ML20062K514
| ML20062K514 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 12/31/1992 |
| From: | SALT RIVER PROJECT |
| To: | |
| Shared Package | |
| ML17310A857 | List: |
| References | |
| NUDOCS 9312220173 | |
| Download: ML20062K514 (39) | |
Text
{{#Wiki_filter:- - _ _ - _ _ _ _ _ _ _ _ _ _ . _ _ _ . - _
\
A J
>>>>>>>k- s _
{ t' C O L RiverProject 1992 93 '. nualReport p / [ M i 8168)};8
Six strategic priorities form the foundation for To be the loiv-cost supplier among our our future: Competitors of high value energy and water services. Comp,etition. The SRPMission SRP is committed to cost and
' service competitiveness.
, ,, Water.
n today's incre asingly competitive > Employees and the Erkplace: SRP. continues a unique hedtage of storing, and challenrag environment. SRP Continue to meet the challenges of an
. . managerr.ent continues to take well- equitable and well-managed workplace transporting and delivering planned strotry steps positioning the with constrained resources.
water at a reasonable price. ,, company for tomorrow. > Community Responsibility: Corporate goals driving today's SRP Build on a long record of responsible ' Environment. include: community involvement. . gp (
> Economic Value: Improve the solutions to environmental value SRP provides customers.
shareholders and investors. issues.
> Ser ice Value: Maintain the current high level of customer and Customer and Shoreholder shareholder satisfaction. Serelce.
Quality service is a high priority in meeting customer and' shareholder needs. Employees. To train and redeploy entployees rather than increase the work force is at , the core of how we will meet' the challenges of change. Community Responsibility. SRP focuses on community activities that benefit customers and shareholders consistent with their expectations. s n.mau.--.m.
l Contents Highlights
- Wito We Arc. l'
.l Recennes/ Expenses (000) Fiscal 1993 Fiscut1992 and Shareholders -
3 Total operating revenues S1,301,128 $1,183,349 GeneralMsnager'sStaff ' 5. Total operating expenses 1,030,690 933.616 SaltRiver Project .. Net operating revenues 270,738 249,733 Partnerships. 6 15 Other income. net 20,427 36,457 l FinancialResults . 16- '. Net financing costs 236,203 245.962 StatisticalRevieb . 18 - j Net revenues S 51,962 $ 40.228
.(
.. CombinedFinancial <s,,e 7mys 13 32m
. . .Statentents 20 -
? '
NoiestoCombined . FinancialStatements- 24 . f. Porter Operations Board Menibers . ' 32 b a 563,816 g gg . y Electric customers at year-end 519.093 Average annual kilowatt-hour use/ residential customer 13.039 12,628
~
l, j . Average annual residential revenuesfkilowatt-hour 8.80c 8.31c Isee inye Iu) e 4
~. Water Operations Calendar 1992 Calendar 1991 Assessed water accounts 180,778 180,991 Water runoff (acre-feet) 1,771,199 1,711,752 ggg . j '
f Water in storage, Dec. 31 (acredeet) 1,573,075 1.510,-477
. 'g g .
f Water deliveries (acredeet) 982,691 932,427
~ Togedwr,utammuktadilletemt L } <sce;wuc n;
+ Publisher: SitPPubile& - - "
CemmanicationsServices
. P.O. Box 52025 _
. ^L Selected statistics (000) 11 scal 1993 nscal1992 Phoenix, Arizona 35072202S ' ~
NME - .O Gross plant investment $5,973,092 $5.820,751 Long-term debt S3,618,62G $3,667.056 As a special serske, EltP isleallag Gils .
.l' axes and tax equivalents S 172,50a. $ 163.74a_
ammalWMavaRable . Wlhe ArizonaSalelharyforlhe i Electric-revenue contributions to end support water operations S 33,129 $ 31,003 g . .. (E02)2555513. Employees at year-end 4.669 4.681 (See (>aues H. 21) O ..
-~ . '
r f
l alt River Project is the nation's SRP was created in 1903 through flow and pumping technologies. Our third-largest public power utility. provisions of the National Reclamation system carries water to municipal, We provide electricity to more Act. This year SRP celebrates its 00th industrial, agricultural and residential , customers in metropolitan Phoenix than anniversary. users throughout the region. The l any other utility and we are the state's SRPis one organization with two Association monitors the 13,000-square- ]' largest water supplier. compatible business units. mile watersheds of the Salt and Verde But SRPis more than water and > Salt River Valley Water Users' rivers, which are managed by the U.S. electricity-SRP is people. People Association, and Forest Service, for various conditions ] building partnerships today for a better > Sait River Project Agricultural such as precipitation and runoff. l tomorrow. People making a difference. Improvement and Power The District is a public power utility l Named for the Salt River, the major District. and a political subdivision of Arizona. It - water supply to the growing The Association is a private, provides electricity to more than 560,000 metropolitan Phoenix area, SRP is the residential, industrial, commercial and Arizona corporation that delivers water oldest multipurpose reclamation project to a 240,000-acre service area in central agricultural power users, chiefly in i in the United States. Arizona. SRP operates state +f-the-art inetropolitan Phoenix. SRP's 2,900- t square-mile service area spans portions I water delivery systems through gravity of Maricopa, Gila and Pinal counties in .{ central Arizona. l l l l l : l The Salt Rher Project ! AgriculturalImprosement and Power l District pnsvides electricity to power , users in a 2,904aquare-mile senice I area in parts of Maricopa, Gila and i Pinal counties. SRP resenoirs feed the 135 mile canal system that, along with other [ analler waterways, carries water to eight cities, as well as agricultural and ~j ~
~j ',
!-. urban irrigators. i I Electric service area set e4 exclusively by SRP. , l !
. SRP provides full }n.myidn WWe
- of another utility for resak. i SRP pnnides full power requirements of -
another utility for resale. Project makes direct sales to customers for all mining loads. Electric service areas not sened by SRP. SRP's irrigated area. - l
> > > 1 i
7--r-- -- . , t --v-re-,, , _-...-y-_. .- __,,___m _
s
, .g
=. ix e>>>>>>>>>>>>>>
'" ?. $,,
{ ' . - W.}
- DesertBouse A . I.4. .
encouraggsenergyand}3
~
44 wateitontervatio. , ..*n: . . m, ... -
' .. .. . ..-.. , j
.},'
~ '-
- . energy @ og, f ;} \.]
l . E demonstrattenandresearch 11;::
. : .fasilitypillitiatthspestti.1 $g
- l86 tiniest 4ardentaPhgG ;i
. .. - ' .Itpfselsvinne(e,ateg!Q.~.0j
,t > "'
. fitnEyhomethatytereitstingf.j ,' y 1.itechnologiesnndlitilldlif ' :-l -
- c. '&
n.iste.iitaidan,.aki..e.f8els.
.,- .. N . ., ..,:.t; , ..
tute .",::) , Dorwaterendenergiftnis g i '.' . i' , %
. ' '#artesirship$1RMSNPW : 1. j .
longwtaifdhigonnsitmentto Zj - wiseresourceananagement i ,. ..:
-.:J andtopruden,t~planhhigf6r. . .
.(.,
~ . . . . . . . . . - .... .
, ' theruttire.J,oinin.g$.RPend
.E. .J, .
. ,.- thispdtgeshiparethe1[.fj
' E ArismaDeparnhentof O1 CommercsEnergy'Ufficey
,:.. . - - 1 thecityof Phoenixand the .uy tiniversityofArizona. - II
.G e
..<}
~ . . . .:.;
s _ .g. 7 "-
'}.
a,
.. l. k g .
a
_ _ _ _ _ _ . . _ . . _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ mm
l l To Our Bondholders and Shareholders:
] iscal 1992-93 was a good year for Management actions taken during the past two years to refine operations 3 Salt River Project-for our continue to pay significant dividends.
. investors, customers, employees Our six-year financial plan is on and the communities we serve. track, producing short- and Today's utility environment is long-term benefits.
marked by rapid change and increased Power facilities are reliable and competition. We continue to identify continue to perform well. Excess energy and to adapt to opportunities from an sales, the sale of electricity to other enviable position of stability, leadership utilities, also have been strong. and strength. A position that has been a SRP met and managed the challenge tradition-a hallmark of SRP for 90 presented by the largest rainfall and years. runoff in the state's history. Teamwork Our cash flows remain strong and by SRP employees throughout the stable. During 1992-93, funds available organization made the difference. for corporate purposes were $185 But these successes are only part of million. These are funds remaining after the picture. At the core of our deducting cash operating expenses- achievements are the partnerships SRP debt service costs and taxes from SRP's builds inside and outside the company. revenue sources. We achieved net These alliances are making a revenues for the year of $55 million from difference: total gross revenues of $1.3 billion.
> la the soundness of These results well exceeded financial an investment in SRP 4 projections.
In the value of the service we As SRPis a political subdivision of provide the state of Arizona, net revenues are in the quality oflife in reinvested in the company and reduce Arizona. the amount of money we must borrow. g This results in lower electric rates for and highly competitive era. Plans are in our customers. place to take full advantage of the opportunities this era presents. SRP's top management is committed to trise uw of the state's precious teater and energy resources. From left to right in (mnt uithe lksert House are: \\ilham P. Schrader. Lice President; } John R 1.assen, nrsident, and CM Perkms. General.%mmler
>>>3
. . . 1
l Price and service separate SRP from Managers with our latest electric our competitors. Our mission is to research vehicle. provide value-added service at the These two unique projects are lowest price, to deliver more value for representative of SRP's planning for our customers' and shareholders' water tomorrow. We're forging partnerships and electric do.'lars. now to help us meet the future. Customer and shareholder On the following pages, we offer a satisfaction with SRP is very high. summary of other SRP partnerships. We Presently,89 percent of water invite you to read and learn more about shareholders and 95 percent of power SRP people and the difference we're customers say they are either "very making. satisfied" or " satisfied" with our ability to meet their water or power needs. We j g will continue to improve. John R. Lassen Already, we are helping reshape the Pres.i dent utility environment of the future. Vigilance in refining and redefining our place m the market positions us in a William P. Schrader leadership role. We would like to draw your Vice President attention to the photographs in front of the Desert House, a new partnership f . f representative of SRP's commitment to wise resource management. In addition, C.M. Perkins you'll see SRP's six Associate General General Manager lhi Ji h y h e s 2.:.
