ML20095E434

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1983 Annual Rept
ML20095E434
Person / Time
Site: Mcguire, Catawba, McGuire, 05000000
Issue date: 12/31/1983
From: Clay G, Shaw R
NORTH CAROLINA MUNICIPAL POWER AGENCIES
To:
Shared Package
ML20095E402 List:
References
NUDOCS 8408240239
Download: ML20095E434 (27)
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Contents Page 1983: TheYear it All Came Together 1 A Ilrief Histoty 2 Organization and Management 4 Ikxtrd of Commissioners and Alternates 4-5 The Ruticipants 6 Openttions __ 7 Construction 9 Finance 10 Financial Statements 12 Auditor's Opinion 16 Management Staff,

- Consultants, Trustees, litying Agents inside 13ack Cover Almut the Cover:

CollstrtK1lOli ofl'Ilit I ;tt ottawixi Nuclear 5tatiott w;ts alx>ut 9) percellt coniplete at tlle et)(l of 198,5. [Illit 2 at Cita%Ixt, it) ullitli NCMPA I li.ts a 75 [x rcent ow11ership share, w;ts alx >ut 66 percent coniplete.

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1983: The Year It All Came Together ,

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Since they pioneered bringing This annual repon contains details discouraging decide llut the electricity to Nonh Qtrolina before and luckground nuterial municipalities'suppon of their the tum of the centuiy, the goal of conceming these and the agentys agency and its goals and purposes the state's municigulities that own other 1983 aaomplishments.'Ihe withstooti that test of time and trials, and operate their own electric undedying theme is one of and 1983 stands as tangible proof systems has been to provide an congratulations to our puticipating that their judgment was sound.

adequate, reliable supply of electric municipalities, their ollicials and ,j power at the knvest cost possible. citizens We sincerely tlunk them f /g .

For Nonh Carolina Municip'il)ower fortheir uppnt.

Agency Number 1 (NCMPA 1(L983 Cluimian was the year everything came-F,or all praaicil purposes, work together to bring the desired resuhs tomtrd the Catmin projea began in lloard of Commissioneis 1974, with dnt&ing oflegislat. ion to

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[P t etat authorize the fomution of municipal power agencies in this g gg ,

resources all jelled. OnJuly 1,1983. j NCMPA 1 became the all-ne I las n a long, often ilph W. Shaw frustrating, and sometimes l General M;unger requirements power supplier for j the 19 towns and cities that are - __ _ _ _ , _ . _ _ . _ _

panicipants in the Cattwba Nuclear 3

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Station project. g ,g '% >

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'Iluuugh December 31, the agencv's [ " A {' 3 A <

c4 I first six months of operation as a '

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.g: y ? 'b. d _. - ;y l power supplier, revenues exceeded Ii ,sg

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j t 'f with uncenainties in the municipal j (.3. ' ,  ;

bond market, NCMPA 1 successfully g l.

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nurketed a $200 million electric I I h .

1 mvenue bond issue in Februa19, !i f!!

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and for the first time since it closed [ '

' f) .. l die Catawin purchase in late 1978, retired its first nuturing debt, $75 l

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l million in revolvingcredit notes. A y' l]J l

second planned bond issue had to 4 - -

/i!i stponed twice during the f]

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Ralph V . Sluw (left ), George % . Clay,Jr. ( right )

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A Brief History l

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NCMPA 1 Chartered-On January 13, needed to operate its business. The Purchase Closed-On November 29, 1976, NCMPA 1 w:ts chanered as amtngement avoided the 1978, the agency and Duke a municipal corporation under the unnecessary, and expensive, closed on the agency's purcittse of enabling act ptssed by the Nonh duplictrion that sepantte agency a 75 percent undivided ownership Carolina General Assembly in May staffs would have entailed. interest in Unit 2 of Catawin.

1975 (theJoint Municipal Electric First llonds Sold-On November 16, Additional Financing-NCMPA 1 Power and Energy Act). 1978, NCMPA 1 sold a $ 100 lus issued electric revenue bonds annually since 1978 (it sold two Catawin Project Approved-On million eledric revenue bond issue issues in 1981), and will continue Februaiv 27,1978, after two and a at a net interest cost of 6.812 half years of negotiations between percent. It wits, at the time, the periodically to issue bonds and/or notes to finance its share of the NCMPA 1 and Duke Power second largest issue ofits kind ever construction of Cataniu Unit 2.*

l Company, the NOlPA 1 Ikurd of offered by a public utility.

Commissioners approved the Construction Schedule-In May l

j Catawin projed and authorized 1982, Duke issued the third major

execution of joint ownership - - - - -

q resision of its Catawba construction contrads with Duke. I j schedule. Cataniu Unit 1 is now Municipalities Approve i [ scheduled to begin commercial Contracts- ByJuly 10,1978,19 of

} ;{Catawba operation inJune 1985, a the agencys 20 member cities had Unit 2 inJune 1987. At the l l y end of 1983, the project was ahead approved the essential contacts 1 between each city and the agency.

of that schedule.

'Ihe City of Concord, an agency . McGuire Station-Unit 1 at Duke's member, did not vote to panici[ute  ! l: William B. McGuire Nuclear Station, in the project. l lt a " sister" plant to Catawba, begin

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Managemcat Senices-In October commercial opemtion in December 1978, NCMPA 1 - along with the 1981. McGuire Unit 2 has operated state's other power agericies _ at 100 percent of power and is 3

contnicted with ElectriCities of j Nonh Carolina to provide the j{

agency, at cost, with staff and I4 l professional ntulagement senices q  !

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'In January 1984. NCMPA 1 marketet!its eighth innd issue. See Hnance section of this report.

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I currently undergoing testing. North Carolina's opemted or under construaion, by ration is scheduled Qtrolina Power & Ught Company ofi>NCMPA Eastern 1 has Power Agency Commercial for March 19M. (Cln&I.).

reliability exchanges with Duke Nonh Qtrolina Eastem Mun. .icipal p . . gyp 3) w.33 In order to close its purchase, nwohing the McGuire plant, which NCEMPA sold three major issues of chanered in December 1976, under enables it to get project power from electric revenue bonds in 1982,

"" the state's 1975 enabling act. It has ,

, 32 member municipalities, all of raising $1.3 billion in cipital.

i NCMPA 1 Power Delivery which are panicipants in a joint On December 30,1981, NCEMPA

( Begins-OnJuly 1,1983, by projea invohing ownership becune the all requirements power utilizing the reliability exchange interests in four generating stations supplier for its 11 panicipating irwohing McGuire, NCMPA 1 municipalities that had previously replaced Duke as the all-been wholesale customers of requirements power supplier for Virginia Electric an Power the 19 municipalities panicipating Company. On Apr . 22,1982, the

, in the Citawba project.

I agency became the all-requirements  ;

power supplier for its other 21 i

panicipants, who had previously been served by CP&L

  • AlcGuire l' nit 2 lxpn wmmercial operation
  • 31.trch I. I.ike NCMPA 1, NCEMPA has l .

