ML20082N543
| ML20082N543 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 12/31/1990 |
| From: | Parris W, Plante R HUDSON LIGHT & POWER DEPT. |
| To: | |
| Shared Package | |
| ML20082N499 | List: |
| References | |
| NUDOCS 9109090228 | |
| Download: ML20082N543 (85) | |
Text
{{#Wiki_filter:t l
\ /
/ \
W Hudson Light and Power Department 1990 Annual Report
;hrolBBS!! Z!88l[p
n; hssMe... [ A Mesmege f>wne Ibe Board 2
'.The yetr 1990 tshered in a new
. decade, and it is one that the lludson Ught and Power Depantsent anticipates willle marked by relatMi-bie ratts
' C'ar and Tessil Eksels 4-Iraq's invasion of Kuwalt sent tremors through an energy field in -
which memories of the 1970's o!! embargo remain vivid Seabreek en Line 6' One of Itudson's maior shicids from the impact of increased oil costs was the commercial operation of the Seabrook Nuclear Power Plant in New !!ampshire. Nedsen Goes to Court 7
- In an effort to recoup our ratepayers bases resulting from delays at Seabnx)k, and from Seabrook con-tract changes, Iludson end other
- municipal light departments filed complaints in the courts.
Costen Edison Settles 10 Projections for stable rates were aided by a $2.2 million settlement agreement reached with Boston Edison in connection with the - Pilgrim Nuclear Power Plant. Cutleek for Tomorrow 1i We anticipate that by the mid-1990s, iludson will how to either panicipate with others or alone to increase Intermediate and peaking generation resources. Mnancial Statenernts 13 Definitions, Assets, Equity anti IJabilities, Statements of Equity, Comparathy income Statement, Operating Rewntte, Expenses, Statement of Changes in Financial
. Position, Footnotes, Receipts and Expend!tures, Revenue from Sale
- of Electricity, Statistics, Five-Year Comparathe Electric Sale Data-Photo Ackneseledgementt The liudson IJght and Power Department would like to express its gratitude to the Hudson Daily :
SunA1tarlborn Enterprsse, for the photographs of itudson businesses, residents and ewnts that it so generously donated for this 1990 Annual Report. All photographs shown in this Report . era taica by Hudson D<nly kn/Marlborv Enterprire photographers. h
N -_
; ,- ,:n ,
4' "Y, , e n 4 :. '
'c i 9fa : u,
,! yy 7h;/
d a ! : ?
; <kw, , , * ,y.,** _ s e c
*' l 7!r _ 's
[,, nr s,y+
- m. . me t sy%a%g -
f / g%g b .- q -- (* ~ g[ ml l T 4iy I y:,: M :n-
- . M ~,
ny f *
+ w t j~ y% %N p :
m' g- , ?*,* a
%* . e~
,,^ %Vf pnqq ,'+,gt :< e.R ;R A ='L ~ + +4 ,[Y e v
+,%,.k, 4
)h/f h .. g %
"; ll $ _
h&: $%- hNih': yb(k,4
/
% e - g .f p f> 3g ();7ac:e .a p
rung,NWy ' M;g g q> y,'Q[ ~ ;y4:' , ;p#~
. , '.%m h pi g*L,
- ;s syw*J5 " *
$Pp ey ,n r " .oby*t 5 . -
? ^-- e
Q-
' %p1
+4 ,
- g. i Y'_
ri ,
,y. 'x ,. i
{_ - [k '. n u , l 9; 17 fk??% g?? 1 2% m%%
,sj
,.- s
' c:, ,
>f gg&+_ f+a f Q g3 ,
(yfpj;;/; ~ )g
%. ' ~
t's o - f .; i e.
?w;;$
4Q ') ]?I l r) ; , ;-l. 4
;e 4 i
;g 4My g ,.
W 4-v _
;Q-ji:y,z
.Q ?':
e ' qt-. * ~ . . - "' ' w,y~ m] i l. [ ' f-2 vQW, . , u
,h,* % % %% %%
?, %;L _ '
.=sy
' .n;99
*%, u,
+p g
y e p. g A
,Yhe fjug ' IIR ht a,n; p w i n nch, ,I,"Ud to g 4 < + i n o' !!n sul Rcport u .v e c ~~, Arnivg pg,
"~so,,,a yI"ht, ai bon,n,cn l,,"!nen nia,,, ryg,,
c,,,,, lhe tvu7jg i x
m lA Message A New Decade... gg gg .The year 1990 ushered in a new decade, and it is one that the lludson Light and Power Department anticipatts will be marked by relativelv stable rates for its consumers. BSard During the early 1980's, the Depanmen prided itself on having one of the lowest electric rates in Central Massachusetts Our rate whedules tracked those of New England Eh'ctric System (Massachusetts Electric), only our's were considerably lower. The latter pan of that decade, however, saw a change In that status quo as inflation , had its impact, and costs associated with capital expendituNs for the Seabnok Nuclear power Plant lecame due. Not 0:dy did we find onnelves in the unenviable position of
- having to pay for a power plant from which we received no power, but we al.so watched helplessly as the price tag for that plant was pushed to a staggering-% billion dollars by regulatory delays and repeated intenentions by Massachusetts officials.
'Ivo suits have teen filed by liudson and other municipal light depanments in an attempt to recoup some or all of its losses for consumers. These cumbersome court proceedings are ongoing.
Seabrook finally lecame commercially operative during 1990, and access to this generation has helped to shield us fmm fluctuations in fossil fuel prices triggered by the Middle East crisis. While other more oil-reliant utihties were mailing customers notifications of fuel price increases, we were able to maintain our rates. New England's utilities - liudson included - are experiencing severe financial difficulties. The cost of doing business is rising rapidly, Electric rates across New England are expected 'to increase during the 1990's, and the trend has already begun, Despite the dim expectations for New England's electric bills, we remain relatively confident of our prointions for stable rates our caletdations take into consideration the following.
* - projected annual kilmvatt hour consumption for the entire system;
- Available and new resources with their respective real and estimated capital costs;
- Estimated fuel costs based on New England Power Pool forecasts modified to reflect current known world situations; and 4
- Operating and maintenance cons.
All of the above are, of course. subject to change .The assumptions and projections are based on the best information we have to date For example, one assumption we used is that the Iraq-Kuwalt situation will be resolved by the end of 1991, if it'is resolved earlier, the Department's assumptions will be conservative If resolved later, they will have leen too low. Another reason for our confidence -is our relatively young power supply. Most of New Englami relies on a power supply with an average of 37 years. liudson's power supply averages fi38 years old per MW. In the following pages, we present the 1990 Annual Pepon and hope that we have addressed one of our consumers' major concerns - dollars and cents and electric bills This report focuses on the different variable impacting electric rates and service, from the intemational ) arena to local collection activity. We would like to take this opportunity to thank the men and women of tl.e 11udson l Light and Power Department far their continued dedication and diligence in sening out - j consumers. 1 Poland L l'lante. Chainnan Peter it Keane Weedon G. Parris, Jr, Clerk thidwn .11unkspal Light Board l l
-. . - . .. l
_ ] -.
[ l
. -I4 *i
~
w- $n'd p%
~g h, -
1, C;w g) ; ~ ,W
- 'T '-
A, .;[ g%. , J' y w q W 1 hb l f __
-g y
+!
4 V ,
'lwkc' - w l .P -;. -
Q__7
~
-w j.
-l e_ "
n 4 . , <
\y g- ,
e ,, C $$.. a . w _ $']A . ^ p (l e : a i e w{. e 7;fm' #d/d, ' j
. - f[] g, ;
Y _~ $hbbki' -. '$
'g jt
...y j
-{
i N?
.s
~
/,.,gt y/ p , .
a,. .y '.9*$8 ,y'1 : > [ i,f w. j H jb .= Q' s A.yAjgf[ Ly s l [w-f;.'< ?w' k[' 40o0 . [s fk ~ e +1-MEfpJ. 1. ngg
$ .Jh e , Q; ..y...
#. . U,, kJ;d[( # N w [YhQ: s fa%b wwp. -
7 t - Y &- 1 g 4$$M(i 45- MpM bgby I anh in , i
+j;b@$NS$q?R$g!Yh 4w pm tg&g[f~mwg e
hh { s lkQkk Yh,?. mo QhQk hhh "oug. AGE?li. ihlm Y
+%, , a m, % %'- 7;YNhphdf ?"f SH AA
,r7h wc'r? - %%
Ng%k,A_iNiil^k
;a gf, y %gg;OjQ;
. gya a",lleRWQ . ?f
@M M),n'gg;&
- e. .
'Mi>%u;,,
e-
,^) n:y$. y$.*
,# *~ * <
p- 9; s.f ;
. m .. + m. - % kwa" ?M Mi rx*T n) Hit tutt@w 2m l
-w, vnl if}f.hkt
/ nn .a y l' ?! h fQ ,
I'
~:h ,f+f ~ kn,
^ j fb;g , , .
It*! Drhoall, & tih bsII. and hofdlote g v,s4, ,.,xw, gr,,sa an,,,,,,,
., ,h.i Aw~ O~ .jj ** '
h 'h b'Y M Y N
- II U.h'N W f , ~
.n ,
k?:W ;. = ,p vw +ni ., Imu N y sy a u g l.
--N,
' ^
'- -m.-. .? - - - ' ,.__~~'l
~~
3 u
Marsager's vouer Planning rays off... D""" f "et" t o"$ " fo$$'l I"el Pr'ceS '8"ited bv " tem"t'"" i 2"""" i ""a c""t * ' R Q ort et nmsmn on the homefront, the iludson 1.ight and Power Department was able ta c ; J e benefits of its long tr ge lever planning during 1990 and maintained stable Rates
- n rstand how rates are estabhshed, one must understand how utilities operato l!nlike companies such as Boston f.dison, Com.nonweald 1.Fctric, etc., the lludson 1.ight od Power is a municipal light departmeu owned by the conununity in which it is located and sup[ntted solely by its ratepay trs, in accordante with the provisions of the Massachusetts General laws lludson nas no stockholders, only ratepayers. This means costs and benefits alike are reflected in the rates. A private utility is a profit making entity and must receive State appmval for rate lucreases. A municipal l$ht department is noa-pmfit, and it need only file new rates with the State. Iludson's rates are estabushed to satisfy projected annual ex[rnses.
The law stipulates that rates may not be changed more often than once in three months. Iludson experienced no rate lucrease since 19M9, nor is one anticipated in 1991. To ensure that municipal light departments are indeed nonprofit, the Commonweahh specifies that rates must be fixed to yield not more than F% lrt annum on the cost , of plant. During both 1989 an(' 1990, the Department's rates did not yield a profit. ! War and Tossil Tuels... ' Iraq's invasion of Kuwait sent tremors through an energy field in which memories of the 1970's oil embargo temain uvid. Throughout the years, the lludson 1.lght and Power - I l>epartment has finroy maintained that the only rehable energy is a mix of all resources. Dependence on any one fuel can be disastrous. By December of 1990, the cost of oil per barrel had more tha.. aoubled. Many more oil reliant utilities mailed out customer notifications of increased fuel charges. Iludson's r attractive fuel mix, however, brought it through the fluctuations with no financial impact on its consumers. iiinno (5.N E PI3 MIS M Posrer During a irak demand (a3y je 4 -~ period-tije highest yfgijiff?;jg.:j
~:
vcorded electrical ,r,<,<,,,,:::,yxyg 1 . consumption on a '*9;'X' 9'Sf9Et , system-the Depar' ment has access to generation resources that are 80% r.uclear. D' iring 1990, the peak demand set a new wcord of 44A MW, g,y recorded at MO p m., 011,& G U NtTI.IAR July 18. ON (sg 39 11tull Hl'DWN 1990 ACl, KL ITil Hi\ (N1W.X Mit includes hydro. nucle, gas and oil units) UT771 Un M1 Micicelstekman. $ cf!!r. bun. s.%hes livfkm ers ret le hs Mont shpfor flants
- M
F6..:.4,s,%4192.% 3, a .y . W. % u#\;
. , r, D,,. .s,3 W.D<1:~ + r %:' 7 B n.s .
- YkA hh -
ff' ' Qf S ? hY w +acm ; ,.w m.. .
.: ~
~
ss - , us.i li'wt e, a
~ . Jo
',,1,,. '. , k a ll = #*;
e
.)
- y ;g1j'*'l<E fe(n
, ., % s
'9 Q**.'{.. , ;
' ~
' g s'
- jjY % ' s t.% . . % d5%f u
. ,ge,. g .~ , y . . . , . .
,, 4 - 4 e s ..e a "
s~A- ~ .2 y.,. _v.-s
- 3. 4 ,v4 m ..
,,re > .
.:_* a /' .4
./
s (..y...a - t ' d<;
.o , , ,
* - g
, t; V ** f (s , ' **
Qv- D, %<'l ; .J "W g ' & ;/! Q ,. -
- t
,&W&&hW '
^
2ld!& ) U lj f W f p l @ .Q; ,.i p h ,} &}QX p*R
< m> w r aav7 ,4
.n ,
w y, w~+ x ,g e, W - t
'l + m. + +. '8-m.+ .e ri
.,.J% w%q,y- Q 9' M* ,%m& %);v
- p,:.yn ,s .,- %;:y
- c. . u Li;=..:;', -
- b. q r~p;{+.
a w :.
, 3;u . gi .. . w, o ,
h a c 4 : w ' ..s. wr w k . %y g 4 8,,:. y
.np, n. A,,w .,a ., ,. m ..r;.;. p u r w$w;< ,+ y, r ggn [
n .
,V
/
t
.c. ,,,- e. ..m4. . ,,L
. N/
. g g%,,., w %ae s.f...s.,
gq ."M uw'y w
' Y,' ..
-p p ..
04 j gs y? A. .gp' g l }7 ,'N'{sF~T & l;a%e ,ldl'
; l/i
**h .
['.,d ^g -
.e Yhhb &, g/ h.w. ga_msc 1;i
~
t t~y &rb. 4k, m$h > m .o, k 5 f#d ,(
- > s . 1, x
a q,. a, j-E j . tt , .
<Am ,- m 3 ? c- w&ghy
, y 7 A. c#4;j.wm,..q&n-t a s gk g h.. m%
$;f[g;' &
V f Aiy- b .,Q:'a $ &p. Sx 9@4 4 ;g
- M, Vi ygy;t "o +*s
,ts yg h 51 d %w+C %an.n. C % E, @
?
,9},r ~ w%ffiI- ??.4%x%'
,,. / c g,_ ll + %b g -
, gy -
y +.. Ne+ s. /# c*
% ;. 3,G_; .
n s pYy Q, m; 4 3A w \ l, J e, x 1, ># //j i #W v c.s.p.y
* % jw 0;j, &,. y\.
l# 4 ~ y W \.sg, . QQ;';,s&m# ~Q-
. ls&, .c cN 94 gy?9 .,* f R q q, ym ' f, .w, gR g '
' - * ~
f* g, , WA +
% >( y gl k
&s m ,
&g /. +
hqj ns L
; Y; ps;c5 W g :'n "3m w ,. x w, pN%a g& w c ' m q) w .
'u i
\ r
^
w n w hif gQ*, m% A
.,- 4 g '% ? . +
C O 1
$"p , fg.W .1~w wp
( %
~
m% 4
/v i p%?(?< ** N T
*
- l i'u,
d,%,Q[
.* il g, v s u) gma' -[ ;o j @_b,% *
%^: (Q[;,PW
/ C,. .
be a < me
omm=.s= - _ _ _ _ . . , -= " ' " ' -
.m. -
-_ -- em -
in aihtion to MNd y }[g m,am,. e *"f"'- f y [-[, [y ,., h a o c W a n g e ' IWg % ster goud Dune r n,uonn
%h b II y,g gfv. ' u, , a M1
% kar "",' <5 s t i 5 s r i! sj il Mk b JI ;,' m i, , i J
' ' ,g yg g.
NahM i, - 1, p .i , t ' i !'
.30. t 1 i
ew . e ii s N K It'Jf t
. Mo 4 M ld ,
y mu'i ) c , . 4 '
, . . \4 4s4 !
()d g. a1 '
- 4. I. L nm 4ai ihl g ' 9~. ;; -
;,e i . I.i -
Vi nas* .
,,g
()J i"t -a m' , H e i4 i ! ' M e nh f
~, . , _ - - . - - y
;g i
p
- f. f, q?
3 n
?
- rgi .
} }k'5 8R'!,Qpgp, y.e,vi!Mg g
S 4 gp ea . y.
# c *l ' _
^
lgW- wmn+ l ~ .li 1 3
+.
, _ Q ^ nam %
lyW., . y b + ., jf; ' s %e 4
~,[, y: -* w4 .jo. <
o&Y s o
; . lj . y- 4 4
+
v L *
\y. , 3+ - ,
J., j.p.. yf'- f.- qQ' ,' r
.; 5 7; ~'; jy a
s n ~i3 , p % c'3,-,
> _; q ,
. yi7. ;p & .ff 3 t 4 ,)t -
, 4 7, d; $ y.y _p .
,tf gw&5 X::g . ha s
~. o - 9, ~\ <
s y . y g p"b
' jf3 ,, s h~ ,j u .
- .: 7,
)-f
,f,(.t,4 r i s pf: jjQp a
. ,s "i 4s l . im f n ( t ,;
- Q g >4 wy4 <
a&.Q p{gfWh j ,f a .- : , (p y ;- gw gfsgM-t-g$ i y s.Wd., y, g,.Ak s k f<Tg D j Q & :} & wQ,. W1Q aff jl% lNp:Qi4Y$:fy,y: , b' t 4 g ha, } v N3 %, p ; _ r. f,qym .' %s 3 y t. p %3s. & f~ 63 p v .
..t g. y q),e;y> y . et ; d ;
,a ;. ~ v a q it; p e 'e , 4 j i - . r ~ i,., ..,4 f ,9 4
4 ql s
'[ h
- i
.p j[4i 9,3b M w3.- DI n
i v h
,[h . I '. Y +D
-' s. u .m c .s i
" . ~ 4p a. . i t g >
Tj: u q. e
<+e m9g . ,-
w i
, ,. ;e.
,, # h 'M i ]., i X' ' ~ <, g p q; +,
c.c E.
, s
. 9 cW-
- t. M'. . .e7 e
_ r:: 1 , i* s 1x = -* , ;<
.ft 7 ($wl #
s
+
,- e 5
c3o y i v,i <1 ~ . 3 x .ap <
.(i .' .
n s a g. g
- TQ _ '
e ~31 .
, x ,g/n 3s
.y y 1
<t.
.w ws , ' c{y y. ' l. ? ~, f y' #
F4 {g.. ,t
~
[. e ' a-
.5 y
f -c
, y ~ % +m,_. , s. me 7
m-n, v p,
, y'
_' -t) 'r,
< ,y yg 5 -54 s
, . b.
' , . t
,4,,' ' ' .,'g.
g #d;) % i " 1 1 r V Q ,
.yY; .. r h I
;. g' .-
' .lQ ,,
i . \
.f>.b c.n S +-- , "I N , -- -
4 y + pm -
.. s ,y n m4 y, -
A,cyyy ;j,q gpygg 3
"'m. : M a-
> ,4 W qs). ,
ly , [4e.*'. b' ~. i;' ;,ps >si . s
, T n,
ftlh { g .-- s , M-gg&,$4NpLbWb. . k ,. .
*~" ~ ~n .
de I _._----~ I
l seabrook's uimmenial opo nion shouhl h.nc in, advene im p.u t on ileutic rates Apprmimately kn%, of a oi,tona r3 but represents Scabionk onts A hdlyoperational Seabrook accounts for approximately M of our customeri tiedric needs The Seabmok Nudrar Po ver Plant will poince 7 5 bdhon Lilowatt hours annually. Its generanon will replace 13 3 mdhon baneb of on year. The price tag for 13 3 inillion bantis of oil is ipprmimately $ psn nulhou, It'$ no scelt t tilat Scalifotik b;ls llot P!oved to I*e ;Ls lit nelliial a\ be had lH' ped %}Wn initial invesunents were made during the 19?ns While the operating cost for Seabrook's p>wer n relathcly mnpenshe and its addmon to our fuel mix provides us with a nke buflu from oil prices, the cost to budd the plant was prohibithe. The bondmg to constmet Seabrook must be paid 11 a this wnstruction eyrnse that causes the planti metall unst per kilowatt hour to k high t hpically ready for operation in the Spring of 1%. Scabniok was hiled by pdines untd the Sunnner of 199n. The wst of thow delays was in excess of $;0 million montidy and totalled more th.m $2 bdlion. In slew of the fact that Seabniok'a fmal wot Was
$6 2 bilhon, tht delays add"d approximately ;n t to the bill fludstm Goes to Court...
In an efIort to recoup our satepayer los#s resulting hum delays beyond our cont:ol, we hate joined eight other municipal hght departments in ilhng a complaint against the Conunonweahh and a hundier of its offk ials. Iludson, Ashburnham,15oylston, Paxton, Peabody, Shrewsbury, Templeton, Wakehehl and Et lioylston 1.ight liepartments have m ci bk ,
. per h, 4. p,
* ,,Z "; w i .
i >
% Q'4ha .:
% -Aw,%9 4 .
4
, .,s.,
( . - - . [
* ,'*% '?){
Mk[!1. ,i p' A [' I k 8 *- y ,. 9 4 1.'Q . . , wh
-er A,p@+pvM e M;V,M" i, f*,M 3
p a woypWT -~. g mw# x M%2& Avv % ~nr9 p Af h 4 ,
- y pj d e n f,. *
, ,i A" '
r gojfe9- M"_-Q s W '}% Q[y1yff Mn , s @-
# M i N '
4 g wy p q, p j , g ', ga yn-r o . iy, < ; y.n NWYl _ ) (l(
.i .- . , h Q l't M IIt's rtRii a tos 4o 4
'w
, c, .
* + h.
ihi;7..
.y . .w m.f fc a,,s a c,, m,n,,-
p,it nt a fclc:t pt:tuse at !!n v on
-~
% - 4gv l^ 1" " ,.. jo. "r t!< 4aalvt Rt, re at u m,/ ra. A
,,i,gm-
< yb ,
.fr;,*
;L:~**%._ *~ Mk ,.
s, -% ar - .