'3 The General Alanager and six Aswciate Generalllanagers (mn a sulid, seasoned executice team focusing SRP resources for maumum n turn and results Ins;wcting SRP's neurst electnc cehicle are (left to nght) Oren D. a 1hompson. Customer. Slarketmg & WaterServices: Slark B Bonsall, Financial, information & Planmng Sercices; Q L J TiupTRen, Giwrations N lluman Resources Sercices: D Alichael Rappoport 1%I>lic & Communications Sernces. Ikwid G Areghmi, Pouer. Construction & Engineering Seraces; Richani H Sdrerman, fxnc &
R f QUK,,[l, Q) pg&
-y[u u&qp;j ? y?g [ -
mgy;o -g Administratur Savices; and General Slanager C51 Perkins _q ps v p ' _f f, , s @. inWNP @ds yv r . gg > > > 4 k,' $?hi M i "qyi1"% ' i' Q* ) ~;@ ' f,i F & St n t t .h$ 4 abQ h $
=
p p p > > > > > > >
}Y*Qh, t
j- ,
"b_i,Q,,yp, a y'C;;f ,e ..
.y .-
,.ca bS$!$)b IbN2
Rates are the measure of our success. We've kept increases u: ell below levels ofinHation. f] This year's finan< ial plan again I he utility industry is changmg. reflects SRP's goal of containing rate s
] It is changing rapidly. And, increases On an inflation-adjusted 1 while last year's National basis e!ectricity is costing our Energy Policy Act seeks to create a new customers less. Since 1982, SRP rates playing f cid for the industry. we think have decreased more than 12 percent, we are ahead of the game. adjusted for inflation. The real cost of SRP generating facihties are turning 5RP electricity shouhl continne to in sohd operating perfonnances Costs decline in the future, as well.
are down and productivity is up For During 1992a1 SRP internally example, the net capacity factor for generated cash flow covered 100 percent Navajo Generatmg Station (NGS)in of capital expense. For the first time northern Arizona was MO percent in since 196E SRP did not borrow money 1992a1 compared with M13 percent in to finance construction. 199162. Net capacity factor is a On the ec onomic scene. Arizona is measure of the station's energy experiencing positive growth. with productivity. SRP manages NGS and resulting increases in customers and load. owns 21.7 percent of the plant. An example of the strong alliances Performance was better than we have forged in the arena of economic hudgeted at Coronado Generating development is Papago Park Center, a Station (CGS) as well, w here the mixed-use development that is a wholly equivalent availability f actor (EAF) was owned subsidiary of SRP. It is the focus SE8 percent, compared with the 85 for growth at the epicenter of t percent hudgeted for the year. EAf metropolitan Phoenit Red River Opry, measures the amount of electricity a unit a new country western theater at the could produce,if required. Salt River in Tempe, is a welcome Staffing levels remain low er than at addition to this developing region. any time since 19X2. No st.dfing There is no single reason for our increases are projected through the end overall success. Rather,it is the result of this century. of prudent planning. partnering and A companywide conunitinent to hard work. service exists throughout and empowers j employees at all levels to take initiative and make a dif ference.
> >>6
i y_J . ,
- y. ; .
^
[ ,2 - .
~.1 1;
g,
.; ; $hapingthefatture
~
,- . EAssumingaleadershiprolein.
foENE h fahaplugthefutur6 utility . . I
~
60
.l:iuTuR g ft ,
; environmentis:Impor,tantto
?: ' $RP'ssuccesse Leadingthe
- waylato this. marketplace. -
~ ^
h .SRPIst drivingforcein.the .
. ~ * . newly formed $9athwest.;, . . .
- 9. .~ ,. .
r_.'........- y RegionalTransiniladon
. sa s ~ Associate (swnTA). .. ~ ~ -
. ,c ' SWRTNs goalisto pfovide gfg [ , access-topowermarketsin the ,
- : w o The., anwaise.
.,.__.;= '
poweiend
. v.. i.ncanea systemernciencies -
. - . _ . _ _ . . - . _ ~ J for.theutilitiesinvolved. . :-
y==w, . e .. . . r_
.d'.>
l e sl :
, . . 8 P...f .
7 .. g
, - ' . . ,. +
n, - (; N _ f:ff; . . 7
- k. . c'. ' y .
W.[.},._ . -- -
l l m electrical transmission system lant operations and excess connecting utihties in the Pacific
}
D energy sales were strong Northwest, California and the Southwest. Ma contributors to our success. It willcreate regional marketing
> Coal-fired facilities were well-run opportunities for electricity. These and demonstrated increased reliability, utilities will be able to buy or sell Net capacity factors for all plants, with electricity to others in the system. The the exception of Hayden Unit 2 in results will be increased flexibility and Colorado, were greater than budget. Net an advantage for SRP as competition capacity factor is a measure of the actual escalates.
amount of electricity generated by a Another benefit is that SRP can plant as a percentage of the plant's defer costly plant construction. Again, maximum generation potential. we will be doing more with less. Mead-
> We took advantage of windows Phoenix schedules are on target, and the of opportunity created for wholesale system will begin service in 1995.
energy sales to other utilities. > Energy partnerships have been
> Palo Verde Nuclear Generating formed with our residential. commercial Station recorded solid results and and industrial customers. These continued to produce more electricity partnerships improve customer services than any other nuclear facilityin the and allow more efficient load nation. SRP owns 17A9 percent of Palo management, increasing profitability for Verde, located west of Phoenix. our customers and SRP.
A principal factor in our success is > Delta 10 is an internal the commitment and dedication of SRP partnership that is making a difference, employees. Its goal is to increase the capability of An understanding of the need to be our electric system by at least 10 parcent totally cost <ffective is working its way without increases in budget or through the entire company. We are personnel. We are planning for an doing more with less. We are reducing estimated 65,000 new customers durMe the real cost of electricity over time. the next four years, and our Delta 10 Program will help meet that increase Powerful Partnerships through better use of our existing
> Managed by SRP, the Mead- gg ; {
Phoenix Project is an alliance among the .. In anticipation of a changing future' U.S. Department of Energ' y's Western SRP rema.ms committed to deplov ~ Area Power Administration, two Arizona resources for research and development utilities and two California public power m
. the areas of alternative fuels, energy agencies. The project creates a new elficiency and the environment.
> > > 8
=.=
i.2 . 15 L y. ,. / . s ,.$ 1 ..;.... '
,..e,.3
,. , s . ..
a;Y OY '
. ' ll .
- f*. : : I,' s 's' ^ \. 9 ,f
$,'; i * 'l'. ' ,._.j'l(l'.
'S j :: ,' ' l ll ;l: ..
,.k.h 'lf(g] ;;q..q bJ.a ; :;.?.i; :
+;
q,~ #. . }y;y; V #. <x. v';%p.,R. . l.?; n
? < . .: . :
l'.:r;3
-: . .; m A ..
% 7 .} y,. . G; y .T : ; 2 FW :1' p-- ..,,. p? . a.p ,.".,'3..s. .; - . . , . o,.1t
- 1, .. . ,
?5 ..
k k k k k k k k k k k k k k , [. 'r
. , . ...; s . 2-l m. .
' .[ 'htM, $ N,g0 .G r f !..W ,1, b ; . s; ..
${ f. ;; $ fb - w:::; . tz
~
B. ec < y n y
J[ . ; ,.
o Re.'.f,fble,. : fy'., ~. p;:- ;'.. :
, 3 i
,] y , . '
v' >- ' . . .[ , ' , _ , , 1 : q . ' ..: . . ,
? .,
x..; ly
- 9. g/ m, T
, p~.
- t y
.,m . :. g( l:+ , . . , .-
hhu:w 4 w,?. Y. h ' '$ ;. l .: . I ' Y?k;'g fs
. .c ....::.- , 3 .
k!f J lQ.ll{i.:.c.x p:
- [y : ; . x' . . ~..;f Q l' .
[c g 5 .'d,ekg,n&_
, m v. c x .. . ..
N .. m e- *. i 3 9' W. 3 .. H - Q N,ni $' > g'3:c .
;i ~ ~t i i L :. :. . f . '. 1 . . 1
.h f f. 0 '
- f :. l N f . . l _ .) . ; -
y ; u<;L,, e, Q. ; a:, ..:. . .:. . Q J.; M., 9 t!'i . ti; ',L;r; l:' ' -. ;!:- '. :
,vr hpwtf ,a 9
.._t -:
g..,. ..m; . if
- k. .'k;;. ..v.< c .
^
l r ', A.c1 $
. . .?. [ . , ;.,
q ,g .. . - - In 4s ; 1 a %: ; *. ; - ' ';
,. h . _ , , ',-
.,.-O~ "..
n; ;. y . :i;!. .: I..;
%~, -
l }' ~.s. ...,.,e E . e.l [h fj
- T " '; *.'.s' g1 .. ,,
m2 T 3 . ~. , p.a ' t . N. , q} r. e';
. : ,. c ..
... g.
..vr. e;;.;.. .
Ja .Yi'.', 3 ;) - - 1 ,." a t. ;; @-
' l"' ' ' '
' .*k' ?' , 'h hj.; !;: ., ,, t.J
$ p.' ' '
, :ll;h a e
( .,I.ne .
- [ ..
e, k .} . a
~,
- w'
' ' * ^
%j,. 'd , . d '. * . * - l'C>
gy .
- n. .y . . .m :
(Q : . Tt . i i!A:.' I: . ' . , . . r.7 ;
,m.
.::. } _ . ^l
'# . %.:[. L * " ;-
gh h a s.) p 3 gi 7 , ,,g [ % .J . ,,f,.'*,
- i. *I
'I . .,
Q, f . . .[ l [ -
} Y- l(; , ,
, , A *: Y .L :: ;;, . J. v '.' :
g ;L_.fc /
- g. ; 4: . "? .....r.,
d m 19 M; @ Q~ i' e
; r,; y.
I ; l 6&h.)aga
.. m y;. .
- . v .J
;y ph
' 4 ,,
.m.7.../.: u; . .
~
y w+ , ;, , .N.:.:. . :. .: : - f.h l V $' ),
~
a b1i: .,
} ;j ;f, ~iq;.'s:. '.l- . _ ; , ' A ,, -' ' l] .
.[ ^ ~~ ,' ;
f ':: ' l. :l $
.,."Y,:..,:
n . , . n. . ' . j @?:: . y l- >' . ' 'L i. This tras a year of solid perforniance. gl Q @ byg/ns.g T.::'h :dg .h.'.-'M3: .l W Poiver operations helped make the difference. Qa Q%,,!: m m; mqm QQh 3.kg..,
% g ,m m,gy g' g??m y Q%yig'E:.O.'7 ^.. m.
[ f i x m.g.
'o s a/.n") :.
+o yw mm:. . , . .:.vy , =. .. ' .
.s f *.. j
- y. y., C . . . q ;; :: ;,. . ->
.l[;.)ff;.h& ; q k , ff;.3,fl.,nl.l . S
Innovation, efficiency and wise water use are \ what our business is aR about. !