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__.__~~_m contracted with EleariCities of f Nonh Qtrolina, Inc., to provide it with professional management staff and senices.

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I i num - mmm mz um, a m.ww c ym= - e .mmm w . ~m Organization and Management i

NCN1PA 1 is a municipal Ralph W. Shaw was reappointed as On December 16,1983, the coqxration govemed by a lxxtrd of genemi nunager. James T. Bobo, NCh1PA 1 Ikxtrd adopted a commissioners, one member of director of firtuice and administa- ntinagement agreement with which is appointed by each tion, and William G. Wemhoff, ElectriCities to continue to provide member municipality. Each direttor of engineering for the agency with management staff municipality also appoints an ElectriCities, were reappointal as and senices needal to run its attemate commissioner who the agency's assistant business.

represents the city at lxxtrd secretuy-treasurers. Ihe management services staff of meetings when the regular In October 1983, ElectriCities of ElectriCities carries out the agency's commissioner cannot. 'Ihe txxtrd North Carolina, which until then daily opemtions, including its elects its own ollicens who, together had been an unincorpomted senice financing and accounting, billing, with four at large representanves association, mis incorporated under planning and budgeting programs.

also elected by the lxxtrd, compn.se nov legislative authority as a joint In addition, it closely administers the agency's executive committee. niunicipal assistance agency, with the project agreements and At the 1983 elections, held in authority to provide a full nuage of monitors the perfom1ance of Duke December, the lxxird re-elected as senices to its municipal members. with regard to the utility's i ollicers: Chaimttn George W. Clay, fulfillment of obligations in the ,

Jr., mayor ofShelby;Vice Chaimrin project.  !

Earle E. Riddle, utilities commission chaimun ofIrxington, and Scaetary-Treasurer David E. Inwe, nturiger of Lincolnton. --r-~~---~-~r---~~--~-

Re elected as at-large members of y' ,

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the executive committee were:

h'\ (,s Ij N1olly Al. Danvin, council member, l! W p3; l l

Alorganton;J.E. Elinkel, city -~

\f p f% ~ j 9 h ntutiger, Alonroe: Jack F. Neel, city j. 3 '

nunager, Albemarle, and R. Duke (!  ;

j Whisenant, city manager, Newton. j ,

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(Irft to Right) Whiwnant. Walker, Clay, Ihdfman, Neci, Ilinkel.

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James L Ik>rton Akkrnutn, Gnur>rrt

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William M. Edwards 3 x

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  • Dasid E Isme Odt to Right ) Damin, Edwards, Fiddle, Sparrow, Mendenhall, Gunter, Gill.

Akuuy7, Lincolnton Ntcyn3tc JudyMmdenhaH JohnIloke Gitat:cilAhndxs; lith >hItint Commissioners Gunmiss*>mr, Genutius Clyde E Ilagwell Eric LJones

  • Jack F. Neel ygggy,yj,z,.gg,. StatestGle

, Akternutrr IstruHs Akuugr,ARxvunie Joseph E Baker,Jr. Andrew M. Kistler,11 Nannic 1%tts Marugr,lYnetille Mi9or, Marganton Gnnmissforur, G>nutius P.E Bazemore John E McGinnis Ronaic Ransom G>uncilman, Monn>e Cottncilman, Oxsry,Gle G>uncilAhndxr, Gastonia Behin B. Beck,Jr. Marcus C Midgett

  • Easic E Riddle Manager,Inington Gnnuilman, Akaden Utilisks Gnnmissk>n Oxdnnan Imington Jack R. Clark iI. Irwis Price G>mndssknur, Gmnitefalls Manager,Ilighndnt Marion Spamnv Onnndssknur,Ihmterstille Wayne Dellinger Stephen Royster May>r, Neuton Akknnan, Sixthy Marugr, Akdden Kenneth Ilarris Wayne Sheppard Ak9t>r, Ditmi G>uncilnum,ik>stic
  • R DukeWhiscirant Marugr,Neu ton PaulineT. Ilelms A.E Tarr GnnuitMernher,ARxnunie Ahlenrum,linwinton Marpret S. Wingate G>uruilAhndxr,11netille Gary D. Ilicks Conwnt&Itunterstmesmts Manager, Gastonia eutantatyturerut
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The Participants The 19 municipalities that are power to their customers, which Eight of the panicipating cities are puticipants in NCMPA l's Catawha gene'mted $133.5 million in electric the county seats of their respective project mnge in size from liigh revenues. counties. Tie 19 include some of Point, which is Nonh Carolina's the state's oldest existing electric Tie state's Piedmont section is a 40 sixth largest city with a senice area utilities. Three of these municipal county region that stretches from population of more than 66,000, t the foothills of the Blue Ridge utilities were established prior to Bostic, with a service area Mountains east to Raleigh, the state 1900 and eight of them were population of 370 and an electric capital. The area, which operating by 1910, although none distribution system that has only geogmphially comprises 45 nowowns nyindependent 141 meters. percent of the state, is Nonh genemtion facility.

Together, the 19 puticipants Carolina's leading area in growth, T1 rough their joint action in provide electricity in a 14munty population and wealth. The creating NCMPA 1 and panicipating area in the state's Piedmont section. Piedmont has more residents than in its Catawba project, the Tlat senice area is 571 square the Coastal and Mountain regions municipalities have retumed to miles in size and has a population combined. their historic role as full panner in of more than 280,000. In 1983, the state's electric power supply these 19 " electric cities" provided community.

2.5 million megawatt. hours of Tie panicipants, and the year their electric systems were established, are:

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.sm --v--,ss----m-~. ~ .-n New York City # 1. Albernarle .. .. (1910)

2. Ikistic . .. . ....(1920)

Washington e 3. Cher pille . . . . . . . . . . . ( 1906)

North Carolina 4. cornelius .. . . (1905)

5. Drexel .. . . . . . . ( 1926)
6. Gastonia . ... . . (1919) c"a o$"ra m 7. Granite Falls .. .

. (1923) t 8. Iligh Point . ...... ..(1892)

Atlanta e 9, }{unter$Tille .. .... . (19lb)

10. landis . .. . ( 1919)
11. Irxington . ... .. ... (19M)

N 12. Iincolnton . ... ... (1900)

13. 51aiden .. . . . .. . (1920) g g 14. 51onroc . . . . . . ( 1912)

Catawba n v 15. 51organton .. (1916) u.ame . ..

