Text

1991 Annual Rept South Mississippi Electric Power Assoc
	ML20097B252
Person / Time
Site:	Grand Gulf
Issue date:	12/31/1991
From:	Mckamy W, Thomas H; SOUTH MISSISSIPPI ELECTRIC POWER ASSOCIATION
To:	;
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ML20097B251	List: ML20097B247; ML20097B252;
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1991 ANNUAL 1:

REPORT 4

SOUTH--

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MISSISSIPPI-ELECTRIC POWER s

ASSOCI ATION.

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' - EXECUTIVE MESSAGE 3_

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BOARD OFFICERS '

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-SMEPA*S HISTORY '

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A SPECIAL THANK YOU.

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4' A TRIBUTE TO J. T OUDLEY, SR,,

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. A TRIBUTE TO GEORGE D. TAYLOR, y-q

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, COAHOMA, EPA

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COAST EPA

, 10 DELTA EPA

_j 11 DixlE EPA -

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o MAGNOLIA EPA ~

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- PEARL RIVER VALLEY EPA

,14 SINQiNG RIVER EPA - ~

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' SOUTHENN PINE EPA 18 SOUTHWEST MISSISSIPPI EPA

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~. TWIN COUNTY EPA

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7 YAZOO VALLEY. EPA 18 Contents.

19 inei OPERATING REPOR 4

31

- MANAGEMENT.

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32 FINANOIAL SECTION --

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33 1991 FINANCIAL REPORT 34 %

THE ELEMENTS OF COST '

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' COMPARATIVE OPERATING STATEMENiS

.36 THE COMPARATIVE

SUMMARY

~ 37 THE AUDITORS

REPORT 38 TliE BALANCE SHEETS h 40.-

STATEfe NTS CF NET MARGINS AND PATRONAGE CAPITAL

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. STATEMENTS OF CASH FLOWS 42 NOTES TO FINANCIAL STATEMENTS

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47 LOCATIONS

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r SOUTH MISSISSIPPI ELECTRIC POWER

. ASSOCIATION (SMEPAfly A, RURAL - -

' ELECTRIC OENERATION ANDTRANSMIS.

SiON COOPERATIVE (G&T). SMP.PA t

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Abtn SMEPA%

SERVES AS AN ECONOMICAL POWER ~

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s SOURCE Fog ELEVEN MEMBER OWNER

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DISTRIBUTION COOPERAT'lVES WHICH

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_1. PRCVIDE ELECTRICITY TO MORE THAN 270,2 h,SSISSIPPIAN1..THROUGH '

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COMMITTED LEADERSHIP AND COMMIT-t

' TED EMPLOYEES, SMEPA IS ABLE, YEAR -

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AFTER YEAR.TO FULFILL THIS MISSIOE r

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EXECUTIVE MESSAGE i

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W. C MSamy, Jr, Nsdent unh a

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Henry Thomas General Manaur l

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1 South Mississippi Electric Power' employees is reflected throughout Association became fifty years of the Asweiation's operation. How-ap in 1991, with niany of those ever,the comple.v.ity of the power years spent as a paper entity, industry continues to bring forth

. During the nast twenty years,

' new issues, creating an ongoing.

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however, Soath hiissisippi has tuvironment of change. ShtEPA's grown into a full fledged G&T success is, and will be, the result of cooperative p wr supplier, the same determination by its providing the generation and current managers, directors, and

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transmission requirements of employees. Few organi:ations can eleven member systems, equal the records of accomplishment

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e as does Sh! EPA, operating with 234 i

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The many challenges faced well-trained and highly motivated during ShlEPA's formation and employees dedicuted to the same c'oristruction were successfully cooperative philosophy a3 those in i

1 overcome. The cs.mmitment of the past.

- past. managers, directors, and mm.

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During 1991, SMEPA continued While we proudly look back over.

to closely monitor cost with thelife of SMEPA, we alsolook results. New methods of opera-boldly at its future. Many chan;;es ~

tion and management techniques will occur and many problems will have proved highly successfulin be presented; but with the support stabilizing costs; this was reflected of its members a'nd employees,-

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in stable rates ind reliable service SMEPA willcontinue the credibil-l which were maintained even ity, respectability, e ccountabilit'y,7

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while the Association was experi-and responsibility necessary foi encing rapid growth.

success in todiv's ever-changing l

business environment.

SHEPA also entered into a new spirit of cooperation-rather than We are proud to share the success competition-with its investor-of SMEPA and i.tr employees in' owned neighbor, Mississippi meeting th'e needs of a changing -

Power Company. These agree-

industry, ments and understandings will allow both to have a more positive impact on the State of Mississippi.

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W. C. MCKAMY w

HENR THOMAS s.

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BOARD OFFICERS

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Seated,from leftl.

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W. C McKamy. )r., President; T

Naiflordan, Mce PresJent l

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- - Hollis Alford, Secrefary-Treamrer;- -

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SMERNS HISTORY s

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We never tire of'relling our story Administration (REA) coopera-

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and use the occasion of out 50th tives and thereby reducing the

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1 anniversary to do so again. In so cost of power and futther

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. doing, we also celebrate and pay extending the fundamentals

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' - - tribu'te to the cooperatives that upon which our electric power

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. cirganized SMEPA, to the men cooperatives are founded." The

_ under whose~ guidance SMEPA co-ops represented were Coast

. flourished, and to the coopera-EPA, East Mississippi EPA, Jones

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tives thst' ate members today.

County EPA (now Dixie),

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Magnolia EPA, Pearl River Mhile our his' tory began with our Valley EPA, Southern Pine EPA, incorporation,we share a history and Singing River EPA.

oF THE SEVEN ELECTHIC POWER behind the history.With all rural

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electric cooperiirivesi the forma.

Original plans for SMEPA's first Associations Tx4T ORoAN:zt0 ;

, -tion of the rural electrification generating plant placed the SMEPA, sliREMAlH MEMBER EPAM

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COAST, DIXIE, MAoNOUA. PEARL '

, program. There's a lasting and -

facility on the Pearl River at River vAu.EY.smomo river. AND

' satisfy:ng pride in knowing that Columbia. 't he fuel source fo we, to this day; continue the -

plant generation was te be waste

. SOUTHERN emE.'

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legacybf cooperation and products extracted from the dedihtion laid out more than manufacture of wood vd m iw, CAPITAL EPA, souTHwtsT half a century ago, timber. In October, the original MISSt30PPI EPA, AND WASHINoTeN.

TbeplaM dN,N,M ST. TAMMANN ELECTRN: CO.OP (OF an "as approved by REA;constrt.c-

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touiSiANA> sEcAuE uEMsERs.

sournEst is THE oNLv REMAiNiNo JD'?mses bm sem =

sn Nam were mmded on MEMBER' electnc power associations (EPAs)

December 6,1941. The next day,

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J, organized South Mississippi EPA the United States was plunged on April 4,1941'in downtown into World War 11, causing all THE FOUR SYSTEMS LOCATED IN THE

. WMd A m8m wu

$mmkpmMd NORTHWESTERN PART Ot THE STATE -

passedihat day in favoT of somED THE Assoc ATioN m issa THOSE EPAS ARE CO,AHOMA, DELTA, organi:ing a G&T cooperative The end of the War did not so as to make possible the activate construction. Other l

u Twm COUNTY, AND YAZN.

generatingund transmitting of delaying factors soon Came into 1

power by our Rural Electric play,and it was not until 1958 that SMEPA's members were

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able to proceed as planned..

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However, from 1960 to 1968,

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South Mississippi Electric was engaged in along and fierce y

public battle with investor-S owned utilities attempting to

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halt construction 0f SMEPA's R -D. Motrow, Svfor hom out, coal-fired plan ~ _ named.15 -

generating facilities. The

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Association would fight and shoun here as a sery speaal guen

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- win one of the toughest battles at the dedication ceremo'in forthe ever encountered in the utility industry, it would last almost

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Ms M6 trow setted or. r'.e w

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- and as Board Piesident from June _ '

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nine years ending on December AssociJtion's Board for 24 yehrs 16,1968, when th. U S. Supreme wa ro october A#e repre

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Court upheld the decision c

sented Sohthern Pine Electric '

s reached June 10 by the Missis-

'v b' A""id" M' M""'

sippi Septeme Court in favor died Augun 25a4 - -

'.h of SMEPA.

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Groundbreaking for the Moselle Plant R. D. Moriow, Sr., began Generating Station was held on commercial operation in'1978.

Septer..xr 12,1968; on Aurist 1, The plant,locateci on 884 acres

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1970, the three-unit,177 MW of land near Purvi3, Mississippic m

plant began commercial opera-houses two units with a total 400-tion. The transmission system MW capacity.

consisted of 300 miles ofline to serve 52 substations.

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A SPECIAL THANK YOU

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Throughout allof the delaying groundwork for Mississippi's first u

1 factors and intervet ing years, and only G&T have been

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SMEPA, as an organi:ation,did unforgettal 'e.

_3 not lie totally dormant. Frustra-v tions may have built, and activity George Taylor's association with

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may have diminished. hut no one SMEPA began in 1959 and was to ever thought of abanuoning the last twenty-six years,during=

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dream, which time he served as consult-ant, engineer,and manner. By 3

s The pages following pay tribute the time he became tnanager in -

o the fir 3t managers of South 1967, Mr. Taylor.already had -

Mississippi Electric Power r 'ayed a very important part in Association,J. T. (Tim) Dudley, the formation of the Associatidn.

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s Sr.and George Taylor,and to The next phase wo_uld give him

- 2 SMEPA's eleven member distri-the eciting task of constructing '

bution coopen.tives.

South Mississippi Electric Power s

x Association. From consttuction Tim Dudlev was manager of

'of the first gas turbine,through y

Singing River Electric Powet tw o I awer plants,and yet

. J. T. DUDLEY. SR. W AS MANAGER OF Association when he was.2ked another gas turbine, SMEPA siNoiNo nivEn opA rRou io4a To in 1958 by SMEPA's Board of remained in vsry capable lea' der-..

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-1980 AND WAS MANAGER OFSMEPA Directors to be manarer also of ship.

the Association. Without

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a3 hesitation, he took on the addi-And our memberswner distribu?

s ticnal responsibilities and the tion cooperatives.. They are, as c

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obstaclesinherent in forging a hasbeen said many times over,s

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x G&T system. Very capably he our sole reason for existence for oconcE s.TAnoR eEcAuE marshaled the best people and our pnmary goalis to supply :

' MANAGER OFSMEPAIN 1967s together they tenaciously took them with a reliable, ecoriomical

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on every roadblock and every sourceof wholesale power. Pages ANo nEnnEo m ms.

delaying tactic as they :.urfaced.

' through 18 highlight our -

Mr. Dudley's efforts in laying the member systems.-

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1and George Taylor J. T. DUDLEY, SR.

re brought nm Dudley together one' day

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J and asked chem for che

The first problem i guess the In late 1958, they asked me to be memories e/SMEPA '

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electric pow er associations had was manager for about six months:

from uhai they knew of gettinsthe Enabling Act passed.

About nine years!ater we finished.

the incorporation :hrough They had tried and been unable to conurucnon it was unh doit. After President Roosevelt By the time we finished the first extreme pleamte that " '

- called Governor Hugh White, the round of court hearings, we had sat lwk and (mened to Act passed.

planned for three 22 megawatt

' thex cuadedwared and generators; and by the time we got deromined former ~

Then neither one of the investor-through with the Supreme Court

' owned utilities would sell SMEPA the first round, the loads had managers recall the mals and successesin r# g power;but when the owner of a grown so that we couldn't serve sawmill and generating plant in them. We had to go back to try to SMEPA from a t.

. to a

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' Crosby, Mississippi, sold them get another loan to increase the she power, that broke the impasse, of the Moselle plant to three 59-

. They got the first loan pretty soon megawatt units. We didn't really after that for about $2.1 million.

have any problem with that.

Hamil approved the first loan.

Clapp was administrator when H

REA approved the second and w%EgTERMpp$j P^

9f third loans.

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=* ~psy Nh it was '64 or '65 when we got all the h

sk 703 loans in order to build the system.

by We had to go back thrnigh the S

s Mississippi Public Service Comrnis-

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sion and the Supreme Court. (We hgg went through the Mississippi ehMi 4

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Supreme Court three or four times "And rm a darn poor loser." -

6W tW altogether.) We also had a problem I(6kM with the gas supply;we needed

-Tim Dudley p

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Federal Power Commission e%4 approval. It was one of the last s

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hurdles we had up there that I

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,At

q~s The things we had to go through -

that'll make you scrap. And I'm a

_ Of courxW&M War 11 started darn poor loser anyway..

about that ' time, and SMEPA couldn't get materials; so they had Ahhoud m. his, retirement years,,,

<to shut her down. Then we made a Mr. Dudley hasfound the nght mix push around 1950-to no avail.

f business and well. earned leisure.

He remains a consultant at Singing

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'The push started again around 1955.

River EPA. Mr. Dudley lent his

.We had some studies made. We expertise t three of our member twere encouraged by some of the systenu that uere threatened with staff members in Washington, but takeover in the late '80s, and he also v

there hadn't been a loan made in serted as Execurita Director of the

, years for a new stsrtup C&T George County Economic Develop-

' system. We kept plugging. The ment Fou adation for about six years.

power company gave us an inciease He and ha. uafe Daphne hate

-of 35-40%,and thaPs what got the loan approved. That was in '.958.

traveled quite extensitely.

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GEORGE B. TAYLOR

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The fitst I heard of SMEPA was in things kept falling apart,and we January 1959. I was working for kept putting them back together Southern Engineering. They had When I was 'a a game,I wanted to just gotten a big filehox of stuff in win;and when I had a job toda,1 -

from SMEPA, and they turned it wanted to prove that it could be ; -

over to me. They told me to make done. Then when I was privileged

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a study and get ready to go to the to serve as manager and bo'.d this

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Mississippi Public Service Commi3-system-that was a lot of fun. Not ;

sion. My total wc:k back in those many people get to build a new a

days was making G&T studies. I power system, from buymg the did it for groups of co-ops al! aver right of way through ihe plant the eastern part of the country.

construction. I'm not sure whether this was the last power Icame to Lucedalein May of1962 system built in this country or to work for Tim at Singing River not; but if it wasn't. it was close to -._

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EPA as chief engineer-actuahy, it.

i the only engineer. UntilI becanu manager of SMEPA in 1967,I held that position.

