ML20095H447
| ML20095H447 | |
| Person / Time | |
|---|---|
| Site: | Vermont Yankee  |
| Issue date: | 12/31/1991 |
| From: | Weigand J VERMONT YANKEE NUCLEAR POWER CORP. |
| To: | |
| Shared Package | |
| ML20095H446 | List: |
| References | |
| NUDOCS 9204290398 | |
| Download: ML20095H447 (23) | |
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VERMONT YANI E ; l NUCLEAR POWER. CORPORATION ii i!
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ANNUAL REPORT 1991 i i
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Contents Page Description ofllusiness I l' reside nt'.* letter 2 liighlichts 3 Comnmn Su>ck 0,vncrship a Financial lleview -1 Statenwnts ofInnor.e and itetuined Earninp. i.
Ilulance Sheets Assete r, Capitalization and 1.iabihties 7 Statements of Cash Flows 8 Notes to Financial Statenients 9 Independent Auditors'lleport 21 lloard of Directora 22 Oflicers 22 i,
VEllMONT YANKEE NUCLEAlt POWEll ColtPollATION FEltitY llOAD
, IlltNI'TLEllOlto, VEllMONT 05301 7002 Description ofIlusiness vernwnt Yankee Naclear Pow er Corporation w as incorporated under the laws of Vermont on August h 1966. The Company w as fonned by a group of New England utilities for the por po-e of con'tructma and O[Wratkily a lluelear pow t red generattlig plafit (the "P}atit~1 The Plant cominenced commercial operation on November 30,1972 and has been in full operation since that time except for maintenance and refueling shutsiw n( The Planti operating bren-c. oneinally due in expire in December,2007, has been extended to Marc 1,2n12.
The Plant is hicated in Vernon. Vermont and has a net electrical capanty of alwiut 52s megawatt s The conunon stock of Venmmt Yankee is on ned by thideen utilitu s. nine of w hich are the -pon-oring utihties that are entitled to and obligated to purchase the output of th" Plant.
Under the terms of the Company 9 Power Contracts each sponsor is obligated to pay Vennont Yankee monthly tregardless of the Phaiti opt rating level or w het) er or not it u opeiatingi an amount equal to its entitlement percentage of Vermont Yankeei total fuel cos'3, opelatmg expenses. deconimihioning covis alul an allowed return on equity. Also, under the tenns of the Capital Funds Agreements with its sponsou, the six tiwirs are conunitted to make funds available for changes or replacements needed to maintain or restore operation of the plant or to obtain or maintain neense:, necessary for the operation of the plant.
The names of the sponsors and their re-pechve entitlement percentages of the capacity and output of the plant are as fbilows:
Entitlement binnwr Pere gn t age Central Vermont Public Service Corporation Mh<
Careen Mouniain Power C97poration 20.0 New England Power Corporation 20.0 The Connecticut I.ight and Power Company 95 Central .%nne Power Company 40 Pohlic Service Company of New ilamp+ hire 4.0 Western Massachusetts Electne Company 2.5 Montaup Electric Company 25 Cambridge Electric 1.ight Company 25 100.0'i 4
Presidellt'N Letter Ver mont Lukee telebrated armther lainlmar L3ear in 1991. pnidonng ein, ugh electority to -opply the power need of ovi r noo.tuilu.uselmlds fbr an entne 3 ear at a rate of 3 69 tent, per Ldou mt hour. *1 he l plant sent more than four bilhon kuou att hours of electrinty to the Nea England power vnd last year.
making it ene of our hert y ear s in tenn of the amount of(let t ro ity generated.
For t he y eais 199(i tuid 1991 conibined the plant u as ilm ntuntaci esii t,ciit-r al Deeti'it to.iling w ater reactor in the w or hl for asailability. or for the percentage ofinne that elet truity w as av.nlable to the end during the 1w o-year penod. In 1991 electricity w ac as ailable 9.1 iP . af the tune.
A Nuclear Regulatory Conunirion iNlr > " report card" on the planti operntmn for an 1+ nonth peiin i illdifilled M contiflued blM}) fedl Ta} apprm al oIthe P! ant. The Iepoit. nanWd tbc S)5temaDC A'*erNent of 1.ic ensee l'erfonnance iSAl.Pi. ranted Vi nnent LokeeV per f onaance irom ( >ctober,19s9 unt d Man h.
1991 in th e at ras as " continued rupenor per f or mant e". the luche-t grade po-ihle The catecones an-plant operation , m.lintenance and surveil!am e, engineenne and tet huical suppor t. emergency piep.n ed-nee atid palt ty as$es'lileitt and tlu:llity \ crillLittioil. Irl addiliti!1 to litt' blit
- flot Inal Lt'gu$attif y lin*Ceu sal.l'is desiened to em.ute comphaen wnh NIT rules and reguhitions Several unportant financial attintie- also took place durmg 1941 'Ihe Federal 1:ncret llegalatory Cottuninion appioVed the Company'5 d3 ~n nu!!kon annual rate ledullH<n resultind Imm an c\len'Wn oI the plant operatine license from 1)ecember,2n% to March. 2011 Vennont Lnkeei finance dep trtnient managrd an an rage of U0 inilhon in detonuniwomt t rust f utui amets during 1991, produnng a 14 6',
ti.ita! let tirf) tkn ith eptritt Oth d M lt!cment M a4 Ot'gotiated u ith a Fuppln'i id outl8'al fut } Milit hria iit u t-Vices a litnitiating a $2A nulhon cont ract cancellation fee, The Cornpany also settled with the internal lietenue Service all irues related to a 19%l thtouch 19% audit resulting m the teropt of over $2 nulhon m tax refunds and intese,t. Fins.y dunne 1991 Vennotit Lokee comph ted the reputtha-e of approw mately 29 of the outstandmg common sto(L and ewcuted a 5101, inilhon hund exchange resultmg in a reduction in the cost of debt.
Vernuint Enkee (ontinues to have un outstandmg safet3 and operating terord and ranks as one of the be~t commercial nuclear power plants in the uorld, the re-ult of a dedicated staff and a program of continuous improv ement.
February 11,1992 (
.) Gary Weigand 2
llighlights I Mil item % ( hange Fiiiancial id< llar4 in eiillionsi:
Ol erating l(ever.ucs . (151.7 $166 6 .K o Net incorne 85 (U -10.5 Totai Assets. 117 6 395 7 45,5 Average Nuinher >,f S!.aies of Conunon Stot k ( >ut.,taniling it anus.unho 391 100 -1.5 1 eturn on Average Common Equity. 15 5'. 16 2' 1.3 Pet Share of Conunon Sttwk:
Econings per As erage Conun"n Shar" "1.50 21 40 s9 I)ividend< Paid Iwt Conunon Share 23.71 32.32 -26 6 Book \'alue iwr Conunon Share <3 ear endi . 138 2n 1 to 52 1.6 Operating:
Kilowatt hour Sales ibillions1 1.1 36 413 9 Cost per Kilow att-hours s cents L. 3 69 4 60 -19.8 Nuniber of Einployeer (year endi. 336 316 0.0 Common Stock Ownership h rerntage sharen Ow oed ouned Cent ral Verinont Public Service Corporation. 31.,14 122,653 New England Power Company . 2RO 78.402 Green Mountain Power Corp, nation. 17.9 70,oss Connecticut Light and Power Corporation . 95 37/212 Cent ral Maine Power Compt ny. 4.0 15,681 Public Service Company of New llampshire 1.0 15,6s I llutlington Electne llepartment . 3 11 14.301 Montaup Elect ric Cotnpany 25 9.801 Cambridge Electric Light Company. 2.5 9,801 We. stern Massachusetts Elect ric Company. 2.5 9,800 Verrnont Elect ne Cooper alive, Inc. 1.0 4,213 Washington Elertne Cooperative, Inc. 0.6 2.131 Lydonville Ekctric Department. _ ofi __2??