16. Newton . . . . . . . (1896)

! 17. Pineville . . .. . (1939) l . em.

y - j' 18. Shelby .. ... . . (1912)

19. Statemille . . . . . . . . . . (1889)

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At 12:01 a.m. or. July 1,1983, (Jnit I at McGuire Irgan its 19 paniciptnts need beyond that NCMPA 1 began supplying the 19 commercial openition in December generated by the agency's municipalities that are panicipants 1981 and Unit 2 is scheduled to ownetwhip entitlement in th" in the agency's Catawba project begin commercial openttion in Catiwba project.

with all-requirements power. In March 1984.* litch of the 19 municipalities has doing so, the agency replaced Duke Construction of AkGuire, which is execured a powcr sales agreement as the power supplier of those cines located on lake Nonnan in Nonh with the agencv. In those contracts, and towns. Carolina,17 miles nonh of the cities have agreed to pay for an FromJuly 1 through December 31, Charlotte, irgan in April 1971. Bie aggregate 100 percent of the cost of 1983, the agency supplied its cities two McGuire units are rated at 1180 the ageng's project. Einse with 1,195cj98,000 kilowntt-hours of megauntts each. agreements are "take or pay" electric power. Opemting revenues stccuire Unit axgan commercial qxraion contnicts and fomi the security for of $51,716,000 for the period atmh 1. the agency's bonds.

represented an excess of revenues The Basic Agreements liich participatin over expenses of $6,855,000. Ele Under the agenq's contnicts with also signed aplemental su[$g municipalit power aventge monthly power purchases Duke, the compuw will build, fuel sales a' i by the cities from the agency were and openite the Ca'tauba plant, and which'greement it has a with the agency ~i hv 252,201,160 kilowntt-hours. Bie ofits electric [ greed to purchas will supply NCMPA 1 all the xwver and energy avemge monthlyagency billing to the cities was $8.619,000.

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i from the agency, over and alx)ve entitlement in the project will be costs, including the cost of that prosided by the ageng's approximately 860 meganutts of ownership, opemtk>n and ownership entitlement and cipacity. maintenance, financing, certain excluding any pnver and energy resen e accounts, administrative and

. made muitable by the Southeastem Peak Demand geneml costs, supplemental power Power Administration, the regional The agency's peak demand during costs, and other special obligations.

nurketinb abvent for fedenil its first six months of opemtion was The mtes will be adjusted at least hydroelectric pnver. Tose approximatch.6 61 megawutts, annually to reflect changesin. the agreements are in the fami of"take which exceetied the projected peak agency's costs. EITectiveJuly 1,1983, and pav" contnicts. demand of 618 megawntts. Eut demand was met with 211.7 the ageng unplemented a long-The McGu. ire reliability exchange, mnge nite stabilization policy

, nyuus of capacig from the which the agency imtiated effective agency's ownership interest intended to minimize fluctuations July 1,1983, presently panide7 the (through the McGuire exchange), in the costs of project power to the agency with approxinutely 21'. and <i31.3 megav,utts of supple put cipants. That policy involves megauntts of capacity. An additional mental cipacity purchased by the collection of revenues to be exchange, which can be begun by nuintained as resenes to iny a

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the agency froin Duke.

the ageng* as early asJanttuy 1986, ponion of project power costs in wuuld provide an additional 215 Bulk Power Rates future periods. The policy is megauntts of cipacity. Hie bulk power nites the agency expected to be continued into the When lx>th Cataniu units are bills its panicipating municipalities 1990s.

opemtional, the ageng's ownership are designed to recover agency NCMPA l's bulk power mtes are recommended by a six-member agency ate cominittee (all of r -l whom are members of the lxurd) and must be approved by the NCMPA 1 Highlights agency's full lxurd of For the PeriodJuly 1,1983 - December 31,1983 commissioners, on which board every member city is represented.

Kilowntt-flourSales (thousands) . . . . . . . . . . . . . . . . 1,195,ei98 Mie txurd adopted the agency's Maximum I lourly lsud (kik)wntts) . . . . . . . . . . . . . . . . . 615,981 first mte schedule onjune 16, 1983 l

On December 16, it adopted a i Opemting Revenues . . . . . . . . . . . . . . . . . . . . . . . . . $51,716,000 10.23 percent mte increase, to k Excess ofRevenues over In'ome elTettive February 1,1981.

That increase resulted from a nse in I Expenses .............................. . . . . $6.855,000 the projected cost of supplemer.tal Customers Senulby Ruticipating Municipalities (June 30,1983) . . . . . . . . . . . . . . . . . . . . 120,831 l power, monies placed and from in the are an incre '

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Construction Mie scheduled operation dates for that will provide ste:un to a General representing 10 municipalities in Qttmha areJune 1985 for Unit 1, Electric tuthine generator. Ele that state. Duke retains ownership andJune 1987 for Unit 2, the unit in nuclear steam supply system is of 25 percent of Catmha Unit I and which NCN1PA 1 has a 75 percent substintially similar in guver niting of the station's suppon facilities.

ownership interest. %e station's and general design to the system construction wns ahead of that employed in 21 other Westing- Duke Power Company schedule at the end of 1983. As of house units with construction Duke Power Company uns December 1983, Duke estimated pemlits and six others with estiblished in 1901. It is an investor-construction to be 99 percent operatiag licenses, including owned electric utility sening complete for Unit 1,61 percent Duke's AlcGuire Units I and 2. approximately 1.3 million  :

customers in Nonh and South complete for Unit 2, and 86 percent complete for the station as a whole. Joint Owners Carolina. Its power is produced by Subse luent to NCMin l's purchase a baktnced generation mix of Duke has applied to the Nuclear Regulatory Commission for pf a 73 percent ownership interest primarily coal and nuclear plants.

authorization to operate each unit in Catawixi Unit 2 (and a 37% During the 12 months ended of the Catawixi station for -10 years, PC"'ent interest in the Catawba

, September 30,1983, Duke's electric which is the unit's intended station s suppon facilines), Duke revenues amounted to has sold or has agreed to sell a 7), approximately $2/i billion, of which minimum useful operating life. In percent interest in Catawixi Unit I approximately 70 percent uns October 1983, hearings began on that application, with various panies to a group f rural electric derised from Nonh Carolina.

petitioning to intenene. Additional c penttives k)cated in Nonh and Among investor-owned utilities, the I

hearings were scheduled to begin South Quolina, and the remaining company nuiks eighth in the United in Mar'ch 19Pil, but Duke otlicials 25 percent of Catmixi Unit 2 to a States in kikmntt-hour sales. -

remained hopeful that the company South Qwolina power agency would receive authorization by May .- . _ _ ._ _ . _ _ . _ _ _

to begin to hxtd fuel in Catmha

~~ -'-~ - - - -

Unit i. NCMPA 1 PowerSupply Program (Iku1nber 31,1983)

The Catawba Station Proposed Commerciai

%e Qttmixi station is k)cated on f8u*>* . .

07e'*'"

Inke Wylie, in " ' County, South cATAVBA UrllT 2 (N'JCLEAFl)

Otrolina,19 miles southwest of U6 WN ERSHIPSHARE 75% . 6/87 .

