-term borrowing primarily due to the relative ease of acquiring funds under that process. It appears that at the end of 1981 we will be able to begin to reduce our short-term indebtedness. Although the exact amount is not yet known, we will have approximately $100 million remaining in the Gerald Gentleman Station Unit No. 2 construction fund. Not only was the plant constructed under budget but there are additional funds available due to a reduced cash flow , and a higher than anticipated interest income from invested funds. It is contemplated that approximately $38 million of the surplus will be allocated to Unit No. I to help pay the costs of common facilities between the two Units and another $18.6 million may be needed for Unit No. 2 water treatment facilities in the event the facilities are required by the Nebraska Department of Environmental Control. We will be able to utilize the remaining funds from Unit No. 2 to pay some of the preliminary costs of our next major power supply program which currently is the 500,000 volt MANDAN power line to Manitoba, Canada. An alternate in the power supply program is a coal-fired plant in central Nebraska. With these funds available we should not be in the short-term or long-term bond market for power supply purposes for a couple of years. Ilopefully, when we face the need to return to the market,the interest rates will have stabilized at a more reasonable figure. 6
Our Production Cost Adjustment (PCA) fund exceeded $8 million in l excess revenue during 1981 which triggered the mechanism to begin crediting our wholesale and retail customers from the fund. A credit from the PCA fund also carric<l over into the 1982 rate period. The excess funds were accumulated primarily due to a slower than anticipated increase in fuel costs and good operating experience from our lower cost base load generating units. We successfully concluded two major lawsuits during the year. One was the suit against General Electric, Westinghouse, Burns and Roe and others concerning schedule delays and cost overruns at our Cooper Nuclear Station and the other was the nuclear fuel litigation involving General Electric. These matters were settled out of court and in each instance the results were beneficial to the District's ratepayers. Still pending is the suit with the contractor on Gentleman Station Unit No.1. We also benefited from regulatory relief during the year when the Nebraska Department of Environmental Control rescinded its permit order requiring the testing of the sulfur content and BTU content of coal being burned at Gentleman Station before it could leave the mine. Extremely important in the operation of a utility the size of NPPD-which is the state's largest electric utility - is our relationship with others. Improving our relationship with the various publics over the years has been of prime importance in maintaining our credibility and image. The District's relationship with the rating agencies, bondholders and bankers continues to be excellent and, although we are not currently in the bond market, we maintained those relationships during the year by personal visits to the various financial institutions. We considered it an opportunity to explain the difficulties that beset us during 1980 and to reassure the financial world that the District was,indeed, a sound financial organization. Through the Wholesale Customers' Committee, this class of customers has ample opportunity to discuss concerns with our staff and management and a reorganization of this committee during 1981 hopefully resulted in an even broader opportunity for communication. During 1981 the DStrict made in-lieu-of-tax payments, lease payments and gross revenue payments, as required by law or under contracts, totaling approximately $9.2 million. This money is delivered to the various taxing agencies by our local representatives who are our front line in communicating with the retail customers. These payments are based in major part on retail revenue. Although we have had to reduce the workforce significantly due to a slowdown in the growth of annual kilowatt-hour sales and the fact that we have no major generation projects under construction, most of the employees who left the District were of the calibre that their talents were immediately recognized by other employers. Through our advertising pragram, the District has initiated an "open door" policy with the public. Only by inviting questions and comments from Rbraskans can we continue the level of communication necessary to apgopriately guide the activities of a public power district according to the wishes ofits customer / owners. General Manager 7
l l 1981 in Review l 5, W,*,Gs a :
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) kilowatt-hour sales during 1981 were 1.7';
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.. kilowatt-hour sales of 8.16 billion compared to j .(E_,. ' 'y 7 ,, .f . 3O; 8 32 billion in 1980 Wi i c[ n,1 ' . ' ] g*N # . . . As expected. t he I)ist rict's customers did 1 not set a new summer peak demand on the
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- the system set in 1980. The record stands at
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O-d 19Mi rose to a new high of $273.9 million jU i N. ' M..[ ('.I M [3'% which is an increase of 13.3', os er J yA(j*g h, r- ~ - 1. ' : q . f 7 %; . the 1980 figure of $211.7 million- ! Pi .# M . . ,, ;
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l I This is a substantial recovery from a year ! ago when the District experienced negative net revenues of $10.2 million. The District's planning department is l projecting an effective annual compound r/owth rate of 4.29 through 1991 in the summer peak demand and an energy sales s l
- etrective annual compound growth rate of 4E; e during the same time frame. v
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l v j During the year the Board approved the borrowing of $22.8 million in two-year notes to p. [ j _- y l' pay for additional construction costs at Cooper i Nuclear Station. The notes were issued at an %" E9 ' I interest rate of 109. The Board opted for short-term notes instead oflong-term financing dur- ,1 - -C ing this pericxl of high intere.st rates. 'V 1
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y. w I i. t. l In October, General Manager D. W. Ilill l announced that he will be retiring from that h j position elTeCtive DUC. 31, 1982. Solar energy potential is an irnportant jmrt of the Iiill came^to Nebraska in 1964 ta be n sidential encray audit prannun. named general manager of the former Con-sumers Public Power District. lie has served . as the only head of Nebraska Public Power ! District since the merger that created NPPD in 1970. Ilill said he was announcing his re. A new emphasis was placed on employee tirement more than a year in advance in order committee meetings during the year. These to give the Board of Directors ample time to meetings have been taking place within the l conduct a thorough search for his replacement. District over the past several years and are ! The Board, in September, voted to amend held twice annually in each regional ofTice and the charter of the District to revise the bound. power plant. j aries of director subdivisions to more closely Employees and management discuss bene-approximate an equal number of registered fits, policies, working conditions, salaries, voters in each subdivision as required by state projects and use of equipment - any subject in
; law. However, that action has been challenged which employees or management have ex-before the Nebraska Power Review Board by pressed concern.
certain customers and the amendment has not The purpose of these meetings is com- l 1 yet been implemented. munication and there are currentiv 10 em- ~
- Early in the year the District announced ployee committees throughout the state. I the initiation of its residential energy audit Initiated during the year was a coopera- !
program required under the Residential Con- tive program with the Electric Power Research l servation Service Program Plan of the Na- Institute (EPRD and the United States De-1 tional Energy Act. The District is one of eight partment of Agriculture developing a process covered participating utilities in Nebraska. of regulating the growth of trees under power , Auditors are trained in home energy con- lines. The process chosen has two positive side ' i servation and can point out and explain spe- efTects. First of all, it is environmentally ac-cific practices and measures that may improve ceptable and secondly,it will save money fbr i the energy etTiciency of the home. the ratepayers. U i j
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h%$$2 l t 'h im al trucction h lps omin>lgrou th of trees underp<ncer hnes. t l A chemical is injected into the trees to cont rol grow th in power line rights-of-way. If the experiment is successful in Nebraska, as it has beca on the East and West coasts ihr sev- _ eral tears, it will climinate the need to trim the trees every Iwo years. Control of tree ;:,. ,. grow th under power lines is a major expense of ;;;.7c c.3 2 electric utilities. _ d,.~ ,:....,; ,,- The 1)ist rict also instituted a program that = I?',F- . will reduce expenses associated with the tram- ce ' . . ing of personnel at its Gerahl Gentleman Sta- ~* tion. The l'uhlic Affairs audio-visual depart- 4 ment spent 320 hours video taping vendor ~. pre entations at the plant site during 1981 4 -- w hich will eliminate the need to transport nac,, tap,,,a , cinfor pec,cntations hus sarca thou,aruls personnel to industry headquarters for future 4,f dolla rs training it uill also aid employees in locating I potential problem areas in the event of a In a cooperative effort with the Depart-malfunction at the plant.1)nring 1981 alone ment of Environmental Control and the Ne-the 1)istrict e. timates it saved approximately braska Game and Park.< Commission, the Dis-
$ 180.000 m eliminating travel expenses for trict announced an effort to improve the qual-t raining purpose .. ity of fi hing resources in the Lower Niobrara lti
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River during the year. The District reduced the number of times it flushes the Spencer Ilydroelectric Dam on the Niobrara River. It is necessary to flush the reservoir occa-sionally as sitt from the river builds up, reduc-ing the amount of water that can be stored. The Conunission thinks the flushing may have i a detrimental effect on the fish environment in the river. po,,,on ,7c,,,7,,,, gga,;on cong,vi ,,,_ llecause of these concerns, the District has modified the operation of the Spencer Ilydro which has reduced the number of flushings , and has scheduled the necessary flushings at ! times to minimize any adverse efTects on the j fish environment. The modified operation of i the facility has resulted in some loss of hydro-electric power generation. A combination of unfbreseen events hap-pened to the Districo during 1980, some of g-y y,-.y ,_.
- e which involved temporary emergency modifi-
[. cations at our Cooper Nuclear Station, Gcrald ( - Gentleman Station and Sheldon Station. In L - N addition, our customers used less kilowatt-F hours of electricity than had been anticipated { during the year due to milder than normal weather. The combination of these and other inflation-related factors fbreed the District to raise rates efTective in 1981 in order to meet
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financial obligations.
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. ~ . . .M$Mohn costs during the latter part of 1980, the rate During the year the District completed increase was not as large as it might have demolition of an old landmark that was a been. The new 1981 rates were expected to neighbor to our general ofTice headquarters in raise approximately 8.79 more m wholesale Columbus. The old St. Mary's hospital building revenue than m 1980 and approximately 14'<,
which was on property owned by the District more in retail revenue.
