ML20056D892

City Public Service 1992-93 Annual Rept

ML20056D892
Person / Time
Site:	South Texas
Issue date:	12/31/1993
From:	Bryany F, Rosenberg A AFFILIATION NOT ASSIGNED
To:
Shared Package
ML20056D884	List: ML20056D887 ML20056D891 ML20056D892 ST-HL-AE-4537, Forwards Current Annual Financial Repts for Licensees for South Texas Project,Per 10CFR50.71(b)
References
NUDOCS 9308180233
Download: ML20056D892 (34)

Text

{{#Wiki_filter:_. I i i i 1 THE FUTURE BUILDS N O n.: 4 - g m &x E Z b . Ty:s c ,mg:.4 q y N + "p - y a m H ns e n. t YkY; m &w?% em M "i As e D 1hd .H y e pu t m 4r, m m x jd. sm N Aw ';." ; L 'A vm,, :9 'O $.f j4 O-a K~g, Wa Q ..~........%... r i H A I,lD H d S TI H cI S H A I D t ? t i I CITY PUBLIC SERVICE 1992-93 ANNUAL REPORT 4 1 9308180233 930810 53 i d@i PDR ADOCK 05000498 I PDR - + - - m-

r HIGHLENTS OF THE YEAR i . Assets increased by 588.892JWO to. . 54.685.683.WO I l City equity increased + $30.150JKO to. .. $1.77M,842JKO ? I City payments increased j 5 t l3,515.(KO j 54,498,(XX) to.. ? Grou revenues increased 131,992,000 to. 5847,376JKKt Cost to residential customer -[ per KWH increased 3.6% to.. 6.62e Cost to residential customer per MCF of gas increased 3.2% to. $5.09 Maximum electric system load increased I8,WO KW to. 2,817JKX) 9,223 electric customers were added to total. 485.345 ~I KWil sales increased 2.3% to 12.287.295.753 .[ MCF sales increased 2.2% to. 25,362,687 { i ~

SUMMARY

OF APPLICATION OF REVENUES ' i Gross revenue for 1992 93........ . 5847.376.000 i Application of Revenue: Fuel, purchased power and resale gas. . 5201.699,000 Other operating and general expenses. 143,754,fKO i Maintenance of the systems, 65,170,0M) For debt requirements '{ and other interest. .5256.305,000 } Interest charged to construction. 29,055.MO Net debt requirements and other interest. 227,250.000 Payments to the City of San Antonio. . I 13,515.Of 0 Balance from operations available for construction 95,988J00 t Total.. 5847,376,000 Gross amount spent for replacements, f F I improvements and expansion of as l and electric systems $171,952JKO I Funds obtained from: - Operations. .- 5 95.988.000 Commercial Paper. 57,913,0fx) Improvement and ContinFencies Fund ..(2.551.000) Contributions and advances in aid of construction. 5/02JKK) l Liti ation Settlement Proceeds. 15,000,000 F Total . 5171,952XKO I ) J l l l 1 1

,~ i PROFILE OF CITY PUBLIC SERVICE San Antonio, the third largest metropolitan area in Texas, has a population of - approximately 1.4 million. Tourism, manufacturing, construction, insurance, retailing and medical care have been the traditional economic mainstays, along with one of the largest concentra-- q tions of military installations in the U.S. In recent years, San l Antonio has broadened its economic base to include numerous THE FUTURE high-tech firms in the fields of electronics, data processing, j 13UILDS ON biotechnology and telemarketing; THE PAST. Meeting the energy needs of this thriving area is City Public Senice, i THE PAST one of the largest municipally-owned utilities in the nation. CPS pro-GIVES vides electric senice to approximately 485,000 customers thmughout j PERSPECTIVE its 1.566-square mile service area, which includes all of Bexar TO THE County and ponions of seven neighboring counties. The gas system 4 supplies approximately 290,0(X) customers in the San Antonio urban l FUTURE. area. 1942-1992 CPS was founded in 1942 when the City of San Antonio purchased the CELEBRAT/N(1 utility systems by issuing $33.9 million in revenue bonds. A five-mem-ber Board of Tmstees, with the Mayor of San Antonio filling one of the 50 YEARS seats, sets policy for the utd. ity. OF SERVICE

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~ CPS operates seven power plants in the San Antonio area with a j combined capacity of 3,736 megawatts and owns 28 percent of the - 1 South Texa< Project nuclear plant which adds another 700 megawatts of capacity. [ The gas system is comprised of 3,973 miles of gas lines through which natural gas is deliveed to CPS customers. j e City Public Service had 3,513 employees as of January 31,1993. a I 1 5

m _ i REFLECTI0ilS Ol4 50 YEARS OF SERVICE !I i l Change has been an important characteristic of the utility industry during the last 50 years. From providing a commodity that customers considered a luxury, utilities base become the mainstay of modern life makmg it j l possible for businesses to flourish and individuals to enjoy a high standard of living. Probably no other indus-i I i trv has such a profound effect on people as they go about their daily lis es, . pm wwa- &&e nj ~ + g n +,n.u.

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e +, ,o $. [m.[ '$ ;f" 'l As City Public Service ends its 50th year of sening San Antonio as a municipal utility, l p the occasion offers the opportunity to reflect on the history that has made CPS the thriving i orgamzation it is today. During the 50 years it has been owned by the City of San Antonio, CPS has grown and changed as has the cits it senes. i i From a population of 3(Kun)in 1942 San Antonio has become the tenth largest city in the country. During the same time, the electric capacity of 90.5 megawatts at two power plants has increased to 4A36 megawatts as CPS has expanded its facihties to meet the needs of a j gmwing community.1.ikewise the pas system has expanded from 734 miles of main in 1943 to 3,873 miles today. Dr. Frank Bryant and Arthur von Rosenberg l i While change has been an important element in the CPS history. some things do not change-the tradition of i 1 1 j excellent senice which has been a hallmark of the utility since its beginning. CPS continues that tradition today because of its motn ated, w ell-trained and profewional work force. With an eye toward the future, CPS pledges to continue pros iding quality sen ice at a reasonable price as it embarks on its second 50 years of semce to i San Antonio. Y Y-Mg Dr. Frank Bryant / Arthur von Rosenberg Chairman General Manager 2 1

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e i l i Hy building on its past. Cn3 Public Senice has positioned itself well for the future. Achietemenb and growth during the last 50 years have laid the foundation for good j decisions that contmue to benefit the utiht.s's customers. Durine 1992 93. the utilitis r 9th year. CPS achieted both operating and financial successes which are Leys to a positis e f uture. FUEL D!VERSIFC.'.ll0N: A KEY FOR SUCCESS CPS has a disersified fuel base that has resulted in favorable rates for its customers. Since the early 1970s when the country faced sesere shortages of natural gas and the price increased rapidly, CPS has followed a l philosophy of dnersifying the fuel used to generate electricity. Continuing the record 'y

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] of the past sescral years, CPS customers' monthly residential bills for the merage usage of gas and electricity ranked lowest among the 10 largest cities in the country g-during the 1992-93 fiscal year. CPS customers also consistently paid less for electric t{ cnergy and natural gas than in other major cities in the state. d pa ~~~ J j The CPS fuel disersification program was begun in 1973, when the Board of f Trustees authorized participation in a nuclear project and building of two coal-fired l generating units. The twin coal-fired J.T. l)ecly units were placed in senice in 1977 and 1978. The two nuclear umts went into commercial operation in 1988 and 1989 l and together can furnish 7fK) megawatts of power to San Antonio. In Nosember 199' A, the 5(Khmegawatt JX. Spruce Plant went into commercial operation following test-ing which began last summer and prosided further disersification in meeting the city's electrical needs. 4-The Spruce Plant, which was built under a $444 milhon fixed-price contract, burns When City Public Service was purchased in about two-thirds of a trainload of low-sulfur Western coal per day at full operation. 1942, the electric peak demand was 88 The unit includes state-of-the-art environmental equipment-two baghouses which megawatts. Today,50 years later, hourly remove approximately 30JXX) pounds of fly ash per hour and three flue pas scrubbers peak demand has reached 2,817 megawatts. w hich reduce sulfur dioxide emissions significantly. The location of the new plant adjacent to the older Deely coal-fired generating units at Calaveras Lake takes advantage of existing coal yard facilities which were expanded to serve the Spruce unit while continuing to sen e the Decly Plant. Completion of the plant gives the utility a total of 1,336 megawatts of coal-fired capacity. Tw o additional trains of railcars uere purchased during the year to deliver the additional coal which will be required for the new plant. The purchase brings the utility's ou nership of railcars to more than 1 JXXL The second element of the fuel diversification program, the South Texas Project nuclear plant, finished a suc-cessful year of operation. Unit 1 produced 90.3 percent of its maximum potential generation during its 18-i 4