Iono'i 392,181 3
Fimincial Review . _ . . _ _
Operatmg sevenues oithe Compan,i are bilh41 atul receis ed hom curtomer s lused on the tenns of the l'owTf ('untrcJts. {'ndtT those colltracts, customelo af e Sevelally lequilt4) to lMy l}h'('olnpally itu altnaunt l
equal to the Company's total fuel tosts opetating expense 3 w1th iespect to the Plant. ami a n turn on not unit insesttent ax defined in such powet contractt Operating revenues de(reased m 1991 from 1990 by 8101, prunarily as a result of loa cr operating, main-tenatue, depreciation and deconnuis ioning expenses, oll-et, m part, by higher fuel and property tax c h pt llM%
Nudear fuel expense inaeaned by $18 nulhon in 1991 from 19m The incremed Inel expt use is abnost entirely related to increa-ed elet tncal eene:ation m 1991 due to the fm t that a scht doled refnehng and maintenaiue outage wa < not undertaken during 1991.
Other operating expenses decrea .ed 7.7% to $59.7 milhon in 1991,largely due ta the teven al of a $2 A million fue l enrichment cuntract cancellation fee w hich w as originally recorded in 19M The cancellotmn fee was withdraw n by the resulor following renegotiation < w1th the Company.
51aintenance expense decreased h3 $12.9 milhon m 1991 from 1990 'runardy because a ref uehng outage wau not perfonned during 1991. The plant operates on an eighteen-inont h refuehng ryt le, with the let scht duled ref ueling outace completed in October,1990; Depreciation expense decreased by $11 million and decom.ni%iening expeu Je( reused by 015 nullion in 1991, primarily as a result of rate reductions related to an extension in the tenn of the planti operat-it.g license from December. 2007 to Starch. "012. The rate reduction was approved by the I ederal 1:oerg3 Itegulatory Commi>sion on February 28,1991, with the new rates ell'cetive beginning January 1.1990.
Property and other taxes increased from $5.2 rnilhon in 1990 to 510 :1 million in 1991. This 98.1% increa-e i.< ahnost solely the re.sult of an increase in state property taxes following the pauage of new tax legisla-tion in early 1991.
Other income, net of other deductions, det rea.-ed by 812 nulhon in 1991 hom 1990. Contributing to this decrease w as a loss on the sale of securities, the partial reversal of a 1900 inteie-t income accrual asoci-Ult 41 With an IM aud l 5t*ttit inent and lower prevailklig intt re3t rateN lsow t r ifiterest rale
- bl* o produced raoet of the $1.2 million decrease m 1991 interest expense from 1990.
Net income for 1991 was $10 inillion less than the net income for 1990. The lower in t mcome in 1991 is the result of a decrease in common equi'v following the Company's repurchase of approximately 2'; of the outstanding shares and a low er average net unit investment base used in detennining net income.
During the fourth quarter of 1991 the Coinp:my paid its seventy +ixth connerutis e quarteily disidend to common shareholders.
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Statements OfInemne and lletnined Earnings
, Jenr. etuned Ipyr nti ,er :ti, s teJl itm s pie (Dollat e ill ilurumahde eserpt per whure amount 61 Operating rett nue4. $1M.72y $ 166.T s3 S145.585 Operating expen-es:
Nuclear fuel espense. 24,861 22,110 21.109 Other operating espense 59,666 61,677 51,301 Maintenance. 13.661 26,57h 19,i16 Depreciot ion , 11,500 1 -1,h52 11.857 Decommissioning expense (note 2 t 8,065 11,536 6,778 Taxes on income (note 9) . 3,1x5 1.669 3,36i Property and other taxet in,291 5.216 5,5!O Total operating es penset 1$1N 110NN 1 >k451 k Operating income. 19,881 19 915 20.131 Other income and (deductionst Earnings on decommiuiening fund (notes 2,5 and 10). 5J,5M 3,:11, 3.017 ~
Decemmissioning expense t note 21.. , ( 5,55 N ( 3,31 N 01.017)
Allowance for equity funda used during construction.. 121 126 219 Interest. 1,3 , i J,631 Sol Tnxes on other income rnote 95 , i417) (1,397i !al3)
Other, net , 1917,.;
_ -, .-45. 9 .__ . 15 0 137 _ _ _2. ,_30 K 657 Income before interest expense. 20,021 22.223 20,788 Interest expense:
Interest on long-term debt . 7,684 7,bH9 8,55]
Interest on diqvsal coets of opent nuclear fuel (note 7). 1,312 5,319 5,319 Other interest expense . - -
330 Allowance for borrowed funds used dunng construction . 0165> (451) i 1,20M Total interest expense 11.531 12,757 12.995 Net income. 8,190 9,400 , , ,93 1(etained earnings at beginning of year.. 1,9R2 5,441 5, t 11 10,472 14,910 13,201 Dividenda declared:
Preferred stock, $7.48 per share. - -
592 Comr'on stock, respectively $23.71, $32.32 and $17 92. 9.3n6 12,928 7.168 Ifetained earnings at end ofyear, $ 1,166 $ 1,9M2 $ 5,441
.= ._=.== =
Net income per average share of common stock out. standing.. $ _21.56 $j23 66 $ _ 18.00 See accompanying notes to financial rtatements, 5
Italance Sitects Anets December a1, I_M_41- --
19'MI tItoltarn in thou.antha Utihty plant:
Electric plant, at cost (note Gi . $355,561 $353,00 t les accumulated depreciation.. 173,527 162.065 181,737 190.9s9 Construction wot h m progiew 1.185 110 L t electric plant . 155,925 191,129 Nuclear fuel, at cost:
Ar#emblies in reattor . 83,213 83.213 Fuel m proces* . 637 1,2b7 Fuel in stock . 22,863 7h9 Spent fuel.. 227,010 227,010 333,751 315,309 Les., accumulati d at:urtization of burned nuclear fuel . 245.326 265,000 1H.427 50,309 less accumulated amortization of final core nuclear f uel. 5.GH7 5,011 Net nudear fuel . 10 p-dm-12,7.exr==w 45,298a m Net utility plant. 22H.665 23GA27 Current acets:
Cash . Mt 2,271 Temporary in estments, at amortized cost which appro,imates market. 4,981 5.032 Accounts receivable from sponsor.~.. 15,535 12,391 Other accounts receivable . 3,275 0,291
.\laterials and >.upplios . 16,408 11,877 Prepaid expenses , 3,222 3.385 Total current assets, 43,504 _ ._ _14.2 16 Deferred charges:
Deferred decommissioning costs (note 21.. 33,655 31,560 Accumulated deferred income tmes.. 10.358 9,165 Other deferred charges (note 4 4 8.029 3,309 Total deferred charges.. 52,042 44.034 long-term funds at amortized cost:
Decommissioning fund (notes 2,5 and 10 s . 60,085 53,339 Disposal fee defeasance fund tnotes 5,7 and 10). 27,317 17,606 Totallong term funds.. 93.402 70.9-15
$417,G17 $395.652
.== == = = - ==
See accompanying notes to financial statements.