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was razed when no further use could be deter- District customers received a break on mined fbr the structure. The District plans to their electric bills effective in April due to renovate and landscape the site and the Dis- lower than anticipated costs for purchased trict will retain the property. electrical energy and the District's ability to 11
l utilize lower cost fueis in the generation Unit No. 2 coal-fired plant was the major in-process. gredient causing the higher 1982 rates. l The reduction came about because of a In addition, the Board approved an aver-surplus of approximately $8 million in the age increase of 27.l'i in irrigation water rates Production Cost Adjustment (PCA) fund which for the District's 600 surface water irrigation is a separ. .e charge to the District's retail and customers in the Platte River Valley. The w holesale customers reflecting increases or de-increase affects approximately 38,000 irri-creases from the original estimate of certain gated acres. variable costs such as the cost of purchased , energy or fuel. During 1981 the District conducted a rate survey usmg a typical, residential customer
'I,he surplus in the PCA fund resulted in
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" . reduction of approximately 4.7 4 m the cost consuming 750 kilowatt-hours per month with of power and energy to wholesale customers an electric water heater. This type of customer
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and approximately 2.5's m the costs to re- is representative of NPPD residential custom-tail customers. ers and is one of the consumption levels used for rate comparisons by the Federal Energy llowever, near the end of 1981, the Board Regulatory Commission. of Directors approved new w;holesale and retail rates which would be effective m 198 . l'he The 100 cities and towns across the nation rates are projected to collect $275.8 million m surve}ed had populations between 1,500 and operating revenues from the District's 25,000 which are representative of the , wholesale and retail customers during 1982. communities served at retail by the District. This represents an increase of $39.7 million The District's average residential rate fbr over the revenues that would have been the type of customer used in the survey was collected based upon the 1981 rates. These
$38.78 per month. Out of 73 cities responding, amounts do not include revenues from 20 cities in the survey had residential rates participation and non-firm sales.
which are lower than the District's rates and The first year of debt service and operat- 52 of the cities had higher rates. The average ing re<piirements fbr the Gentleman Station rate fbr all utilities responding was $43.76. NPPD RESOURCES SOUTM SaROTa
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l l During 1981 the District paid approxi- During the trial in June,1981, the District i mately $9.2 million back into the state's reached an interim settlement agreement with economy in the form of lease agreement pay- General Electric which deferred a multimillion ments, gross retail revenue payments and pay- dollar lawsuit against General Electric regard-ments in lieu-of-taxes as required under ing buy-back payments and removal from - contracts and by law In addition the District Cooper Nuclear Station of spent fuel supplied made payments in excess of $2.5 million to by General Electric under a nuclear fuel school districts in two counties that sustained supply contract. additional financial burdens due to the influx The agreement provided that General of workers and their families during construc- Electric remove "as soon as it is legally tion of Gerald Gentleman Station. Although possible and practicable" all of such spent fuel the payments are not mandatory, Nebraska after it is discharged from the nuclear reactor. law allows public power districts or other Although responsibility for the ultimate entities engaged in the construction of electric disposition of the spent fuel was not resolved, generating facilities to make payments to General Electric paid the District $1 million school districts affected by the construction. and will make cash payments in an amount equal to one-half of the buy-back payments contemplated by the fuel supply contract in addition to sharing certain costs associated y "AI e% w with the removal of the spent fuel. h b b b ej d i b a h uj y Aside from the initial payment of $1 million, both parties have a full reservation of rights if the matter is litigated again in Two lawsuits involving Cooper Nuclear the future. Station were brought to successful conclusions during the year. Both were the result of out- Attorneys for the District and the Win-nebago Indian Tribe appeared in United States of-court settlements. District Court in Omaha in December on the One settlement involved a lawsuit brought issue of whether the District can proceed with by the District in September,1975, against right-of-wriy condemnations for a transmission General Electric Company, Westinghouse line the District is proposing to construct Electric Corporation, the architect-engineering across portions of the Winnebago Indian Res-firm of Burns and Roe, Chicago Bridge and ervation in Thurston County, Nebraska. Iron Company and Contcol Components, Inc. The District is constructing the 345,000 Results of the settlement included cash volt line from the Iowa Public Service Neal payments and credits to the District of more Generating Station in Iowa to the Hoskins than $11.7 million and the dropping of more substation in northeast Nebraska. Construc-than $8.5 million in counterclaims against the tion is complete on the line from the Iowa sub-Dist rict. station across the Missouri River into Dakota The District received approximately $5.5 County, Nebraska, and structures have been million as cash settlement and also is entitled erected from the Hoskins substation to the to $6.2 million in credits on future equipment Thurston County line. No construction has and services from General Electric, Burns and been done in Thurston County pending the Roe and Chicago Bridge and Iron - generally judge's decision. over the next seven years. Thisis the second attempt made by the The suit asserted five claims relating to Winnebago Indian Tribe to halt construction of delayed start-up and extra expenses incurred the line, in the construction of Cooper Station. The settlement resolves four of the five claims but Earlier in the year the United States retains the District's right to reinstitute legal Supreme Court denied an efrort by the Tribe action against General Electric and Burns and to overturn a decision of the United States Roe for a claim relating to extra costs incurred Eighth Circuit Court of Appeals which upheld in modifying the Station's containment the sufliciency of an environmental impact system. assessment made by the United States Army 13
l ('orps of F.ngineers. The Tr:he filed t hat suit af ter midnight on .hin 1. lim 2. when t he -ec-in 1979 against t he I)istrict and the ('orps ond < >f t w o coal-fired units at t he Gerahl Gen-alleging that an environmental unpact as3c3s- tleman Power Station went into conunercial ment filed by the ('orp4 had f ailed to consider ope rat ion po%ible harmf ul environmental effects on the Indian I{eservation and the .\lissourl I{iver ( entleman Stalmn l' nit No 1 a ei50J H)0 Valley wildhfe. especially 'he bald eagle kilowatt facility. ioined if nit No. I to complete Nebraskan largest electrical generating plant. l' nit No. 1. al3o a (i50.000 kilowatt facility, w ent into commercial operation April 2.1979. An accreditation of fiO4) i net i megawatts f or l' nit No. 2 was filed w ith the .\ lid-A maior nulestone in the Ibtricti power ('ontinent Area Power Pool i .\1 APPt .\l APP is supply pringram w as reached at ime minute an organl/ation of utilities in eight upper ( oui sta, i, r n tai m, r a t G, vil.no n .%:anun
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Alidwest States that are interconnected by the District to meet a compliance schedule for high voltage transmission lines. These inter- installation of appropriate off-stream cooling connections provide reliability for each system equipment. as well as allow for the interchange of electric- The District has maintained that any ity among the various independent systems. additional heat from Unit No. 2 into the reser-Before it went. into commercial operation, voir will not be harmful to the water's Unit No. 2 had been operating satisfactorily in population. a test mode since late summer. Construction i on the $287 mil' ion Unit began with ground ! breaking on June 7,1977. The Unit was built l by Austin Power, Inc., of Dallas, Tex., and has f a llabcock & Wilcox boiler and General Elec-
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Gentleman Station is situated along the south shore of Sutherland Reservoir in west- I - ,. central Nebraska. g[ l A financial analysis revealed that Unit r.T/ , No. 2 went on line with more than $100 f million remaining in the construction account. g}a s , i It is estimated that Unit No. 2 will be com- p(' ' # < i pleted at approximately $52.7 million under 3.1 9 budget and there is an additional $48.1 million b% excess due to a higher than anticipated inter- " est income and a reduced cash flow. . l It is contemplated that approximately $38 million of that surplus will be allocated t Removed rection oflow pressure turbine at cooper Unit No. I to be applied primarily to the costs station showing re noved blades. Insert is a for common facilities at the site. In addition, close.up of broken blade. i
$18.6 million may be needed in the event the j District is required by the Nebraska Department of Environmental Control (DEC) Two low pressure rotors and nearly 3,000 to install supplemental water cooling staGonary blades were replaced during a fal!
equipment in order to operate Unit No. 2. oc.tage at our 800,000 kilowatt Cooper Nuclear The District previously obtained a Na_ Station near Brownville. . tional Pollution Discharge Elimination System Rotor disc cracking was discovered during (NPDES) permit fbr Units 1 and 2 providing a 1980 inspection and the District temporarily that there would be no discharge of heat into corrected the problem by removing some of the Sutherland Reservoir from Unit No. 2. As a discs from the turbine rotors and installing part of the renewal process of the permit, the baffles vhich alleviated pressure drop. Four rows of stationary blading were also removed DEC has temporarily waived the no-discharge-of-heat requirement subject to the completion at that time. of a monitoring program approved by the DEC. The plant was shut down four days prior A stipulation, as a part of the NPDES to the scheduled spring refueling outage in i J permit, was approved by the Board of Directors 1981 when abnormal vibrations were detected l providing that upon completion of the monitor- in one of the low pressure rotors. Subsequent l J ing program DEC will issue findings in an investigation revealed that several small l order which will either permanently waive blades in the turbines sustained cracks and as < 1 the provisions of the permit specifying no dis- a result two more rows of blades in each of the , charge of heat from Unit No. 2 or will order turbines were replaced. ' i I i 15
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.uniih \ a cil St at nin i- " i n exce' lent phy-ical cornhtion I lt ' .cen t onunen tal operat ein in 1971 "'"I ' I"'i"M "imrat ed in a -afe n'an nor by
.tfril .\jetil I l'h l . L i < gh f liittl lit i'll t ill' t ht' lilH' 'IIIE I] I t Y' 'I" 'II IIi a . al ut 1:;ti out of J..iTH da\ - and :13 of flui-c J.n - u r:e -( heduled out age- fhat I N ii ) 13 a non-profit organi/ation inade up l i '. i \ t - itil\ lIl.' il.1 \ - i st li e rt't 1l iill t ;lgi'- li iret il t iI lit I!!Ilt's t hill i tE Ii illlClt'al lll;illl 3. Iht' MFt allp.
il m il ' i e .it !!n } il . l f it l .lpprii\ lln.it el.\ I li er!!!t1l at t t'l iht' accidcIlt at Ihlee' .\lile 13land. u h h r b. t i i h.in t he .n er.iee f.ir nuclear l'a . e-t ablishc3 -t a ndard, for t he tacilit ie-p- ei plan - a:n nu nie and help- ut iht ie- !ne. t t ho-e -t andards.
i INPO conducted this first evaluation of It was the cost of the pump back energy site activities to make an overall determina- that cast doubts on the economic feasibility of tion of plant safety, to evaluate management the project in recent years. When the District systems and controls and to identify areas first planned the pumped storage facility,it . needing improvement. was intended to use low cost nuclear power for i pump back purposes but another nuclear plant k In August, the Distr.ict's Board of Direc- in the state was cancelled a few years ago and r tors approved the action of the Central Ne- NPPD currently has no plans to construct
- braska Public Pmver and Irrigatmn District,s another nuclear unit on its system.