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working relationship with REA g

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during the first years of formation.

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s I never was involved back in those

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did all that. Primarily, my job was y%a'_

l engineering and making all the "For me it w*s aichallenge-studies.

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. and a fight. "- George Taylor Of course,I was more interested in h^

n designing SMEPA's system because p,W

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that was my big part in it. REA released the funds on August 29, IN

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1967, to build the system and the l

plant. About $36 million. We did get the system built on schedule I.ve had only two bosses in m, life, and within the budget. That was i

good. And in the beginning, before and Tim was one of them. I really the <hortage of gas causd prices to enjc,y d working for him.

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increase so much, we dehvered power for what we had estimated Mr. Taylor thomaghly enjoys nis -

several years earlier-about 7.25 retirement. He keeps busy doing a.-

mills per kilowatt hour. We were van'ety f things; He spent 3-v2

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l always proud of that.

yean teaching one person to read; -

worked uith SCORE as a consult n I know it was hard to get SMEPA ant f r small businesses; has been off the ground. We could have tay actiw in cEurch wk and

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given uplots of times and just quit.

ther c mmunityJrelated actirities...

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But of course, Tim wouldn't do One activity he looks forward to is -

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that; he's not a quitter. Ilike that reading stories to students? nia because Ilike to keep on going.

Undaganen Amugh 3rd grade.

(Being a grandfather of 7 has well-It was fun for me right from the prepared him for this role.)f

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word go. It was a challenge;and

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COAHOMA ELECTRIC POW'ER ASSOCIATION

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LYON MISSISSIPPI E

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3 i-A lj Coahoma Electric Power in the 1950s,Coahoma EPA had I

,t-li Association is nestled in the twice the consum, o

i is now.

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Ly lj Delta area of northwest Missis.

The outward migration of farm

M sippi Amid fieldsi>f cotton, rice, labor in the 60s and 70s due to j

'and other row crops. Farming-chemicals and machines, caused I

l seasonaland highly vulnerable the drop in membership. How-(

to the elements-makes up 10%

ever, being small-and Coahoma

.of Coahoma's load.

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Board of Directors (1-5):

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.Giles Dounds,

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- Coahoma's commercialload is the smallest of SMEPA's comprises a catfish processing member-owners-allows the EnEnO2Eo na 3.

MILES OF UNE 100 '

3o0 turer,and Coahoma Junior with its members.

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p serves a portion of Clarksdale

'which has a population of i

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approximately 22,000.

1,*25 MILES OF LINE 6,500 i

CONSUMERS m

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COUNTIES 7

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_ MWH PURCHASED.

90,596

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x COAST ELECTRIC POWER ASSOCIATION LJ F

Il B AY ST. LOUIS, MISSISSIPPI

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Through the years, Coast industries are numbered 1

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Electric Power Association has among Coast EPA's commei-f

- j earned the reputation as being cial consum~ers. c i

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- 1 electric cooperatives in Mis-

.%ere is a price forhaving the' >

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sissippi and the nation, with Gulf at your doorstep with ' '

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an average yearly growth rate thirty miles of sandy bealh-

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s of 6%. Ruralareas combine to enjoy: Fesidents must with the densely populated be mindfulff the potential urban areas to bring the for hurricanes. Who could

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4 forget Hurricane Car'nille?

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Members of ShfEPA's

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d Ri hard LAuseer i,,

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. Robert Occhi, General Manager s

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avetage member per mile of The coastal areas' {teryhish I ~ ' ~

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hne to eleven. Coast Electric eight flags have flown; a mg has a 934% residential load.

proudly reflec't their~multina-g',,,3 tjy,

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tional heritage; but the

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so.

Two industrial parks lie French influence dosinath 9 l3 I

coaurlis '

s within the cooperative's to this day. This is+ amble:d f

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[Y service area: Port Bienville in the cuisine, heard in the s

in Hancock County and the spoken word, and ex' erieryce( 5

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2 Long Ee,ch industrial Park in fully during the Ma,rdi Gras Mids oWNE 3,827 a

1 Harrison County. Because the season. -

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,f service area borders the Gulf

"*" punes4sso, 74a.o2o,

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a of Mexico,several marine m,

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DELTA ELECTRIC POWER ASSOCIATION i

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A steamer trunk filled with operated by Shell Pipeline

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l Delta EPA's valuable docu-Corporation for seven major (w

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~ments was taken to Washing-oil companies that pump

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^ $qpeS ton in thelate '30s to prove a crude oil through a 44-inch need for electric service to pipe from the Gulf of s

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.. cover.a four-county area, The Mexico to refineries in the

' co.op's attbrney said that they mid-western and eastern took that trunk'everywhere-parts of the U. S.

even had to put it $n top of a

. taxi to take it to REA offices.

The Stapicotn Compress and Warehcuse is the largest

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f, hoard tas. t nM*

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.fie-nr3 C. Waterer, Jr.

flarry H. Smner,

- A General Manager c

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The mission was successful, cotton compress and storage and the driginalline con-facility in the Southeast.

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- ENERGCEO 1%M struction was completed There are 27 buildings, with a Mn ES oF UNE 135

' CONSUMERS 450 without there even being total floor space of 1,166,400

- a company office. Today, square feet (approximately 27 4

.. Delta EPA serves four acres under roof).

COUNTIES

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7 consumers per mile ofline, 84W,9f whom are residential.

Cotton gins, irrigation uow: -

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1 _ s.rar pumping,and aquaculture urtEsoruwE consumers 2o.7a*

The cooperative's service are alsolarge electric consum-

' area Includes several large ers. These loads are seasonal I

counnEs is commercial enterprises. The and vary greatly.

MWH PURCHASED =

366,018

- Caplitye Pumping Station is j

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DIXIE ELECTRIC POWER ASSOCIATION

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Dixie Electric Power Associa-Lumber related-Scott Paper, tion was incorporated as Mississippl Forestry Commis-

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g Jones County EPA to provide sion, Leaf RiverForest

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l service to a portion of that Products, Georgia-Pacific,7 i

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one county. The territory Hood Industries; _

soon expanded to include

~

parts of three additional Poultry productior, anil '

counties. In 1949,the co-op's processing-Southe-n Hens,.

name was changed to Dixie Marshall Dtirbin Farms; 1

,3

. ~.,,,.

Members of SMEPA's l

Ik>ard of Directors (l-r)-

,f

'l G. Pierce '

i 1

Y I

4.

./

f*:,,J General Manager j

al. T. Dudley, Jr.,

6 "I

2N l

'y.

y

(

~

l i

l s

w,

i g

L '

EPA with the number of Chemical processing 9 dan.

m rHEN: s l

counties up to seven.

Industries, Wayne' County ENERdIZED '

72&30 Lime Co., Hattiesburg Gas c-MILES OF UNE 210 Located in the piney woods Storage Co, Delta Storage and

(.

CONSUMERS-494 s

area of southeastern Missis-Distribution.

I COUNBES

'I 4

sipp, Dixie EPA serves a e

variety of industries, some The Hattiesburg/ Laurel i '

of which are:

Regional Airpqrt, Broadcast-

~,

w w:

ers of Mi~ sissippi, Robins 6n^ -,

s

' MILES OF UNE 3,750 --

Oil related -Chevrou, Tilapia Fish Farms;end ~

CONSUMERS'

, 21,369 Murphy Oil USA,Inc.,

Stevens Sportsvicar Co;ne COUNhES

~ 7 Texaco, Amerada Hess, Fina additional commercial fon.

MWH PURCHASED ".

462.245 l.

Oil; sumers.

r

[~

=

- 11 y

1 e

,9 d

~

r

[

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s.

i l

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[

y._

MAGNOLIA ELECTRIC POWER ASSOCIATION JfL

[l7 '

McCOMB, MISSISSIPPI g -

J.

l' l

r j

}

j

'. _ Magnolia Electric Power area with cabins and camping s

l k+x

/

1

' Association serves cae of the facilities. The Association h

~

"~ ' J more rural par'ts of Mississip'pi also supplies electricity to a 9

' 'Qatd

- ytth less than five consumers number of smaller private per, mile of line.

and public recreational areas.

(

i f

The ro-op's territory is very Several Magnolia substations

- compact, so there are n<

serve carbon dioxide injec-

_, I district offices. Linemen tion stations. These are part

~

2 of Shell G.! Company's t

e

~

f

~

j._

l

~~

~

1 Men.bers of SMEPA's

~

Ikurd of Directors (i.rf ~

l

~

Sollis AlforJ E

~

'Samm"y Willi ~u, O

'i s

ps -

Ma nager) i s

~c j-3-

.s wc 4

s.-

7 n

~

7 i

j.

c,

. i 31 i

w.

.e-

~^

t l

e [can tragel tythe ektreme.

$250,000,000 enhanced oil

~

^

w

$nenacto boundaries within 45 minutes.. ' recovery project, w n..

y s.

.s

~

sMJLES OF UNE

~

228 ] ~-

s.a ng the more than 21,000 Poultry processing plants, x

N

-consuuens -.

no

,c

. '?merhbers'of the Association dairy farming, sawmills, a counts.

i

- [~ e ente'rtainer Jerry Clower turkey caller manufacturer, a

ar 9 arid popular columnist and -

' and an airplane emergency

-.~

' ~

s

- aptlFr Rose Birdd Stevens, escape chute factory are other 4

~

g, tt pes of industries in Magno-uites or une 4.437 -

3 s

N. -

possumins '.

2i.us E, Phrt;y Qui?in State Park is li Electric Power Associa-a s

""E

. 'f 5

! '- eenvedby Magnolia. The park tion's service territory.

c r

t MWH PURCHASED -

375,31' healawlabanhca im s

n 1

m n.

z:

~:

2-f r

4

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l_

f, 12 : ' '

(

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m. -..'., " -.. _ _ - _,

't W's a,

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. - - - - - -. * - - ~. > - -

3

(

b N

PEARL RIVER VALLEY ELECTRIC POWER ASSOCIATION COLUMBIA, MISSISSIPPI s

3

/,_

' s

-7 s

The Pearl River,425 miles long, lines includes Georgia-Pacific, p

fp runs through CJ mbia which Chevron, hfethodist Hospital,.

~

l t

f

~

L,Qj is the headquarters for Pearl and Mississippi Farmers' I

p.

River Valley Electnc Power Cooperative _

~

4 Association. Spread across

[

'~

l twelve counties, the Associa-Quite a few r5creational

~

t

'~

.. ~

tion's service area is the second-facilities are served by Pewrl

-s v, _

fastest growing in the state, River Valley. Thelargest s

with the coastal region ranked areas are Paul B. Johnson State y

i first.

Park in Hattiesbmg, Little m

~

+

Black Creek-Water Park in -

)

p

(

.s e-i r

4

~

t

=

s-Members of SMEPA's j

j, s

Board of Direcors (l-7)-

G~

e

.+.

1:..L

.)

' L y Speighti-

\\

'.W. T. Shows, a

['-

~' '

Geagrai Manager

~

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s

)-

~

l

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~, -

~

9 z

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s

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c

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e. - -

,y 7'

~ ~

2

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s. ~

s 1

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l, N'

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The co-op's membership has Purvis,and Flint Cree (Water - ' ~

x

_ q been increasing by approxi-Park ir Wiggins.: * ' 'c THEN: %

[,,,,,. ' ~

_ f-J

,,,,gy,,

s, j

mately 3% a year for the past

'g,

,1li several years. Sixty-four Pearl River Wiley also serves -

.p cousuuens k G.' ' 2k percent of Pearl River Valley's several farge reside ~ntial dejel: _7 ' - 3,g 1..,

,g load is residential, leaving 36%

opments: Timberton,ai465 ' ~.

,1

_ 'q commercial. The fastest acre development which

'(. C j (21

~-J

~

x growth on the system is to be includes several. lakes, ponds,

. 'r,-

em found west and south of and streams,andin 18-hole, N r - -

ua*w use ~.

4.ser a-Hattiesburg.

championship golf course;Rnd CONSUME S

) p.207

~

s CanebSke, whiih includesh

' countie,s

-32

~

A sampling of the industries 300 acrelake

[;1 "5=cHAS507 =57 '

j[

~

s l

on Pearl River Valley EPA's

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4

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1

~

E SINGING RIVER ELECTRIC POWER ASGOCIATION I

fc

.O LUCEDALE, MISSISSIPPI c

=

n

/;-

U t-H l-q' Singing River Electric Power account for 24% of its load. A

~

x k

Association-is bordered by sampling follows. Plantation j

Q.

Alabama to the east and the Pipeline is a refined petroleum

\\p Gulf of Mexico to the south'.

products pumping station Jackson County, along the used to transport products to s

coas' the rnost industrialized the North. The buch Missis-county iri Mississippi and sippi Corrections Department accounts for almost 83% of the has a state prison facility in I

'co-op's total system load The Greene County, with an County is also the most heavily expansion planned for 1994.

i Members of SMEPA's 4

Board of Directofs(1-rk j

,;g r

,o Nauf Jordan -

.Y?

~

l

)ack Wase.

General Manager _

. A l.

s, x

x p-o

~

g' h n

. Ngx

,a

. qs y

2

<1 c

3g y

't n

E e

%y gp l:;,

tg.z e

-t ua-Y populated of Singin~g River's area cith more sanJ0% of~

Bird-Johnson Propeller Corpora-tion manufactureslarge ship ENERGtZED ~

12539

. _the cooperatibe's consumers -

propellers. Jackson County MILES OF UNE 76 l

CONSUMERS.

89 living there. -

Community College, a satellite campus of the Mississippi Gulf

~~'"3'~~

~5 COUNTIES

~

[-~

~

The northern part of the Coast Community College,is service area is primarily.

located in Gautier. The

' ~

a

.. timberland thatis managed.

Jackson County Port Authority Now: -

~

MILES OF UNE

.4.626 jfofpulp, with the remainder has a pumping station that CONSUMERS 1 44.267 hejn[used [hr farming.

transports water through a e

l COUN' DES twenty-mile pipeline from the 6

j

'MWH PURCHhSEO. ' 808,434 Singing River EPA's commer-Pascagoula River to the coastal

- -cial andindustrial consumers area.