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lhihmee Sheets . -
1 Capitalliation and Liabilities Deo ml.a al, IMll IP[HI 1Ibnar. in Ihou amto Capitaliration' Common stock equity; Common stock, $100 par value; authorized 490,100 sharer, issued 100,014 shares of which 7,53S me held in Treasury. $ 11:,001 $ 40A01 Additional paid-in cap;tal 14,227 14,227 Treasury stock 17.533 shares at cost t <1,131) lietained earninge.. 1,166 1.982 Total common stock equity . 51,263 M,210 1nng-term obligations, not (note Gr . 77,091 79,233
~.
Total capitatiration. 1.;j l M6 135,,11jj Commitments and contingencies inotes 2,12 and 13) 1)isposal fee and accrued interest for spent nuclear fuel (note 71 75 l'i7 71,125 Current habilities:
Accrued liabihties . 2%759 23,690 Accounts payable 2.798 2,372 Accrued interest . 1,092 1,39S Accrued taxes . , 1,018 1,502 Total current liabilities . 3't ,697 2Mhi2 Accrued decommissioning costs (note 2 L 101,550 Hi,M87 Accumulated deferred income taxes . 61,112 60,720 Accumulated deferred investment tax credits. 6,231 8,971 Unamortired gain on reacquired debt, net. 2,582 3,267 Other deferred credits. 3.652 277 Total deferred credits , 177,127 160,122
$ 417,617 $395,052
= =,z = : . :.==
bee Secontp2inying notes to [1nancial Statements.
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Statements of Cash Flows wmnacam mi,sm,_
}?H !L?.' M?*
i % uu inuniuunds encept per sluuv smounta e ;
Cash llows fnmi operatintt m tivitie.a.
Set income ~ , S 8gl90 $ 9,466 $ 7 17p]
Adjtatment.t to reconede net income to net cc: h provulal by operating activitiew.
Amortization of nuclear fuel . 21,u02 20.020 20A02 Depreciation . 11,500 11#>2 11M57 Decommissioning expense. 8.065 1i,5'16 6,778 Nuclear fuel di.eposal fee inte rest ocerual 4,312 5,319 5.319 Interest and dividendA on dispiul fee defe asance fund.. (1 A9M (1498 427 M tincrease) decrease in accounte receivaole
~
(129' 45,37:1) 1,9M ilucreawi decrear,e in prepaid espetres . 163 166.h f160 1Invea*.e> in materials and supplies mventory. ( l.531i 12,121) i659) lucrease 'decrea.4elin accounts pavaW and accrued liabilitit n 5A95 10.47a i11,0971 lucrease 41ecrease) m intere3t and tuer payuNe G;0) bH2 9 1 Decrease) in d( fei red tam., iM/1i i 1,521 i (2,5773
'Decrea*elin deferred msestment tav. credits.. f 71th 1420) (i,8181 Other. j1,776, 3 612i 1 ,j2710 L Total adjust reento ,14,605 ;t6.9p aug10 Net emh provided by operating activities.. fd,0,$ f6412 _,HH.Ti3 Cash Ikwa from mvuting activities:
Electrie plant ndditions . i G,59d i (2,390) (3,367)
Nuclear fuel ndditions . .
, (18.4 li (20/160) (5,811; Paymenin to dettanmissioning fund, 18,3234 (11,526) (GA Mh Paymer.Ls to dispnal fee defeasance f und . W 216)
G,930 s (10.000!
litimburserr,ent for emergt ncy rerp4n9e fanlity infonnation eystem - - 12,001 Other. . .
- 1,841 (2.576)
Lt cash used in investing activities (41,579) i3M,765 i t 16,252 )
Cash Cows from financing activitieo:
Common stock divider.ds. (9,306) (12.92M ( 7,16M Pn fbtred i.tock dividendn - -
(5N)
Nithase of treasury simk. (1,131) - -
Rwh mption of prefenrd stock. - - t8,353)
Iwuance of Series G first mortgage bonds... ,
21000 -
lauancW Series 11 first mortgage bonds. 10 485 - -
Payme notes payable . .
- - !6,1 % )
Paymems of long term ebligatiene . t 60,597 i I87,617 > (237,111) llorrowings undet long term agreements. 517jM tp200 229,900 Net raoh used in financing acovities . LIM 51) (l?dtfp J,2'140jn Net increa e (decream in cash and temporary im estments . ( 2,2.M ) 5,302 (7.42M Cash and temporary investu,entn at beginning of year (note 101 _ 7,,30:1 _ 2,001 _!b 129 Cash and temporary inve8+ments at end of year.. S 5,06k $ 7,30:=1 $ 2,001 w- - =- x.==-
b*f heCompanying holes to fillanCial $!;1ternt'nt.%
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Notes to Fimmelal Stutements
! NorE L sumnmry of Significant Accounting 1%11cle.
In) nph Svs ad er mGvv The Company i3 subject to regulations presenbed by the F"det al Etu rgy h'egabtory ('omon elon
f ElT
- 8 the Stronties and Exchatwe (hniriduion e SU(~i und tiie 15d.hr Se:Tice Ibard i,f the Stat" of Vertnont m to acmunting, transaction 4 sutyct to Ihe Pahlu Utihty lloiding Compmy \ct of IWit and semntic3 inues. The Company is abio suh f ect to regulation by tlm Nort"at llegulsory Counmrion ifSIT7 fer nuch ar r ! ant 1kensmg and .ufi ty, and by Fnior.d and state annen, for enun nau r.tal mat-ters su h a4 uir quahty, water quahty and land ue The Company rec <pize+ revenue pursuant to the tenn4 of the Power Cont racts and Ad htioimi Pow er Contructs. The Sponer% a proup of nine New Engl:ind utdnies. are oldiaati d to p:iv the Comitue, ath month their entitlement paentage of amounts equal to the t 'ompanyi total f url co ts s nd op rating ce penses of its plant, plus an allowed return on equity Isime Dueml+ r 1,1%9,12WE : from L) 6.19% to Der.cmher 1.19MI,12': t Sus contracts abo t bligate tac b,unwrs to mate decomna un: rune pyments through the end of t p'. ant % service hfe and the cernpletion of tbe decomnus mning of the plant All Sponsan are connuitted to such paymen's regardle" of the planti op ratmg fewl o w hether the plant i-out of cervke du1ing the period Under the terms of the Capital Funds Acreemt ins the Sponsor s arr <ommitted, subyt t to obnoning In'CeMary Telpda'.ory authonr_ations to triake fun b o cadal lr to chb.iii or inainttiiti Ikenues riece mrv tv, keep the plant in op4 ration.
(b! /kprreintwn u d.1laintemturi Electsic plant i4 bemg de preciated on the traicht hne int thod at rates di.ogned to fuuy derreciate ab depnriable pr+ rtim ou r the lesser of estimated w.cf td hu s or tne planti semaining NHC bconse life.
