ML20055F887

Eugene Water & Electric Board 1989 Annual Rept

ML20055F887
Person / Time
Site:	Trojan File:Portland General Electric icon.png
Issue date:	12/31/1989
From:	Solin D EUGENE WATER & ELECTRIC BOARD
To:
Shared Package
ML20055F881	List: ML20055F879 ML20055F887 ML20055F889 ML20055F890
References
NUDOCS 9007190326
Download: ML20055F887 (36)

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Financial Highlights (Thousands of Dollars).

Electric Utility 19es toes iss7 toes (CacWng Trqan Prmect) _

For the Year Gross Operating Revenues 76 972 71 788 65 634 62 501 Net Operating Revenues 6 733 5 278 3 857 4 393 Net Revenue 827 915 (540) 37. l Capital Expenditures 8 177 14 067

-14 851 8 380 p

At Year End Net Working Capital.

12 400 11 866 12 953 14 768 x t Long Term Debt 36 037 37 293 37 020 49 841 Retained Earnings 121 741 120 914 119 998 120 538 Water Utility For the Year Gross Operating Revenues 6 981 6 977 7 143 6 740 t

Net Operating Revenues 53 1 021 1813 1509 : b Net Revenue (341) 489 1124 741 Capital Expenditures -

995 991 1259 I507 [

At Year End Net Working Capital 2 606 3 273 2 814 1976.!

Long Tenn Debt 10 500 -

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I1 845 12 454 Retained Earnings 17 826 18 ~167 17 678 16 554 l

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Standard & Poon's.

Mood (s investors i

- Bond Ratings corporation service Electric Utility System Revenue Bonds AA+

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Electric Utility System Conservation Bonds AA Al j

Water Utility System Revenue Bonds AA Al:

Trojan Nuclear Project Revenue Bonds AA.

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Eugene Water & Ele::tric Board W A:' g '

500 East 4th Avenue P O Box 10148 Eugene. Oregon 97443 21/.8 503 484 2411 i

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1 To dur Customers j

j 9 P n asking demanding questions about the future, the Eugene Water & Electric floard (EWEB)

Commissioners and management staff have addressed many issues. Improvements to uClity j

facilities have been completed. Potential resources to meet the future demand for power have been k

expl'ored. Comprehensive f'mancial planning is underway, guiding the utility in maintaining rate d 6 stability and excellent bond ratings.

Strategic, ongoing analysis of customer needs and utility services provides valuable infonnation for decision making. These efforts will help EWEll continue to achieve its mission of providing Excellent Service at Low Cost.

-In 1989...

• EWEB completed its $25.5-million headquarters area improvement project which improved nearly all aspects of the utility's operations.

+ the Board examined and updated its goals to strengthen EWEll's commitment to customer service and financial and resource planning.

• an Energy Management & Control System--one of two in Oregon-was brought on line, improving operation of the electric system and management of power supplies.

i

• resource acquisition e(forts continued, with receipt of a federal license to install generation at the U.S.

q Army Corps of Engineers Dam at Blue River, with further development of conservation resources, and with the Smith Creek flydroelectric Project.

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• the new computerized General Ledger and Budget systems were installed, ptoviding managers with more up-to-date financial infonnation.

• public involvement was emphasized and customer input was sought an numerous key issues, including y

.g conservation funding, rates and relicensing of EWEB's hydroelectric projects.

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EWEB's achievements result from thorough analysis and positive actions, in the 7

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l990's, EWEB will be focused on assuring adequate energy and water surplies,

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being Ihe best at meeting our customers' needsfor service, and maintaining financial j

stability. This emphasis provides the framework for the 1989 Annual Report.

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lf Dennis L. Solin j

President Board of Commmioners 1

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Resource Development WEB's power supply must be increased to meet demand, and the utility has the customer support to move forward. Over 7% of utility customers support the utility's efforts to develop new energy resources now. EWEB is looking to its customers for their involvement in the careful planning for tomorrow's electric so, m9

, J power supply, Cuuome' con.on sonov Growing customer demand for power is increasing EWEB's dependence on outside p

power suppliers. The Bonneville Power a '< %

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Administration (BPA) currently provides

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- about 70 percent of EWEB's power needs, 3

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N and that percentage is expected to increase in ty,5' Q oTig.

the future. While BPA's pow er will continue N[#ih; to be important to the utility,its future cost is

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mu 4:S certain to rise Resources EWEB develops a Areeassonev N AreedsomewV E Neu w The Three Sisters and owns provide stability through direct 8 0***"**

mountains in Oregon's Cascado control of project costs and operation.

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Range are a source of the lt's a complex issue. Energy can be obtained through purchase, generation and McKen6e Rivo; Customer resnonse which supphes conservation. Current sources of power must be retained and new sources must be to the questbn

((g*c[cy developed. A comprehensive, strategic resource plan helps the utility examine the

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merits of various resource options, Environmental factors and relative costs of dy,hl* " +

n O' *C"@tv at power resource opportunities are considered as EWEB takes action to achieve this time?.

greater resource diversity.

EWEB Loads and Resources 400 -

EWEB's power resources are expected to dect.no over the next

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s owned and contro !ed fem power 1,

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Supphes. the ut.hty wdl need to

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purchase more power from the

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Bonnevee Power Admastration 4

b to meet the growing system load 0 - 990

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/ 12 M Purchases from M Firm Resources Bonneville Power Administration

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s. - ;. 2 Nsw Hydro Projects

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I or the first time in 13 years. a j4

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new generatmp resource was c.,,

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The Smith Creek flydroelectric y '; p p ' -

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Project is tomorrow 's bargain, in

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contract to purchase the project s

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wc output at a fixed price of 4.8 cents M.

per LWh. The power will be available in early 1990. The 4N'"*

project-constructed by a private energy developer.

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Smith Falls flydropower-will produce enough o

energy to meet about 3.5 percent of the annual w

electricity use by EWiill's customers.

Although the cost is higher than the rate EWEll currently pays for power from the llonnes ille Power Administration, the fixed price provides a long term advantage as costs for other resources continue to escalate. Addinonally. EWIill has the option to purchase the Smith Creek facihty in 1997, to f urther reduce project costs.

In 1989. EWEll receis ed a 50-year f ederal license to construct and operate new generation faciliues at the existing U.S Army Corps of Engmeers' Hood control dam on Blue Riser, about 40 nules east of Eugene. Oser the nest two years. EWEll will decide whether the project can be deseloped at costs competitive with other resource optior-

Energy Conservation EWEB has more than 14 years oiexperience in energy conservation. Nearly 24,000 Eugene homes have been weatherlied through the very successful residential program, saving enough power to serve the typical electric needs of over 5,(KK) new homes!

Customer support for EWEB's conservation programs was indicated in the results of a recent public opinion survey. Eighty percent of the respondents view ed EWEB's conservation programs as beneficial to the community, y

The customer research was conducted to help the EWEB Commissioners decide the level of conservation programs for 1990, since funding from the Bonneville Power Administration (BPA) was I

L being sharply reduced. BPA had provided the large majority of funds for EWEB's conservation efforts since 1980. To remain responsive to the number of service requests by utility customers, the l

Commissioners decided to offset a portion of the reduced Bonneville assistance with EWEB funds.

[l EWEB is now expanding its energy efficiency programs for I

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commercial and industrial businesses. The " Energy Smart Design" 1

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program for new commercial construction projects was introduced '

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., a by EWEB in cooperation with BPA. EWEB's Energy Smart design l

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.] staff help commercial developers, architects, designers, engineers I

{l i N-( and contractors identify cost-effective measures to make their build-I'I ings up to 30 percent more energy-efficient than required by Oregon'a

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t kk Building Code. In 1989. EWEB completed design assistance on 17 q

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commercial and industrial buildings. This same energy efficiency

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goal applies to construction of new homes under the Super Good v

Cents program. Construction began on 372 energy-efficient housing g

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units in EWEB's service area, the biggest year yet for the program!

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Overall,it's estimated that EWEB's conservation programs to a/y.

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j. p-date are saving over 100 million kilowatt hours per year, This aw. -m.

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' reduces annual power purchases from BPA by $1.6 million and tm I

helps stretch our existing low <ost energy resources.

TheLen y

Casanova Athletic I

Complex. under ConstruCDon at the University of Oregon, is an Energy Smart building

EWEB's Generating Capability As a generating pubhc utihty,!!Wiill can use its low-cost power to mis with outside power purchases to keep customer rates low. E!Wiilrs NkKenzie River projects produced nearly 18 percent ot !!Wiill's 1989 power needs.