Charh>tte, Nonh Qtrolina. - . -

8^ T ' (NJCLEM)

Construction of the Catawha station ye -.[^y"3g j,y,7 begtn in May 1974. -

Catmixt is a two unit station, with McGUIRE Ut IT 1 (NUCLEAF )

an expeded nxtximum net H80 ECANGE JNI( 12/81 dependable cipacity of Il 15 -

megmutts for each unit. Inich unit contlins a Westinghotise

,,gg

[xCYNGE NT~ 3/84 pressurized wuter reaCIof SYSICM to 20 ao ^ io so 60 70 80 90 100

% Construchon Complete 9

wmmmmnmurammmmmmxammmms anmz=amww.w=a=_m==_=m __ ...

Finance 1

i in February 1983, NOIPA 1 sold a Some of the proceeds from that sale dealer for a tax-exempt commercial

$200 million electric revenue bond were used to retire $75 million in paper progam invohing shon-temi, issue, plus $100 million in bond outstanding revohing credit notes. unsecured promissory notes. Mut anticipation notes, at a true interest T1is is the Grst maturing debt progmm is expeaed to be in place cost of 10.81 percent for the bonds NOllw Ilus had since it began its in mid-1931.

and 6.92 percent for the notes. (Mie joint ownership project in In December 1983,thelxxtrd net interest costs were 10.33 November 1978. adopted a 1931 constmction and percent and 6.86 percent, Mie sale wns NO11% 1's seventh operations budget of$ 165,242,000.

respectively.) and put the agency in position to

=

~~- - be able to choose'its next sale time Solid Statutory Security during a bond nurket year that was Tie instability in the electric Estimated Funding revenue bond market that nurked marked by more tlun usual instability.' It was a fonunate much of 1983 was due to three h2.3$"i )

position, because market conditions pnncipal factors: (1) the continuing dictated that a second nujor bond large federal budget deficit,(2) an issue planned by the agency for exceptional inDux of municipal 1983 had to be twice postponed.* housing bonds, and (3) a state

. coun decision involving the g It is estimated that a series of Washington Public Power Supply g.g additional bonds in the amount of System (wPPSS).

m 3sandani ..arionnotes approxinutely $350 million will be Mt BoIAnt Notes

! j+! re(juired in the seCond half of 1931. InJune, the Supreme Coun of the

<s im ,nm.oni \P State of Washington ruled that the ga To increase the agency's flexibility utilities of that state lacked specific y s=o sg,'= in the debt market, the board of statutcny authority to enter into the commissioners inJuly 1983 selected "take or pay" contmcts theylud

,,,,,,3,,, Ihe First Boston Corporation, an executed with MPPSS. Mie decision

<s2= a*=r mvestment lunking fim1, as its disrupted municipal bond market activities across the counuy, and

< 52" =d'*)

jg mut sale was successruny completed in resulted in slightly higher interest a .g January 1934 when NOH'A 1 marketed a Costs for many municipal bonds,

  • ',", "d,Sp f f, s432 million lxmd issue. Proceeds from the inCltidin gfe January issue will be used to refund all of the agenCles'g

. whose pan.those paid

.-icipants do lW pow Too$afon[

  • agency's 1980 series lxmds a large portion of jo its 1981.A series, and to repay lxmd have specific stattitory authority for 7,gs n anticipation notes dueJuly 1,1984. "take or pay" Contracts.

Including theJanuary 19&4 issue and the refunding it pnnided, the agemy lus in me sand senes outstanding obligations slightly more than Si.5 ts4m mma) billion in kmg-term debt (1xmds) and $200 million in short-term debt. ~lhe agmcy estimates that it will issue additional lxmds in

/ the aggregate principal anx>unt of

"$1TS null un of the 1981 A Series and all of $858 millkm in connection with the Catawba the 1980 Series were refunded through the l sale of Series 1984 Bonds n January 1984. EN

  • l 10 l

"kr

. c -el ha b- r e .# "

'*r r# .a.

r.-_,-..__._._..__.. _m._____...._._, .. .. _,._...___... _._ ____ _ ___._. . __,__,__, _ _ _ _ ,

t l

NO1PA l's lx)nd attorneys and g~r - - -  :~m r r r r- 3 Nonh Carolina counsel have lx>th  :; .

^

r Y>./ - d:i aflinned that the municipal utilities  ! p '- L

g. .,

in this state have explicit statutory lb / ' ' '-

/ t1

' , Y

' . }- ,j  !

authority for the "take or pay" ll /

contnicts they have with the state's  !! 4 } .

. ,~ . .

  • ld two power agencies, and have said ei '/ <

)

4' 'kY,N 4 ', A 'V ' -I E - h ruling utn have no direct, adverse !l! " # k l

'r,

,\

/  !!

legal impact on NO1PA 1. 4 j Q , i) \ p Av

ay h,d,*,4 l[

There is also another imponant 4 '

factor that makes the Nonh Carolina U y ,

. ' ll situation distinct: The Nonh ll , 'd,4 'w. '* , .. ,7 , , .,s' '

{

Carolina Incal Govemment

- , l;l g; .j . [ i s ,

Commission (IGC), a division of

{ji; . . .y ," , ,

l;

i

- !4 the Depanment of the State '. s i

1

' .i S ,

Treasurer, has been directly i!' # # -- - - - - - - - -

A 'l 'l' - -

i

- ._ n; ' '

f 4 involved in the ageng's project from its inception and is the continuing contnicts, such as the now in place to suppon the orgmization that sells the agencv's "take or pay" contnicts the agency's business activities.

bonds- municipalities have with the .Ihe interconnection bill audit agency. .

.Ihe commission has statutory system became openitional in authority to assume full control of Systems Au8ust 1981 It is usal for posting the financial all' aim of any To meet NO1PA l's expanding role the monthly electric energy bills municipality that fails or refuses to from Duke to the agency's general as a power supplier, four major meet its obligations under integnited computer systems are ledger system, which began operation in 1982. ,

. ~ . ~ . .. -

,_ ~.

lhe annual planning and budget l Construction Administrative sysIem Wits 5n p! ace in limC to )

Co p C ts Project Estimate produce the ageng's 19M budget. l cnmusuut,of Donan) 'Ihe fourth major system, the power I demand and operating statistics 12 31-8

}

Est 1981. It verifies Duke's bills and Construction Costs 1.023.579 728.902 ggllggg3, g3jpg3jnS and reDofts 8 Nuclear Fuel Costs 127.690 60.348 Finance Costs 1.227.490 386.508 monthly l(xid statistics.

Adrmnistrative Costs 11.241 6.328 ,

Nuclear $2.390.000 $1.182.086 Fuel / N Finance con ([nn3]ly enhanced and rel}ned

)

%',' 57d as its activities raluire.