The og rating Iktnse originally expired in 2007 but in Dicemb"r 1990 w a, < tiended to 2012 bee not":t Ibr a dc4cussino of the plant %, NIT license exten*:.m and the ;iro-pective treatment of depreciation.
Depralation expense was equh alent tu ocerall ofh a te.e rate s of 3 2%, l.0HG and 11hl for the ) arn 1991,1990 and 1969. respe(tively.
Henew als and betterments constituting retirenrent urdts are < harged to cler tnc plant. hor renew als and letter nents me charged to imuntenance expense. When properties are retired, the origin'd cost, plus cost rf remm:d. les salvege is charged to the accmoulated ptovision for depraiation.
tc) kunii:onon ofNuci oc Fuel The cos1 of nuclear fuel is n nortized to expense Laced on the rate of hunoup of the individual areto blies comprising the total wre, The Company also provides for the costs of dirposing of spent nuclear fuel at rntes specified by the Omted Statea Department of Energy PDOE7 under i contract for di po al ho-tween the Company and the DOE. See note 7.
In 1965, the Company legan amortizing to expenne on a 3traight-hne ha<in seventy-five 1ercer:t of the estimated costs of the final unspent nudear fuel core w hich is expected to be in place at the expiration of the plant's NitC operating lkense. EfTective Decend>er 1, R'9. the Company began unmrtinng one hundred rertent of these -osts in conformity with rates authonted by the FEltC. See note a for n discur+mn of the plant's NRC operatmg license extension nnd the ptaspen he treatment of tinal core amcrtization.
a 'onti nu ed >
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Notes to Fhiancht! Statements kI N $$$$t$ $ (? ? bh$ l' $h ? $' lf sh k F f!l (ll f lf ?
In !!WS, the l'omivny began amartiting to npenw a fornmh amount designed to fully ainoitive the ro,t of the matenal and sopphes na rntory w hit h s nperted to be on h.md at the npit at;on of the planti NiiU operatmg beenw. Nec note 3 f or a ibsuomo ( f the plant % N) C op rating ht en+e e r v.on and the prit.-pectlVD t j entIDent OI ni itel'kul9 a t } AlllspiH% anhnrt1/at n'll, h
i lo r ],o :) to nn ['e in k The reing my act ottiit s for it - investinent- in brig-t. rm f unde at aiut a tized < -i iin e . ha~ h<.th tiie knlent afid abilltY (4 hold die.W If u t .*tiot nis fol t he fo' ereaY e (t?t ni v*. ditnorl d ed U NI 1( pl e+r ntW tile Oi t to put(ha w t he un e-ttin rit tiet <>f ain .in,irin.i tire d pi. ,ium- i i cli-1i,iaint S, e in >tc 5
- 41) , \ 1>:6_ r dilu t h t h t ai l eh t i). Int [b*fttjutha! (h hl Ihe difletence h tween the innount p ud upon reaupositmn of any 'l"hl s e(m its and ths Lu c ulue the cof. phu an3 unamor tired prenuum ;e-: an3 rtinted unamor tind debt ex; en .c atul re wquHtion costs or les nay ur.nuoritud di-count, t elated de ht t xpren and ieurqu+ d a nt t mt s applicable to the debt ~deenun retired and c ou elet) i- defn red b' t he Comp.my and ainorived to npenw on a st raicht-ling ham over the remahung hfe of the req,u im ;unt3 s new s
h,0 b ?!o 'nl H rt Int h 't a ils l'*$$$hletot]linafim fo,1 i
Alhouuae for funds us d donna con t ructhm i AFFI)C, a the e-tunated row of f unds n-e i to finam e the Compcmyk cum.truction wm k in progrew mnl nuclear inel 'n pua er w hu b n not r eemered f rom the Sponmu through current revenues. The allow ain e is not reahed m rash currently, but under the Pou ei
' Unnti.a ts the all.mance win be reem ered in ca-h m er the plant % .crsice hic becure oflughet resenues n-miated u nh hi,fher deprecintmn and amort vation open+
AITPC wa-(apdab rrd at overan eGective rates of H !N, . 7m , and 79, fbr lml.1900 an i 1939, t espec tn cly, u-me t he grou rate nu t hod.
t Ih$ f[ t'e} rs!!*: hh ne = t t' I n ij 5
The t'ompany u ace uine the e-omatt d cost of deconnus nonina its pLmt m er the plant 9 t ennoning NitC brenw Ofe. Any mnendmenu to the+ e-tiniated arts are accounted for pnspectively. See note 3 See note 3 for a dnru%mn of the phot % N1;U bcense nienyon and the pn-pmtise treatment oiib com-mbrioning co+t .
I11 ]'HJ i ? o r $) rs ot. r le Elk I' .T 5 k8 @ !! I ' n'lIC# 's m i re El[("I!n N l'I f[ ll alf kIIIl uEndk N i( ) $I' Ii$ I'" lI1} $ ) e (it'4 k',
the Ft:1;C. Prmisions fm deferred income tase- tetht the tax efhts of all timme ddim entet lnu stment tax credits have been deferred and are bring amortired to income m er the hves of the r e-lated w+ts f;) l 'G s h l,' jn t
- U it v 6 ror purp_iis smtemena ,a cam vn the compamy cona,mn imumy h,uia #m.rm im s estments wit h a maturity of thn e month < or le- to be emh equivalents.
t ( 't ent illar(l !
10 f
Notes to Fimmelal Statements 1
cin Ra e la,s n%s It f lakin k nf If Itmt 0 41 Ill t ht- l@9 and IM InuN Ml sloh nu nt- he hn n in lar-d'n d to lonh,rm u Mb the 1991 lo e>< ntation NOTU L thrommiminning The Untnp.my r .u~ n t iman d dowmn a- m rm m i o-t - tot n' nm h at plant lm I on 't udn , by an nulept rnient t ngmecimg tir m wlm h a-mne that dn onam- mnme a dl N miomph in d hv the pr ompt renomal ami donantime nu tin.d This me thol w pun - that imbom t n e man r uh he renu ni h oin tie _
plant ute with all bmidine and fmhto drm.mi!nl immi diately ath i +adow n simir e tiinate th t
.mpnoum.ne,3 is 31.o- w ouhl bo inpm ul to drm mile thi pl,mt at hutdow n n mm e wa-te ,nd n'ho c the ste The ormnul rtudy w hwh was prepaini m le1 mul e tunated total deu> nmo-mnine os- el
$!2 s mdhnn in 1%) d. llars w a< updated m (t u nni to >n u nh t he lW> l l IM' t :it e t . " to an t -t unate of W s nnlinoi;n 1%l doharx in Februr3 199. a m ont dro mmr~iomne tmly w as < omph n d a hn h c~t unatol total deoimim-uimne o ~t- ni oppu n unah 13 co nolhon in 19*s d han 1 ho (imp.my i e implemented iah , beed on a erit!cment .wt me nt s ah the 1 i IT wimb allow n! $ 190 un! hon in 1%
dollars e the estun.ited d.uommWonine e Tin- alb m ed amount n n+1 to i ompute the l'ompany s habilit V ;tnik IOhdip to t}it' bln dP 8 d *. l$Nt11 on Hil aWuned !nllati'In late Of N s j'er immun alPl .m i \pir a tion of the phmti Nir operatmc bien + m 2011 the o tunatni t1 t of dn ununroonmc at i nd et hie o appn nunatt l3 3Di nulhon. ~llm pn*nt ulue of t he pm mia pm t mn of dn onmo- n mne unt- u led to date r 51011, mdhor.