- recharging the underground aquifer.
l uring 1992-93 SRP expertly ThL will bolster groundwater and managed a year of record- increase water supplies during dry breaking rain and runoff. years. SRP will operate GRUSP and own December 1992 through February 33.59 percent of storage entitlement. 1993 was the wettest winter ever in > SRP s Water Partnership Phoenix. Runoff was the highest since program encourages wise use of water. Theodore Roosevelt Dam was completed The Partnership provides education to in 1911. residential. commercial, industrial and Already-strong partnerships were agricultural users about how to manage further strengthened among SRP, the U.S. and protect this precious resource. Bureau of Reclamation, U.S. Army Corps Safety and environmental lnformation of Engineers, Arizona Department of also are important elements of the Water Transportation, Maricopa County Partnership. Sheriff's Department and Indian > A new partner has been added communities to successfully manage the to our already successfulwhite amur record runoff. fish progre m. The tilapia, an algae-During a tyoical year, SRP delivers eating fish, is now in our canals as a approximately I million acre-feet of result of a cooperative elfort with the water through our system. This year, cityof Chandler. Avoraciousweed-because of record precipitation and eater, the white amur has been cleaning runoff the Project released -ore than 4 growth from SRP canals since 1989. million acre-feet. And yet, we still These two innovative fish programs help maintained f unt tionally full reservoirs, controlgrowth in the canals and mpmvewa rquaMybyminin1Mng Teamwork and Technology herbicide use.
> Six area cities have joined SRP SRP continues to protect and the Salt River Pima-Maricopa Indian shareholder water rights in ongoing Community to create a solution to one of adjudications and supports appropriate the most challenging water problems.
settlements of Indian water rights. Granite Reef Underground Storage We are dedicated to providing Project (GRUSP) will make more efficient le dership to solve crucial water issues use of Valley water resources. The 350-today and in the future. acre project willstore water by
>>> 10
h.
>} .
New technology to
' ; ;improve weather
' ' detection, forecasting .
~ The National WeatherService,
- ' headquarteiedatSRP l
. . corporateofficesinTempe, .
hasinstalleditsWSR 88D 1 Dopplerweatherradar.. Also
'1 - -
known as NEKRAD(Next
~
GenerationRa r)the ^ ~ .
.installationisth Arstofits. . .
kindin the West. The new system willprovide' earlier
. ahdimproved warningsof
. severe weather. Tids
~ partnership willgive valuable, up;tothe minuteinformation
' itoSRP, allowing asto better
- 3. usanagefuture edher-related impacts our water
. . . system.
s , I f' Y} . 11-y
i Mi
- g. s e.
su>>>>>>>>>>>>> 1
^ $)
w_- o m m g
- t. ; i x M
'i ?
E a r ,4 4 ANj I a
,y];N ;"'
m ! gy)
- m. .
-ic1%
s
~ 'g 6
, y n -e
=.. m'p) l t q 4
d
' 3 q
m;j tN 0
?
j
'41
;$$ f.b' Sgo
,-,, n
; v.
.: 4l .%m % ia9
- s, m .
Re h. p. g ;. f. g p_-w 4 __ 4 g -4 g%# .c ._
.x y
- l[ d .hi_ h_dh I' Q'!. . 3py"ltkdf. Q y; ,'Q:, _.y 3 d{N$$$., g$g$$.,w$$.Dy
;l w . e' :t R:.
.a.x W ryfst.:sv v., .4. g ..'_.4fgf-
- & k, , 3
'. l jf*p :hikf!' f f;hf,: . l\;.f[ i %pm;gG;ygfY.kk;';' %gg
. ; i
. liMdEMWM:.MMQ(i?
)gl::&,
; 39:c;yf ; %,_A:l,$;Q .'f f..$&;.;$;3.;;3;g?[3, ..,y (-
l, mg d4 ' e
.ny.m:%ggw;pp&gj%
jfg%ggkQ%5f p ljf ff 'yf Q Q The y best f R u:ay to keep customers and shareholders MakM y____n_e $- @..%iVQWv @p. happy is to be cost-elTective, to understand and y- =._;_;E
- k
&gy meet their expectations.
- - - - -tw g; :g;>
h~~~" N4Fi -- l' Q.l
.no 5 I ?: 0.v. '
k. . ,-()f.yI ?.e'l%_Q'- }gy?:g ; ,, g
;g y;.F.f; . , L : . :L. v .; ,M;c. L;z. :;;yykyg
* ^
I fl 1 SRP. Results of these partnerships h o meet service challenges, SRP include reduced costs for our customers 1
; brings added value to customer and SRP. We anticipate company savings
) and si.,reholder .elationships. of approximately $250 million during the VJ .4 ,ing " ms m help our next 20 years. SRP's successful si.m aa.d thrive in a partnerships include:
woi . o i , , instan'. > Climate Crafted Homes are for rm.et > a and 30 percent more efficient than homes shareholders, tEs i
, w ping them without energy-efficient designs.
manage daily energ. aer needs. Seventy percent of new home buyers are For commercial a. .dustrial aware of our Climate Crafted program. customers,large and sma!!,it means > Purchase Power reduces stepping on the other side of the meter, summer peak loads and increases winter identifying opportunities and solutions revenues. Cash incentives and operating to energy problems. cost information encourage customers An example is SRP's Execu lve to replace old or inefficient equipment. Account Representative program. Each This includes installation of high-member of the General Manager's Staff is efficiency heat pumps which are more assigned specific commercial and cost +ffective and help increase industrial accounts. They regularly winter load. meet with executives of these > ElectricSavingsTime(EST) companies to learn more about their helps customers control utility costs needs and concerns. The insights they through thne<>f<!ay rates. gain help SRP improve service quality. A variety of other services alsols The commitment of SRP customer available and Energy Partnership service is to reduce cost and add value, programs are offered to commercial and to ensure SRP service meets customer industrial customers, as well. expectations. We fulfill this promise by Because 12 percent of our creating partnerships with our customers are Hispanic, we continue to customers. And,it works. develop and enhance service to this i portant customer base. For example, Customer Satisfaction we assign bilingual customer Our Sem.ce Quality surveys reflect representatives to our Spanish<>nly that 9a. percent of SRP power customers telephone line. We developed a are more than satisfied with our services. template, available free of charge, that Energy Partnership programs when placed over an SRP electric bill, deliver commercial. industrial and provides a Spanish translation of residential customers improved energy billinginformation. efficiency and improved load factors for
> > > 13
Our customers and shareholders expect us to be involved in the community. It relates directly to our core business. the value of SRP electric facilities in each g q RI, community service is county. nn Ag ww , g w -w;m'me y4i wem$ customer driven. It's tied to our > SRP VOLUNTEERS,in its {,D 5lYD' <?'C N
; g [:{ &'
mission and is strategically inaugural year, resulted in more than 500 { .ah}0 L l focused. During 1992-93: SRP employees giving 3,000 hours to 20 ff , f ]p
> SRP's Employee Boosters different projects. Because of its E M1 b,M d, j IhM
" ,' $(( $
Association raised nearly $500.000 in success, the program is being expanded i contributions for organizations in to include a partnership with SRP's 1,500 g 4 up% '
?
f, ?#ch.f^ V M4 communities throughout the state. active retirees. The biggest project was b k h h h @N Q4y k pr#I ' *, . ~M. N,N Support included donations to United the cleanup of South Mountain Park. J ' .i w7 n Way agencies. St. Mary's Food Bank and including employees and their families, a
- M([S ' 5 '% i[ jg%%yMME -
Gompers Center for the Handicapped. some 250 volunteers participated, j
> SRP increased its support to donating more than 1,250 hours.
p%$ m ,5 -h Mhih[e(( [ k education during the year as well. > Through SRP's Community _ gp * >@+hy 7 O" s h Highlights included classroom presentations by SRP staff to more than Partnership program, individuals, organizations and employers are h{7 ,; 3.y,y % , M} h (([Bj 7%gh Qg^ [f% ]% W ]"pp 100,000 students in grades K-12, building math, science and technical skills. We encouraged to get involved in community service to improve quality of D/ M , JO 'WA focused on energy, the environment, life in the Valley. Many people would like !!E$U I r water conservation, water and electrical to perform community service, but do $ not know how to get involved. This q" safety, and historical and cultural y preservation. unique program directs volunteers to j
> SRP's commitment to many worthwhile community b 4%a (( gg ,
environmental education continued organizations. 4 . g ~ M? during the year. We sponsored 11 high school student entries from around the Leadership Awards h& h ,; '
- b. . i 1 W
<To'
% g 9 A ' e~ w $
Long recognized fori .ts leadersh. ip in e ~ state in the Solar & Electric 500 auto race and challenged students to develop community and civic issues, SRP UP-' '<1- - received two dist.inct honors calling alternative fuel vehicles. pubh.c attention to that role.
> During the year, SRP paid $84.9
> Arizona Governor Fife Sym.ington million of in-lieu property tax payments to school districts, cit,es, i counties, presented the prestigious G,overnor's V *s A. '
Arts Award to SRP for s.igmficant _ community colleges and special districts contributions to the arts in Arizona. In nine Arizona counties. A political
> The Phoenix Business Volunteers subdivision of the state, SRP makes for the Arts named SRP recipient of its voluntary contributions instead of 1992 Outstanding Business of the Year paying property taxes. Th.is contribution award for our contributions to more than cf fectively makes SRP the state,s second-40 orguizations in Arizona.
largest taxpayer. Payments are based on
>>> 1!
1
. _ _ _ - _ _ _ _ _ _ - - - - _ _ _ _ _ _ _ - _ __ __ I
'(); >
%7q pniO7% Q $,Q7%;g
> m 3
( _ y <
#. i f i
- e i j w' ' ' '
c, 1
. 3
'lp' I j ,$'$
,> ,--) 1 q _ _19 ;
_ '%lyt. _) ;
, } .
,- WW N~ + ,
m w Hm
')-l ~ . *Y Q'. ' fl._ . ' h i,~'5
?
;; ; ' i n_
W lW K ,0 j.1 Q, , Q- -
.:a
,.s. ( , . .,.3 , g. ,
,g1
> > > > > > > > > > > > > >t># p>g>j;g M'Mgp.ylM F W Mg..iih(; Mq; 6 gy (2 se , yr4<
, g.s y a ggq t
s %. .7
- l. ; . l lf. ' V'e <
' Y yy . _ t /[qq
*} ~7WQT [: . [. :
7 _J f l l l 1y e q Ag,nye[; WPwyNfi /q!Q%gdgg[sT9 Q (e w; g&un L: f jfj em xa wnAgn mx qf o- m~ p v y ; g~ g g a y. ~ 3 g~ 4
+ n g nm m,-,ngu-a ygg gg g g yg gg 4n g~, . w c
v[ %ggh ;cg4un/f3, w; ,; .; ;-[; h g PQhdp h{ n ( f n n g( g [ ( % l h [ a m+o H. A A' y ^ w uk, ,& < a. n ne,yggdy
; ,ygspg,
,m y mq E WMmedpwqg, tg;1 r
a c
- V 4 . . . .