~

14 e

a' s

l 1

.9

-r'>

1 3

~

-t

r h.i SOUTHERN PINE ELECTRIC iPOWER ASSOCIATION TAYLORSVILLE, MISSISSIPPI ff]l p

Southern Pine Electric The majority of Southern.

- ~

h{n [h

~

Power Association is one of Pine's commercial / industrial

/ T! g P

the largest rural electric consu:ners are to be found int i

%y cooperatives in the United

~

S' States and the largest of Oil production and related Mississippi's twenty five.

processes;

~

Membership grows at a rate Production of refined pet.ro-

'~

of 4.5% per year.

leum products, including storage and transportation; Southern Pine's accounts are The poultry industry:

balanced at 50% residential growers, processing' protein -

-. d

~'

c.l

~

Mernbers of SM EPA's brd of Directors (l.7)-

Harlan B. Rogers u

, {

Don Jordan, Manager

~.

+

o g

=

. d

'i

~

- ~

i

~

~ ~

sales and 50% commercial /

conversion, hatcheries, etc.;

~

industrial sales. The largest Forest products, including residential concentration is sawmills;

~

'. "saa ~

uus or uNs found in Rankin County Lighting manufacture; coNsuuens.

481 which is adjacent to the state's Industrial parks, state parks,;

capital. The largest industnal and recreational areas.'

' COUNTIES

,11 consumer is the Georgia-1 ~

^

Pacific paper mill plant in To better serve its members,.

MILES OF bHE 8,875 '

w w:

Monticello; the paper mill's Southern Pine fill begin ' "'.A Taylorsville plant ranks constructing three new district coNsuusas?-

. 47.3ai

~

second.

offices, scheduled for comble-

- f covanes u

tion in 199L

~

uws puncusseo1. i.ris.7s4

(

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4

- 15

.. ~, -

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on 7

SOUTHWEST MISSISSIPPI ELECTRIC POWER ASSOCIATION

' r i

' '[

h LORMAN, MISSISSIPPI j _

'f jl b

d f

_ southwest Mississippi EPA's Other types ofloads served by 7;

f y

1oad is 92.1% residential, with Southwest are sawmills; cotton,

~

iL, the remainder classified as 5.8%

soybean, and corn crops; dairy Q~ ;

industrial and 2.1% public farms; cattle operations; chicken j

j buildings.

~

houses; and a few hed and-

~

breakfast nomes.

. Shdl Pumping Station is one of l

4 7

l~_

large consoniers, served since headquarters :s located just

' Southwest Mississippi EPA's Southwest Mississippi EPA's

[

l -

~

1976. This station pumps crude about midway between i

i. -

j

?

[

s l

l

~-

l, Members oTSMEPA's

! ~~ '

Board of Directors // o - -

s

(

James A. Ventrcu

~

Robert StJohn,

['. ';

- 'y 4

General Manager q

y

. s_

Y l

t e

Q.

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[ f,,_

'i~

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TH5N:

oihhrough a 44;inchfipe from Vicksburg and Natche:, so the i

/ "

the Gulf o ieSico to refinerie's ~ sen vice area is steeped in history.

ENERG12ED

1 27'30 in the mid-western uhd eastera Colorfullandmarks exist to this MILES OF UNc 202

=

2

't 606

~ parts 6f the United States, day to the delight of tounsts.

f CONSUMERS Historical markers dot the

,,. ~

COUNnES'

-f 6

-6 l0

' r~

Severalinstitutions of higher highways nd roads. noting

. ~., ' ~. -

~ learning are located in South-Indian burial grounds, Civil

~ * *:

,rss --

mest's service areaa Alcorn State War battles and those who sim

~

14nife~rsity, Hinds'Communith perished, and buildings and witEs or uNE 3

consuuEnd.

rCollegeWcorn State Univer-sites. Antebellum homes

e-j _,gity,.SchTxat of Nursing, and Co-abound.

couwmS (in Vhat onal M b

M H PORCHASED = 336,997

/

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4

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p-fr

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,.7 p. <~ m i.

~

...N_.,.....,.u'"

~.

s TWIN COUNTY ELECTRIC POWER ASSbCIATIONI

~ ~ ~

HOLLANDALE, MISSISSIPPI n

-3 f2_

~

fy-t Twin County Electric Power The land is esserytially level, 7

Association was so named with elevati6n ranging froni85.

~

,/~f.

s because it began service to feet to 127 feet above sea level. _

(

{

@J.-

members who lived in

~

t l

Humphreys and Washington The area along the Mississippi ',

~

l Counties. Maior portions of River has several oxbow lakes '

these counties are served formed by changes in the,

~

v today.

current of the river. These J

~

lakes provide excellent fishing '

Twin County EPA provides and sites for' recreational facili-

^

service in west-central ties.

~

i e

c j

3

~

~~

~

\\~

Members of SMEPA's i

4

' Board of Directors d-r):

,1 1

4

~

r 0

<W.-C McKamy, Jr.

i

~

W.,;

Vesper Bagley,

,'/.

, Marpager, n.

x

/

y.

(

^

+

l 3-

~,

?

3 s

i m. t.+,1

, s

~

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~ -

~ _ _ -

Mississippiin an area that is Residentialionsdm6rs accountc'.

~

~ ' -

considered the heart of the for 46% of Twin County's load.

rHEN:

b

'y y.<

' ~

~

~ ENERGIZED 12.2438 f

=

Mississippi Delta.

All-electric gin',s and four MILES OF UNE

/ ~~

0 277 a

catfish-related' companies coin =

c-

. t 's t'

. CONSUMERS.

835 L

?

The service area is bounded pose the cooperative's'indus, trial '

~ hou e O

-I on the west by the Mississippi load.

'. ~1.

a\\s - x River from Greenville to t'ie

c. d _'

f s

J mouth of the Yazoo River Humphreys County daimsthe er >

i -

~s

-_f -

w w:

near Vicksburg. Its eastern title of " Catfish Capital of the'^,4 Mi(ES OF UME 2,147 r

I boundary extends to the World? because more than,a w

co"suuEn3

.-,u.sm Yazoo River and some areas third of the state's 100,0d0 acres '.

.1 couw7ies 7

~

r,

beyond.

of catfish ponds are locatedC.[

217,231 MWH PURCHASED s

within its borders.

u. -

s t

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".m-W

' ', ",, 17 1>

f S

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'D

J YAZOO VALLEY ELECTRIC POWER ASSOCIATION jfE

]:

YAZOO CITY, MISSISSIPPI

/"

p

{w ij

~

)p/

p' Association is headquartered YVEPA serves Penn: oil

~

Ya:oo Valley Electric Power Of the gas and oil industries,

- Q(

in.Ya:oo City which is very Producing Company, Darnell R_.,.

much a part of Mississippi's Engineering Corp., Union Oil

- Delta.

of California, Koch Pipeline s

i Company, and W. S.

Approximately 88% of Ya:eo llancock, Inc., known world-Valley EPA's load is residen-wide in the a field construc-

'tial. Thelargest commercial tion business. Electric pumps 1

o ll g

~

e l

Member., of SM EPA's _

s

~

J-Ikrard of Directors (I-r).,

<R. D Hines -

9 C H. Shelton, Manager t

e r

/

~

3 1-f

,0 l

s.

W 4

consumer is International-for oil wells also contribute to l

THEN:

' -Peper of Redwood, fPeen

\\

~~

ENERG1 ZED '

32338 Ya:oo Valley's industrial i

492

- miles north of Vicksburg.

loads.

l MILES OF UNE

^ CONSUMERS 878

. Service tothe catfish industry The co-op has its share of the

~

COUNTIES 6^

l

=

E

-is significant. Yazoo Valley Delta's cotton related indus-

~

EPA serves a number of tries, serving eight cotton gins catfish producers and two and other cotton-farming.

1 uOw:

. ;j[r e processing p! ants:

operations, including irriga-MILES OF UNE 2,600

$irnmoDs,lnC.,and Fresh-tion.

CONSUMERS 8,600 y

CounriEs s

~ ' Watir Processing.

MWH PURCHASED

-232,134 n

l j

~

l

' ~

~

18 l

~

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n.

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A 1991 OPERATING REPORT.

f

..........,_..r

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PLANT R. D, NORROW, SR.1S CJ SMEPA'S LARGEST GENERAT-4 M

ING FACILITY. IT IS. LOCATED

' a. A.

ON 884 ACRF. SIN LAMAR

~ '

.g COUNTY. IN 1991, THE PLANT

~,

BURNED APPROXIMATELY 2,000 TONS OF BITUM: NOUS

~ S r*

. /,/ '

COAL EVERY DAY TO GENERATE ELECTRICITY.

~

ry..,.

e g

4g TWO 200 MEGA, WATT POWER i --

3 UNITS PROVIDE A TOTAL' 5

0

q' t

CAPACITY OF 400 MEGA- '

p

o WATTS.

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L~-

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j-ENVIRONMENTAL PRO.

- g h..

TECTON EQUIPMENT WAS -

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7. m.. e

~., -

_. ',5

..__w. _....i,a-INSTALLED DURING IHE

~

' ~

IK7 s

' I kg '

- PLANT'S CONSTRUCTION j

- Neuham} &-

AND ASSURES COMPLIANCE

~

'b-: M L D.WL

. f WITH ENVIRONMENTAL.

i.

Y y m % "t4Y

(

O O 4 @-

REGULATIONS.

.,.s 3 e,a w so. sm W *e

-wy +ge;tQ2{^N ;

M L cidln4

~

/

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V s

J he 46 s.,

$fh k k c'

-l E~ g_q

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f.

t.:.

/ _ g

.(,

, 2g f. ~y ' '~ THE MOSELLE GENERATING E. : ).s

..,. 4 :; \\-

.4 g.', ; 'a W

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3

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1970. IT StTS ADJACENT TO N

THE LEAF RIVER ON 65 ACRES hg

~ THIS PLANT IS EQUIPPED TO

- 1N MOSELLE, MISSISSIPPI,

.X

.w

., y V,[.

. v.

-'.'y,

.. W. s,.j.

x^

.. ' c J s ' USE EhTHER NATURA'L GAS OR

~

I

~

h_ )

h J/s.

FUEL OIL AND HOUSES THREE g

W 7

.. a...x

. f.

& at T'

E T

95';,

[. - ' -

~ POWER UNITS, E ACH RATED

~

t' fT.

[

b ;-

AT 59 MEGAWATTS. SEVEN 9 g '. E.', (,

,-.g j Q Q, j,

- 4y py%

&c...

MILLION GALLONS OF FUEL

, ~,n~*) h:@a % N W N hIIhkN k.

-^ - Ott CAN BE STORED ON SITE.

~

" M c j,gq

. gp 9q% gg, ;,-39 T

{

g;4

- /i ys'/pW M :.

4. 4 :;yi.4.wp.. ee.e, y%' - H {("t r" - f. I '

.W2 i;%'- ' -

PLANT MOSELLE PERGONNEL

'si_

.;1 q m., -

ii w

y gg

.t 7,

p, 9 =m

4, y,

' ' ~ ' '

"?

, {WO PEAKING TURBINE

~

4

. Ih

- k

', GENERATORS-ONE LOCATED s

g IN JASPER COUNTY, THE OTHER IN GEORGE COUNTY. '

2 J-- ' :

~

a M if '

9,.

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1 y W,( c.g@. ' _'

er J

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PRODUCTION DEPARTMENT n

\\

Moselle Generating Gtation s

Chor.s in Command i

Following the announcement of The number of units in service tne plantied Tetirement of Howard varied according toload require-

,Hensarl', lack Thompson was ments, economic considerations, na' mea -

ecd Hensailing as and the need for load regulation "lant Sup undent. Harold support. A minimum of one s.

mostuE cENtRAtmo station bowery Was promoted to I! ant unit Was in operation at all times NETosEnAhoNI627,s59 uWf upervisor to assin The Tipson in during the year.

.THIS 1818.8% OREATEA.HAN liiallaging the faci!Itf.

THE 1990 PRofbCTloN AND REPRE.

Natural gas femained avallable in

~~

sENTsw posi pRoDuctieN rno9 Hensarling joined 3MEPA in 1969 sufficient quantities and at THE r ACILfTV.SmCE 1978. Tide YE AR a!)d beCame super nttndent of the f averable prit!n:; levels for most 1

THE PLANT woRRow UNITS ENTEF,En oselle Station in 1983. Thomp-of the year which served to on and bowery have worked a promote the operation of the couutRc:At oPERAftoN.

i Plant Moselle since 1977. and 1969, facility. Three units were i

~

NATURAL GAS USED. T,5M.000 uuGTU respect Yely. '

Consistently operated during the

.eRicmo roRiutt WAs vnE Lowest ' t suminer load season, and thir,

)

ovamo TwE suuuER LOAD stAsoN Operations production contributed sign!fi-WHEN DOWER DEMAND WAs GREA'T.

cantly to the succe,in meeting EST. BMEhA REAWED A rvEL COST

' '. ' The I'lerit was operated in an peak demand requirements for i

sAvmo's or ALuost gi,sDr % ron

~ intermediate and peaking m6de the system fpr ll.e er)t$re year. UtSt5 Wefe

- THE YEAR.

c

(- cycled into servity as needed to

)

^

meet systerli generation demand.

rutt oit ust6, a. 40c oALLowr,

<, ~

~

.e s

g+e h

~.

c

. s

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$/

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+

y

%nt Mosellc Saperint dent Houurd 4fenurling (I 1 stired

pp T'

thiryear after :2 yeah with SMEPA.

Il

~

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g.

&L Thompwn,former.Mainte.

n-

.~

)fance Superusor, h Moselle's t :w

$ g"Y y-Su dintendektalail has been an'*,

3 7

th Plant for :9 yeart a m

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+

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s Planned major inspection proce-Steam flow totalizers were dures were completed on the installed on each unit to replace Unit 3 turbine generator, and the obsolete and inaccurate equip-unit was returned te service in

- ment. These will provide an.

February. The inspection process indication of steam flow and an began in October 1990 as part of instantaneous readout of unit,,

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the plan preventik.naintenance heat rate, which is beneficial to '

progtrr-

' operators in optimi:ing hoiler operation.