Ihhire to sponmrs for -timated dn omnn- enong w~t mmmem ed th>i um Pr L at w ho h time thi
<-m3_&d a dma . th -m + h,- - _m a-n _ _
enst, applicable to operations of the p? ant for poor period- ('uti. nt permd deoonmi wnne co-t- not fund d through bdhne ta sponsors os i .o mov on decomunmoniw hmd wet .n e al-o deh t r ed 'I bew def4 rred o.-ts sull be amm tm d to expen-e m t hey ar e fu ; led m , r t he icinannne hfe of t he NIM ' opeut maheense
()n January 1. H&l, awl eat h f out 3 t ai pe t iod t hereafter. put -uant to f he } ll13' rate m der _ the l' en pany must in be its s hedule of f ulme annual decemnurMany lund rollechon- to ulin t in im h.d ddhl-em e- hetw ern a-mned and m tuM rates of udiato.n. and lustorial ddlen nees bi t w een ; - omed and at tual rate- of ear nings on devonuni-iomne f und a-eh Chance- m !!cderal ua poute un ome tax law s an i ute- reqaite omnnhate r encon m the d, t omunwoning huahne t hedule and -ub" <pn ntl3 m tollme in March 1%s. the Internal Hesenut Sen ic e r sued the final t egulatnor unplementmc N et mn IMA of the Code and dehnenting the ti dena f ar estubh'hm; a quablied deconunnsonina t ro-t. depout s mto w hu h w ould he allowed e a current deduct mn tor tm purpmes in ; a onhmee wit h the+ weulat c>ns t ho Company e tabli3 hod the Vertoont YaeLee lieconuni-ioning 1 rust. pm suant to an hulentum er Tru s t ,
dated Marth 11.19w and dt p+aed th< mm 6121 muhon. heme the maount of demmno,nming t ort s wh Ic< ted m 19e and pnoc 3 cars in July 19% the Inh i nal lieu nue Si n ur r-ued its leite r. purruant to uid wgulations ertabli-hine the lhding Ann.unt ahow able f or each 3 ear-ino 1% 1 lbed on this iciter. the Fotopany filed amended returns for the 3em > 19s2 and 19s t thn och 19%
Uwh weened inon Sponsor 3 for plant dernemuHoning emts is deposned into the Ikeonon-nonna Trust in other the Qualdied fund t i e, anmums deducuble ptu-uant to the IRS letter, or t he Nen Quahfi< d Fund > i r. execr roth4 tion- pur-uant to I- ElW authorvation w ha h am not currently deJu< tihho. Fund, held by the Trtrt are ins. Me d in high grade gmi rnment recuntms nr rettitirates of depo 9t of hanhnm in-tdutions suth wet, in esce" of 6100 nullion Intere-t i n the Ikenmun ioninc Trust assets i- wronled in other income and deductiorr with an equal nmount representing the t urtent period deconuni -ioinne om t funded by <uc h ranune ieflectnl nr detonanienuung etpense m other income and dedur' ion-d 'ont u ninii 11
Notes to Financial Statements i Decimunissioning expense for 1991 incle.les an adjustment of appimunately $2.1 milnon resulting fn,m the Company',i rate rnLetion filing ais,nived by the FEltC on February 28,1991. This filing w as in n+ponse to an amendment of the nuclear phmt's operating licen+ iuued by the NitC on December 17, 1990. This amendment estended t'ie 1erm of the operating license from ikcember,2007 to March,2012 1 This adjustment reDects the approved retroactive effect on decommiwioning expenw to January,1990 In l Atwust 1991, the Internal llevenue Senice iuued a letter; pursuant to the above regulations, establishmg i a revised Ruling Amount for 1991 and subvquent years u hich conforms to the approved FERC fihng. I NOTE 3 FEltC Rate Case Matters on January 2,1990, the FEllC issued an order granting the Company % motion to implement rates bas ed on the pronmed settlement agreement on an interim basis, subject to refund, elketive as of Decem-ber 1.1989. The propomi rttlement agreement speciDed a return on equity of 12.2Mi as compared to the 14.259 the Company requested; an allowance for the estimated cost of decommissioning of $190 million in 19M dollars, as compared to the $212 million the Company reque .ted; and that the Company will be ab '
lowed to amortire 100'i of the final fuel core as compared to the 759 previously allowed. The proposed M ttlement agreement was approved on August 1,1990. Under the settlement as approved, decommioion-ing charges, depreciation and amortization were calculated haml on a ervice life endmg in !keember 2007.
On April 27,1989. Vermont Yankee filed an application with the NRC to extend the term of the operat-ing licene to 2012, so that the plant ma) operate for forty years nfler it entered conunercial wrvice in 1972. On December 17,1990 the NRC inued an amendment of the operatieg license extending its term to March 21,2012. The Company submitted a rate reduction filing with the FERC to reHect in rates the adjustments to decommissianing, depreciation and amortization resulting from the license exten.+ ion The Company propowd to make this reduction eMeetive as of March 1,1991 and, since the extension w as i+
sued in 1990, to reflect the neemary mljustment for the period January 1,1990 through Februmy 28,1991.
On February 28,1991, the FEHC approved the Compan/* rate reduction filing The effects of this ruling were accounted for prospectively in iberd year 1991 producing a net revenue reduction of approxi-mately $7A milhor in 1991 which reflects the retroactive treatment to January 1,1990. This ruling will result in reduced revenue requirements in future years appmximately $15 mlhon in 1992.
NOTE 4. Other Deferred Charges Approximately $3.3 million of the $8.0 million in et her deferred charges at December 31,1991 relate to payments made to a vendor for the construction of a main 9 ansformer. The Company financed the con-struction of the transformer w hich will be instded in 19d2 and is expected to be purchawd by a third party and leased to the Company under an operating lease. Approximately $3 2 million of the remaining balance in other defi rred charges at December 31,1991 relate to paymenta made to the Vermont Low Level Radioactive Waste Authority c'VLLHWA"i, an agency of the State of Vermont, for the siting and construction of a low level waste disposal facility. Pay ments made to the VLLRWA not pertaining din etiy to the siting and construction of a low level waste disposal facility are being expensed currently.
(Continued) 12
Notes to Financial StatemcNs -
NOTl? 0. I.ong-term Funds The Imk value and estunated n.arket value oflong-term fund investment securities at December 31, is as follows:
Ital
_ . _Ititii ..
Ilmik Market ihmk Maiket s alue value value s al w (Iwlars le thou.andui Decommissioning fund:
U.S. T: easury obligations.. $35,921 $38,055 $21,666 $22,213 State of Vermont obligations.. 28,799 30,152 31.522 31,436 Accrued interest and mone3 market funds.. 1,3c5 1.365 15i 151 66,085 69.572 5.1339 53,830 Disposal fee defeasance fund; Corporate lwands and notes.. 26,791 26,192 17,205 16,983 Acciued interest and money market fund.. 526 526 401 101 27,317 26,718 17.606 17,381 Total long-term fund investments.. .