The Walterville hydroelectne project was built in 1911 to provide electncity for pumping w ater and to power the city 's street behts l'Wi!ll was fonned to manage the a

project. Today-nearly 80 years later-the project still prosides an important power supply for the conununity. I!WiiB's other hydroelectne projects on the NicKenzie River are the 60 year-old L.caburg tacihty and the 27-year-old Carmen-Smith and Trail findpe Iacihties.

l.caburg and Walterville together prm ide about eight percent of the utility 's power needs. ((Wiill staf f are currenti) engaged in a rigorous federal rehcensing process on these tw a NicKen/ie Rner hydroelectnc projects. [!WI!Il is comnutted to gaining new long-term hcenses f rom the I ederal linergy Regulatory Commiwion tiliRC)in 1;;

1993. In addition to protecting I!Wiill's power supply through relicensing. the utility will pursue cost ettective plans to improse the efficiency and output of the projects while also enhanemp other aspects of the nser.

Relicensing these projects requires addressing ditlerent-- % ometimes competing-customer view points. Niany customers are mterested m mamtaining the projects because the generation helps keep utihty rates low. Rec-eational users of the ns er w ant to ensure adequate rner flow f or boating and fishing actisities. To incorpoiate these siew s into the relicensmg process, l!Wi!B tonned a "N1cKenzie Network Group" of commumty citizens and representatnes of groups who benefit f rom the riser. The "NicKen/ie Netw ork Group" meets regularly w ith liWi!B staff to review the relicensmg issues. A bi monthly new sletter-W Acacic currento-n bemp dntributed to NicKen/ie R n er area residents and to members of recreational groups to maintam an open dialogue on riser issues.

Three ens ironmental studies-tocusing on fish migration and habitat, w ater quahty 4

5aa and recreation-were started by I!WI!El to gather mtonnation for the reheensing awr application About twehe dif ferent studies will be conducted as part of the process.

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!!Wi!Il s Willamette Steam Plant n another source of eleetnc generation. In 1989

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the Steam Plant generated f or just oser four months. helping pay for installation of improsed air enussion controls.

Geothermal Opportunities EWEB holdsgeothennal Water Resources liigh in the Cascade mountains of; leases in the Cascade

. Oregon,the McKenzie River begins its -

. Range of Oregon, and the rtility has been active in weeward joumey. It's a clean, plentiful source of.

geothermal tescarch and '.dvocacy for over 15 years, water. EWEB has never needed to restrict the Geologists believe Oregon has vast geothennal public's use of writer and the quality surpasses allt potential. - With the regional Safe Drinking Water Standards.

power supply surplus declining, The average daily consumption for all of EWEB's there is renewed interest by water customers is about 28 million gallons.' The,

developers in geothermal.

biggest water usage day in 1989 was about $30 EWEll continues to support gallons per water user, a total of nearly 53 million construction of a pilot geother-gallons. This would be enough water for nearly mal generating plant in Oregon everyone in the United States to have four eight-so that the resource can be ounce glasses of water in one day!

properly evaluated.

EWEB customers are very pleased with their O

water service. Over 85 percent of EWEll's custo;

- Power for Tomorrow

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ity as good or excellent.-

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if EWEB's existing resource diversity is a result of

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foresight by previous and current EWEB Commis-

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perfonn morethan75,000 =

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.sioners and utility management staff. Today's y

i eustomers receivethelow costbenefitof decisions y4 4 f Q]

7 L the llayden Bridge Filtra, ag ' tion Plant laboratory to'.

made in the past. Tomorrow's customers will benefit

..L4 monitor the continued' f

from decisions made today.

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y l$ k, [ :~, m ' i -g,y " purity of EWEB water.

& sg/yggg. g g. EWEB's Opera-Oregor s Cascade e

Mountain Range tors arc certified Water Treatment Operator IV, the -

has substant:al geotherma! potent:at highest level of certification available in Oregon.

R<pht At the llayden Bridge Filtration Plant,particulates One of EWEB's certded operators are removed and the water is purified to remove any tests the water at the Fittration bacteria or other disease causing agents. Filtered Plant's on site lab water is then pumped through 552 plus miles of pipes g

One of the two lo local homCs and businesses. From filtration to 2 mnon ganon sed +me ntaton customer use, the system is completely enclosed to -

baus at the Hayden Bndge protect the water's purity.

Filtrat:on Plant

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now, ice and temperatures below 10 degrees M 7 VP Nt'?yPDiOO Q g W(@d gw,,w

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m,. T @p$ v:y Fahrenheit kept Eugene hostage for six days

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M in February. The "Sibenan Express" was unusual f or Eugene's normally mild chmate.

The customers' need for electricity w as more important than eser, and many 4

people faced ruptured pipes f rom

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broken water pipe m the wall of g

a house could cause thousands of f)"f dollars in properts damage m a t

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m very short time And without gyrq C[, N' 4

heat, the indoor temperature in a home can drop quickly When customers needed help from EWER they needed it fast.

y Respondmg within an aserage of 20 minutes 01 receising the call. EWEB's water operations department helped more than 1.0(Klot the utility 's w ater customers. These emplosees located and turned ot t the customers' w ater supply to allow the repair of trozen pipes. Employees also helped anothec l.200 customers w ho called with ques-tions about frozen valses, meters and pipes.

Electric operations crews worked around-the clock responding to an average of seven power outages se, e,. &... e w

a rm.

each day. An all time energy consumption level of 572 megawatts-nearly double the average load-r was set during the " Siberian Express.' Power w as m short supply in the Northwest, and EWEB's dispatchers and power schedulers responded to the increased demand for electricity quickly and efficiently. They maintamed constant contact with power producers-and maxinuzed operation of EWEB's ow n generating plants-to nsure an adequate supply for customer use.

And throughout it all. EWEB's warehouse, accountmg. communications and telephone sy stem employees also worked to help deliser the much-s alued customer sers ices.

The "Sibenan Express" w as just one dramatic example of how EWEB responds to customer needs.

prepared with technology and the people resources to get the job done.

it's a Partnership Eugene ao/cin torrned I WEtt in 1911 Imr n years cusionien h.ne trusted the unhty to o[wrate in their best interest l or this partnership to thin e,eniplo)ces hsten t aref ull) ('usionier' t an tell! W }ill w hati on their inind every nionth, sunply by filhng in the Cusionier Conirnent sechon on the back of their bill Custoniers ret en e a personal response to their no ad uinmnm m h wd

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learn more about utihty sers ices and lacihtles (her 2JNMI Y'

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.j commun ny 's la gene celebranonJ Ntaior customers are m-

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+n Prompt. quahty sers ice f or utdity customers-Prosiding conenumt) sersice. EWI it's 55 acre Water floard Park is open to the publit all year and can be resersed for tanuly or preup delnered with personal attention and respect-is picmcs 1.arge rooms m the headquarters building are us ailable for miportant to EWEB. To nurture this partnership, pubhc meetmgs. and are usually resersed escry mght of the week.

the utihty emphawes employee training and A new pubhc seruce bemp ottered by EWEB is the Radio llelp leadership deselopment By preparing itself with the appropriate technology and

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notit) the pub!lc that utility

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needs well into the f uture.

employ ces can call f or assistance

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m an emergenc) situation

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the utility conducted an alditional pubhc opunon surs ey regardmg customer mterest in future consen anon programs.

"Bnnging You Our Best" is the theme of a new mass media customer communication program started m 1989 to encourage customer interaction. One campaign's f ocus w as to pros ide customers

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with an tinderstanding of w hat to do w hen they hase a power outage, Stiirrs f or circuit breaker tmes were inserted with all customer a

b limp, complemented by radio and new spaper tommumcation.

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] WEll's electric rates rank among the lowest for l

' major cities in the Northwest. EWEll's finan-7Mb d

cial strategies of the past decade focused on stretching available resenes to minimi/c rate increases. This effort, along with continved fleerric Residem'al Sill Comparison hv rsmmmevm a s ex. mm n umne nwe l

insestment in the electric system, resulted in low customer bills and high sptem reliability.

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u Reserves Helped to Stabilize Rates j

!!WEli maintains high standards for utility financial perfonnance, meluding objectives for unrestricted cash reserves. Cash resen es in the

,arly 1980s-which accumulated from wie increases and budget variances-pen uited EWEll to stabili/c electric rates.

!!WEll's financial strategy during the 1980's was to reduce capital siwnding, utili/c cash resen es and implement efficiency improvements lo cos er operating costs. A sub-Unrestricted Cash Balance stantial portion of the resenes Demc vt or was used Io offset higher rates isas r;

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charged by the llonneville Power l

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_ _cdE sale pow er. For nearly fis e y ears,,,, nx::cn:~.r:

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EWEll had no rate increases.