Actual 11

Balance Sheets '

North Carolina Municipal Power Agency Number 1 (5000s)

December 31, ASSE75 1983 1982 EIECHt!C UfllITY PLANT (Nues 2 and 3):

Construction work in progress $ 9%,587 $ 761,151 Nuclear fuel 60,351 35,276 1,016,938 7 % ,427 SPECIAL l'UNDS INVINED (Notes 2,4 and 10): '

~ Construction fund ~

305,210 272<l53

~Ih>nd fund 225,821 187,262 Iteseire and contingency fiind 15,299 12,003 Decommissioning fund 613

__Special reseire fund 1,027 llevohing credit tiind 81,558 517,973 553,276 CUltitFNF ASSEIS:

Special funds invested (Notes 2,4, and 10):

Operating fund 2.245 5,761 Supplemental flind 27,297 Ilevenue fund 3,881 33,423 5,761 lbnicipant accounts receivable 8,383 Prepaid expenses 58 41,861 5,761 (KulOKD7.ED DEBT ISSUANCE COSIS ( Note 2 ) 33,020 28410  :

$1,639,795 $1,383,874 l l

kv nostes its)hutndd statansmit

-.._-~.-.--.--.,_~~._._n____-,. _ . - - . - _ . . . . . _ . , . _ - . . . . _ _ _ _

12

December 31, IJABillTIES AND FUND BAIANCE 1983 1982 IDNG TERAI DEBT:

Bonds (Note 4) $1,375,000 ~$1,175,000 Revolving credit notes (Note 5) 75,000 Ik>nd anticipation notes (Note 6) 100,000 100,000 Irss: unamortized discount (27,33 0 (20.068) 1,447,616 1,329,932 SPECIAl. FUNDS IJABIIJTlES:

Ik>nd anticipation notes (Note 6) 100,000 Construction fund payables 4,009 746 Actnied interest on bonds 65,483 46,433 ActTued interest on bond anticipation notes 9,000 5,750 Accrued interest on revohing credit notes 1,013 178,492 53,942 CURRENF IJABillTIES:

Accounts payable 6,318 Accated taxes 230 6,548 DEFERRED REVENUES (Note 7) 231 COAIA11TalENIS AND CONTINGENCIES (Notes 3,8 and 9)

FUND IMIANCE 6.855

$1.639,795 $1.383.874 L

--- _ _ _ - - . ~ . - ~ . - __

13

l Statement of Revenues and Expenses and Changes in Fund Balance l North Carolina Municipal Power Agency Number 1 (5000s) l'erial from July 1,1983 through December 31,198.}

Ol'EllATING ltlNENU15:

Riles of electricity to participtnts $ 51,716 Ol'EltATING EXi'ENSI5:----

Interconnection senices:

l'urclused pnver 35,2-13 Tmnsmission and distribution 5,709 Other 152

.s1,101 Adnyrpstatim ant _i_genemi 198 N.C. gross receipts tax 3.Os3 41.615

~ ~ ~ ~

NIff~OfEIUUIIIn}5CjSii_ __ ___ _ _

_ _ _____ 7,071 IN'RitiST CllARGES (CitEDH5J:__ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . ,_ __

___lnterest expense 14i,867 Amoitization of debt issuance costs 2,756 Investment income (62,521)

Net interest capitalized (85.l(40 DEFERRED RINENI15 (Note 7)

EXCESS REVENUIS OVER EXPENSES 6.855 l'lIND IIAIANCE. Itilv 1,1983 -

11 ND llAI.ANCE. December 31.1983 $ 6.855

.W runtes truffrktst<hst staatsvrt<9sts

~ . . - . . . . . . . - . . . - . - , . . . - . . . . . . - . ~ . .

- - , ~ . , ~ -. .

.. . .,.---...,_-~..-_.n.,_~-----

14

Statements of Changes l in Financial North Carolina Municipal Power Agency Number 1 Position (S000s)

_ _ . _ _ _ _ _ _ _.__._ _._. ___.~.._ _ _._.- . _ . _ _

Year Ended December 31, 1983 1982 SOURCE OF l'UNDS: --_- _.

. Operations:

Excess revenues over expenses 5 6,855 $

Deferred revenues 281 Total funds prosided by_ operations 7,139 ___

Proceeds from sale oflx>nds 200,000 200,0fX)

Ihreeds from sale oflx)nd anticipation notes _ _

100,000 Decrease in .special funds invested 5,303 Increase in special funds liabilities 12-1,550 8,0i5 Decrease in debt discount and issuance costs 2.754 1,738 139,746 209,783 APPIJCATION OF FUNDS:

Increase in special funds invested 36,433

__ Additions to electric utility plant 220,511 158,170 Provision for retirement of bond anticipation notes 100,000 Additions to unamonized debt discount and issuance costs 11,680 14,4 10 Retirement of revolving credit notes 75.000

.j 10.191 209.063 INCREASE IN WORKING CAPITAL 5 29.555 $ 740 CllANGES IN CO.\lIONENIS OF WORKING CAPITAI.:__. - -_ _ - ___

Increase in current assets:

Special funds invested $ 27,662 $ 740 P.uticipant accounts receivable 8,383 Prepaid expenses 58 36,103 740 (Increase) in current liabilities: _

Accounts payable (6,318)

Actnni taxes (230)

( 6.518 )

INCREASE IN WORKING CAPITAL. S 29.555 5 740

.W rardes tusjirkerusalshiftsroesuts

_ . . _ . _ - - _-.__.m,_. ___. _ . - _ _ - . _ ~.-- . _. .-- . . . . - . . . , ~ . .. .- -. ,.. - - . - ~ . - - - . . _ - . . ,

15

$ awxmeeasarxauwamam=m mu,rma=aram,xnamawamexewmmauuummmeummm .

February 22,19M I bI .

. Ikurd ofCommissioners Nonh Carolina Municipal Power AgencyNumber 1 Raleigh,Nonh Carolina We have examined the balance sheets of Nonh Carolina Municipal Power Agency Number 1 as of December 31,1983 and 1982, the related statements ofchanges in financial position for

i. l the years then ended and the statement of revenues and expenses and clunges in fund balance for the peri (xl fromJuly 1,1983 (date revenue-producing operations commenced) through December 31,1983. Our examinations were nude in accordance with genemlly l

accepted auditing standards and, accordingly, included such tests of the accounting records . ,

l and such other auditing procedures as we considered necessary in the circumstances.

! In our opinion, the following financial statements refened to above present fairly the financial position of Nonh Carolina Municipal Power Agency Number 1 at December 31,1983 and l

1982, the changes in its financial position for the years then ended and the results ofits j operations for the period fromJuly 1,1983 through December 31,1983, in confom1ity with generally accepted accounting principles applied on a consistent lusis.

Our examination was nude for the purpose of fomling an opinion on the basic financial statements taken as a whole. 'Ihe information on page 24 is presented for puiposes of -

- additional analysis and is not a required pan of the lusic financial statements. Such infomution has been subjected to the auditing procedures applied in the examination of the

- lusic financial statements and, in our opinion, the infomution is fairly stated in all material respects in relation to the basic finant ial statements taken as a whole.