$_93,402
_ $_96..._29__0 $_7.' ,214
$.7 0_._9 _15_
At December 31,1991 und 1990, gross unrealized gains and gross unrealHA iosses pertaining to the long-term invest ment securities were as follcws:
timi umo (Dolla rw in thour andal Unrealized gains on U S. Treasury obligations.. $2,131 $ 577 Unrealized gains on State of Vernmnt obligatir,ns $1,353 $ 28 Unrealized losses on State of Vermont obligation ... $- $(114 )
Unrealized gains on carporate bonda and notes.. $- $ 5 Unrealind losses on corpornte bonds and notes . $(599) $(227)
Maturities of obligations, bonds and not(s (face amount) at December 31,1991 are as follows (dollars in thousands):
Within one year. $23.181 Two to five years . 5,950 Five to semn years . 18,236 Over ses en years.. i2,835
$90.202
=
(Continued) 13
Notes to Financial Statements I 1
NOTE 6. lxing-tcini Obligatioriti A sununary ofloag-term obligntions at December 31,1991 and 1990 is as follows:
limi gKt (Dollars in thouumda First mortgage bonds:
Series A - 9.625% due 1998. $ - $ 10,485 i Series li- 8.50% due 1998. , 1,307 L332 .
Series C - 7.70% due 1998.. 1,612 ' u 'i l Senes D - 10.1259 due 2007. 27,234 '
Series E - 9.875G due 20m , a < 03 Series F -9.37fW due 2007. 5,704 5 v4 Series G - K944 due 1995., 25,000 25,000 Series H - S.25% due 1996.. , ,
_10,485 _._
Total Orst mortgage bonds.. 77,015 79,178 Unamortized premium on debt. 48 55 Total long term obligations.. * $3(,g gg
"'be first mortgage hands aro issued under, have the terms and provisions set forth m, and are ratably ana equally with all other bonds outstanding thet tunder secured by, an Indenture of Mortgoge dated as of October 1,1970 between the Company and the Trustee, as modified and supplemented by twelve supple-mental indentures. All bonds are secured by a first lien on utility plant, exclusive of nuclear fuel, and a pledge of the Power Contracts and the Additional Power Contracts (except for fuel payments) and she Capital Funds Agreements with Sponsors. Annual sinking fund requirements for Senes B and Series C first mortgage bonds will be partially met by depositing Londs held in treasury. The bonds held in tren-sury will be suGeient to meet the sinking fund requirements fbr these bonds through 1996. Cash sinking fund requirements for Serie '1, Series E and Series F first mortgage bonds will commence in 1999. There are no sinking fund requirenwnts on the Series G first mortgage lxmds. Cash sinking fund requirements fbr the Series H first mortgage hands amount to approximately $2.1 million per year for the years 1992 ,
through 1995.-
In Februmy of 1990 the Company issued $25.0 million of Series G 8.949 first mortgage Imnds stated to mature on January 1,1995. The Company applied the proceeds of the sale of the hands to retire other long-term obligntions. In July of 1991 the Company issued $10.5 million of Series H 8.25% first mortgage bonds stated to mature on June 1,1996. The Company applied the pmceeds of the sale of the bonds to re-tire the remaining Ser es i A 9.625% first mortgage bonds.
The Company has a $75.0 million Eurudollar Credit Agreement which expires on December 31,1991.
The Company issued commercial paper under this agreement with weighted average interest rates of 6.569 for 1991 and 8.44% thr 1990. Payment of the commercial paper is supported by the Eurodollar Credit Agreement which h secured by the nuclear core of the Company's generating facility. There were no amounts outstanding nder this Agreement as of December 31,1991 and 1990.
NOTE 7. Disposal Fee fo." Spent Nuclear Fuel The Company has a contract with the United States Department of Energy (? DOE) thr the permanent disposal of spent nuclear fuel Under the terms of this contract, in exchange for the one-time fee diseu.med below and a currtmt fee _of1 mil per kwh of net generation paid quarterly, DOE agrees to provide disposal services when a facility for spent nuclear fuel and other high-level radioactive waste is available, which is required by current statute to be prior to January 31,199&
tContinued) 14
Notes to Financial Statements The DOE contract obligates the Company to pay a one-time fee of approximately $39.3 million for disposal costs for all spent fuel disdarged through Apnl 7,19n Ahhough such amount has been cob l lected in rates from the Spnsors, the Compam has elected to defer payment of the fee to the DOE as permitted by the DOE contract. Tne fee must be paid no Liter than the first delis ery of < pent nuclear fuel to the DOE. Interest accrues on the unpaid obligation based on the thirteen-w eek Treasury lhll rate and is compounded qumterly.
Through 1990 the Company deposited approximately $15 9 million in an irrenoible trunt to be a sed exch.sively for defensing this obligation at some future date provided the DOE tomphm with the terms of the aforementioned contract. In 1991, the Company deposted an additional amount of apprmimately
$8.2 million into this trust.
On December 31,1991 the DOE issued a final nde amending the Standard Contract foc Dirp*al of Spent Nuclear Fuel and'or lbgh Irvel Radioactive Waste The amended final role conforms with a March 17,1989 ruling of the US Court of Appeals for the District of Columbia that the 1 nul per kdowatt hour fee m the Standard Contract s houhl be ' wed on net electricity generated and sold. The unpact of the amendment on the Company i4 to reau ine basis for the fee by U , on an ongoing ha-i- and to establish a ~
receivable from the DOE at December 31.1991 ef 82 2 null 5n for previou, overbilling- and acc rued inter-est. The Company has recognized in its rates the full impact of the amended final nde to the Standard Cont ract.
NOTE 8. Short Term llorrowings The Company had lines of credit from sarious b mks totalHng $6.3 L illion and $112 milhon at De< cm-ber 31.1991 and 1990 respectiwly. The maximum amount of short-term borrowing outstanding at any month 4;.d during 1991,1990, and 1989 was approximat ely $0.4 mdlion. $ and $8.0 million. rerpec-tively. The merage daily amount of nhort-term luirrowine otitstanding was approxiniati ly $0.1 nullom,
$0.1 million mal $4F inillion with curresponding weighted average iiitetest rates of 8.19'. 9.77'i and 10.(i9'i, espectively. Tht re were no amounts outstanding i.nder the:<e lines of cretlit as cf De cinber 31.
1991 and 1990.
NOTE 9. Taxes on income The components ofincome tax expense for th" 3 ears ended Ih cember 31,1991,1990 and 1959 are as follow s_
IW1 1990 !!N9 (Dollars in thouwuule Taxes on operating income.