i i j t i M j month fuel cycle which endeJ September 19 when the unit was shut down for refueling. The unit generated about 14.5 bilhon kilowatt hours of electricity the most energy eser produced by a Westinghouse reactor during I j a single fuel cple. I' nit 2 ranked fourth in the world in 1992 when it generated 10.807.760 megawatt hours, breating the preuous li.S. annual pnwiuction record of 10.45 million megaw att hours. For the fiscal year, Unit 1 l operated 62.8 percent of the time wfule limt 2 had a capacity factor of 93.2 percent. The combincJ capacity fac-1 tor of 78 percent compares with 69.75 percent in 1991-92. The improved pedormance reflects the fact that i 1991 92 represented the first year the phmt had one unit on line i ] for the entire 12 months without a refueling outage as a resuh of - mg ymy,- 3 ) changmg to an iK-month retuehng c)cle during 1991. ,3 ?* ~ ;4 'h I l Durmy the fiscal year. nuclear-fueled generation prosided a Mk y[ /k.jQ4 b, l record 37 percent of the CPS electrical generation while coal ~ i= 1 l accounted for 41 percent. Natural gas was used to fuel the j remaining 22 percent of the peneration. The fasorable fuel mit l resuhed in a cost of 51DS per milhon BTlis. The iuel cost was 5.14 per milhon HTl:s picater than the prior fiscal y ear due to an increase in natural gas pnces anJ higher coal costs. The price of natural gas increased more than 12 percent during 1992-93. lo assure the conunuation et adequate supphes of natural gas at t compeutne rates. CPS entered into a 10-3 car contraa with Reata The Spruce Plant, the newest City f Industnal Gas. LP.. an af filiate of Valero Natural Gas Partners. Public Service generating station, 1 P. Cost pmtection is buik into the contract through a ceihng on includes State-01 the-art enVirDH-gas prices based on the weighted aserage cost of gas deinered to mental BQuipment. The new plant selected electric utihties anJ gas distribution systems in Texas. is 10Cated adjacent to the Deely Plant to take advantage of newly 4 Renegonation of the 1958 Reata pas contract should save CI,S I expanded coal yard f acilities. Two l ratepa)ers $13 3 milhon during the nest fise 3 cars. additional trains of railcars were ) purchased to serve the new plant. i I 1 l l I PAST GiGYDiCONT!HS 1 When the utdity was purchascJ by the City of San Antonio in 1942. the electric peak demand stood at hS i j megawatts. Growth has continued during the utility's 50, sear history. reflecting the vibrance of the San l Antonio area. i One rneasure of the growth in the i.iy and the utility is the new hourly peak demand records which have tren set i 3early in all except four years since 1942. In fiscal year 19093. CPS customers set new records for hourly peak i demand and 24 hour usage. On.luly 1,1992. the hourly Jul demand reached 2.817 megawatts. surpassing the e l i 4 1 5 1 J

m 2.799 rnegawatt record set in August 1991. On July 2, a new 24-hour generation record of 52,256 megawatt hours was set, up 1.6 percent from the previous year. The peak demand is expected to continue its steady gmwth, reach-ing nearly 3.7(K) megawatts by 2(KK). The number of customers also has grow n during the years. From 90,705 electric customers in 1942, CPS cus-tomers reached an all-time high of 485,345 in 1992-93, an increase of 9.223 over the previous fiscal year. Gas customers also increased to a record 290.497. up from 287,502 the presious year. Gas customers in 1942 numbered 64.975. Ilousing starts in San Antonio during 1992 indicated that the growth in customers will continue. Ikime builders staned 4.2tD single family houses in 1992, a 73 percent jump from 1991. Ilousing starts are projected to rise by 20 percent in 1993. Long-term, CPS expects electric customers to increase by 10fK10 per year durirg the i last years of the @cade, with the total number reaching 550JKO by the tum of the eco l PROGRESS FAR tury. sew gas cu io mers are expected to increase i perceni peryear during the naiance FROM CONSISTING IN of the decade.

CHANGE, Electric use per residential customer also is pmjected to increase from the current aserage DEPENDS ON.

of 11,420 kilowatt hours per year to more than 12,500 kilowatt hours per year in 2000. RETENTIVENESS... rmm a iow of uki2 kilowatt hours in 1M7, the earliest year for which statistics are avail-THOSE WHO able, the average annual usage for residential customers has increased more than tenfold. CANNOT Despite the utility's extensive conservation efforts which have substantially reduced the growth in demand fmm earlier years, the growth in kilowatt hour sales continues and REMEMBER THE PAST reDects the ever-increasing ways in which electricity contributes to modern life. ARE CONDEMNED TO Increased use of comemssed natural gas as a fuel for vehicles represents another potential area of gmwth for CPS. State law requires school districts, transit authorities, state agen-F U L FI L L I,I.,. cies, kcal posernments and private fleets with 25 or more vehicles to phase in use of ahemative fuels during the remainder of the decade. Although cps will not be affected und M,6e usty has conmted R veWes to operate on N and gadne, pun GEORGE SANTAYANA chased four new CNG vehicles and built a refueling station which was opened for use in LlfE AND REASON 1992, Use of CNG is expected to sase CPS noney on schicle maintenance costs and opening of the refueling station should encourage other organizations to use CNG as they l make vehicle conven. ions to meet State law, i 5 I J

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i i l i 1 i FEfMCJ1STEluTY Assets of CPS hase grown rapidly during the utility's 50-year history. From assets of $37.7 million in 1942 l when the utihty was purchased. CPS has grown to 54.69 bilhon in assets. with the City of San Antonio's equity standing at 51.79 bilhon. j Another measure of the utility's success is the increase in revenue. From 510.7 million in resenae in 1942. 1 CPS res enue has elimbed to refleci growth in the number of customers and thur increased usage of utihties. i At thcal y car-end. res enue stood at 5847.4 million. an increase of 532 million os er the presious y ear. l l { As a resuh of the increased resenue the benefits to the City of San y, y.3 4 a a e... M..m.=m~+~m 3 k , uh Antomo also hne increased with the City payment for fiscal year 1992-3 '4m f ;.he fe & - ~" ~

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93 reaching 5113.5 milhon In 1942, the city receised only 5160JXX). A s t e-dyf 7 ~ Cumulatisely. CPS ha paid 51.55 billion in cash and senices to the { gi g ISb~} MlG - ~ -- Cas of San Antonio dunne its 50 scars as a municipal utihty. These _ l S'_ payments base allowed the Cay to keep tax rates low while providing needed services for the community. I . g' f l Operating egenses were 53 milhon less than budreted for the lhcal f j year. Efforts to contain costs base prmed to be ef fectise with major }- 4 ) success being achiescJ in reducing staff. cuning interest egenses and f d.2 i pc i taking aduntage of new technology. a.- in 1946, each crew had a lamp man who picked up lamps, l Since a hiring freeze was initiated in December 1989, staff has been refilled them with kerosene and replaced them on barrl- ] cades at job sites for the night. He also served as the reduced 6 6 percent mcluding new employees added to operate the i crew's water man. j Spruce Plant. In a more appropnate companson. if the 123 employees i i hired to operate the nea plant are deducted from the current person-nel suength, the uaff reduction stands at 9.8 percent compared with l j 1989 figuret f i + 1 j CPS took a h antage of lower interest rates durmy the year to issue SAKLS milhon in refunding bonds. Bonds j u ith interest rates of 7 percent to 11.7 percent issued bdween 1975 and 1988 w cre refunded and 5198 milhon 2 j in short-tenu commercial paper notes were converted to long-term debt during the y ear. The aserage interest rate on the new bonds was 5 97 percent. The 1992 refunding bonds should sm e ratepayers 556 million during a the next i1 ycars. ) ? in rating these new bonds both Moody's imestor Senices Inc. and Fitch Insestors Service Inc. gne CPS } higher bond ratings mer the previous highly fmorable A A rating because of the financial strength of the util-i ity. Moody's Aal rating and the Fitch AA+ rating put CPS in an elite class. since only two other pubhc utili- [ t lies in the t ountry hae bond ratings alu e AA. The ratings recognize the strengths of CPS: responsise man-agement. low er capital needs and a strorg fuel dnersification program. + e t F i 9 i f m-...

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i .a k l i i The utdity also tales advantage of new technology to reduce costs through increased efficiency. CPS has 4 t adopted a new standard for personal computers and will make the consersion during the next fiscal year. The upgrade will allow employees to u ork more efficiently and automate esen more functions. l MAKING A EliFERENCEIN THE COMMiMTY ) Recogninng the special role of a municipal utility in the community it senes. CPS has made a commitment to assist San Antonio in its eco-k k ~~~J nomic deselopment efforts. CPS continued to support the work of the j .""_ ' --m - i MaA'Y /- e 3 3A 4 Economic Deselopment Foundation, an organization dedicated to W g. attracting new businesses to the San Antonio area. Utility employees 4 made presentanons to representathes o: otential new businesses and gf, I helped plan electric and gas senice. ,7 m" +M ,,,..,.....=.*n9 sw m ##iA*^*#^*/^**'#^' J#**///*'*A*### = w::: m ;.v. l

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U '#**####^*d### Relationships with the San Antonio business community were j impnned with continuanon of special programs. The utihty provided ) audit senices to business customers to help them consene gas and Money still goes a long way when spent for electric service in I clectricit3 and worked with them to insure they are being bdled under San Ant 0nio. Compared to the ten largest cities in the Country, 1-CPS residential bills for average usage are the 10 west as a the most fasorable rate for the.ir utd. ity senice. Seminars, particularly result 01 sDund finanClal management and Careful planning. i for owners of small businesses and minority business owners, were held to pnnide information about products needed at CPS and the requirements for doing business with the utility. j l d As the city strhes to create job through attracting business and to imprm e the standard of living for all citizens, CPS employees wlunteer their time and talents to help effect change. CPS employees contributed more than I 54%.SW to United Way and wlunteered their time to uock at United Way agencies to make those dolktrs go far-ther in sahing community pi iblems. 1 l j The \\'ol mtects in Public Senice, a CPS program to nutch employee talents u ith needs for wlanteer u ork in the i I commumty. contributed 8.641 hours of time to community senice. The 847 solunteers raised money to purchase l toys for neeJ) chikiren, purchawd and installed playground equipment at a housing project. organized supplies l for the Red Cross. distributed food to the homeless and much more. These and similar volunteer efforts have been j recognized in the past u ith local and national aw ards. l j The CPS mlunteen also initiated a partnership program with a heal elementary school u here employ ees sene as tutors after w ork hours. The experience offers students the opportunity to establish a relationship with role matels u hile they pet asistance with their academic program. l Coneem for the community leJ CPS to another successful year of sening customers through special customer i 11