/ w & h.  ;

l Cenified Public Accountants i 4 Raleigh,Nonh Carolina l

' l( L -_. - - - - i a

_ _ _ _ _ = _ - - . -_ _ _ _

16 l i

1

~

Xotes to Financial Statements Years Ended December 31,1983 and 1982 North Carolina Municipal Power Agency Number 1

1. General Matters '1* ^8e"cr 1"s ent""' i""' " '*"i"' """" S le" Agreement and a Supplemental l\nver Sales Agreement Nonh Carolina Alunicipal Power Ageng Number I with each of the Paniciptnts. lhese Agreements panide (Agency) was organized onJanttuy 13,1976, pursuant to for each Ituticipant to purclttse its All Requirements llulk Clupter 159(11) of the General Statutes of Nonh Qtrolina P(nver Supply, in excess of pnver alkaments from

( Att), adoptal by the General Assembly of North Carolina Southeastem Power Administration (SEPA), which on Alay 1,1975. 'Ihe Act enables municipilities owning includes its total share of Project Output (as defined by elatric distribution sptems to create joint agencies with the Project P(nver Sales Agreement) from the Agency. The authority to finance, construct, openite and maintain Ageng is obligated to pnnide all electric pnver required eledric generation and intnsmission facilities.1he Ageng by each Panicipant at the respective delively points. litch has twenty members, nineteen (Panicipants) which Panicipant is obligatal to pay its slure of the openiting receive pnver through the Ageng and one which and debt senice costs of the Project.

receives p>wer from Duke Power Company (Duke).

OnJuly 1,1983, the Agency's Paniciptnts began receiving 1he Agency Itts entered into several agreements with their total elettric power, exclusive of pnver alkxments Duke which govem the purchase, ownership, from SEPA, from the Ageng. Such power is panided by construaion, operation and maintenance of the Projat Project Output together with supplemental purchases of (defined behavh pnver from Duke. Pursuant to two " Reliability Exchanges" The Purcluse, Constmction and Ownership contained in the Interconnection Agreement, Projat Agreement panides, among other things, for the Output will be provided in essentially equal amounts Agency to purchase a 75% undivided ownership from Gnawha Unit 2 and three other nuclear units (Catawiu Unit 1, AkGuire t? nit I and AkGuire Unit 2) in interest in l' nit 2 and a 37.5% undivided ownership interest in cenain support facilities of the Catawfu operation or under construction on the Duke System, all Nuclear Station (Project).1his facility is presently of which are of similar size and capacity. The Reliability Exclunges are intended to nuke more reliable the supply under construction by Duke.1he ac'quisition is being financed by the issuance of Cataulu Electric of pnver to the Ageng in the amount to which the Revenue ik>nds (Ik>nds) pursuant to Resolution No. Agency is entitial pursuant to its ownership interest in R- 16-78, as amendal, (Resolution ) of the ik xird of Catawiu Unit 2 and to mitigate potential adverse Commissioners of the Agency. economic effects to the Agency and the Participants from unscheduled outages of Catawfu Unit 2. Conespondingly, lhe Interconnation Agreement provides for the the Ageng bears risks resulting from unscheduled interconnation between Duke's clutric power outages of any of the Catawin'or AkGuire Units.

system and the Agency's Project and for the exchange of power between Unit I and Unit 2 of the 2. Significant Accounting Policies Cataniu Nuclear Station and between the Catawiu .

units and Duke's AkGuire Nuclear Station. 'Ihe Ilasts ofAccounting Agreement also panides for the purchase and sale

%e aaounts of the Ageng are maintained in accordance of cipacity and energy, and the transmission of with the t'nifom: Sp, tem of Aaounts of the Federal energy to'the Ageng's liuticiptnts. Energy Regulatory Commission, and are in confomiity with genentily accepted accounting principles ( GAAP).

The Openiting and Fuel Agreement panides for Duke to operate, nuintain and fuel the facility, to nuke renewuls, replacements and cipital additions as approval by the Ageng, and for the ultimate decommissioning of the tincility at the end ofits useful life.

17

v.mmsmazmammxwmmazm mmmmwa=m.umm=ammuwwanam Construction Workin Progress . .

All direct and indirect expenditures, includm.g interest

3. COnStfUCliOn Program expense net ofinvestment camings on funds not yet The Agency lus substantial commitments in connection expended, associated with the devek>pment and with the construdion of the Catawba facility, The Agency's coitstmction of the Projat are capitalized as constmction direct costs of constmction, including nuclear fuel, are work in progress until such time as the plant becomes presently estimated to be $1,151,269,000. These costs, operational. Depreciation expense will be recognized on together with provisions for working capital and debt the facility when operations commence. senice costs during the construction period, will require the use of the proceeds from the issuance of up to Nuclear Fuel $2,390,000,000 ofIkmds. Any future changes in the All direct and indirat expenditures, including interest construction schedule affect the cost of such facilities and expense net of investment eamings on funds not yet affect the amount ofIk>nds to be issued.

expended, relatal to the purcluse and construdion of nuclear fuel cores, are cipitalized until such time as the cores are placed in the reactor and are operational.

& Bonds The Agency is authorized to issue Ikmds by and in Inmtment &cun. ties , .

accordance with the temts, conditioits and' limitations of Investment securities included in Special Funds Invested the Resolution.1he total to be issued is to be suilicient to are stated at amonized cost which approximates nurket pay the costs of acquisition and constmotion of the Project value. Investment securities include securities of the U.S.

, (as defined by the Resolution) and/or fi>r other purposes Govemment and govemmental agencies and securities set fonh in the Resolution. On May 3,1983, the Incal purchased under agreements to resell (securities of the Govemment Commission (IGC) of the State of Nonh U.S. Govemment and govemmental agencies sen e as Carolina approved the issuance of such Ikmds up to a collateral under such agreements).

maximum principal amount of $2,390,000.000; additional Unamortized Debt Issuance Costs IGC apparal must be obtained for the issuance ofIkmds Costs of issuance of bonds, revohing credit notes and in excess of this amount.

bond anticipation notes are deferred and amonized on a As of December 31,1982, the Agency had issued straight-line basis over the lives of the related debt

$1,175,000,000 of the total authorized Bonds. During 1983, numments an additional $200,000,000 was issued (Series 1983)

Taxes bringing the total outstanding Ik>nds at December 31, Income of the Agency is exempt from federal income tax 1983 to $1,375,000,000 as folkms:

under Section 115 of the Intemal Revenue Code. Chapter syg,gs3973 159B of the General Statutes of Nonh Carolina exempts s2uo 6.4ss nuturing anmully rnxn the Agency from propeny, franchise or other privilege i9m to 20m , ,79,g y taxes. In lieu of a franchise or privilege tax, tl'e Agency 6.6% nuturing in 2003 with anntul sinking pays an amount equal to six percent of the gross receipts fund ruiuirements beginning in 2mt 2sgon o from sales of electric power, less such like amounts 6- s nuturing in 20m with annual sinking included in payments to vendois for electric power or rund raiuirements beginning in 20m ss,93sno related senices. In lieu of paperty taxes, the Agency pays 6Ms% nuturing in 2020 with annual sinking an amotint which wuuld othenvise be assessed on the fund raiuirements beginning in 2009 260.290n o real and personal propeny of the Agency. amungo Reclassifications Cenain rechtssifications luve been made to the prior year's financial statements to conform to classifications ttsed in the current year.