Federal - em cent . $4.0% $5,251 $6.084 Federal - deferred.. < 1,2 35 ' '3,675) < 2.335 )
State -current . l.021 1,368 1,275 St at e - deferred.. 4S3 (S496 (212i investment tax c redit adjustment . 1740) (4261 (l.418) 14h5 1,669 3,364 Taxes on other income:
Federal - current . 353 1,124 252 State "urrent . .-.-
94 _-
273 . -
61
_.4_4 7 1_3_97 __3_13
, =
e 4
~ 9==
f(l k$kuk' 15
N'otes to Financial Statements A reconciliation of the Company's efketive income tax rates with the Federal statutorv rate is as fbliows:
1imi itoo 1999 Federal statutory rate. 3401 310's 34.0's State income taxes, net of Federal income tax benent 6.1 5.2 56 '
Investment credit . (6.0) ( 7.3 ) (10.31 Ihmk depreciation in exce.,s of tax basis.. 1.7 2.7 4.2 AFUDC equity . 0.9 (i.8i -
Flowback of excess deferred taxes . t G.7 ) < &8) (2.1 )
Other . ._.1.._. 7 0.5 0.7
-31.79 24._. 5.' 1 32. 14 The items (.omprising deferred incorne tax expcise are as follows:
1tml 1imo 19e (Dollarm in thou* ands)
Decommissiening costs . $ 14 $ !281) $ (651)
Tax depreciation over (under> linancial statement depreciation . 955 (2,160) (2491 Tax fuel amortization under financial statement amwtization . (1,389) i14 D (304)
Pension expense disallowed.. (562) (232) t5191 Postemployment benefits reversed . - -
414 Low level waste accrual disallowed . (50) t441) (390)
Flowback of excess deferred taxes . (H28) (1,101) <243)
Low l# vel Waste Authority Fee. 875 370 -
Other. 184 (5381 tG35
_$i801) $_(4,52_.4. ) $_4 2._.57__7 )
In February 1992, the Financial Accounting Standards Board issued Statement of Financial Account-ing Standards No.109," Accounting ihr incomo Taxes'. This Statement will require the Company to '
change from the deferred method to the liability method of accounting for income taxes. The liability method accounts fbr deferred income taxes by applying enacted statutory rates in etTect at the balance sheet date to differene s between the book basis and the tax hasis of as. sets and liabilities. Adoption of this Statement, w hich is required for years beginning after December 15,1992, but may be adopted earlier, will not bas e a significant efTect on tax expense or cash flows of the Company.
(Continued) 10
Notes to Financial Statements H , ,
kOTE 10. Supplemental Cash Flow Information The following information supplements the cash now information provided in t- Statements of Cash Flows:
1991 ifdao 1989 (Dollnra in themumd )
Cash paid during the year for:
Interent (net of amount capitalizedi .$ 7pj(j {7] $ 7,722 Income taxes.. $ 4.793 $ 6.683 $ 5,777
= = = . . ===u.- = = = . =
Decommissioning fund activity:
Cash received from Sponsors . $ 8,323 $11,526 $ 6A99 Investment earnings. 5,5 M 3,318 3,017 Income taxes paid.. t1,135) (577) (1,5093 Net increase. 12,746 14,267 8,007 Balances at beginning of yean Decommissioning fund.. 53,339 39,072 28,590 Special deposit. - -
2A75 Balances at end of year. $66.085 $h ?,1139 $39,072
==-- -= . . . = = = =
Postemployment medical benefits fund activity: .
Hm! ID% 1999 t Dollaru in t housandsl Investment income . $- $ 100 $ 93 Reimbursement to the Company. --
Fl .264 ) --
Net increase (decrear.e) . - <1,155) 93 Balance at beginning of year . -
_ l,155 1,062 Balance at end of year.. _ $- $- $ 1,155
- - - = = . = = = = = = = = = .
In November,1988 the Company's Board of Directors appmved the funding of $ t.1 million for postem-ployment medical benefits based on an estimate calculated by the Company % actuary. The Company sub.
sequently deposited $1.1 million into an escrow account established to accumulate t hese funds. In 1989 the Company reversed the liability established for postemployment medical benefits as these amounts are in-cluded in the current FERC approved rate settlement as a component of decommissioning. In 1990 the Company transferred this fund to the Company % operating account.
iContinuedi 17
Notes to Fimmeial Statements DOE defeasance fund nctivity (see note 7):
1991 19%) 19s9 l (Ibtlars in thmaand*)
Payments from the Company. $ 8,216 $ 5,930 $ 10S00 investment income . 1,495 1.398 278 Net increase 9,711 7.328 10,278 Balance at beginning of year . 17Jion 10.278 -
Balance at end of year.. $27.317 17Autj- - _ - $10f-E78 Fund activity includes purchases, sales pr .ceeds and matunties of approximately $67.9 million,
$4G1 million and $10.0 million, respectively,in the decommissioning iund and $46.1 million, $0.2 milhon and $37.4 million, respectively, in the DOE defeasance fund.
NOTE 11, Pension Plans and Postemployment Benefits Other than Pensions The Company has two nor. contributory tru teed pension plana coveiing substantially all ofits reg-n',ar employees. The Company's funding policy is to fund the net periodic pensmn expense accrued each year. Benefits are based on age, years of service and the level of compensation during the fio .? years .)f employment.
Th" aggregate funded status of the Company's pension plan.s as of December 31,1991 ami 1990 m as follows:
December 31, 1991 I!No (Dollars in thousands)
Vested benefits.. $ 5,017 $ 4,444 Nonvested benefits.. 851 , 673 Accumulatsi benefit obligation.. 5,898 5,157
.\aditional benefits related to future d com pensation levels . 8.823 7,703 Projected benefit obligatio'n. 14,721 12,860 Fair value of plan assets, invested primarily in equities and bonds. I 1,tilu 9,239 Projected benefit obligation in excess of plan assets. $ 3,081 $ 3A21 Certain changes in the items shown above are not recognized as they occur, but are amortized system-atically over subsequent periods. Unrecognized amounts still to be amortized and the amount u hich is included in the balance sheet appear below.
Decemlwr 31, 1991 l!MM (Dollars in thousando Unrecognized net transition obligation. $ 1,117 $ 1,177 Unrecognized net (gainiloss.. (2.430) <925)
Pension liability included in balance sheet. 4,377 3,351 Unrecognized prior service costs.. 17 18 Projected benefit obligation in excess of plan assets.. $ 3 081 $ jj.G21 (Continued >
IM
Notes to Financial Statements -_.
The weighted average discount rate was ROG as of December 31,1991 and 1990 Th" rate ofincrease in future compensation levels used in determining the actuarial present value of the projected benent obligatmn was .3%, and the expected long term rate of n turn on plan assets was 8M as of December 31,1991 and 1990.
Net pension expense for 1991 included the following components:
Attar, in ihousan(M Senice cost - benefits earned- $ 1,147 Interest cost on projected benetit obhgatmn.. 1,101 Actual (returniloss on plan assets., t 2,12 t p Net amortization and deferral. _1.4_5_2 Net pension expense. S_lA79 l'ension expense was approximately $1.11 million. S1.4 million and $13 million for the years 1991, 1490 and 1969, respectively. -
In December 1990, the Financial Accounting Stamtards Board trued Statemem of Fmancial Account-ing Standards No.106," Employers' AccounHng lbr lbtretirement lienefits Other Than Pensioni cSFAS 1067. This Statement v,ill require the Company to change from the cash method to the merual method of accounting for postretirement benents. The accrual method will reymre the Company to record the esti-mated exp"ose of postretirement benefits as employees render the services necc.-ary to earn their po+
retirement benefits. The Company expects to adopt SFAS 106 during 1992. Adaption of SFAS 106 is not expected to have o materialimpact on the Company \ future Gnancial position or results of operations because the costs are, and will continue to be, recovered in rates.
NOTE 12. Lease Commitments The Cornpany leases equipment and systems under non-cancelable operating lease. . Chargea agamst income for rentals under these leases were appmximmely $3.7 million, $14 milhon and $1.1 million in 1991,1990 and 1989, respectively. Minimum future rentals as of December 01,1991 are as follews:
Arnunt Fi cal years ended rental.