Reassembly was delayed as a result of finding unexpected damage to

< New fuel / air ratio controllers 3

two stages of the turbine blading.

were secured for each of the

_ PLANT PERFORMANCE 00ALS WERE' New turbine blades were installed boilers. These devices monitor _

in the two rows which were and automatically control ~the MORE THAN MET'AS,THE NET HEAT damaged.

mixture of fuel and air for RATE W AS LESS THAN 12.000 BTut s

efficient firing and operation 's KWH FOR FIVE HONTHLY PERIOD 1L

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The inspection was performed by of the boileis. - '

THE BEST PERFORMANCE WAS

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the plant maintenance staff; con-s AcevEo is auty wmN THs net., _

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tract personnel conducted certam J

HEAT RATE oecREAsEo io si,24a 3

s field and shop repairs.

Plannedequipment 'epair and a eTu xwH-r e

replacement were completed on f.

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The No. 5 feedwater heater on the plant cooling towers as part s

,i Unit I was replaced as planned of a multi year' facility, upgrade '

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during a fall outage. Replacement program. The new fan asshmblies,.

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was necessary to restore operating are more efficient than the origi>

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efficiency and to improve unit nal components resulting in'

'r reliability.

significant operational savings [

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~i Certain instruments and control Other 1991 preventive mainte-

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m devices were replaced during tl.e nance measures and upgrades

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1 year to enhance operability and included painting certain a'r6as' reliability of the units:

of the plantind rebuildin'g two -.

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condensate pumps.

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~~1 the neu ILnt SuperintenJent, hai been s.d $MEPA una ic7 Ihll. 0;wrarmnt supctuwv. is an IN)ca? l't'!cian Of tht' $ twiCla!WfL The arc lfctated in the Plant's Control Rm~~