.A g f' 4~ e a gfC
@# , j v!( r ag 4{R{ ,f -{
e
;z m,~4 -_ m_a y
. - s~
b ~. - y 4 <
, W.g y , . y, .d9;gggy y,.
. o y%.opgm y-]
% a w w ps + m.g An
~,7, ,
g h ,h wwha < s 4 .> , qhwQ&4oMg w n 4y %g ty
- h -- 3 1p,*% , yqjy:W% __ g %y n.3,Q,Q , m[ n1q9J g.~
s_&gpf h h, nyygh
, , B kh hN, f
, ~ - +
n %. p.s, h x 7, w ,%, wh. e.m y g,,A 4 &,, m:,m ms
- e. g ,,
.z , ,.
[pbh [ 5 h, k . ghf .ON ' , T n n Jffnn~n w M -j * .
+
]
n 4 . q 9ew% wy ghy_mgmu_s 4 y . e hhk
. h, Nh , gd. a - -[w
[A[sm$ + h% ,- W. .. ..e.,m q - m. 3-Wcnym m a, . . p mi"f ; j% b de .
.A w
eq o-u a w .. . . a . r u o , - m,..
, , ,a .
l, gN g
,8 - , ,
' 5. M hk, hgff - fh < l
% 8%A 4
g V ]h W%g$$@l MdM$ $$ ad D ,L , , # s im'
.- ~ex.r a v
. n n, G)nL. q ^ ,nl.m..
sMMMS@##@@w m~ m Qm w g ey$',,~y-;w% $a wgo^ hlW m&wy: +w smnp ne W t w,
- -- OY.y&&) $e3s & > . pq
, ?m wl'B
;l-_
&.f
,<npy hnolm% m e Q Vg g , * , /l a 4
y3 >e '+4 yj mg 2 _ym o . y = 9%f,Q. 9 7V ;y :n y:ng. 2g
' p+ >,
h t,g < , ;~ r+~- e is s mos p s
< ..p Q.g;- c a .> >fgg ; g ': <:;;pQ. ~gtp , ,
~
ye %smaaOfn qh n m. p% m , f 2
.y %w , g - s cp _qu > &.
n- [g W6 bhhfN ' bJ[ gh , ',e i m -8 , ex 's ; n
, d4 4 h y.h/ * '6,f -I
- y. .@, q 4%, yvM
. M50 . nlen 3 4 ?> #
,l} bh k _
p/ , a r m ,
, s, own; a y m n v .u , xo 4a u ;:;
f ,N :z ,W 1 W,P n-k lN_ " w ' m e - m* ' .'y m - {2 < lMy UN 4
.,3 -m 3
w, m - s Vi 'm , Th
,', ;g[p;c, ~ y . '.a.fn;;?gyMyp
' < s g ~
- t. ,:V,. C 4 f,s 'f. ,
?
c, - m,, ag w-* yn n y , pus s' %.. .. . g ;
199293 Results Exceeded Financial l Expectations. l onlinued close attention to cost year. Instead,100 percent of our electric , control and a strategic focus system construction and improvements I DebtService Coverage Ratio contributed to a year that were financed with internally generated
.l exceeded our financial expectations. funds. Reduced debt ludia SRP l
,g
~~
Combined net revenues of $55 customers and helps maintain oui 7gg 7gg l million were well above budget, due in favorable bond ratings. Our bonds are gg large part to healthy excess sales and rated "AA" by Standard and Poor's solid plant operating performance. Both Corp. and "Aa" by Moody's investor 2.0 L9,~,
; the volume and profit on our sales to Service Inc.
1.85 ; other utilities increased compared with Our net financing costs were nearly l.9 - fiscal year 1992 levels. This was because $ 10 million lower than last year, because f' 1.8 1.7 I 8889 89-90 90 91 91-92 92-93 g { of a shortage of available energy in the Northwest, driven in part by drought conditions. Overall plant performance during the year was very strong. Most of debt refundings and lower interest rates. During fiscal year 1992-93, we again took advantage of lower interest rates and issued $793 million of electric notably, Palo Verde Unit 3 set a site system refunding revenue bonds. record for the shortest refueling outage. Proceeds of the issues refunded existing Record rainfall during the year also higher-cost debt. The present value of prompted significant water releases, the savings that will accrue exceeds $55 which boosted SRP's hydroelectric million. Reduced reliance on debt also is generation. The unusual weather also m de supplementalwaW purchases fundsAvailablefor
, unnecessary for most of our water Oradu e customers. As a result, water delivery 9
revenues of $7.2 million were reduced 200
$182.9 $1811 compared with last year.
180 The year also was exceptionalin ElectricDollar other ways. For the first timein more 160 than 25 years, SRP issued no "new" debt $0.14
$1391 Reilwested in M0
$132'3 r construction purposes during the Project Plant - g
$122 fuel & Purchased
$0M Power Principal 120I.0 100 8W
. 8&89 89 90 90 91 91-92 92-93 $0.17 laterest _ O&M-
$0.13 -
>>> 16
_._ _ _____z_ _ _.___ _ _ _ _ _ _ __ ____ _ _ ________ _ _ _ _ _ _ _ _ _ _ _ .
W Combined NetRevenues
'(Thousands) reflected in SRP's six-year financial plan. > Containingincreases in electric 60
' Other financial plan goals are healthy operating expenses per kilowatt-hour solvency or cash flow,and improved and controllable water operating , 3e profitability. Our 199499 plan expenses per acre-foot to less than the l exemplifies these goals and shows rate of inflation over time. The six-year 30 -
improved financialindicators. Lower plan operating and capital expenses are ma projected inflation, combined with at the same or lower levels, in real tenu, 15 higher system energy sales at lower from the previous plan. $ (sam) (sa8x) 0 production costs, contribute to the At Salt River Project, we firmi., improved forecast. l.ower production believe that adhering to these goals and "g h costs are made possible,in part, maintaining our strategic focus will because of the renegotiation this fiscal position us to meet the chauenges of the 220 year of a coal supply agreement for future and provide even greater value t M9 89-90 9491 91 92 92 93 Coronado Generating Station. The new our custcmars,in nstors and agreement wUt yield significant savings shareholders. .- during the term of the contract. SRP's financial goals through fiscal year 1998-99 include: T0lalCeCtric Sales
> A debt ratio of not more than 75 percent near-term, and 60 percent t 3.8 65 percent longer term. The debt ratio Resales g,g at the end of 1992-93 was 73.5 percent. Residential l.
> A debt service coverage ratio of I 6
at least 1.80. This ratio was 2.11 for se, 1992-93. Sales Debt Ratio-.- :
> Limiting average system rate .
1 76 increases, including changes in fuel 74.9%l 7g costs, to less than the rate of inflation. 73.5% -
.d, !
and limiting the frequency of rate. g_ adjustments to no more than once every Commercial & Industrial 71.4 % l 72 70.7 %
- two years. Again, we are exceeding our expectations. The rate adjustment , 1
.o t ' .
originauy scheduled for January 1994 i has been deferred until october 1994. 68' . 66 L l 88 89 89 90 90 91 92 92 l
' > > . > 17 o q-i
_ m . ,
StatisticalReview 1993 cunaused)
- Project General H (in thousands) 1793 1992 1987 .1982 Operating revenues $1,301,428 $1,183,349 3 '888,506 $ 664,463 -
Electric 1,291,272 1,175,379 881.340 655,682 I Water and irrigation 7,156 7,970 7,166 ' 8,781. Operating expenses 1,030,690- 933,616 706,377 . 460,907 Other income (deductions)* - 20,427 : 36,457 64,467 61,701' Net financing costs
- 236,203 245,962 171,835 ' 106,915 Net revenues (loss) 51,962 40,228 74,761 : 158,342 Additions to plant, excluding allowances ;
for funds used during construction 196,153 173,061 309,356 .393.270 Utility plant, gross 5,973,092 5,820,751 4MI,055 3,265,863 Contributions of electric revenues to support water operations 33,129 31,005 15,975 13,676 Taxes and tax equivalents 8 172,503 $ 163,745 $ 103,097 - $ 64,589 Employees at year end" 4,669 4,681 5,735 4,776
- Itett,s withur these cutog,mes how twen tvdadhed kw 1%!und 1%r kw cenislent twentathm oth the currentpart
' U,ns not include ternpswury etnpt,9m
> Water
- 1992 1991 1987- 1982 Total storage and pumping capacity (acre 4eet) 2,856,192 2.827.393 2,889,725 ' 2,827,428' Storage capacity (six reservoirs) 2,019,102 2,019,102 2,019,102 2,019,102 installed pumping capacity 837,090 808,>u1- .870,623 808,326 Water in storage Jan.1(acre-feet) 1,540,477 840,845 1,671,535 . 1,116,338 -
Project storage only 1,283,172 631,910 - 1,415,710 895,118 ;, Runoff (acre feet) 1,771,199 " 1,711,752 1,036,805 1,667,257 Water in storage Dec.31(acre feet) 1,573,075 1,540,477 -1,691,741 1,631,411-Project storage 1,279,834 1,288,596 1,464,978 1,345.252 Sources of water for deliveries (acre-feet) 1,028,999 1,010,588 1,136,429 1,054,163-Gravity supply 983,732 " 926,757 . 928,053 - 936,680 Groundwater supply (pumping by SRP) 36,636 74,330 50,482 104,019 : Groundwater supply (pumping by others). 8,631 9,501 15,056' . 13,464 Use of water (acre-!eet) 982,691 '932,427 870,658 --955,389 Agricultural 30G,380 - 280,103 1 290,572 379,903 - Urban 413,219 445,157 395,158 . 355,278 City domestic 305,595 329,016 ' 284,192 247,216 . Subdivision irrigation - 60,311 66,127 60,877 61,460.' Other non agriculturalirrigation . (schools, parks, churches, etc.) 47,313 - . 50,014 ' .50,089 - .46,603" Decreed deliveries 56,332 52,038 :47,963 - 58,400 , Contract deliveriesi 206,760 155,130 ~ 136.965 103,686 : Seepage and evapotranspiration 46,308 78,161.' :122,933 156,896 . Canals, total (miles) 135 135 133 - 131 IJned/ underground 107 107 91 . ~ 71.- 1.aterals, total (miles) 924 922 892. 886 Lined and piped : 813 ~841 792z -764-Assessed area (acres) . 238,400 238,400 238,170 238,172 1 Numberof assessedaccounts 180,778 180,991 181.894 179,532
> > > 18 Number of times water delivered to users 446,370 498,440 . 471,845 - 491,242 -
- Waler sktintics tus cransmted on a calendarpur Ikms.
' kwd o,t U$ 415 prwnuunalrecords cruIare sub)ect to o&ustnnent
6 Mm s y;e "t ;1
, y*c ,
(S W@ ~ ,f[ 3;
- ). . . _
t7- - . 3i ,, ; p .4 4 l , q' < 1993- 1992= '1987, 1982' [
;' i Energy sources (k%h) - . . .. , .
g ~
,. . Net nuclear generation - 4,752,599,000 - 4,231,935,000 . 1,955,479,000 ' 4.