18

m M 'MPEER*!1MM'hirir;WA'PJ%EE'WTT8P"PWNati*W42i!ME9%*"WJW,R435%$NM18,J@Fgy, y7,,.fy~y-__.,- EiBS SERIES 1979 On January 26,19M, the Agency sold $432,000,000 of 5.75% to 6.9% nuturing annually from Bonds, Series 1984. %is series is comprised of the 1986 to 2m0 - 27,2mm - following:

- 7.1% nuturing in 20N with annual sinking fund requirements beginning in 2001 12,905,000 8.5% to 10.25% nuturing annually from 7.375% nuturing in 2020 with annual sinking 1991 to to 1999 .

$ 44,185,000 fund requirements beginning in 2005 109.895.000 10.375% nuturing in 20M with anntui sinking fund requirernents beginning in 2000 35,725,000 150.000'000 10% nutunng in 2014 with annual sinking fund requirements beginning in 2011 50,000,000 SERIES 19HO - Refunded in 19M 100.000.000 7.5% maturing in 2019 with annual sinking fund requirements beginning in 2017 50,000,000 SERIES 1981 10.625% maturing in 2020 with annual sinking

- 9.4% to 10.5% maturing annually frorn fund requirements beginning in 2000 252,090,000 1991 to 1998 11,125,000 H32,000,000 10.75% maturing in 2001 with annual sinking fund requirements beginning in 1999 9,875,000 Upon issuance of the Series 19M Bonds, the Agency ftudr r t. Nin i 20N 25,000,000 entered into a Refunding Trust Agreement for the 11.125% nuturing in 2020 with annual sinking refunding of $100,000,000 of Series 1980 mmds and fund requirements beginning in 2002 79,0m,mo $175,000,000 ofSeries 1981A Bonds.

125.000,000 Under the Refunding Trust Agreement, obligations of or guamnteed by the United States of Americt have been SERIES 1981 A placed in an inmucable Refunding Trust Fund maintained 11% nuturing in 2015 with annual sinking by the Bond Fund Trustee. nese govemment obligations, fund requirements beginning in 2012 25,000,000 along with the interest eamings on such obligations, will Refunded in 194 175.000,000 be sufficient to pay all interest on the refunded &mds 200.000.000 wnen due, to redeem the Series 1980 Bonds annually at SERIES 1982 - their maturities from 1986 through 2010 and to redeem

. I1% nuturing in 2003 with annual sinking the Series 1981A Bonds in 1991 at a redemption price of fund requirements beginning 1991 14,700,000 103%. %e Refunding Trust Fund, including the interest

- 7.5% nuturing in 2018 with annual sinking eamings on the govemment obligations, is pledged solely fund requirements beginning in 2m9 25.000,000 for the benefit of the holders of the Bonds refunded. After 11.25% nuturing in 2020 with annual sinking establishment of the Refunding Trust Fund, the Bonds fund requirements beginning in 20N 160,300.000 refunded will no longer be considered outstanding 2m.000.000 obligations of the Agency.

%e remaining proceeds of the Series 19M mmds will be 8' 09 nuturing annually fmm 1991 to 1996 7,300,000 tised to retire a portion of the Bond Anticipation Notes l 10.25% nuturing in 2003 with annual sinking dueJuly 1,19M.

rund requirements beginning in 2002 10,000,000 Interest on the Bonds is payable semi-annually onJanuary 7% ntauring in 2018 with annual sinking 1 andJuly 1. %e Bonds are subject to redemption prior to fund requirements beginning in 2009 25,000,000 '

maturity at the option of the Agency, on or after the 10.625% maturing in 2020 with anntul sinking fund requirements beginning in 20N 157,700.000 200,000.000

$1.375,000.000 19

g_

maamwaremmn=www-me-a---w.m:memmm--e.w-mmmma i

folk) wing dates, at a maximum of 103% of the respective 6. Bond Anticipation Notes principal amounts:

I?ond Anticipation Notes in the aggrepte principal serio 19'8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jantuy 1.1989 amount of $100,000,000 dated October 1,1981, bearing an series 1979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jantuy 1. Iwo interest rate of 11.5% per annum, will matureJuly 1,19M.

Series 1981 . . . . . . . . . . . . . . . . . ..... . ... . lantuy1.IW1 Iraterest is payable semi-annually on January 1 andJuly 1.

Senes 1981A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jantuy 1.1991 series 198.! . . . . ....... ... . . . . . . . . . . Jantuy 1,1993 Ik>nd Anticipation Notes in the aggrepte principal Series 1983 . . . . . . . ... . . . . . . . . . . . . . . . Jantuy 1,1993 amount of $ 100,000,000 dated Febru:uy 1,1983, traring Series 19M . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jantuy 1.1991 an interest rate of 6.5% per annum, will matureJanuaIy 1, 1986. Interest is payable semi-annually onJanuary 1 and

'Iliese Ik>nds are special obligations of the Agency, July 1.

payable solely from and secured solely by ( 1) revenues The notes are payable from proceeds of subsequently (as defined by the Resolution) after payment of operating issued Ik>nds and are additionally secured by a lien on expenses (as defined by the Resolution) and (2) other revenues, junior in right of payment to the Ik>nds (Note monies and securities pledged for payment thereof by the 4),

Resolution.

'the Resolution requires the Agency to deposit into special funds all proceeds of Ik>nds issued and all revenues (as

7. Deferred Revenues deiined by the Resolution) generated as a result of the Rates for power billings to panicipants are desigued to f\wver Sales Agreements and Interconnection Agreement. cover " costs" as defined by (1) the Resolution, (2) the

'Ihe purpose of the individual funds is specifically defined Project Power Sales Agreement, and (3) the Supplemental in the Resolution. Power Sales Agreement. 'Ihe Agency's rates are structured

. . to systematically proside for the debt requirements, Maturities of outstanding ik>nds including the S,eries 1984

. operating funds, and reserves as specified by the Ik>nds, through 1988 and thereafter are as folkwvs (in Resolution and l\wver Sales Agreements. Those thousands of dollars): " expenses" according to GAAP which are not included as 1986........................ ..... ...$ 4.s90 " costs" are deferred to such period as they are intended to 19 s 7 . .. . .............. ..... ... . . 4,mo be covered by rates. 'lhose " revenues". under the 1988 . . . . . . .. . ... .. ........ . . . . . . . . . . s.100 Resolution and the linver Sales Agreements which are 19H9 and thereifter 1.s17,470 collected to cover " costs" which are not " expenses" are deferred to such period as they are intended to cover

5. Revolving Credit Notes " expenses".

In 1980, the Agency and a group of four banks entered into a revohing credit agreement which allowed the Agency to borrow up to $75,000,000. 'Ihese notes were retired during 1983 from proceeds of the Series 1983 Bonds.

20

7, ...rm u s::. ~y , . .