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1 Plant R. D. Morrow, Sr.
Change m Command After serving as Plant Superinten-turbine inspection outage on Unit Jent since 1985, Roger Smith 1, pu rchased energy commit ments, accepted a position in the Corp >-
the relatively successful operation rate Planninu 6t Operations of Grand Gulf 1,and the availabil-l Department as Director of ity of natural gas for the hioselle Operations. Plant Supervisor Station on an economical basis.
Charles Stuart was promoted to the superintendent's position in A major inspection of the Unit 2 i
l Pt ANT FI D. MORRQW, SR
, u he-turbkne-gCneratoT WaS Comp!cted l
during a planned sprin outage.
NET oENER AnOw un.aso uwN s
l Shift Supervisor Bill Small was The inspection, initiated a year
.Tsisis APPRoxiuATEtv 22s Operations Supervisor ahead of schedule, led to the BELOW THE 1990 PRODUCTION AND name l
REPRESFNTS THE LOWEST ANNUAL to Comp!ete staff Cbanges.
purchase and installation of an PRODUCTION SINCE 1979. THE Flf'Sr enbanCed design no!Ile k>!oCk-FULL YEAR Or OPERATION AFTER 0;iemtiom COMMERCIAL OPERATION.
Otlier significant work during The plant was operated primarily the outage included the repair of in an intermediate and base load major steam path components and CDAL SHIPPED: 806.223 TONS mode for mech of the year.
installation of new blading in the COAT usEo usus TONS
.THE INVENTORY OF r.OAL SHOWED bloWever. loading on the units low pressure section of the tur-A NET INCREASE OF 130,700 TONS, was cycled as necessary to match bine. The new blaJing results in RESuLTING IN A YEAR-ENOING system deman.
Figher efficiency and a slight stOCxPitE Or'2ae.ees TONS.
increase in capacity. The genera-The simultaneous operation of tar and main boiler feed pump the two hiorrow units was re-turbine were disassembled for ruCL Ott usEO: 39i.sa c AttONs.
.As REOuiREo rOR St ARTu, Aso quired only during the summer inspection and required only
- load season _ and for a limited time routine rnaintenance.
rtauE sTAsetizATiON euReOsEs in knuaTy and November. The need for single-unit operation was The boiler waterwallof Unit 2 a result of seasonal system demand experienced a series of tubeleaks variations, a planned spring in the reverse slope section, and the decisiva was made to secure 22
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n and install replacement tube protecting t testle structures from Sections. To reduce the potential coal accumulation and subsequent for overheating and water circula-corrosion problems. This action it i
tion problems, ri0ed tubes were intended to decrease the amount specified instead of the smooth of repair work required in the bore of the original tubes.
future and to extend the life of the structure.
Delivery was completed in Janu-ary on the fleet of new railcars for The second year ph a of a four-SMEPA's coal movements. The year planned contract painting-investment has reduced railcar pcoject was completed in 1991..
maintenance, decreased operating Structural painting of th-Unit 1
~
costs for unloading coal, and scrubber and limestonW nd!iug resulted in significant coal trans.
areas was completed by miusum-portation cost savings. The 110 mer. Primary focus in 1992 will be new aluminum cars replaced on coal and ash-handling compo-SMEPA's original Geet of 160 nents.
steel bodied railcars.
A program was initiated to reduce A Caterpillar 621E motor scraper the carbon loss in the coal com-was purchased for use in the bustion process. A lower loss of handling of coal and plant waste ignition representsless unburned pu& cts. An agingdumptruck fuel in the combustion re' fuse.
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"5 was,etired as part of this process.
Investigations resulted in operat.
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The purchase of the scraper ing adjustments along with some -
^" "*"*S**"C""""'
increased the capability of the significant physical modifications plant to move coal, ash,und sludge, to fuel-burning equipment. The and to complete on site dirt success of the program has been moving projects.
redected in an increase in the availability of Oy ash of market-An xtensive corrosion protection able quality.
project was u-dertaken on the coal unloading trestle. This Some other upgrades and preven-
~
project addressed the need for tive maintenance measures were:
Office renovations Mobile w
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yr; o
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Plant Morrow Medanics (from left)
Tommy Mih James hh, and -
Don Harsey change out air preheater y,l
. baskets located in the combustion air
.Q huh. Wejghmg up to 300 pounds -
4 apiece. the baskets act a3 hear-Y{q; ;g
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exchangen to'helpimprose com.
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s8 and install replacement tube protecting trestle structures from
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sections. To reduce the potential coal accumulation and subsequent for overheating and water circula-corrosion problems. This action is '
i tion problems, rifled tubes were intended to decrease the amount specified instead of the smooth of repair work required in the ~
I bore of the original tubes.
future and to extend the life of I
the st ructure.
i Delivery was completed in Janu.
i ary on the fleet of new railcars for The second year phase of a four-SMEPA's coal movements. The year planned contract painting investnwnt has reduced railcar project was completed in 19s" maintenance, decreased operating Structural painting of the Unit 1
~
costs for unloading coal, and scrubber and limestone-handling resulted in significant coal trans-areas was completed by midsum-l portation cost savings. The 110 mer. Primary focus in 1992 will be new aluminum cars replaced on coal and ash handling compo-SMEPA's original fleet of 160 nents.
steel-bodied railcars.
A program was itiitiated to reduce A Caterpillar 621E motor scraper the carbon loss in the coal com-was purchased for use in the bustion process. A lowerloss of handling of coal and plant waste ignition representsless unburned products. An aging dump truck fuel in the combustion refuse.
^8"*"*""'F^"*"'"
" " " ' * * * ^ * " " ' " " * " '
was retired as part of this process.
Investigations resulted in operat.
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The purchase of the scraper ing adjustments along with some
^"""*"**^*"C"'^8"""'
increased the capability of the significant physical modificationt plant to move coal, ash, and sludge, to fuel burning equipment. The.
and to complete on-site dirt success of the program has been i
moving projects.
reflected in an increase in the sH~
availability of fly ash of market-An extensive corrosion protection able quality.
project was undertaken on the l
coal unloading trestle. This Some other upgrades and preven-project addressed the need for tive maintenance fueasures were:
Office renovations Mobile mr
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- Plant Morrow Mechamcs (from left)
Tommy Mi;!s, James Woods,and'
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. Don Harvey hange out air preheater f '. Ij
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I baskets located in the combustion air path. Teighing up to pa pounds b
apiece, the baskets act at heat'
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exchangers to helpimpfote cCm.
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. 3 hustion efficiency in IkehdeT1 7 -- Ay.,-
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equip' ent storage building con-kolated tracts of SMEPA's prop-J m
^ 35truction tUpgrade of waste erty under two separate sublease
~~disposal system with p1rchase of arrangements,one with Shamrock~~
~~, a rotiry air compressor for the Coal Company and the otner with Dewatering Building'~~
~~Repairs _~~
Great Western Coal. SMEPA and of the perimeter fence toimprove Andalex have shared equallyin
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' security and general appearance royalty p yments made during s
.cf plant Alnstallation of a new
~~1991, r~~
aboveground a'sh sluice water s
s supply piping system from the ash Timber marketing from the 1 -
sluice pumps to the bottom ash Kentucky property continued-4
' ho'prers on each unit '.
throughout the year,with further
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7,
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~.. Grand Gulf Nuclear Station.
Under the terms of an oil and gas lease, Penn Virgir.ia Retources ORAND OULINUcLEAR PLANT The results of twoindependent completed a seismic survey of the c -
NET oeNERAnON TO SMEPA:
'assessnients placed the Orand Gulf stoperty and initiated plans to 7
2 eis,ase Mwyr,.nas rfoisREis $
" Nuclear Station amo~ng the top xgin a drilling program for.
H10HER THAN LAST YEAR'S DUE M Tforming rWClear plants in the
- exploration and development;in RErutuNo AND UNSCHEDULED Wr. /
- nation.
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. return,SMEPA received annual AoEs:N )D90 AND REPRESENTS THE
y. -
delay Tental payments for the<e nCONON$EST ANNUdOUTPUT
' The.NucleafRegulatory Conimis-rights. The drilling of two wellsis
~sion Completed its Systematic expected to be completed by April SWCE THE U*HT ENTERED COMMERJ /
T' JAssessment of License Perfor.
1992, with additional development
- ciAL orERAnoN W 19As.
' n the remaining months of the 2 ~
5_
mange Review,cocering a 16 -
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month peridd through March.
year.-
1991. The Grand Gulf staff was s
3 s
u c rated superior in performance in
^
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3' six of seven rated areas. An e.
improwd'ratir:g was awarded in l
~
7 s-f the single remaining area.
CORPORATE PLANNING &.
i 1
OPERATIONS DEPARTMENT s r J
~~in April,aftFr compleiing an-~~
.V -
evaluation of the Grand Gulf -
control center
}i
-operation, the lystitute of Nuclear I _., '
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e Pow ~er Operations gave the facihty 1991 prove'd to be a good year for -
~
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a r<
ah overall assessmentof Category the purchase and sale of economy-_
1, the highest available rating. This energy, allowing SMEPA to 3
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p-
' C makes the se6ond consecutive year
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7 AJ that the7acility has been evaluated. supplement its own generatio and reduce energy costs to its.
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at thislevel;,
- members. An agreement for the f
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purchase of 50MW of around-the-
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ye clock energy was extended N
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. Kent'ucky Coal Property l through 1992. This energy is being 7s
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s purchased from Cajun Electric i
s t ile Resourcescontinued Power Cooperative at a favorable KENTUCKY COAL PflOPERTY -
And f
- cLEANcoAl.3ROcuenON:
6s2,000 TONS T h o develop the coal re' serves on -
~~price.-~~
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wrnou, sot 3suRrAce ANooEEP-Mens 4 { ggg.,
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gentucky under the rovisions -
SMEPA continued to work with -
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SidoT a property reassarrangemen't.-
~~its members ta attract strong i~~
Ae
~~industrialloadt and with existing -~~
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This shouldbe to the advantage of -
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power costs down in the future.
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SMEPA maintained its paition 1991,most of the marketing on the North American Electric efforts had been in the resident Reliability Council's Control tial and industrial sectors.
Performance Honor Roll, i
moving up to second best in the siectronic support
- ' CONTROL CENTER DISPATCHES (MWH)
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l southeastern United States and
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l fifth in the nation.
The Electronics section and' nowuocu l
Engineering coordinated the
' NET otwtnArios tori. ass l
Duriag 1991, the Department rephcement of five Remote:
i worked c'asely with Production Terminal Units to enhance the '
ruacHAsrs ron $4tes '
to incorporate " daily balancing" transfer of data back~to the DISPATCHED 1.770.934 -
l on United Gas supply at Plant Control Center.This improves l
4 Moselle.
the reliability cf delivery of.
TOTAL ENERGY OfSPATCHED 4.442,787 power to our memoers.~
Marketing As SMEPA's system grows older, SMEPA continued to work it becomes necessary to replacc nmen wEur
~
closely with its members in outdated equipment. In 1991, SALES TO OTHERS ouTSIDE promoting electric heat pumps the Electronics group replaced-sisttu aae.ost,
i l
with its incentive program. As a battery sets at five substations result, members partcipating in and replaced t'ne telephone.
$MEPA AND uP&L LOAD
_j
<surPA s cowTaoi ARtA>
4.ooe.rso i
i the program reported an in-system at Plant Moselle with a -
crease of 56% for qualified heat new, upgraded version.
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pump installationsin 1991 2
compared to1990. Of special sming interest was the instr.lletion l
according to program standards The Billing section worked with, - T of fourteen ground source heat the metering design section to e
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l-pumps.
incorporate r..ote metering at i ;'
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36 member delivery points.
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The Marketing Specialist was Renmte metering makes it instrumentalin providing possible for SMEPA to retiievs training for twenty two member billing data without going to the.
_3 representativesin Assistin;:
delivery point. It tilso allow.
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Commercial Ctstomers. Before periodic checks of the data = - -
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during the m6 nth to determine :
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load patterns and changes. i M 3
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,7,,, 7[,,}ing (inseil retir'ed in y
October after ao years uith SMEPA It u i
uith sadness that u(report his death'on -
December n During his tenure as Chief
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j Ddteicher. SMEPA tonsiitently'reccind
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.. high national radngs and placed first in -
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' electric utilities by the National Electric.
s7 Reliability Council (NERC).
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, At left are Dan Kay and Charles
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' flolliman, Seniof System Dupatcherg N ~
Q,. ' ~ Control Center Dispatchers upsk on
~~s.,~~
L an hour-to hour (sometimks minute to-l 1
minute) basistuenty-four hburs a day, ? ',
l ito assure ihat SMEPA's membey systems
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, ~receitt the most economical supply of 1
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I ibi bek V transformer at the
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Ilomcuoaf whtarmn. The stor
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transformer riat c!rd h Itairi to Forest,
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((#(h Mi.utuippi,from San Jose, California,
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uhere it uas manafxturcJ. Special
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h-.p. e crancs an ' moung c,julpment ucrc
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4?- 1 t).? ! aft (t perfortning routine maintenance on one of SMEPA's
%,r W
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($k
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i lines. The Association's presense maintenante program
, %*Y '
7,h: system on a four year cycle.
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' includes clin bing inspections of the entire transmission 3/'
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Dunng construction of dne 313 near W
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Lorman, Matt Ready, Tracy Stiglets, d!
_ ' c.nd ll.trcn Butleefmish framing thep,},
top of a structure uhtle "Bigfoor" sets guyuire ar.chors, some of u hich may.
~,'s s
extend more than 23 feet into the-l ground. Because SMEPA's ime crews i
uere aNe ;o complete thir project earlier I
than original! < p!anned, Southa est
'* :2 Mississippi EPh u.as aMe to aioid an 2.?
mYiMid$ly,Lfh@M,M WM ~3@
A extensit c outage.
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ENGINEERING, CONSTRUCTION &
line carriers; four use South MAINTENANCE DEPARTMENT Central Bell phone circuits.
Planning and Protect 6on The Planning and Prote; tion section also completed application
~
ShiEPA obtained REA approval of 100% stator ground fault -
of the Environmental Assessment protection schemes for Plants and Finding of No Significant hiorrow and hioselle and com-Impact related to the proposed plete e required tnird harmonic Alabama Electric Cooperative field tots on each generator. The im msrittanoN nouRes ron
( AEC)/ShiEPA 230-kV intertie.
equipment will be installed in 1992.
Etternome uttr.n:No ntetacurNT:
ShiEPA has aiso obtained REA