7 (Net steam generallon* ' 12,986,837,0001 t 12,993,864,000 i . 9,667,574,000 - 12,429,457,000 .. E' LNet combustion turbine - - f -. , . , $
. t generation L , .11,531,000 ^ 4,657,000 ;2,287,000 ' a 24,298,000 : '!
Net combinedcyclegeneration 177,247,000 i :85,965,0001 ' 991,739,000 3 ;4,188,000 ! . 9' '- d Net run of river generation 796,524,000 ; '643,390,000 ' 410,679,000 ; 5 255,762.000 0 Pumped storage generation" 75,222,000 - . 137,635,000 : L 211,088,000 J ; 155 560,000 < > Total net generation
- 18,799,960,000 - 12
. Purchased ~ 1,522,730,071: .18,097,446,000f 1,417,919,068 _ ; 3,586,056,028 ' . 13.238,M_6,000 1,691,696,160 1 1 i L ,869,265,000)
Interchangereceived ~ 164,637,988 = - 83,103,204 : 105,387,000 ;
- l109,169,000 ; s j
% heeling received . 132,886,979 / . 229,197,108 - 15,091,962 2 7,788,840 i ,
j
' Totalenergy sources : 20,620,215,038 19,827,655,380 '16,945,380,990. _14,677,919,000 i ,
j Energy disposition (k%h) _ _ .. .
+
Residential; ' 6,583,832,541 J .~ 6,216,045,662 - 5,333,601,362; / 3,996,561,567? 3 . Commercial & Industrial- 8,286,481,456 4 7,799,730,361 ' 6,252,344,184 ' L 5,076,034,94a - , l Irrigation pumping 42,950,329 - 1113.013,697 233,684.815 - - 249,286,026 ,
, , Street & highwaylighting 127,623,117 e 117,619,607 98,746,120 :46,963,317 Public authorities' 340,144,620 : '336,570,420 ' 270,239,264 s 374,397,640 - q Interdepartmental 92,920,434 - 95,669,413 7 - 82,902,577 - L179,577,422 , O Sales for resales 3,841,552,355 c - 3,593,342,026 3,294,959,549 3,564,619,094 \
~~
[ Totalsales - 19,315,504,852 ; 118,271,991,186 ' 15,566,477,871 :13,487,440,013 - , Interchange delivered 89,320,780 - . 126,066,380- 104,549,000.: f63,328,000 :
' %heelingdelivered 127,753,393 221,971,185' 13,887,031 - c 7,148,429 Energylosses 980,355,013 . 1,011,017,629 - 958,912,088 ? 895,393,558 ,
Energy for pumped . storage operation 107,281,000 , c196,619,000; : 301,555,000 L 224,609,000; y i Totaldisposition of energy . 20,620,215,038 19,827,665,380 L -zl6,945,380,990 : 14,677,919,000 - Peak overall power system (kW) ~ 3,912,000 - l 3,570,000 L 3,264,000 '= . 2,729,000 ? 7 j Aug. 26,4 p.m.'- . Aug. 20,5 p.m. . ' July 30,6 p.nd !
. Date and time (MST) Aug,17,5 p.m.
Peak Project customers (kW) ' ;3,440,000: : 3,176,000 . 2,785,000 : 2,266,000 Date and time (MST) - Aug.17,5 p.m. Aug. 8,6 p.m. > Aug'. 20,5 p.m. _Aug. 26,6 p.mL
'i
. Generating capability (kW)** -
Nuclear - 641,000 - 641,000 . 213,730 J o4-
^ Steam
- 2,386,000 ' '2,386,000 2 2,411,115 2,285,250 ' .
< l Combustion turbines . 397,000. 397,000 393,000- J393,000 :
- Combined cycle 292,000 (292,000? 288,000;. 288,000 -
ilydroelectrk conventional o 94,000 94,000i -96,400 : 95,000 _ Hydroelectrispumped storage ; - 148,000 ' 1148,0001 137,000L > :137,000 1 1Totaloperating' capability $ 3,958,000 ' 3,958,000 1 ' 3,539,245.- T 3,198,250f Contract purchase at peak: .420,0001 l 514,000 1605,547 329,547j : Total resourcest 4,378,000 : ~ 4,472,000 : 1 4,144,792. q 3,527,797 / _ J Electric customers-yearend"* _ . _ . U
~
o . Residentfal1 511,507 1 498,067 ' 441,293 : 315,948 ? _ .
; ( Commenstal&ln'd ustrial; 43,387i 42,485 37,218 : 23,M03 .. j Other- :8,952 : 8,541' L8,810 : ;1,62 0 e
~
Total - -563,846- ' 549,003 .487,321 - , 341,412: l
' Average annual k%h use/1 . ..
r 0 1
- residentialcustomer" 13,039' 12,628 12,440- 12,798
!Iverage annuairesidential ..
o revenues /k%h (cents) 8.80 8.54 : : 7.54 6.55 :
' twuda swputmpauxnerpatyaa,4p,w . ~ c -
" AbitwpaMtties durirt suminerpmk ., ..
>l> > b.L LL
, ' ** unem shqxwtw & M thmeth tuna 2 ales, electnc cmksnmyeutend muup k% use and avemy orwaalreventre on estimakd Qures ,
J, -
) h_ S 4 - _ _ L..-. _- ,
, , f , W . , ~
( r n, - . Com sined Ba anc~e S aeets-EApril30,1993 and 1992 ~ [(in thousands)I
> Assets 1 ,
1993. -1992L LTrilIIY PIANT, at historical cost (Notes 2,3, s and 6):. Plant in service-Electric - $5,067,772 $4,915,800l-i Irrigation '- -136,002- : 135,036'.
.a Common ~ __ _
.382,998 382,5_301 Total plant in service- 5,586,772 5,433,366 e 1 Less- Accumulated depreciation on plant.in service - .
] l,660,941) . {1,525,512);;
3,925,831 3,907,854 , 1> : Plant held for future use(Note 4) j 93,726 y 92,824; O Construction workin progress 245,861* . 244,760 L
- Nuclear fuel, net . .
.. 46,733 - ' 49,801--
- 4,312,151 , 4,295,239 c OTilER PROPERTY ANDINVESTMENIS:
Nonstility property and other investments (Note 8), f 81,647 69,878 4 > _ S,egregated funds, net of current portion (Notes 2, 6 and8) 126,094 123,939 n_. 207,7411 ' l.193,817. 3 CURRFAT ASSETS:. Cash and cash equivalents, at cost (Note 2) - jl5,685 3 '130,676 N Temporaryinvestments (Note 8) - . j 168,760 -: ' 170,838 : Current portion segregated fmids (Notes 6 andB)! ' 87,637 l 1 90,264)
- Receivables, including unbilled revenue, net (Note 2) L 1 83,237-- ,
' 89,485:
~
Fuel stocks, at last4n, firstout cost ; E47,314. :: 68,142.- Materials and supplies, at average cost .- 81,628 L 92,858 : 13,647 16,002 i 10ther current assets? 1597,908 < . 658,265 i DEFERRED C11ARGES AND OTilER ASSE13(Notes 2 7and9) 288.773 1 241,632 e n $5,406,573 - $5,388,953 k The accompanying notes are an integmlpart of these combinkd balance sheets. :
)A 3 J I
-_..._ma... - ._ -6 ,
1 L r I
> Capitalization and Liabilities 1993 1992 LDNCvTERM DEET (Notes 6and8):
Electric system revenue bonds, net of current portion $3,273,626 $3,292,056 . .; Commercial paper and'other _ _ 375,000 _ . _ _ 375.000 3,648,626 3,667,056 ACCUMULATED NET REVENUES: ' Halance, beginning of year 1,263,382 ' 1,223,154
. Net revenqes hy !he year
_ _ 53,962, __,_, _ _40428 Balance, end of year 1,318,344 1,263,382 TOTALCAPTIAIJZATION 4,966,970 4,930,438 . CURRENIIJAlllLITIES: Current portion, long term debt (Note 6) 57,847 55,565
. Accounts payable (Note 2) 55,724 102.885 Accrued taxes and tax niuivalents 67,74 e 42,528 Accrued interest 68,743 . 74,107 Customers' deposits 40,982 37,113
_Other curres.t liabilities _ 51,012_. _ _ 31,878 --
- 342,055 , 377,076 - DEITJtRED CREDTIS AND OTIIER NONGRRENT IJABillTIES (Notes 2,9 and 10) 97,518 : 81,439 COMMrDIENIS AND CONTINGENCIES (Notes 5,9 and 10) '
l 85,406,573 . $5,388.953 The accompanymg notes are an integralpart of mese combined balance sheets,
- > > k . 21
-. i
. , < g ,
.) ;_
? i-.
3a ' . Thi Conibinec Statements:of N6t Revenues
^L For the years ended April 30,1993 and 1992 (in thousands)\
1993 1992- ';
' OPERATING REVENUES ' $1,301,428 -l $1,183,349 i
.s OPERATING EXPENSFS:
Power purchased ~61,576 :55,415' Fuel used in electric generation 244,709 u227,625 Other operating expenses . 272,698 i217 566 - Mairitenance :109,484-f98,746 ?
. Depreciation and amortization 169,718: D 170.4893
_T. axes and [ax ecluivalents,_ __ _, ,gl72,505L _ i 163,745 j
. Jptalppegtingexpenses; _ _ , , __ . - _ , , , , _ , , - , _ '
. _ 1,030,690.. ' '; .. 933,616 :
Net operating revenues . .270,738 : 249,733 ' '
;i. 4 OTilER INCOME (EXPENSE):-
. Interest income a - 23,852 30426.:
ptherinco!nefexpensehneti . . _ _ _
. : p 42,3 . 6,031 : ,
. .;Totajpther incpmq(expensch net L,_= .
, . -- 20,427 - - .. 36,457 :. .;
Net revenues before financing costs :- 291,165: -286,190 f , a.- FINANCING COSTS: Interest on bonds, net of capitalized interest . 212,721' , 220,013-Ami>rtization of bond discount, issue and refinancing expenses :11,192- :- 8,357 Interest on other obligations _. . _;12,287_g ' '
.17,592 ? < ,
Net financing costs. . 236,203 i ' 245,962-;
. NET REVENUES . ! $ : 54,962 . $ J40,2281 ,
- The accompanying notes are an integmlpart of these combined statementsJ ;i I
a s t 4
, #.cj
- g. ;
- 1
' 5; h % ,_4 6 -f.
t Jr 1
.' ', 1 4 .
g- .. c: .