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All rates must be appr wed by the Agene/s ikurd of Commissioners. Rates are designed on an annual lusis

9. COnlingenCiCS and are resiewed qttuterly. If determined to be Duke has applied to the Nuclear Regulatory Commission inadequate, rates nuy be resised and must be appawed ( NRC) for an operating license for the Catmiu Nuclear by the board. Station. 'lhe license is expectal to be received prior to the end of the construction period. Ilowever, there is no Restnues deferred in 1983 to otFet future bilh.ngs to Particqunts (in thousands of dollars) include the assurance that the NRC will issue such license and the l

following: flic lity cuinot be placal into senice without it.

'Ihe Price-Anderson Att limits the public liability tbr a llOND RIN)llTDON REQl?IR131FNls INCill)FD g g gg g ,

gg IN HilllNGs TO TlIE PARnCIPAVIN 5lu ial Funtls Ikpits $ 1.N $560,000,000, which amount is to be covered by private insurance and agreements ofindemnity with the Nuclear GuP rnats Nor INcu urD IN HiujNus Regulatoiy Commission. Such prinite insurance and in mE P.wnciPrvis: agreements of indemnity are cirried by Duke on behalf of interesi cats 1. co all co owners of the Catawfu Nuclear Stition. 'Ihe temis of I .renul Resenue. 53, this coverage require the owners of all licensed flicilities to provide up to $5,000,000 per year per unit in the event of any nuclear incident involving any licensal facility in

8. Commitments the ""ti"""ith a nuxinnun of $10MD rr yen grr unit ownal in the event of more than oneincident.

,i If any

'Ihe Agency has a contrattual agreement with ElatriCities such payments are required after the Catawiu Nuclear of Noith Carolina. Inc. whereby Elettricities prosides, at Station has receival its operating license, the Agency cost, general management senices to the Agency. 'Ihis would be liable Ihr 37.5% of those payments.

agreement is fbr three years continuing through Property damage insurance coverage presently antilable December 31,1986, and shall be automaticilly renewitl for the e' ntire Catawiu Nuclear Stition has a n'uximum tbr successive three year periods unless tenninated by one wnefit limited to $160,000.000. Such antilable coverage year's notice by either guny prior to the end of the lus been obuined.

contract term.

1'or the years ended December 31,1983 and 1982, the Agency paid ElatriCities $1.27-i,000 and $653,000, respettively.

21

1 1

Notes to FinancialStatements Years Ended December 31,1983 and 1982

10. Changes in Assets ofSpecial Funds ($000s) 1

.. , _ . _ . - . , . - - _ --- . - . ._y _ m,,-,r y cowntucnON PUND j 'BONDRWD.

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Cashanthestments, Daember31,1981 (1) $ 112.019 $ 141,471 $ 91 $ 32,801 $ $ 40,886 $ 110,500 Iknipmceeds(2) 98,435 67,959 21,372 bestmentintune 10,697 18,3 % 8 4,413 225 14,536 Disbursements (108,042) (1) (8,625) (85,431)

Transfers 221 (96.717) (676) 89.032 (3.858)

Cashand bestrats, Daember31,1982(1) 113,330 131,109 101 27,913 44,712 142,550 Iknlpraeeds(3) 18325 149,447 19,531 80,705 18,958 Note [mreeds(4) lbarrbillingreceipts bestmentirrome 15,990 20,569 8 2,306 1,322 290 17,405 Dabursements (207,799) (11,500) (2,708) (110,235)

Transfers 100322 (149.370) (7) (3.811) 130.857 (19.286)

Cashand besments, Detrmber31,1983(1) $ 120F3 $ 151.755 $ 102 $ 14.908 $ 17.572 $ 65.624 $ 160200 l

1. Cash and imrstments at December 31,1981,1982, and 1983 include acenied interest of $7,514,56,332 and 59,468, respectiwly.
2. Net of underwriters fee of $4,990 and discount on Ix>nds of $8,978 plus acenied interest of 31,734.
3. Net of undemriters fee of $4.834 and discount on tw>nds of $8,101 plus accrued interest of $2,1&4.
4. Net of wxterwriters fee of $1,n45 plus accrued interest of $704.

22

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l l- 3 l 1 l I f F si i 3 5 $ s s ~9.0~2 5 5,021 5 s s s 52! M IC.T(3 3 10HT 740 2 59.6 5 i (8.121) (210.220) 12D0 (2) -

12D)3 81.558 5.~61 -

559.0T 1.953 189.256 W.663 i 39.335 4D+8 43.383 l

1313 10 52 1.611 425 1.128 52 10 62.521 l

(2.024) 0.032) 0 i 166 ) (F2.6) 603 9'i (81.145) (9#) 22 # 0 (882) 653 -

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s 2.2 15 $ 2 3r 5 3.218 s 663 s 581 3)6 l

I l

23

Schedule of Revenues and Expenses Per Bond Resolution l and Other Aweements v For the Period fromJuly 1,1983 (Date Revenue-Producing Operations Commenced) through December 31,1983 ($000S)

Project and Other Total REVENUES:

Sale of electricity to panicipants $ 4,537 $47,153 $51,690 Other operating revenues 26 26 Investment revenues antilable for operations 410 1,128 1,538 4,947 48,307 53,254 EXPENSES:

Interconnection services:

Purchased power 2,803 32,440 35,243 Transmission and distribution 5,709 5,709 Other 152 152 2,803 38,301 41,101 Administrative and general 118 380 498 N.C. gross receipts tax _

272 2,771 3,013 Special funds deposits:

Decommissioning fund 601 601 l Rate stabilization fund 783 783 Revenue fund 367 367 1,754 1,754 4917 41,452 46,399 EXCESS REVENUES OVER EXPENSES $ 0 $ 6.855 $ 6.855 24

Management Staff M'

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General 3lanager Dinstar 1inance Dinstor Gotvrnrnent Dinrtor Enginanng RAl.I'lI W. $1IAW ant /A</ininistration Affairs WII I.L\M G. WEMIloFF JAMES T.110110 FRED M. Mll.l.s,JR.

Consultants, Trustees Nonh Carolina Counsel EngineeringConsultant Bond FundTmstee Spruill Inne Carlton McCotter & Jolly RW. Beck and Associates Chemical Bank Rocky Mount, Nonh Carolina Orlando, Florida NewTbrk, NewYork Wishington Counsel Bond Counsel Gnstruction FundTrustee Spiegel & McDiannid Vtxxl Dawson Smith & Hellman Wachovia Bankand Tmst Company,NA Washington, D.C. NewYork, NewYork Winston-Salem,Nonh Carolina Paying Agents Chemical Bank Continentallilinois National Bank Wachovia Bank andTrust Company, NA NewYork, NewYork andTmst CompanyofChicago Winston-Salem,Nonh Carolina Chicago, Illinois North Carolina Municipal Ibwer Agency Number i N C M P A 1l>n5"7 *""" C""" s"i" $""

ik n 95162 lbleigh Nonh Carolina 27625

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