With a ten percent electric rate g;;g.:g:7 ] g- (Q

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increase in 1987 and a sesen tus Tith._

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$20 516

$10 M

109 Pf)9 309 j

percent increase in 1989, E%. Ell c, m.,

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mhrs at w.o s has now fully passed through the a,.m nmmy %,ms, 1

carlier llPA price increases.

Now that resen es are close to the lioard's minimura target, future rate increases w ill tv necewary to cos er ongoing operating and normal capital costs. A 4.6 percent electric rate increase and a fise vrcent water rate increase (the first in eight years), hase been approsed by the EWEll Commiwioners f or April 1990.

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Financial Plan Provides Guidelines As EWEll moves inm the 199Ws, a primary financial strategy will be to maintain working capital balances at lesch that are slightly higher than those existing at the end of 1989. EWEll cyvets to accomplish this by continuing a highly competitis e rate structure that allow s for modest annual increases. EWEll staff anticipates these rate increases will be smaller and more frequent than in the pau. Research show s these smaller rate increases are pieferred by most EWiill customers oser leu f requent, larger rate increases.

The lloard will adopt a strategic imancial plan in 1990. The plan will communicate the floard%

financial goals and pohcies and specify management practices for achieving those goah. The plan's policies will guidt EWEll management staf f in the formulation of budget, rate and financing proposah aimed al maintaining the utility's fmancial position.

High Customer Support Continues o

in the next decade, EWEll's f acellent/ Good Rating by Customers a 1969asius7 s.*-

financial position will be s o ----...... - m carefully managed in order to L_

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customers' high opinion of

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EWEll. Results of the 1989 d

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lighted improsed levels of so, m.m ca.. o-om customer confidence in utility operations and rates, esen better than the already excellent survey results of two > ears earlier.

Product quality and efficient delivery of services will require continued investment in EWEll's w ater.clectric and steam utilities. Comprehensis e financial planning and capital improvement actis ities will ensure a future with reliable sersices and financial stability.

Year in Review netall 86 Electric The high.techncingy, $5.2-million Energy Management & Control Electric Seles System began operation September 7,1989, following five years of g

p f research, design and installation. The system's computer sof tw are is used by EWEB's f~ T

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power dispatchers and schedulers to facilitate cost. effective decisions on power pur-j a

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chases and efficient operation of the utility's electric network. Only Iw o other utilities 4

{ ja in Oregon hase similar systems.

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i A second milestone fer the electric utility in 1989 was the successful, cooperative I

b n.gotiation with a neig'iboring utility to transfer a 5(Khacre area in west Eugene into f

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EWEll's service territory. Service to the Willow Creek area had been in dispute for 20 3 _

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years. The Eugene City Cs.uncil believed the area, one of Eugene's primary kications l

for new light industrial des elopment, would be best served by EWEB. Reliability and 1

e6 7 EWLil's lower rates were major factors behind the Cit)\\ desire for the transfer of j

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)g f service. Utility staff negotiated the purchase of the electric facilities, and 67 customers i

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joined EWEB in November.

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Eugene's economy was strong in 1989. Growth in the city's housing market and a fIiik large number of commercial construction projects required connection to EWEB services, both water and electric. A total of 700 new electric services were connected, Water 10 l

Sales 21 percent higher than the > car before.

M EWEll's Carmen Smith, Walterville and Leaburg hydmelectric projects on the 3

McKenrie Riser generated 410,513 mWh in 1989, nearly 2 percent less than the year

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q 18 percent of EWEB's customer demand for 1989 h

h The llonnesille Power Administration supplied 1,689,536 mWh, enough to serse

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+ y._hy 70 percent of EWEH's load. Over 293,086 mWh was purchased through other power A

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contracts. EWED's steam plant also produced 27,584 mWh.

)$!. 4 The number of residential customers increased from S7,556 to 58,124 in 1989. The i

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._[.1 4 3 h f average residential customer consumed 16,509 kWh during the year, up slightly from

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7) j 1988's as erage of 10,166 kWh. At an average price of 3.446 cents per kilowatt hour, a g

y typical residential customer bill for electricity was less than $50 a month.

J 4_Q_g To ensure reliable services for EWEH's customers, the electric operations crews 3

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monitored and performed necessary repair work on 126 miles of transmission lines and 3

1,400 miles of overhead and underground distribution lines.

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L WCt3r On January 1,1989 EWEll contracted to operate the M

Custo'v ett, tour i-v in pumprcom e

i water system for the 4,(KKi-customer River Road gaw et EWLB's l

hb Hayden Bndpe Water District. Under the terms of the sersice contract. EWEll F, tretron rient aanng 1989 s q

provides all billing and routine operational functions and receives Beuer Water a monthly fee based on the number of customers. This contract

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g h similar to agreements EWEll has with the Santa Clara and O'

. ['j'g $,,,

Glenwood Water Districts.

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EWEll offered public tours of the llayden !! ridge Filtration

<M ini Plant and equipment demonstrations at the headquarters site in jiJ,(

i conjunction with the national lletter Water Week in May. Over i

600 visitors toured the facilitien.

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Over 30,(KK1 feet of w ater distribution mains--on over 40 diIf er.

1 ent projects-were installed by EWEll crews, adding 405 new 4

services, in addition, EWEll crews maintained the utility's existing I

$52 miles of water lines,28 pump stations and 23 resenoirs.

1 l

Stocm EWEll's steam plant provides steam heat to 122 customers in the downtown Eugene area. The plant burns hogged fuel, which is wood w aste from area lumber mills, in 1989, steam heat sales brought in $1.7 million in resenue. The facility can also penerate electricity, and in 1989 produced 27,584 mWh,a s alue of 5810,(XK) to EWEll.

In 1989, EWEll investigated ways to reduce particulate emissions from the steam plant. Emissions are increased when the plant generates electricity in addition to its usual steam heating function. A patented flue gas recirculation system w as selected and installation was in progress at year's end.

e 1989 Anahsis of Sales es, -,, e.., c., M,e m,e c

Average Number Consumption Total 1989 Electric Sales Class of servko of Customers (Kuowett. hours)

Revenue and fiertent co ny f rom MHe wet, u

Residential 58 124

+ 1.09 959 6I8 937

+ 3.19 533 072 862 47.84 General Service 7 092

+ 2.29 714 178 157

+4.3%

22 682 552

+ 9.99 Large Crnnmercial

& Industrial 22

-4.3%

513 131 593

+ 3.7%

13 818 454

+ 6.8 %

Street Lighting 8

0.0%

6 529 965

+ 3.14 204 475

+ 5.29 Water Utility 1

0.09 15 477 544

+ l.39 426 821 2.84 Retail Electric Sales 65 247

+ 1.1 % 2 208 936 096

+ 3.69 570 205 164 48.29 Sales for Resale 161 575 000

-22.9%

3 895 199 10.79 Total Electric Sales 2 370 SI1 096

+1.2%

574 100 363

+ 7.0 %

Average Number Consumption Total 1989 Water Sales Class of $ervko of Customers d.000 Gallonsi Revenue and tecesit dwoe fro'n HsB8 rees E

Residential 31 322

+ 3.64 3 534 242

+ 0.54 53 601 688

+ 2.09 General Service 4 348 12.4 9 4 058 193

-0.34 2 732 836 2.09 Water Districts 3

0.0G l 159 524 0.14 585 057 0.49 Electrie Utility 1

004 115 568

+ 6.99 57 326

+ 4.4 Q Total Water Sales 35 674

+ 1.3 %

8 M67 527

+ 0.19

$6 976 907

+0.49 1989 Payments in Lieu of Taxes City of Eugene school Districts & others Total and[etentt' angel'om M8tt8

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56 $31352

+ 2.7 4 52 727 940

+ 3.7 9 59 259 292

+ 3.09 l

l 1

Financial Statement Financial Statament The management of the Eugene Water & Electric Board maintains a system ofinternal controls to meet Responsibility ituesp nsibihty fonhe integrity and @jyctivity ohts hnancial statenients and to saf eguarcHts auets.

The financial statements w cre prepared m confornu.ty with generally accepted accounting principles for public utilities and accounting requirements of the Federal Energy Regulatory Commission. They reDect all adjustments which are,in the opinion of management, necessary for a fair statement of Gnancial condition and results of operations.