programs, such as presentations about the efficient use of gas and electricity and energy soneys of residential, commercial and industrial properties. In addition. CPS personnel presented programs on the safe use of gas and electncity to more than 10]JW people in the senice area. More than half of the persons viewing these safety programs were school children. LEADERSHIP AT CPS AND IN THE INDUSTM City Public Service enjoys an excellent reputation in the industry. The utility's success has led to the recogni-tion of CPS management and staff members for their achievements. i Dunng the year, the CPS General Manager was recognized by the Texas Public ~ Power Association for his outstanding Icadership and dedication to public power. Mr. Arthur son Rosenberg also was cited by the National Utility Alliance for his dedication in furthering the cause of dis ersity in the u ork place. 1, Mr. von Rosenberg was ciccted to sene a two-year term as chairman of the Electric Reliability Council of Texas, an organization of Texas electric utilities ,b dedicated to the reliability of electric senice throughout the state. The ERCOT a dra;jgdj wnice an a cosers 75 percent of Texas, approximately 195JM square miles with Use Of CDmpreSSed Dalural 92S BS a Vehicle fuel about eight million residents. He also began a four-year term as one of two ERCOT represents a 00!ential area Of gr0Wlh for CPS. representatives on the Board of Trustees of the Nonh American Electric Reliability Council and is a member of the Board of the Electric Pow er Research Institute. The CPS Board of Trustees saw changes to its elected officials during the y ear as Dr. Frank Bryant, who had sened as Vice Chairman, w as elected Chaimian on February 1,1992. Mr. Pat Lepan, who previously sened as Chairman, continued to sen e as a Trustee and w as re-elected to a Gre-year term expiring March 31,1997. Mr. Al Aleman, w ho has sen ed on the Board since March 1989, was elected Vice Chairman. At the staff lesel, Mr. J. K. Harz retired as Assistant General Manager for Administration on April 1.1992, after nearly 39 ) ears of senice with the utility. LCDKING AREAD TO THE NEXT 50 YEARS As City Public Senice completed its 50th y ear of senice as a municipally-ow ned utility, the Trustees and staff remain committed to meeting the challenges of prosiding reliable, cost-effective natural gas and electric senice. The records established during the first half-century of municipal ownership redect a proud history which senes as a reminder of the goals w hich the utility pursues. The City of San Antonio stands on the threshold of mereasing greatness. offering an excellent quality of life as the business climate benefits from the connuence of technology and trade. CPS will play a j major part in this promising future by providing the energy needed to pow er a great city. 12

I l i b i I l j EDARD OF THUSTEES Wyyylvgy W TOP LEFT: Dr. Frank Bryant, mf g 6,.7. f.. ~. f 5,ps . g 'c. '"s'.- Chairman of the Board, a 'i.>

-~

y(.,7.1 . }'. physician in family prac-1 4.. tice. e

1. 4 k, 4 *

. V The South Texas Medical { ~$ l Center serves as the hub of the g medical service industry which j I r plays an increasing!y impor-i Y tant role in the San Antonio ) economy. l ^4 TOP RIGHT: Al Aleman, [h YiceChairmanof the I j I Board, owner of Aleman .G Food Service. Rivercenter Mall represents the l [ r y' 'A ;Cc confluence of the retail and y' '~ tourist businesses in San i k RESEA RCH ^*na l PA k '$ CENTER LEFT: Gloria j M Hernandez. Trustee, owner t 3 j [ 4 of Suchy's Flowers and { d}. Gifts. The R ver Waik beckons visi-I tors fiorri th!oughout the World 4 Q., to one of the most popular I.- ' f tourist spots in San Antonio,

j l

,p, yf} . gj second Oniyto the Alamo g N$b# }_ _ bk CENTER RIGHT: Pat Legan, Si Trustee, owner of Legan Properties. N The Biomedical Research Park i helps bring new business tn i San Antonio as pa1 of the l 4 cit /s economic development L g, I _ effo1s. i l so LOWER LEFT: Nelson W. l Wolff, Ex-officio Trustee, { Mayor of San Antonio. i The 65 000 seat Alamodome which opens in 1993. is expected to a"ra:t large con-venhons, spods events and enterI3!nment i 13

i l 1 1 CPS MANAGEMENT STAFF ~-"' ' rq . w w w.+q w> The Dcwntown Customer jg

Vor.

) ScrTlcc Center serves as a fl', [: { convenient location tar y? ! p y,g more than 30.000 CPS cus-o tumers a manih to pay 1 g their tuils and discuss their a f Utikty service. -e. Howard f reeman, Assistant i Generai Manager for Finance; b I 1 "" John Leal. Manager of 0 l' E ~ Personnel; Anmony Edwards. .[ i j Manager of Employee Relabons: Ralph Alonzo, Manager of Customer [. I Services. Dona'd Tnomas. ' ~ ~ " " - l Manager of financial Services. 1 0 r Cy Hutchinson, Manager at h {lfSyh m Data Pmcessing Serates; Barbara Sicver, Manager of l Pubiit Relations l In the cas and Electric L, l Operadens Center, comput- ~ [g [ ers allcw the CPS staff to d ccatrol the Geration of the gas and ciectric systems. Kenneth Fiedler, Ass:stant [ Genera! Manager for ~ l Operanons. Nick Flores. N , Ql@yg}& A ,g I Manager of OperaSons. y Wuham Gunst. Manager of w n tw _ Production. f Work continues on maintaining and expanding the natural gas and electric g j systems to meet the needs of a dynamic city. Ml i Joe Trevino, Assistant General Manager for Transmission and Distnbution Engineenng and Construction. tes Barrow, Manager of Construction, Paul Garza. Manager of fieid 'A Adrninistrabon, Leonard Hdi, Manager of Transmission and Distribution Engineenng g The sky!me of San Antonio changes as the city continues to grow. w, W Arthur von Rosenberg. General Manager and Stewart Schooler, Manager of Legal Services. 1 i ^ Faciht}es at Calaveras Lake have been planned to handle the addition ct a ) future coal-fired generating unit. Lou fleckenstein, Manager of Materials and Transpanation; Martin Clausewitz, Manager l cf Power Engineenng. Jamre Axtell, Assistant Genera! Manager for Planning and Development; Steve Braimer. Manager of Administrative Services; But Geissler, Manager of Generahon and Environmental Planning Donald Schnitz. Manager of Gas Engineenng and f uels. E" we l l l [ 14

i I i (WaGEMEhTS FNJCAL SUhm FOR FISCAL YEAR 193243 l l f i The 1992-93 fiscal year marked City Publie Service's 50th anniversary as a city-owned utility. During the year. CPS recorded posithe accomplishments that included expansion of its fuel diversification program, continuation of its competith e rates, emphasis on reducing debt costs and the upgrading of its bond rating by two prominent fmancial evaluation senices. CONCil0N I ~ ELECUDC SALES Hecal fears Enese Jassary 31 - i = i 11e utility contintui its fuel dhersification program with cmipletion of the LK. E Spmee Plant, a coMired 500 megawatt generating station. Completion of tir E 12A W i plant had a positive effect on capital electric production expenditures, which 12 ' 11 g g IIS l were 556 milhon less than the presious year. w l r i g 4 1 ( 5 t i 4 The CPS strategy for payment of its construction pmgram relied on revenue [ l fmm cunrnt and pnor years for almost 55 percent of the capital expenditures. ) Comnercial paper financed almost 34 percent of construction costs while rnare 4 5 2 than 520 millim came fmm htigation pmeceds and custoner contributions. y G t I l~ b 5 l g_.. l With no maja pmjects planned, CPS expects to fund its low er capital needs dar-1999 1999 1991 1992 1993 i ing tie next few years primarily fnun revenue and commercial paper.12mp-tenn b 1 3E GAS SALES Hscal fears Eames January 31 huds will continue to be usal psdically to convert outsunding comnercial .E._ E 27.7 i paper to hng-tenn debt in periods u hen interest rates are advantageous. E 25.4 j 25 24.4 24 2 p q g c d Fi*aNd?G RESULTS I E k 1 y c j During the year. CIS issued almost 5701 million in h nds to refund outstanding (' e t 1 15 j higher-inten st hads at lower mies. The utihts also comrried 5198 millim of I I tax emnpt conmercial piper to hyng-temi huds. 'lle refunding issue will sase g e $56 million in interest through the year 20% 5 o b L { k I 4 Y h The 1942 ref undmg had issue continues the pmgram which was begun in 1985. p bringing the total interest savings to nearly 5249 million. The savings are 1999 1999 1991 1992 1993 achieved fmm 1986 thmugh 2015. I CIS was awarded the highly favorable Aal rating by Mady's investor Senixs and AA+ rating by Fitch investor Sersice. q 11e upgral farn AA puts CIS in an ehte class with mly twmsher public utihties which have had mungs afove AA. l j The 530 million outstanding balance of commercial paper at year-end had a weighted average interest rate of j 2.61 percent Nc! revenue hads outstanding totaling 2.7 billion at year-end had a sery favorable 6.295 percent j weighted average interest rate. ) 15 1 l