;n L
c t Combined Statements of Cash Flows F0r the years ended April 30,1993 and 1992 (in thousands) 1993 1992 NET CASilILOWS FROM OPERATING ACrl) tiles: Net revenues ' 8 51,962 - $ 40,228
. Non-cash items included in income-Depreclation and amortization -- 169,718 170A89' l Amortization of bond related expenses 11,192 8,357 (Gain)/ Loss on sale of property 1,587 (421)
Decrease (Increase)in-fuelstocks and materials & supplies 32,058 ' (8,074)' Other assets (31,598) (49,738) Increase (decrease)in. Accounts payable (47,161)- 5,109 Accrued taxes and tax equivalents (4,781) 1,616 - Accrued interest (3,364) (1,491) Other liabilities, net _ __ _ _ _ _ _ _37,095_ _ _ _ _(22,276) Net cash provided by operating activities 214,708 143J99 CASill10WS FROM IMTSTING ACfl5TflES: Additions to utility plant (203,517) (179,283) Additions to non-utility plant (769) (14,710) increase in other investments (11,000) (13,000)
. _ Proceeds from sale of, plant.
. _ _ __ __ _ . . (95) ! __ _ . . IJ23 Net cash used for investing activities (215,381) (205,670)
' CASilILOWS FROM f1NANCING ACTI)Ti1ES:
- Proceeds of bond issues, net of offering costs 747,337 333,528 -
Contributions in aid of construction 14,412 18,266
- itepayment oflong-term debt .(55,867) (43,022)
~
F (Increase) Decrease in segregated funds - 472 (2,916)
. ;Deggsits intp escrw for bon _d_defeasance_ _ ___ _(720,672)__ ' . _ (281,7571
- Net cash provided by (used for) financing activities (14,318)- 24,099 '
c . NET DECREASE IN CASil AND CASil EQUIVAlfMTS ' (14,991) -(37,772) k : BAIANCE AT BEGINNING OF YEAR IN CASil AND CASII EQUIVAlfNfS 130,676 ,. 168,448 BALANCE AT END OF YEAR IN CASil AND CASil EQUlVALENTS - $115,685 - - $130,676 . SUPP!IAIENTALINFORMATION: CASilPAID FORINTEREST $237,739 '- . $242,318 -
-The accompanying notes are an integmlpart of these combined statements. -
.> > > 23 i
1 4 . ifJ
)
Notes to Combinec Financial Statements. April 30,1993 and 1992 -
.( )1 Basis of Presentation:
> The Company. :
- The Salt River Project Agricultural improvement and Power District (the District)is an agricultural i improvement district, organized under the laws of the State of Arizona, which provides electric service in ,
parts of Maricopa, Gila and Pinal Counties in Arizona. : The Salt River ValleyWater Users' Association (the Association), predecessor of the District, was; incorporated under the laws of the territory of Arizona in February 1903 as a result of the passage of the.. - National Reclamation Act, in 1937, the Association transferred all of its rights, title and interest in the Salt y River Project (the Project) to the District, in 1949, the' original agreement was amended so that the District would assume construction, operation and maintenance responsibilities for both' the electric and irrigation systems. The District then delegated to the Association operation and maintenance of the irrigation and
. water supply system of the Project.
> Principles of Combination
- The combined financial statements include the consolidated accounts of the District and its wh'o lly.
owned subsidiary, and the Aisociation. together referred to as Salt River Projbet (SRP). The District's . subsidiary is Papago Park Center, Inc. (PPCI), a real estate management company. All significant j Intercompany transactions have been eliminated.
> Regulation -
- Under Arizona law, the District's Board of Directors (the Board) serves as its regulatory and rate setting /
agency.
>. Electric Rates UndEr Arizona law, the Board has the exclusive authority to establish electric rates. ,The District is i required to follow certain procedures, including public notice requirements and holdin'g a special Board [ <
meetini, before imhlementing changes in standard electric rate schedules. (2) Significant A'ccounting Policies:
;> Bantsof Accounting l The accompanying combined financial statements are presented ln accordance with generallyf ,
, accepted accounting princlples and reflect the rate-making policies of the Board.c
> Utility Plant, Depreciation and Maintenance '
Utility plant is stated at the historical cost 'of constfuctiors Construction costs lEclude. labor, materials; services purchased under contract land allocatlons 'of indirhet charges for engineering, supervision, s w transportation and ' administratfve expenses'.E O-
~
~
- Interest on funds used to' finance construction work ln progressi 's capitalized as a part of the elehtrici ,
and general plant. Composite rates of 6.67 percent and S.28 percent were used in 1993 and 1992[
~
respectively.2 , J Depreciation expense is computed 'on'the straight-ilce basis ove/the estimathd usefuhives of t' he1 A
~
various classes of plant. The depreciation rites in ellect for fisdalyear 1992-93 resulted in inovisions ;
~
. approximating an average rate of 2.97 percent on the average cost of depreciable electric plant, an average?
rate of 2Al percent on the average cost of depreciable irriga' tion pidnt and'an average rate of 6.70 pe'rcent on;
~
l the average cost of depreciable common plant? ' ~ The cost of property that is replaced, removed or abandoned, together wit'h ie' mon) costs,less T salvage, is charged to accumulated depreciationf SRP charges to maintenance expense the cost of labor 6
- materials and other expenses incurred in the repair and replacement of minor items of property > - ',
> > . > 24
.m
'[_
_, '* . m ,i~..
> Bond Expense Bond discount, issue and refinancing expenses are being amortized over the tenns of the related bond issues 1.osses associated with bond defeasance transactions are deferred and amortized over the lives of L the defeased debt in accordance with the rate-making policies of the Board. Included in deferred charges and other assets are unamortized losses associated with bond defeasances of $172,098,000 and $126,304,000 . as of April 30,1993 and 1992, respectively. > Nuclear Fuel Under the provisions of the Nuclear Waste Act of 1982, the District is charged one mill per kWh on its share of net energy generation at the Palo Verde Nuclear Generating Station (PVNGS) for the cost to dispose of the fuel. The District amortizes the cost of nuclear fuel, including its disposal, to fuel expense using the unit of production method.
In connection with the Energy Policy Act of 1992, electric utilities that have purchased enrichment services from the Depai: ment of Energy (DOE) will be assessed annually for a fifteen-year period amounts to fund a portion of the cost for the riecontamination and deconimissioning of three nuclear enrichment facuities operated by the DOE. Th 3 Energy Policy Act provides that such assessments are to be treated as a . cost of fuel. At April 30,1993, the District had recorded its estimated portion of such assessments of approximately $7,870,500 as other noncurrent liabilities. The related asset was recorded in deferred charges and will be amortized b fuel expense and recovered through the fuel adjustment clause over a fifteen-year period.
> Decommissioning The total estim%ed cost to decommission the District's share of PVNGS is $234 million in 1992 dollars.
Decommissioning funds of approximately $22,100,000, stated at cost, as of April 30,1993, are main'ained in an external trust. This amount is classified as segregated funds in the accompanying combined balance sheet. The corresponding liability is classified in other noncurrent liabilities.
> FuelCosts The District maintains a fuel adjustment clause balancing account to adjust operating revenues for variations between the recorded cost of fuel and purchased power and revenue designated for recovery of such costs. At April 30,1993, underrecovered fuel costs of approximately $307,536 are recorded as accounts receivable. At April 30,1992, overrecovered fuel costs of approximately $35,783,000 are recorded as accounts payable.
> IncomeTaxes The District is exempt from lederal and state income taxes.
> Cash Equivalents The District treats short-term temporary task investments with original maturities of three months or less as cash equivalents.
> Recogn16on of Unbilled Revenues
. The Distrkt estimates and accrues revenue for electricity delivered to customers that have not yet been bilkxl
> Reclamifications
' Certain 1992 amounts have been reclassified to conform to the current year presentation.
(3) Possession and Use of Utility Plant: The United States of America retains a paramount right or claim in the Project which arises from the original construction and operation of certain of SRP's facilities as a federal reclamation project. SRP's right - to the possession and use of, and to all revenues produced by these facilities is evidenced by contractual - arrangements with the United States. (4) Coronado Unit 3: In 1991, as a result of a re-examination ofits long-range resource plans, the District cancelkxl construction of a third unit at the Coronado Generating Station. The District wrote down its investment to
> > > 25
3 ' * ' vy~~ ~
~ '
L R~ , Lv ,
~
- y w , nr ' c:; ' < > '
.> sf,Q , [.l f + a- '
'S - ' '
's
,:? 7
$$ f( , , .
\ ,
. , , . ,, , w >
& 3A'~ ' N l'ts' estimated riet realizabic value'and is actively atte'mpting to s51' t he componentd of t'he unitdiinagement\ ' - r
~
Q~ < continuesjo review theialue of the assets on hind and is ; confident that they are recorded a't their net s ,
' realizablevalueat April 30,1993. #
l (5) Interests in Jointly Owned Electric Utility Plants:L f
, , The District has entered into various agreements'wNiiother electric uillilles for the jolnt ownership of ) '
, : electric generating and transmission facilities. Each participating owner IN thesdfacilitles must provide for d
. the cost'of its ownership share. The District's' share of expenses of theJointly owned plants is included ini 1
W operating expenses in the combined statements of net revenues ( The following tablullects thb District's1 ownership interest in jointly owned electric utility plants is~of April 30,'1993F ; M _ , , . , _ . _ , . o _?' w.ch_
, e, "'1 x ,
.(Thousa'nds); ' '
2
- 1 r Conuruction '
' Ownenhlp 7 1 Plantin j ' TAccumulated L 1Workla t gg >
2 ~' Plant Name. -Share ? Service c. ~Depr Pmgr_ess . _- ._eciation
- $ n 89,646 i Four Corners (NM)(Units 4&5) 1000% ;$ . (35j48)E : $ ?.7,774j , .
10.00
.Mohave(NV)(Units 1&2) ' ~
lE48,6531 f(24$99)L , {4,854 j ,
. Navajo'(AZ)(Units 1,2&3) l 21.70 .- 1228,527 f(114,569)i ;3,610fs -
Ilayden(CO)(Unit 2) . ' 50.00 . 68,352 L i (35,683) . /995 ' . Craig(CO)(Units 1&2) ' 29 00j ' 226,129 i (88',724) V3,850 ? d Palo Verde Nuclear
; Generating Station (AZ) .
- (
. _Un.i.t,s_1,2.,._&3) ._. . 17.49y .
1,M9,616 ; _ V(291,116): _ L26,380
& H ,
- $2,310,923 - i $(590,039)~# I $47,4631
- The District acts as the operating agent for the particihants'in the Nivajo Geberating Station 2 4 ~
T The District retains an option 1o repurchase up to s additional 5'.7 percent interest id PVNGSOhich j
~
. .was previously sold to another participant.: The' repurchase price would be based on reproduction;costl ,
new,less depreciation, and can occur no sooner than 2001.-
-(6) Longterm Debt: . ,
1
D, long-term debt consists of the followingi -
a_,_ : - e
'^
(Thousands) ' ' _ Interest - Rate '
,1993: , 1992.:
Revenue Bonds (mature through 2031) '. ' 2.7-9.3%j $ 3,472,537 c .8 3,451,296 ) UnamortizedIkmd Discount : : (141,064) 2 - (108,036) j , Total Revenue _ Bonds Outstanding E3,331,4731 L 3,343,2601 CommercialPaper 1 2.1-2.50 . 375,000- '375,000
,Other ., . O! M,361 7 ,
? -.._.