Coopers & Lybrand, independent certi6ed public accountants, are engaged to perfonn an esamination of the floard's financial statements. The examination provides an objective outside review of management's responsibility to report operating results and fmancial conditions. Working with our internal auditors, they res iew and make tests, as appropriate.of data included in the financial statements.

Treasurer March 23,1990 Report of independent We hase audited the financial statements of the Eugene Water & Electric Board for the years ended December 31,1989 and 1988, which are included herein. These Anuntants to the Boerd of fir"incial statements are the responsibility of the lloard's management. Our respon.

C:mmissioners of sibility is m express an opinion on these financial statements based on our audits.

Eugene Water & Electric Board:

We conducted our audits in accordance with generally accepted auditing stan-dards. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about w hether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, An audit also includes assessing the accounting principles used and significant estimates made by management, as w ell as ev aluating the overall financial statement presentation. We belies e that our audits proside a reasonable basis for out opinion.

In out opinion, the aforementioned financial statements present fairly, in all material respects:

(1) the financial position of the Electric System and Water System of the Eugene Water & Electric floard at December 31,1989 and 1988, and the results of their operations and their cash flows for the y ears then ended; and (2) the awets and liabilities of the Electric System's Distribution Division and Trojan Project of the Eugene Water & Electric floard at December 31,1989, and the results of their operations and their cash Dows for the years ended December 31,1989 and 1988, all in confonnity with generally accepted accounting principles.

$U Eugene, Or"pn March 23,1990

,pya Electric Splem Balance Sheet twember 31.1989 und 19K8 Awets 1989 1988 Distr 6bution Trojan Electric Electric Division Project System System Plant in service 2II 836 446 217 044 117 428 880 563 407 $22 291 Leu Accumulated depreciation &

amortitation 85 499 814 32 094 751 117 594 565 107 482 899 126 336 632 184 949 366 311 285 "98 3(K) D39 392 Property held for future use 500 (KK) 5(KMKK) 5(K1000 Construction work in propren 3 168 766 3 168 766 5 931 482 Nuclear fuel,less accumulated amortization 1989 - 571,759,803; 1988 565,808,093 16 453 422 16 453 422 18 012 926 l'Illity Plant 130(KI5 398 201 402 788 331 408 186 324 483 8(KI liond funds 3 517 215 10 566 012 14 083 227 13 513 408 Resene & contingency fund 2 (Kl8 934 2 008 934 2 (KK10lK)

Renewal & replacement fund 500 0(K) 500 (KK)

$(KMKKI Construction f unds 1 010 842 1 010 842 4 140 644 Decomminioning resene fund 2 298 504 2 298 504 1 392 193 Segregated l'unds 5 028 057 14 873 450 19 901 507 21 546 245 Cash & temporary im estments 4 939 $43 2 2 to i13 7 149 706 16 316 765 Capital improvement resen e 1 921 246 I 921 246 Segregated cash & im estments 4 045 110 3 512 795 7 557 905 7 017 982 Receivables, less allowances 1989 5235,990: 1988 5220,152 12 231 380 12 231 380 10 824 983 Materials & supplies, at userage cost 2 660 049 5 359 331 8 019 380

$ 833 047 Prepayments & special deposits 644 021 660 540 1 304 561 1 146 798 Current Awels 26 441 399 11 742 779 38 184 178 41 139 575 Advance refunding costs 8 196 764 8 196 764 8 613 548 Long-term receis able, llPA II 236 I81 11 236 I81 12 066 383 Deferred charges & other 3 573 758 705 466 4 279 224, 3 038 102

()ther Awets 14 809 939 8 902 230 23 712 169 23 718 033 5176 284 793 5236 921 247 5413 206 040 5410 887 653 The acwmpany mg notes are an miegral part of this statement.

l

1:quitt & l. labilities 1888 1888 Distr 6but6on Trojen Electr6c Electric Division Project System System llalance at beginning of y ear 120 913 966 120 913 966 119 998 $31 Net revenue for the year 827 435 827 435 _

915 435 Hetulned 1:arning:s 121 741 401 121 741 401 120 913 966 q

1.ong ter m licht 36 036 933 117 840 461 153 877 394 158 499 712 Accounts pay able 10 298 097 3 972 559 14 270 656 12 813 744 Accrued payioll & vacation pay 997 176 997 176 1 027 424 Accrued interest on long term debt i 481 064 2 360 348 3 841 412 3 735 479 Long term debt due within one ycar 1265 (WK1 3 475 (KM) 4 740 tWX) 4 490 (KK)

Current 1. labilities 14 (Mi 337 9 807 907 23 849 244 22 066 647 Unamortired pain on defcasance of debt 4 047 007 4 047 007 4 578 621 Deferred credits & other 418 115 418 115 2 275

()ther I. labilities and licierred Credits 4 465 122 4 465 122 4 580 896 lieferred Trojan Net llillings 109 272 879 109 27.'879 104 826 432 5176 284 793 $236 921247 5413 206 040 5410 887 653 um m-um

-'m-

Electric Sptem Statement of Net Revenue i or the vem i naca ticomber 3i,1989 and ivss 1989 1988 Residential 33 072 862 30 669 839 Cwnmercial & industrial 36 3S7 550 33 467 646 Sales for resale & other 5 801 543

$ K01522 Steam heating 1 709 759 1 849 109 Operating l(es enues 76 971 714 71788 l16 Purchased pow er 40 799 681 38 006 689 Steam & hydraulic production 2 280 388 2 996 133 1ransmission & distribution 6 341 648 6 799 39()

Customer accounting 2 460 174 2 564 074 Consers ation cytenses 2 092 915 I 788 794 Administrative & general 8 177 665 7 253 (N6 Steam heating eyrnses 1 605 931 1 606 145 Depicciation & amortitution Plant 6 479 892 5 495 532 Operating 1:spenses

__ 70 238 294 66 509 853 Net Operating Ro enue 6 733 420 5 278 263 Intere a carnings on insestments 1 171 034 1 207 203 Allow ance for funds used during construction 253 (KX) 174 931 Cther nonoperatmp revenues 236 2k2 163 021 Other Resenue 1 660 316 1 545 155 Contributions in lieu of taxes 5 543 978 5 205 351 Preliminary surse)s & insestigations 360 894 Other revenue deductions 409 963 191 478 Interest expense & discount amortitation 1 299 466 1221481 Allowance for borrowed funds used during construction (48 (XX))

1710 327)

Res enue 1) eductions 7 566 301 5 907 983 Splem Net Resenue 5 827 435 5 915 435 Tbr aanmpany mg notes are an integral part of thn statement.

Electric sy> tem Statement of Cash Flows icihe Ycan IMed December 31, Iw9 und too 1989 1988 Cash Dows fmm operating activities Nel revenue 827 435 915 435 Adjustments to reconcile net revenue to net cash prmided by operating activities Depreciation & amortitution 6 242 161 5 238 544 (Increase) decrease in receis ables (l 406 397) 137 638 (Increase) decrease in materiak & supplies (473 713) 1I896 (Increase) decrease in prepay ments & special deposits (56 608) 43 965 (Increase) decrease in long tenn receivabic, llPA 830 202 (4 939 210)

(Increase)in deferred charges (1 060 054)

(660 477)

Increase in accounts payable &

accrued payroll & vacation pay 443 716 416 423 Increase in accrued interest on long term debt 161 017 371 982 Increase (decrease) in deferred credits & other 415 840 (206)

Distribution Dhision 5 923 599 1 535 990 Depreciation & amortiration 11 248 177 I I 502 696 (Increase)in materials & supplies (l 712 620)

(213 451)

(Increase) decrease in prepay ments & special deposits (101 155) 155 602 (Increase) in deferred charges (339 856)

(97 713) increase in accounts payable 982 948 868 026 (Decrease)in accrued interest on long tenn debt (55 084)

($1$32)

Increase in deferred Trojan net billings 4 446 447 12 839 336 Trojan l'roject

_ 14 468 857 25 002 964 Net Cash Prmided h Operating Acthitles 20 392 456 26 538 954 3

Cash flows from investing aeth ities Additions to utility plant Net Distribution Division 9 006 005)

(14 740 009)

Trojan Project (lo 236 579)

(15 212 8411 Net Cash l' sed in lmesting Arthities (24 242 584)

(29 952 850)

Cash flow s from financing activities Decrease in segregated funds 2 559 967 12 850 276 (Increase) in capital impros ement resen e (1 921.246)

(Increase)in segregated cash & insestments (509 102)

(862 041)

Pmeceds from isume of bonds 1434 (KK)

L.n; pnneipal payments (l 195 500)

(l 120 000)

Distribution Di Ision (l 065 881) 12 302 235 (Increase)in segregated funds (915 229)

(306 146) tinerease) decrease in segregated cash & imestments (30 821) 40 285 liond principal payments (3 305 (KK1)

(3155 (KK))

Trojan Project (4 251 050)

(35ll161)

Net Cmh Prmided h (l' sed in)l'inancing Acthities (5 316 931) 8 791 074 3

Distribution Division (3 148 287)

(901 784)

Tmjan Project (6 018 772) 6 278 962 Net increase (Decrease)in Cash and Cash Equhalents (9 167 059) 5 377 178 Cash & cash equivalents at tieginning of year

_ 16 316 765 10 939 587 Cash and Cash Equhalents at I:nd of Year 5 7 149 706 5 16 316 765 Supplemental 1)istimure of Cash I' low Information Cash paid during the year for interest Distribution Division 5 I 564 673 5 1 339 461 Tmjan Pmject 57 46 295 5 'f'4iK) 89(1 The maompanpng notes are an miegral pan or Ihn statement.