SAIIS CAPITAL EXPDEEtuRES 4assansam fasias Jammerv at Electric sales set a recorcl reach.mg 12.3 billion kilowatt hours. The increase in -g 2%nn-{f% 2%]$172 sales over last year reflects a modest increase in de number of customers, which IM3 has twn the trend in recent years. w; m e g m n y,I S238 i#tM= %,L15%1 J 1982 'I Gas sales totaled 25.4 million MCF, a slight increase over last year. Gas sales have e - been atTected the last three years by mild weather. em--m,ml$272 v!.5%j8%j ' {a%1 C1 REVENilE ymw m:www~m Gmss revenue increased $32 million from the previous year, reaching $M7 mil- <E $295 1990 4 00% b 17..%. : - Ng'L + "I lion. Operating revenue was up $42 million because of higher fuel and distribution -~ gas mst recoveries and from increased sales. Nongerating revenue declined by . m y g w n w w* w m b $351 $10 million because oflower interest rates. N%) 1989 4E%j 7 MILL 10fts OF DOLLARS CPS camed about 84 percent ofits revenue fmm electric sales and approximately e m., 8 All0ther W ;a STP LA .K. Spruce 13 percent from gas sales. 0:hcr sources of revenue included interest on invest-t '?J L;gd Eil nrnts and miscellaneousincome. I 1he average revenue of 50.058 per KWH and $4.44 per MCF iepresents a slight unit wst increase over last year and is a result of higier fuel and resale gas costs. ' FUNDDIS OF CAPITAL PROJECTS %yng,, gg si ww.,mm less i ea,r i, a 3 m: $172 EXPENSES Operating and maintenance expenses for the fiscal year totaled $411 million, up wmmnNm $35 million from the previous year. Fuel, power and resale gas expenses of about 1992 . E ; ' ; 3B i. IR - $230 $202 million acmunted for more than 49 percent of the msts to operate and main-tain the electric and gas systems, an increase of more than $27 million from last yw+_ -m w ye-IM1 '(W; i at c 147f $272 year. k hf $295 Coal-fueled electric generation accounted for 41 percent of CPS generation for the 1990 year, while 37 percent was from nuclear fuel, these were the lowest-cost fuel -i -vy -wmmw - sources in 1992-93. CPS use of higher-cost natural gas and oil has declined gradu-i 1939 i $' r : 13 > - ! 33 ( 196 5351 i ally and represented only 22 percent of total CPS generation. Gas-fueled generating IlllLLleiss OF DOLLARS facilities represent 54 percent of CPS clectric generating capacity. 1 30perausas il Bonds f Lluganen Proceeds R Commercial ka ei and Other M Paper Non-fuJ operating and maintenance expenses excluding the South Texas Pmject nuclear plant were up $8 million primarily because of the requirement to ftmd post I i retirement heahh care costs. Non-fuel costs for the STP remained almost j unchanged from last year. i I 10

SUBSEQUENT EVENIS Both units of the South Texas Project were shut down in early February 1993 because of problems with the auxiliary feedwater pumps. Subsequent visits from Nuclear Regulatory Commission teams resuhed in a Confirmatory Action Letter listing 10 operating and regulatory issues which must be addressed before the plant can return to service. The Pmjert Manager, liouston Lighting and Power,is attempting to address the 10 issues and will notify the NRC when it is ready for an inspection and public briefing. - On June 25,1993, the NRC placed the STP units on its " watch list" of plants with " weaknesses that warrant increased NRC attention." This action added no new constraints but reaffirms that the plant will not be able to resume operation until all 10 issues have been addressed and verified to NRC satisfaction. The costs of compliance and schedule ELECTRIC GEllERATlotl A CAPACITY BT RIEL TYPE for operation are not known; however, the outage is not expected to 1993 M8MT8EC241TMIEtt%Ei 12.7 ?MUlse%7CE;JCs4%EQ3 4.4 operations. liigher fuel costs will be recovered through fuel adjust-ment charges to customers, and CPS has adequate capacity to serve 1992 Mat %3EE.1Q42%EMN%212.8 its cuuomers. [WJE21%ICOTZ Sl%h,M3 3.9 1:31 s3.2PilCG Q d 42%32[ T J 2 31% M 12.5

SUMMARY

JIWLE21%EED181% Eld 3.s As CPS begins its nex: half-century of senice, its assets stand at $4.7 billion and its financial health is strong. The utility's operation has been wAem 41% - -~,ie%,ng ;,12.3 1996 mn._ :a a;; n 110%E21%53ZZ S1%Et^f,3.9 judged by two bond rating agencies to be in the top category among l municipal utihties throughout the country. l 1989 8%T II47%$!Ei 245%EM11.4 10%7 23%G if 47%3

• S 3.5 The utility projects that its excellent financial health will continue as it t$q Nuclear {j Coal

, ; Gas /Oli provides outstanding service at rates that are among the lowest in the pq sm v i TOP BAR: Generatten in Billion KWH Fiscal Years Ending state and nation. LOWER BAR:Capacityla IRiliten KW January 31 GR0ss REVENUE AND APPUCATION OF REVENUE OPERATDiG & EAINTENANCE EXPENSES i { 49e=mewgyggg.wmpy-7

7. r y

p p, ggy / EN ! ;113 ? $7 l $s47 Yj3plqiT13p(13-5-]g$411 1993

r 485 n o 1993 wqm

g wwvee r

. p m y y w p p m p l $375 a M 4 i s a ti cist sel $tt5 1992 mfimy y4 71!! ' :: 15 : ' y 1992 my(W,j 4 n g y e y e c e l $819 973 t[ywmmecl$392 1%1 1 O atB ? :IIS OB 1991

q /M SI0 %1B ? *

+ y n,,% ' M-tes ~ : ,,,l$t37 ,Q g f M $ _pi.5; ,,,} $4e1 >NW? 1990 Its 77 1998 713 ; +fp-ygp?pwg*15 IIl$778 ~r' rymmewaymyr 1989 < 17. W e i, i n 1 1989 ya g f14) q113 $356 I MILLIONS OF DOLLARS Mltil0NS OF 0011ARS i h Fuel, Power & Resale h STP Other Operating [ 3 Other Operating I ]Gi Operating and maintenance P2 Debt Resuirements h4 Gas Expenses rhd & Malatenance UJ & Malatenanes Expenses and Other laterest I"' h3 CityPayment nevenue Arallable ter 6e ConstracDon Fiscat fears Ending January 31 1 17 4 1

BALANCE SHEETS JANUARY 31,1993 AND 1992 Notes 1993 1992 Assets anawasansa UTILITY PLANT, at cost: 1.3.9 Electric. $ 4,197,904 $ 3,555,434 Gas 252,947 241,777 General..... 109.806 99,983 Total plant in service. 4,560,657 3.897,194 less-Accumulated depreciation. 917,783 806.770 Plant in sers ice. net. 3,642,874 3,090,424 Construction work in progress. 110,693 f 16,719 Nuclear fuel. less accumulated amortization of $74,131 in 1993 and $51,208 in 1992.. 88,497 94,128 Ileid for future use. 34,129 33,800 L'tility plant, oet. 3,876.193 3,835.071 RESTRICTED CASH AND INVESTMENTS: 1,2,3 Bond reserse - Old series bonds.. 4 17,398 17,637 New series bonds. 4 212,265 206.697 Improsements and contingencies fund. Ii1,770 109,645 Cash restricted for paymen. of construction retainage payable.. 20.673 Other. 26,375 15.630 Total restricted cash and imestmena. 367,808 370.282 CURRENT ASSETS: Cash, including temporary cash investments.. 1,2 48,806 49,854 Cash restricted for payment of construction retainage payable. 21,628 Customer accounts receisable,less allowance for doubtful accounts of $2,593 in 1993 and 52,215 in 1992. 62,908 52,957 Litigation settlements benefits receivable 9.10 9,601 24,231 Other receivables. 2,767 3.459 Imentories and supplies, at as erage cost - Materials and supplies. 54,004 49,288 Fuel stock. 29,495 27,210 Prepayments.. 5,965 7.574 Total current assets... 235,174 214.573 LITIGATION SETTLEMENTS BENEFITS RECEIVABLE 9.10 9.601 DEFERRED DEBITS AND OTilER. I 206,508 167.264 TOTAL $ 4,685,683 5 4.596,791 The ac wmpanysrig rwics are an integralpart of thesefinaru sal statements. r l l is )

t Equity and Liabilities Notes 1993 1992-tin thousands) LONG-TERM DEBT: Revenue Bonds - 3,4 Old series - 38,250 5 50.970 New series - 2,978,500 2,777,875 i Less - Unamortized discount on new series bonds. (93,256) (67,953 ) Unamortized discount on capital appreciation bonds (301,591) (315,140) Revenue bonds, net. 2,621,903 2,445,752 I Commercial paper.. 5 30,000 160,000 Long-term debt, net. 2,651,903 2,605,752 EQUITY: Appropriated retained eamings-3 Bond current requirements - Old series bonds. 216 Bond reserve - Old series bonds. 17,398 17,637 New series bonds 159,807 154,239 Improvements and contingencies fund Ii1,770 109,645 Total appropriated retained earnings - 289,191 281,521 Reinvested earnings - 1,489,651 1,467.171 Total equity. 1,778,842 1,748,692 CURRENT LIABILITIES: Current maturities of revenue bonds. 4 86,455 77.825 Accounts payable and accrued liabilities 68.929 59.462 Litigation settlement benefits payable to customers 10 9,338 9.853 Construction retainage payable. 21,628 Customer service deposits 23.509 23,145 Total current liabilities.. 209.859 170,285 DEFERRED CREDITS AND OTHER: Customer advances for construction. 7,203 5,801 Other-29,076 48,198 Total deferred credits and other... 36,279 53.999 l LITIGATION SETTLEMENT BENEFITS PAYABLE-- 10 8,800 18.063 COMMITMENTS AND CONTINGENCIES. 3,6,9,10 -i TOTAL.. $ 4,685,683 $ 4.596,791 The acevmpanying notes are an integralpart of thesefinancialstatements I 18

I STATE 1HElfTS OF EAR 10110SS Allo APPLICATION OF EAlufDISS ) Years Ended January 31, Notes - 1993 1992 fin thousands 1 L i j REVENUE: I 5 672,434 Electric. $ 708,257. Gas - 112,611 106,927 ' Interest and other income 26,508 36,023: Gross revenue 847,376 813.384 i i EXPENSES: 1 Fuel. purchased power and resale gas.- 201,699 ~ 174,759 Other operating and general. 143,753 136,975 Maintenance -. 65,170 63,860 - 1 Depreciation-- 120,879 _ 114,332: Interest and debt expense.. . 201,265 201,198' Allowance for interest used during construction - (29,055) (31,418)' Payments to the City of San Antonio.. 8 113,515-109,017 : 1 Total expenses.. 817,226-. 768,723 NET EARNINGS. 30,150 46,661 -- t ADD: Depreciation.. 120,879 114.332' Amortization o',pital appreciation bond discount 13,549' 10,766 Amonization of t and discount and refunding debt costs - '19,010 15,506 Interest requirements on new series bonds (payable from improvements and contingencies fund): 159,169-160,959 AVAILABLE FOR APPLICATION, - $ 342,757 5 348.224-~

i APPLICATION:

11 To pay long-term debt requirements - Old series bonds - Principal payments - $ - 12,306 5 11,500.i Bond reserve -- (239 ) 83 i ' {l ) -l To reinvested earnings, net loss on sale of assets. To improvements and contingencies fund - Minimum requirement (121/2 percent of gross revenue) 3- .105,922 101.923 Balance of available net earnings - 224,768 234,719 i APPLICATION. $ 342,757 5 348.224. l Ihr acnmtpanying notes arc an integralpart of thestfanancial starcments. f c: P i f N i r

STATEMENTSO CHANGES IN EQUITY Years Ended January 31, 1993 1992 (In ihmournds) BOND CURRENT REQUIREMENTS, old series bonds: Balance, beginning of year.. 5 Additions - For old series bond principal payments. 216 Balance, end of year... 216 5 BOND RESERVE, old series bonds: Balance, beginning of year.. 17,637 $ -17,554 Additions - Net accumulation of income not transferred.. 83 Deductions - Transfer of income. (239 ) Balance, end of year. 17,398 5 17,637 BOND RESERVE, new series bonds: Balance, beginning of year.. $ 154.239 5 140,352 Additions -Transfer from impros ements and contingencies fund for debt service. 5.568 13,88't Balance, end of year.. 159,807 5 154,239 IMPROVEMENTS AND CONTINGENCIES FUND: Balance, beginning of year.. 109.645 $ 105,703 Additions - From application of earnings - Minirnum requirement (121/2 percent of pross res enue). 105,922 101,923 Balance of available net earnings. 224,768 234,719 Total. 440,335 442,345 Deductions - New series bonds - Additions to resen e - 5,568 13,887 Payment of Nmd interest. 159,169 160,959 Payment of bond principal. 69,965 62,520 Construction expenditures.. 93,863 95,334 Total. 328,565 332,700 Balance, end of year... .. $ 111,770 $ 109,645 t REINVESTED EARNINGS: 1 Balance, beginning of year.. . $ I,467,171 5 1,438.422 Additions - From improsements and contingencies fund - For construction. 93.863 95,334 For new series bonds principal payments - 69,965 62,520 From application of eamings - For old series bonds principal payments.. 12,090 11,500 Net loss on sale of assets.. (1 ) Total. 175,918 169,353 Deductions - Depreciation - 120,879 114,332 Amortization of capital appreciation hmd discount. 13.549 10,766 Amortization of bond discount and refunding debt costs 19,010 15,506 Total - 153,438 140.604 Balance, end of year... . $ 1,489,651 $ 1,467.171 The at ampanysng noscs orc an snregralpart of thesefirutnaal staremcnts. 21

STATEMENTS OF CASH FLOWS i 1 Years Ended January 31, 1993 1992 (In thousandsi ) CASilllOWS FROM OPERATING ACTIVITIES: Net earnings. 30,150 $ 46,661 { Noncash items included in net earnings - - I Allowance for interest used during coi struction. (29,055 ) (31,418 ) Depreciation expense. 120,879 114,332 Amortization expense - Debt expense. 14,043 11,789 Discount on new series bonds. 4,967 3,717 Amortization of capital appreciation bond discount - 13,549 10,766 l.nss on sale of utility plant. 1 l Changes in current assets and current liabilities. 16,808 (34,008 ) l Proceeds from freight litigation settlement - 9,231 17,565 Refund of freight litigation settlement benefits payable to customers.. (9,778 ) (20,110 ) Decrease in other assets - 5,631 15,262 Decrease in otherliabistics... (21,317) 3,532 Net cash provided by operating activities. 155,108 138,089 NET CASil FLOWS FROM INVESTING ACTIVITIES: Additions t -tility plant. (142,783 ) (198.387 ) Net cash used by investing activities. (142,783 ) (198,387 ) CASil FLOWS FROM FINANCING ACTIVITIES: Contributions in aid and customer advances for construction - 5,60S 2,720 Sale of refunding bonds - 664,600 335,055. Sale of commercial paper.. 68,000 85,000 I Defcasance of bonds refunded (422.215 ) (123,645 ) i Commercial paper refunded (198,000 ) (200,000 ) i Debt costs. (723 ) (3.802 ) Excess of reacquisition amounts over principal of bonds refunded in advance. (44,434 ) (9,737 ) Principal payments on revenue bonds (82,055 ) (74,020 ) Proceeds from STP litigation settlement. 15.000 30,000 Net cash provided by financing activities - 5,781 41,571 NET INCREASE (DECREASE)IN CASil AND CASil EQUIVALENTS _ 18,106 $ (18,727 ) CASil AND CURRENT RESTRICTED CASil, including temporary cash investments: Beginning of year.... 49,854 5 73,910 End of ) ear. 70,434 49.854 Net increase (decrease).. 20,580 (24,056 ) RESTRICTED CASH AND INVESTMENTS: Beginning of year _ 370,282 364,953 End of year. 367,808 370,282 Net increase (decrease). (2,474 ) 5.329 NET INCREASE (DECREASE) IN CASli AND CASil EQUIVALENTS.... 18,106 $ (18,727 ) The as amipanymg notes ave an integ~alpart of thesefinancialstatements 1 ) N

NOTES TO FINANCIAL STATEMENTS JANUARY 31,1993 AND 1992 1. Summary of Significant Accounting Policies plant assets consist of land, buildings and equipment for gmral and administratis e purposes that are used commonly in ORGANIZATION - City Public Sen ice (CPS). a municipal " ' " " E '"P#'""""' utihty owned by the City of San Antonio (the City), provides electricity and natural gas to the San Antonio metropolitan CPS computes depreciation using the straight-line method over the estimated service lises of the various classes of area. As a municipal utility. CPS is exempt from payment of income taxes. state iranchise and sales taxes and real and depreciable property as determined by periodic engineering personal property taxes. CPS prmides cenain payments and studies. Depreciation as a percentage of average depreciable benefits to the City as described more fully in Note 8. plant was 2.99 percent in both 1993 and 1992. OTilER RESTRICTED CASil - These funds, which are B ASIS OF ACCOUNTING -The accounting records of CPS generally restricted as to use for other than current operations. are maintained in accordance w ith generally accepted account-ing principles for rate-regulated enterprisk. as prescribed by or are designated for expenditures in the acquisition or con-t Mructmn of noncurrent assets, consist primarily of the current the Financial Accounting Standards Board (FASB)and.where applicable, the Governmental Accounting Standards Board ponion of the New Series Bonds sinking fund, customer IG AS14. The accounting records of CPS follow the Uniform assistance program funds, insurance reserves, retainage on + System of Accounts for Gas and Electric Utilities issued by the long4enn construction contracts and short-term investments Nanonal Association of Regulatory Utility Commissioners. fmm tax-exempt commercial paper proceeds. Certain prior penod amounts have been reclassified for com-INVESTMENTS - Imestments are stated at cost which paratise purposes. approximates market value.The specific identification method is used to determine cost in computing gain or loss on sales of FISCAL YEAR - The hscal year ended January 31,1993,is securities. Amorti7ation of premium and accretion of discount referred to herein as 1993 and the 3 ear ended January 31,1992, are recorded mer the tams of the investments. 3 ;993, DEFERRED DEBITS AND OTilER - These amounts RE\\,LN1.ES AND EXPliNSE5-Resenue is recognized as comist primarily of. he unamortized balances of bond issuance t hilled on a c)cle bau.s. Rate schedules include iucl and gas cost adjustment clauses that pennit recovery of fuel and gas costs in "" W "I " " "*"""^ *"* #"""""

• Y#"'#'""

E"" ""##~ the mont h incurred. Prior io fiscal y ear 1992, fuel and resale gas recorded m er the period of the outstanding bonds. costs were tully expensed when incurrel in fiscal year 199_,, CPS began recognizing fuel and resale pas costs on the same STATEM ENT OF C ASil FLOWS - For purposes of report-basis as it recognizes resenue. Management belieses this ing cash flows. CPS considets all highly liquid debt instru-l accounting change results in an imprm ed presentation of the ments purchased with a maturity of approximately three months finantial statements as it relates to the results of CPS' opera-or less to be shon-term investments. Accordingly, CPS' tions. At February 1,1991.thecumulatiseeffectofthischange temporary cash investments and restricted cash and imest-in accounting priw:iple increased deferred fuel and pavNs by ments are cash equivalents. No material noncash investing or 5765,fkK). which expense has been recognized in fiscal 1992. financing transactions occurred during 1993 and 1992. j CPS amortires its share of nuclear fuel for the South Texas In order to detennine net cash provided by operating activities, j Project (STP> to fuel espense on a unit-of production method. net camings have been adjusted by, among other things, i Under the Nuclear Waste Policy Act of 1982, the Federal changes in current assets and current liabdities, excluding Gosernment assumed responsibility for the permanent dis _ changes in cash and temporary cash investments, current posal of spent nuclear fuel. CPS is [harged a fee for disposal mat urities oflong-term debt and litigation settlements benefits of spent nuclear fuel, w hich is included in fuel experne, in the receivable and pay able. Those changes shown as an (increase) decrease in current assets and as an increase (decrease) in ] amount of $1MW)94 per Lilowatt hour iKWlb for its share of cunent habitines are as tonows electricity produced by STP. For further discussion regarding the STP. see Note 9, wn me UTILITY PLANT - Utihty plant is stated at the cou of d" '^"*"d" 5 "" ' S2# construction. including costs of contracted services. direct ['""(("]"7";,, material and labor, indirPCt costs, including peneral engineer. wnlonenh benefin m en aNr. f,92 257 Prepayinens ".f.H9 PP " - ~ ") 0*" '"*""""""N b ing, labor and material m erhead, and an allow ance for interest 1 0 73: used during construction ( AIUDC). CPS computes AIUDC u oy,m p,n asc e,mmnasum. or,7 c 3s43 using rates representing the cost of borrow ed funds on projects Coaum"*" 'cu' ave PoaNe - Na estimated to cost in excess of 51 million for projects estimated " " " " " " ~ "