. issuance of $30 milhon m notes to finance a portion of the cost of the Kingsley Hydro A pumped storage hydro project is used 1 Project. primarily to meet day-to-day peak electrical demands and the water must be pumped back The District's approval of the terms and conditions of the borrowing was required to an upper reservoir during non-peak periods. t under terms of the Power Sales Agreement ap-proved by the two Boards in June. The interim financing for the hydroelectric project near Lake McConaughy in Western Nebraska enabled Central to start construction of the E 50,000 kilowatt facility. Under the contract between the two Dis-tricts, Central will construct the facility and NPPD will pay certain costs by purchasing the power generated. r The Nebraska Power Revmw Board ap- The MANDAN Project, a 600-mile, proved the Kmgsley Hydro I,roj,ect in July. 500,000 volt transmission line which will link A management recommendation to delay summer-peaking utilities such as NPPD with for an indefinite period any further activity on winter-peaking utilities in Manitoba, Canada, the proposed pumped storage hydro electric and the northern United States, moved ahead [ facility in Boyd County was approved by the during 1981. E Board in March. Early in 1981, the District's Board voted All activities on the project were halted to make the MANDAN Project the next major e and the District's permit application to con- power supply resource on the system and struct the facility was dismissed without prej- deferred construction of a coal-fired plant in
- udice by the Federal Energy Regulatory Com- Custer County.
mission (FERC). Dismissal without prejudice Not only is the MANDAN Project a less means that the District may refile an applica- expensive source of power for our customers tion for t,ae project agam at a later date if but with the growing diversity between our
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it chooses. summer peak demand and our winter peak, it The District had been studying the feasi- will help alleviate one of our major power bility of the project since the early 1970s and supply problems. The project has the backing had chosen a location along the Missouri River of the Nebraska Power Association (NPA) and m northern Boyd County in 1973. a number ofindividual utilities. r C t' I E s l7 [ b
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Early in 1982 the South Dakota Public MANDAN, an acronym for Manitoba, Utilitios Commission denied the application Dakotas and Nebraska, will allow the ex-to build and operate the portion of the $686 change of surplus power and energy between million line in that state. The District has utilities with differing peak load patterns. The appealed the decision to the state circuit court line will run between substations near Hos-at Pierre, S.D. kins, Neb., and Winnipeg, Man., with substa-The South Dakota PUC turned down the tions in North Dakota and South Dakota to application on the basis of the "need" issue, allow utilities in those states to interconnect. saying the District " failed to establish by a A $20.7 million transmission line project preponderance of the evidence" that the power that brings additional energy into an eight-from the line would be needed. District pre- county area and improves system reliability in dictions, backed up by independent forecasting south-central Nebraska was placed into service firms, indicate the additional power to be during the year. supplied by the line will be needed in Nebraska in the late 1980s. Completed were two new 345,000/115,000 volt substations and approximately 50 miles of MANDAN Project representatives held , 345,000 volt transmission line. public meetmgs m Nebraska and North Dakota to gather infbrmation from landowners One of the substations, called Sweetwater, and others for use in selecting a line route. is located in Custer County and the other sub-The North Dakota Public Service Com- station, called Axtell, is located in Kearney mission approved a mmlifieu c orridor which County. l'he transmission lme connects the , contairux! several possible line route options two substations. Ihe Sweetwater substatmn is and a specific line route application will be connected by 345,000 volt lines coming from filed in North Dakota in 1982. The North Gentleman Stat [on to the west and Sheldon Dakota PSC, in handing down its corridor nd Looper Stations to the east. approval, said there is "no present credible Anothei 14 miles of 345,000 volt line to be evidence" that the line would cause adverse built in 1982 will carry power east from the biological effects as had been claimed by some Axtell substation to a substation in Adana opponents of the line. The PSC also said that County, completing the high voltage project in "it is not technologically or economically feasi- that area. ble" to build the line underground which had .. . been proposed in some quarters. Activity will also continue during 1982 on a 45-mile 345,000 velt hne m northeast An application for a construction permit Nebraska that will connect the Hoskins sub-was filed in Nebraska with the Power Review station with the Shell Creek substation near Board. The application was approved early Columbus. A 65-mile segment of 345,000 volt in 1982. line between the Hoskins substation and a Negotiations are underway between the substation near lawa Public Service Com-District and Manitoba Hydro, the Canadian pany's Neal Generating Station in northv/est utility cooperating in the project, on details of Iowa has been delayed by litigation filed by a contract between the two prime project the Winnebago Indian Tribe concerning utilities. right-of-way over the reservation. 19
FINANCIAL COMMENTARY Comparisons of the net revenues and debt service relationship with the City of Lincoln. Revenues de-coverage of Nebraska Public Power District for the rived from sales on a non. firm basis and participa-years 1980 and 1981 reveal a dramatic change. The tion sales increased $25.9 million from 1980. The improvement is primarily attributable to increased increase is related primarily to the City of Lincoln - revenues as a result of a rate increase which became becoming a participation customer. efTective during the year 1981. Revenues for the year The District's 1981 peak demand, excluding non-reached an all time high of $273.9 million which was firm and participation sales was 1,717,548 kilo-an increase of $32.2 million or 13.39. These reve- watts. This is 0.1% less than the year 1980. nues less expenses as described in the District's Electric System Revenue Bond Resolution provided Operating Expenses funds which were sufficient to cover debt service The District's operating expenses for the year requirements 1.61 times. Other significant events 1981 totaled $256.1 million. This total exceeded include the commencement of a new contractual re- 1980 by $6.1 million or 2.5%. Purchased power and lationship with the City of Lincoln which among production expenses total $202.2 million or 79.09 of other things provided for participation in certain the total operating expenses. Purchased power ex-production facilities and the completion of required pense amounts to 24.2% of the $202.2 million. Ex-mmlifications at Cooper Station and Gerald Gentle. penditures for purchased power have decreased in man Station Unit No. I which permits each unit to recent years due to completion of the District's operate at approximately 100% of rated capacity. Cooper Station and Gerald Gentleman Station. The Continued operating success at these facilities is of remaining operatmg expenses amount to $53.9 mil-major importance to the District. These events are lion, an increase of $5.5 million or 11.4% over 1980. reflected in the financial statements of the District Net Revenues which are summarized below. The net revenues for the Electric bystem opera. Operating Revenues and KWH Sales tions total $8.8 million which is a significant improve-The 1981 operating revenues reflect an increase of ment over 1980. The increase is primarily associated
$32.2 million or 13.3% over the year 1980. The ex. with increased rates since there was only a nominal clusion of non-firm, participation and non-electric increase in KWH sales.
sales indicates that the total operating revenues in- General creased 1.91% over 1980. Retail revenues for 1981 The improvement of net revenues in 1981 over were $94.6 million which is an increase of $7.7 mil- 1980 was truly important to the District. It is gratify-lion or 8.89 over 1980. The increase was primarily a ing to know that the Board of Directors accepts the result of higher rates in effect during 1981. responsibilities associated with a utility and is will-Wholesale revenues declined $3.5 million to ing to respond to the needs of the District by imple-
$124.7 million from 1980. The decrease can be menting rates that will provide suflicient revenues primarily attributed to a decrease in KWH sales of to allow for payments of all costs so that the District 14.19 which reflects the change in the contract can maintain a sound financial condition.