Water Sy stem Bal:nce Sheet Ikvember 31.19kV ated IVkk Assets 1989 1988 Plant in setsice 48 903 864 48 081 640 less - Accumulated depreciation & amorti/ation 26 181 077 24 953 441 22 722 787 23 128 199 Property held for future use 104 766 104 766 Construction work in progress 324 $$3 378 565 l'tillt,i Plant 23 152 106 23 611 530 i

i Segregated llend l'unds 1 356 193 1 189 062 Cash & temporary imesiments 2 122 950 3 222 526 Segregated cash & investments 1 885 603 1 719 800 Receivables, less allowances 1989 517.657:

1988 - 518.297 668 $30 653 968 Materials & supplies, at average cost 459 971 385 749 Prepayments & special deposits 422 495 99 679 Current Assets 5 559 549 6 081 722 Advance ref u. ding costs 1 080 410 1 175 136 I

Deferred chtspes & other 211 (KK) 109 676 l

Other Assets 1 291 410 1 284 812

$31359 258

$32167126 i

lhe accompanymp notes are an integral part of thn statement.

1: quit) & l. labilities 1989 1988 Balance at beginning of ) car 18 167 014 17 677 $38 Net revenue (cyienst ? for the year (341 064) 4N9 476 Retained 1:arnings 17 825 950 18 167 014 1,ong term Debt 10 $(K) 265 11 191 617 Accounts payable 16014(M) 1 504 908 Accrued payroll & vacation pay 359 327 331 131 Accrued interest on long tenu debt 292 670 309 804 1.ong-term debt due within one year 7(K) 239 662 652 Current I.iabilities 2 953 636 2 808 495 lieferred Credits and Other 79 407 531 359 258 532 167 126

Water Spiem Statement of Net Revenue f or the Yeardnaett Deceniber.1t,1989 and tus 1989 1988 Residential 3 601 688 3 530 834 Commercial & industrial 3 375 218 3 420 863 Other 4 417 25 489 Operating Resenues 6 981 323 6 977 186 Source of supply, pumping & purification 1 390 551 1 384 622 Transm4sion & distribution 1 708 798 1 342 359 Customer accounting 460 558 416 153 Administratise & peneral I 710 434 1 229 398 Depreciation & amortiration Plant i 658 436 i $83 223 Operating 1:spenses 6 928 777 5 955 755 Net Operating llesenne 52 546 1 021 431 Interest earnings on im estments 393 525 3(Xi 699 Allow ance for funds used during construction 23 500 23 (KK)

Other nonoperating resenues 21 370 19 423 Other Resenue 438 395 343 122 Other tes enue deductions 6 952 8 436 Interest expense & discount amortiration 839 053.

680 64i Allowance for borrowed funds used during construction (14 (M K))

(14 (NWin lles enue lleductions 832 (W15 875 077 Splem Not Resenue il:\\pemel 5 (341 064)

$ 489 476 The accompanpng noies are an niegral pan of ihn staicnient

Water System Stotsment of Cash Flows ha the w an I.nani tecenarr 31, iun and im 1989 1988 Cash flow s from operating activities Net revenue (espense)

(341 064) 489 476 Adjustments to reconcile net resenue (expense) to net cash provided by operating rtivities Depreciation & amortization 1 848 478 1 758 104 (Increase)in receivables (14 562)

(2 866)

(Increase)in materials & supplies (74 222)

(50 967)

(Increase) decrease in prepayments 4; special deposits (322 816) 9 470 (Increase) decrease in deferred charges (l10 543) 18 687 increase in accounts payable & accrued payroll & vacation pay 124 688 206 294 (Decrease) in accrued interest on long term debt (17 134)

(15 581)

Increase in deterred credits & other 79 407 Total adjustments 1 513 296 I 923 141 Not Cash Prmided 11,s Operating Actisities 1 172 232 2 412 617 Cash Dows from imesting activities Additions to utility plant Net (l 276 222)

(l 053 477)

Not Cash lied in imesting Actisities ti 276 222)

(1 053 477)

Cash flow s from financing activities

~,

(Increase)in segregated bond funds (167 1311 (91 356)

(increase)in segregated cash & imestments (165 803)

(73 293) liond principal payments (662 652)

(622 593)

Net Cmh 1%ed in l'inancing Actisities (995 586)

(7x7 242)

^

Not increase tDecrease)in Cmh and Canh 1:quis alents (1 O W 576) 57i W8 Cash & cash equivalents at beginning of year 3 222 526 2 650 628 5 2 122 950 5 3 222 526

( ^ ash and Cash 1:quis ulents at I:nd of Year Supplemental Distimure of Cash I' low information Cash paid during the > car for interest 5 743 355 5 780 717 The aaompanying notes are an integral part of tha statement.

tu

N:t:s to Fin:nci I Stst m:nts Iw emic.s1.1989 Summary of Signincant Accounting Policies:

Other Accounting Policies Debt premium, discount, expenses General The Eugene Water & Electric floard, an administra.

and ads ance refunding costs are being amortired over the tenus of tive unit of the City of Eugene, Oregon, is respomible for the the respectise inues. Nuclear fuel amortization is imed on the ownership and operation of the electric and w ater utility s) stems.

quantity of heat produced without provision for sahage salue.

The !!oard has the authority to th rates and charges. Board Reclawincations For comparability, certain 1988 amounts have accounting policies conform to generally accepted accounting been reclawified to confonn with accour.r clawifications used in principles for public utilities and gosernmental units. The 19yu Nre e :.o ef fect on previously neported net revenue.

Gmernmental Accounting Standards lioard (GASill is the accepted standard setting lul) for establishing governmental Cash and im estments:

accounting and fmancial reporting principles. Significant policies The Board maintains cash and im estments in several accounts in are described below, accordance with Bond resolution. Cash and imestments are Cash and Temporary Imestments - For purposes of the carried at cmt or amortired cmt plus accrued interest which statement of cash flow s, the lloard comiders all nonsepregated approximates market, c Acept deferred compemation imestments highly liquid debt instruments purchased with a maturity of three w hich are reported at market value. The Board's im estments during months or less to be cash equivalents.

the > ear included repurchase agreements and obligations of the U.S.

Utilit3 Plant and Depreciation Utility plant is stated at original Gm emment, all of w hich are authorized by state statutes and bond emt. Cmt includes labor, materials and related indirect costs resolutiom. The lloard maintains depository imurance under such as engineering, tramportation and allow ance for funds used federal depmitory.nsurance funds or state and financial institution during construction.

collateral pook for its cash deposits and investments. Repurchase The cost of additiom, renew ah and betterments is capitalized.

nyreements, obligations of the U.S. Gmernment and deferred Repairs and minor replacements are charged tooperating e spemes.

compensation deposits are exempt from statutes requiring such The cost of propeny and removal cost,less salvage,is charged insurance. The entire bank balance of the demand deposits are fully to accumulated depreciation w hen pro [wrty is retired.

insured at December 31,1989 Depreciation is computed ming straight line composite rates The Board's im estments are categorized to pis e an indication of which are equivalent to apprmimately 3.24 of the Electric the lesel of risk assumed by the lloard at year cnd. Categor) I System Distribution Divkion and 3.59 of the Water System includes im estments that are insured or registered or for w hich the original costs of depreciable utility plant. Depreciation for the secuGlies are held by the Board or its agent in the lloard's name.