, n. . . Up - a ju 3
sg e. g
asked the Coun to set the potential large damages for the State's actions during the Seabrook licensing pnicess. A municipal light depanment carnot conduct the tylw of financing needed to invest in a project such as Seabniok without State authorization. Massachusetts repeatedly deemed Seabniok to be "needed and necessary," and authorized MMMT.C to raise nearly $700 million through the issuance of revenue bonds for constmction of the plant. Once the financing was undertaken and the binding contracts were signed, the State changed its tune and began its repeated immentions and attempts to bhick Seabrook's commercial operation. The delays added an estimated $2 billion to the cost of the plant. 41111e the lludson Light and Power Department cenainly denks no one the right to their opinion in regard to nuclear power, we believe that political grandstanding must not be allowed to overshadow the facts. And the fact remains that our consumers are learing the financial burden of delays in the licensing process of a nuclear power plant - delays caused by a Commonwealth that upproved our investment in the plant in the i i l first i ace. lludson and its co-plaintiffs are still awaiting a decision in Suffolk Sultrior Court on the Attorney GeneraPs filing to dismiss the complaint. It is still too early to speculate on the possibility for success and what it would mean in dollars and cents for iludson.
--In another court matter, iludson .tnd the Peabody Municipal 1.lght Department have challenged the Massachusetts Municipal %hoksale Ekctric Company (MM4IC) over the Pronct *6 -
Power Sales Agreement (PSA) - the largest portion of our Seabrook investment. Other municipal light depanments have also challenged MM4EC, but in different suits. Iludson looked forward to reduced rates by about 33% once Seabrook came on line and providing all original contract terms had remained in ellect. Project #6 would have allowed us to sell back to Seabmok's owners up to 50% of our entitlement over a 10 year period. Known as the sell-back agreement, its value in today's dollars is $45 million, or $75 million over the 10 year period. Faced with massive default, MM%IC and Public Service of New llampshire (PSNil) renegotiated the terms of the Project #6 contract and gave up our sell-back agnement. Ilu6on and Peabody have claimed,- among other things, that the terms of the contract cannot le changed without the unanimous consent of Participants to Sat contract. There are numerous f.:cets of the complaint filed against MMwT.C. One issue concems I a number of Vermont utiliths which had panicipated in Proket *6. When the Vermont ; courts determined that its utilities did not have authorization to contract with MM4T.C ! for Seabrook's power from the start and declared those PSAs null and vold, MMVT.C l charged only otlwr Project *6 Participants for the vold created by the Vermont action. Iludson and Peabody do not believe its customers should be held responsible for financial obligations incurred by utilities that should not have participated in Project *6 in the first place Our consumers should not pay for a mistake made by MMMT.C, Vermont utilities, i and their bond counsel. A Suffolk Superior Court judge has issued a preliminary mling that the emaining Project j *6 Participants must pay the Vermont share. This initial decision has been sent to the State Supreme Judicial Court for a final detennination. In the meantime, all ot wr t aspects of the litigation have been put on hold until the higher coun completes its review. The Depanment also has a claim pending in bankruptcy coun against PSNil in the sell-MWl7tntN H/ito lluden 's it Gov. Paul Cellucet and NACk U3\\UI' cor n at,a.n m sann onAc Gor ernor's /naugural Rraptm" Sucwss in the courts could mean lower rates, but the size of any decrease will delwnd ttlement reached The prudency claim which was filed by Hudson and Peabody against PSNil was settled between the parties and approved by the BankruptcyJudge in 100. 8-
} W
%, +.3 .
3,4 n
/ke. p ;
4
,% = yl
, y
# ~
h % :;: ts -3
; /Uh fi(( g I*
... ji$.: ,
y . . - a, c w y1 s ., d;, n fQ ,
,p1~4 $ 1
., *d . . .
(f.; g M' } g k w j %g yy a , y Tr- ) ~ a8 . : ., ( ) T,/
, . gbVD .,
8 mage, e
- If-
_s, y ._ (.
+
~
y'
., lY {h *' . A '
,M ,b,s '
m, , y<-4
. - ,t '
7
~. .
.:6 g-)
j f'Lfl;3}f yq : 4r ,-v >
\
- s. y ,-
,a
, , ya' fc 5
.-l
'a ,
b 3
'i; k :. \' b 1 uj jh T
+ A ._4
,+ .
- Q. , (.
-+s. .
W" . *g
's f HfRE CtUtU Tilf M',Y he (tmtts of Hudson plays a little n ..
~
ha kry sad while uuttungfor his clau s In begin W U f ( X4 EN$gr$996 Roston Mison Settles... Iludson's j!ojections for stable rates during 1991 were aided by a $2.2 mill;on settlement agreement reached with lioston Edison in connection with litigation launched in 1987 over the Pilgrim Nuclear Power Plant in November, the Department received parthi payment of $400,00(t lludson will receive the remaining $1.8 million plus interest in the form of a credit on its bills trom the Pilgrim Nuclear Power Plant. Dejending on the interest percentage, the settlement should take us into March or April of 1992 on the Pilgrim billings. Court proceedings were initiated by lludson and other murncipal utilities over what plaintiffs charged was excessive "down" - or non-operating - time of the power plant owned by Ikrston Edison. Down time occurs when a generating facility is shut down for repair and/or maintenance, or other regulatory reasons. R$11s At Home... The liudson IJght and power Department bills its custotaers monthly based on actual meter readings, and offers a 10-discount on the current bill when pa)uent is made on or lefore the tenth of the month. Appmximately 9(Yb of our customers take the 10% discount, which facilitate nur cash flow. Collection activity on delinquent accounts was increased during 1990, with greater emphasis placed on payment plans that allowed customers experiencing financial difficulties to keep arrearages under contml without interruption to their electric service. The Depanment aligned itself with financial assistance agencies such as Welfare, South Middlesex Opponunity Council, Salvatio? Army, and Marlboro Resources to help customers in need. ' ily working with these customers, the Department was able to increased collections on delinquent accounts by an average of 11% during 1990. A total of $1,30%,774 84 was collected on flagged accounts for the year during the final two weeks of every month
- the traditional termination period - with little increase in the number of services actually interrupted for non-payment.
lleiping customen control their bills by tinderstanding how ekttricity is consumed in their homes was again a high priority of the Depanment. During the Winter of 1990, Mass Save installed a display in the roain office lobby on forest Avenue highlighting l different conservation measun$ to help consumers save on their bills. The Department contracts with Mass Save to provide conservation services to its residential customers in addition to the energy audits that Mass Save has traditioc. ally offered through the Depanment, customen can take advantage of M.0 M. - Mall Order Materials. A variety of material is offered to facilitate llot Water Savings, Water Consen'ation, lleating and Cooling Savings, Door and Window Draft Stoppers, llome Comforts, and IJe,hting Savings. Order blanks are available at the Depanment's main office. hpansion During the 1990s,.. ONi$00N Largely due to the addition of Seabrook to our generation resources, the lludson Light pgy and Power Department's current energy resources are in good shape. Expansion is part of our long-term outknok. We anticipate that by the mid-1990s, Iludson II will have to either panicipate with others or alone to increase intenuediate and peaking generation nsources. Whether we join with other> in financing a new generating facility, or expand our own fac ties on Cherry Stnet will depend entirely on the climate of the times There are defmite advantages to kwal expansion, not the least of which is local control and the elimination of the problem of transmission cats. Local expansion would also impree the reliability of local service, as we would be kss impaued by failure of the malor tie line connecting us with Mw England's ekttric generating resources.
'Ihe fmancial impact of any expansion, whether loca! or joint, will also depend on the climate of the times. Given the current "not in my backyard" attitude and the vocal antinuclear power contingency, we would be unlikely to partklpate in a new generatJ.g facility without firm guarantees from the regulators. We would again seek the support and consent of our community.
Qu!!e often, energy experts' projections of a need for new power plants are met with
,v "s
~
~
p , 4 d .. I L; b q tI 4
!) . f', 4 I'g f h h.
n' s w [q' '
,~
e4 4 4 f.,(,P. *! } s ', er N f ,
.p- -
., %g 7 3g 4 *
- i ,
*" xvany) vim l75 STARRYIJmfB
* $.MQ, ' %'n ugwpom ru semaars, ans stam en Main swt wt a glow .%xb a j t yyy y
jg/ W
.y ., e a
. Ot
- ~
I suspicieu and outright disbelief The need to expand generating capacity is not the "babbhng of doomsayers " Prior to the availability of Seabrook's power, iludson was repeatedly ordered by the power pool to ask our larger consumer > to voluntardy reduce their dectical consumption in order to help New 1:ngland avoid the need for the more drastic measure of rolhng blackouts. On July 5,19W, Washiogton, D C and Italtimore, Maryland experienced the unthinkable. liigh demand, low reserve tuargins, extended maintenance outages and sudden outages at other plants all contributed to mandated rotating blackouts for 280,(KK) customers of Italtimore Gas and 1;lectric Company and Potonic lilectrk Company. 'these controlled interruptions of service were the first of thov: utilities in over 20 years. With New 1:ngland's slow supply growth, steady demand growth, dwindling (apacliy margins and constricted tran., mission capability, this could be a precursor of more to come for the Nonheast during the 1990s. Utihtles art not building enough generation resources to satisfy the demand growth and to replace retired generation facihtks. Simply put, utility eucutives are afraid to jeopardize their stockholders' r11oney. Today, there is a great deal of concern that a planned generating facihty can be completed and brought on line in a titudy fashion. Not only is the regulatory process onerous, politics can and have interfered. Generating facilities are extremely capital sensitive, placing not only stockholders' investments at a risk, but the entire utihty itself These are variables that the Department will have to look at closely before any expansion dedslon is made. I would hke to take this opponunity to thank the men and women of the lludson 1.lght and Power Department for their loyalty and dedication to improving the service of this Department. I would also like to thank the lludson Municipal I.ight lioard for their continued guidance and support. In the following pages are the financial statistics of the liudson 1.lght and Power Department.
!!orst lluchmer, Manager I
6 i Ul U
< s .
/ ,\
/ ,) )
f( ) ^ .l& ..\ ' f :l .
;f-gy m u: e y4r x ~
INIi 1Rn otixG g? e{ l n.,r. +,nar 1n e sa,,.e o ouna e,o n Iwarn b , bebernt the f s nin,,a y aa aire ch.n ,$ ;,' p l I
~
- ))
1' 6 yp s 9 0 # pgm n a a p9 ,y W4.HJ L$ A -W-- I s q T' Under the Cash Basis of Aucunting, revenue h recognited only when cash is received eyensn Mf'[/F#///0F#S are recorded only when they are paid in cash l'nder this inethod the detennination of income rtsts ujxin the Collection of revenues for unicos or pnahicb rendered l'.yerises are incurred uixin the actual payment of cash for products or tenices recched. This tyle of accounting is seldorn finitid in practice and filiancial statements which could le prepared on thk basis do not reflect the financial position or ojerating results of a hustness in conformity with generally accepted acmutiting principles. tinder the Anrual Bants of Aucunting, revenue !s recognized when it is realized and egenses are rttognized when thrurred, without regard to the time of receipt of payment. The focus of acct"al accountilig is on the realization of revenue, the incurrence of cosb, and the inatching of revotiue with wsts incurred. This "Inatching" concept rtsjultes that the cost sticurred to create revelines he accounted for at the same time Conwquently, if rnenue is accounted for during a geriod, the " matching" cieb must le acmunted for nen of it requirn an estimation of these cmts. Dalatne Sheet... A Balance Sheet is a concise t,tatenielit of the aw;b, liabihties and equity of a business as of a given date. Assets... Anything owned that has money valut or utility is an Asset. Asseb are divided into plant or Property Assets, Current Assets, or Other A% cts. Property Awls are buildnins, generation equipmeni. f tratistnissioli equipment, distribution up(pment, etc. In use. Constmetion Work in Progress is Plant Under Construction whkh has not leen completed as of the date of the statement. Current Assets are cash, receivables, inventories of generation fuel, gasoline, luhe oil, po'es, etc., prepaynients, unhilled utility revenues and other miscellaneous assets. l)eferred hets represents egenditun's for preliminary surrep, plans, investigations made for the purpose of determining the feasihihty of Utlhty projeCB utider cotisideratioin. f a
,,m b
- sticD $ I VI Vil u i ^
Huden t&t on a slec im4 ukn
,~ tteusd thmugh the own latuceurwk ef 14 ufovr reak cf the Touw Hall s
-U-
l
)
IJabil6tles... 1.labihtles consist of debts outstanding (unpaid billd and in the prwess of accruing 1 hey are . usually classified as to Current IJabilities, ikferred 1 labilities, or tong Teena Debt. Current ljabilities are sheet Terms IJabilities.1 hey generally consist of obligations which I are to te liquidated within a year from the balance sheet date and include anuaints accmed l i to date or those liabilities which accumulate from day to day.1he nust conunon Cunent IJabilities I are accounts payable (bills owed as of a specific date'), accrued salaries and wagn, accmed interest, etc. Deferred 1. labilities... Advance billings for services tendered, etc. lang Term Debt... Debts incurred through borruwing such as bonds and notes or other fmancial obligations which are payable over a long period of time. Equity... 1he amounts paid on loans over the Departunnt's existence, monies irmted by the Town in the Depaament, the earnings retained in the Department as reprewnted by progerty. Income Statement... An income Statement is a report in summary form of the revenue earned by a particular business during 'e hd period, together with the relateo costs and exirn.v;s and the hases for that same p . the resulting nea income (or net kas). l l I
~ ._ __ -_ _ _
y' - s. y., . .,
- ,A .
... c :
n ..R
.s ;
*[ ,
1 u ,_y ( $ q -.
, . ~ ; a, a
Q%.*e , _ \ ., , .
'=.1 #
i (s t
,\
p ?
'f f ,
g s ,' p
~
v.
,, , 6, , .
g, p.q w.. < i un e x. I-
^
- s
I ,
.]'.'
. . ;.'L. /
1 m- . 4 ,i ! l,. . ~ l I ,
,/
, v ;
). ;
j . ;f _
.j m I
/
gs==,- g 1. . .. .
;N
, - p :,
't
'N (..' ll
~
g _
,]
- 15 l
i a Compuritive Innesse
" *"#*" }
NO Electrit- Utility Plant (Set)... gggg Instangilite Plant Prodactkin Plant in Sen' ice g 3.833 40 $ 2.P28,693 0. 265,929 M 0(o $ 2M,2,7(,3 37 3 833A0 Nuclear Fmid HN.M0 M 0to 109,90 g Transmission Plant in Set.9cc 264A27 39 259M,4 43 4,7 0.96 Agspfg 2A31,746 39 2,3 M ',2 5. 4 5 116,220.94 l>istrdotkin Plant in Service General Plant in Sen kr 425,241.89 M4,709 05 09A6 LIM Uinstructkin Work in Progress $34,2936 3,3473 t g (4 (j, gng,3 j g 7g Total Ltilky Plant in hervice $ 6,802,882 59 $ b,733.247.23 $ 69,635 36 Cash Assets... Operation Cash $ 175,9 % 70 $ 31,917.11 $ 144,078 59 Miscellaneous Cash 397,911 20 27,M,6 (6 370,244 54 Depreccation rund 439,716 91 189,573 80 250,143.11 l>rpredation Pund Investment 2,202,032 13 2 A20A02 49 (218,370 36) Insurann 11cnne Resene 407,567.40 784.041 34 (376,473 44) losurance Iserow Pilgrim 927 83 927.H3 0 00 Insurance 1%ctow ltoied #6 1,518 0) I, ann 37 109 64 Petty Cash 4000 500 to 0 00 Depre,tts Interest Account $1,276 90 $3,372 36 (2,095 A6) Customer Deposits Amnant 217,787.75 192.948 62 24,839 13 Total Cash Balantes $ 3,H95,234 33 $ 3,702.75R SM $ 192,475.75 Other Current and Attrued Assets... Customer Accwn! Receivablo l 2,978,459 65 $ 3,023,776 31 $ (45,316 6M Other Accounts Receivabi(s 75,540V) 40.619 17 34,920 83 Material and Supplin 730,46n Ho 610,193 06 120,267.74 IWp,aytnents 501,542.I8 451,092 02 50,450 16 Int dwidends ReceWahle 42,49M 92 48,MO93 (6,342 01) Accmed Utihty Revemws 0 00 160,879 6M ' (160,M79 bM) Mlse. Cunent & Accrued Awets O tW) Ofo 0 00 Total other Current and Anrued Assets $ 4,328,501.55 $ 4 335A01.17 $ (6p M 62) Deferred Assets... Prehmina.y Survey Charges $ Oui $ 0 00 $ 0 00 Misc. Deferred Delists 7 3,33R 76 6UW) 66 9,37M.10 73,33H.7'i $ 9,378.10 l Total Deferred Assets $ 63,960 t = $ 1 Total Assets $ 19#N,957J $ 14.835,367 64 $ 2M,sH9.49 i l
~ $6 ~
Ineea,, Equity 1990 1989 (Decrease) Jg 1.quity... Inans kepayment $ 1,92VKo to $ 1.42 HK0 (0 $ 20,093 39 $ Oto 0(0 [ggggggggg Invested by Tomi $ 20JN3 39 $ 44,656 84 L1nappnipriated I;ananp _$ 1039131(07 $ 103 4 8% 23 $
'Iotal $ 12,336pi6 46 $ 12,29iSi9 62 3 44.656 84 Current & Attrued IJabilities...
Actounts l'ayable $ (06.036 72 $ 1,196 $15.16 $ (560,478 44) 217,787.75 192,9 4H 62 24,839 13 Custona r l>episits 51,276 (o 53372 36 (2,095 96) Customer Incpisits Inten.st 21,09% 75 0to 2Ip)x 75 Tac Collectbut l'avable Misc. Curt:at & Acenwd IJab 32,16848 7.142 56 25.025 92 Customer Advances for Constr. 2 5.H50 00 3 HiD0 00 (10.750(0) Tidal Current & Attrued liabilities $ 952,218 (4 $ 1,434,57M 70 $ (4R2,3Ntt0) Delers ed Credits... Misc. l>cierred Credits $ 1,3'h 15 ) O(0 $ 1,399 15 I)eferred Credit-l'uel Charge 699.633.70 O(0 699,693 70 Total Deferred Credits $ 701,032 85 $ 0 00 $ 701,032 89 thenerves... 700 9 0 00 $ 7WUO100 $ 0 00 Injuries and !>amaps lwrve $ Total Itcorrg ce $ 700# 0 00 $ 70090(o $ 0 00 40RH W 32 $ 1,260 00
$_ 410# h 32 $
Contributions in aid of Construttlen...
$ 410V19 32 $ 404.839 32 $ 1,260 00 Total 1:quity & l. labilities $ 1596.457 24 $ 14 M453(.7 (*) $. 2fr1389 54
$10346,W6 23 0
thed Surphis January 1,1990 Net locume or (loss) (364,32v. 20) Miscellaneous Credits to Surplus (AM 985 04 Total $10391513 07 [ggf[y Appro of Surphis licturned to Town 2009 0 00 Appro, of Surplus - Ikinds 0 00 Misc. Debts to Surplus 0 On Total $ (200MKMWO Total linapp. I'.arned Surplus $10,391313 07 n
comparastre ,n ,en,e g g 1990 19N9 (Druense)
$ gg Operating Retenee... $ 29 670,913 38 $ 29,%2,617 (7 $ 308,29t7i Opeesting I,npense...
Production $ 858,647.25 $ 1,254,63H30 $ (395,991 05) Ihtch.u.ed Powt r lap 9tse 26,283,418 HO 25,281.353 80 1,002,064 00 Transmission Engenws 816,324.i9 679,445 10 1 %,87M 30 Distribution Ergenx$ 320,251 93 357,243 6M (36,991.75) General f.x[enxS 1,625,934 41 1.RM7,74015 (261, Hot?4)
! epreciatkin 420,79M 01_ 4(0.7k7 05 11.010 4H Total Operating Espenses $ 30,325,374 59 $ 29,H70,20M 85 $ 455,16t74 Net Op rating Reverans $ (654,461 21) $ (507.591.18) $ (146,870 03)
Othee Intome... Incotre f rom Contract Work $ 0(U $ 0 00 $ 0 00 Intertst & DMdend knome 290,193 72 358,71$ 88 (68,522 16) Mactllaneous Nonoperating locome 103 40 __ 0 to 103 40 Total Ottiee income $ 290,297.12 $ 358,715 88 $ (68,41H.76) Mietellancoins intome Dedm<tions... Other locome liedactions $ 135 22 $ 0 ou $ 135 22 Total Income Dedettiene $ 13t22 $ 0to $ 13(22 Int liefort Internt Charga $ (364.299 31) $ (148,870 30) $ (215,424 01) Interest Charges... Other internt Exgv'nw $ 28 H9 $ 12.180 70 $ (12,151 Hl) Total Interest Chartes $ 28 89 $ 12,lHO.70 $ (12,151 81) Net intouse before Iteturn to Town , (364,328 20) $ (161,056 00) $ (203,272 20) less Return to Town 2(0,0(o 00 200 00f)(0 0 00 Net Income (loss) i (%(el328 20) $ (361,056 00) $ (203.272 20)
january 1,1990 to liesember 31,1990 [nfOnIf
$ 63mSx's <.8 StatenJent sales to lu%iential Consoniers balt% to lonlilwrLillt Con %Ullirf) idkbNU AN 14,H92N M 25
[fM Sales to Powt r Consunwes lTivate Pttgrrty 1.lgliting Salo % 22225 Operniing Hunicipal holes... NrtPNNd' iludmn stntt IJghts 160civ7 76 Iludmn MutikipalItulldup 31.U5 35 lludmn Munkipal brwer 4'7.4'9 1 40 All f.Itcric Munkspalltulldings % 6,719 64 Stow A Ikrlin Street IJghts 6A97 67 blow, 't.synard & Other Munkipal herne 114.302 44 bales fut Rcsale 17 2.2 % 2_%_ Total Me eenue froen halen of I:lettrhity $24.H33,64H 27 I earl Cliarges... Reudential Sales fuel $ 1,1W323 61 249,274 44 Comtnernal Sales fuel tower Sales fiel 4 S23.227 74 Private Property 1.lglsting lirl 14,736 74 Munitipal I'mel Charges... Stmt IJghting flow t*t ftwl 667 Ni Mtuucipal Power lludvin fiwl 10194490 Munkipal Coinmercial Iluden furl 9.379 31 Munkipal Power Stow et fuel 22,392 25 Munkipal Conunercial stow et fuel 2.211 34 MunkIpal All l'.lectrk fuel 118,263 74 Mtwellantms I.lectrk bales _ _ (Wl3113MJ Total l'esel Charges $ 4.79thiM 63 Other Intome...