.. Totallong-Term Debt , y . .$3,706,473 ' ; $3,722,621 > ,
. The annual matudttes of 1ong-term dethfU w y mmmercial paper and unamortized boEd disc as of April 30,1993, due in the fiscal yearsedug Aprn.2,p c as follows: s
.}
^
1 _.a.ma .w ,a _ :__ :_.,___.w_ ; .
- (7housands) ~ ,
-1994' . $f 57,847l l nq d,;-6 -1995'- :63,948: l 4 .-'. . - . ..,,,;..f
,1996- :65,814 ? -
s. L 71,871' 1997 1998 75,919
. 3,137,1381 '
' T_he.rea_fter '
' > . > >f 26 S3,472,537
. _ _ _ _ . . - . + . . _ _ _ _ . _ . _ _ _ . _ _ _
+ w' ( $ l J QQ [:Q.Q ' l.) , , , ,; , ,
> Revenue Bonds Revenue bonds are secured by a pledge of, and a lien on, the revenues of the electric system after deducting operating expenses, as defined in the bond resolution. Under the terms of the bond resolution, the District is required to maintain a debt service fund for the payment of future principal and interest.
lacluded in segregated funds is approximately $183,586,000 and $189,541,000 of debt service related funds 'as of April 30,1993 and 1992, respectively. The District has $245,775,000 of mini-revenue bonds outstanding which can be redeemed at the option of the bondholder under certain circumstances. The District has a $50,000,000 revoMng credit agreement available to refinance these bonds in the event significant redemption requests occur. Based on historical . redemptions made on these bonds, management is confident that this credit agreement is sufficient. The debt service coverage ratio, as defined in the bond resolution, is used by bond rating agencies to help evaluate the financial viabihty of the District. For each of the years ended April 30,1993 and 1992, the debt service coverage ratio was 2.11. Interest and amortization of discount on the various issues results in an effective rate of approximately 6Si percent over the remaining terms of the bonds. At April 30,1993, the District has authority to issue additional electric system revenue bonds totalling
$124.218,000 principal amount and electric system refunding revenue bonds totalling $1.191,775,000 principal amount.
In fiscal 1993 and 1992, the District defeased $720,673,000 and $281,757,000, respectively, of electric system revenue bonds resulting in lower future debt service requirements as well as losses of $50,426,000 and $26,647,000, respectively. Consistent with the rate-making policies of the Board, the losses have been deferred and are being amortized over the life of the defeased debt.
> CoimnercialPaper The District has issued $375 million of tax exempt commercial paper at an average interest rate to the District of 2.26 percent. The commercial paper generally matures not more than 365 days from the date of issuance. The commercial paper has been classified as long-term in connection with refinancing terms under two revoMng credit agreements (the Agreements) which support the commercial paper. Under the terms of the Agreements, the District may borrow up to $275 m.illion thrMigh October 29,1993, and up to $100 million through March 19,1996. The District is in the process of renewing the $275 million revolving credit agreement.
While the revolving credit agreements contain covenants which could prohibit borrowing under certain conditions, management S confident that financing will be available. The District has never borrowed undet the Agreements and does not expect to do so in the future. Alternative sources of funds to support the commercial paper program include existing funds on hand or the issuance of alternative debt, such as revenue bonds. The commercial paper is an unsecured obligation of the District.
> General Obligation Bonds in 1984, the District refunded its then outstanding general obligation bonds. Although the refunding constituted an in-substance defeasance of the prior lien on revenues which secured the bonds, the general obligation bonds continue to be general obbgations of the District, secured by a lien upon the real property of the District, a guarantee by the Association, and the District's taxing authority. As of April 30,1993, the l
l amount of defeased general obligation bonds outstanding was $57,595.000. (7) Employee Benefit Plans:
> Defined Benefit Plan SRP has a defined benefit plan (the Plan) covering substantially all employees. The Plan is funded .
entirely from SRP contributions and the income earned on invested assets. No contributions were required to be made to the Plan in fiscal years 1993 and 1992. Plan assets consist primarily of stocks, US Government Ohhgations, corporate bonds, real estate funds and a guaranteed investment contract.
> > > 27
7. Net periodic pension cost (income) as of the dates of the iatest actuarial report (April 30)is made up of
- the components listed below and was determined using the projected unit credit actuarial cost methode 1993 . .. 1,992 -
Service cost l $ ' 9,974 - $ 8,691 Interest cost 23.905 . . 21,890 : Actual return on assets - (27,230) (45,493) - Net amgtization and deferral ,_ (9,671L_ ,] 6_91 0, Net periodicpensionincome _. . . _ . _ _$(3,022)
...._. ; $(4,221)
_ a.._._ ___.- The discount rate used in determining the actuarial present value of the projected benefit obligation ! was 8.25 percent for 1993 and 8.75 percent for 1992. The rate of increase used to determine future 4 compensation levels was 5.5p' ercent for both 1993 and 1992 The expected long-term rate of return on ; assets is 9.75 percent for both 1993 and 1992 The following schedule reconciles the funded status of the Plan with amounts reported in SRP's ' combined financial statements as of April 30:
-. -. . ..- . .. -.-.=.a . .u (Thousands)
.2 ~~.-,.,n, . - -. . ...~ , ,. .~.., ..n g - - .19.,93, 1992 n
Measurement Date January 31 April 30' Plan assets at fair value $ 365.037 - $ 349,063 Actuarial present value of ' projected benefit obligation: Vested benefit obligation (235,139)- _(213,520) No_nvested_ benefit,o,bligation _ _ 8,0L ( _ R OM Accumulated benefit. obligation (243,196) f (221,223) Effect of projected future , . . cognpensation levels _ ,. __ _ (74,860) __.
!(59,39 9 -
Prgjected_ benefit obligation _ (318,056)__ J280,61,9) ' Plan assets in excess of projected benefit obligation ~ 46,981. - 68,444.- Unrecognized transition asset ' (39,023) . (43,359) Unrecognized net loss (gain) 18,768 (1,845) Unrecognizedprior service cost _ _ . _ 5.243 _ _ 1 5,707 Prepaid Pension Cost $ 31,969 - 6 28,917 : y Defined Contribution Plans SRP maintains two defined contribution plans which receive employee contributions and partial employer matching contributions. Employees are eligible for employer matching contributions upon completion of one year of service, SRP contributions to these plans were $3,366,000 and $2,977,000 in the fiscal years ended April 30,1993 and 1992, respectively, y Other Postretirement Benefits SRP provides certain health care and life insurance benefits for retired employees, Employees are . eligible for coverage if they retire at age 65 or older with at least five years of vesting. service, or any time after age 55 with a minimum of ten years of vested service. These benefits are subject to deductibles, copayment provisions and other limitations.SRP may amend or change the plan periodically. Currently, the cost of these benefits is recognized as expense as the premiums and/or deposits to the trustee are paid. The total cost of postretirement benefits ' expensed was $4.164,000 and $3,560.000 for 1993 and 1992, respectively.. In December 1990, Statement of financial Accounting Standards No.106," Employers' Accounting for Postretirement Benefits Other Than Pensions
- was issued. This new standard requires that the expected '
> > > 28
cost of postretirement benefita must I:a charged ni expanse during the years that the employees rends - service, The new standard will be implemented in the first quarter of fiscal year 1993-94, and will be adopted , ratably over the next 20 years. Based on an actuarial review, the postretirement benefit obligation at April 30,1993, measured in accordance with the new standard. is approximately $130 million. The adoption of the standard will result in an increase in 1993-94 annual postretirement benefits of approximately $18 million, of which
, approximately $15 million will be charged to expense. These estimates have considered the effects of ~
amounts charged to/from joint participation projects; (8) Fair Value of Financial Instnnnents: The following methods and assumptions were used to estimate the fair value of each class of financial instrument identified in the following items on the balance sheet.
> Investments in Marketable Securities SRP invests in U.S. Government Ob!igations, Certificates of Deposit and other marketable investments.
Such investments are classified as Other investments, Segregated Funds, Cash and Cash Equivalents or Temporary lovestments depending on the purpose and duration of the investment. The fair value of marketable securities with original maturities greater than one year is based on published market data. The carrying amount of marketable securities with original maturities of one year or less approximates their fair value based on the short maturity period.
> long-Term Debt The fair value of the District's Revenue Bonds, including current portion, was estimated by using pricing scales from lndependent sources. The fair value of commercial paper approximates the carrying amount, because of its short term to maturity
> OtherCurrent Assetsandllabilities The carrying amount of receivables, accounts payable, customer deposits and other current liabilities approximate fair value because of the short maturity perk >d.
The estimated fair values as of April 30,1993, of SRP's financialinstruments, excluding those instruments where carrying amount approximates fair value, are as follows:
- - - - - . - . . - - . ~. .-
- . . . .(Thansands)
Carrying . Fair . Amopnt _ yalne . Investments in Marketable Securities: Other investments $ ' 24,570 $ 24,M5 Segregated Funds $ - 99,071 $ 102,607 ' Temporarylavestments $ 18,0M $ .18,286 tong-Term Debt $3,331,C3 $3,805,429 (9) Commitments: ;
> Construction Program
- The construction program represents SRP's six-year plan for major construction projects and ongoing .
. Improvements to existing generation, transmission, distribution and irrigation assets For the 19901999 period,SRP estimates exp'tal expenditures of approximately $2.0 billion. Planned major construction projects include the adchtion of scrubbers at the Navajo Generating Station and the construction of the
- Meadfhoenix Transmission Line which will strengthen SIFs ability to exchange electricity with the western and northwestern portions of the United States. In addition, the construction program includes an estimate of the costs associated with complying with the Clean Air Act at its generating facilities.
Construction costs will be financed primarily by funds currently on hand, future net revenues and the sale of revenue bonds,
> > > 29
i
> Long-Tenn Power Contracts -
The District has entered into four long-term power purchase agrecuents to supply a portion of its projected load requirements through 2011. Minimum payments under these contracts are approximately $46 million in 1994 and approximately
$57 million per year thereafter. Minimum payments under two of these contracts, of approximately $25.2 million per year, are unconditionally payable regardless of the ability of the District to utilize the power.