Trojan Plant h computed using the 69 sinking fund method Category 2 includes un mured and unregistered imestments for based on a 33-year plant life.

w hich the securities are held by the counterparty's trust depanment Operating Resenue Operating revenues are recorded on the or agent in the Board's name. Catepoly 3 includes unin ured and baskof servicedelisered. Apprmimately 129 of 1989and 198g unregi tered imestments for which the securities are held by the Electrie System operating revenues w ere'the result of sales to one counterparty or by its trmt department or agent but not in the indmtrial customer.

Board's name. Imestments held by the counterparty financial Interutilits Rent - The Board has an interutility rent agreement I"'N'"U"" I" safekeeping are comidered to be Category 3 in anordance w. h G ASil interpretations. The Board's im estments in w hich th'e Electric System awesses the Water System an annual a

cred emngwnsadon mutuapun6, are held in safeLeeping rental amount for it[ proportionate share of the headquarters en facility. Rent esessed under the agreement for 1989 w as 5310,(M K) in book entr> fomt by the financial mstitution counterparty m the

($155,(NK) for 1988).

Iloard's name and are considered to be Category 3 investments under the above criteria.

i 1

Cash ans im estments consist of the following at December 31.1989:

Cash and Capital Segregated Total Total Total Segregated Temporary improvement Cash and Carrying Market Bank Funds investments Reserve Investments Amount Value Balance Distribution Disision Cash on hand 8 610 8 610 Cash in bank demand deposits i2 984 505 098 4 765 9 157

$320(4 956 726 Imt. ament Deferred compensation mutual funds 2 990 182 2 990 182 2 990 182 investments. Direct obligations of U.S.

Gm ernment 5 015 073 4 425 885 I 916 481 1 045 771 12 403 210 12 424 657 Total 5 5 028 057 5 4 939 593 5 I 921 246 5 4 045 110 Trojan l'roject Cash in bank demand deposits 17 359 5 281 2 184 24 824 24 824 investments - Direct obligations of U.S.

Government 14 856 091 2 204 832 3 510 611 20 571 534 20551532 Total 514 873 450 5 2 210 Ii3 5 3 512 795 Water Splem Cash in bank demand deposits l I 806 213 471 9322 234 $99 401 870 Cash in bank demand deposits - Other agency collections 802 609 802 609 802 6W Investment - Deferred compensation mutual funds 486 774 486 774 486 774 investments - Direct obligations of U.S.

Gm ernment i 344 387 1 409 479 586 898 3 840 764 3 847 842

~

Total 5 1 356 193 5 2 122 950 5 1 885 603

l.ong term Debt:

1989 Electric Utility System Revenue Bonds Series 1986,7 1 86 issue Serial Bonds,5.75 7.509, duc 19912003 4 835 000 Term Bonds,7.60%, due 201I 6 330 000 Series ht,9 22-86 issue,7.169 capital appreciation, due 1996 999 500 Series 1987,12187 issue,6.15 7.909, duc 19912011 9 415 (KO Series ht,4-5 88 issue,6.809 capital appreciation, due 1997 2(04 1424 (KKI Electric Utility System Conservation Revenue Bonds Series 1985, 91 85 issue,7.(0 9.209, due 1991 2(K)0, subordinate to Series ht, Series 1986 and Series 1987 13 315 (KK) 36 318 500 Less unamortired discount 281 567 Distribution Division long term debt 36 036 933 Trojan Nuclear Project Revenue Bonds, Series of 1977, subordinate to Series 51,1986,1987 and 1988 Serial Bonds,5.20-5.759, due 199198 35 425 000 Term Bonds,5.909, due 2009 83 700 000 f'

119125 (KK1 Less unamortired discount 1 284 539 Troian Project long wrm debt i17 840 461 1:lectric S3 stem Long term Debt

$153 877 394

~

Wavt Jtility System Revenue Bonds 8-i-66 issue,4.359, due 199199 1230 (KO f.

8168 issue,4.00 4.90%, due 1991-99 1(KK1000

. ' {-

12 l 82 issue,8.50 9.00%, due 199193 1 235 000 Water Utility System Revenue Refunding Bor.ds, 11-15 86 issue, 5.00-6.609, due 19912006, subordinate to 81-66,8168 and 12182 issues 7 l(Al(KO 10 565 (K10 Less unamortired discount 64 735 Water System Long term Debt

$ 10 500 265 i

Total debt requirements during the years 1990 through 1994 are as follows:

-- ky-

' h.y._. Y J ;1({!

Electric System Water System

/;.f Distribution Division 51'

~ Reserve Trojan Reserve

};if 7pi Maturities Deposits Project Maturities Deposits i [.

1990 1 265 000 488 957 3 475 (XX) 700 239 123 156

..m; #

1991 1350 (KK) 264 225 3 660 (XX) 730 (XX) 37 888 M

1992 1455 (KK) 203 349 3 840 (KK) 785 000

'jj 1993 1 805 000 49 879 4 055 000 835 000

.,.g gM 1994 1 901 000 4 275 (K10 445 (K0

%wq

).f l

pl Ki s., L'll

The lloard has observed, performed and fulfilled its cosenants

'I rojan NucIcar Plant:

and obligations as required by resolutions authorizing the issuance The lloard has auigned to hPA and other public apeney of menue tvnds.

participants its 309 share of the output from the Trojan Nuclear During 1987, the lloard extinguished 519 488,(KK) of filectric Plant. The lloard w ill receis e payments and credits (net billings)

- System Distribution Division Series A, C and D Bonds throogh an equal to its share of all Plant costs, including decommiuioning, in substance defcasance. The in subuance defeasance was spent fuel storage and debt service whether or rmt the Plant is accomplished by placing approximately ',14,300,(KKlinto an irrevo-operable or operating and notwithstanding the suspension, inter-cable trust from w hich principal and in'.erest payments will be made ruption, interference, reduction or curtailment of Plant output.

on the Bonds through August I,2004, the final maturity date. The An initiative petition is being circulated w hich would prohibit the resulting pain on defcasance of approximately 55,188JKK)has been operation of the Plant until specific conditions are met, including deferted and is being amortitt.d over the remaining life of the licensing of a permanent radioactive waste disposal site, if defeased Bond iuues.

enough signatures are collected, the initiatis e will be placed on in November 1986,the Poard extinguished 56,610,(KKlof Series the ballot in the Nosemtwr 1990 general election.

1082 Water llonds through an in-substance defcasance. The in-Net billings may vary from expenses each scar but are substance defeasance was accomplished by placing the Water recognized in each accounting period only to the ettent of current Refunding Bond Series 1986 proceeds and segregated funds in an expenses. There is no eff eet on the Electric System statement of irrewcable trust imm w hich principal and interest payments will be net revenues and, accordingly, net billings and operating expenses made on the lionds through August I,1994, the earliest call date.

are not included in the statement of net res enues. The accumu.

'I he Board vad the llonneville Power Administration (IIPA)have lated excess of net billings over expenses is stated in the balance entered into v' e Bond Financing Agreement to fund BPA's share of sheet as "De ferred Trojan Net llillings", Following is an analysis n

residential a catheritation measures w ith pmeceds from the Elec tric of changes in this account during 1989 and 1988:

Utility System Conservation Revenue 11onds, Series 1985. Under tenm of the Agreement,llPA has unconditionally agreed to pay the 1888 1888 debt sets ice and any other costs awiciated with the 1985 lionds. A re<.eivable is recorded by the lloard for the difference betw een the TM m1 M@

63193 M M45

+

unspent bond proceeds and the outstending prmeipal and accrued Mi 2 6M C3 1698 35 interest on the lionds. I'here is no eflect on the Electric System g

statement of net revenue and, therefore, mterest receipts and Operation & maintenance expenditmes approximating 51.27 million and 51.32 million for 41 252 977 36 600 739 expenses 1989 and 1988, respectively, related to the Bonds are not meluded g

m such statement.

amortization 10 704 156 10 955 426 Other fuel expense 1 686 276 1 912 380 Interest exnense 7 735 233 7 896 628 increase in Deferred Trojan Net llillings 5 4 446 447 512 839 336 Power Suppl 3 Resources :

The Board reseives approximately 219 ofits power require-ments from its own generating resources and 799 from upA and other agencies under contractual agreements expiring through 2017. BpA provided approximately 82% of the lkiard's purchased pow er in 1989(84% in 1988).

u---...i.