$ 47,216 NH Other 1:loctric it enues (kl3. etc )
Total Ins ovee $ 29.670.914 4M
i
@ NMK january I,1990. Deceamber $1,1990 PItontuloN he< lear Power Generation...
Opratkm Supention $ 9,208 74 Fuel 22,179 85 Cailants and Wa'er 750 96
- t. team Expnus 4,015 44 Electric Lagenses 214 67 Miscellaneous Nuclear Power Exp nus 19,150 98 Mmintenance Sup ntion 3,04M 68 n'*inte narwe of Structurts 6590' Ma. ".cnance of Reactor Plant Iquipnwrit 2 '>07.8M Mair..enance of I'lectric Plant 593 84 )
Malntenance of Mtwellaneous Ntklear Power 1,315 R1 l Total Nuclear Powet Productlen I:apensee $ 63,645 N6 ! Other Poser Generation... , 0;rration Sugention $ 21,33668 Fuel Oil 74,569 20 l Pud Natural Cas 234,844 00 Generation Exp'nse 170,934 20 Generation Ex!rnw lab 10,730 98 Mhcellane<aa Other Power Generation Exp nws 46,191.53 Maintenance Sup:viskm 21,823 07 Maintenana of Structurts $2,559 H7 Maintenance tef Generation and Electric Plant 157,60H 17 l Maintenance of Miscellaneous Generatkm Plant 4.403 09 Total Other Predoctlen Espenses $ 795,(01.39 Purchased Power Espenses... Purchawd Power Entitlement $24610.373 00 Purcha'ed Powet-Ne:rx 1,612,457.91 , System Control and load tus[rnion 25,519.17 ! Other Exp .ws Purchase Power 35,068'12
)
Total Purchased Pomee $ 26,283,418.80 l I Distributlen I:apenses... 1 Opration Supention and f ngineering $ 23.2H2 90 l Statko Expenses 0(0 overhead Line Expenw 14,264.72 t!nderground (Jne Expense 317.90 Street 1.lghting and Signal Ex;rnw 8,072 65 Meter Exp nws 32,455,28 Customer installation Exgense 517 64 Misteilaneous Distributko Exp'nws 4,5H2 44 Rents 9500 Maintenance of Sulention and Engineering 23y13 34 Maintenance of Station Egulpment 247.84 Maintenance of Overhead IJnes 189,096 31 Maintenance of !!ndergnond 1.Ine 1.406.74 Maintenance of IJne Trans former 9.874.34 Maln'enance of Street 1.lghting 8,835.47 Maintenar cc (4 Meters 4.109.36 Total Distribution I:spenses $ 3.:0,251.93 Transnaission I:tpense $ 816,324 19 l l l s
General... Sugermion $ 9NN f 6 44,927 50 Meter eteader 1 xla nwS Custonn t I:nords and Collection I.x;enys 176 3 34 87 Adverming 1.x[rnse 25 00 Miwtilantun Sals 1.npenx OtCS) IW2 46 Adminhtrauve and General Salarin 278,242 l$ Offue Supphn and 13;env5 11.8t>6 45 Administratht Expensn 1ransferred (440 Outode Servkes Ernployed 410.4 % 34 l'rojw'rty losurarne 233NO bl injurin and Darnagn 137,(M M lmploytw pomion and herafits 3M.151 1 H ltegulatory Cotunibsson 1 xgenw 22$ 92 General Advertising Exteruc 1,669 % Miwellancoia General Expeuxm 33,205 26 Maintenance of Gener.nl plant 48,783 44 1 ransp.rtation lajense 40,623 84 l'oprtriation Ex;wnse 420.798 01 letal General and Deprestation 13penses $ 2.0%.M 75 b,27167 Tases Other then intoine (besbrook H.t:.) $
'Iotal Operation I~.spensee $ 50.325.374 A9
N M nf f unds were proilded fremi... of Changes <>vena~... In Mnancint Ny: *
%t%W' gggg Pantal hly,rtm i Settlement with ike, ton i d Total l'unda Provided Un%985 04 I (65,454 85 t' unde mere used for...
Net Addithm to l'ulity Plant $ 389,699.5% Constnn1kri Gob of Nuclear Plant 71,761.00 QvistnK1kd1 Cmu of N L llydro-Transmisskin 29,072.82 Return to Town of Iludvin 200JWM) 00 beferred Assets . 9,87H 10 (Increau) in 14fened Crrd ts (701.032 M) (Increau-) in tw:ves (1.260 On) (2,481.351) Intresse in Workisig Capital $ (67,936 23 inieense (Deccesse) in Working Capital Represented by... Cch $ 169.732 OM Recolvables (10,39%A3) Mattrials and $uppths 120.267.74 Itepaymeriu 60,450 16 Intertst Roccivable (6,342.01) Accrued Utility Revenues (160,879 (>8) Acmina l'ayabic 540,478 44 Taws Payable (21,098 75) Mbccllaneous (Jabilities (24,02$.92) Customer Ad<anets for Construcuon 10,750 00 Total , (67,9.% 23
1he lludvni IJght and hiwir ikpannwnt's accounting p licia are in (untannity with gowrally acapted F00tNotfS 70 arunioting principals and uniform to de unifonn system of aconnits pasrtiled for Pubhc Puhuts by the lederal lawrgy Regulatory Gonnuoion as mmbhed by the Mawachuwen lupartmuit of hduc l'ohtas [fN#NCf4f for rounkipal owtwd hghtuig plaen St#temeNis
#rrenwes are anupited ini de basis of nunithly bilhngs to nistonwes 1%tdlied reventus inom die sale of etwrgy are not aanwd n of de end of tlw calendar year Mixellaneous ehrtric sales adjustmem a for overbilled or underbilled pmer adjustment tharges fliciale l'tildly Plant Awts arc r,tated at ont 11w provanni for depnslation b determined by the straight hne nwthaJ hawd on a 3% annual depnviation rate 11e cost of niaintenance and repairs a expenwd n incurred, renewals, replawnwnn and letternwnts are capitaured Preltmtmery Awrwy Charges (l>rferred Assels)lucirred for prope.ed pro cts Omnigh MMutt are Mened pending innidmg of the propned facibiy. lunds relatir g to MM41r projects nie refunded to the tiepartnwnt after binding Charges relaung to prolitts whah are undertakin by die liepartnietit alt transferred to constnicthin work lit progrou afid OVntu.dly to utlhty plant on Compledon propTts abandoned by MM*1r or the Depanment are (harged to espenw.
progets started but not unnpleted are charged to Constraciden M erk /m Progress. Any proprt abandoned is charged dinttly to surplus lezerstorats of the Depnristion l'und are in Cerubcates of l>croit in the state 1,ankuig sptem n prescriln d by law Furtlwr, intenst ennwd on thew hunk can enly be uwd in the sanw fnanner n deprvaation funds as prescnled by de Mawathawtu General laws twsweeeses,.. Ost of materials and suppllis are valued at average u6t on the lint in, lint out basts (11101 Ost , of fuel h based on average ost
%rgregated funds...
The ik-preciat an f und b restncted to addmuns and replacemenu of plant, propeny and equipment under the Generallan of tlw Onnnuwiweahh of Massachuwns and regulanons of state agencies During 1984 the t>epartnwnt t.et up un laswrmarr 1:sceww' Atrewat to u ti insure for tonditions that the liepartinent may enniunter in la day to day operations Penstens... The Departnant's employm :ue memlers of the Middlesex Onmty Retirenwnt System lhe Municipal (Aght Board has estahlbned the liudson Municipal laght Departnwnt I,mployWS keurrment Tne,t to relminirw dw Town of iludson for reurtnwnt unts of its employm T'us fund b maintained by the transfer of funds inun the Depa*tnwnt to the Tntst twwd on actuarial studus perfonned by a professunial actuartal consuhant An amount equalin $245.478 % was transfened to the fund Cemnestmeuts and Cemiingencirs... 1he lludson 1.lght and power Department lias pinhase contracts wit'i the following spinw companies lor the kilowatt h,nir anunmt entitlements listed Irlow: F.nergy M Traely Cost lkaton Edison, Pilgnm Atomic 15,M2,741 $ 1,310,656 51 VermoW sankee At nule 4,021,290 1b5,239 P9 Maine Yankit Atonut 7,205,533 26 vim 58 Central Maine power, Wyman 5,312,842 251,290 RM New linuiswh k the, Pt lepreau 41,Rh4,2 37 1,924,162 H2 Onnnuuiwealth the, Canal 13,189,707 5n6.7H0 92 MMult, Nuticar Mix al 4.722,771 167,979 18 MM4TE, Mllbtone *3 4,219,812 H2,466 us MM41E, $cahnnk Project #4 7,503,579 1,197,425 43 MM4TE, Seahnsuk project *5 835,729 161,9xM 36 MMVit, Seahnok project *6 56 8203M 15,6nM,196 56 Taut ton, Cleary #9 11,050,611 678,704 15 NL Stdlues, Middletown *2 & 83 6,416,536 401,955 63 NE I?ul tws, Montville #5 & *6 7,0M7,%0 468,%570 pASNY llydnelectric 15,903 331 71,716 34 kefaw hel Assm1ates 4,417.983 358,733 62 Unned Illununating, Ma 11,406,731 537,4n5% MM41E, Holyoke #6 & *7 701,965 157 323 99 2!?,633322 $ 24 616.457 00 New laigland power Exchange 48MM,3no $ 1,618,193 12 Totals 2t4,521,622 $ 26,2R65012 l
^b~ j
890 MW of beabnok Unit al ts be.ing obtattwd by this !>cparunent on a dmrt ownenhlp b,vis for which the liepartment uwd lurt equity financing On June 3n,19% Seahniuk was dnlared operatkutal. lie lludun Light and Ptmer Deparunent b inw of nine Platnufh in a lawsuit fded thrender 9,192 i agatint the Commonweahh of Manachuwtu and wveral of la ewutives and agencies 11w lawsuit sisks nunwtary damages for the Commonweahh's actuna rehuve to tlw Seabmok ikeming pnxen lludwn and de utlwr l'laintiffs allege that tie ankun of tie Commonwealth amount to a taking of ilwir investment in Scubnxik. After the hccruie haued on June 30, 1990, fludsori utka recovery of damages resulting from tlw delay. hudwti, along widi twthy odwr Mawachuwits munlopal dectric departments, bled hugauon against Itustoa Ediusi Lompany in 1987 mrt the down time of the Pilgrim Nudear 19wer Plant. 11e Town of floden Light and Power !>epartnwnt tradwd a $2 2 millhwi settlenwnt agttement with lluston Edimu Company in countrtion with higrim Nudear Powrr Plant litigatioit Partial payment of
$WAtal we received in Decemtwr of 1991. Iludson will tw receiving the remaining $18 millkm plus interest in dw funn of crwlit on its higram bdhng Iludmn h aho a pany to two additional pnictedmgs at the Federal Dwrgy Regulatory Cornminkm concer..
m tontract with Ikaton Edison to purchase a share of the outpit of the Pilgrirn Unit, (l) a pmceeding to dariff the duration of the anitract and (2) a case to detennine lludmn's duomiainioning payment
<dihgation Neither caw has turn concluded 1he IJght Department of tl e Town of flodson (dw 14partment) is a Participant in certain Projtris of
'he Mamadmwtts Municipal Wholesale Liectric Cmupany (MMutC), a pddic corp ratkm and pditical sulxhvision of the Conunonwealth of Massachuwtta MM4tC b a coordinating and planning agency for the development of the bulk pmer supply requirements of its Menden and Project Participann MM*TC is authortwd o own or ptrdikw owtwnhap intertsts in, and to hsue itsenue lunuh to doctric faciliths (Projecu) MM*LC obtains power supply capacity by actpuring interests ist vartma generating umts and the operathm of its own thctric generattrg facihties MM*TC sells tle capabilnf of each of its Prokets to its menden, und o'her utdiths (Project Panicipants) under Power Saks Agnemena (1%). Arnong other things, the PSA for each Pntxt rtyuires each ProPet Participant to pay la share of MM*TC'S costs rdated to the Project, which indudes ddit service on bonds issued by MM*1C to finance the Project, plus 10% of dibt service to be paid into a knent and Contingency I'und. In addition, shoidd any Pm)ect Panicipant fail to inake any payment, odwr Project Panicipants may le rtynred to pnwide additional payments in an anunmt up to 25% of the continuing Participant 3 paymenu for the Project. PSA Participants have cmenanted to fix, tevise and collect rates at least sufficient to meet their oldiganons under the IM Tirre h a dispac between MMSIC and lludson mrt tlw oldigauon to make mcreawd payments resulting from dw Vemmnt decision wt forth telow.
MM41C aho obtains pmtr by entering into contracts to pirchaw long term an#or intenuediate term smer from third parties This power h nsold to menden and other utdities under Power Purchase Agreements (PPAs). 1he -ommitments made by Participants in luth 1% and PPAs are payshle soldy from their ekttric system reveaues, and each Participant is uncondith nally oldigated to make payments due to MM*TC whether or not tie Pndect is corrpleted or operating and notwithstanding the suspension or interruption of the output of the Pr$ct. MMWl'C's 11.6% loint ownership intenst in tlw Seabrook Station reprewnts a stdotantial portion of its plant investment and fmancing programs. On March 1,1990, the U.S Nudear Regidatory Commission (NRC) authortmi a ful power operathg license for Seabnuk Unit 1 (Unitt 1hc Unit legan its power ascension testing program to Mar;h, and June 30,1990, the Unit was turned mer to NEPOOL for dispatch. Seabnok Station originally consisted of two 1,150 megawatt nuclear reactors Unit 2 has twen cancelled. Constnrtion of Scabnok Stat.on Ualt I was completed by New flampshire Yankee (Nil Yankee), whkh currently is a divblon of Public Service of New Itampshb (PSNil), the Umt's lead owner, holding 35 6% of the Unit. In October of 19% Scabnnk re,ched a 40-year operating license with certain pre-conditkan that induded NRC approval of radiological emergency response plarm. In response to NRC rulings in 1988, the joint owtwrs prmided $72 millko, thnogh the pirchaw of surety, and establishment of pre-operational and supplementary trusts, to demonstrate their abihty to decommisskm dw plant afwr low-p3wer testing Tim NRC staff, in August of 1989, recommended that a full power li.enw tw granted on the basis that adequate and implementable resp >nse plans were in place for Massachuwtts and New flampshire. Seabrook Statkan experienced perststent and substantial cost increase and significant schedule delap, and he larn the munt of continuing controveny and opposition from gowmment officials, regulators, intentnors and oilwn; and has cwated financial problems for many of la joint cwners, including MMMIC.
& MM*IC Project Panicipants, per the 1%, are hable for tlwir proponionate share of the cost of a nuclear incident at a nudear powet plant as outlined in the Price Andenen Act. Additionally, the Panicipants mammenemmmmmmmmmune
- )) -
"' I .
_a- _ _ . _ _ _ _ _ _ _ __m. _
i
- are hable for the demmmiuloning exp'nses of an operaung innlear umt Mdl> tone No 3 and Seahnok linit I divotnmiulonmg emirnses are funded through monthly Inthnp PSNil, as a result of the contmoed delay in nimmenial opratue o. Seabrook 11ntt I and its inatolity to newer costs of tlw Unit thnogh rates prior to onumercial operation, eyrtienced subst.mtlal difilmhy m t,ustaining its f nancial obhgatkun for its % W share of dw Scabnok Prdect PSNil challenged the consututkinahty of New llampshire's ann CWIP law flowever, the New llamp, hire Supreme Court upheld that statute, thus pmbibinng PSNil from billmg its nistomers for Sc.ibnok related tosts unto tlw commental o;erathat of tlw Unit This dtrahui effectivtly barred appnwal of PSNil's emergency rate rehef mjucst Shortly thereaher, PSNil Lied for protection imm its cred! tors under Chapter 11 of dw Federal lianknipicy Code in January of 19M The funkruptcy Cmrt utbainhtering the reorgantration of PSNil allowed reorganir.ation plain to it filed After beac ags on dadosure statements awiciated with the plans, PSNil, the State of New flampshire, varum thnkruptcy Cteditor and 1. quay Committees and othen agntd to and lutned in symwing the reorgamratl<o plan submitted by Northea'.t Otthtks (NU/PSNil Plan) to acquire PSNil, inwiuding Seabrook Station. llearinp on conhnnation of de Nt'/PSNil Plan were lwld in the fall end winter of 19H9/
IV4 and the omrt approved the Plan on Apnl 2n, lyn Implernentation of tlw Plan is conditioned on a numler of events, indading neessary approvals by the lederal Energy Regulatory Commiwlon (11kC) and the Securities Luhange Comminion ($1CL in this regant, likC hearing. "= are an Administrative I.aw Judge (Alj) began August 6,19% Tlw Alj issued las optnlon on Decemler N,174 whkh nrornmended appnwal of the merger, sabject to a nurnber of conditions rtlated to transmission accow Tlw Al/s opinion has been sent to the 11RC lull commtwinn for comideration Various parties have filed excepthms to the Alj dedston. IIRC has prevkosly stated the commission will imw an order on or atout ik<emier 31, 1991 The SLC held no Iwartnp and on ihrernler 21,19 4 granted unconditional approval of tlw merger. One pany has appealed that decision to the O S Circutt Gort of Apleals for dw Distrk1 of Columl4 MM41C has requested nromiderattori of that decision with tir SLC. On June 1,19M, MM41C's lloard of !)trecton adopted a strategic plan of acuan relating to its Seabnok joint owtwrship interest. The plan of action edenced, among odwr thing, an intention to draw down funds previously paid and not to pay any future direct obhgattorn to the Seabnok Prect MM41C's prepayments were uhausted on or atout July 24,19M Tiw Connectimt IJght and Power Company, in exchange for a power salo arrangenwnt with the other joint owners, and thnogh additioral payments, furnished funds to the Scalinok Project in lieu of MM41C%. paynwnts for the July 24 to November 30, 192 period. As part of the Comprehensive Seabnok Settlement, dw Connecticut IJght and Pottr Company released any claims it may have had against MM41C as a result of making papnents to the Sesbrook Project. On Novemler 4,19M, MM41C and PSNil entered into a Memorandum of Understandmg wtwreby MM41C ointinued its full ownership in Seabnok Station and further agreed to execute a Settlement Agntment. Upon the Lflectsve Date, August 1,19M9, the Memorandum and Settlement Agnement provide, among other things, that all notices of defauh were rescindrd and covenants tml to sue among the maior loint ownen of Seabrook were effect ve. The Settlement Agreement required PSNil to le respmstble for MM41C'S portion of the Seabrook Station pre opruttonal costs, commencing thrember 1,19M to NE1001. dis;ntch of the Unit or up to $3n mdllon, whkhever occurs first Omer er as of the Settlement Agreement are:
- PSNil must pay MM41C $2 milhon per year for eight years upon commercl4 operation of the Unit.
- The Sellback Agntment letwtru MM41C and PSNil was jointly tenninated The Sellback Agntment called for PSNil to purchase certain annonts of Seabnok capacity from MM41C at cost.
- MM41C's Pt. lepreau transmiston contract was extended until October 31,1995, at existmg ratn.
The PSNil bankruptcy nort approved the Comprehensive Seahnok bettlement on Apnl 14,19'<9. PSNil made pli construction payments for MM41C untd early May of 19'% when the $30 milhon was exhausted.
*lhe Seabnok Unit was tumed ont to NEIUOL for dapatch on June 30,19% and MM41C made all catch up payents as m;utred by the Settlement Agreement on July 2,194n MM41C has made all Seabmok-related payments required of it as a joint owner since that date.