IDollan in thousand,a 1992. $3.6s9 1993. 3,575 1994. 3,211 1995. 2,869 1996, 2,696 1997 and after.. 8.687 NOTE 13. Commitments and Contingencies The Company has unconditional purchase commitments of approximately $1.0 million associated with nuclear fuel requirements through 1992. The Company also has approximately $180 million of *re-quirements based" purchase contracts for nuclear fuel needs to meet substantiahy all ofits power produc-tion requirements through 2001. Under these contracts, any disruption of operating activity would allow the Company to cancel or postpone deliveries until actually needed.
The Compimy has contracted for uranium enrichment services from a company in France for the period 1990 t.o 1996, with an option to extend and from alu rnative vendors for the period 1991 through Wominued) 10
- Notes to Financial' Statements 2002. The Company aho has an enrichment contract with the DOE which expires in 2001. Ilowever, the j Company has exercised its right to partially tern inate the DOE contract for the period 1990 to 1996.- _l I
- The Company has commitments for capital expenditures amounting to approximately $6.5 mdlion for 1992.
The Price-Anderson; Act prmides, among other things, that the liability fbr damages resulting from a nuclear incident w6uhl not exceed the greater of $560 million or the amount of Snancial protection re-quired of the licensee (presently about $7.S hilliont Under the NRC regulations promulgated pursuant to the Price-Anderson Act, the Company has insured against this exposure by purchasing the maximum avail.
able private insurance t$200 million) and maintaining an indemnity agreement with the NitC. Under a mandatory industry-wide program, owners of operating nuclear facilities tincluding the Companyi may be assessed a retrospective premium of up to $66.2 million for each reactm owned in the event of any one nuclear incident occurring at any licensed commercial reactor in the United States, with a maximum
)
assessment of $10,000,000 per year per reactor owned. Such retrospective premium is subject to inflation- j
. based indexing at five year intetVals aRer 1958 and,if the Fum of all public liability claims and legal costs '
atising fromhny nuclear incident exceeds the maximum amount of financial protection, then each such i ow ne r can be asso, sed up to an additional 54 of the maximum retruspective assessment. !
i l
NOTF,14. Unaudited Quarterly FinancialInformation l The ftdlowing quarterly Snancial information is unaudited and in the opinion of management includes all adjustments ? consisting only of normal recurring acertmle necessary for a fair state' ment of resuhs of operations for such periods. '
Quarter ended March Juno September December (Dallars in t housands - except per share amounto 1991
- Operating revenues., , $32,917 $,16,250 $38,765 $ 43,760 Fuel exptm# . 6,281 5,629 6.096 6,858 Other operating expenses * . . . , 11.014 14,083 16,370 18,199 Slaintenance expense *., . 2,289 2,892 2,917 5,536
' Operating income. , 6.226 4,639 4,586 4,433 Net income L,._.. . 2,350 2,044 1,937 2,159 Net income per average she of common stock- . 5.91 5.21 4.91 5.50 1990 Operating revenues- , - $37,200 $37,904 $47,361 $44,118 Fuel expense * . . - ,
6.5 18 7,106 4,485 3,971 Other operating expenses * . . . 14,430 11,997 15,181 21,069 Alaintenance exp(mse* 2.303 3,020 14,093 7.162 Operating income. . . . . 5,276 5,13a - a,150 4,354 Net income , ,, , 2,36 t = 2,391 2,357 2,354 Net income per aserage share of common smek.. . 5.90 5.98 5.89 5.89
- These selected expenses fluctuate from quarter to quarter due to plant outages. There was no outage in 1991, the majority of the outage activity occurred in the third quarter of 1990. The operating expenses not presented remain relatively constant.
20
Independent Auditors' Report KPMG Peat Marwick The Stockholders and iknrd of Directors Vermont Yankee Nuclear Power Corporation:
We have audited the accompanying balance sheets of Vennnut Yankee Nuclear Power Corporation as of December 31,1991 and 1990, and the related statements ofincome and retained earnings and cash Dows for each of the years in the three-year perio:1 ended December 31,1991. These financial statements are the responsibility of the Company's snanagement. Our responsibihty is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standard *. Thme standards re-quire that we plan and perfonn the audit to obtain reasonable assurance about whether the financial state.
ments are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements An audit alao 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 proside a reasonable basis for our opinion in our opinion, the financial statements referred to above present fairly, in all material respects, the finan-cial position of Vermont Yankee Nuclear Power Corporation at Deter.d(r 31,1991 and 1990, and the re.
sults ofits operations and cash flows for each of the years in the three-year period ended December 31, 1991, in conformity with generally accepted accounting principles.
k [ ML 130ston, Massachusetts February 11,1992 21 s
Board of Directors lit:nNAim M. Fox, President and Chief Operating DoNAtv G. PAnotis, President and Chief Executisc Oflieer, Nartheast Utihties,11artford, Connecticut Omcer Eastern Utilities Associates, Ibton, M assachuset ts Fntornie E. GitrLNMrs. Vice President and General Counsel, New England Power Compw3, Gtnsto C. PotuN, Vice President, Engine < ring.
Westborough, Massachusetts Central Maine Power Compan3, Augusta, Maine Josteil IluutiNotoN, Vice President, New England A. NONMAN Tenntni. Senior Vice President, Green Power Company, Westborough, Massachuset t s Mountain Power Corporation, So lluthngton.
Vennont DorG1.w G. IlYne, Executive Vice President, Gnyn Mountain Power Corporatien, Tnours C. Wrnu, Chainnan, Vermont Yankee So. Ilurlington, Vermont Nuclear Power Corporation, liratt1choro, Vermont, President and Chief Executive Omcer, Central F, ilAY IU:Ystn, J n., E ,yciur, Chairman, lh3ser, Vermont Pubbe Service Corporation, I!utland, Crowley & Meub, Chairman, Central Vermont Vermont Public Service Corporation, Itutland, Vermont -
J. GAny WEicAND, President and Chief thttutive
- 1. eon E. M AGIAHHJN, Jn., President and Chief Omcer, Vermont Yankee Nuclear Power Executive Omcer, Public Service Company of New Cmpiration,13rattb Imro, Vennont llampshire, Manchester, New llampshire flesstLt. D. WauGirl, Financial Vice President, GonooN P. MnJ.s, President and Chief Executive COM Energy Services Company, Cambridge, Omeer, El. CON Management S, rvices, Massachusot ts St. Johnd ry , Vermont Jons F. OPEKA Executive Vice President, Nmthent Utilities Service Company,lladford, Connecticut Officers TuoMAs C. Wenn, Chairman J. GAuv WEtuAxu, President and Chief Executive Omcer WAnnEN P. MURPnY, Senior Vice President, linUCE W. WIGGETT, Vice President, Finance and Operations Treasurer JAMES P. PFJJJIM0n, Wce President, Engineering Gu.NN J. MoncAN. Nretary and Assistant Trear,urer JotIN A. ItrrstIEn, Esycuu:, Anistant Secretary 1.INDA S. OnHTIN, Acting Assistant Treasurer (This report is not to be considered an ofter to sell or buy or soliotation of an oiler to sell or buy any security)
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