.n uciens
.n snts.aicettutAn apptoval to reclassify unemcum-Design Engineering '
bered guatanteed L-8 l0an funds
~
P'*oNEs
.1 POWERUNE CARRIEn
.1 SOUTH CENTML BELL CIRCult l
for the engineering and construc-The Design Engineering section.
tion of these transmission facilities.
administered completion of This project will improve transmis-construction of the second auto-sion reliability in the southeastern transformer addition at the part of our system, firm up our Homewood Subeation, including -
existingintertie with AEC,and installation of all new contral i
eliminate some proposed transmis-board equipment.
- 1 sion censtruction projects.
~
Personnel supervised repIacement The electronic metering replace-of Harris Remote Terminal Units ment program was continued.
(RTUs)with Westronics RTUs c.
As of L3ecember 31, there were three substations.
48 remotely accessible wholesale meters atd4 sites on ShiEPA's Design Engineering completed
~
/
system. Thirty eight locations use a major portion of the design of;
^
cellular telephones; two use power the Benndale 230-kV Substation, awarded contracts for major equipcwnt and materialiand -
administered site preparation.
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En 9,w c: 6 kN -
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~~,yyles Cor[ey (left), Relay and k' MN $'JQ3y ' f~~
~~Metering Supertisor, and Mike~~
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- Collum, planning and protection ph 4lj g,
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- EnginceR discuss and coordinate 5
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gy w.g
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Joga relay projects [ Jncluded
(.. g y ' l1lv-A
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ghEQ}~y among the many prohcts is work
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- :pk.V Svhnation.
3;d to be done on the new Benndale m
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l ENGINEERING, CONSTRUCTION &
line carriets;four use South i
i MAINTENANCE DEPARTMENT Cen* 11 Bell phone circuits.
i Planning and Protection The Planning and Protection section also completed application ShiEPA obtained REA approval of 10h stator ground fault -
of the Environmental Assessment protection schernes for Plants
~
and Finding of No Significant hiotrow and hioselle and com-impact related to the proposed pleted the required third I;armonic Alebama Electric Cooperative field tests on each generator. The muusrattAnon nounts ron (AEC)/ShiEPA 230-kV intertie.
equipment will be installed in 1992.
etternonic utrenino n'tPtacutwr, ShiEPA has also obtained REA
.x utrens.nsries'.n etttutAn
=
approval to reclassify unemcum-Design Engineering' PHONES 1 PoWERUNE cARnlER-bered guaranteed L-8 loan funds
.i sours eturnAt etto cincurt for the engineering and construc-The Design Engineering section-tion of these transmission facilities. administered completion of l
This project willimprove transmis-conttruction of the second auto-sion reliability in the southeastern transformer admuon at the part of our system, firm up our Hoinewood Substation, including existing intertie with AEC,and installation of all new control i
eliminate son.c proposed transmis-board equipment.
sion construction projects.
Personnel supervised repfacement The electronic metering replace-of Harris Remote Terminal Units ment program was continued.
(RTUs) with Westronics RTUs at As of December 31, there were three substations.
~
48 remotely accessible wholesale meters at 44 sites on SMEPA's Design Engineering completed system. Thirty-eicht locations use a major portion of the design of~
celltAt telephones; two use power the Pe de 230-kV Substation, l
awardec contracts for major f l
equipment and material,~and administered site preparation.
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& y } 7 3 ~w ' % gg, 8 u . y [s w w., Q . -;& '&p[L Myles Corley(leftk Relay and ,s[h.. w&y y. \\ ? J Metering Supenhor,'and Mike ' i L ;' l y ", j a s. J- '~ Cpilurn, planning and Protection p.%( ' % y% Q Q e I.g& y A(kg. ,,^ J l D)
~~Enginid discun and condinate af g 89~~
~~,. q. - 992 relay projecci. Included - i fy 4, f Wt among the many projects is ucrk s.h s. I to be done on the new Benndale v g nig4 ' -~~
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%4 no-k V Subnation. 1 .f. e / s ; I $14 ik i; -,g 4. ' i ~ 3 , y + ;, '4, e s O y ~ m' ,m 21 s L ^ s * ~ - m- -n. P .-. L - -..c----._..T--"------~~,-
z s, . 7 7 - - - - - - - - - ---- - o < cm yy- ..- - m, .4, _~ m. ~ l s For the Benndale 161 kV Substa-milesof transmissionline. Inspec- ~ ~ \\ 'tlon switchyard additions,the tions by Osmose identified 21 poles ~ section completed a maj'or portion for changeout. ~ .of the de>ign and awarded con-tracts. -- Substation Maintenance r I .] 4 Design for Line 231(Benndale-SMEPA technicians calibrated and ~ McIntosh 230 kV) was also com-tested all metering equipment in pletedi ? - the system. Relay calibration - netted 718 relays. v
~~'SystE-m Construction Technicians also assisted North~~
'SMEP5 trews constructed two American peisonnelin repair of ~ c ? new taplines in 1991. One pro-a new transformer at Homewood THE LAND SECTION WAC RESPONSIBLE ,yjde$ setvice to Coast EPA's Watts = and replaced a failed 230-kV - FoR PURCHASING AM MARIONO 3300. Substatica at 115-kV. The other bushing on the intertie trans. ^ DANGER TREES ON SMEPA'S TRANSMIS-will serve ~the Southwert Missis-former at Waynesboro. BloN SYSTEM; )~ sippiEPA Alcorn Substation also y ~ 7 at 115-kV. In addition to the above, - Infrared surveys were completed ^ ~ - SMEPA crews installed three new on substation facilities belonging - ' GOAB switches which provide 69-to SMEPA, Dixie EPA, faroo 4 ' -~ kV service to new substations for Valley EPA, Magnolia EPA, Singing River EPA, Southern Pine' Southern Pine EPA, Pearl River - EPA,and Dixie EPAc Valley EPA,and Twin County x ^ EPA. 1 Confract crews rebuilt the 69-kV s 'T line stossing th'e Pascascula River. Additional work involved replac-a - Theline provides service to ' ing defective current transformers ~ ~ ' ' Singing River EPA's Vancleave - at eleven meter locations,complet-i N a X$ubstation.l ~ ing civil site maintenance of all substation GOABs and microwave .un Maintenance I and radio towers,and installation '~ of 31 cellular telephones at selected a [e ~.The annual right of way recleare meter locations. i-ing program involved the clearing - 'l of approximately350 miles of - t.and section ~ I;' trmsmbslon line right of way,: f A total of 3 300 danger trees were in 1991,the Land section accom-l - Jecleared on 150 miles of trarsmis ~ ' pilAed the following: sion line. s ~ l-THE LAND SECMON AS88STED THE l NREcA' STAFF IN ORTAINil[O N ~' ~ Assisted in negotiating timber. AuiNoMENT sycoNdRESstoTHE, Oround line inspection of155 sales and gasleases on SMEPA's 2" uNroRM RELocanoN AS8hThNCE .' miles of trans_ mission be resulted Rentucky property. in the ti zatment of 2,150 poles for . AND REAL PROPERT[ACoVISmoN ~$.s [. 1PoueJES ACT(URLAPfTo OlVE REA $ - decay, insect damage, or mechani-' - < Acquired right of way for six THE SAME EXEMPTOW Ffh0M bRLAF:'.] ' Cal dam 3[;ei tfansmissionline projects for a D. = THATss pro 6pEDTv( ENACTuENT. ' 9 'line inspCClions Werei s L other transmission projects - ?.- total of more than 35 miles.: Also . oFyHIS HARD WON LEGISLADVE C.fia abstracted and permitted two i ' m.mvE4 AseEEu EsnMATEDia .), perfortned on SMEPA's 1,450-L h" ..'SAVErRURAL ELECTRICRYSTEMS - imiles of tEansmisSIon line on al totaling 11 miles. [ L c. ANNVALLY. 5 ' ' < i monthly basis.F *
~~NAnonnoE soME Wan duoN bi N~~
~~. [,e = i -Climbinginspections;were per 1 A< ^ s: _ r 7 t~~
~~forme ~d by SMEPA crews on 357~~
~~-v, f ,1 .y ,e f ,f-T e, e ge a-g , [ w -A b-s j . 5 ^,, -r .). ~! ~ A ; c y g8. f -.]. ' ' ~l>, ~ g ^ N.: w + .se ,'. ~ ~ l ~ s -~~
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','a k .^e : l. _, -f 5 l h - ~-- -- - i Ib l '. -. K.2 a L.1 2.- .d .w ? Of A = - - - - - -~ = - ~ i
f HUMAN RESOURCES & safety DEVELOPMENT DEPARTMENT SMEPA's safety record for 1991 Facilities was the best in more than fifteen years in terms of accident fre-During 1991,a 2500-square foot quency and ac:Idents involving expansion accommodating a new lost time from work. Employees records storage vault and offices have been outstanding in their for the Data Processing section wa., attempts to maintain safe ivorking added to the Headquarters office. environments and practice ofe Office renovations were also work habits. completed within the Control Center and Land sections. The Association also received its fourth consecutive safety accredi-Transportation tation from NRECA. Safety accreditations are issued every Established fleet procurement and three years; therefore,SMEPA has maintenance p,.' grams continued met all requirements for the past in 1991. Today's fleet consists of 55 twelve years. vehicles which travelalmost 1,000,000 miles per 3 car covering Personnel Administration the SMEPA system. During 1991, the. Association The fleet also consists of 26 pieces continued to address the escalating of off-road and maintenance cost of fringe benefit programs. equipment which enabla con. An evaluation was conducted of st ruction and maintenance crews SMEPA's medicalinsurance plan. ' to work throughout the system, to ensure that the most cost-regardless of the terrain they effective means of providing encounter. Reet reliability is quality health care was being ~ maintained through a cumprehen-utilized. The study resuned in - i sive maintenance program. plan design changes that offered l MWnwww a74[. ; y ~ Gordon Nanney (far left), Director ?y4 . g
~~.. y'g l 7..~~
..;'Q 3 of Facilities, oversaw construction of " '*
~~W the much-needca 25ao-square-foot~~
~~~ ~ ( l h addition to the headquarters build-bp,,o ej 4.,, # ; m-] - R ing. He is shown in the new records~~
~~3. b %j.L}~~
~~' a storage vault which accounts for 140o + square feet of the addition. .\\~~
4
, Oe u { . f.k.J/ J ' w ~ .g A t 6 i. y t J Arthur Ricketson (far righ't), Vehicle - 3 r Maintedance Forer.an, assures that a W. fnD ' SMEPA's fleet is kept in top-n' orch, ~ 33 f;jw.'. p.y ' reliable condition. Vic Barber. Laborer, j
~~3. y: 3 gga..~~
c..w.a. n one of the maintenance employees - - ~ p%..wp= -.. p = whe helps drthur kecp the fleet. rolling. f .s p ~ YOU Eunh <$ 3A 4e u& ~ ~ 4 A "r M v t ~ ] a'* f me u
~ l L additiont.) cost containment as annual reports, brochures,and meas"res as well as increased cookbooks. employee awareness and participaton in managed health-Lights On', a video explaining the care systems. generation and transmission process, was produced in associa-Discussion withlocal health care tion with the University of bouth-providers also began in 1991 in an ern Ml:sissippi. It quickly became attempt to create competition in an e.ellent tool for helping both . the health care community. The internal and external audiences results of the,e talks will continue better understand what SMEPA . to offer SMEPA and its employees does. Besi la being made available additional cost savings. to SMEPA employees, the video was used as part of a presentation ' nforrnation services developed specifically for member i systems' employees to help them South Mississippi Electric Power understand the relationship Association continued to expand betw(en their co-ops and the 'its internal, member, and public O&T. Two systems scheduled the relations cfforts during 1991 presentations in 1991, with more planned for 1992. In addition to maintaining its high level ofin-house support to all The section also continued to departments, the Informatian oversee other educational md ~ Services department produces all community-oriented activities, internal and external publications, including plant tours, civic club including a monthly newsletter, presentations, Adopt-a-Family,and SMEPA's annual report,a biweekly Adopt a-School Participation in l b .emp oyee pu lication,and numer-such programs provides many ous brochures. The section also mportunities for SMEPA employ-produces newsletters for four .to enhance the Association's member systems, as well as other relations with the public and member related publications,such within the community. ~ ,8 r* w .Q n p ~ l ~, ..SMEPA management and employees' I 'N _ ~ participated in seteral com,nunity- + related actitities this year. Among ,h aan 8I%s ~ them uos the " Corporate Challengt"_ 7 gew' ^ 4 part of the local United Way campaign ~ t.. '(,'y ~T*." N,~ kickoff Fourteenerganitationsentered ~ tlf 4 tt 4 b,. .%Me% 4 ([k.. teams olemployees uho compe ed in six + categones,from stileybcIl to tug ofimr. - )d t 1 g in this photo, SMEPA employees get. o +. - " 3 '2 t 3 readyfora few hours offun and g A y. '4 '.' y d . physical exertion: +- 5l l[ y( s, , p1: Left to right: Tommy t ark, Rod
1 84*
~~' ' Dobson, Robin Harris, William Eakes, Brown, Odis Waters, and J. T.~~
~~'i z.> 9~~
~~- g ' k-7) - Tracy Stiglets, Ytette &ans. Larry ~ 4 W Hartfield. ~ .[ l h~~
~~f.'~~
30 ~ { .[ + .. -~. - N i _E_.._._________L-_- ~~- ~
j ll i l MANAGEMENT I g.[ .l 1 South Musismppi Electric Power A ? a, Associdtion's Managers,left to rnght: ( . $~ ~ 1.0j;> 13enny Mt ray, Human Resources & Deeelopment ..? John Carley. Corporate' Planning & ~ Operations c, Richard Mongomery, Finance 1 l .,'p / ' // - +Marcus Ware. Production _ ;A -]dn Hughes, Engineering, Construcuan ,e f( [,. : [ J. g, an. 3- / & Maintenance jy
/
j , s..g. - .$w % +a, /.. -N) i w. '*$.J J ell 1 The day to-day operations of Seuth The ove all function of the Engineer-I Mississippi Electric Power Association ing, Construction & Maintenance are carried out through five depart-Department is tne delivery of whole-ments under the manaument of the sale power through 1,450 miles of high-i men pictured above. vohage transmission lines to the Association's eleven member systems. The Production Department's pri ary This is accomphshed throt h systetu - ~ responsibility is to the Association's pla nning (Long-range Tn...smission l generating facilities, which includes Studies and Five-year Construction operating and maintaming the Work Plans); design (substations ar.d. facilities and securing fuel The transmission lines), and construction Department also assures equipment, and maintenance (substations, trans-unit, and plant availability and mission lines, rights-of way, and reliability, along with the generation ground and aerial patrols). of economical end dependable electric powe r. Human Resources and Development is responsible for headquarters facdity Corporate Planning & Operations maintenance and const ruction, trans-designs marketing and industrial mission system warehousing, fleet development concepts to encourage procurement ar>j naintenance, better use of resource andlower personnel administration, me'mber power costs through rate and incen-and pubhc relations, administrative tive programs. Responsibilities services, safety, and training. s s include kad forecasting, generation and pe er su;; ply planning, Control The Finance Department is respon- - -~ Center operations, rate analysis and sible f,r accountiRg, finance and cash. - design, member billing, marketing, management, purchasing, and data I electronics maintenance, control processing. computer system,and environmental affairs. ~ 31 s e' "f a ~ ^*
l s l f FINANCIAL SECTION s J s INDEX TO FINANCIAL SECTION, l FIN # NOlAL REPORT . 33 tj ' ELEMENTS OF COSY 34 i COMPARATIVE OPERATING STATEMENTS 35 1 36 i-COMPARATNE
~~SUMMARY~~
~~AUDITORS' REPORT 37 l t l BALANCE SHEETS 38 STAltMENTS OF NET MARGINS 40 STATEMEN~S OF CASH FLOWE 41 NOTES TO FINANCIAL STATEMENTS 42 1 i i r i i b ymre u a 7-The Data Processmg sectwn includes a~~
~~f#5%y>.~~
i 5 f i f Director and three Systems Analysts. j ( t , ft : Fro,n crie left are Stete,Lancaster; Addy , g,j" f ' 14 ,c l, Yearscood, Direttor: Pam Eatenson; and L . John Lang. - hl,a{s { [J 6 g' v. ,:f y s
~~g 4~~
~~the contersion from the Harris Sco computer. {l - Wh0 h h jr/r ' During the yea~~
~~Data Processing continued f.I i~~
~~b@[phu @ '~~
~~j h - h{ j' ' -~~
' )':k'. / J 1- .'w. .L%m# syst'em to the Hettlett Paskard pw; system. V1 g' b q,. ' Almost all of the maps systems (payroll, i A Human Resources, accounti payaNe, and . h@#'"),/ g;, i l ger.cral ledger) uere cosched in 1991, uith j4 = q '.y l completion of other systems schedkled for 7 ..w w y{p, - j i. y \\.. a 1.2 - ~ 9 j-( w v ~ 1 N ,v. l s i a pse ~ ~ ,m 4 ^ a n 32 ' l '/ __7,. t_-: - ~... ~