The Vermont Department of Ithhc Senice (VDPS) brwght an action against MM41C in a Supenor nort of Vermont in Octoler of 19M challengmg the validtry of the Pronct *6 PSAs en'ered into by the Vermont Participants. In 1986, the Supenor Court judge nded that the PSAs for Progit No 6 letween MM41C and several coruumer owned utihties in Vermont v ere vahd under Vern. ant law. The platntiffs appealed this ruhng to the Vermont Supreme Gort, whkh heard arguments in April of 1997. In 19% the Vennont l Supreme Gort ruled that tlw Project No 6 PSAs wnh the Vermont utiliues were void snce incepuon j l
(tcht ub tmho) locause mta ohg the Vennont unhues lacked the statutory authonty to enter into the omtrans and to dekgate cenain authority to M441C. Mr.%tt l'wd a motion for a reheaung, howtver. In January of 1949, the Vennoot Supreme Court denied MM itum for a nbeanng MMutC also hled a wrtt of certiorari with the Pruted States Suprenw QS s itTiew dw Vernunit Suprenw Coon dechion.1he wrn of cernorari was denied in Octoler of 19H9. The Vermont supreme Gnut dnishm, wgether with Vl>Ps acutos, resulted m dw Venmna municipal Project Nn 6 Participants ceasing to make their payments to MM41C The Vennont 1:In1ric Qoperathe and Washtugton Liectric Cuilerative of Vennont had ulready stopped making payments on January of 19M6 and 19% rnpithcly Shortfalh m ',he Project No 6 risenues ute being nuide up imm available lands within the Progct.1he default by the \ermont Panicipants and Eastern Maine Elettne noprativt rendted in a reallocation of tiw Project No 6 Proktt Cap,diibry inasmuch as the Stony lirook Internwdiate Pro et has appnixtmately 8 2% of Prohtt Capabthry titider 1% Alth Vermont entnies, which 1% are tittually idenucal to the Protect Na 6 IM, the Vennont Supreme Court detblon on the pro et No. 6 PSA could apply equally to the Stony hmok intennediate PSA. Tlw Venuont Irghlature enacted legidatkm utking to vahdate the Stotic liniok Intennediate PSA in hght of the Venuont Supreme Guitt dweton MMu1C h wt king a declarathin of dw vahony of tir Stony hrook Intertnediate PSA, as well as curative legidation, in the matter of ,11,1fttfC t' $/a/e rf/ h emont et s/ currently pendmg in tlw Supctior Owt in Tadiington Giunty, Vennont 1he Wnnont Supreme Court derblon dwlanng the Project Nu 6 Vermont Participants' nintracts void ab initio, ntused cenaln Mwachuwtu project No. 6 Participants to rahe hmes relating to llr validity of the Prwet No 61%, allegmg. annmg odwr things, that lWt partwipatkoi in the 1% h a condluun prettdent to the validity of dw Proicet 1% in April of 1949, the Hingham Municipal IJghting Plant and tie Shrentury 1:lectric IJght Plant both filed identical lot wparate Etiom in tlw Sustior Osurt of Suffolk County in Manachuwtts. The primary bash fu, t!w complatms b wlmther the Project Na 61% are vahd'and bindmg as to them, since as alleged in the onnplaints, a aindloon precedent to the validity of all Proint No, 61% a IW4 participatum in said Agreernent, and if the (enmmt Partlopana' contract > are initio, then thh u.ndition precedent has not been met Further, the complainn i allege Jtat any increaw in Project No 6 bdhop as a result of the non-payment by the Vermont Pmlect Na 6 Panicipants is unlawful on the hash that the Propct No 6 PW failed to have lim. pankipallon and MMutC's uw of Projwt Na 6 funds to tuver the shortfall in uttipts omstitutes a breach of the 1% hve other Manachusetts Project Nn 6 Panicipants ided similar annplaina in Suffolk Suirrior Court lludson and Pealody have made all payments under protect pending dettnnination of their respntive ohhgatium in the litigation In ' April of 1989 MM%IC fdvd an original action in the Supreme Judicial Omrt for the Commonwealth of Manachuwta agalmt tw Massachusetts Project Na 6 Panicipants. A single lusuce of the Conn accepted MM%IC's motion to have the Gmrt transfer to the Supreme Judicial Omrt the other Pr$ct No 6 Parucipant cases pending in the Su;wrior Court. l'unbernwre, the lustic( granted MMutC $ request for two prelinonar" ininnctions, ordering the non paying Participants to pay dwir ohhgatiota in June of 1989, the Pani Ipants withdrew their complaints MMw1C amended la eng!aint to include all hees and named as defendants Shrewsbury, lloiden, ilud3nn, Pealuly, Danvers, Georgetown Hingham, Pauon, Sterling and west ik 91ston
**IC also filed a rnotion for Summary judgement with the single justht, who allowed for dacovery to take place prior to scheduhng a hearing on de summary udgement motluta The Danvers, iludson and Peahody IJght Depanments filed a motion asking the justice to recuw himwlf due to a intential confhet, which he did in january of 1990, wnding the caw back to the Sullolk Superior umrt On August 10,1990, Iludmn and Itabody fded a moum for lurual summary ludgenwnt on the lotto panicipathm and stelwup issues. On November u,1990, the judge heard arrurnents from all panics and ruled that the non- payment of the Vennont Participants constituted a delauh withm the sneaning of the govennng documents Thb defauh then triggered a step-up and other related actium reqmred by the documents.
The judge tlwn resened and reponed his order to the Appeals Omn and stayed all other pnneding pendmg the final otucome of the case All of tle pames have requested the Supreme JudKlal Omrt m hear the appeal and, lf tlw mpet is gnmted, it b expeted to tw heard by the Supreme judicial Giurt for the Commonwralth of Massachusetts in the Spring of 1991. On July 17,199n, after recetring July Pro!cet No 6 bdhnp, which included Seahnok operating and maintenance costs iluden and Pealuly fded a motion to amend the injunctum requiring them m pay Proicct Na 6 costs The light depanments asked that the part of the operatmg costs attril*utable to the Vermont Participants be placed in escrow pendmg fmal outeume of the htigauon. On July 2n,199n, the coun denied the motion. The Town of fludson IJght and Power Depenn'eut and City of Pealmdy Mumcipal IJght 1 tant f.ied a ( lawsuit in November of 19M which, among other dung, umght to culoin the MM41C Ik.ard of Directors from acting upon the Memorandum of Understandmg with PSNil in Novemtwr of 19ks, the Mawachowits
- j5 -
k a Apr ah Wt lu linrinter of im the lludson and traloJy anwnded tinir unnplaint agaimt MMw1C to nulade shalia.gts to the valnht) of the hoit<t No L IM on tlw lun% pantripation issor, as previomly dMwed MMWit not j to wilipil arbitf ation of tius depite und the Supt ttor Cairt gratited MM41C 6 rnonon to acuitdante with the urun of tlw 1% in the f all of l'NI, in uinjunction with the sununary pdgrine nt prn enimp on the Dwa partiupation and step up iwws MM410. Iludmn and Pral%Ir liave grent to ronhe odat murs through the wurts t:nher than artottatrin llowewt, all actium on tlwse other twot s arr stau d p tang the ouhume of the ap;ol t, tla Suprtun Jud:cial Osun metitioned alme. 11 idson atul l'ralwidy an ynnoning whethrt MM414 has the authortiv to trlraw PSNIl from uttain of its oblmanom tmdet tlw Pront No 6 l$A when rtiraw froni stkh ohhganum unpair tena!n valu,d.le nghb of iluduni an l'e.d%h Alm, ilm huganon qurunim the vahdity of the Prowet No 6 PSA e a inuh of the Vennont suprtine Diurt i dnision, whkh lwhi the unitract wnh variom Vennont utthties whkh had meni to paniupate m hoicct No 6 to ir tvid sh #mho hi lkt ernh r of IW1. Contue ntal Uhnon hink, the handidirn' inntre. Idt d a (ompl.unt in the inkral Iristrkt Wirt agaunt une hyht depan.nonts that wert ointesung the Protect no 6 wotracts, and ter1ain airn nt and fonm r hght dt pattrua nt inan m n MM410 was tiamed a mio .n.d party in the one, an no dainages are knight froni n The Wilt alleyn ihne lartuipants rnisreprtvnte d as uncoriditional their iminuon to pa3 MM4l1 tlw nvuwy it treds to pay tht- debt wn b e on MMw i c hoods MM%1 C nin nds to wk distn!wal of the uimplaint in Mardi of 19m, M aahinson Met tric Cooperatne of k niuint (%10) fded smt agairnt MM41C in the W ashtopon County hu;rnor Omn in Vonnorit her restnunon of paynmots made to MMWIC under the myrtt No 61% VI C rn tivn! an ex ps/c trustw pnrew agalust other \ennont utthtles whkh are taaking payments under MM41L 6 Stony brook Intermediate itsut (or tracts MM41E temowd this tase to the O s l'otrict % art le the lustrict of u rmont where hearing wett behl and an order nsued to diwiht the tnhtte pre tonlingent on MM%l.C gmng notre of an) intent to take pay the Vermont Partiupanti Intermt , hate l' nit t apat Itb On July $1, lW), MMul.C filed an attion an,unst (crialn dirnton, nianagers and attorneys of the 41C for inbrtpuvntation Tlwv tlutdparty difendants have tumed to dainWs the dailm in Nowndu r of IM tlm \brS twned to inten-ene to tha rec aini bled a (taim of $6 2 milhon for restitution for all \ermont Project 50 6 Parthipant pmnents in March ol Itan, the ledt ral lintrk1 Court, purmant to MM41 C s runnon. dannwed the WPy inteninnon in the tase The VDPS has appealed tlw decmon to the Suond umitt Coun of Appealt On Dnemler 18, lyn the Apl rah Court uphe ld the Instrkt Coon ruling denying WP$' monon to intenene VDPs b now wrLing n tomider tion of the drusion f oi (M emirt \ tW), the Tnistre bled complainh agaimt u rtain managen, tommhstonen and other indmdaah of the \nmont enuties that had paruapated in Propxt No 6 The suit 3 allege fraud and tuntrprrwntanon in annm taken relatna; to the hoht No 6 mottatt The Vennoni Partiopanu har fdtd a nunder tI ddferrot monom and afhdauts m tid (aw lastern M.une lintnc Cooperatne O Miu, a l'anicipant in MMATC s holect No 6, dal not make ib june, July or August of IW pannents and ided for protecnon under Chapter 11 of the lederal Bankrupt 6 C. ode in Augmt of lW In ib ictition, LMIE asked the u ort to triert its contract with M%MC in thto!Tr of Pl% LMIM S pt ullon for rt {ttlhan of the (ontract wat deluril h) IIW l' h. hankruptcy Court The ludge comiuded that MMult has a sahd (laim agaunt 1MIC summing from IMin ddault under the contract prior to LMI C3 entenng Chapter 11. I MLC tes}nnded to the MMWI C dann fded in this vne wah a munttrtlaim al!rgmg, among othrt things, that Ib Proiret No 6 iM with MM41C n void as a inolt of the \crmont Supreme Court dechion. A trial scheduh d for january of IW) was prst}uned a the two pames agret d tu dwuw witirment I Min t oumel undaterahy Ided a setdenwnt agtn ment v.ith the cour1 whkh. among otht r thmgs. wmid allow MMWif to teruttr up to $15 imlhon on its 1W phn mdhon chum ag.nmt 1.14 MMW1C has ohnued to the agrn ment On May 10,1915, the tourt apptuwd the s+ttlement of the dann MWIC ha ap{taled the dension to the ledetal Imnnt Court m Mame, where the appral is sult p ndmg in Septemkr of IM the ledi ral Bankruptcy Court ju lge hearing the cae remowd huustlf from the s aw, wluth wu tht n awgned to a new lodge inently appomted to the l'rderal Bankmpte) Cmrt ui Mamt Sewral amended reorganizanon plam hoe been ht d by MMult, I MIL and the Proht l'artnipants' coinnuurt. Tim new Judge La held hearings on sewral epx b of the tav No u hedule oas ht-n set for comph tmg the raw Ili ja! Malt (d lNL NW lluh $tulikipal lag!!tillg I!allt idrd sult (tgMat MM%~l f SM-ktf f a deLlaratuilt that m 1% for Not h at Mn 1 Nutiear Proints b i and 5 and hojnt No 6 rdating to Srabrook wrre inul d, an,l an insuncnon ag umt MMulC tthertmg any afnn ab from llull undet the aghtInontx i and inonetar) d.noagts The smt (hallenges the uhdici of thew % on sanous ground 3 and alleges. among othi r thu@ inNrpraratalian, hit ath% and unprudtnues by MM%10. On Manh ( 19 % the MaWhIlmel19 hupetiter UU1 granted MM41C's liHif to" to Sta) NW }c[al pnicet'dmgs and cornprl arbitrathHi I.
-y-
of the suit, and for a preliminary injunction rtquiring llull to pay tu share of monthly pruer asts a rtquired tri the PSAs on March 21, 1986, a single justice of the Massachuwtu Appals Court denied llull's pcithm for rtlief Imm the orden of the Sup-rior nort, and the matter went to arbitratkai.1hc Massachuwtu Supreme Judicial Qurt suouquently icok the caw and issued an opinion uphold" g the injunction in August of 1987, the arbitrator ruled that the notracts signed by llull's light board with MMuIC were valid. The arbitr tor has yet to rule on the other alkged breaches, impmdencies and misreprewntathms claimed agatast MM4TC by llull. After withholding payments, llull b currently making payments, under protest, in accordance with the nort order, After a hiattu in the caw, a new arbitrator wu agtttd to in January of 1990 Disctwery on fact witnesses was completed in Envrnier of IVn 1here have lutn no additional hearings or documents filed since that date, altinogh a stiodated schedule has bien for4arded to the arbitrator for hh considtratiots. As of Decemler 31, 1990, total capital expenditurts amount to $1,464,545,000 00, of which $161,487,(x0 to reprewnts the annent attributable to the !>cpartroent. Debt outstanding for l'ro)wts included Power Supply System Restnue londs totaling $1,427,055,00000, of which $140,441,000 00 h attrdotable to the 1% of the l>epanment. As of Decemler 31, IWu, the total future debt wrvkr requjrement on outstandu,g ikods issued for Projects under nostruction is $3,830,532,000 00, of which $454,219,000(0 is attrdutable to the Department. Iludson's 1.lght Department has entered into power [vtchase contracts or 1% with MM41C. l!nder thew agreements, the Depanment is required to make capacity or debt wrvkr payments to MM41C *the aggregate amount of such required paymenu, exdusive of Reserst and Contingency I'und billings, on Ibnds outstanding arid significant power purchase contracu timogh MM4tc at launder 31,19>0 is shown telow. ANNilAL Co$T l'or years ending Decemler 31,1991 17,682,0 0 00 1992 18,981,000 00 1993 18,857,000.00 1V>4 18,006,000 00 1995 17,023 000 00 later fiscal years 369,818,000 00 Total $%0,367,00Mo in addition, the 14partment b rtquired to pay la share of the opration and maintenance costs of the units in which they participate. The Department's total O&M usts including debt wrvice under the agttrments were $20,617,000 00 and $20,387,000 00 for the years ending thremier 31,1930 and 1989, rtspectivdy. l t I l l l
, 28 ..
c.si, n.i.ne c - J.nu.ry n , i990 $ 3,702,7s8 sH #fff/plS Ret elsed Netelpts... Rnid(1iti,il Nales Conmwrcial Sales 8 HAN4,752.23 1,684,439 44 { ggggggg industrial Salts 1HA9n 1% H Stittt 1.lghtitig 157,83404 Yaid 1.lghting 122,482 23 Mun6cipal Salts 1,484 69.4(6 Comumer fic; wits 101,180 00 mt on f . imen' lic;we,its H N40 79 Int (d: d lunds 2(se,3M6 82
$nndn m s97,990 31 Energy.. > t l'tilities 172.21% Q 31,%H,019 07 Total kitt4 :
Paid Out Espenditures... Returned to Town $ 200.0 0(o Consumers' llegunits Refunded 76,340 87 Comumors' liespolts lot Allowed 10,936 25 overpayment Hefunds 4,792 /8 Contractor Advancts Refunded 9.4'M) 00 l'ayrolh 1,250,076 71 inv. for Supplies, N rvius, etc. 29.677,114 5H 11nploytw Retirement Trust 146,792.13 (31.37s,343 32) Total Ex]a nditurn Canti R.I.nte - Deteinber .it,1990 $3 M95,2% 43
Reswissse hans ja .ary i,i ,,o.iiu n.6,,3i,i ,9: Sale Of J lil !!$0% hl0% OUll R 101A1 Electricits v
"c' s ~ "^"
Res biet Ileater "I'
* ^ " * 'a wA43i 30
* '409.109 ""& 61
* ~^ * < = ' '
22 989 21 1.1.'I.0 % 12 All 1.kr N nice "l" 1.033.426 43 410 til % 12.2;o 5 i 1.4% 31N 7; (.ou t li:g & Air i ond 4;iM 19 2 '37 (d 0 00 1101 41 Corn knkt "C' l .0C,4 s l 16 3 o.x3119 9W M i ar7o 27 large Power "Ir 13.371 ,H2215 iW19 3M 0(o 14 3M O.641 H3 ' Munical.al A!) 1 hr I14.025 Os oto u2.Ull 0 4 ;W714 04 Munici[ul henIct- "C" sl,72; 3; ! /.;Oi OM bh 42 b t.910 4 5 Muniupal Ibwer "tr 439,72; x2 101,727 ;) om sal 3;3 % Street iIghting 1;4M97 76 64222/ ; +0 1Wr6 9 4 Yard 1.ighting 83,4xx 74 12919 f>7 734 M2 % 222 23 l'r,el Charges Ket Senue "A" 462.4;7 su 161,1;; 24 x.; 62 99 632.kA 72 Res. Wtr. Ileater "I" 1138td % 6X.776 (6 4Wal 186,4D st All I.lec Servite "r" 204.024 9' 81,614 63 2 169.76 2x1.1 w 36 Com litg & Air Cond 1.14M 93 7;2 fo oln 1.9;l ;3 Com. benice "C 187.399 47 V.14 6? 1.74i kl Ji?.322 4; large Power "Ir 3 o37.53$ ;; 3x7.227 A s o 00 4,0N 763 00 Merucilul All t he 2(29 t ,8 O(O % e wi lik 2M 7 6 Municipal Srn tre "C' 937931 2,20x M7 2 17 1130 M Municipal Power "D" 102,;49 66 22,392 2; o ou 12 i.9il x9 Str+tt I.ighting o 00 6;832 94s u.7 xo Yasi 1.ighting 12.771 77 18is 83 116 la 14 7 % 7/i Total Rneuue I:sth Tone $ h.9'O.629 3; $ 4A%7;o 14 5 M7 576 91 $ 30.311,9;s 9; Misc. I:lcatric Sales tw ;13 49 Total Rnenue frein hale of I.tr<tricity 5.3 4;1.i62 ; 7 Res Nwice "A" 9
$t 55.34i es3 lies Nwice "L' Wtr litt 1307 622 M All llec N nke "I" 1,713M;7 II Com litt & Alt. Cond 4,153 ++
r.om Nwice "C' 1.f N>,oM 2 2 1.arge Power "D" 18.925,e6 M Municipal All flec 674,982 82 Municipal Sentce "C' 7;.891 00 Municipal Power
- D" u6.39; 2; Strtti IJghung 156.663 23 Yard IJghting 110.4 % 97 Total $ 40. 4 i 1.9;; 9;
- y1 -.
janu.n i, :990. neitmher .s. 990 8t#l/Sl/CS hilowatt innint t rnerait d at staunii 13Sl4,732 hiluwatt boun hinhawd 2h6MW 6 KilOr#ff #0NTS lotel Generated and l'urth.ord 2 N , 44 2. 'M GCNCrHlCN9 litDSON hIOW 01111 M ARIAS [gffhg$fd f kilow.st hours hold... , 1-:nntente Sen-kr r 27,Ni7S12 9.615,73i 414.M6 80 sen n t - r t wu i,tr i n.7 t s.9m 4 os7.iii 24).s26 All I in tnc hers it e ' l ' 11.327.024 Mil .401 1 P.111 44 6'M t 1 915 0 litg and Air Outd lot houness Outunirn i,il Nnhe T- 7.571.816 2 Mh. lM M375 1 % 6 W,,%1 1 %,62hci40 0 1.a rpf hmer "li' W).7?k U U liepartinental I \ane 13 n 200 0 ; 20s m Meniupal Allllertoc . 370.161 87,937 91 Munnipal Nnu o "O
'i,Oh8 7h4 h%6. W) O Munkipal l'ower "Il btreet 1.lghting 1. 0 0.l79 26.M 3M Yaf d llf,hting $2O[ _ [b.[M i. Iib
.<. nilow.u hour. i .<h tone m7.9 naso 37.300.737 6.16 * .w3 25',44(UMI TDtAl hil .iW4tt hiRin dhtribilled hilowatt houn Mdij lO* rnale M7.57 5 hikm.itt hours uwd at SLitton and inisttilaneous iM2MI 16,2 & 972 hilowatt hours lost in Statrui anil Traniusuuinn Kilowatt hoorn Imt in ilistriluition lint 5 4 802.120 Total _ _2,_9: $ U A J Pricent lost in stanon anil Transnussion i.inrs 4 7N
v NFf Ef4f 1990 1989 1988 19M7 1986 Re 8314 8255 8135 8058 7902 Ek h o>mmerc'*' Industrial
'o8 200
'os" 179
' "9 163 949 166 923 163 gkg pggg Municipal 91 85 164 85 162 84 81 160 Others 153 .,
Todel Castemers 98(4 9741 9674 9414 9219 Kilewntt Hour Sales... Resiu'ntkl 64,951,123 66,201,051 67,203,493 65,216,046 63,146,242 Comitiercial 10,067,170 9,976,428 10,574,652 9,700,(61 8,321,322 Industnal 162,256,701 157,725,576 141,553,854 128,923,612 119,895,569 Municipal 13,258,001 13,703,799 13,M6,295 12,611,(61 11,239,163 Other 600,307 625,314 6i9,480 583.1 % 578.641
. Tes41 ADN Sales 251,133,302 248,232,158 233,297,774 2'17,034,539 203,180,937 Revenues Billed...
Residential $F.006,413 l') $7,685,256 7i $7.289,054 91 $6,31. '.06 $4,972,237.43 Commercial 1,695.246 66 1,589,281 56 1,% 6,855 14 t,305.., d 00 937,708.38 Industrial 18,925,40+83 17,002,680 35 14,426,M5 25 11,755,672 03 8,937,811.94 H,nidpal 1,573,932.30 1,513,038 85 1,365,914.76 1,135,655.26 831,562.12 Otht: 110.958.97 Itd.9n98 101,456 41 84,700.75 70,241 66 lu $30,311,955.95* $27.900,1M 45* $24,. i,126.47* $20,591,48210* $15,749,561.53*
' m .mt reflect accmnting udnistments for tuner charges.
l l l l l l I 1 l l N
~ }) ~
1
lil!!K RKIT 11.S IUSTAGE l'Allt l't.kMIT NO 42 IllilN)N. MA 1 1 3 l l l l l l l l 1 1 i i Hudson Idght & Power Departsnent 49 fotsst Avenur e Hudson, Masscheurtis 01749 e (617) 568-8736
r. Y 20 cm r Y
- 1 t{
s
p T:: s VERMONT ELECTRIC GENERATION AND y
. TRANSMISSION COOPERATIVE, INC.
! Financial Statements December 31,1990 and 1989 (With Independent Auditors' Report Thereon)
'.~
h e i.
) _-: ).
u _ _ _ .. _..; _ __. _ . _...__.. _ ._-._._ _ _ . _ ... ...-....-.. _ _ . . . , . _ , _ _ . . .