• ~

prior to February 1,1992, and S250,0(K) for projects estimated after February 1.1992. Retirements of utility plant, together The following provides infomiation related to cash interest with removal cost less sahape, are charged to accumulated paid by CPS for the years indicated: depreciation. The maintenance of property, and replacements mn we and renewals of items detennined to be less than a unit of ila rho-nso propeny, are charged to maintenance expense. General unlity h erenciorAnT a 5 u t sca s uw \\ i

,a 2. Cash, Temporcry Cash Investmtnis and payments of the New Sries Bonds, (c) for the payment of any 1 investments: obligations inferior in lien to the New Series Bonds w hich may CPS cash deposits at January 31,1993 and 1992, were entirely be issued, (d) for an amount equal to 6 percent of the gross collateralized by banks for the account of CPS. Deposits are rewnues of the systems to be deposited in a repair and replace-ment fund,(e)I.or cash payments and benefits to the City not to j collateralized by securitic s held by a third party in CPS' name. exceed 14 percent of the gross revenues of the systems and (f) CPS' investments, including both restricted and unrestricted, any remaining revenues to the repair and replacement fund. at January 31,1993 and 1992, were all in U.S. Treasury The New Series Bonds ordinances require that a bond reserve l securities and w ere held for the account of CPS at its general fund at least equal to the average annual principal and interest i depository bank. CPS' investments are generally limited to requirements of all outstanding New Series Bonds be estab-U.S. Gm ernment or U.S. Gos ernment guaranteed obligations. lished. i investments were 5431.5 million w ith a market value of $444.7 i ^* ""M '

• M"

'"N"*#" million at January 31.1993. Series Bonds and New Series Bonds have been met. 3. Revenue Bond indenture Requirements: The trust indenture executed by the City in conjunction with the issuance of the revenue bonds dated February 1.1951, A summary of revenue bonds is as follows: f through August 1,1974 (Old Series Bonds), contains, among w,goa we,, others. the following provisions: imanam on Outstamhng January 31 (1) All of the assets of the pas and electric systems, n=da '*2 together w ith the net res enues of the systems. as defined, are ~ "~# pledged with the Harris Trust and Savings Bank of Chicago. og 9n, lilinois, as Corporate Trustee. to secure the payment of the Old ir3am tw4 -t w7 r, 8t.2s s swo s e.o<c N'* *"" S"*""d' Series Bonds. 1475 IW2 lW42017 6.2931 2.549.670 2.341.N5 (2) Gross revenues of the gas and electric systems shall T7dj"j g3

g. y3,

be applied to: ia) expenses of operating and maintaining the Nc= sene.caima veredaunn naas. sy stems. (b) debt service and reserve requirements on the Old ]*,Qj '"Md 5"N Series Bonds, (c) payment of an "in lieu of tax" amount to the n.aa mum <3ni.su i .3 nuo, City. (d) an amount equal to 12-1/2 percent of gross revenues e203s 2ans.33x 2,523.5n l*C""* "'d*""" 8" " "25 to the improvements and contingencies fund, (e) additional Revenue imnds no beneGts and payments to the City to bring City benefits and omnem o.nnn sm 3n 5u43 732 payments to 14 percent of gross revenues,(O additional pay-Principal due (in thousands) for the next five years are: ments to the improvements and contingencies fund until such fund equals 20 percent of the value of fixed capital assets and Pan +1 Dae (g) the balance to a surplus fund. ou senn sew senn ha Ikma Ihma Taal ( h The following funds are established: (a) general fund, g (b) improvements and contingencies fund. (c) bond construc-tw3 i23e moo v2.o30 tion fund (containing the proceeds of resenue bonds), (d) I"*> 82350 E5 H'

• W IW7 13.300 Slfitu 104.510 principal and interest current requirements (containing the nifo i n y, monthly payments of annual debt requirements) and (e) bond reserse fund (containing an amoum equal to the next fiscal During 1993 and in prior years, CPS refunded cenain previ-year's principal and interest requirements). These funds may ously issued and outstanding New Series Bonds through the be im ested w ith authorized depository banks or in U.S. Gov-issuance of New Series Revenue Refunding Bonds. The re-crnment secunties.

funded Nmd issues and trust accounts are not included in CPS Beginning with the fiscal year ended January 31,1976, new financial statements. At January 31, 1993, ponions of the series electric and gas systems revenue improvement bonds Nmds u hich have been defeased in-substance were still out-(New Series Bonds) were issued. These bonds are junior and standing as follow s: subordinate to the Old Series Bonds. The bond ordinances authorizing these issues provide that no funher bonds or Fiscal year 1987 refunding $253,350,(KK) obligations will be authorized or issued under the terms of the Fiscal year 1988 refunding 168,725,000 trust indenture for Old Series Bonds. While any of the Old Fiscal year 1990 refunding 324,925,0(K) Fiscal ear 1992 refunding 33,765,(KK) Series Bonds are outstanding, the New Series Bonds are 3 payable solely from the net revenues of the system 4 !) depos-Fiscal year 1993 refunding 391,265.000 ited and available for deposit in the improvements and contin-gencies fund and (2) from funds payable to the City. At such Based on the borrowing rates currently available to CPS for time as the trust indenture emering the Old Series Bonds revenue bonds with similar terms and average maturities, the becomes inoperatis e, revenues will be applied as follows: (a) fair value of CPS' resenue Imnds is essentially equal to its for maintenance and operating expenses of the systems,(b) for carrying salue.

h CPS may issue New Series Revenue Refunding Bonds during im =2 iwi fiscal 1994. If it elects to do so, it would be to achies e interest N ="* savings on certain outstanding New Series Bonds, ' [h,",' [""$""""' M ' $ ' $ c -i Totaicomnsa s 2n.w : 5 iom 5 - iva

5. Cornmercial Paper.

co,,,%,ou - 5 no.o7 5 ui,m7 s wo in October 1988, the City Council of San Antonio, Texas (City 7" P"""" 5 """7 5 "'3"'5 L *P "FC' '"""*'"* '" '"'al l Council), adopted an ordinance authorizing the issuance of up ~ * * * ' -" to $300 million in Tax-Exempt Commercial Paper (TECP) to CPS ctminbutum to hetal - assist in the financing of eligible projects, including fuel ro,nd re - nw os os l n acquisition and capital improvements to the utility systems (the Systems). The pmgram's scheduled maximum maturities w ill l not extend beyond Nos ember 1,2028. As of January 31,1993. Of the amounts contributed during years 1993,1992 and 1991, $30 million in principal amount was outstanding, with a approximately $12.8 million. 511.7 million and $10.4 million, weighted-aterage interest rate of apprmimately 2.61 percent respectively, was funded each year to cover normal costs of the and an average life outstanding of appmximately 79 days. In Plan. The remaining contribution in each ear was funded to 3 September 1992 CPS con ened the outstanding 5198 million cover the amortization of the unfunded actuarial accrued in TECP to long-term bonds. CPS issued $15 mi!Iion in liability. October 1992 and 515 million in December 1992, bringing the The Government Accounting Standards Board (G ASB) State-l total outstanding commercial paper to 530 million. All pro-ment No. 5 requires that a pension benefit obligation be I ceeds have been, or will be, used to pay for capital projects. rneasured using the actuarial present value of credited pro-l Jected benefits, as adjusted for projected salary increases.This The TECP has been classified as long-term in connection with measure is independent of the funding method used to deter-the refinancing tenns under a revolving credit agreement with mine contributions to the Plan; however, the significant a consortium of banks w hich supports the commercial paper. actuarial assumptions used to compute the contribution re-Under the tenns of the agreement, CPS may borrow up to an quirement are the same as those used to compute the pension i aggregate amount not to exceed S300 million for the purpose benefit obligation. On January I,1991, the Plan was amended l of paying amounts due under the TECP. The credit agreement to determine plan benefits and contributions on total compen-has a term of two years, currently extended until November 1, sation rather than base pay as in prior years and to change the i 1994, and may be renew ed for additional periods. There has e reduction in early retirement benefits prior to age 55 from 2-1/4 l been no borrowings under the credit agreement as of January percent per year to 4 percent. The actuarial valuation and the j 31,1993. The TECP is secured by the net revenues of the actuarially determined contribution requirement as of Decem-Systems. Such pledge of nel resenues is subordinate and ber 31,1992, were computed using an assumed rate of return j inferior to the pledge securing payment of the Old Series of 8.5 percent and projected salary increases averaging 6.5 Bonds, the New Series Bonds and any New Series Bonds to be percent. As a result, under G ASB No. 5, the following repre-issued in the future, sents CPS' pension benefit obligation (in thousands) as of December 31.1992,1991 and 1990: i 6. Benefil Plans: iw2 tuoi iwo CPShasaself-administered defined-benefitcontributorypen-I""ciacet wnerwneuna j sion plan (Plan) emering substantially all employees who d"Z ["$"f_ ~ 22*2" '""2'2 * *"# 7 has e completed one year of sen ice. The Plan assets are held m f.mrtoya amt emr%ec. '""'d""*"d"*~ " 7 427 "7373 3*"" a separate trust which is periodically audited and which tms'"oy#n'nanew mee,w statemenN include historical trend information. Generally. wm. ras go wm wn participating employees contribute 5 percent of their total t mycn..n wnwa o%gi.on _ y,uo tu An ww compensation and are normally fully vested in CPS' contribu-N" "* * *i"* '"' N"" *"d