.J U. f T. M. Kyster First Assistant General Manager & Assistant Treasurer 20
i l Nebraska Public Power District ELECTRIC SYSTEM Report ofIndependent Public Accountants To the Board of Directors of Nebraska Public Power District: We have examined the balance sheets of the ELECTRIC SYSTEM of NEBRASKA PUBLIC POWER DISTRICT (a public corporation and political subdivision of the State of Nebraska) as of December 31,1981 and 1980, and the related statements of revenue and expenses, accumulated net revenues and changes in financial position for each of the three years in the period ended December 31,1981. We have also examined the supplemental schedules of the calculation of the debt service ratios for each of the three years in the period ended December 31,1981. 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 referred to above present fairly the financial position of the Electric System of Nebraska Public Power District as of December 31,1981 and 1980, and the results ofits operations and changes in its financial position for each of the three years in the period ended December 31,1981, and the supplemental schedules of the calculation l of the debt service ratios for each of the three years in the period ended l December 31,1981, present fairly the information set forth therein, all in conformity with generally accepted accounting principles applied on a consistent basis. Arthur Andersen & Co. Omaha, Nebraska, March 12,1982. 21 1
l t t Nebraska Public Power District ELECTRIC SYSTEM l Balance Sheets December 31,1981 and 1980 IEe41 19MO ASSETS (Thousands of Doll. irs) Utility Plant, at Cost . . .. .. . . . . ...... .... ... . . . . . $549,013 $513,312 Less-Reserve for depreciation and amortization (Note 1) . . . . . . . . .... .. 177,304 164,216
$371,709 $349,096 Debt Reserve Account:
Cash. . . ... . . . .. ... . .. ........................$ 2 $ 4 Investment securities .. . .. . . .. .... .. . .. . . ......... 30,730 30,738
$ 30,732 $ 30,742 Receivables from Sale of Property . . . . .. ....... ..... .....$ 2,575 $ 2,611 Current Assets:
Cash and investment securities (Note 5) . . . .. . ..... .. . . . . . . $105,888 *121.981 Receivables, less reserves . . . .. .. .. . ............ ...... . 34,062 30,336 Materials and supplies, at average cost . . . . ...... ........ ... .... 15,278 20,293 Prepayments and other assets . . . ... . . . .. . . .. . . . 294 266
$155,522 $172,876 Deferred Charges:
Advar.ce payments to Nuclear Facility (Note 1)- Nuclear fuel . . . ... ... . .. . .. . .. . . . . . . . $ 31,844 $ 24,314 Replacement rotors . . . . . . .. .... .. . . .. .... .... 5,021 882 Unamortiwd financing costs . . . . . . . . . ... 3,363 3,584 Other. .g . . .. . .. . ... . . . .. .. 2,746 3,022
$ 42,974 $ 31,802
$603,512 $587,127 LIABILITIES AND CAPITAL Long. Term Debt (Note 4) . ... . ... . .. ..... ... . . . . . . . $384,640 $391,528 less-Current maturities .. . . ... . . .. .. . . ...... .. 8,221 7,031
~ $376,419 $384,497 Accumulated Net Revenues . . . .. .. . . .. .. . . .... ... ... 120,234 111,479
$496,653 $495,976 Notes Payable:
52h9 of prime, due 1982 . . . .. . ... .. . .. . .. . ....$ 1,320 $ 1,320 659 of prime, due 1982 to 1984 . . .. . . . 30,000 15,000 57% of prime, due 1982 to 1984 .. . .. .. . ... . ....... .. 4,447 4,447 72%'I of prime, due 1982 to 1986 . . . . . .. .. 30,000 30,000 Less-Current maturities . . . .. . . 20,237 -
$ 45,530 $ 50,767 Current Liabilities:
Current maturities . . . . . . . .. .. . . . . . $ 28,458 $ 7,031 Accounts payable ' . . . ... . 17,784 22,831 Accrued lease payments . . . .. . .... . .... ... .. .. 3,587 3,053 Accrued interest . .. . . .. . . 66 Other. . . . . . . .. .. 8,357 4,007
$ 58,186 $ 36,988 Unamortized Payment Received for Refinancing Costs. . . .$ 3,143 $ 3,396
$603,512 $587,127 ',
The accompanying notes to financial statements art an integral part of these balance sheets. 22
1 i I l 1 1 Nebraska Public Power District ELECTRIC SYSTEM Statements of Revenues and Expenses and Accumulated Net Revenues for each of the Three Years in the Period Ended December 31,1981 lipMI 19MO 1979 ,
* * *"d*"'"""'"'
Revenues and Expenses: Operating Revenues (Note 2) .. . ... . .. . . . . . . . . . $_273,886 $241,712 $224,662 Operating Expenses: Power purchased-Nuclear Facility and Power Supply System . . .. .. . $126,738 $ 96,055 $ 76,412 Other . ... .. .. .. ... . ..... .. .... . 48,858 59,767 64,174 Production-Fuel . .. . . 19,506 23,611 25,944 Operation and maintenance . .. . . . ..... .. 7,064 6.965 6,409 Deferred production cost, net (Note 11D . . .. .. .. .. - 15,094 (11,588) Other operation . . . ... .. . .. . . 19,634 17,435 16,450 Other maintenance .. ..... . . . . .. . .. . . 5,776 4,952 4,431 Leased plant payments (Note 1) . .. .. .. . .. 6,696 5,678 4,953 Depreciation and amortization . . ... . .. 16,789 15,956 14,715 Payroll taxes and payments in lieu of taxes .. . . .. . ... 5,004 4,430 3,954 Total operating expenses . . . . ... . .... . . $256,065 $249.943 $205,854 Net operating revenues (expenses) . . . $ 17,821 $ (8,231) $ 18,808 Interest and Other Revenues: Allowance for funds used during construction . . .. . .$ 2,003 $ 2,047 $ 1,462 Interest and other . . . . . . .... . .. . . .. 16,745 23,648 15,759 l Total interest and other revenues . . . $ 18,748 $ 25,695 $ 17,221 l Net revenues before other deductions . .. .. . $ 36,569 $ 17,464 $ 36,029 i Other Deductions: Bond interest . ..... .. . . .. . . .. ... .. . $ 22,878 $ 23,157 $ 21,449 L Other interest .. .. . . .. .. . .. 4,810 3,853 3,767 Miscellaneous, net .... . . . .. 126 610 98 Total other deductions . .. . . . . . . $ 27,814 $ 27,620 $ 25,314 Net Revenues (Expenses) (Note 2) . . . . ..$ 8,755 $ (10,156) $ 10,715 Accumulated Net Revenues: Beginning balance .. . . . . 111,479 121,635 110,920 Ending balance . . . .. . .. . . $120,234 $111,479 $121.635 The accompanying notes to financial statementa are an integral part of these statements. 23
Nebraska Public Power District ELECTRIC SYSTEM Statements of Changes in Financial Position for each of the Three Years in the Period Ended December 31,1981 19R1 19MO 1979 (Thousands of Dopars) Funds Provided by Operations: Net revenues (expenses)' . . .. . ... .. . .... ....$ 8,755 $ (10,156) $ 10,715 Add items which require no current outlay of working capital-Depreciation and amortization . . . . . . . .. .... . .... . id,789 15,956 14,715 Other.... .. .... .. .. . . .. . . ... .. 588 502- 649 Total funds provided by operations . . . . . . . . . . . $ 26,132 $ 6,302 $ 26,079
.Other Sources of Funds:
Sale of revenue bonds . ... . .. ..... . . . . .. - - 60,893 Proceeds from notes payable .. ... .. ............ 15,000 19,520 5,600 Contribution from Basin Electric ... . .. . . . . ..... 82 11,868 32,601 (Increase) decrease in fund balances . . ...... ... .. . . 16,102 15,809 (3,306) Proceeds from sales of property .. . ..... ...... .. . . .. 569 698 225 Total funds provided .. .... . . . . . . . . . . . $ 57,885 $ 54,197, $122,092 l Funds Applied: l Utility plant additions . ... ..... .. .. . . . $ 40,057 $ 55,449 $ 77,285 Decrease in receivables from sales of property. . .. . ..... . (36) (368) (359) Increase (decrease) in receivables . . . . . . .... 3,726 (30,152) 11,134 Increase (decrease) in materials and supplies . .. ..... . .... (5,015) 6,238 1,803 Advance payments to Nuclear Facility (Note 1)- Nuclear fuel . . ... .. .. ... . .. .. . 7,530 2,508 19,966 Replacement rotors . . . .. 4,139 882 - ! Repayment of notes payable . .. . . ... .. .. - 28,000 - P.etirements of long-term debt .... .. . 7,031 6,760 5,275 (Increase) decrease in accounts payable . . . .. . .. . 5,047 461 (4,985) Other working capital changes . . . . . .. . . .. .. (4,788) (15,390) 11,032 Other . . .. .. . . .. .. 194 (191) 941 4 l Total funds applied . .. . . $ 57,885 $ 54,197 $122.092 The accompanying notes to /inancial statements are an integral part of these statements. 24
i f Nebraska Public Power District ELECTRIC SYSTEM Supplemental Schedules-Calculation of Debt Service Itatios for each of the Three Years in the Period Ended December 31,1981 { 19MI ISMO 1979 (nounands of Dollars) Operating revenues . . . . . . . . . . . .... . . . .. . .. . $273,886 $241,712 $224,662 Operating expenses, excluding depreciation and amortization of
$17,377,000, $16,458,000 and $15,364,000 .. . . . ... 238,688 233,485 190,490
$ 35,198 $ 8,227 $ 34,172 Inierest and other revenues, excluding interest on construction funds of
$10,378,000, $9,639,000 and $7,642,000 . . . . 6,367 14,009 8,117 Net revenues available for debt service . .. .. . . . .. . $ 41,565 $ 22,236 $ 42,289 C
Amounts deposited in the Electric System Debt Service Account-Principal . . . ... .. ..... . . .. ... . .$ 6,770 $ 6,505 $ 5,025 Interest .. . .. . . . . .. . . 19,106 19,385 15,602
$ 25.876 $ 25,890 $ _20,627 Itatio of net revenues available for debt service to debt service deposits . . . . 1.61 .86 2.05 The accompanying notes to financial statements are an integml part of these statements.
25
cost of utility plcnt and is credited to Intercst cnd Other Revenues. The capitalization rates for construction fi-nanced with revenue bonds are based on the interest cost of each issue less interest income. The rate for construc-tion financed by revenues is based on a projected rate for short-term borrowing. For the periods presented herein, the rates vary from 6.1% to 8.25'7r. D. Unamorti.ted Financing Costs-These costs represent issuance expenses en all bonds and the premium to retire the Electric System Revenue Bimds,1975 Series, prior to their maturity date and are being amortized over the life of the respective bonds using the bonds outstanding method. E. Advance Payments to the Nuclear Facility-In December, 1978, $30 million ofintermediate term notes were issued and the proceeds deposited in the Gen- t' eral Reserve Fund to finance the Electric System's obliga. tion to the Nuclear Facility for working capital for nuclear
. fuel. Payments to the Nuclear Facility for these obligations Nebraska Pubh.c Power District and eert'ain carrying costs are reflected in the balance sheet ELECTRIC SYSTEM as a deferred charge.The deferred charge including carry-mg costs is bemg wnt ten off to Power purchased -Nuclear Facility at the rate of $500,000 per month commencing October,1981.
Notes to Financial Statements Payments to the Nuclear Facility have also been made for the District's share of replacement rotors and (1) SU51 MARY OF SIGNIFICANT have been classified in the balance sheet as a deferred ACCOUNTING POLICIES: charge. The District intends to fund this requirement A. Organization - ... through debt fimancing. The deferred charge will be writ-The District has three separate divisions for account- ten oft to Power purchased - Nuclear Facility over the life ing purposes as follows: of the debt. Electric System Nuclear Facility F. Unamortized Payment Receiwd forRefinancing Costs-Power Supply System This reimbursement from the Nuclear Facility was As required by Bond Resolutions, separate records for certain refinancing costs of the Electric System in-are maintained for each division. The Electric System curred in 1968 and is being amortized over the life of the financial statements exclude the Nuclear Facility and 1968 Revenue Bond issue using the bonds outstanding Power Supply System, for which financial statements method. are presented separately herein. The Electric System G. Incestment Securities-financial statements should be read in conjunction Investments are made in U.S. Government securities, with such other financial statements. Federal Agency obligations, and bank certificates of de-It Depreciation Amortization and Maintenance- posit. The Debt Reserve Account in the Debt Service Fund in 1980 the District began using separate deprecia- is valued semi-annually at January 1 and July 1 at the tion rates for each major classification of plant. Deprecia- lower ofcost or market in accordance with requirements of
*% was approximately 3.09 in 1981 and 1980, and 2.5% the Electric System Revenue Bond Resolution (Electric in 1979 of Utility Plant in Service. Resolution). The securities in the remaining funds are The District has signed long. term lease agreements valued at the lower of cost or principal amount in accord-with approximately 250 municipalities. These lease ance with requirements of the Electric Resolution.