=- . . . - - . . . . - .-
VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC. December 31,1990 and 1989 l l Table of Contents j l l Page Independent Auditors' Report AB i Balance Sheets C-D
- . Statemc.its of Operations- E Statements of Changes in Equitiet F
, -1 i
'Staternents of Cash Flows G Notes to financial Statements HO )
Supplementary information-l Independent Auditors' Report on Supplementary Information P i 1 i Schedule 1-- Administrative and General Expenses 0 ( -i i
)
, ,, m,- , ,__-,,- -- - --,-w--r ,, --m- er <-n- -wa--,, - - am - - - - -- w--,- ,,v,w,,,e,, r- .w.ag--v-s,sv~,a,,wwm,mvw- - - -
(.^.' k? . f. ;*@)n(7": $a@f9f n _ KPMGJ Peat Marwick Certified Public Accountants O O n Ih4. [3 O l l JJ O cw y..
'pl
=-
, . . -. - . .- .. . - . . - . .. -= - - -.-.. . = . - - .- ... ...-
- j ' -d 1
l l l
.1 1
'1
+ -
I l
- 1 i
l l 1 I s VERMONT ELECTRIC GENERATION AND i-TRANSMISSION COOPERATIVE, INC. Financial Statements
- December 31,1990 and 1989 __
(With Independent Auditors' Report Thereon)
/
y
) ,
- l. -
M ?- * = ve-m_w+ . -g,e -mvw- e w wu wtve-,-. -,Vy + e w.- y.g-<w-97a%-+'9 D ey-- ye-w.-g,gy-.m-pq r-ym+ g sy-y W -4. q +w7--y, $m *'3 p r y t fee.-p tivyg qg g-'-t Wp y yi9.mw--
. _ _ . . _ _ . . _ . . ... .._..__.__.._m _ . _ . _ _ . . _ - . _ _ . - _ _ _ _ _ . _ _ _ _ _ _ . _ _ _ _
1 . l VERMONT ELECTRIC GENERATION AND TRANSMISSICN COOPERATIVE, INC, December 31,1990 and 1989 {-- Table of Contents PEla Independent Auditors' Report AB
)
Balance Sheets C-D
' Statements of . Operations E I
Statements of Changes in Equities F Statements of Cash Flows -G y-Notes to financial Statements HO
)-
- Supplementary Information:
Independent Auditors' Report on Supplementary information P Schedule 1 - Administrative and General Expenses O f
')
.)
mm KPMG! Peat Marwick Certified PutAic Accountants q one Church Street
'- PO. Box 664 Berhnoton. vT Of.402 O
INDEPENDENT AUDITORS' REPORT n The Board of Trustees Vermont Electric Generation and Transmissinn Cooperative, Inc.: q We hav. audited the accompanying balance sheete of Vermont Electdc Generation and
" Transmisalon Cooperative, Inc. as of December 31,1990 and 1989 and the related statements of operations, changes in equities and cash flows for the years then ended. These financial statements are the responsibility of the Cooperative's management. Our responsibility is to express an minion on these financial statements based on our audits, We conducted our audits in accordance with generally accepted auditing standards and g' Government Auditina Standards, issued by the Comptroller General of the United States.
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 aud:t also inclJdes assessing 'he accounting principles used and signitiCant estimates made by manage.m nt, as well as evaluating the overall financial statement g presentation. We believe tnrt out audits provide a reasonable basis for our opinion. As discussed in Note 9(C) to the financial statements, the Cooperative has not recognized in its 1990 financir.1 statements the loss which will be sustained upon the completion of the safe of its ownership interest in the Seabrook Unit No.1. Recognition o' this loss would have resulted in a significant additional expense for the year ended December 31,1990. Generally O accepted accounting principlus require that this loss be recorded. As discussed in Note 9(C) to the financial statements, the Cooperative did not recognize estimated expenses of $950,000 in its 1989 financial statements relating to the estimated remaining costs to be incurred in connection with the construction of Seabrook Nuclear Power Plant Unit No.1. Generally accepted accounting principles require that such expenses be q" reccHed. h our opinion, because of the effects of the matters discussed in the third paragraph, the 1990 financial statements referred to above do not present fairly, in conformity with generally l accepted accounting principles, the financial position of Vermont Electric Generation and !g' Transmissior: Cooperative, Inc. at December 31,1990, or the results of its operations or its cash flows for tne year then ended. In our opinion, except for the effects of not recognizing as
-A-La 3$$5 L E A d L tr m L _ .._
2 F expenses the estimated remaining costs for construction c,f Seabrook Nucicar Power Plant Unit No.1, as discussed in the preceding patagraph, the 1989 financial statements referred to above present fairly, in all material respects, the financial position of Vermont Electric i Generation and Transmission Cooperative, Inc, at December 31,1989, a'id the results of its operations and its ccsh flows for the year then onded in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that Vermont Electric. Generation and Transmission Cooperative, Inc. Will continue _ as a going concern. As j- discussed in Note 9(A) to the financial statements, the Cooperative's not capital deficiency, and its inability to meet its obligations raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 9(A). The financial statements do not include-any adjustnents relating to the recoverability and classification of reported asset amounts or the amounts and classification of liabilities that might result from the outcomo of this uncertainty.
) s As discussed in Note 9(E) to the financial statements, the Cooperative is a defendant in '
various lawsuits. The ultimate outcome of such litigation cannot presently be determined. Accordingly,'no liability, er loss, that may result upon final adjudication has been recognized in the accompanying financial statements. 2 liPiH 6 l%t Jr)a;w&A l-February 5,1991 r
) -B-Vt. Reg. No. 92-0000241
C VEh.AONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC. Balance Sheets December 31,1990 and 1989 ( Assets 1910 1983 C Electric plant, at cost: Electric plant in service $61,936,101 31,813,563 Less accumulated depreciation 5.267.519 4.137.744 Net electric plant in servico 56,668,582 27,S75,819 ( Construction work in progress - Seabrook Nuclear Power Project (note 9) ,_Q 28.506.869 Net electric plant 56.668.582 56.182.688 ( Other investments (note 2) 263.20_4 296.141 C Current assets: Cash 1,587 572 Cash restricted for construction 34,953 7,820 Accounts receivable - affiliated cooperative
- Accounts receivable - other 21,785,649 22,696 15,761,383 7,600 (
Prepaid. expenses 121.514 61.936 Total current assets 21.966.399 15.839.311 ( Deferred charges, net of amortization (note 3) 2.761.398 2.875.269 ( Total assets (notes 4 and 5) $ 81,659,583 75d91409 C See accompaiiying notes to financial statements.
-C- (
-. - ~ _ - - - -
. . . . . . - - - . ~ .
J Liabilities and Deficit 191Q J1@ - Equities (deficits): Memberships issued and subscribed $ 30 30 Other deficits (326.454) (326.454) ) Total def! cit __ 326.424) ( (326.424) Long term debt (FFB), excluding current installments (note 4) 28c270.438 28.495.917 Current liabilities: Line of credit,9.125% in 1990 and 9 75% in 1989 (CFC) (in default) (note 6) 5,268,179 5,268,179 ) Current installments of long-term debt (FFB) (note 4) 205,868 89 111
. Long-term debt (REA) (in default) (note 5) 14,446,119 14,446,119
' Accounts payable . 8,325,817 7,372,002
- Accounts payable - affiliated cooperative 466,416 367,731-Advance payable affiliated cooperative - 1,812,000 1,812,000 Account payable - REA guaranteed debt (note 4) 13,494,651 -10,155,776 Accrued snterest: . 9.333.952 7.513.098
) Total current liabilities 53.353.0.Q2 47.023.916 j- Deferred credits (note 7) 362.567 0 Total liabilities 81.986.007 75.519.833 )- : Commitments and contingencies (note 9) Total liabilities and deficit $ 81,559,5_83 75,193,409 ' ). ~ } -D-
- . - . - . . - - . ~ - . . - .
1 VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC. ; Statements of Operations l Years ended December 31,1990 and 1989 : i l I' 1E9D 19E9
-l Operating revenue (note 8) $ 1 @ t0E9 10.018.235 Operating expenses: i Purchased power (note 9) 3,457,813 3,590,184 .
Nuclear generation 907,692 574,272 ) Hydro generation 115,745 105,281 l Transmission 536,920 594,797 i Customer accounts 1,478 1,105 i Administrativo and general 885,921 791,388 l Depreciation 1,239,045 817,719 i y Amortization 112.3EB- 112.368 l l Total operating expenses 7.256.982 6.587.114 1
)
Earnings from operations 4.793.107 3.431.121 Other income: , Interest and dividend income 36,681 35,875 I Rental incomo 9.626 0
) ,
Total other in*ome 46.307 G53Z5 1 Interest charges: Interest on long-term debt 3,312.954 3,319,374 l
- Allowance for funds used during construction (502,258) (1.,014,857) l Other interest 2.028.718 1.162.479 l l
l Net interest charges _ 4.839.414 3.466.996 j
);
g Net earnings $__ 0 J l
)- l See accompany!ng notes to financial statements.
1 l
-E- )
1 l e_ _ . _ . . . , _ _ . _
\ VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC. Statements of Changes in Equities Years ended December 31,1990 and 1989 l:-
-1 l
I
).
Other Eauities i);; Memberships f- Issued and Donated Earnings Subscribed Caoital (Loss) Balarce at December 31,-1988 30 $ 20 -. (326,474)
)'
Not earnings for the year 0 0 - _Q Balance at December 31,1989 30 20 (326.474)
) --
Not earnings for the year 0 0 0 m
. Balance at December 31,1990 30 $ 20 ,_(326,474) -
iSee accompanying notes to financial statements. L.
- -F-
)
VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC. Statements of Cash Flows Years ended December 31,1990 and 1989
]
1990 1999 Cash flows from operating activities:
} Not earnings Noncash expenses included in camings:
$ _1 0 Depreciation 1,506,76' 1,035,390 Amortization of deferred charges 112,368 112,368 Changes in assets and liabikties; increase in accounts roccivable - affil;ated cooperative (6,024,266) (4,297,256) increase in accounts receivable - other (15,096) (6,979)
Decrease (increase) in prepaid expenses (59,578) 8,636 Decrease (increase)in deferred charges 1,503 (10,772) Increaso in accounts payablo - other 953,815 1,169,412 Increase in accounts payable - affikated cooperative 98,G85 106,504 Increase in accrued interest 1.82(LB14 2.266.478
# 385.781 Total adjustments ( 1.604.0,L4Z)
Not cash provided by (used in) operating activities (1.604.94 Z) 385.781 Cash flows from investing activities: Additions to electric plant in service (237,574) (94,914) 3 Retirements of electric plant in service 150,771 119,979 Additions to construction work in progress ( *, ,543,292) (3,031,160) Return of capital on VELCO Class C preferred stock 14,660 17,592 Return of CFC patronage capital m.277 0 increase in cash restricted for construction (27,1Q (7.500) D Net cash used in investing activities .gif;21211J (2.996.003) Cash flows from financing activities: Increase in accounts payable - REA guaranteed debt 3 M 675 2.671,937 Repayment of long-term debt r ins $y (61.195) Net cash prc ded by firiancing acavities _ 1230.253 2.610.742 Net increase in cash 1,015 520 j Cash at beginning of year _, cil2 52 h, Cash at end of year $_ 1758.7 _5M Supplemental cash flow inforraation: Cash paid during the year for interest $ 47,675 37,242 O See accompanying notes to financial statements.
-G-D
l 4 VERMONT ELECTRIC GENERATION AND ! TR ANSMISSION COOPERATIVE. INC. j Notes to Financial Statements g December 31,1390 and 1989 l (1) Summary of Significaul!1Cf0VH1!DQ20]!Cl2S (a) BCQldal01y_JBLISdiCli.2DS Vermont Electric Generation and Transmission Cooperative, Inc. (the Cooperativo) is under the jurisdiction of the Federal Energy Regulatory Commission (FERC), the Rural Electrification Administration (REA) and the Pubhc Service Board of Vermont (PSB). (b) Revenue Recognition The Cooperativo recognizes revenue for electric service in the months that bills are renclered as opposed to recognizing revenue in the month that service is rendcred. This method of recognizing operating revenue is consistent with other rural cloctric cooperatives. (c) Repicciallon
')
The Cooperativo follows the policy of charging to operating expensos annual amounts of depreciation which allocate the cost of the electric plant over its estimated useful life. The Cooperativo cmploys the straight-lino method for determining the annual charge for depreciation. The estimated usefuilives for electric plant are as follows: XC.SEL .n Millstone Unit 3 (jointly-owned) 35 N. Hartland hydro plant 50 N. Hartland tio line 50 Highgato investmeu t 10 m"' Millstono nuclear fuel is charged to operations at a rate of $4.185 in 1990 and $9.43 in 1989 per b megawatt hour of generation. (d) Amortizalien The Cooperativo follows the policy of charging to operating expenses annual amounts of
'q amortization which allocate the cost of various defcl red chamns over periodo established by management for rate making purposes. The Cooperatwo emp, ,s the straight-lino method for determini1g the annual charge for amortization.
(e) CQIROIatelttuC!ure_antilnCome Taves n' The Cooperative is a nonprofit and nonstock membership corporation organized under provisions of the Electric Cooperative Act of Vermont. The Cooperative is an organization described in Section 501(c)(12) of the Internal Revenue Code, and is exempt from taxes on related incomo under Section 591(a). (f) M2WaQC0 for Funds Used During Construction n U A!!owance for funds used during construction is the interest cost of borrowed funds used to fund construction in progress. The interest costs are capitahzed in the same manner as other construction costs, with credits to interest expense. (Continued) nv -H-
VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC. Notes to Financial Statements
'(g) Decommissionino The Cooperative pays its share of estimated decommiss'oning i costs for the Vermont Yankee
. Nuclear Power Plant and the Millstone Unit No. 3 Nuclear Power Plant. Such payments are deposited in escrow and trust funds,'and are adjus.3d periodically based upon adjustments to estimated decommissioning costs of the plants.
(2) Other Investments i
-The investment account includes the following, at cost, at December 31,1990 and 1989:
1930 1932 National Rural Utilities Coopative Finance c- Corporation (CFC) membership $ 1,000 1,000 h National Rural Electric Cooperative Administration membership 10 10 i CFC capital term' certificates 17,1 7 17,167 i CFC patronage capital certificates 42,719 60,996 VELCO Class C preferred stock 202.308 216.993
)_ $_2631 204 296 141 Because the Cooperative-is in default on its obligations to the Cooperative Finance Corporation
- (CFC), as disclosed in note 6, CFC has asserted tha' all amounts reported above as investments in CFC are sub,iect to CFCs legal rights, including off set and recoupment.
- 13) Daffred Charges The balance in deferred charges consists of the following at December 31,-1990 and 1989:
)- Amortization -
I Period 1930 -1993 ' Seabrook Unit No.'2 1985 -2015 - $1,902,904 -1,977,056 Pilgrim Unit No. 2 1984 2014 773,353 -843,478 Preliminary survey - load control None- 52,414 52,415 Seabrook Unit No.1 None 32,727. . O Other - 0 2.320
$2,761,398 2,b75,269 The costs associated with the abandonments of Seabrook Unit No. 2 and P$ grim Unit No. 2 are ) being recovered in rates on a straight-lin_e basis over thirty (30) years.
(Continued)
.i.
I
)
' VERMONT ELECTRIC GENERATION AND TRAN 3M!SSION COOPERATIVE, INC,
- Notes to Financial Statements (4) Leng-Term Debt
) The Cooperative was indebted as follows at December 31,1990 and 1989: 1MD 1M3 Mortgage notes payable - Federal Financing Bank (FFB). due through 20'i0 at various rates of interest averagir.g [) 9.08% and 9,10% at December 31,1990 and 1989
$28,476,306 28,584,928 respectively Less current installments 205.868 89.011 Long term debt, excluding current installments $_2827_0A38 _2_8A95A17 Debt service on the FFB mortgage notes has been paid since early in 1986 by REA, as guarantor of the obli0ation. The account payable to REA for reimbursement of debt service payments made on behalf of the Cooperative was $13,494,651 and $10,155,776 at December 31,1990 and 1989 -
respectively. The following is a schedule of minimum required payments on long term debt tot the years ending December 31: o rincioal Interest 1991 $ 205,868 2,577,716 1992 273,565 2,557,349 3 1993 308,998 2,531,658 1994 337,185 2,503,471 19 0 368,003 2,472,653 Thereafter 26.982.687
$28 1476,3_06 g
A!! of the assets of the Cooperative are pledged as security unt hose notes and the notes discussed in note 5. g- (5) Lono Term Dent fin Defau!t) Long term debt (in default) consists cf the follnwing at December 31,1990 and 1989: 192 1232 l Mortgage notes payable - U.S. Departrnent of Agriculture 9 Rural Electrification Administrntion (REA),5% mortgage notes, due through 2018 $14,44g9 _14,4461J9 t The Cooperative is in default due to nonpayment of debt service on these notes in cumulative amounts, including interest, of $4,551,228 a .d $3,653,693 in 1990 and 1989, respectively. Because Q of the default, the balance has been classified as a current liability at December 31,1990 and 1989. All of the assets of the Cooperative are pledged as security under these notes and the notes discussed in note 4. (Continued)
.J-O
i D VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC, Notes to Financial Statements 3 (6) Line of Credit (in Defaulli The Cooperative is in def ault due to nonpayment of principal and interest on a line of credit agreement with the National Rural Utilities Cooperative Finance Corporation (CFC). The maturity date under this agreement was March 31, 1986. The Cooperative was indebted under this O agreement as follows at December 31,1990 and 1989: 1990 1933 Principal $ 5,268,179 5,268,179 Accrued interest 2,790,346 2,115,209 O (7) Driened Credis The balance in deferred cred:ts of $362.567 and $ 0- at December 31,1990 and 1989, respectively, cons;sts of the over amortization recorded on Millstone 3 fuel. This amount will be written off over a burn cycle of approximately cir;hioen (18) months which will begin in Apri! 1991 (8) bjtillated Cooperative Certain officers and trustees of this Cooperative are also officers and trustees of the Vermont Electric Cooperative, Inc. (the VEC), an affiliated cooperative. Transactions between the Cooperative and O VEC, made pursuant to tariff agreements, are summarized as follows for the years ended December 31,1990 aned 1989: 1990 1939 Sa!es of energy to the VEC $ 11,413,742 2,847,257 Services provided and costs allocated by the VEC 172,031 203,893 O Interest expense on cash advance 98.685 108,504 The Cooperative sells the major!ty of the power it purchases to the VEC Through its wholesale power contract with the VEC, the Coooerative is able to bill all costs, margins, and reserves, not of revenue billed to others, to VEC. Under this contract, the VEC is committed for payments to the Cooperative of principal and interest on the Cooperative indebtedness. The obligations of the VEC O to the CoopJrative have not becn met. Its ability to meet these obligations in the future remains unce" ,(see note 9A). (9) Gofnmitments and Contingencies O (A) Gqi.ng Concorr - Debt Restructunna As shown in the financial statements, the Cooperative's current liabilities exceded its current asnets by $31,386,603 and $31,184,605 at December 31,1990 and 1989, respectively, and its total liabilities exceeded its total assets by $326,424 The Cooperative's affiliata, the VEC, has nJt met its obligations to the Cooperative, and its ability to meet these obligations in the future O remains uncertain Additionally, as discussed in notes 4,5 and 6 the Ceoperative has been (Continued)
-K-O
D VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC. Notes to Financial Statements J unable to meet or is in default on its debt obligations to various ! enders. As discussed in Note 9(E), the Cooperative is also a party to various legal actions, and holds an ownership interest in the Seabrook Unit No.1, which experienced persistent delays and cost overruns before beginning operations during 1990, as more fully discussed in Note 9(C). These factors, among others, indicate that the Cooperative may be unable to continue in existence in its present 3 structure. Management is in the process of completing negotiations with its lenders concerning debt restructuring. Included in this restructuring is the proposed sale of the Cooperative's ownersHp interest in Seabrook Unit No. I for substantia;ly less than the Cooperative's cost, and the s proposed sale of 2000 kilowatts of the Cooperative's North Hartland Station, as discussed more J fully in Notes 9 (B) and (C). Other terms of this proposed debt restructuring which are currently being negotiated include proposed settlemer2 vith the Cooperative's unsecured creditor, the Cooperative Finance Corporation (the CFC), at less than the full amount of the Cooperative's unsecured debt, and full repayment of secured CFC debt of both Cooperatives, through proceeds from the proposed sales; and restructuring of the indebtedness to the REA and the Federal Financing Bank (FFB.) J in December,1990, the CFC filed an action against the Cooperative for principal, interest, and costs associated with its line of credit with the Cooperative, in the amount of approximately
$8,000,000. The Cooperative and the CFC have entered into settlement discussions regarding this action, but no settlement has been reached. ] Moreover, the terms of the debt restructuring agren.nent with the REA are not yet finalizad.
Additionally, many elements of this agreement, including the sales of the Cooperative's ownership interest in Seabrook Unit No.1 and the sale of 2000 Kilowatts of the North Hartland Station, as well as the actual restructuring agreement, are SLbject to regulatory approval by the Vermont Public Service Board. As a result, a Luccessful conclusion to these negotiations cannot be assured, and, in the event of failurt , tiling by the Cooperadve under Federal
> bankruptcy statutes is likely.
(9) Power Contracts The Cooperative obtains power pnmanly from other utilities under contractual arrangements. In J addition, the Cooperative obtains powar from its hydro generation facil;ty, the North Hartiand Hydrculc:tric Power Plant, and its 0.35% ownership interest in the Millstone Unit No. 3 Nuclear Power Plant, and its 0.41259 % o vnershL interest in the Seabrook Unit No.1. A brief summary of the purchased power agreements as of December 31,1990 is as follows: The Cooperative obtains power under a life of-the-unit purchase contract from the O Vermont Nuclear Station (Vermont Yankee), operated by the Vermont Yankce Nuclear Power Corporation and from the Merrimack Unit Nc. 2 (Merrimack), owned and operated by the Public Serv::e Company of New Hampshire. The contracts expire in 2002 and 1998, respectively. The Vermont Yankee and Morrimack purchase contracts are tane or-pay con;racts which require the Cooperative to pay its proportionate share of the fixed costs of such facilities even during periods whr' U power is not being generated by such facilities or being delivered under such contracts. Such fixed costs represent a substantial portion of the tr: . cost for power from these sources. (Continued) O -L-
VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INC. Notes to Financial Statements The Cooperative has other take.or-pay contracts, with Connecticut Light ar- %r Company, expiring in 1993; and with the Vermont Department of Pub!!c Se. A s .: ' Hydro Ouebec Power, expiring in 1995. The Cooperative is also a joint own. s direct current converter terminal station and transmission line in Highgate, Verma.