.' ii.ii i t

k k

k

(

(

s 4 s k

b 6

kll reptil.it erflpht)ces with at Ic.nl u s nhiriths til si, r s h e tii ht [hiy ablc ili the t uturc as it icsult tit einphly ce set h e to d.ile The palth lpale nl the ( Ucyon IubIh I niplo)cs Nchirment by sicm measure wIut h n the ailuarial prCsent s alue oI projected benetIls iPlRhi an agent multip!c employer dehned beneto penuun n mierkled to help users asscu f undmp status on a pomp a ontern plan estabhshed bs state stalute and adonnntered by the Statt of basn asscu proprew m.hle m au urnulatmy sult h ient awets to pay

()tepon w hh h n designed hi pros ide a benetit equal to I 6' of benet ns w hen thic and maLc (omparison among Pl R$ and employ -

a pdrlh lpant 's highc'a h nhirith as ef ape salar) k5cric t ll s are ers t he flic.nurC is IndepCrlderll til the.h tilarlal f ullding nicthtMl estab!nhed by $ tate statute under w hh h e n cred employ ces are used to detemune s ontributiorn to the plans How cs er, the siytuh-requurd tii s ontribute u, of then s.dary. w hh h the ihnird h.n s ant at tuaruil assumptnirn used to t ornpute the pension benent aptred to p.n on the employ ecc behai!

't he llow.I n requoed obhyahon are the wime as those used to torupute the at tuarially b) the %llite staillle l(it t Hittibute the renlainifly anli ullts net cudr) detCrruined t tintIlbuthilis i

lii pay twnelits w hen duc 't he Boardi rcquued timtribuhorn an l tuler Pl R$ no cibhyation tot retned members n attributed to the addlliollal i I II', til (in Cred w apes. dIc at lliarlalI) deterfillnCd l$t hild. as Ik.Nh p(iols thC rnk le!ated lo retMed CWpIo)ces among using the entrs ape at tuanal t ost method I ties tn e January I all the parth ipatmy employers Pl R % iransf ers the obhpanon f or IWi the emphner icquaed tiintnbution raic w :ll be desicased bCnctits f rom mdn idual employ ers to the Pl RS as a w hole w hen to ill h U, of u n cied w ages I he lloard's pay roll f or employ ees hencht s tx t ome pay able b ordmply. the pension bencht obhpath m un cred bs PI R% f or luu w.n \\ l hJ N H U M N i d i t h h i t h m i t oi show n below f or PI R$ u n ers only t un ent and ternunated employ ees IU% i bital pay roll w as \\lh h k U N HI (51 %v M U M Ni f or luxxi Pl.R h n tintlibut n On lLithled afbl e s pensed h 4 l %V w cre apprt ni

\\lp oll h arli.h Iliar la!.luuinpt hin s f nalCls \\2.lMlN MIILO thC l Ics tf h hs slCrn and D2 I.t k N iltM the bupplem@n181

% ater $s sicmi \\2. (2'lH Hland S44 bh h t lespctin cl3.foiIONA, PEFIS Plan Hh ludillp allhirtl/alutfl iit the unf unded liabillt) ItH the plescilt Ihtte tit.h luar tal s a!Uat hill l ICL LI.I@

.I all I,1NhD s alue of all past noim.tl t osts in cf a hl y cal per akl I somated annual return on.nsets

., 5 ',

N O'<

.l he I upefic % alef A i let it h lh hlrd suppleillCilt.II f ellicillcllt Proict led annual salary mt reases hiF, Not Apphs able plall a stnpk chiphh cl dellfled bellClit pelnhin p!all eslab is Pimes ted annual t ost of In mp Inhed athl.hhmnntered by the lhiaht liclh tits arc cstabh shed by uh reases to renrecs 2tr.

2(N the ihniid l)ur:np luk,. the lhhod reticptitiated its iinti.h t w ith Ins ic.nc m benchts tid members l'i' Nh tsi pn n ide bef10 tits.h t umulated in the supplernental plan w ith unutih /ed sh L Ic.n c as of.lunc h t 10% by then as tn e employ ees through Pl Rh

\\taic

,W, Noi Appih able Auoldmpis. ihe supplemental plan w as amended to only un er i emaic 5W-Not Apphsable reured employees a ho w cre plan pauh ipants at.lunc ht 1%s As a resuh of chnunatmp a. tn e employees f rom the plan. the l'enshin benefit (ibllpathin kh' aid h nl thi pay tiil! ho parth ipalits during Iusuaini I %% ihe Netilecs A IWnCIh larles t urrenlls plan's h luJf lal t ulkling niclhlhi w.ls t hanpt d t hthl thC attairled reten my benehts A ternunated age nomial method to the unit t redn methild i thle the new employ ces not y et ret On my benehts 4 V' N 20%

nWlhnkl. ali uilt ulhlCd.h luarlal.h t fued liabillt) is est.lblishCd A L umulated employ er s oninbutn mv equ.d hi ilk dittelefh s belu cCn the present s allN (d.h t rLICd uk ludmp alhvated ms Cstment bene h t s at the s aluation date and auets.n.nlable to prin ide these beachts

.I hn habihis a di be amortt/cd and f unded in er carnings lANHI Mll I rnplos er - I m uh ed s ested 12 I 16 61h a PCII kl lhli 16 5 e st Ced )I s t'ais ItH

,OV the anuiunts turkled l

I mployer Fmans ed nom ested 654 414

.ind e s'1CDsed w ere appr(is imalCI) V V, l ll k l Itu the l let trh

' n h I l' I 4 004 'ox hy. tem and \\llIlk ki lor the W ater % s sicm 154'N ' ' H H i and

~

Net a sets.n.ulable f or bcnents 14'hlAII 1 2l' 646 hU l j N I' I re q Wstisels, hir 195\\l

'I he pelnhin benellt tibilpathin is a sll:3.u dt/cd dlsshnure I nf unded Pension me.nure of the present s alue ill peran m benetits adiusicJ hu the bellebl ( Ihkallon YI1 \\\\l %hil

$ l h41 %h2

Trend infonnation is useful in awcwing the plan's progrew in trend inf ormation regarding the plan's progrew is show n below :

accumulating sufficient awets to pay benefits w hen due. As ailable Unfunded Pension Employer Net Assets Benefit Obligation Contribution As a Percent of Annual Covered as a Percent of as a Percent of Valuation Date Benefit Obligation Payroll Covered Salary Covered Salary

~

Supplemental Retirement Plan 1988 January 1,1988

$8,9%

Not Applicable Not Applicable Not Applicable 1989 january 1,1989 65,5G Not Applicable Not Applicable Not Applicable Oregon Public l'mplo3cs Retirement Splem 1988 Decemtwr 31,1987

$$,39 515 8(R)(KK) 77.69 11,41%

1989 Not Asailable Not Available 516 3(K)(KKI Not Asailable 11,419 in addition to pension benefits.the lloard provides certain health filectric Sy stem and S i 18,(XWi tor the Water System (e spense for care and lile insurance benefits to retired employees. The 1989 eost, 1988 was 5373,(KKl and 583,(WKI, respectisely).

recognized as expense as claims are paid, was $$39,(WXI fm the iieferredCompenwtion:

income attributable to those amounts are solely the property of The lloard ollers all employees a deferred compensation plan the lloard, subject only to the claims of the lloard's general created in accordance with internal Res enue Code Section 457. The creditors, participants' rights under the plan are equal to those of plan permits them to defer o portion of then salary until future years, general creditors of the lloard in an amount equal to the fait The defened compensation is not available to employees until market value of the deferred acwunt for each participant.

termination, retirement, death or unforeseeable emergency.

Participating employ ees has e ses eralim estment options with Apprepate amounts deferred at I)ccember 31, 1989 which are varying degrees of market risk, The lloard has no liability for included in awets and liabilities are 52,000,182 and $486,774 for the lowes under the plan, but does hase the duty to administer the tilectric System and Water System, respectively (52,542,216 and plan in a prudent manner, The floard belieses that it is unlikely 5413,849, restwetisel), at December 31,1988).

that it w ill use the awets to satisfy the claims of general creditors

~j All amounts of compensation deferred under the plan and ai,

' the f uture.

Commitmentst and installation of an energy management control system. Related During 1986, the lloard began the headquarters area improve-commitments under contract at December 31,1989 were ment project, which includes construction of ses eral new Iacilities approximately 5802,(KXI.

d M

N m

Wilb-Y

Management Staff het/eu le't to p"tn~rT~t h CT 3

Randy L. Berggren nght Ja m n H

.Em Randy tierggren was selected by the EWEB

,Q '*

Comminioners toien e as EWEll's Acting General James u ten Manager in February 1990. He had sened as a How L auistant general manager for planning and

1. U""

development since 1988, after joining EWEB as engineering manager in 198$. In addition to his responsibilities as Acting General Manager.