> FuelSupply At April 30,1993, minimum long-term commitments of approximately $2.1 billion exist under coal ~
supply contracts. During 1989, the District paid approximately $59 million to terminate a contract with Kaiser Coal Company. In accordance with the rate-making policies of the Board, the remaining termination costs of $42,269,000 and $46,232,000 at April 30,1993 and 1992, respectively, are included in deferred ' charges and other assets, and are being amortized to fuel expense over the remaining life of the original contract. u
> Papago Park Center The District is currently developing a 350 acre (net) mixed-use commercial park called Papago Park' Center in Tempe and Phoenix, Arizona. In connection with the infrastructure development, the District and the City of Tempe have entered into an agreement whereby the District will pay an armual assessment of -
approximately $1.75 million per year through 2008 to the City of Tempe to pay for its share of street and infrastructure improvements and right of way acquisitions. The obligation of the District to make - assessment payments is an unsecured obligation payable from District general funds; The present value of this obligation has been recorded as a noncurrent liability. The District's wholly owned subsidiary, Papago Park Center,Inc., will serve as the real estate
~
management company in accordance with the terms of a long-term lease on the property. (10) Contingencies:
> Nuclearinsurance Under existing law, public liability claims that could arlse from a single nuclear incident are limited to
$9.3 billion. PVNGS participants currently insure for this potential liability through commercial insurance carriers to the maximum amount available ($200 million) with the balance covered by an industrywide retrospective assessment program which is required by the Nuclear Regulatory Commission. The maximum assessment per reactor per nuclear incident under the retrospective program is $75.1 million sub}ect to a 5 o percent surcharge which could he applicable in certain circumstances, but not more than $10 million per reactor may be charged in any one year for each incident.
Based on the District's ownership share in PVNGS, the maximum potential assessment would be $41.4 - million including the 5 percent surcharge, but would be limited to $5.2 million per incident in any one year.
> Environmental SRP is subject to numerous legislative, administrative and regulatory requirements relab to air :
quality, water quality, hazardous waste disposal, and other environmental matters. (uch requirements have and will continue to result in increased costs associated with the operation of cding properties. SRP has been named as a Potentially Responsible Party (PRP) at one site by the Environmental Protection Agency (EPA); however, a settlement has been negotiated for a portion of SRP's obligation. SRP has not been , identified as a PRP at any other EPA or Arizona Department of Environmental Quality (ADEQ) identified ; sites, but the District is working with ADEQ and the other owners / operators regarding potential petroleum hydrocarbon contamination of a site, SRP conducts ongoing environmental reviews of its properties to-identify those which it believes will patentially require remediation. SRP works with the EPA and ADEQ, as applicable, to determine the appropriate remediation actions necessary, bny. SRP has recorded en ironmental reserves of approximately $17,500,000 which represents managment's best estimate of its liability related to th'e remediation of known properties at April 30,1993. The District and the Association are pursuing insurance and third-party cost sharing for the remediation costs. The amount of shared costs,if any, cannot be reasonably determined at this time ~-
>'> > 30
*' e-x: :,
L therefore has not been ofisu against the recorded liability. The estimated reserves are subject to
- continuing review, howev4 management believes that the remediation costs incurred bySRP for -
-_ environmental liabilities vill Loi have a material adverse impact on its financial position or results of
' operations.
~
liie Clean Air Act Amendments (ACT) of 1990 require reductions in sulfur dioxide add nitrogen oxide emissions from coal burning power plants and may regulate emissions of hazardous air pollutants by coal burning generating facilities. The District estimates its costs to comply with the ACT to be approximately
$100 million and has included this amount in the 199&l999 construction program, in addition, several of the -
' enerating g stations in which the District has an interest have been subject to studies relative to air quality.
The Navajo Generating Station participants have agreed to lastall scrubbers at the Navajo Generating J Station. Capital expenditures of $110 million are included in the District's 19941999 construction program
' for these scrubbers. Sim!!ar air quality studies are currently underway at the Mohave Generating Station in which the District owns 10 percent and have been proposed for the Hayden and Craig Stations in which the .
District owns 50 percent and 29 percent, respectively,
> Indian Matters From time to time, the District and the Association are involved in litigation and disputes with various Indian tribes on issues concerning royalty payments, taxes and water rights, among others.- Resolutk>n of these matters may result in increased operating expenses which would be passed on to customers.
> Otherijtigation in the normal course of business, SRP is a' defendant in various litigation matters. In management's opinion, the ultimate resolution of these matters will not have a material adverse effect on SRP's financial position or results of operations.
t Report of Independent Public Accountants To the Board of Directors, Salt River Project AgriculturalImprovement and PowerDistrict, and Ik>ard of Governors, Salt River Valley Water Users' Association:
' We have audited the accompanying conibined balance sheets of SALT IWER PROJECT as of April 30, .
1993 and 1992, and the related combined statements of net revenues and cash flows for the years then
- ended, These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards .
^ require that we plan and perform the audit to obtain reasonable assurance about whether the financial
- statements are free of material misstatement. An audit includes examining, on a test basis, evidence -
supporting the amounts and disdosures in the financial statements. An audit also includes assessing the 1 accounting principles used and significant estimates made by management, as well as evaluating the overall i financial statement presentation, We believe tha't our audits provide a reasonable basis for our opinionc l.n our opinion, the financial statements referred to above present fairly, in all material respects, the
- financial position of Salt River Project as of April 30,1993 and 1992, and the results of its operations and its -
cash flows for the years then ended in conformity with the generally accepted accounting principles. Phoenix, Arizona, Arthur Andersen & Co.
- June 15,1993
> > K 31.
~ , !hf w
)
>.> > > > > > > > > > w.> >
i SRP B rds 4
, .4 The two complementan Boards that guide SRP are: the - . .
}
' 10 member Salt Riv ' alley Water beers' Associa ion Board. f
' of Governors, whose embers
-:4 are elected every tw( years, ', " "'#%D~&m ggg and the Ifmember.' River Project Agricultural -
Improvement and Power District Board of Directors, , I
.whose membem serve staggered four-year terms. ; phy Four of these membem are -
elected at-large. These Boards set specific . . .. policies and, through SRP's management, conduct SRP's business. For purposes of electing Board members, the SRP water Ervice territory is divided into Seated, from left: 10 voting districts or dhistons. William W. Arnett, Atlarge, District
'lo qualift as voters indhiduals Joe Bob Neely, District / Division 8, Association & District Dwayne E. Dobron District / Division 10, Association & District '
must own land within one of Standing, from left: Ihe l0 rating districts or Robert E. If urley, District / Division i', Association & District divisions. Additionally, District James R. Marshall, Atlarge, District wtem must be quallfled Not pictured: electom of the state of Arizona' Fred J. Ash, Atlarge, District Gilbert R. Rogers, District / Division 4, Association & District 5 A
~
i front row, from left:
.lohn M. %31\ lams Jr., District / Division 5, Association & District
+ s Ann M. Burton, District / Division 7, Association & District a.
c:{ Iloward LydIc, District / Division I, Association & District Thomas P. Ilurley,* Division 6, District Back row, from left:
- 1) Eldon Rudd, At-large, District Clarence C. Pendergast Jr., District / Division 2, Association & District
;9 Bruce B, Brooks, District / Division 3, Association & District N ' ' ~; i James L Diller, District G, Association
- k
- lbswd away July 30.1993 d
s a
.A a=' . ;pe ;,,,,,.
a g
- fkSl'
> > > 33 J
i l Front row, from left: lxster Mowry, District / Division 7, Association & District l John A. Vanderwey, District / Division 2, Association & District Council Chairman James M. Acconwio,* District / Division 3. Association & District l David Rousseau. District /Divison C, Association & District Roy W. Cheatham. District /Dl cision 5, Association & District != Second row, from lef t: W. Curtis Dana, District / Division 9, Association & District C. Dale Willis, District / Division l0, Association & District [ Clarence J. Duncan, District 6, Association l Elvln E. fleming. District / Division 3. Association & District Third row, from left: Charles D. Coppinger, District / Division 4, Association & District flyton G. Wllliams, District / Division 4. Association & District Robert W. Warren, District / Division 6, Association & District Orland Ilatch, District / Division 10, Association & District John E. Andenon, District / Division 3, Association & District l Dan C. McK1nney Jr., District / Division i, Association & District Fourth row, from lef t: Emil M. Rovey, District / Division 1, Association & District inrry D. Rovey, District / Division 2, Association & District Ben A. Butler, Division 6, District Lawrence P. Schader, District / Division 10, Association & District y;, c
.t pi@
- lbsseJ au ay July 519D l
's ia,_ -4
;,, :, j tiji 1 4' s t
!.h
,y'},...
. ' ' l. k!f,,
'S] j; .
L / . y g (p~.$.y. m
& ' in
.. ?
'tP- f r e, ' y --
g
l l 1
~
?1 SRP Councils 9
3 Ti Y 'hdg g'"1 [ The two Councils that p y establish SRP policies are: the
- - - , a 30-dlember Salt River Valley t r im m e =
' ' jJ - ' ' -
Water Users' Association, e n
. i ~Jj Council and the 304nember
[' . Salt River Project Agricultural , improvement and Power U District Council. l-These Councils set broad . j policy by enacting and
. , amending bylaws relating to the management and conduct of SRP's affaim,
}
n yy w r-gv. h Three Association Council and m,-ym
.- aa M N,wua&., lyg&g;x;QM g
h wak pFd8% p! three District Council members are elected from each of the 10 voting dist;icAs or divisions. Front row, han lef t: filmund Navarro, District /Ihrision a, Association & District To qualify as voters, Council l' ice Chairman Martin Nempton. District /Dicision N. Individuals must own land Association & District within one of the 10 SRP
*? Mayne \. Marfetta Ihstrict 'Dn'ision 1 Association & District **w"6 Second row, from lef t: voting divisions or districts. >( Dale C. Riggins Jr.. District Divison 9. Associalma & District Michael N. Gantiel, Dntrict' Division & Association & District Additionally, District votem fjik 9 g W Robert L Cook, thstrict Division I. Association & District Back row. Irom lef t: the state of Arizona.
I.ee L Tregaskes. Ihstrict Division 9. Association & District Carl E. Weiler. District /Dicnion a Assortation & District e Mark Y. Pace, District / Division S. Association & District Nesin J. Johnson. Dutrict:thvision 1, Association & District Not pictured: , 11oyd Ire itanning. District: Division -I Association & Disnict Wayne A. flart. lkstrict:Dictsian 2 Association & District li
4 }
'. Salt RiverProject Corporate Officers President.. John R. lassen .i Vice President. . William P.Schmder Secretary.. . William K. 0'Neal j
Treasurer .... .. : Dean K. Yee 1 Consultants i legal Adviser Jennings,Strouss & Salmon Independent Public Accountants Arthur Andersen & Co. Ikmd Counsel Mudge Rose Guthrle Alexander and Ferdon s Financial Consultant lazard Frsres and Co.- o 1 k
.I j
1
..l l
s
)
> > . > 3I) j l
- l .
u}}