agreements obligate the District to pay for normal prop-erty additions during the term of the lease. The District II. Deferred Production Costs-has recorded a provision for amortization of $3,796.000 in Estimated fuel costs in excess of those included in 1981, $4,323,000 in 1980, and $4,215,000 in 1979, which is basic rates are recovered by a Production Cost Adjustment approximately equal to its obligation for additions to (PCA) which is billed to all customers. When PCA billings properties leased from municipalities. The accumulated do not recover the applicab!e costs, the excess cost is de-amortization of leased plant additions totals $26,529,000 ferred. When PCA billings exceed applicable costs and in 1981 and $23,363,000 in 1980. prior deferred costs, the excess is not reported in revenues The District charges maintenance and repairs,includ. in the current period. Present District policy requires that ing the cost of renewals and replacements of minor items billings for the PCA shall be made using rates adjusted - of property, to maintenance expense accounts. Renewals from time to time so that all costs incurred by the District and replacements of property (exclusive of minor items or which are to be recovered by the PCA shall be recovered 4 property, as set forth above) are charged to utility plant from PCA billings either in the current rate period or fu. accounts. Upon retirement of property subject to deprecia. ture rate periods. tion. the cost of property is removed from the plant ac- g, g,,,,, g,,ggyg,jyy _ counts and charged to the reserve for depreciation, along In accordance with industry practice, the District rec-with the removal costs. net of salvage. ognizes revenues for retail service in the month the meters C. Allorcance for Funds Used During Construction- are read. Since retail meters are read on a cycle basis, ' This allowance, representing the cost of funds used to substantial revenues applicable to service rendered be-finance construction, is capitalized as a component of the tween the last billing and the end of the year are not 26
e recorded. Substantially all wholes.de revenues are re- (5) CASH AND INVESTAIENT SECURITIES: corded in the period in which service is rendered. December 31. (2) RATES: iggi isso The District designs its wholesale and retail electric iThousand. or noitar.> service rates to cover cost of service, including; D operat. Revenue Fund .. .$ 16,321 $ 15,502 ing expenses other than depreciation,2) debt service, and Operating Fund . . . . . 3,539 7,039 31 certain capital additions. All costs are recovered from Construction Funds . 76,099 85,290 customera in the current rate period or in future rate Debt Seevice Account .... 160 4,086 peried3 by increasing or reducing revenue requirements in Reserve and Contingency Fund . 1,200 1,133 such future rate periods. The following table illustrates General Reserve Fund 8,569 8,931 the effect of these adjustments in revenue requirements on $105,888 $121,981 the Statements of Revenues and Expenses. Adjustments of Hevenue Hequirementa Funds consist of $86,494,000 of investment securities and $19,394,000 of cash at Deceraber 31,1981, and hte Per- $102,905,000 ofinvestment securities and $19,076,000 of EITect on Statements 197s-1977 8978-1979 1980 19s1 cash at December 31,1980. of Revenues & musn. or Donaro Expenses (6) LONG-TERSI GBLIGATIONS: 1976-1977 $(2.1) The District has an agreement for the purchase of the 1978-1979 .6 $ 9.4 entire output of a 100 megawatt steam electric generating 1980-1981 .6 (9.4 ) $( 10.7 ) plant through 1991. Under the agreement, the District 1982-1983 .9 - 10.7 must make minimum payments monthly. The aggregate annual amount of such required payments at December As provided in the Electric Resolution, the District 31,1981, is as follows: covenants to charge rates for electric and other services so 1982 $ 968,000 that revenues will be sufficient to pay annual operating 1983 968,000 expenses, including Nuclear Facility and Power Supply 1984 968,000 System charges, debt service and other charges payable 1985 968,000 out of Electric System revenues. 1986 968,000 New rates for wholesale and retail service, including 1987-1991 4.840,000 the PCA rate, which were placed in efTect in 1982, are Total $9,680,000 expected to increase revenues by approximately $39.7 mil-lion for the fear. The minimum payments will be reduced in 1987-1991 by payments made from reserve funds of the owner. In (3) PENSION PLAN: a'ddition, the District is required to pay the variable The District has a retirement income plan covering operating expenses of the plant. The District's total pay-substantially all of its full-time employees. Employee's ments under the agreement were $.5,041,000 in 1981, contributions to the plan are based on salary, and the Dis- $11,981,000 in 1980, and $10,840,000 in 1979. trict s contributions are allocated to employee's trust ac- The Distiict has entered into an agreement to pur-counts based partially on the employee s contributions and chase all the output of a 50 AlW hydroelectric generating partially on years of service and annual salary. The plan
, facility. The District is obligated to pay all costs of operat-provides for retiremen' income equal to the total of the ing and maintaining the plant plus a management fee.
employeer trust acwunt, including trust earnings. The The plant is currently under construction and long-term District,s contribution was $3,166,000 for 1981, financing has not yet been arranged. The plant is esti-
$2,834,000 for 1980, and $2,489,000 for 1979.
mated to cost approximately $63 million excluding inter-(4) LONG-TERAI DEBT: est during construction and financing costs. l Decemher 38, iggi i ,so (7) CONSTRUCTION AND FINANCING: (Thousands or Dollars, The 1982 construction plan for the Electric System Revenue Bonds: provides for estimated expenditures of $27 million. These Serial Bonds- expenditures will not require the issuance of long-term 2.0(Vi, due 1981 to 1990. , $ 5,955 $ 6,925 debt. 4.301-6.009, due 1981 to 1985 30,945 36,745 4.759-6.309, due 1986 to 1990 44,465 44,465 4.909-6.401, due 1991 to 1995 34,010 34,010 5,009-6.109, due 1996 to 2000 39,850 39,850 5.004 6.30G, due 2001 to 2005 49,740 49,740 5.759-6.407, due 2006 to 2009 27,820 27,820 Term Bonds, with annual sinking fund requirements-5.109, due 1987 to 2002. 41,000 41,000 6.609, due 1993 to 2003. 33,200 33,200 6.754. due 1991 to 1995. 17,100 17,100 7.001, due 1996 to 2005. 57,250 57,250
$381,335 $388,105 Lease Purchase Payables-2.009, due 1981 to 1992. 5,530 5.790 Unamortimi llond Discount . (2.225) (2.367)
$384,640 $391,528 27
l l Supplementary Information To Disclose The Effects Of Changing Prices (Unaudited) The following supplementary information is supplied in accordance with the requirements of FASB Statement No. 33," Financial Reporting and Changing Prices", for the purpose of providing certain information about the efTects of changing prices. It should be viewed as an estimate of the approximate effect ofinflation, rather than as a precise measure. Constant dollar amounts represent historical costs stated in terms of dollars of equal purchasing power, as measured by the Consumer Price Index for All Urban Consumers iCPI-U). Current cost amounts reflect the changes in specific prices of plant from the date the plant was acquired to the present, and difTer from constant dollar amounts to the extent that specific prices have increased more or less rapidly than prices in general. The current cost of property, plant, and equipment, represents the estimated cost of replacing existing plant assets and was determined by indexing the surviving plant by the Handy-Whitman Index of Public Utility Construction Costs. The current year's provision for depreciation on the cimstant dollar and current cost amounts of property, plant, and equipment was determined by applying the District's depreciation rates to the indexed plant amounts. Fuel inventories and the cost of fuel used in production have not been restated from their historical cost in nominal dollars. Wholesale power contracts limit the recovery of fuel costs through the operation of adjustment clauses or adjustments in basic rate schedules to actual costs. For this reason, fuel inventories are effectively monetary assets. Charges to the District's customers are based on historical cost. Consequently, the excess of the ost of plant stated in terms of constant dollars or current cost over the historical cost of plant is reflected as a reduction to net recoverable cost. To properly reflect the economics of historical cost rate methodology in the Statement of Revenues and Expenses, the reduction of net property, plant, and equipment should be offset by the gain from the decline in purchasing power of net amounts owed. During a period of inflation, holders of monetary assets sufTer a loss of general purchasing power while holders of monetary liabilities experience a gain. The gain from the decline in purchasing power of net amounts owed is primarily attributable to the substantial amount of debt which has been used to finance property, plant, and equipment. Since the District is limited to the recovery of historical costs, the District does not realize a holding gain on debt. The benefit of any holding gain on debt accrues to the customers. 28
Nebraska Public Power District ELECTRIC SYSTEM Constant Current Con entional Dollar Cost Statement of Revenues and Expenses Adjusted for "i'{,'j"' igg"$;,,iAU"#,, Changing Prices for the Year Ended December 31,1981 iThousand. or isalar.> Operating Revenues. . .. . . . . . . . $273.886 $273,886 $273,886 Purchased Power . ... .. .. . ... .. . . $ 175,596 $175,596 $175,596 Fuel Used in Production . . . . . . 19,506 19,506 19,506 Amortization or Lease-Operated Plant . ... . . . . .. . 2,766 2,766 2,766 Depreciation lupense . . .. . .... . . . .. .... 13,182 22,146 23,225 Other Opera' ng and Maintenance Expense . . . . . 44,174 44,174 44,174 Other lhluctions . . . .. .. ... .. . .. . . .. . . 27,814 27,814 27,814 Interest and Other Revenues . . .... . . (18,748) (18,748) (18,748)
$264,290 $273,254 $274,333 Net Revenues (Expenses) from Continuing Operations (Excluding Reduction to Net Recoverable Cost) . .. . .. .$ 9,596 $ 632* $ (447)
Increase in Specific Prices (Current Cost) of Property, Plant, and Equipment IIeld During the Year" . . . . . . $ 49,266 Reduction to Net Recoverable Cost . .. .... . .. ... . $ (13,556) (18,261) EITect of increase in General Price Level . . .. (43,483) Excess of Increase in General Price Level Over Increase in Specific Prices After Reduction to Net Recoverable Cost . .. $ (12,478) Gain from Decline in Purchasing Power of Net Amounts Owed . . 21,003 21,003 Net . . . . . .. .. . . . . . . . .
$ 7,44] $ 8,525
- Including the reduction to net recoverable cost, the net revenues (expenses) from continuing operations on a constant dollar basis would have been $(12,924) for 1981.
" At December 31,1981, current cost of property, plant, and equipment, excluding construction work in progress, net of accumulated depreciation, was $603,209, while historical cost or net cost recoverable through depreciation was $339,995.