' The Cooperative currently has cornmitments to purchase power in excess of its needs. Additionally, the Cooperative's mix of power is not optimally priced. The Cooperative is discussing the sale of 2000 kilowatts of the North Hartland Station with two potential purchasers Negotiations have not yet been finalized. As more-fully discussed in t'ote 9(C). tW Cooperative has entered into an agreement to sell its ownership share of Seaa oak Unit No.1. If these-sales-take place, the Cooperative will have reconfigmed its power supply into a more economical mix.
However, these events are subject to finalization, and to federal and state regulatory approval, and their successful conclusions cannot be assured. j (C) Seabrook Nuclear Power Project -j i. Seabrook Unit No.1 (Seabrook) represents a major commitment for the Cooperative, as a 0.41259% owner. Prior to becoming operational during 1990, Seabrook was subjected to delays and cost increases since construction began in 1976 with the Public Service Company of New Hampshire (PSNH) as~ lead owner. Through December 31, 1390, the Cooperative incurred construction costs of $30.050,161 for Seabrook. Debt obligations incurred by the , F Cooperative to finance it' vestment in this project have not been met. The Cooperative ceased J. making Seabrook construction payments m January,1986. Advance payments have been made by other joint owners to cover this shortfall. The Cooperative owes approximately !. $5,600,000 to these other joint owners for Seabrook costs, and approximately $800,000 to joint 3 owners of the Millstone No. 3 Nuclear Power Plant (Millstone) for construction costs of that facility, in January,1988, PSNH filed for protection from 4s creditors under Chapter 11 of the Fedatal Bankruptcy Code. As discussed in Note 9(A), the Cooperative is engaged in negotiating a restructuring of its debt. As a part of that restructuring, the Cooperative and PSNF' are in the process of settling claims which the Cooperative had brought against PSNH The proposed settlemnnt includes the sale of the Cooperative's ownership interest in Seabrook to PSMI at a price of $6,400,000. Additionally, the Cooperative would be ailowed an unsecured claim of
$2,500,000_under the proposed settlement of litigation in the PSNH bank uptcy. The bankruptcy court has approved the settlement. The Cooperative and PSNH are curantly in the process of drafting the Purchase and Sales agreement and obtaining the necessary regui try approsals.
- . . The proceeds of this proposed settlement and sale, a'ong with the sale of 2000 kilowatts from
( the North Hartland Station, as discussed in Note 9(B), if cuccoufully concluded, will be used to f repay the amounts in arrears, including 'nterest, to the othur joint owners of Seabrook and Millstone 3, and to other unsecured crede s. The Cooperative has not recognized, in its December 31,1990 financial statements, u1e loss which will be sustained upon the completion of the sale of its ownership interest in Seabrook to PSNH. The recognition of this event would have resulted in significant additional expense for 7 the year ended December 31,1990. ! (Continued)
- .M-
f VERMONT ELECTRIC GENERATION AND TRANSMISSICN COOPERATIVE, INC. Notes to Financial Statements
)
At the request of the REA, for the year ended December 31,1989, the Cooperative did not recognize, as an operating expense, additional estimated remaining costs of $950,000, to be
- incurred in connection with the coastruction of Seabrook prior to its operating date, as required by generally accepted accounting principles. Expensing this cost would have increased the Cooperative's expenses for the year ended December 31,1989 by $950,000.
(D) Begulatorv Matters The Vermont PSB is investigating least cost investrents, coergy efficiency, and conservation and management of demand for energy for all utilities offering electric or gas services in Vermont, in connection with this investigation, the PSB has adopted reporting requirements and the development of demand side management and long term integrated resource planning by utilities. The Cooperative has entered into a collaborative effort with another Vermont utility to facilitate compliance with these requirements. Although the Cooperative, along with other so-ca!!cd "small utilitiesin the state, has been excluded from these requirements, this decision by the PSB could make it more difficult for the Cooperative to obtain regulator; approval for the restructuring of its power contracts, as discussed in Note 9(B). The Cooperative has obtahed the approval of its Board and the Vermont Public Service Board for the purchase of additional power over the next three decades frorn Hydro-Quebec, and will be submitting the issue to a vote of its members on April 5,1991. PSB approval, however, is subject to certain conditions, including that, if the PSB determines that the Cooperative's needs for power could be more effectively met through demand side management, the PSB may direct the Cooperative to offer to sell excess power. The PSB initiated an investigation of costs relating to Seabrook in 1982, and dismissed this investigation as moot in 1989. However, in dismissing its investigation, the PSB stated that the Cooperative's obligations under Seabrook were a matter for separate resolution in the opinion of counsel, this issue could arise in the context of other PSB proceedings, and may affect the Cooperative's joint ownership in Seabrook. Various other matters are also pending before the PSB. Management is unable to estimate whether or not these matters will have a material adverse effect on the Cooperative's financial statements. (E) Other Legal Matters The Cooperative has not been able to obtain directors' and officers' I: ability insurance tince 1986. The Cooperative's bylaws require that it indemnify current and former officers, trustees and employees against expenses, judgments, fines and settlements incurred by reason of the fact that such a person is a current or former of!icer, trustee, or employee. This may give rise to significant liabilities to the Cooperative. g h The Cooperative has been named in a complaint alleging breach cf a letter of intent to purchase the output of a certain nydroelectric generating facility. Judgment is demanded jointly against the Cooperativa and its affiliate for $3,275,000, plus interest and costs. During 1989, a trial on the issue of liabinty, but riot damages, has resulted in verdicts against the Cooperative and the VEC. Litigation in this case continues with an appeal by the Cooperatives to the Vermont Supreme Court, and .no outcomu of such litigation has yet to be determined. (Continued)
-N-
VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, INCi Notes to Financial Statements j Several matters of litigation have boon brought against the Cooperative in regard to the North Hartland hydro electric generating facility, During 1989, several claims against the Cooperative
'in connection with this facility were settled,' primarily o' y negotiating payment of a lesser dollar amount with creditors. Liabilities related to those claims of approximately $1,031,000 remain on the books of the Cooperative, and litigation continues with respect to some of these cla.ms, Management is negotiating settlement of these remaining claims.
The Cooperative is siso a party to various cther litigation. Should this litigation be decided in a manner unfavorable to the Cooperative, the impact on the Cooperative's finarcial position could be significant.- Additionally, the Cooperative may also have a number of unasserted claims against it, upon which counselis unable to give an opinion as to the probability of assertion, k ) i y 1 ( ( .O. I l
]
[Nh! PeatMarwick Certified Public Aucuntants One Church Street PO Box r;G4 Burhngton. VT Ob402
)
INDEPENDENT AUD! TORS' REPORT ON SUPPLEMENTARY INFORMATION ) The Board of Trustees Vermont Electric Generation and Transmission Cooperative, Inc.: We have audited and reported separately herein on the financial statements of Vermont [ Electric Generation and Transmission Cooperative, Inc. as of and for the years ended December 31,1990 and 1989. Our audits were made for the purpose of forming an opinion on the basic financial statements of Vermont Electric Generation and Transmission Cooperative, Inc. taken as a whole. The supplementary information included in Schedule 1 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such supplementary information has been subjected to the auditing procedures applied in the audits of the basic financial statements; however, because of the adverse opinion expressed on the basic financial statements, we express no opinion on it. The accompanying financial statements and supplementary information have been prepared assuming that Vermont Electric Generation and Transmission Cooperative, Inc. will continue as a going concem. As discussed in Note 9(A) to the financial statements, the Cooperative's net capital deficiency, and its inability to meet is obligations, raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also desenbod in Note 9(A), The financial statements and supplementary in'ormation do not include any adjustments relating to the recoveraDility and classification of reported asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. As discussed in Note 9(E) to the financial statements, the Cooperative is a defendant in various lawsuits. The ultimate outcome of such litigation cannot presently be determined. ) Accordingly, no liability, or loss. that may result upon final adjudication has been recognized in the accompanying financid statements and supplementary information.
/fPrnG j%f Mlawd
) February 5,1991
,o.
Vt. Reg. No. 92-0000241 pT!r?T"T7 lI$$$h50NO$$ C:%L .v., .-
Schedule 1
- g. VERMONT ELECTRIC GENERATION AND TRANSMISSION COOPEFATIVE, INC, Administrative and General Expensea Years ended December 31,1990 and 1989 L
Change from f_ Prior Year 199.Q al Amount 1933 Administrative and general expenses: Property taxes $ 238,888 (10%) (27.059) 2c5.947 Administrative and general salaries 85.202 8% 6,408 U.794 Office supplies and expenses 8,896 70 % 3,678 5,258
~
Outside servi:es 271,004 (9%) (26,725) 297,729 Property insurance 32,413 1% 377 32,036 Injuries and damages 46,031 (9%) (4,630) 50,661 Regulatory commission 70,313 60 % 26,301 44,012 Miscellaneous 1,150 33 % 287 863 Assoc;ation muetings 4,738 32 % 1,162 3,576 Directorf expenses 13.480 7% 928 12,552 PSNH prucency claim 113 906 _lGQT: 113.806 0 Total administrative and general axpenses $ 885A21 _ 12 2o 94 533 791,388 K 2 -O-
F C KPMG1 c C C C C C C C C C
7,7,y KPMGtPeat Marwick Certified Putalic Accountants MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY FINANCIAL STATEMENTS WITH SUPPLEMENTARY INFORMATION YEARS ENDED DECEMBER 31, 1990 AND 1989 WITH INDEPENDENT AUDITORS' BIPORT THEREON
MASSACHUSETTS MUNICIPAL hTOLESAJJ ELECTRIC COMPANY FINANCIAL STATIME]iTA WITH SUPPLEMENTARY INFORMATION YEARS ENDED DECEMBER 31. 1990 AND 1989 TABLE OF CONTENTS Pace Independent Auditors' neport 1 Financial Statements Statements of Financial Position 2 Statements of Operations 3 Statemeats of Cash Flows 4 Notes to Financial Statements 5 Supplomentary Information Independent Auditors' Report on Supplementary Information 20 Project Statements of Financial Position 21 Project Statomonts of Operations 22 Project Statement,of Cash Flows 23
< rmn m KPMG Peat Marwick Certified Pubhc Accountants One Boston Place Telephone 617 723 7700 lelecop4er 017 723 6864 Boston, M A 02108 Telex 617 443 0082 PMMDOST INDEPENDENT AUDITORS' REPORT The Board of Directors MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY: We have audited the accompanying statements of financial position of Massachusette Municipal Wholesale Electric Company (a Massachusetts public corporation) as of December 31, 1990 and 1989 and the related statements of operations 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 g 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 eur opinion, p In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Massachusetts Municipal Wholesale Electric Company as of December 31, 1990 and 1989, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. March 18, 1991
> I l i
@sk[WIYM u eliR;ma.~~_ _ __ -____-____--____ _______ _ ______-___-__ _ _
)- HASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY STATEMENTS OF FINANCIAL POSITION DECEMBER 31, 1990 ANb 1989 (In Thousands)- ASSETS 1129 1989 ) Electric Plant
$1,230,094 390,938 In Service (Note 4) $
Accumulated Depreciation (Note 2) f_115 . 2 3 8 ) f86,456) 1,114,856 304,482 799,463 Under Construction (Notes 2 and 4) - ) Nuclear Fuel - not of amortization (Note 2) 40,860 44,560 Total Electric Plant 1.155.716 1.148,5Qi 256,253 269,585 Special Funds (Notes 2, 3 and 8) Current Assets } cash and Temporary Investments (Notes 2 and 8) 1,809 1,826 Accounts Receivable 5,736 7,610 Unbilled Revenues (Note 2) 9,065 7,373 Inventoties at Cost (Note 2) 17,182 8,816 5.816 2,152 Prepaid Expenses 39,608 27.777 ) Total Special Funds and Current Assets 295,861 297.362 Deferred Charges Amounts Recoverable (Payable) Under Terms of the Power Sales Agreements (Notes 2 and 5) g4,862) 329 Unamortized Debt Discount and Expenses 36,835 38,348 ) Other 4,617 3.128 36.590 41,805 112488,167, 11,487,671 LIABILITIES ) Long-Term Debt (Note 3)-
$1.409.775 S1,427,185 Bonda Payable Current Liabilities Current Maturities of Long-Term Debt 17,280 16,270 25
) Notes Payable (Note 3) 46,793 1 34,492 Accounts Payable 14,318 9,700 Accrued Expenses 78,392 60,487 Commitments and Contingencies (Notes 4 and 7) Si t 4_83 x y l 11J87,672 The accoopanying notes are an integral part of these financial statemento. ) - - . - .
[ KASSACHUSETTS MUNICIPAL WHOI,ESALE ELECTRIC COMPANY STATEMENTS OF OPERATIONS DECEMBER 31. 1990 AND 1989 (In Thousands) 1229 1221 Revenues (Note 2) $257,679 $258,035 Interest Income 23.725 26.294 Total Revenues and Interest Income 12314AQg {1544)l2
) Operating and Service Expenses:
Fuel Used in Electric Ceneration $ 27,658 $ 34,955 Purchased Power 87,121 82,355 Other Operating 23,809 12,854 Maintenance 4,500 4,664 Depreciation (Note 2) 29,033 13,995 ]) ' 3,837 2.914 Taxes Other Than Income 175.958 151.742 Interest Expense Interest Chargee 137,077 138,311
) Interest Charged to Projecto During construction (Notes 2 and 4) (36.822) (72.231) 100 255 66.080 Total Operating Costs and Interest Expense __276,211 217.822 Reserve for Project Billings - Net (Note 7) - (2,722)
Decrease in Amounts Recoverable Under Terns of the Power Sales Agreements (Notes 2 and 4) 5.191 69.229 129,ldOJ 123Ad12
) )
- The acenmpanying notes are an integral part of these financial statements.
)' 3
MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY STATEMENTS OF CASH FLOWS DECEMBER 31, 1990 AND 1989 (In Thousands) 121Q 1989 Cash flows from operating activities: Total Revenues and Interest Income $281,404 5284,329 Total Expenses (276,213) (215,100) Adjustments to arrive at not cash p provided by operating activities: Depreciation and decommissioning 29,408 14,131 Amortization 10,178 3,203 Reserve for Project Billings - (2,722) Change in current assets and liabilities: Accounts Receivable 1,058 2,588 g Unbilled Revenues (1,692) (312) Inventories (4,432) 1,279 Prepaid Expenses (3,219) 79 Accounts Payable 12,669 (1,284) Accrued Expenses and Other 2,771 1.595 51,932 87,786 Net cash provided by operating activities Cash flows from investing activities: Construction expenditures and purchases of nuclear fuel (12,510) (2,683) Interent Charged to Projects During Construction (36,822) (72,231) Net reduction in Special Funds 13,332 5,541 Decommissioning Trust payments (747) (2,423) Proceeds from property dioposal and other 1,222 199
) (35,525) (71,597)
Net cash used for investing activities Cash flows from financing activities: Payments for principal of Long-Term Debt (16,400) (16,495) Change in Notes Payable (24) (6) Net cash used for financing activ'.ies (16,424) (16,501) Net decrease in cash and temporary investments (17) (312) 2,138 Cash and temporary investments at bsginning of year 1,826 Cash and temporary investments at end of year 5 1,809 $ 1,826
> Cash paid during the year for interest (Net of amount capitalized as shown above) g_95,311 $ 56,874 The accompanying notes are an integral part of these financial statements. > 4
MASSACHUSETTS MUNTCIPAL WHOLESALE ELECTRTC COMPANY NOTES TO FINANCIAL STATEMENTS RECEMBER 31. 1990 AND 1989 (1) Massachusette Municioal Wholesale Electric Company (MMWEC) MMWEC is a political subdivision of the Commonwealth of Massachusetts, authorized to issue revenue bonde secured by rovenues derived from Power Sales Agreemente (see Note 7) with its members and other electrie systems to finance the construction and ownership of electric power facilitiee. A Massachusetts city or town having a municipal electric cepartment, authorized by majority vote of the city or tewn, may become a member by applying for admission to MMWEC and agreeing to comply with the terms and conditions of membership as the MMWEC By-Laws may require. As of December 31, 1990, thirty-one Massachusetts nanicipalities were members. MMWEC obtains power supply capacity by acquiring interests in various generating units and the operation of its own electric generating facilities (Projects). See Note 4 for a discussion of MMWEC's construction program and commitments related to these facilities. In addition, MMWEC contracts for power for resale to its members. (2) Sionificant Accountino Policica MMWEC presents its general purpose financial statements in accordance with generally accepted accounting principles as promulgated by the Financial Accounting Standards Board and the Governmental Accounting Standards Board. Interent Charced to Proiects Durina Construction MMWEC capitalized interest as an element of the cost of electric plant and other property while under construction, including an appropriate testing period. A corresponding amount was reflected ao a reduction of interest expense. The amount of interest capitalized was based on the cost of debt, including amortization of debt discount and expenses, related to each Project, net of investment gains and losses and interest income derived from urexpended Project funds. Nuclear Fuel Nuclear fuel includes MMWEC's ownership interest of fuel in use, in stock and in process for Millstone Unit 3 and Seabrook Station. Fuel in use is reflected net of accumulated amortization of $15.6 million and S7.0 million through December 31, 1990 and 1989, respectively. The cost of nuclear fuel is
> amortized to Fuel Used in Electric Generation based on the relationship of energy produced in the current period to total expected energy production for nuclear fuel in the reactor. A provision for fuel disposal costs is also included in Fuel Used in Electric Generation based upon fuel disposal contracts with the Department of Energy.
r. 1 MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY NOTES TO PINANCIAL STATERENTS DECEMBER 31, 1990 AND 1989 i I (2) Sionificant Accountino Policies (continued) Special runds Proceeds from the sales of revenue bonds for Projects are deposited with Trustees to be invested until they are required for construction or debt service payments. The Special Funds are restricted as to their use by the - General ' Bond Resolution, which includes investment thereof. Investments are
- limited - to direct _ obligations of, or ooligations the principal of and interest on which are unconditionally guaranteed by the United States, Federal covernment
(- agency securities, new housing authority bonds issued by public a( .1cies or municipalities, direct and general obligations of certain states or certain political subdivisions, bank time deposits evidenced by certificates of deposits j issued by certain banks, and repurchase agreements with primary dealers secured by certain secur wies. Certain Special Funds are more restricted as to which of the aforementioned investments can be purchased. (See Note 8.) Cash and Temnorary Investments Certain cash and temporary investment amounts are used for power O purchases and working capital requirements of MMWEC. These funds are not governed by the General Bond Resolution. In addition to the investment securities delineated in the General Bond Resolution, MMWEC purchases Canadian currency for cash and forward settlement and invests in repurchase agreements with banks where MMWEC has established acccunts. (See Note 8.) O Inventories Fuel oil and spare parts inventory are recorded and accounted for by the average cost method. At December 31, 1990 and 1989, fuel oil inventory was valued at $7.5 million and S3.9 million, and spare parts inventory amounted to S9.7 million and 54.9 million, for the respective years. O Retrenues and Unbt11ed Revenues Revenues include electric sales for resale provided from MMWEC's operating units and power purchases; billings for administrative and general services provided to MMWEC's Service Participants; and billings of debt service on certain Projects prior to commercial operation of the units within those O Projects. These and additional details of revenues are as follows: Revenueo 121Q 1912. (In Thousands) Electric sales for remalo $207,000 $168,415 Pre-operation debt service 46,432 87,446 O Service 2,367 2,174 PSNH Settlement 1,167 - Gain on land taken by eminent domain 713 - Revenues 1257,679 jR58A M MMWEC bills its members for costs incurred in providing services and O purchased power obtained - on their behalf under terms of the Service Agreement and the Power Purchase Agreements. Service revenues are recorded as the expenses are incurred. Amounts which are not yet billed are included in Unbilled Revenues on the Statements of Financial Posttion. 0 _ _ _ _ _ _
MASSACHUSETTS MUNTCIPAL WHOLESALE ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1990 AND 1989 (2) Sionificant Accountina Policies (continued) Revenues and Unbilled Pevenueg (continued) Electric sales for resale include pre-operation debt service revenues for Seabrook Station through June 30, 1990 at which time Seabrook Station began commercial operation. The difference between amounts billed currently under the terms of the Power Sales Agreements and total expenses recorded in the Statement of Operations is charged or credited to Amounts Recoverable (Payable) 'Jnde r Terms of the Power Sales Agreements. Amounts Recoverable (Pavablei Under Terms of the Power Sales Acreements Billings to Project Participante are designed to recover costs in accordance with the Power Sales Agreements. The billings are accordingly structured on a Project-by-Project basis to provide for debt servics, operating funds and reserve requirements. Expenses are reflected in the Statements of Operations in accordance with generally accepted accounting principles. The timing difference between amounts billed and expensed is charged or credited to Amounto Recoverable (Payable) Under Terms of the Power Sales Agreements. Amounts will be recovered through future billings or an expense will be recognized to offset credit balances. Tne principal differences include depreciation, costs associated with cancelled or aoandoned projects, certain interest, reserves and other costs. The reduction of Amounts Recoverable (Payable) Under Terms of the Power Sales Agreements for Projects with billings in excess of cost is primarily due to the billing of interest costs for Projects under construction through June 30, 1990 An increase in Amounts Recoverable (Payable) Under Terms of the Power Sales Agreements is primarily caused by recognition of depreciation expense in excess of bond payments related to a Project. Individual Projects with a cumulative deferral of costs total 5146.1 and $132.5 million and Projects with cumulative billings in excess of costs total S151.0 and $132.2 million at December 31, 1990 and 1989, respectively. i These amounts have baen netted in the Statements of Financial Position. Deoreciation Electric plant in service is depreciated using the straight-line method. The aggregate annual provisions for depreciation for 1990 and 1989 averaged 4% of the original cost of depreciable property. (3) Debt Power Suonly System Revenue Bonds To finance construction of ownership interests in electric generating
> projects under its General Bond Resolution, MMWEC issues Power Supply System Revenue Bonds (Bonds). The Bonds are secured under the General Bond Resolution by a pledge of the revenues derived by MMWEC under terms of the Power Sales Agreements and from the ownership and operation of the Projects in its power supply system. Pursuant to the Power Sales Agreements with the Project Participants, each Project Participant is obligated to pay its share of the f actual costs relating to the generating units planned, under construction or in operation. The Project Participants' obligations are not contingent upon the completion or operational status of the units.