• tion after completing 15 years of credited service. Normal 122.m I 2M444 2I4h7#

tal fan smirkrt salue). " " " * " " " " * " " " * " " " ~ retirement is age 65; howeser, early retirement is available w ith 25 years of benefit sen ice. Retirement benents are based on length of service and compensation, and benefits are re-Prior to GASB No. 5, CPS reported the Plan status as the duced for retirement before age 55. actuarial present value of accumulated plan benefits. Under such method, the actuarial present values of accumulated plan The total employer and employee pension funding, which benents using an assumed rate of return of 8.5 percem was 5247,973,000 at December 31,1991. At that time, net assets includes amortization of past-service costs over 30 s ears using the unit credt cost actuarial methal. is summarized as follow s: asailable for plan benefits were 5288.494.000 at fair market value. As of December 31,1992.the actuarial present value of accumulated plan benefits was 5269.203.000. This value compares to the net asset value of $322.031,000 as reponed above. Employees that retired prior to 19M3 are receiving annuity l payments from an insurance carrier as u ell as receiving some benefia directly from CPS. These incremental costs for 1993 i i

and 1992 were 5625,0(0 and 5637,00(L respectively, and were Matagorda County. Suit was also filed by iIL&P against these recorded when paid. parties in the Dallas County District Coun in w hich litigation by Austin against llL&P was pending, seeking to have CPS 7. Other Postemployment Benefits: and CP!JCSW brought into the Austin litigation as third-party' CPS provides certain health care and life insurance benefits for defendants. The causes of action asserted by HL&P against retired employees. All former CPS employees are eligible for CPS and CPL /CSWare basically the same in both suits. IIL& P these benefits upon retirement from CPS. The annual cost of denied Austin's claims based on bmach of contract, including retiree health care and life insurance benefits funded by CPS is mismanagement, in connection with liL&P's performance as recognized as an expense of CPS as employer contributions are project manager, but assened that it is entitled to indemnity and made to the programs. These costs approximated $1,590.000 contribution from CPS and CPL /CSW to the extent any liabil-and $1,404,000 for 1993 and 1992, respectively. ity is imposed on IIL&P for these or Austin's other claims, w n e u ent n ment anomad oWgahn in addition, retired employee and covered dependents contrib-by llL&P as project manager. uted 5573,(XK) and 5451,(XX) for their health care and life insurance benefits in 1993 and 1992, respectively, in 1993, in March 1988, CPS and CPL made a call for binding arbitra-there were approximately 1,456 retirees and covered depen-tion and designated arbitrators, under the terms of the STP dents eligible for health care and life insurance benefits. as Participation Agreement.conceming theirdisputes with HL&P compared to approximately 1,415 in 1992. over the STP including any breach ofits obligations by llL&P, in siew of the potential economic significance of these ben _ and have requestehhat any proceedings on liL&P's pleadings efits, CPS has initiated a preliminary review of the present against CPS and CPL be stayed pending the arbitration. The value of the postemployment benefit obligations, w hich man-arbitration call, w hich is binding on the panicipants and should agement currently estimates to be 590 million. CPS began supersede HL& P's district coun actions against CPL and CPS, partial accrual and funding of projected future benefits to sserts issues conceming (1) the extent to which IIL&P has current retirees in 1992. Funding totaled 52,000.000 in 1992 breached its obligations under the Participation Agreement md 55.(KK),0(K)in 1993. and the amount of damages caused by such breach and (2) that neither CPS nor CPL is liable to IIL&P for any portion of the 8. Payments to the City: damages alleged against H12P by Austin. CPS h;s filed a pleading denying IIL&P's allegations, seeking an order The trust indenture provides for benefits and services totaling compelling arbitration and subject thereto, urging a counter-14 percent of CPS gross revenues, as defined, to be paid or claim for damages. Trial of Austin's claims in Dallas resulted provided to the City. Payments to the City for 1993 and 1992, in a jury verdict on July 5,1989, finding that, although IIL& P based on allowable resenue, wcre as follows: failed to supply the participants with information as and when required by the Panicipation Agreement, no costs were in-g thr thmundu reasonable probability, would not have been otherwise in-IewmMw _ curred. The Dallas Appeals Coun has affirmed judgement in wu,mi mem. m no w favor of IIL&P, and Austin is seeking review by the Texas $ I1 Mis i HNM7 Supreme Court. On August 20,1990, the Dallas District Court ruled that the N"'#"" arbitrable and should be subm."' d to arbitration befo 9. South Texas Project (STP): itte chosen as pmvided by the STP Participation Agreement. Since CPS is one of four panicipants in the STP, w hich consists of that time, H L& P has unsuccessfully challenged certain aspects two-1,250 megawatt nuclear generating units in Matagorda of the arbitration procedures in various appeals courts and has County, Texas.The other participants in the project are Hous-filed a petition for writ ofceniorari pending in the United States ton Lighting & Pow er Company (lIL&P), the project manager, Supreme Court. CPL has settled its claims apainst HL&P and Central Power and Light Company (CPL) and the City of arbitration of CPS

• claims has not yet begun. In the opinion of Austin (Austm). Under the terms of the STP Participation management of CPS, the outcome of such proceedings will not Agreement.cach participant provides funding for its share of have a material adverse effect on the financial position or construction and operating expenditures. Full power operating results of operations of CPS.

hcenses were issued by the Nuclear Regulatory Commission (NRC) on March 22,1988, for Unit I and March 28,1989, for In December 1985, a suit involving the STP was settled on the Unit 2. In-service dates for STP were August 1988 for Unit I agreement of B rown & Root, the former architect / engineer and and June 1989 for Unit 2. CPS' 28 percent ownership in the constructor for the STP,to pay the plaintiffs, CPS and the other STP is for 700 megawatts of plant capacity. At January 31, participants,5750 million. CPS commenced receipt ofits 5210 1993, CPS' investment in the STP utility plant was approxi-million share of the settlement in January 1986, of which 515 matety 52 billion. net of accumulated depreciation. million was outstanding at January 31,1992. Quanerly install-ments, without interest, in the amount of 57.5 million are LITIG ATION - On January 7,1988, HL&P filed pleadings remitted to CPS pursuant to an unqualified contractual obliga-against CPS, CPL and its parent company, Centrol and South tion of Aetna Life Insurance Company. The two remaining West Corporation 1CSW), in the State District Court in payments were received in 1993.

NIJCLEAR INSURANCE - The Price-Anderson Act, a NUCLEAR DECOMMISSIONING - In July 1990, CPS comprehensive statutory arrangement providing limitations together with the other owners of the STP filed with the NRC on nuclear liability and governmental indemnities, is in a cenificate of financial assurance for the decommissioning effect until August 1,2002. The limit of liability under the of the nuclear plant.The certificate assures that CPS will meet Price-Anderson Act for licensees of nuclear power plants is the minimum decommissioning funding requirements man- $7.8 billion per incident. The maximum amount that each dated by the NRC. CPS' portion of the estimated costs for licensee may be assessed following a nuclear incident at any decommissioning the STP nuclear power plant is approxi-insured facility is 566.15 million which may be adjusted for mately $150 million in 1989 dollars, which exceeds NRC inflation, for each licensed reactor, but not more tharr $10 minimum requirements. This cost estimate will be reviewed million per reactor for each nuclear incident in any one year. and updated periodically and could change by a material CPS and each of the other participants of STP are subject to amount. CPS will record ratably the expense of decommis-such assessments, which CPS and the other participants have sioning over the life of the STP nuclear power plant. Begin-agreed will be borne on the basis of their respective owner-ning in 1991, CPS started accumulating the decommission-ship interests in STP. CPS' ownership interest in STP is 28 ing funds in an external trust,in accordance with the NRC's percent. For purposes of these assessments, STP has two regulations. The trust accounts and related decommissioning licensed reactors. The participants have purchased the maxi-liability are not included in CPS' financial statements, mum limits of nuclear liability insurance, as required by law, and have executed indemnification agreements with the At January 31,1993. CPS has accumulated approximately NRC, in accordance with the financial protection require-518.5 million of decommissioning funds in the extemal trust. ments of the Price-Anderson Act. Decommissioning expenses were approximately $5.1 mil-A Master Worker Nuclear Liability policy, w ith a maximum lion for each of the fiscal years 1993 and 1992, limit of 5400 million for the nuclear industry as a whole, 10 Commitments and Contingencies: provides protection from nuclear related claims of workers In December 1986, CPS approved a settlement offer from employed in the nuclear industry after January 1,1988, w ho no railroads involved in disputed issues about the proper do not use the workers' compensation system as sole remedy and lawful freight rates. As a result, CPS received payments and bring suit apainst another party. STP eould be assessed up of 59.2 million and $17.6 million in fiscal year 1993 and to about $3.1 million per reactor or a total of 56.2 million to 1992, respectively. CPS will receive an additional final pay its maximum share for this liability coverage. payment totaling 59.6 million, during fiscal 1994 from the NRC regulations require licensees of nuclear power plants to railroad settlement, which is expected to be returned to obtain on-site property damage insurance in a minimum customers as payments are received. The final amount due in amount of 51.06 billion. NRC regulations also require that 1994 has been recorded as litigation settlements benefits the proceeds from this insurance be used first to ensure that receivable. the licensed reactor is in a safe and stable condition so as to OT)1ER - In the normal course of business, CPS is involved pres ent any significant nsk to the public health or safety, and in various other legal proceedings related to alleged personal i then to complete any decontamination operations thst may be g ,g ggg g g ordered by the NRC. Any funds remaining would then be available for covering direct losses to propeny. appeals and discrimination cases. In addition CPS power generation activities and other utility operations are subject The participants of STP currently maintain on-site propeny to extensive state and federal environmental regulation. In the damage insurance in the amount of $2.590 billion, dich was opinion of management of CPS, the outcome of such pro-l the maximum amount of such insurance availabh at Decem-ceedings will not have a material adverse effect on the her 31,1992. The 52.590 billion of nuclear propeny insur-financial position or results of operations of CPS. ance is composed of a $1.265 billion pnmary layer ofinsur-ance and a layer of excess insurance that would contribute Purchase and construction commitments amounted to ap- $1.325 billion of additional coverage that is subject to a proximately $832 million at January 31,1993. This amount includes approximately $532 million that is expected to be retrospective assessment from each electric utility w hich is a paid for natural gas purchases to be made under the contracts member of Nuclear Electnc Insurance Limited (NEIL). An additional 535 million of primary layer insurance coverage currently in effect; the actual amount to be paid will be dependent upon CPS' actual requirements during the contract became available on January 1.1993.The panicipants of STP increased the primary insurance coverage to the 51.3 billion period. Also included is 550 million for coal purchases,5204 maximum available on the policy renewal date of March 1, million for coal transportation and $22 million for treated cooling water based upcm the minimum firm commitment 1993. In the event that propeny losses as a result of an under these contracts. Also included is $5 million for the accident at the nuclear plant to any utihty msured by NEIL balance still owing on a turnkey contract for construction of exceed the accumulated funds available to NEIL, the maxi-mum retrospective assessment for STP would be approxi~ a new 500 megawatt coal-fired electric generating plant which was placed in operation November 1992. mately 57.6 million for the current pobey year that began November 15,1992. CPS would be liable for its ownership interest as to premium and any retrospective assessment with j respect to STP and for the cost of cleanup, repair or replace-ment in excess of the policy limits. p j