1991 FINANCIAL REPORT NET MARGINS SMEPA earned net margins of $3,037,700 in 1991 as compared to the record net margin of $3702,243 recorded i i 1990. The 1990 margin was unusually high as the system experienced warm weather extremes causing the on system peak demand in 1990 to reach 862 megawatts as compared to the summer peak of 790 megawatts in 1991. The 1991 net margins marked a return to more normallevels as did the 790-megawatt concurrent on-systen, peak which, when adjusted for the aberration in 1990, reflected continued growth in system demand. SALES OF ELECTRICITY Revenues from sales of electricity tc. members fell from approximately $251,860,000 in 1990 to $244,140,000 in 1991, a reduction of 3.1% The reduction was affected by the decreased demand and occurred despite an increase in energy sales to members of 2.44%. The reduction also reflects reductions in fuel and purchased power costs coupled with den eases in interest expense and cost containment in other items comprising operation and maintenance expenses. As a result,tne average cost of wholes e power to SMEPA members fell from 48.74 milk per kilowatt hour in 1990 to 46.12 mills per kilowatt hour in 1991. This marks the fourth r ccessive year in which power costs to SMEPA members have declined. In the fourth year of a contract with Alabama Electric Cooperative, energy sales reached their highest level,increas-ing from 444,355 megawatt hours in 1990 to 828,500 megawatt hours in 1901. Gross revenues from the sales in-creased from approximately $12,4o5,000 to $17,767,000 in 1991 which, while affecting tord &ctric energy revenues, had minimal effect upon net margins under the terms of the contract. EQUITY INCREASE SMEPA's equity as a percentage of total asseta increaseJ from 3.54% at December 31,1990, to 3.95% at year end 199L TIER AND DSC The 1991 times interest earned ratio (TIER) was 1.03 while the debt service coverage (DSC) ratio was 1.17. Both of these trios exceeded mortgage rquirements and met SMEPA's policy goals. LONG-TERM DEBT Long-term debt decreased frosn approximately $719,277,000 at the close of 1990 to $707,593,000 at December 31,1991. The average interest rate on long-term debt at year-end 1991 stood at 8.85%, a decrease from the 8.97% rate at Decem-ber 31,1990. l l SMEPA drew only $1,i24,000 in 1991 against concurrent RSA 'CFC loans and did not receive any advances under REA guarant~ d Federal Financing Bank loans. Construction work in progress was generally at a lower level than that of the past several years. SMEPA used internally generated funds o initially finance certain construction projects and to permanently finance other projects. Loan advances are expected to increase in 1992 as construction activity increases particularly with regard to the 300-megawatt addition to the interconnection between SMEPA and Alabama Electric Coore.r: ed the construction of a 230-kV transmissLn line associated with that project. SMEPA plans to contino o i aeral funds for front-end financing to the extent that such financing is i economical. t l CASH AND INVESTMEhi - General fund cash and shomm investments increased slightly to approximately $46,560,000 at the end of 1991 despite the investment of such funds on a short-term basis to support construction work in progress. GGNS I DECOMMISSIONING l The external tax qualified grantor trust established in 1990 to provide for decommissioning expenses of Grand Gulf Nuclear Station I was funded on January 2,1991, with an initial contribution of approximately $1,127,000 rn which an l additional $439,000 was contributed during the year. The trust assets (at cost) to:aled $1,652,400 at the close of 1991. The overall yield on trust assets exceeded that used in the projection of the requitement for sufficient funds to decommission GGNS1in the year 2022. GGNS II AMORTIZATION Amorti:ation of the cost of Grand Gulf Nuclear Station Unit 11 construct;on which was abandoned in 1989 was approximately $2,506,000 in 1991. The unamortized balance at December 31,1991, was approximately $86,096,000 and will be amortized on a predeterminmi basis thronh the year 2016. Amortization in 1992 will be approximately $2,605,000, 33 ,w..v r e,. ,-<w ,. n
I Tile ELEMENTS OF COST l __J 1987 1988 1989 1990 1991 L SMEPA'S OWN GENEFIATION & TRANSMISSION SYSTEM I l Cost of f uel Burned in 5MEPA's Plants - 4/MMBTU 176.38 181.64 '76.72 175.77 160.03 Production Costs and Purchased Powerl Interchanged Power - Mills /kWh 2549 25.27 2594 2602 7155 TransmissionO6M Mills /kWh 217 2.46 238 2 ",, 120 A6GExpense Mdis/kWh 125 1.09 112 110 102 Depreciationand Amortization Mills /kWh 6.16 5 41 5 08 539 4 93 Interest Mills /kWh 20 81 17.8 0 1630 15.2 2 1338 Taxesant'Other Mills /kWh 41 .22 2.77 .22 .19 TOTAL-MILLS /KWH OF SALES $6.89 52.2% $3.79 50.33 45.27 + 11. DOFIDERL!NE SYSTEM Purchased Power / Interchanged Power M lls/kWh 38.91 3434 34 C5 33.08 34.93 Depreciation and Amortization Mills /kWh .02 02 .02 .02 .02 l lnterest M !Is/kWh .05 .03 .03 .03 .03 i TOTAL - MILLS /KWH OF SALES 38.98 34.39 34.90 33.13 34.98 I Ill. TOTAL SYSTEM Production Costs and Purchased Powerl Interchanged Power - Mills /kWh 29.23 27.59 28.14 27.72 26.14 TransmissionO6M Mills /kWh 2.00 183 179 l.81 t70 A6C Expense - Mills /kWh .90 .81 .85 .83 .79 Depreciationand Amortizatior' Mills /kWh 4 46 4 03 3.83 4 to 3 81 Interest Mills /kWh 15.0 4 1325 12.4 3 l156 1034 Taxes and Other - Mills /kWh .29 .17 2.10 l .14 TOTAL 88 -- WLL&KWH OF SALES $1.92 47.68 49.14 46.18 42.92 6 k 1 \\
~~Excludes Kentucky coal operations.~~
j 34
COMPARATIVE OPERATING STATEMENTS 1987 1988 1989 1990 1991 REVENUE Sales of Energy $231.025.124 $231197.763 1251362.947 $264325.407 $261.907,622 Other 138.691 (230.848) (474.686) (209.843) 231.995 TOTAL HEVENUE $231,163,815 $237,566,915 $250.888,261 $264,115,564 . $262,139,617 EXPENSE Operation Expense: Productiortfuel Cos 57.521.531 62.232.299 62.868.651-60182.%8 - 55.049.i92 Other Production Expenses 10.270.l42 11.138366 I2.241.178 '3.201.932 121'5 297 Purchased Power $3.892.164 57326A67 66361.893 74.296.846 86.613J15 ' Transmission 7269310 7A54 432 7.721.419 8,458.919 8163.606 Consumer Accounts 56A47 40.144 4tJ98 40.185 51.942 ~ Safes Expense l1322 95.612 83329 93.023 Administrative 6 General 3A68.286 3390.732 3.8501/1 3.980.047 - 4.055.d49 - TotalOperation Expense 132.477.880 141.h3.962 153.181.292 160.843.826 166.901624 Maintenance Expense: Production 63 25.996 4.872231 6.641A74 7268A66 6.079.990 Transmission 1.509339 1353180 1.721.705 1.696.906 1.629329 General Plant 433.135 525.626 470A33 5 6I.611 637.168 Total Maintenance Expense 8A68.670 6,951.637 8.833 612 9326.983' 8346.487 Depieciation and Amortization 19.559.144 19,846154 19.782.095 22.984.653 23329181-Taxes 650120 754384 '765395 836A36 791.058 Interest Expense (Net)and l Other Deductions 66.902.644 65385309 75.931.84FN 65.182.661 63.603.175 l TOTAL EXPENSE 228,059,058 234,932,246 258,494,435 250,374,559 262.976,125 l OPERATING MARGINS 3.104157 5 2.634.669 (7.606.174)* 4141.005 (836.508) NONOPERATING MARGINS 2.043.929 J221.756 _3A00.861 3.9612 38 3.874.208 NET MARGt!49 $ 5,148,686 $ 4,85d,425 ($ 4,205,313) - $8,702,243 $3,037,700 alnitial write-ofI of utvecoverable exp(nses of $10.130,000 upon abandonment of GGNS Unit 11 is iricluded in'Other Deductions." 35 ~
l \\ THE COMPARATIVE
~~SUMMARY~~
l L.__ ___._.._-_i I 1987 1988 1989 1990 1991 ENERGY SOUACES - MWH Generated-Steam 2.953.615 3.135.747 1218.046 1869.106 3.070210 Othei Generation 1322 1.595 348 3384 -1.643 2.954.937 3.07.342 1218394 1171.990 3.071.853 Purchased Dirett Purchaw 298.487 562.736 726.824 982.926 1.629.558 OJderhne -(SEPA) 72.098 60346 87.100 106.648 96,148 370385 621082 814.014 1.089374 1.725.706 Interchanged Power -(Net) 1.16 3.9 % 1.263398 13 45.741 1.457.712 1.434367 TOTAL ENERGY AVAILABLE FOR SALE-MWH 4,489,452 5,023,822 5,5/8,149 5,719,276 6,231,926 SALES - MWh Southwest Mississippi EPA 287.278 304.212 329328 _ 337.582 336.997. Dixie EPA 400.435 4ll.036 425.274 436.878 462.245 J Pearl River Valley EPA 410 333 414.742 427357 440.644 445.467 Singing River EPA 716.158 738.911 758.895 786.146 808.434 Southem Pine EPA 946.401 982333 1.128.945 1.181249 1.21! 764 Magnolia EPA 301.0M -337.915 369.027 318.ll; 375319 Coast EPA 645.4!0 673.761 70t.440 7313 42 't 43.020 yazoo Valley EPA 118.094 203398 201.468 201.657 232.134 Coahoma EPA 81143 90.108 86383 88.763 90.591 Delta EPA 305.681 334.935 332.986 367305 366.01.8 Twin County EPA 169.734 187.272 184.609 211 478 217.231 Alabama Electric Cooperative 3.085 239.851 316.902 - 444355 828300 Southeastern Power Administration 3.416 TOTAt " ALES - MWH 4.386,918 4,922,090 5,263,214 5,611,510 6,121,720 TOTAL SYSTEM DEM AND - kW 1,067,395 1,248,607 1,290,464 1,448,259 1. ' 't,901 -l 36
-. ~- _.. -~~. 7 } THE AUDITORS' REPORT i.
4 FINANCIAL STATEMENTS AND ONDEPENDENT AUDIT" hts' MEPORT OF DELs@TTE AND TOUCHet Board of Directors South Mississippi Electric Power Association Hattiesburg, Mississippi We have audited the accompanying balance sheets of South Mississippi Electric Power Astmiation as of '
- December 31,1991 and 1990, and the related statemruts of net margms and patronage capital end cash flows for the years then ended. These financial statements are the responsibility of the Association's management. Our : responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and the Government Auditing S:andards, issued by the Comptroller General of the United States. Those standards require that we -- plan and perform the audit to obtain teamnable assurance sbout'whether the financial statements are free of.- material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and - disclosures in the financial statements. An audit also includes assessing the accounting principles used and , significant estimates made by me,Jgement as well as evaluating the overall financial statement presentation; We believe that our audits provide a reasonable basis for our opinioni 1 In our opinion, such financial statements present fairly,in all material respects, the financial position of South ' ( Mississippi Electric Power Association as of December 31,1991 and 1990, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. i l k L February 12,1992 ^ .4
~~1 5~~
37 A -
r__________...__ 1 l l THE BALANCE SHEETS L__.-___..__,._.._..__...__.- II ASSETS d Decerr:ber 31, 1991 1990 1 i ELECTRIC UTILITY PLANT (Notes 1s,1b.1c,2,and 3) 1 In service - at cost $ 731.831.767 5 726.048.283 y -7.604.965 10.468.466 Constru-tion work in process j 739.4 %.732 736316.749 g less allowance Ior depteciation 182.674 721 169.891336 1 l 556,7J2.011 566,625,413 i OTHER ASSETS AND INVESTMENTS Urrecoveredplantcost(Note 3)-atcost B6.095.731 S'/.983.865 Investments in associated organizations (Note 4) 11.265.403 11342.874 1 Debt urvice reserve for pollution control bonds 4.462.430 4.633.838 y' Decommissioning trust (Note 3)- at cost 1.652.400 Of her noncurrent assets 3375 _ _3.670 i 103,479,339 103,964,247 l CURRENT ASSETS 4 General fund cash and temporary cash equivaient investments (Note li) 2537t Q3 38.184.190 Other invested funds 20.991353 7.627.726 Accounts recesvable (including receivables f rom members of approumately $18.956.714 {t991) and $19.762.000 [1990])(no allowance ior doubtful accounts deemed necessary) 20.767.662 21.448.134 inventories (Note id) 4 Coal 14.910 323 8.541.128 Other fuel 8 21.115 777A29 Matrial and supplics 12302.413 13.024,704 - 282 33.851 22349.261 Other 1.289.982 2.19 7,2 % 96,854,481 91,806,517 DEFERRED CH ARGES (Notes 1e and 5) 1,931,644 ' 1,549,598 TOTAL ASSETS $ 759,027,475 $ 763,94y5 4 f I 5ee %te. to financial Statements" 38
i THE BALANCE SHEETS - Continued I I EQUITIES AND LI ABILITIES December 31, 1991 1990 EQUlllES (Notes 1f and 6) Memberships 55 55 Donated capital 535.436 535.4 % Patronage capital 29.552313 2 6.5I4.613 30,087,804 27,050,104 LONG-TERM DEBT, excludtng corrent maturttles (Note 8) 693,319,139 705,964,390 ACCRUED DECOMMISSION,NG OBLIG ATION (Notes 1b and 3) 1,652,203 1.126,952 CURRENT LIABILITIES Accounts payable 16.881.623 14373.747 Accrued interest 773375 833.584 Other accrued expenses 2.039.262 984.578 Current maturities of long-term debt 14274.069 0 312220 33,968,329 29,004,129 COMMITMENTS AND CONTINGENCIES (Notes 3 and 10) TOTAL EQUITIES AND LIABILITIES $ 759,027,475 $ 763,945,575 = = - - = d 39
i v Years Ended December St. 1991 1990 1 OPERATING REVENUE j Electric energy revenue $ 261.907.622 $ 264.325.407 Other - net 231.995 (209.843) 262,139,617 264,115.564 j OPERATING EXPENS.s3 Operation expense'. Fuel 55.049.192 60.782.368 Prodte;tien 12.278.297 13.201.932 Purchased power 86.613.715 74.296.846 Transmission 8.763.606 8.458.919 Administrative and general 4.200.814 4.103.761 166.905.624 160.84T.826 - 3 Maintenance expenses: Production 6.079.990 1,268.466 Transmission 1.629.329 f.696 906 General 637.168 561.611 1 8.346.487 9.526.983 Depreciation and amortization (Notes la and Ib) 23.329,781 22.984.653 Tares 791.058 836.436 199,372,950 194,191,898 OPERATING MARGINS BEFORE INTEREST AN D OTHER DEDUCTIONS 62,766,667 69,923,666 INTEREST AND OTHER DCDUCTIONS interest 63.673.417 65.191.402 Alloviance for funds used during construction (Note tc) (153.342) (91.84f) Other deductions - net -83100 83.100 63,603,175 65,182,661 OPERATING MARGINS (836,508) 4,741,005 j NON-OPERATING MARGINS - PRINCIPALLY INTEREST INCOME 3,874,208 3,961,238 NET M ARGINS 3,037,700 8,702,243 PATRONAGE CAPITAL AT BEGINNING OF YEAR 26,514,613 17,812,370 PATRONAGE CAPITAL AT END OF YEAR $ 29,552,313 $ 26,514,613 -==-= . = = -. -. 1 See Notes to Finanaa! Staternerts' 40
STATEMENTS OF CASH FLOWS J Years Ended Decomtwrr 31._ 1991 1990 CASH FLOWS FROM OPERATING ACTIVITIES Nzt margins $ 3.037,700 $ 8102.243 Adjustments necessary to reconcile net margins to net cash rarovided by operating activities: Deprecation amortization, and depletion 24.110.245 24.213.966 Cain on sale of investment (123.481) Decrcase in accounts receivable 680.472 2.955350 increase ininventories (5.884.590) (190.483) Decrease (increase) in other assets - 371.950 (506.383) increase (decrease)in accounts payable and other habilities 3.262.560 (2.242295) Decrease in accrued interest payable (60.209) (1413lA43) Inctease in accrued decommissioning payabic 525.251 U26.952 NET CASH PROVIDED BY OPERATING ACTIVITIES 2$,919,698 19.327,907 CASH FLOWS FROM INVESTING ACTIVITIES Constn.ction and acquisitions of electric utihty plant (13.058.142) (11339.271) Retirements of electnc utihty plant 852A18 . 4A23A08 Net sales of debt service reserve for pollution control bonds 294.932 Increase in decomrrassioning trust (1.652.400) inctease in other invested funds (13.363.827) (7.625.762) Other 77.766 (177,413) NET CASH USED IN INVESTING ACTIVITIES (28,849,253) (14,719,038) l CASH FLOWS Ff10M FINANCING ACTIVITIES Payment of debt (13.207.402) (17.584.045) Proceeds from debt 1.524.000 9.404035 i NET CASH USED IN FINANCING ACTIVITIFS (11,683,402) (3,180,010) i NET DECREASL 'N CASH AND CASH EQUIVALENTS (12,612,757) (3,571,141) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 38,184.190 41,755,331 l CASH AND CASH EQUIVALENTS AT END OF YEAR $25,571,433 $ 38,184,190 1 CASH AND CASH EQUlVALENTS AT YEAR END l l Cash $ 565A20 - $ - 398337 l Commercial paper 25.006.013-- 37.785.853 $ 25,571,43,3 $ 38,184,190 l Sec " Notes to financiai statements" 41
NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31,1991 AND 1990 NOTE 1 -
~~SUMMARY~~
OF SIGNIFICANT ACCOUNTING POLICIES South hiississippi Electric Power Association (ShiEPA)is a rural electric cooperative established under the laws of the State of Missaippi. ShiEPA is a generation and transmission cooperative which provides electric power to eleven owner-members which are rural electric distribution cooperatives providmg electric power to consumers m certain areas of Mississippi. Financing assistance is provided by the United States Department of 5 Agneulture, Rural Electrification Adminntration (REA). In addition to bemg subject to regulation by its own governing board of directors, SMEPA is subyct to certain rules and regulations promulgated for rural electric borrowers by REA. SMEPA maintains its accounting records in accordance with the Federal Energy Reguiu tory Commission's Chart of Accounts as modified and adopted by REA. As a segulated utility,the metha f allocatmg costs and revenue to time periods may differ from those principles generally applied by nonregu.,ed i l companies. The more significant accounting policies are generally described as follows: c--
~~e. Electric Utility Plant and Depreciation Electric utility plant is stated at cost, which includes contract work, materials and direct labor, allowance for e.~~
funds used dunne construction, and allocable ovethead costs. The cost of electric generating stations and related facilities also includes costs of training and production incurred,less revenue earned, prior to the date c of commercial operation. Depreciation is provided on the straight-line method for utility plant at the following annual composite rates: Nuclear plant 2.85% Non-nuclear plant 3.00% to 3.10% Transmission plant 2.75 % General plant and transportation equipment 2.00% to 25 00% At the time umts of electric utihty plant are retired, their original cost and cost of removal,less net salvage value, are charged to the allowance for depreciation. Replacer ents of electric utility plant ir.volvingless than a desigt.ated unit value of property aie charged to maintenance expense. Coal reserves are stated at cost. Depletion is provided by the units mined method. 1
b. Coat of Decommissioning Nuclear Plant and Amortizatloa of Unrecovered Plant Costs SMEPA's portion of the estimated decommissioning cost of Grand Gulf Nuclear Station (GGNS) Unit 1is charged to operating expenses over the service life of Unit 1 of approximately 35 years.
SMEPA's portion of the unrecovered plant costs of GONS Unit 11is amorti:ed over the remaining hfe of the related debt of approximately 27 vears, and approximated $2,506000 and $2,398000 in 1991 and 1990, respectively.
c. Allower. e for Funds Used During Construction Allowance for funds used during construction represents the wst of directly related borrowed funds used for construction of the electric plant, where applicable, and an allowance based on the average cost of appropriate borrowings when general funds are used te fund construction. The allowance is capitali:ed as a component of the cost of the electric plant while it is under construction.
~~Capitali:ation ceases when the electric plant is placed in service, or in the case of electric generating stations and related facilities, at the date of commercial operation. u.~~
~~d. Inventories Inventories are stated at average costs.~~