Five-Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices Years Ended th ccmber 31. 1977 197M 1979 19H0 19MI (In Thousands of Average 19H1 th>llars) Operating Revenues . . . $238.828 $277,665 $281,199 $266,784 $273.886 llistorical Cost Information Adjusted for General Inflation: Net Revenues (Expenses) from Continuing Operations (Excluding Reduction to Net Recoverable Cost) . $ 7,313 $ (17,854) $ 632 Net Assets at Year-end at Net Recoverable Cost . $144,121 $ 117,518 $117,161 Current Cost Information: Net Revenues (Expenses) from Continuing Operations tExcluding Reduction to Net Recoverable Cost) . . $ 5,662 $ (19,295) $ (447) Excess ofIncrease in General Price Level Over increase in Specific Prices After Reduction to Net Recoverable Cost . $ 21,675 $ 18,846 $ 12,478 Net Assets at Year-end at Net Recoverable Cost $144,121 $117,518 $117,161 General Information: , Gain from Decline in Purchasing Power of Net Amounts Owed . $ 30,101 $ 28,123 $ 21,003 Average Consumer Price Index . 181.5 195.4 217.4 246.8 272.4 29
Nebraska Public Power District POWER SUPPLY SYSTEM Report of Independent Public Accountants To the Board of Directors of Nebraska Public Power District: We have examined the special-purpose statements of assets and liabilities of the POWER SUPPLY SYSTEA1 of NEBRASKA PUBLIC POWER DISTRICT (a public corporation and political subdivision of the State of Nebraska) as of December 31,1981 and 1980, and the related special-purpose statements of revenues and costs for each of the three years in the period ended December 31,1981. 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. The accompanying special-purpose financial statements have been prepared for the purpose of complying with, and on the basis of, accounting requirements specified in the Power Supply System Revenue Bond Resolution adopted by the District on September 29,1972, as supplemented, securing the revenue bonds issued thereunder. As described in Note 1(B), these requirements differ from generally accepted accounting principles. Accordingly, the financial statements are not intended to present and, in our opinion, do not present the financial position and results of operations of the Power Supply System of Nebraska Public Power District in conformity with generally accepted accounting principles. In our opinion, however, the special-purpose financial statements of the . Power Supply System of Nebraska Public Power District referred to above are l presented fairly pursuant to the requirements of the Power Supply System Revenue Bond Resolution described in Note 1(B), applied on a consistent basis. Arthur Andersen & Co. Omaha Nebraska, Alarch 12,1982. 30
N:braska Public Pow:r District POWER SUPPLY SYSTEM Statements of Assets and Liabilities December 31,1981 and 1980 Prepared Pursuant to Requirements of the Power Supply System Revenue Bond Resolution 19:41 19MO ASSETS rrhoumands of Dollarms Utility Plant in Service (Note 2) . . . . . . . ...... .. . ...... . . . $ 698,610 $ 410,986 less-Reserve for depreciation (Note 1) .. ... . .. ... .. ... ... .. 15,116 9,719 Amounts funded from resenue (Note 1) .. .. .. . .. . . 107 15
$ 683,387 _$ 401.252 Construction Work in Progress (Note 2) . . . . .. . .. . ....$ 24,621 $ 260,897 Less- Amounts funded from revenue (Note 1) . . .. ... 596 97
$ 24,025 $ 260,800 Special Funds:
Debt service-Debt service account . . . ...... .. . . .... ....$ -
$ 25,195 Debt reserve account .. . . ....... ......... .. 56,219 57,908 Reserve and contingency fund . .... ... . . ... . . .. . 6,692 2,016 Construction fund . . . . .. .. . ... . .. . ... . 138,043 162,681 Development Notes-1980 Series-Development fund . . . .. . . .. .. ... . . 55,380 53.263 Interest fund .. . .. .... ... ... .. .. .. 3,300 9,900 Power note fund . . . .. . .. .. ... .. .. . .- 35,615 Revenue fund . . . .. .. .. . . ..... ...... . . . 1,713 2,149 Operating fund . . . .. . .. . .. ... .. .. 9,313 1,016
_$ 270,660 $ 349,743 Accounts Receivable, Insurance claim (Note 4) . . ... .. . . . ... ..$ 2,045 $ 2,045 Accounts Receivable, primarily from Electric System . . . .. .......$ 1,885 $ 4,098 Interest Receivable . .. .. .. .. . ... . . . ..$ 9,075 $ 8,562 Fuel Inventory, at average cost . . . . ... .. ... . . ... . . ....$ 7,752 $ 10,446 Prepayments and Other Assets . . . . . . . . ..$ 452 $ 983
$ 999,2,81 --$ 1,037,929 LIABILITIES '
Revenue Bonds: Serial Bonds-4.204-5.609, due 1981 to 1985 .. .... ... . ... . ...$ 38,255 $ 43.660 4.909-6.009, due 1986 to 1990 . . . . . 66,780 66,780 5.509-6.409, due 1991 to 1995 .. . . .. . .. .. 87,775 87,775 5.709-6.609, due 1996 to 2001. . ... . . .. .. . 74,050 74,050 Term Bonds, with annual sinking fund requirements-5.809, due 1998 to 2012 . ... .. .. . . . . . . 168,930 168,930 6.139, due 1999 to 2016 . .. . . .. . .... . . . 239,635 239,635 6.759, due 1999 to 2001 . . .. .. 23,025 23,025 6.909, due 2002 to 2008 .. . .. . . 75,345 75,345 7.109, due 2009 to 2016 .... . .. .. .. 129,005 129,005
$ 902,800 $ 908,205 Development Notes,8.259, due 1982 . .... 80,000 80,000 Power Note,66%9 of prime, due 1981 . . . .... - 35,500 Accrued Interest . ...
1,100 1,640 Accounts Payable and Other Accrued Liabilities . . . . .. .. 9,511 8,814 Operating Reserves (Note 1)- Renewals and Replacement . .. . . . . .. . 4,443 2,452 Coal Car Maintenance . . . . . 1,427 1,318 l
$ 999,281 $1,037,929 !
The accompanying notes to financial statements are an int,;ral part of these statements. 31
l Nebraska Public Power District POWER SUPPLY SYSTEM Statements of Itevenues and Costs for each of the Three Years in the Period Ended December 31,1981 Prepared Pursuant to Itequirements of the Power Supply System Hevenue Bond itesolution IDMi 19No 1979 (Thousamis of Dollars) llevenues (Notes 1 and 5): Sales to the Electric System . . .. .... . . . $ 72,825 $ 58,467 $ 40,835 Investment and other income (Note 4) .. .. .. . . 4,555 5,691 4,148 Total revenues . .. . . . . . $ 77,380 $ 64,158 $ 44,983 Costs: Operating expenses-Pnaluction-Fuel . .. . . . .. .. ... . .. . $ 28,338 $ 21,392 $ 13,092 Operation and maintenance . . . . . .. 8,207 8,068 5,041 Insurance . . . . . . . .. ... .. . .. . 873 989 800 Provisions for operating reserves (Not.1) . . . 1,712 695 540 General and administrative . . . . . . 1,547 1,212 579
$ 40,677 $ 32,356 $ 20,052 Debt service (Note 1)-
Principal . . . . . . 5,405 5,170 4,550 Interest . . . . .. . . . _ 31,298 26,632 20,381 Total costs . . . .. . .
. . . $ 77.380 $ 64,158 $_44,983 The accompanying notes to financial statements are an integml part of these statements.
Nebraska Public Power District POWER SUPPLY SYSTEM As required by Bond Resolutions, separate records are Notes to Financial Statements maintained for each division. The Power Supply System (I) SUAINIARY OF SIGNIFICANT financial statements exclude the Electric System and Nu-ACCOUNTING POLICIES: clear Facility, for which financial statements are pre-A. Organization - sented separat(ly herein. The Power Supply System fi. The I)istrict has three separate divisions for account. nancial statements should be read in conjunction with ing purposes as follows: such other financial statements. Electric System B. Basis of Accounting-Nuclear Facility Revenues are recognized and billed at an amount Power Supply System equal to costs as defined by the Power Supply System Rev.
)
32
enue Bond Resolution (Power Supply Resolution) which (2) CONSTRUCTION AND FINANCING:
- include operating expenses (excluding depreciation), and The District formed the Power Supply System in 1972 debt service on the revenue bonds, less investment in- to finance, construct, and operate additional power gen-come. Revenues are computed and billed so that no equity cration, transmission and related facilities. The entire is accumulated in the Power Supply System. output of the Power Supply System is sold to the Electric Costs as defined by the Power Supply Resolution dif- System.
Gerald Gentleman Station Unit No. 2, a 650 MW,
- fer in the following respects from generally accepted ac-counting principles c al-fired generatmg umt was declared operational on January 1,1982 and is included in Utility Plant in Service (1) Amortization of the debt principal is included at December 31,1981.
as a cost in the accompanying Statements of Revenues Throughout 1981, work has continued on the MAN-and Costs as " Debt service-Principal." DAN Project which is a high voltage transmission line Depreciation is not recorded as a cost. Ilad the planned for, among other things. the seasonal exchange of District provided straight-line depreciation over a power and associated energ), Meetings with Manitoba - 40-year life rather than including amortization of Hydro-Electric Board of Winnipeg, Manitoba, Canada are debt principal over the same period, costs would have being held to develop a definitive contract. The in-service increased $4,900.000 in 1981, $5,100,000 in 1980, and date has been moved from 1986 to 1988. Applications for
$3,200,000 in 1979. Accumulated depreciation state and federal permits are in progress. Substantially all through December 31, 1981, would have increased of the preliminary costs it. curred to date, have been costs approximately $15,200,000. The reserve for de- funded by the issuance of $80 million of Development preciation shown on the Statements of Assets and Notes due in 1982. Such notes are expected to be repaid Liabilities was provided by recording amounts equal from amounts remaining in the Development fund and to repayment of debt. other funds available to the District.