I I
i
)- MASSACHUSETTS MUN2C2 PAL WHQitghLE ELECTRIC COMPANY NOTES TO FINANCIAL STATEFENTS DECEMBER 31, 1990 AND 1989 ) (3) Q1121 (continued)
Power Sueoly System Revenue Bonds (continued) MMWEC financings, other than obligations maturing within one year, ! require Massachusetts Department of Public Utilities (DPU) authorization. ) The Bonda Payable consist of Serial and Term Bonds and are comprised of the following issues, which, except for the 1987 Series D Bonds, are subject j to optional redemption approximately ten years after the issue daw , at 103% of the principal amount, descending periodically thereafter to 100s. The 1987 Series B Bonds are subject to redemption beginning in 1992 at 109% of the principal amount, descending periodically thereafter to 100s. Net Interest December 31, Issue Cost liig 1232 (In Thousands) 1976 Series A 7.2% S 61,640 S 62,645 1977 Series A 6.4% 160,250 163,185 1977 Series B 6.1% 80,060 81,265 1978 Series A 6.8% 63,075 63,930 1979 Series A 7.0% 126,420 130,200 1980 Series A 10.2% 80,060 82,105 1981 Series-A 12.3% 98,965 99,505 ) 1981 Series B 13.4% 81,930 82,395 1982 Series A 13.4% 63,155 65,155 1982 Series B 10.2% 127,030 127,870 1984 Series A 11.0% 93,975 94,510
-1985 Series B 13.5% 52,835 53,030 1987 Series A 8.9% 198,260 198,260
) 1987 Series B 11.8% 139,400 139,400 Bonde Payable 1,427,055 1,443,455 Less: Current Maturities f17,280) (16,270) Total Long-Term Debt 11.,309,711 11,427,181 The aggregate annual principal payments due on the Bonds in the-next }~ five years are as follows:- 1991 - $17,280,000; 1992 - $19,765,000; 1993 -
$21,140,000; 1994 - $22,665,000; and 1995 - S23,210,000.
Bond Refundino Authority MhWEC has received DPU authority to issus $691 million of bonds to ) refund currently outstanding high interest bonds. MMWEC is currently seeking an additional S285 million of bond refunding authority.
)
) -- _. ..
O MbSSACHUSETTS MUNICIPAL WHOLESALE l ELECTRIC CCMPANY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 199QJJD 1989 0 (3) EgM (continued) Nat Revenur Available for Debt Service Ir accordance with the provisions of MMWEC's General Bond Resolution, MMWEC covenants that it shall fix, revise and collect r a t.e s , tolls, rents and other sees and charges, sufficient to produce revenues to pay all operating and O maintenance expenses and principal of, premium, if any, and the interest on Bonds and to pay all other obligations against its revenue. Revenues, which include applicable interest earnings from investments, are required to equal 1.10 times the annual debt parvice for each contract year ending June 30, after deduction of certain operating and maintenance expenses and exclusive of depreciation. For the contract years ended June 30, 1990, 1989 and prior years, d MMWEC met the Bond Resolution debt service coverage requirements for the applicable MMWEC Projects. Contract Year Enied June 30, 1.212 1?.El Debt Service Coverage Revenues $172,299 5171,651 Other Billings 714 719 Reserve and Contingency Fund Billings 13,054 13,121 i Total 186,867 185,491 h Less: Operating and Maintenance Expenses Available Revenues Net of Expenses f34,467)
).UldQQ (41,159) fM4JM Debt Service Requiremant JJ3 M M $131M))
Coverage (110% Required) 1J03 119% lg Notes Psvable MMWEC maintains a S10 millica revolving line of credit to finance temporarily certain power purchases made by MMWEC for cra s ale under power purchase contracts. The balances outstanding wero 50 and S24,000, with a maximum outstanding balance of $1.1 and $0.5 million during 1990 and 1989, respectively. Interest charged on borrowings under the line are at the bank's prime rate. In addition, a commitment fee of 3/8 of 1% per annum is charged on 3 the unused portion of the line based on the average daily principal amount of the loan outstanding. In January 1989, MMWEC executed a 52.5 million 1989 Series A Revenue Bond Credit Facility to finance MMWEC's equity ownership in the Hydro-Quebec
'j Phasc II transmission interconnection. The three-year Credit Facility is at the bank's prime rate for borrowings under S1 million. Borrowings of amounts in excess of $1 million accrue interest at MMWEC's option using prime, Euro dollar base rates plue 1 1/4%, or CD base rates plus 1 3/8%. Euro dollar and CD base rate, vary depending on the length of maturity of the interest rate commitment period. The balance outstanding at the end of the three year period may be, G upon the mutual agreement of the bank and MMWEC, amortized over a ten year period. A commitment fee of 1/2 of 1% per annum, of the unused portion of the facility, is being waived until MMWEC utilizes the facility in excess of the 51,000 balance outstanding on December 31, ;990.
O ) MASSACHUSETTS MUNXCIPAL WHQLES&LE ELECTRIC COMPANY' NOTES To FINANCIAL STATEMENTS 7ECFMDER 31. 1990 AND 1989 (3) Rgh,L (continued) Notes Payable (continued) The revolving line of credit and 1989 Series A Revonue bonds are separate from the debt issued under the General Bond Resolution and are secured under contracts with Power Purchase Agreement participants and certain Servico ) Agreement participants, respectively. l (4) Construction and Financino MMWEC's power supply capacity includes interests in the generating units it operates or is a joint owner in, as noted below. }_ The 1990 commercial operation of Seabrook Station resulted in the - reclassification of the joint ownership interest from Electric Plant-Under l Construction to Electric Plant-In Service. Electric Plant-In Service also includes MMWEC's Service Operations which totalled $2.6 and f2.3 million in 1990 y and 1989, respectively. MMWEC Share of Amounts as of Capability December 31. Proiects Facility MW H2,Q 198,2 (In Thousands) ) Peaking Project Stony Brook 170,0 $ 56,219 $ 56,194 Intermediate Project Stony Brook 311.3 146,429 146,305
'Wyman Project W.F. Wyman Unit 4 22.7 7,349 7,344 Nuclear Project No. 3 Millstone Unit 3 36.8 128,257 128,186 18.4 50,618 50,584
) Nuclear Mix No. 1 Nuclear Mix No. 1 Millstone Unit 3 Seabrook Station 1.9 8,583 8,287 Nuclear Project No. 4 Seabrook Station 49.8 258,759 249,506 Nuclear Project No. 5 Seabrook Station 12.6 70,817 67,873 Project No. 6 Seabrook Station 69.0 500.481 473,797,
$1,227,5Q RJ8107_Q
[ MMWEC's 11.6% joint ownership interest in the Seabrook Station represents a substantial portion of its plant investment and financing program. Seabrook Station originally consisted of two 1,150 megawatt nuclear reactors. Unit 2 was cancelled ao discussed in Note 5 - Unit Cancellation. Construction of Seabrook Station Unit 1 was completed by New Hampshire Yankee (NH Yankee), )- which currently is a division of Public Service of New Hampshire (PSNH), the Unit's lead owner holding 35.6% of the Unit. Seabrook Station experienced persistent and substantial cost increases and significant schedule delays during the construction and licensing periods. This included controversy and opposition from government officials, regulators and intervenors, which created financial problems for many of its joint owners, including MMWEC. In December 1988, the Nuclear Regulatory Commission (NBC) decided on all pending financial qualification questions which were brought to its attention relating to Seabrook. The NRC ruled that, among other things, the Seabrook Station joint owners provide for the financial ability to decommission
MASSACHUSETTS MUNU;)tPAL WHOLEQLE ELECTRIC CQEJANl NOTES TO FINhNCIAL STATEMENTS DECEMBER 31. 1990 AND 1989 (4) Construction and Financino (continued) the plant prior to allowing the start of low-power testing. The joint owners have purchased a surety bond and NH Yankee established pre-operational and supplementary trusts to meet the above condition. MMWEC's December 31, 1990 trust balances of $2.3 million are to be refunded upon resolution of all relevant pending operating license appeals. For additional information regarding decommissioning expenses, see Note 7, Commitments and Cont 5ngencies - Other Issues. PSNH, as a result of the continued delay in the commercial operation of Seabrook Station and its inability to recover costs of Seabrook Station through rates prior to commercial operation, filed for protection from its creditors under Chapter 11 of the Federal Bankruptcy Code. The Bankruptcy Court administering the reorganization of PSNH allowed reorganization plans to be filed and after hearings on the disclosure statements associated with the plans, PSNH, the State of New Hampshire, various Bankruptcy creditor and Equity Committees and others agreed to and joinod in sponsoring the reorganization plan submitted by Northeast Utilities (NU/PSNH Plan) to acquire PSNH, including Seabrook Station. Consummation of the NU/PSN4 Plan is primarily contingent on final approval from the Federal Energy Regulatory Commission for the NU/PSNH merger and a favorable ruling f rom the New Hampshire Supreme Court on certain rate matters. EUA power Corporation, a 12.1% joint owner of Seabrook Station, announced in February 1991 that it filed a voluntary petition for protection under Chapter 11 of the Federal Bankruptcy Code. EUA Power indicated its intent to continue making payments of all of its on-going obligations under the Seabrook Joint Ownership Agreement. On June 1, 1988, MMWEC's Board of Directors adopted a strategic plan of action relating to its Seabroci joint ownership interests. The plan of 3 action evidenced, among other things, an intention to drawdown funds previously J paid and not to pay any future direct obligations to the Seabrook Project. Accordingly, no additional payments were made for construction, maintenance or nuclear fuel under the Seabrook Project Disburning Agent Agreement or Joint ownership Agreement until June 1990. MMWEC's prepayments were exhausted in July 1988. The Connecticut Light and Power company, in exchange for a power sales arrangement with other joint owners, and through additional payments furnished funds to the Seabrook Project in lieu of MMWEC's payments, for the July to November 1988 period. As part of a Comprehensive Seabrook Settlement, the Connecticut Light and Power Company released any claims it may have had against MMWEC as a result of making payments to the Seabrook Project. In June 1988, PSNH gave notice under a provision of the Seabrook Joint Ownership Agreement that MMWEC was in default of its joint ownership obligations. Pursuant to the same Joint ownership Agreement, MMWEC had five months after such notice to cure any default. MMWEC did not agree with such notice that a default occurred on June 10, 1988. In November 1988, MMWEC and
O MMSACHUSETTS MUNICIPAL WHOLES ALE ELECTRIC COMPANY ((QTES TO FINANCIAL STATEMENTS DECEMBER 31, 1990 AND 1982 O (4) Const ruction and Financina (continued) PSNH entered into a Memorandum of Unerstanding whereby HMWEC continued its full ownership in Seabrook Station anc further agreed to execute a settlement Agreement. The Memorandum and the Settlement Agreement provided, among other things, that all notices of default were rescinded and covenants not to sue .O among the ma3ar 3oint owners of Seabrook were effective. The Setttement Agreement required PSNH to be responsible for $30 million of MMWEC's Seabrook Station pre-operational costs. The Settlement Agreement called for MMWEC to make up within seven days of the commercial operation of Seabrook, any shortfalls in construction payments after the 530 million was exhausted, which MMWEC did on July 2, 1990. The Settlement Agreement also provided that PSNH pay g MMWEC S3.5 million on the Effectiva Date of the Agreement and to make a S2 million annual payment to MMWEC, for oight years, upon the commercial operation of the Seabrook Station. As part of the Settlement Agreement, MMWEC and PSNH agreed to terminate the Sellback Agreement which provided that PSNH purchase a portion of MMWEC's Seabrook capacity from MMWEC at cost, to the extent that capacity was excess to the Project No. 6 Participants. The PSNH bankruptcy court approved the Comprehensive Seabrook Settlement. (5) Unit Cancellations MMWEC's investment in Seabrook Station includes an equivalent Seabrook's joint owners have authorized the sale of g interest in Units 1 and 2. all salvageable components and equipment from the cancelled Seabrook Unit 2. The joint owners have also agreed to allow the current Seabrook Unit 2 construction permit to lapse and to take no action for renewal. MMWEC's not costa, including interest expense in Seabrook Unit 2 of 5128.7 and 5123.3 million as of December 31, 1990 and 1989, respectively, have been deferred and are being re vered under the terms of the Power Sales Aq:reements. O In October 1981, the Boston Edison Company cancelled Pilgrim Unit 2, which is included in MMWEC's Nuclear Mix No. 1. MMWEC's not costa, including interest expense associated with the Unit, which aggregated $61.2 and $59.5 million as of December 31, 1990 and 1989, respectively, were deferred and are g being recovered under the terms of the Power Sales Agreements. (6) Benefit Plana MMWEC has tuo non-contributory pension plans covering substantially all full-time active employees. One plan covers union employees (union plan) Q and the other plan covers non-union employees (non-union plan). The amount shown below as the Pension Benefit Obligation for HMWEC is a standardized disclosure measure of the present value of pension benefits, adjusted for the effect of projected salary increases, estimated to be payable in the future an a result of employee service to date. The measure is the O actuarial present value of credited projected benefits and is independent of the funding method used to determine contributions to the plans. l 0 l C MSSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTS DICEMBER 31, 1990 AND 1989 0 (6) Benefit Plana (continued) The Pension Benefit obligation was computed as part of an actuarial valuation performed as of January 1, 1990. Significant actuarial assumptions used in the valuation include a rate of return on the investment of present and futuro assets of 8.0% a year compounded annually, and projected salary increases ,0 of 5.5s a year compounded annually. 7,e Penston Benefit obligation for both plans at January 1, 1990 is as follows: Retirees currently receiving benefits and terminated employees not yet l I receiving benefits S 146,938 current Employees Employer financed vested 608,346 Employer financed non-vested 748,433 Total Pension Benefit obligation 1,503,717 Net asset available for benefits, at market 1,053.171 n j 450x516 V Unfunded Pension Benefit Obligation MMWEC makes annual contributions to the pension plans equal to the amounts recorded as pension expense, which is $379,000 and $302,000 for the years ended December 31, 1990 and 1989, respectively. The union plan uses the aggregate actuarial e et method and the non-union plan uses the frozen initial O liability actuarial cost method in determining pension expense. The assumed rate of return used in determining pension expense was 8.5%. Pension costs applicable to prior years' service are amortized over thirty years. Historical trend and other information which is required to be discl sed in a e rdance with Governmental Accounting Standards Statement No. 5 O is not considered material and therefore is not presented. MMWEC contributes to an employee savings plan administered by a life insurance company. All full-tine employees meeting the service requirements are eligible to participate in this defined contribution plan. Under the provisions f the plan, MMWEC's and the employees' contributions vest immediately. MMWEC (O contributed $75,000, and $70,000 while the employees contributed $119,000, and
$109,000 during the years ended December 31, 1990 and 1989, respectively.
(7) commitments and Continoencies Q Power Purchasee MMWEC's contract with the New Brunswick Electric Power Commission calls for the purchase of 100 MW of capacity from the Point Lepreau nuclear unit. The contract beca.o effective in February 1983, the unit's in-service date, and was initially effective through October 1987, with options for extensions. MMWEC's latest extension of the contract provides for purchases .O through October 1994, decreasing the capacity entitlement from 100 MW to 50MW l { O . F -- er e
t Is J MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY
@TES TO FINANCI AL STAlfEENTS DECEMBER 31, 1990 AND 1989 (7) Commitmente and Contincencies (continued)
Power Purchases (continued) starting November 1993. The contract payment provisions require MMWEC to pay in all events certain fixed, operating, maintenance and other charges relating to the unit, which are estimated at $36 million per year in 1991 and 1992, $33
- million in 1993 and $15 million in 1994. MMWEC has entered into corresponding agreements with its members and other utilities to resell the power.
MMWEC entered into agreements for participation in the inter-connection between New England utilities and the Hydro-Quebec electric system ,3 near Sherbrooke, Quebec (Phase I), which began commercial operation in October
" 1986. The New England portion of the interconnection was constructed at a total cost of about $140 million, of which 3.65% or 55.1 million is MMWEC's share to support. MMWEC has also entered into similar agreements for participation in the interconnection between New England utilities and the Hydro-Quebec electric system for the expansion of t5e Hydro-Quebec interconnection (Phase II) which went into commercial operation in November 1990. MMWEC's equity investment a MMWEC has b' approximates 0.6% or $3.3 million of the total estimated cost.
corresponding agreements with its members and another utility to recover HMWEC's share of the costs associated with the lines. Power Sales Acreements m MMWEC sells the capability of each of its Projects to its members and other utilities (Project Participants) under the Power Sales Agreements. The Vermont Department of Public Service (VDPS) brought an action against MMWFC in a Superior Court of Vermont in October 1985 challenging the validity of the Project No. 6 Power Sales Agreements as entered into by the In November 1986, the Superior Court Judge ruled that the
') Vermont Participants.
Power Sales Agreements for Project No. 6 between MMWEC and several consumer-owned utilities in Vermont were valid under Vermont law. The ruling rejected contentions by the VDPS, Ve rmont Electric Cooperative and the Village of Stowe Water & Light Department that the contracts were invalid and, therefore, not binding agreements. The plaintiffs appealed this ruling to the Vermont Supreme () Court in April 1987. In September 1988, the Verma.t Supreme Court ruled that the Project No. 6 Power Sales -Agreements with the 7ermont utilities were not valid since inception (void ab initio) because inter alia, the utilities lacked the statutory authority to enter into the contracts and to delegate certain authority to MMWEC. MMWEC filed a motion requesting the court to grant a rehearing. However, in January 1989, the Vermont Supreme Court denied MMWEC's () motion for a rehearing, and MMWEC sub6equently filed a writ of certiorari with the United States Supreme Court to review the Vermont Supreme Court decision. The writ of certiorari was denied in October 1989. O O M3SSACHUSETTS MUNIC2 PAL WHOLESALE ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTE DECEMBER 31, 1990 AND 1989 (7) Commitments and Contincencies (continued) Power Salee Acreements (continued) Subsequent to the Vermont Supreme Court decision, The Vermont Public Service Board ordered that the Vermont Project No. 6 Participants cease making their payments to MMWEC. MMWEC recordod a reserve for the receivable in 1988 which was adjusted by $2.7 million in 1989. The Vermont Electric Cooperative and Washington Electric Cooperative of Vermont had already stopped making payments in January 1986 and 1988, respectively. The default by the Vermont Participants and Eastern Maine Electric Cooperative, discussed later, resulted in a reallocation of the Project No. 6 capability, expenses and liabilities in accordance with the Power Sales Agreement. Inasmuch as the Stony Brook Ir.termediate Project has approximately 8.2% of Project Capability under Power Sales Agreements with Vermont entities, which Power Sales Agreements are virtually identical to the Project No. 6 Power Sales Agreement, the Vermont Supreme Court decision on the Project No. 6 Power Sales Agreement could apply equally to the Stony Brook Intermediate Power Sales Agreement. The Vermont Legislature enacted legislation seeking to validate the Stony Brook Intermediate Power Sales Agreement in light of the Vermont Supreme court decision. MMWEC is seeking a declaratiors of the validity of the Stony Brook Intermediate Power Sales Agreement, as well as the curative legislation, in the matter of MMWEC v. State of Vermont et al. currently pending in the Superior Court in Washington County, Vermont. The Vermont Supreme Court declaion declaring the Project No. 6 Vermont Participants' contracts void ab initio, caused certain Massachusetts Project No. 6 Participants to raise issues relating to the validity of the Project No. 6 Power Sales Agreements, alleging among other things that 100% participation in the Project No. 6 Power Sales Agreements is a condition precedent to its validity. In April 1989, the Hingham Municipal Lighting Plant and the Shrewsbury Electric Light Plant both filed identical but separate actions in the Superior Court of Suffolk County in Massachusetts. The basis for the complaints is whether the Project No. 6 Power Sales Agreements are valid and binding as to them, since as alleged in the complaints, a condition precedent to the validity of all the Project No. 6 Power Sales Agreements is 100% participation in said Agreement, and if the Vermont Participants' contracts are void ab initio, then this condition precedent has not been met. Further, the complaint alleged t* st any increase in Project No. 6 billings as a result of the nonpayment by the armont Project No. 6 Participants is unlawful on the basis that the Project No. 6 Power Sales Agreements failed to have 100% participation
-and MMWEC's use of Project No. 6 funds to cover the shortfall in receipts constitutes a breach of the Power Sales Agreements. Five other Massachusetts Project No. 6 Participants filed similar complaints in Suffolk County Superior Court, i _ _ _ _ - _ - _ _ _ _ _ _ _ _ - _ - - _ _ _ - - - _ _ - _ _-
l li&fSACHUSETTS MUNICIPAL WHOLESAM ELECTRIC Q.QMPANY EQIES TO FINANCIAL STATEMENTS DECEMBER 31. 1990 AND 1989
)
(7) Commitments and Continoencies (continued) Power Sales Aareemg.DLg (continued) In April 1989, MMWEC filed an original action in the Supreme Judicial Court for suffolk County against two Massachusetts Project No. 6 Participants. A Supreme Judicial Court Justice, sitting as a Single Justice, granted MMWEC's
) requests for preliminary injunctions ordering the non-paying Participants to pay their obligations. MMWEC also filed a Motion for Summary Judgement with the Single Justice who allowed for discovery to take place prior to scheduling a hearing on the summary judgement motions. In January 1990, the justice recused himself due to a potential conflict, sending the case back to the Suffolk County Superior court. In August 1990 Hudson and Peabody filed a motion for a partial ) summary judgement on the 100% participation and step-up issues in Superior Court. In November 1990 arguments were presented and a Superior Court judge ruled that the Vermont Participants' nonpayments constituted a default within the meaning of the governing documents. The court further ruled that this default triggered a step-up and other related actions as required by the Power Sales Agreement. After staying any further proceeding in the Superior Court, )
the judge reported his decision to the Massachusetts Appeals Court. Motions for direct appellate review were filed with the Supreme Judicial Court for the Commonwealth of Massachusetts (SJC), which court took the case. The case is expected to be heard by the SJC for the Commonwealth of Massachusetts in the spring of 1991.