11. Segmsnt Inform tion:

3 93 1992 Electric Gas Total Electric Gas Total (In thousands) (In thousands) REVENUE.- 5 708.257 5 112.611 5 820,868 5 672.434 5 106,927 5 779,361' EXPENSES - Operating and snaintenance expenses.. 332,608 78,014 410,622 300,504 75JM) 375,594 Depreciation 112,689 8,190 120.879 106,596 7,736 114.332 Total.. 445,297 86,204 531,501 407.100 - 82.826 489,926 OPERATING INCOME. 5 262.960 5 26.407 289.367 5 265.334 5 24.101 289,435 Interest and other income.. 26,508 36,023 Net interest and debt expense and payments to the City of San Antonio. (285.725 ) (278.797)- NET EARNINGS. 5 30,150 5 46,661 CAPITAL EXPEND 17 URES. 5 152.537 5 14.415 5 171.952 5 216.243 5 13.588 $ 229.831 Identifiable assets.. 5 3.811,277 5 223.692 5 4,034,969 5 3.790.51a 5 211.279 5 4,001,817 ' General assets. 650,714 594.974 Total awets. 5 4,685,683 5 4.596,791 28

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ARTHUR ANDERSEN & CO. FLORES, GARCIA & ASSOCIATES San Antonio, Texas To the Board of Trustees of City Public Service: We have audited the accompanying balance sheets of City Public Service as of January 31, 1993 and 1992, and the related statements of eamings and application of earnings, changes in equity and cash flows for the years then ended. These financial statements are the responsibility of the management of City Public Service. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of City Public Service as of January 31,1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Mc / / San Antonio, Texas. March 12,1993 29

FIVE-YEAR FINANCIAL REVIEW (Unaudited) Years Ended January 31, 1993 1992 1991 1990 1989 (in thousand0 REVENUE AND APPLICATION Revenues: Electric sales. S 708,257 5 672.434 $ 677,062 5 683.106 5 636,086 Gas sales.. 112,611 106.927 104,360 118,607 106.114 Interest and other income 26,508 36,023 37.088 34,773 36,191 Total revenues. S 847,376 5 815,384 5 818,510 S 836,486 5 778391 Revenues applied: Cost of operating systems: Fuel, purchased power and resale gas.. 5 201,699 $ 174,758 $ 201.803 5 223,008 $ 228,547 Other operating and general expenses *. 143,753 136,975 127,081 117,423 84,781 Maintenance. 65,170 63,860 63,200 60,508 42,948 Total. 5 410,622 5 375.593 $ 392,084 5 400.939 5 356,276 Operating fund. 5 5 $ $ S Debt requirements for Old Series Bonds: Interest.. 5 4,067 5 4.720 5 5.337 5 5,938 6,454 Principal requirements. 12,306 11,500 10,945 10,375 9,905 Reserve requirements. (239 ) 83 154 121 Debt expense. 7 9 10 11 12 Total. S 16,141 S 16312 16.446 5 16.445 5 16,371 Payments and services to City: Payment in lieu of taxes - S 11,244 5 11,722 5 11,353 11,050 9,891 Refunds for services. 16,387 17,i10 17,378 17,059 16,255 Additional payment. 85,884 80,185 80.922 _ 84,236 78,638 Total. - 5 113,515 5 109.017 $ 109.653 $ 112345 $ 104,784 Debt requirements for New Series Bonds /Other: Interest expense. 5 159,169 5 160,959 5 165,787 $ 168,675 5 172,023 Principal requirements. 69,965 62,520 53,625 42,995 27,535 Reserve requirements. 5,568 13,886 1.588 10304 (1,720 ) Debt expense. 69 81 (95 ) 110 9,049 Other interest

• 5.394 9.158 10,883 7,310 6,279 Total.

S 240,165 5 246.604 5 231.788 5 229394 5 213.166 Allow ance for interest used during , 31,418 ) (22,093 ) (24,780 ) (88,008 ) construction. (29.055 ) ( Additions to plant: Total expenditures for year. S 171,952 5 229,831 5 272,468 5 295,139 5 351.122 Less construction funds provided by sources other than revenues. 78,089 134,497 179.003 145365 191,409 Revenues used for additions to plant. 5 93,863 5 95334 5 93,465 S 149,774 S 159,713 Additions to improvements and Contingencies fund 2.125 3,942 (2.833 ) (47.611 ) 16.089 Total. 95,988 5 99.276 90.632 S 102,143 $ 175,802 Total revenues applied. S 847,376 5 815,384 5 818,510 S 836,486 5 778,391 BALANCE SHEET DATA Utility plant at cost **. S 4,793,976 5 4,641,841 54.444335 5 4,194,614 S 3.925,479 Annual construction additions. 171,952 229,831 272,468 295,139 351,122 Accumulated depreciation.. 917,783 806,770 704,212 608,257 522,371 Annual depreciation allowance. 120,879 114332 111.158 102,498 66.397 Principal and interest coverage. 1,78x 1.83x 1.81x 1.91x 1.95x Prkorfiscal years restated to.scgregate other snterest. Prwrfiscal years reclassified to teficci C<mtrubutions m kd of Constructwn.

FIVE-YEAR OPERATIONS REVIEC (Unaudited) Years Ended January 31, 1993 1992 1991 1990 1989 (in shousandst OPERATING REVENUES Electric: Residential.. S 320,067 5 306,709 5 305,974 S 311,104 5 283,355 Commercial and industrial.. 284,289 267,241 268,098 268,738 256,794 Street lighting. 9,845 9367 9,207 9,015 8,459 Public authorities.. 78,061 75392 78,100 79,538 75,259 Other utilities.. 10,805 8,548 10,426 9,133 7.572 Miscellaneous.. 5,190 5,177 5,257 5,578 4,647 Total electric.. S 708,257 $ 672,434 5 677,062 S 683,106 S 636,086 Gas: Residential. 68,208 65,768 5 63,779 5 73,330 63,858 Commercial and industrial. 37,332 34,110 33,614 37,112 34,662 Public authorities.. 6,283 6.225 6,230 7,367 6,746 Miscellaneous.. 788 824 737 798 848 Total gas. $ 112,611 $ 106.927 5 104360 S 118,607 $ 106.114 SALES ((XX) OM17TED) Electric - KWil: Residential 4,831,794 4,793,631 4,711,423 4,732,736 4.343,500 Commercial and industrial. 5,420,383 5,281,292 5.157,802 5JX)l,737 4,833,460 Street lighting.- 87,567 86,661 85,058 82,791 81,257 Public authorities.. 1,619,005 1,623,979 1,650,207 1,646,668 1,551,533 Other utilities.. 328,547 225,942 296,500 238,741 179.981 Total. 12.287.296 12,011,505 11,900,990 1 1,702,673 1 0,989,731 Gas - MCF: Residential. 13397 13,340 13,116 15,237 12,949 Commercial and industrial. 10,166 9,658 9,467 10,291 9.240 Public authorities.. 1,800 1,812 1.816 2.131 1,838 Total. 25,363 24.810 24399 27.659 24,027 PURCilASE FOR RESALE: Electric (1,(KK)) KWil. 292,686 67,900 24,214 3,986 18,148 Gas (1.(KK)) MCF 25,326 25,078 25,260 28.286 23,968 ELECTRIC GENERATION - (1,(KK)) KW11*. 12,710,278 12,621,547 12,509,782 1 2,425.044 1 1,677,624 Electric Gen. Capacity, KW (Gas)**. 2,400,000 2,400,0(X) 2,400JXK) 2,400,(KK) 2,400,000 Electric Gen. Capacity, KW (Coal). 1,336,000 836,(XX) 836,(KK) 836,(XX) 836,000 Electric Gen. Capacity, KW (Nuclear). 700,000 700,0(K) 700,(KK) 350,000 LILECTRIC PEAK DEMAND - KW. 2,817,000 2.799JKK) 2,741.100 2,697,(XX) 2.664,000 NUM11ER OF CUSTOMERS: Electric. 485J45 476,122 469,962 466,478 462,849 Gas 290,497 287,502 285,699 284,324 284,130 RESIDENTIAL AVERAGES: Electric: Revenue per customer. 5 756.51 5 734.82 5 740,93 758.65 5 696.61 KWil per customer - I1,420 11,485 11,409 11,541 10,678 Revenue per KWii. 6.62 e 6.40 e 6.49 e 6.57 e 6.52 e Gas: Revenue per customer. 5 253,96 S 24732 24132 5 277.94 5 242.46 MCF rer customer, 49,9 50.2 49.6 57.8 49.2 Revenue per MCF 5 5.09 5 4.93 5 4.86 5 4.8 I 5 4.93 1%9 and 1990im Jude Tcst i nergv of 290.!24 and 149.972 respectivcly. Od rarmgfor the parod un:ts is 2.1%HM KWfor thefarc-yar period. 31

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• San Antonia. Texas 78290 Phone: (210) 978-2545
• Fax: (210) 978 3058 -}}