Berggren oversees the information services, auditing, planning & development and human

,m resources departments. Ilerggren has a bachelor's g

deFree in electronic engineering and a master's degree in elecincal engineering. Prior to joining J

EWEB, Berggren was director of the Springfield

'hiiny lloard's electric utility, and held various engmeeting positions with a California utility, llerggren is a registered profeuional engineer and a member of several profeuional engineering organizations and the Amencan Management Anociation.

James H. Origliosso EWED's accounting & finance division director, Jim Origliouo, joined EWEB in 1988.

32 This division includes the general accounting, cash accounting, warehousing, purchasing, risk management and customer senice departments. Oripliono was previously employed l

ns the chief financial officer for City Water, Light and Power of Springfield, Illinoit l

Origliosso has a bachelor's degree in behavioral science and a masters degree in urban affairs and policy analysit Origliouo is a Certified Public Accountant and a Certified information Systenn Auditor.

l James H. Brown EWEB's largest division, operations & engmeering, has been managed by Jim Brown since 1083. The O & E disision includes the engineering, generation, electric operations, water operations and shop / maintenance departments Brown was hired ai, an engineer in 1963 and received a bachelor's degree in civil engineering that year. From 1966 to 1970 Brown w as a commissioned officer in the U.S. Navy. After being rehired by EWEB as an engineer, he was appointed supervisor of civil / mechanical engineering in 1976, and as nuistant director of O&E in 198&85. Brown, a registered professional engineer, is a member of several engineering associations, and the American Management and American Water Works Associations. Brown senes on the Trojan Operating Committee and is a member of the Ferry Street Adsisory Committee.

Garry W Kunkel Director of the power management disision since 1983,Garry Kunkel os cre f WEB's enerFy management services, power resources, resource planning and rate admomtration departments. Kunkel began his carect 26 cars agoas an accounting clerk. lie was promoted 3

to auistant commercial manager and systems analyst prior to serving as EWEB's first rate manager from 1978 to 1983. Kunkelis actise in the utility industry. lie is Vice Chainnan of the Public Power Council,a member of the Executive Committee of the Western Systems Coordinating Council and a member of the Consurner Services Committee of the American Public Power Association.

Jean B. Reeder Jean Reeder sened as General Manager from July 1985 through February 199(t She previously served as Anistant General Manager, Energy Conservation Manager and Gmernmental Affairs Coordinator during her 12 years with EWEB. Reeder was dismiued from her position by a three to-two vote of the Board on February 26,1990.

b2tfi.f.

-W B

EWEB Board Membership Changes in Early 1990 Two new flourd members w cre appointed la the EWEll lloard in May 1990, following the resignation l

of floard President Dennis Solin und Vice President Randy Thwing. Solin and'ihwing resigned from the remainder of their current term of office--which would hase estended through the end of the 3 car-following their defeat in the May primary election.

The candidates receiving the most votes in the primary election were appointed to fill these two llourd s acancies. Jack Deluy w auclected to represent City Wards 4 & 5 and Susie Smith w ill sen e in the at large ptsition, in addition, they will serve a full four year term following their unopywed election in the Novemtwr 1990 general election.

Delay is the Chief Esecutive Officer of Datanes computer Co., and a manager at Sof tware Development Sy stems Strategies, Inc. Delay's past public sen ice includes four years on the Eugene City Council, from 1977 81, chainnanship of the L.ane Regional Air Pollution Authority and membership on Eugene's Economic Deselopment Committee.

Smith is a land use planner for the City of Springfield. She has tren on the lloard of the Solar 1.nergy Association of Oregon for fis e > cars, and currently serves as its Vice President.

Three EWEll Commissioners-Solin,Thwing and Rob Willis-had been the subject of a recall effort following their vote for the firing of General Manager Jean Reeder Reeder was fired by a three to two lloard decision in February 1990. Commissioner Willis will face the recall election on June 26,1990.

Ilowever.Thwing and Solin will not appear on the recall ballot because of their resignations.

A fifth pwition on the EWEll lloard, representing Wards 1 & 8,is vacant follow ing the death of Rieluird I reeman on April 21,1990. An appointment of a new floard memtwr should be made by mid June.

Eugene Water & Electric Board m tw eawn P: s1 ONr B* tN k$iiG(*Off, hf;1JiW1 Nddb 2hoj

$03 484 241t

Board of Commissioners Dends L. Solin phy sician in prn ate medical practice. She is a member of the American, lloard President Solin began serving his second four-year term on Oregon and Lane County Academies of Family Practice. Past chairman the EWEll floard in 1987. Elected by residents of City Wards 4 & 5, of the Lane County Medical Awieiation's community health commit.

Commiwioner Solm was Vice President of the lloard irom 1985 tee, she ahn served as a member of its e secutive council. Commiwioner through E7. lie w as elected by the lloard as President in January 198K llendrickson has chaired the Lane County chapter of Phpicians for and tp:in in January 1989 A certified public accountant, Commis-Social Respomibility and the women's iuues committee of the Ameri.

sioner Solin h a principal in the Eugene accounting firm of Solin & can Awwiation of Physiciam for llumtm Rights.

Awiciates P.C..

lie is aho un aethe member of national and state accounting amiciatiom, and sen es as President of the Fanconi Anemia Richard Freeman Research Fund, as Treasurer of the Willamette International Trade Commiuioner Freeman was elected to represent City Wards 1 ; 8.

Center tnd m a member of the floard of Directors of the Lupene and joined the lloard in January 1989. An EWEll floard member from Chamber of Commerce. Commiuioner Solin has aho sened as a 1971 through 1980,Comminioner Freeman wm floard Vice President in 1973,1974 and 1975. lie w m elected to the Lane Comtnunity College member of the Lane Council of Governments, the Lane County Parks Iloard of Education from 1970 to 1979 and sencd on the lloard of the Commiuion and the Willamalane Park and Recreation Dktrict.

Lane Council of Gmernments from 1972 to 1979. Comminioner Randall E. Thwing Freeman wm an active member of the Eugene Chamber of Commerce Comminioner Thwing began his senice on the lloard in January for 19 years and h currently a member of the Citiren's Advisory Com-1987, following his election to a four year term representing the City-mittee for Electronics Engineering Technielam. IComminirmer Al-Large. Thwiny wm elected Vice President of the floard in January / rrrman paurd away on April 21,1990 af ter a simrt illnent 1990. A partner in'lhw ing and'thw ing, Attornep at Law,Commiuioner Rob Willis Thwing has practiced law in Eugene since 1970, specialiiing in small beinen organizations. lie has sened on the Eugene Planning Commiwioner Willis began hk hrst year on the lloard in January Commiwion, Eupene joint Parks Committee Eugene Citizens Im oh c.

1989 atter being elected to represent the residents of City Wards 2 & 3.

ment Committee and the Lane County liar Amiciation ikiard of Commiwioner Willis is the owner of Oregon Wellnen Sptems, a Directon. Comminioner Thwing is a member of th; Lane County liar health and fitnen comulting firm. and has past esperience as a certified Awiciation and the Oregon State liar Awiciation. lie aho senes on public accountant. Commiuioner Willis is aho a CPR 1mtructor and the lloard of Trmtces of the Northwest Public Power Anociation and Program Director of the Alne & Well Mall Walking Program, Comminioner Willk h a lloard member of the American lleart as Seuetary and trustee of the Eugene Rotary Foundation.

Awiciation, Lane Division, and a lloard member and Vice-Chairper.

Cr, Sarah Hendrickson son of the Lane County llcalth Advhory Committee lie aho serves lloard Vice President llendrickson sencd her ninth year on the as a member of the Coalition for the Fair Allocation of City Tuses and EWEll lloard in 1989 and her second comecuth e ) ear as Vice President. the Oregon Natural Resources Council, along with seseral other She senes the residents of City Wards 6 & 7. llendrickson is a family professional societics and awociations.

C rporate Officers to the Board Advisors and Consultants Randy L. Ilerggren, Acting Secretary' Calkins & Calk.

Gennal Counsel Krista K. Ilince, Anistant Secretary C ""I N'""#F' 0 "Y" "I N W III'I"C' James 11. Oriptiouo, Treasmer Consulting Actuaries David C. Johnson, Assistant Treasurer Public Financial Management,Inc.

• Jc:n 11. Reeder served e Secretary during 1989 feinancial Consultant Coopers & Lybrand Independent Auditor lloward Needles Tammen & Bergendoff Independent EnginecrtConsulting Engineer Schw abe, Williamson and Wyatt Special Counsel Wood Dawson Smith & llellman llond Counsel

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