) Tne Town of Hudson Light & Power Department and the City of Peabody Municipal Light ~ Plant filed a lawsuit against MMWEC in November 1988, which among other things, sought to enjoin the MMWEC Board of Directors from acting
- upon the Memorandum of Understanding discussed in Note 4. In November 1988, the Massachusetts Superior Court denied the Hudson / Peabody injunction request, which denial was upheld by the Massachusetts Appeals Court. In December 1988, the
~
Town of Hudson Light & Power Department and the City of Peabody Municipal Light Plant amended their complaint against MMWEC to include challenges to the validity of the Project No. 6 Power Sales Agreement on the 100% participation issue, as previously discussed within the context of the Vermont Supreme Court decision. This action is now part of the SJC case.
)
In March 1989, Washington Electric Cooperative of Vermont filed suit against MMWEC in the Washington County Superior Court in Vermont for restitution of payments made to MMWEC under the Project No. 6 Power Sales Agreement. Waehington Electric Cooperative received an ex parte trustee process against other Vermont utilities which are making payments under MMWEC'a Stony Brook
) Intermediate Unit contracts. MMWEC has removed this case to the United States District Court for the. District of Vermont, where hearings were held and sn order was issued to dissolve the trustee process contingent on MMWEC giving notice of any intent to take away the Vermont Participants' Intermediate Unit capacity. ) ) ._- _. ._ . _. _ _ - - _
) MASSACHUSETTS MUNfCIPAL WH9tESALE ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1990 AND 1989 I (7) Commitments and continoencies (continued) Power Sales Aareements (continued) In July 1989, MMWEC filed a counterclaim against certain directors, managers and attorneys of the Washington Electric Cooperative for misrepresentation. These third party defendants have moved to dismiss the claims. In November 1989, the VDPS moved to intervene in this case and filed a claim of $6.2 million for restitution of all Vermont Project No. 6 Participant payments. The Federal District Court disallowed the VDPS intervention in the cases. VDPS appealed this decision to the Second Circuit Court of Appeals which upheld the Federal District Court decision. In December 1990, continental Bank N.A., the Bond Fund Trustee, filed an action for securities fraud in Massachusetts Federal District Court against the various light departments contesting the Project No. 6 Power Sales Agreements, and against certain current and former light department managers individually. MMWEC is named as a nominal party in the case, and no damages are g Gought from it. MMWEC intends to seek dismissal of the complaint. Eastern Maine Electric Cooperative (EMEC), a Participant in MMWEC's Project No. 6, did not make its June 1987 payment and filed for protection under Chapter 11 of the Federal Bankruptcy code in August 1987. Furthermore, EMEC's petition to reject its contract with M:IWEC was denied by the U.S. Bankruptcy g Court. MMWEC has formally filed a clain. in the proceedings for the money it is owed as EMEC's largest impaired creditor. EMEC responded to the claim with a counterclaim alleging, among other things, that its Project No. 6 Power Sales Agreement with MMWEC is void as a result of the Vermont Supreme Court decision. The trial on the adversarial claim scheduled for January 1990 was postponed as the two parties agreed to discuss settlement. EMEC's counsel then unilaterally g filed with the Bankruptcy Court a proposed settlement agreement which was accepted by the court over MMWEC's objections. MMWEC's appeal of this decision is currently pending in the Federal District Court in Maine. MMWEC, EMEC and the Project No. 6 Participanto' Committee have filed respective Plans of Reorganization and Disclosure Statements. HMWEC's Plan of Reorganization calls for establishing a new corporate entity controlled by MMWEC to replace EMEC.
) This entity would pay the obligation due MMWEC.
No schedule has been set for completing the Hearings have been held - on various aspects of the case. bankruptcy proceedings. In January 1986, the Hull Municipal Lighting Plant filed suit against MMWEC seeking a declaration that its Power Sales Agreements for Nuclear Mix 1,
> Nuclear Projects Nos. 4 and 5 and Project No. 6 relating to Seabrook were invalid, and-an injunction against MMWEC collecting any amounts from Hull under the agreements and monetary damages. The suit challenges the validity of these Power Sales Agreements on various grounds and alleges, among other things, various misrepresentations, breaches and imprudencies by MMWEC. In 1986, the Massachusetts Superior Court granted MMWEC's motions to stay the legal > proceedings and compel arbitration of the suit and for a preliminary injunction requiring Hull to pay its share of monthly power costs as required by the Power Sales Agreements. A Single Justice of the Massachusetts Appeals Court denied Hull's petition for relief from the orders of the Superior Court, and the matter D _ _ _ _ _ _ _ _ _ - _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MASSACHUSETTS MUNTCIPAL WHOLESALE ELECTRfC COMPANY NOTES TO PINANCIAL STATEMENT { DECEMBER 31. 1990 AND 1989 (7) Commitments and continaeneig,g (continued) Power Sales _Aaregments (continued) went to arbitration. The Massachusetts Supreme Judicial Court subsequently took the case and issued an opinion upholding the injunction. In 1987, the arbitrator ruled that the contracts signed by Hull's light board with MMWEC were valid. An arbitrator has yet to rule on the other alleged breaches, imprudencies and misrepresentations claimed against MMWEC by Hull. After withholding payments, Hull is currently making payments, under protest, in accordance with the court order. After a hiatus in the case, a new arbitrator was agreed to and discovery was completed in 1990. A stipulated schedule has been forwarded to the arbitrator for his consideration. MMWEC has filed a motion for partial summary judgement which is currently pending with the arbitrator. Based on the opinions of Bonu Counsel and other legal counsel, discussions with such counsel and other considerations, management believes that the altimate resolution of the actions described above will not have a material, adverse effect on the financial position of MMWEC. MMWEC continues to enforce the provisions of the Power Sale Agreements to assure that adequate revenues are collected to meet debt service payments on its bonds in accordance with the General Bond Resolution. Other Issues MMWEC, an a joint owner of the Millstone Unit 3 and Seabrook Station nuclear units, is required to set aside funds for their eventual dacommissioning. MMWEC's policy in to funa these reserve requirements over the licensed life of the units through monthly billings to MMWEC Participants in the unit. MMWEC's share of the total estima*nd Millstone Unit 3 and Seabrook Station's projected reserve requirement is #9.3 million and S33 million, of which $1.2 and S0.2 million ras been funded respectively, as of December 31, 1990. The amounts are included in other deferred charges and accrued expenses. In August 1988 a revised Price-Anderson Act was enacted, calling-for a fifteen year extension of the nuclear liability indemnification process. The revised Act limits public liability from an incident at a nuclear power plant to
$7.6 billion. The $200 million primary layer of insurance for the liability has been purchased in the commercial market. Additional coverage of 57.1 billion is to be provided through a $63 million per incident assessment of each of the currently licensed nuclear units in the United States. The maximum assessment is $10 million per incident por unit in any year. If the sum of the liability I claims and costs from an incident exceed the maximum amount of financial protection, each reactor owner is subject to an additional S3.2 million assessment. The maximum assessment is subject to adjustment for inflation every five years. MMWEC's interest in the Millstone Unit 3 and Seabrook Unit 1 could result in a maximum assessment of 53.0 and S7.3 million respectively. ' MMWEC is not currently covered under gradual pollution liability insurance related to MMWEC's Stony Brook power plant. Management is not aware of any material claims made during 1990 or outstanding as of December 31, 1990.
HASSACHUSETTS MUNICIPAL WHOLESb1E ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTS QsCFMBER 31, 1990 AND 1989 (7) Commitments and Centinaencies (continued) Other Issues (continued) Additional information regarding commitments and contingencies relative to MMWEC 's debt and involvement in nuclear projects is discussed in Note 3 - Debt and Note 4 - Construction and Financing. (8) Investments and DecosLtg All bank deposits, which amounted to $680,000 at December 31, 1990, are maintained at twc financial institutions. The Federal Deposit Insurance Corporation currently insures up to $100,000 per depositor. MMWEC's untnsured g' deposits ranged from zero to $5.8 million during 1990 due to seasonal cash flows, the timing of daily cash receipts and favorable earnings offered on these demand deposits. Investments are stated at cost adjusted for accretion (amortization) of the discount (premium). MMWEC's normal practice is to hold its investments g' until maturity. At December 31, 1990, all securities underlying repurchaso agreements, and (11 other investments, were held in MMWEC's name by independent custodians consistang of the Construction Fund Trustees, Bond Fund Trustee or MMWEC's depository bank. Investments, representing the Special Funds and Cash and Temporary Investments, as well as certain additional amounts disbursed but available for investment, and accru :d interest, are presented below: g 1990 1989 Carrying Market Carrying Market Type of Investment Amount Value Amount Value (Dollars In Thousands)
^)
S 25,859 S 26,327 Repurchase agreements S 9,982 S 10,222 Other Investments: U.S. Treasury bills 82 82 34 34 U.S. Treasury notes 29,382 29,602 49,479 49,527 U.S. Agency bonds 36,149 36,380 30,765 30,715 g U.S. Agency discount notes 188,246 188,362 169,327 169,240 Certificates of Deposits - - 89 89 Total other Investments 253,859 254.426 249,693 249,605 Total Investments $263,841 g 648 S $ 215J13, $ Rb_9 32 3 Temporary investments, made up of funds available from amounts for which the expense has been recognized but not cleared by the bank, approximated S5.8 million and 54.1 million in 1990 and 1989, respectively, and are included in the total investments noted above. Due to seasonal cash flows during 1990 and 1989, MMWEC, from time to O time, invested in repurchase agreements with its depository bank that were collateralized by securities in MMWEC's name held by the depository bank. MMWEC's practice is to monitor the market value of the underlying securities to ensure that the market value equals or exceeds the amount invested. O v M! Peat Marwick Certified Public Accountants One Boston Place Telephone 617 723 7700 Telecopier 017 723 6864 Boston. MA 02108 Telea 617 443 0082 PMMBOST
)
3 INDEPENDENT AUDITORS' REPOR* ON SUPPLEMENTARY INFORMATION 3 The Board of Directors MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY: We have audited and reported separately herein on the financial statements of Massachusetto Municipal Wholesale Electric Company as of and for the years ended December 31, 1990 and 1989. 6 Our audits were made for the purpose of forming an opinion on the basic financial statnments of the Massachusetts Municipal Wholesale Electric Company taken as a whole. The supplementary information included in pages 21-23 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such supplementary information has been subjected 3 to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
- O 3
March 18, 1991 9 n lA 8 %QW!7p? dSEddl$3 M;C;L&.....u,, ..
O o. o< o .. o .o o e- 4 4 5 ' f4ASSACHUSETTS 94JNICIPAL UHOLESALE ELECTRIC COMPANY PROJECT STATEMENTS OF f twAmCI AL POSITION DECEMBE R 31. 1990 (in thousands) ASSETS - NUCLEAR NUCtEAR t!UCLEAR NUCLEAR PROJECT NTDeo GUESEC
$ERVICE Nix 1 Pe0J. 3 PROJ. 4 P;DJ, L NO, p PEAttuG INTERMEDIATE WYMAN ._, PHASE II. TOTAL Etsctric Plant S 56,219 ..S146,429 S 7,349 / $1,230,094 in Service S 2,582 S 59,201 S128,257 $258,759 $ 70,817 $5G0,481 -
) ) ) ) (5 ) ) -
2 3' Acetsflated S preciation (1.84 ) _f 3 ) ) 19 888 2,960 J1 7 - - - - 40.860 tuclear Fuet - not of amortization Total Electric Plant /34 53,919 1 785 Jy6 113.196 265.0E _72.515 T1 4 38 082 94.200 4.75 - 1.155.716 specist Funds . 27,422_ Construction Fmd - 86,eM - 4,372 1,344 .5,010 - - - -
- 1,482 1,071 1,416 419 1,382 850 2,278 105 - 9,003:
Sand Fund 600 148,008 Borzi Reserve Fund - 12,383 18,333 22.228 7,139 65,273 8,907 13,145 - Reserve and Contingency Ftsuf - 3,215 2,777 4,082 1,238 6,457 990 1,765 293 - 20,817' 2,082 3,032 2,877 900 3,859 8,340 19,970 - 999 - 42,059 Reverne Fed - 8.944 Working Capital Fmds 8.981 - - - - - - - - f37) 8.981 35.858 25.213 34.975 11.040 81.981 19.087 . 37. 0 8 ' 1.997 (37) 256.253 - Current Assets - - - -
~
(3) 1,809 cash and Temporary Investments 1,812 - - -
'5,736 4,027 48 351 33 6 92 199 854 23 103 Accomts Receivable - - - -
(59) 9,065 - Unbitled Revenues 9,124 - - - -
' 61 1,640 415 2,27. 2,141 10,291 362 - 17,1'E :
Inventories at cost - - 3 (845) (12) - - Advances to (from) Projects 2,044 (54) (59) (177) (72) (828) 295 631 1.137 1.609 407 1.290 49 191 207 - 5.41_6 Prepaid Expenses 580 41 39.608 1/.302 686 1.429 3.105 i36 . 2.826 - 2.392 10.491 36 544 36.080 11.796 84.807 21.479 47.649 2.5 77 4 295.861 Total Special Fmds and Current Assets 26.283 26.642 Deferred Charges Amounts Recoverable (Payable) (4,862) Under Terms of the Power Sales Agreements - 75,017 60,173 (48,9813 (9.647) (90,564) (1,796) 10,947 (11) - 2,782 4,713 6,019 2,153 14,316 1,645 5,072 135 - 36,835 Unamortized Debt Discomt and Espenses - " 425 766 1.079 273 1 493 5*1 4.617' Other - 36.5T . 78,R24 63.652 (41.88 7) i 21) <74,755) (151) 16.019 124 581
$2).01h $168.553 S205.484 $261.232 ~ 090 S$23.476 .S 59,410 $157.868 S 7.452 S 59$ 51.488.167 LIABillTIES Long-Tera Debt $1.400.775 Bonds Payable S -
$163.855 .S200.750 S{53,10) S 74.745 SS10.270 5 54,355 S145.880 S 6 815 S -
l j Current Liabilities 830- 2,765' 1,690 4,555 210 - 17,280 i Current Maturities of Lorg-Tere Debt - 2.960 1,445 2,825
' ~ .- - - - - - 1 1 .
- Notes Payable - -
584 46,793 ? Accounts Payable 17,690 1,017 1,881 4,903 1,414 9,888 2,932 6,108 376 9 327 721 1 408 399 101 553 433 1.325 51 - 14.318 ; Accrued Espenses 63r 585 78.392 ' 27 017 4.698 4.734 8 127 2.343 13206 m 5.055 11.988 . S?Io17 $168.553 S?05.484 ' $261.232 S 77.090 IT?l.476 S 59.410 S157.868 S 7.452 S 585 S t . 488.167 [ ( t _4 __ . _ _ _ . _ _ _ _ _ _ . _ _ _ _ _ _ . _ _ _ _ _ _ _ . _ _ _ - _ _ _ _ . _ . _ _ . _ _ . _ _ _ _ . _ - . . . - _ . .
V Aj Ut .W U .U- V U- TU L .U. - U~ MASSACMUSETTS 80NICIPAL 1As0LESAL[_(([gt!C COMPANY P90)(CT STAIEMEWIS Of OPERATIOES FOR tuE YEAR ENDED DECEMBER 31. 1990
-(in Thousands)-
NUCLEAR NUCLEAR PROJECT - PROJECT NYOGO GUE9EC-NUCLEAR MIX 1 - 'PROJ. 3 PROJ, 4 - Wo. 5 NO, 6 PEAK!NG INTERMEDIATE VmAN PuASE I! ' TOTAL'. SERVICE S88,509 5 4,549 S21,443 S25,712- S 7,9" S63,351 S 8,114 ' .S35,082
- 2,754 S 210 -S257,679 Revenues 23.725 864 3.53} 3 ', 7,449 1.550 4 182 -
Interest incane . Total Reverwes and Interest income $89.373 M8 4 M,259 V M $ 9.664 $ , S_L9M S I16 M Operating and Service Expenses: .S 4,159 S16,031 S 1,654 S :-. . S 27,658 Fuel Used in Electric Generation S - S 807 S 1,638 ~ $ 2,106 S 570 S -693' 86,911 - - - - - - -- - 210 ' 87,121 Purchased Power 5,760 1,548 4,972 374 - 23,809 Other Operatire 2,335 1,656 2,896 -3,380 888 29 289 545 454 115 630 332 1,920 186 - 4,500 Maintenance 2,250 5,934 224 - :-- .29,033 Depreciation , 60 1,731 3,994 4,639 1,269- 8,962 9 825 328 Q3 455 _ l40 1.163 - 177-3 837' Taxes other Than inr.r 477 S.243 29.990 . 2.565 210 175.,958 89 344 4.910 . 9.896 10.907 2.925 19.966 Interest Espense: '- " 137,077 29 11.248 17,423 21,193 6,826 63,004 5,826 11,078 450 Interest Charges
-Interest Charged to Projects During Construction -
(351) (129) iL4 1) {2.726) ) - - - -. (36.82R) 29 0 17 - -1 4 100 5.826 11.073 450 . 100.2$$ Total Operating Costs and Interest Expense 89.373 [ W,897 19 2 .6 N . 11 069 41.068 '. 3.01$ 210 . 276.2 Q (Increate) Decrease in Amomts Recoverable 1,946 (1.405) 69 ) L79) 5.191 tkider Tersus of the Power Seles Agreements - (7.72$) 5.292 J195 G .936 210'
,$89.373 S 8.082 Q(3.171) S29.971 S 8.9 71 $70.800 $ 9.664 S 6 S M-t l
4 22- [ s e
+. ,. -. ~ y n ;r_ '
m a a a m - U V U. . W V V t,..) W W w W MASSACHUSETTS MUsitCIPAL WSOJLSsLE ELECTRIC COMPAttY PROJECT STATE"EnfS 05 CASH ftOWS DECEMBEP 31. 1990 (in thoucarxis) tuCLEAR WUCLEAR NUCLEAR WUCLEAR PROJECT MYDRO QUE8EC M!x 1 PROJ, 3 P90J. 4 PROJ. 5 NO. 6 PE MIkG INTE9 MEDIATE WYMAlt FWA5E 11 TOTAL SERVICE C sh flows f rcus operating activities: Totst Revenues and Interest income 589,373 5 8,082 S 24,021 S 28,971 S 8,971 S 70,800 S 9,664 S 38,376 S 2,936 S 210 $ 281,404 Tot:( Expenses (89,373) (15,807) (27,192) (23,679) (7,025) (57,77's) (11,069) (41,068) (3,015) (210) (276,213) Adjustsents to arrive at net cash provided by operating activities: 5,830 29,408 Depreciation ard decomissioning 60 1,817 4,158 4,721 1,290 9,076 2,233 223 - peorteration - 786 1,550 2,229 625 4,598 94 290 6 - 10,178 Change in current assets and liabl(ities: 1,058 Accomts Receivabte 40 41 (304) (5) 27 stS) 260 920 200 (103) tkbitted Reverues (1,751) - - - - - - - - 59 (1,692) (6) (170) (43) (236) (446) (3,355) (176) - (4,432) Iruentories - - Prepaid Expenses (43) (132) (155) (1,443) (365) (1,060) (3) (13) (5) - (3,219) Accomts Payable 555 (537) 3,811 1,067 7,515 937 (420) 148 584 12,669 (991) Accrued Expenses ard other 3.053 66 133 (52) (14) (74) 168 66 6 (581) 2.771 Nrt cash provided by (used for) operating activities 358 (4.598) 1.6 74 14.383 4.533 JLC2.1 1.838 6?$ 123 (41) 51.932 Cash flows from investing activities: Construction expenditures and archases (12,510) of nuclear fuel (319) (929) (1,626) (3,004) (801* (5,576) (39) (203) (13) - Interest charged to Projects daring (36,822) construction - (3"1) (129) (8,421) (2,726) (25,195) - - - - 8,763 1,753 (119) (161) 754 (470) 3,081 (110) 37 13,332 tiet increase (decrease) in Special Furds (196) Decorssissioning Trust payments - (113) (213) (160) (40) (221) - - - - ( 74 7) Proceeds from property disposal and other 158 23 46 1 - _._,_.} 221 771 - - 1.222 Ret ccsh provided by (used for) (35.575) investing activities (357) 7.393 (169) (11.703) (3.728) (30.236) (285) 3.649 (123) 37 Cash flows from financing activities: (2,795) (1,5u5) (2,680) (805) (2,590) (1,550) (4,275) (2001 - (16,400) Pcyments f or principat of Long-Ters Debt - 1 (24) (25) Change in Notes Payable - - - - cat cash provided by (used for) financing activities (?5) (2.795) (1.505) (2.6S0) (805) (2.590) (1.550) (4.275) (2003 1 (16.424) ^ tet decrease in cash and terporary investments (14) - - - - - - - - (3) (17) Cash md teeporary investments 1.826 - - - - - - - - S - 1.82 6 at begiming of year Cash and teeporary investeents at end of year 5 1.812 S - S - S - S - S - 5 - S - S - S r3) $ 1E9
?9 S 10.670 $ 17.119 $ 11,679 5 3.75 6 S 35.097 $ 5.732 S 10.7M! $ c45 $ -
S 95.315 Cash paid daring the year for interest S (Wet of amount capitalized as shown above)
.z3
- - _ _ _ _ - _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ .____-___I
0_. I tv , , . , . , 4 KPMG*
-- _ _ . - - - - _ _ _ - - - - - - - - - - - _ _ . _ _ _ _ - - - - - - - - - _ _ . _ . - _ - -_.-----__..-__.--_-..---_-_J}}