(2) Billings to provide capital for renewals and (3) LITIGATION: replacements of property and capital additions are in- In 1980, the District filed suit to recover amounts to-cluded in the accompanying Statements of Revenues taling in excess of $50 million from various cortractors. and Costs ac ' Provisions for operating reserves. The suit alleges damages from delays, cost overruns, and Under generally accepted accounting principles, capi- other damages and expenses associated with the construc-tal additions and provisions for renewals and re- tion of Gerald Gentleman Station Unit No.1. The general placements are not expenses but (exclusive of minor contractor, National Industrial Constructors, Inc., (NIC), items of property) are charged to utility plant. counter-claimed against the District to recover amounts
. totaling in excess of $32 million as a result, among other (3) Interest income on construction fund m. vest-ments for Gerald Gen; leman Statwn Unit No.1 is things, of the alleged failure of the District to effectively coordinate and administer the construction of Unit No.1.
capitahzed although commercial operatwn, began in Stearns-Roger, Inc.,(S-R), the District's Architect-April,1979. Such income would be meluded m m , come Engineer for Unit No.1, was made a party to the action of the period under generally accepted accounting prmciples. pursuant to a Third-Party Complaint filed by the District for indemnification of any damages recovered by NIC. S-R (4) Charges for Power Supply System ser-ices are subsequently filed a counterclaim against the District based on cost and facilities are financed with debt seeking reimbursement for its costs in defending the securities. Therefore, there are no significant unre. third-party action. The parties are currently engaged in corded costs of inflation in the financial statements. discovery proceedings. The suit filed by NIC against the District in District C, Utility Plant- Court of Lancaster County, Nebraska, has been stayed, Amounts borrowed for interest expense, less interest pending the outcome of the suit described in the preceding earned on investment sect,rities, all financing costs and paragraph. all other costs related to construction projects are capitalized. (4) INSURANCE CLAIM: As a result of an outage in December,1979, the Dis-D. Speial Funds- trict filed a claim against an insurance carrier for Special funds consis' of $267.780,000 of investment additional expense associated with the outage. The claim securities and $2,880,000 of cash as of December 31,1981, s being contested and a lawsuit for declaratoryjudgement and $346,140,000 ofinvestment securities and $3,603,000 is scheduled to go to trial in May,1982. The District re-of cash at December 31,1980. corded a $2,045,000 claim receivable and reduced billings Investments are made in U.S. Government securities, to the Electric System by the same amount in 1980. l Federal Agency obligations, and bank certificates of de- ! posit. The Debt Reserve Account in the Debt Service Fund (5) RATE COVENANT: f and the Reserve Account in the Reserve and Contingency The District is required under the Power Supply Reso-t Fund are valued semi-annually at January 1 and July 1 at lution to charge rates for electric power and energy from the lower of cost or market in accordance with require- the Power Supply System so that revenues will be at least ments of the Power Supply Reselution. Gains or losses on suflicient to pay operating expenses, aggregate debt ser-valuations are included in investment income. The securi- vice on the Power Supply System Revenue Bonds, ties in the remaining funds are valued at the lower of cost amounts to be paid into the Debt Reserve Account and or principal amount in accordance with requirements of Reserve and Contingency Fund, and all other liens pay-the Power Supply Resolution. able out of revenues of the Power Supply System. 33
Nebraska Public Power District NUCLEAR FACILITY Report of Independent Public Accountants To the Board of Directors of Nebraska Public Power District: We have examined the special-purpose statements of essets and liabilities of the NUCLEAR FACILITY of NEBRASKA PUBLIC POWER DISTRICT (a public corporation and political subdivision of the State of Nebraska) as of December 31,1981 and 1980, and the related special-purpose statements of rever.ues and costs for each of the three years in the period ended December 31,1981. 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. The accompanying special-purpose financial statements have been prepared for the purpose of complying with, and on the basis of, accounting requirements specified in the Nuclear Facility Revenue Bond Resolution adopted by the District on August 22,1968, as supplemented, securing the revenue bonds issued thereunder. As described in Note 1(B), these requirements differ from generally accepted accounting principles. Accordingly, the financial statements are not intended to present and, in our opinion, do not present the financial position and results of operations of the Nuclear Facility of Nebraska Public Power District in conformity with generall. accepted accounting principles. In our opinion, however, the special-purpose financial statements of the Nuclear Facility of Nebraska Public Power District referred to above are presented fairly pursuant to the requirements of the Nuclear Facility Revenue Bond Resolution described in Note 1(B), applied on a consistent basis. Arthur Andersen & Co. Omaha, Nebraska, March 12,1982. 4 ( 34 _. _ _ _ _ _ _ _ _ _ _ _ _ _ - _ _ _ _ = _ _ _ _ _ _ . _ _ .
Nebraska Public Power District NUCLEAR FACILITY Statements of Assets and Liabilities December 31,1981 and 19630 Prepared Pursuant to Requirements of the Nuclear Facility Revenue Hond Resolution ASSETS N N (Thousands of Dollars) Utility Plant in Service . .. . . . . . . . $390,350 $386,885 Less-Reserve for depreciation (Note 1) . . ... . 54,977 46,227 Amounts funded from revenue (Note 1) . . .. .. . 6,602 2,316
$328,771 $338,342 Construction Work in Progress . . . . $ 40,455 $ 30,684 Less- Amounts funded from revenue (Note 1) . . 20,846 8,209
$ 19,609 $ 22,475 Nuclear Fuel-Net of Amortization (Notes 1 and 2) .. . $109,827 $ 96,557 Special Funds:
Debt reserve account . . . . . . .. . .. . $ 26.529 $ 26,249 Reserve and contingency fund .. . . . . . . .. . 5,636 4,617 Additions and improvements . .. . . .. . .. . 2,451 - Construction fund . .. .. . . . . . .. . . ... 196 297 Bond anticipation notes . .. . . ... 18,350 - Fuel reserve account . .. . . .. ... . . . 77 1,058 Fuel disposal fund (Note 2) .. .... . . .. 6,928 3,103 Operating fund . . . . .. 2,969 1,235 Rever ue fund . . . . . .. .. . 1,101 931
$ 64,237 $ 37,490 Accounts Receivable (Note 3) ..$ 8,571 $ 3,665 Interest Receivable . . . . . .$ 1,121 $ 324 Prepayments and Other Assets . . . . .$ 1,392 $ 864
$533,528 $499,717 LIABILITIES Revenue Bonds:
Serial Bonds-4.609-7.209, due 1981 to 1985 . . . .. . . $ 43,385 $ 52,980 4.809-7.209, due 1986 to 1990 . . .. ... . . 45,685 45,685 6.009-7.309, due 1991 to 1995 . . . . .. . . 18,780 18,780 7.389, due 1996 to 2003. . .. . . 11,745 11,745 Term Bonds, with annual sinking fund requirements-5.109, due 1987 to 2009 155,000 155,000 6.309, due 1993 to 2003.. . ... . . ... . 68,430 68,430 6.609, due 1992 to 2003. . . . . .. . .. . . .... . 67,200 67,200
$410,225 $419,820 llond Anticipation Note of 1981,109, due April 1,1983 . . 22,800 -
Accounts Payable and Other Accrued Liabilities 3,277 1,870 Operating Reserves (Note 1) . . 97,226 78,027
$533,528 $499,717 The accom;wmying notes ta financial statements are an integml part of these statements.
35
1 Nebraska Public Power District NUCLEAR FACILITY Statements of Revenues and Costs for each of the Three Years in the Period Ended December 31,1981 Prepared Pursuant to Requirements of the Nuclear Facility Reveaue Hund Resolution j 198I _ 19so 1979 (Thousands of Donars) Revenues (Notes 1 and 4n Sales-Electric System . .. . ... . . ... . $ 55,033 $ 38,470 $ 53,246 lowa Power and Light Company . . . ... . 55,042 38,480 53,948 investment income . .. . . . . .. . . .. 5,683 4,608 4,374 Total revenues . . .. . ..... .. .. . $ 115,758 8 81,558 $112,268 Costs. Operating expenses-Production-Fuel .. . . .. .. .. . . . . . $ 20,556 $ 16,891 $ 14,467 Operation and maintenance . . . .. . . ... . 18,054 16,222 9,454 Insurance . .. . . 3,167 2,281 1,563 Provisions for operating reserves (Note 1) . ... . . . 36,190 8,352 51,375 Technical and administrative . . 4,173 4,173 1,792
$ 82,140 $ 47,919 $ 78,651 Debt service (Note 1)-
Principal .. . .. . . . . . . 9,595 9,145 8,730 Interest . . . . 24,023 24,494 24,887 Total costs . .. . .. . . . $ 115,758 $ 81,558 $112,268 The accompanying notes to financial statements are an integral part of these statements. Nebraska Public Power District Costs as denned by the Nuclear Resolution differ in the following respects from generally accepted accounting NUCLEAR FACILITY principies: (1) Amortization of the debt principal is included Notes to Financial Statements as a cost in the accompanying Statements of Revenues I (1) SU.\lMARY OF SIGNIFICANT and Costs as " Debt service-Principal." ACCOUNTING POLICIES: Depreciation is not recorded as a cost. Had the A. Organization - District provided straight.line depreciation over a The District has three separate divisions for account- 30. year life rather than including amortization of ing purposes as follows: debt principal over the same period, costs would have Electric System increased $3.200,000 for 1981, $3,700,000 for 1980, Nuclear II acility and $4,100,000 for 1979. Accumulated depreciation Power Supply System through December 31, 1981, would have increased As required by Bond Resolutions, separate records are costs approximately $36,900.000. The reserve for de-maintained for each division. The Nuclear Facility nnan- preciation shown on the Statements of Assets and cial statements exclude the Electric System and Power Liabilities was provided by recording amounts equal Supply System, for which nnancial statements are pre. to repayment of debt. sented separately herein. The Nuclear Facility nnancial statements should be read in conjunction with such other (2) Billings to provide capital for renewals and hnancial statements. replacements of property, capital additions, and nu-clear fuel are included in the accompanying State. B. Basis o[ Accounting- ments of Revenues and Costs as " Provisions for Revenues are recognized and billed at an amount operating reserves." Under generally accepted ac-equal to costs as denned by the Nuclear Facility Revenue counting principles, capital additions and provisions Bond Resolution (Nuclear Resolution) which include for renewals and replacements are not expenses but operating expenses (excluding depreciation), and debt (exclusive of minor items of property) are charged to service on the revenue bonds, less investment income. utility plant. Provisions for working capital for nu. Revenues are computed and billed so that no equity is clear fuel are not expenses under generally accepted accumulated in the Nuclear Facility. accounting principles until the fuel is used. 36
(3) Interest income on construction fund invest- disposition of the spent fuel was not resolved, GE paid the ments is capitalized although commercial operation District $1 million and will make additional payments in began in July,1974. Such income would be included an amount equal to one-half or the buyback payments con-m income of the period under generally accepted ac- templated by the fuel supply contract. The agreement also counting principles- provides, among other things, that GE is required to com-mence the removal of spent fuel fiom Cooper Nuclear Sta. (4) Charges for Nuclear Facility services are tion to GE's storage facilities at Alorr s, Illinois, as soon as based on cost and facihties are financed with debt I ally milde, and that the parties will share certain securities. Therefore, there are no significant unre- costs associated with removal Each party has a full reser-corded costs of inflatmn m the financial statements. vation of rights with respect to buybad paymerts and all C. Nuclear Fuel- shared costs. Nuclear fuel in the reactor is being amortized on the I basis of energy poxluced as a percentage of total energy to RATES: , expected to be produced. The District is required under the Nuclear Resciutmn to charge rates for electric power and energy from the D. Speial Funds- Nuclear Facility so that revenues w ill be at least sufficient
~
Specml funds consist of $62,743,000 of m. vestment se- to pay operating expenses, aggregate debt service on the curities and $1,494,000 of cash as of December 31,1981, Nuclear Facility Revenue Hovia, amounts to be paid into and $35,403,000 ofinvestment securities and $2,087,000 the Debt Reserve Account and Reserve and Contingency m cash at December 31,1980. Fund, and all other charges or liens payable out of reve-Investments are made m U.S. Government securities, nues of the Nuclear Facility. Federal Agency obligations, and bank certificates of de- Under terms of a power sales contract with lowa posit.The Debt Reserve Account in the Debt Service Fund Power and Light Company (lowa Power), the District will and the Reserve Account in the Reserve and Contingency make available one-half of the production to lowa Power Fund are valued semi-annually at January I and July 1 at with the balance available to the District's Electric Sys-the lower of cost or market m accordance with require- tem. Iowa Power and the District's Electric System each ments of the Nuclear Resolution. Gains or losses on valua. pay a proportionate share of the nuclear fuel costs (basal tmns are meluded m mvestment income. The securities in on' energy actually deliverni) plus one-half of all other the remainmg funds are valued at the lower of cost or costs of the facility. principal amount m accordance with requirements of the The District has also agreed to make available, Nuclear Resolution. through its Electric System,12%9 of the output of the (2) NUCLEAR FUEL: Cooper Nuclear Station to the City of Lincoln. The District has entered into contracts for various service components for fuel loadings as follows: (5) PLANT DECON151LSSIONING COSTS: Tlw funds for decommissioning are anticipated to be S.n*, MiNa provided by the reserve funds accumulated in connection comp,nent _Through with the operation of the Nuclear Facility. These reserve Uranium 1987 (Estimated) funds, plus any other excess funds including funds re-Conversion 1988 ceived from the sale of equipment and supplies, will be Enrichment 2007 available for payment of decommissioning costs. As a re-Fabrication 1988 sult of changing conditions and requirements for decom-missioning, the District intends to continue reviewing The District has expanded its capacity for storage of decommissioning costs and funding requirements in the spent fuel and it is estimated that such capacity will be future. adequate for storage of spent fuel, other than the initial fuel supplied by General Electric, through 2000. The cost (6) OPERATIONS: of disposal of spent fuel and fuel in the reactor is being In 51 arch,1980, during the scheduh d refueling out-provided as part of the fuel cost of the Nuclear Facility. age of Cooper Nuclear Station, cracks were discoveral in Some of these costs may ultimately be the respemsibility of certain discs of the two low pressure rotors of the main General Electric under the nuclear fuel supply contract turbine-generator. Temporary modifications were made to which is discussed in Note (31 below. the rotors and the plant returned to serviu on June 4, (3) LITIGATION: 1960, at approximately 80% of its rate . apacity. New In April,1981, a settlement i 'as reached between the replacement rotors at a cost of approxin. ate;y $13.5 mil-District and various contractors concerning damages and lion were instalh d during the fall,1981 maintenance out-expenses associated with the design, construction, and op. age. Cooper Nuclear Station is now capable of operating at eration of Cooper Nuclear Station.The District received a 100% ofits rated capacity.The District is also planning to cash payment of approximately $5.5 million and credits have the damaged rotors repaimi during 1982 for use as for future gomis and services of $6.2 million. Such credits spare parts at a cost of approximately $10.5 million. may be used from January 1,1981, through December 31, 1987. The balance of each unused credit at each January (7) CONSTRUCTION AND FINANCE: 1,la subject to escalation. The unused credit which is re. As a result of certain additions and modifications to ilectal as a receivable at December 31,1981, is approxi- Cooper Nuclear Station required by the Nuclear Regula. mately $5.6 million. tory Commission, it is estimated that the remaining cost During trial in June,1981, the District and General to complete the facility will approximate $13 million. The Electric Company (GE) entered into an agreement regard. District intends to finance such requirements from the ing buyback payments and removal from Cooper Nuclear proceeds of short-term notes issued in 1981 and from other Station of spent fuel supplied by GE under the nuclear fuel available funds. The notes would be repaid with proceals supply contract. Although resp (msibility for the ultimate of fiiture Revenue Hond issues. 37
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l i I STATISTICAL REVIEW Nebraska Public Power District Electric System, Nuclear Fac% Average Number of Revenue Customern RWil Sales 9 From Sales 9 . SALES (Thousandel (Thousands: I Iletail: ! Itesidential , 81,442 656,037 7.8 $ 34,633 12.7 Itural & Farm . 5,870 80.722 0.9 4,549 1.7 Commercial . . 17,751 512,612 6.1 25,780 9.4 Industrial . 113 741,572 8.8 23,604 8.6 Slunicipal & Federal . 3,100 137,050 1.6 6,079 2.2 Total itetail 108,276 1 127,993 25.2 $ 91.645 34.6 Wholesale: 54 51unicipalities (Total itequirements) 1,074,296 12.7 $ 32,163 11,7
% Aluniipalities (Interconnection-Partial itequirements) 290,431 3.4 5,967 2.2 26 Public Power Districts & Cooperatives (Totti ffequirements) 3.036,327 35.9 86,535 31.6 Other Utilities-Non-Firm & Participation . 1,931,937 22.8 48,511 17.7 Total Wholesale 6,332,991 74.8 $173,176 63.2 Total Electric itevenues . 8,460,984 100.0 $267,821 97.8 Other Operating itevenues 6,065 2.2 Total Electric System Operating flevenue $273,886 100.0 Production GENEllATION Rwil 9 Cost. <,
(Thousands) (Thousandni Production: Electric System . 445,802 5.3 $ 26,570 13.1 Purchased Power Supply System'3" ' 3,610,476 42.7 $ 80,012 39.6 Nuclear Facility.2' 1,924,598 22.7 46,726 23.1 Other. 2,480,108 29.3 48,858 24.2 Total Power Purchased . 8,015,182 94.7 $175,596 86.9 Total KWil Sold-Electric System . 8,460,984 100.0 $202,166 100.0 t 1) Includes 710,811.000 KWil of test power from GGS-2 at a cost of $7,186,997 to the Electric System. (21 The Electric System purchases 1009 of the net generation of the Power Supply System and 509 of the net generation of the Nuclear Facility based up<m the total costs of the respective systems. Pursuant to the Power Sales Contract, Iowa Power and Light Company purchased 1,926,450,000 KWils.lowa Power and Light participation is not included in the table. NPPD's dollar comes from NPPD's dollar was used for
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= = == dlis6 1 EEM][tb sal.ES FOR COST OF Pt'RCliASED RESAl,E -fu ?e POW ER - 64 l'i RFSIDENTIAI. COST OF POWER SA1.FS - 12 7, PRODt'CTION - 9 7',
Rt'RAL & DEPRECIATION AND FARN1 SAllS -- I 7*, A%10RTIZATION EXPENSE - 6 l', CO\t%tERCIA!. TAXES. lNTEREST. AND OTilER SAllS - 9 t, EX PENsES iNET OF INTEREST INCONf E I INDU$rRIAl. AND OTilER REVENUESi - 7 Wi sal.ES - s e, OTilER OPERATION AND atAINTENANCE Nit'NICIPAL & <!NCI.t' DES ADNIINISTRATIVE. FEDERAL. sal ES - 2 7< j TRANSatISSION AND DISTRIHt* TION. t ETC.. EX PENSEi - 9 :r; OTilER Ol'ERATING REVFNt'ES - 219 NFT FOR HOND RFTIRE.\ TENTS. INtPROVENTENW. ETC. - 3 2 - ! 40 l \
id Power Stapply Sy% tem Year Ended I)ecember 31.1981 1981 19mu increa-e G E N Elt A I, . rhou,end, or isotiar.o l'tility I'lant (at cost): I lett ric System
$ 319.01.1 $ 31.1.;t 1 ; $ R701 l'ow, r Su pplt Ss stem 723.231 (>T1xx3 Ti l .313 Nurlear Facilos 43030.i .17..iH9 13.236 Total l't dit s l'ia at $ 1.703.0-19 $1.602 ist $ 100.2Ni Number of \r c redited b 'la n t - '
( ap.a biht) i h M + Production I'lant Facilities: St ea m - ( 'orn ent nona! 7 1.117.100 St eam - N ut leur i 760.000 l h d ro 11 123.490 l he-el 13 17.910 l'ea k mg Tu rhme 3 119.000 fotal l'roduction I'lant Facilities 3.7 2.197. 71 >o
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< 2, im twles in o 8 tru m pla n t s. la e inciro plant, um! ten hesel plants umler < ontran t to the lhstru t
& In, Iwl. s .tsu.ono K W < ontrw tv,1 t, lon a l'on er un<l Inht Tran mis ion Facilities:
\1iles of Transnussion 1 me in Service 6.35.i Per onneh Number of l'ermanent F.mployee.s 1.993
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