e i 42 I l
~ _ _
o. Def:rred Charcos Cost of preliminary surveys for development of possible methods to obtain and deliver energy to fulfill members' future requirements, including feasibility studies leadmg to financing necessary plant expenditures, are recorded as deferred charges. If construction of a project results from such surveys, the deferred charges are transferred to the cost of the facilities. If a preliminary survey is abandoned, the costs incurred are written off.
Ibnd issue costs are being amortized by the straight-line methcd, which does not diffe, materially from the interest method over the term of the related debt. The amorti:ation during the period of construction is capitali:ed. f. PatronaDe Capital The bylaws of SM EPA provide that any excess of revenue over expenses and accumulated prior year deficits shall be treated as advances of capital by the member patrons and credited to them on the basis of their patron-age. y Interchange Power iMEPA records the electrical power received or provided on an interchange basis at its cost as determined under various contractual arrangements.
h. Incorne Taxes SMEPA is exempt from United States income taxes pursuant to Section 501(c)(12) of the Internal Revenue Code, which requires that at least 85% of SMEPA's gross income be derived from its members.
I. Cash and Cash Equivalents For purposes of reporting cash flows,all temporary investments with.naturities of three months or less when purchased are deemed to be cash equivalents. NOTE 2 - ELECTRIC UTILITY PLANT Electric utility plant consisted of the following: 1991 1990 t Nuclear production plant $394.983.346 $ 394.252.417 l Non-nuclear production plant 210.54 6.218 208.937.254 Transmission plant 75.518204 73.435.329 Coal properties and preparation plant 24,601.851 24.601.851 Land and land rights 12.454.744 12.399.983 General plant and trarsportation equipment 13.727.404 12.421.449 Electric Plant in:>ervice 731.831.767 726.048.2F3 Construction work in process 7.604Sa5 10A68.466 $7MlE732 $736.516.749 l l NOTE 3 - CONSTRUCTION WORK IN PROCESS AND COMMITMENTS REGAfiDING ORAND GULF NUCLEAR STATION SMEPA is a 10% participant in a nuclear generating station known as " Grand Gulf Nuclear Station"(GGNS), which consisted of two 1250 megawatt generating units. Commercial operation for Unit I began on July 1, 1985. In September 1985, the construction of Unit 11 was suspended by regulatory authorities. In September 1989, the majority owner elected to abandon Unit 11. SMEPA's accumulated cost in Unit 11 ' was approxinately $104,000,000, including allowance for funds used during construction of approximately $42,000,000. At the date of abandonment, SMEPA made a determination as to the cost that could be recovered through future rate increases and charged the remaining cost to expense.. After transfers to GGNS Unit 1 i l inventories of approximately $2,085,000 and property accounts of approximately $605,000,approximately $91,180,000 was transferred to unrecovered plant cost on the balance sheet during 1989 and the unrecoverable cost approximating $10,130,000 was included as a loss in the statement of net margins and patronage capital for 1989. This accounting for Unit 11 has been reviewed and approved by REA (see Note Ib). 43 I
In 1990, SMEPA submitted a formal plan to the Nuclear Regulatory Commission (NRC) that demonstrated I. assurance that sufficient financial resources would be available at the time it becomes necessary to &commis-sion Unit 1. In adJitien, SMEPA received approval from the Internal Revenue Service to establish a
~~tax-free" j~~
grantor trust as a vehicle to fund the estimated decommissioning costs. ] SMEPA has contributed to the trust amounts sufficient to fund the estimated accrued decommissioning obligation that existed at December 31,1991, SMEPA estimates that the funding requirement will approximate $439,000 annually through 2022, the expected date of decommissioning. The estimated funding requirement j will be recalculated and adjusted periodically. l NOTE 4 -INVESTMENTS IN ASSOCIATED ORGAN'IAT10NS t i investments in associated organizations are stated at cost and consisted of the following-1 i j National Ru' al Utilities Cooperative finance ~ 1991 1990 Corporation (CFC) Capital Term Certificates $ 8.414.533 $ 8,414.533 r CFC Subordinated Term Certificates 2.490 000 2.490.000 l Other 360.870 438.34I- $1065361 $_Il3_42.874 s l Capital Term Certificates bear interest at 3% and 4% and mature in 2007 through 2080. He Subordinated l Term Certificates bear interest at 9.873% and mature in 2015. 4 i NOTE 4-DEFERRED CHARGES. l The following is a summary of amounts recorded as deferred charges as of December 31,1991 and 1990:- 1991 1990 Unamortized debt discount 71.20U60 $1.284.260 Pastit ace benefit retirement estimate 649.678 Nucleat ' cal costs 80.806 254.190 Other 10.948-l T$I'93IR4 ~$II49398 ; ~ i 1 NOTE 6 - PATRONAGE CAPITAL l At December 31,1991 and 1990, patronage capital consisted of: i 1991 1990 i Assignable - TXb37 760 5449E935 ~ Assigned to date 32.368.371 27.871.441 3576607f . 3236B37I j less' Retirements to date '5.853.758 5.853.758 $29.5523fL $263T46T3 ~ Under the provisions of the Mortgage ' Agreement, until the equities and margins equal or exceed forty percent j . of the total assets of SMEPA, the return to patrons of contributed capitalis generally limited to twenty-five . percent of the patronage capital or margins received by SMEPA in the prior calendar year. The equities and margins of SMEPA represent 3.96% and 3.54% of the total assets at December 31,1991 and 1990, respectively. NOTE 7 - SHORT. TERM BORROWINGS SM EPA has a $25,000,000 short-term line of credit available with National Rural Utilities Cooperative Finance i Corporation (CFC). At December 31,1991 and 1990, SMEPA had no borrowings against thisline of credit.. ] Interest rates on short term borrowings with CFC averaged approximately 7.43% and 9.49% for 1991 and 1990, respectively. Capital Term Certificates in CFC, which are included in other assets and investments, cannot be redeemed so long as the line of credit is in place. u { 44 b_ ,w e'- ,w
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_ =. NOTE 8 - LONG-TE'RM DE3T 1.ong-term debt consisted of the following: 1991 1990 2% REA mortgage notes payable,due in quarterly installments through 2009 $ 26.715.706 $ 28.48!.702 5% REA mortgage notes payable,due in quarterly installments through 2015 20.004391 20.605.936 5% REA mortgage notes payable.due in monthly installments through 2019 9.149.772 8.020.979 Mortgage notes payable to federal Financing Bank (FFB) at interest rates varying from 7.160% to 14.512%.due in quarterly installments through 2019 567.474.555 576.288.905 Notes payable to National Bank for Cooperatives at interest rates varying from 6.95% to 8.80%.due in quarterly installments through 2022 3.152.784 3.250.088 Lamar County Mississippi. Pollution Controf Bonds: 1977 5eries.5.25% to 6.125%.due semi-annually through 2007 29.780.000 - 30.885.000. 1978 A Series.5.40% to 6.125%.due semi annually through 2008 2.140.000 2.215.000 1978 A 1 Series.6.25% due semi-annually through 2008 775.000 805.000 Claiborne County. Mississippi. Pollution Control Bonds - 1985 G Series. variable interest rates (3.80% to 4 40% at Dectrnber 31. i991), due annually - through 2015 47.600.000 48.200.000 975% note payab!e to National Rural utilities Cooperative Finance Corporation, due in quarterly installments througl '022 801.000 524.000 707,593.208 719.276.610 Less current matJrities 14.274.069-13312.220 ' $ 693319.139 $ 705.964390 - J Substantially all assets of SMEPA were pledged as collateral on long-term debt. SMEPA has the option on FFB promissory nate advances to elect (subject t'o REA approval) interim maturity dates - of approximately two years after the date of tne advance or a long-term maturity ranging from approximately 27 to 34 years (depending on the terms of de particular note)after the end of the calendar year in which the advance was made. If the long-term maturity date is not selected, then on subsequent interim maturit y dates, SMEPA may designate that it desires either another short term maturity or the long term maturity date as specified in the note. t- ~ 45
Am 3ximate annual maturities eilong term debt for the next five years are as follows: 1992 414.274.000 1993 15.296.000 1994 16.288.000 19o5 17.280,000 1996 18.550.000 The ah-inaturity schedu'e re'. ts management's prerogative of converting FFB advances at interim maturity dn 0
~~992t' auch 1996 t ang-term maturities. SMEPA has used a rate it estimates to be an appropriate le. g rec,. rate, haJ h~~
% ruber 31,1991 interest rates, to compute the annual prindpal requirement. ~ Decemh r 31,1991. SA.%ad unfunded loan commitments from FFB,CFC, and REA of $27,682,000, 31,503,0M, ai. 4 54,309,000, respectively. Of the commitment fro n FFB, $15,000,(X)0 is restricted for possible 'atu.. funding s/ GGNS. Av v<m, 734,000 in 191 and $79,923,000 in 1990 in interest on long-term debt. Shl.2P 4 .uts to maintah certain average levels of interest coverage and an~nual, St - r.e* ee e9 liance with such requirements at D4 ember 31,1991.- ,:. Nce c. 19 0 .PA agreed with FFB and REA to amend two promissory notes effecting a inpof$45,93x ul, . Jing had not been executed as of February 12,1992. The interest rare will be estaNhhed b FF:'.md ent penalty of approxims.ly $4,815,000 will be paid upon execution (which will be deferred and amort.
~~emaining life of the affected loans). -~~
% ME 9 - PENP ION PLfd i Substantially all r 7 *.A's employees participate in the National Rural Electric hperative Association' 1 NRECA) Retiremcw snd Security Program, a define < nefit pension plan qualified under Section 401 ano tax-emrt ur. der SectWn 501(a) of the Internal Revenue Lie. SMEPA makes annual contributions to the progom t equal to the amounts accrued for pension expense except for the period since July 1,1987 when a moratorium on-contribution was placed in effect due to reaching full funding limitaJon. In this multiem -loyer plan, which h availaNe to all memler coeperatives of NRECA,the accumalated benefits and plan asw : 4e not determined or - allocated separately by individual employer. SMEPA had no pension expense for this pL...n 1991 or 1990..in 1990, SMEPA amended its retirement plan to provide for an earlier retirement. The amendment became effective January 1,1991. SMEPA elected to amortite prie service costs created by the amendment over ten yurs. The - eftect of the amendment is not material to rk. ic Tek otements.' In additw. to providing pensi a s.nefits,SMEPa provides certain health care isurmee ben'efits for redred employees. Substantialls all of ; *hPA's employees may become eligible for thc.,c benefits if they reach normal - retirement age while working for SMEPA. SM'A recognizes the cost of providing these benefits by expentin the annual insuranca premiums, which were not material for 1991 or 1990. Ir.1990, the Financial Accoutiting Standards Board issued Statement No.106 Employers' Accounting for Postretirement Benefits Other Than Pensions," which is generally effective for calendar year 1995. Management is currentiv evaluating the effects of the applicatbn of Statement % 106, which a:.. not presenth known. J NPE 10 - COMMi~?AENTS AND CONTINGLNCIES In Ma ch 1988, SMEPA began ;eceiving its coal supply under an agreement with a new supplier. This agreerr it r evides that certain cmditions be met including.amchg other things, minimum annual d. livery require.. ts, .nd does not require the coal produced for SMEPA's consum ion be taken from SMEPA's coal reserves, so long as the coal meets the cuality requirements of the agreement. SMEPA ! : construction commitmuta for varior -,n-nuclear udity projects totaiing approximately $2,384,000 - atC-cet er 31,1991< SMEPA is defendant ir certain litigation incurred in the normal course of business. Management, based en advice oflegal counsel,is of ti.e opin on that the ultimate resolution of thelitigation will not have a material ' adverse cifect on SMEPA's financial condition. 46 t n
'W LOCATIONS Mosella Generating Station Commercial Operation:1970 Location: Jones County ] l \\ Capacity: 177MW s h L 1 Fuel: Natural Gas / Fuel Oil E Employees: 28 ) w I R. D. Morrow, Sr. Generating Piant Commercal Operation: 1978 Location: Lamar County g. g' Capacity: 400MW Fuel. Bituminous Coal Employees: 94 f l r f nI GMEPA Heaaquarters /] N Location: Hatti:sburg (Forrest County) Employees: 111 Y f Gas Turbine Units [ E Ct&lborn* Ja per o at d 1 4 1 Center located at the head-x s quarters facility: .4 E enndale Unit Jones 8 {' B s a Commercial Operation: 1969 f l M_*For Location: George County k-rest Lamar Cap 1 city: 16MW k )_ l { Fuel: Natural Gas E aulding Unit George P e Commercial Operation: 1972 Location: Jasper County Capacity: 20MW f%, Fuel: Diesel Fuel / Natural Gas s C - - Grand Gt if Nuclear Station (l0% Undivided Interest in Unit 1) Commercial Operation: 1985 Location: Port Gibson (Claibo ne County) Capacity at 10% lbMW Fuel: Nuclear Employees: 1 47 /
i i i I e mb F ' South Mississippi ' Electric Power Association. "The Cooperative's Cooperative _" 4 s 4 l - Post Office Box 15849 - Hattiesburg, Mississippi. 39404 5849 - 601 268 2083 m ( ),, ?, 3".
i Deloitte& Touche o l l l ENTERGY OPERATIONS, INC. l FINANCIAL REPORT 1 f FOR THE YEAR ENDED d DECEMBER 31,1991 1 i 3 DRIlniemational
Deloitte& Touche Suite 3700 Telephone: (504) 581-2727 One Shell Square Facsimile:(504) 561-7293 701 Poydras Street New Orleans, Louisiana 70139-3700 INDEPENDENT AUDITORS' REPORT To the Board of Directors of Entergy Operations Inc.: We have audited the accompanying balance sheets of Entergy Operadons, Inc. (Company) as of December 31,1991 and 1990, and the related statements of income and of cash flows for the year ended December 31,1991 and for the period from June 6,1990 (date ofinception) to December 31,1990. These iinancial statements are the responsibility of the Company's management. Our responsioility is to express an opinion on these financial statements based on - our audits. We conducted our audits in accordance with generally accepted auditing standard,. Those standards --c uire that we plan and perform the audit to obtain reasonable assurare about whether t% Putancial statemcats are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial ' statements. An audit also includes assessing the accounting principles used and significant estimates made by mtr.agement, as well as evabiating the overall financial statement presentation. We believe that our audits provide a reasonable ba. tis for our opinion. In our opinion,.such fmancial s:atemcnts present fairly, in all material respects, the financial position of the Company as of December 31,1991 and 1990, and the results of its operations and its cash flows for the year ended December 31,~ 1991 and for the period ended December 31,1990 in conformity with generally accepted accounting pnneiples. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules - analysis of charges for service associate and nonassociate companies (page 11) and schedule of expense distributica by l department or service function (pages 12 and 13) for the year ended December 31,'1991 are presented for the purpo.e of additional analysis and are not a required part of the basic financial l statements. These schedules are the responsibility of the Company's management. Such schedules ave been se,iected to the auditing procedures applied m our auc,itt of the basic t fmancial statements ar,6,.n our opinion, are fairly stated in all material respects when c considered in relation to the basic financial statements taken as a whole. l February 14,1992 Memr;er l DRIlntemational
l( ?' 7 l t TABLE OF CONTENTS
~~DESCRIPT.I,E PAGE NO.~~
~~3 Independent Auditors' Report 1: - Balance Sheets 2 - Statements of Income ' -4. Statements of Cash Flows :- S' Notes to Financial Statements;-- . 6 - 10J~~
~~4 SupplementalSchedulesi~~
' Analysis of Charges for Service Associate andj - 1 l ': Nonassociate Companies-Schedule of Expense Distribution by Department - 12 --~ 13 - or Service Functior. - - ) T 1 r [ 4 _-_} .J.4.,,,,,,~, , +. .a.... 4, < ;w:, #V. . +:L, ~. ..; -, i ,,, -~..
ENTERGY OPERATIONS, INC. BALANCE SHEETS i ASSETS - December 31, - 1 1991 1990 PROPERTY AND FACILITIES - at cost: Service company property (including leasehold improvements).. 8,416,662 $ 6,557,036. Construction work in progress...................... - 1,281,587-455,179 -i Total.............................,.... 9,698,249 7,012,215 Less - accumulated depreciation and amortization (Note 1).... 1.339,672-- 453,715 Property and facilities - net............c.......
~~8,358,577-6,558,500-CURRENTASSETS:~~
Cash...................................... 51,923 33,685 Accounts receivable -' associated comps -iet............. 7,750,806 5,232,516 Othe r..................... 2,403 ' Total.................,,.............. 7,802,729 ~ 5,268,604 DEFERRED DEBITS: Other... 249,035 136.931 $ ~.16.410.341[ $ - 11,964,035 TOTAL-.... e d i I t 2 l- ,R l l: I' O...
] 4 1 t O ENTdROY OPERATIONS, INC. BALANCE SHEETS 3 CAPITALIZATION AND LIABILITIES a ) December 31, i 1991 3 _ 1990= l-CAPITALIZATION: Common stock, $5 par value, authorized 1,000 shares; ( issued and outstsad'ng 1,000 shares (Note 3).......... 5,000_$- 5,000; }~ Paid in capital................................ 995,000' ' 995,000 1-4 Total................................. 1,000,000 1,000,000' 1 CURRENTLIABillTIES: Notes payable to associated companies (Note 2)........... 7,410,000 --5,;. 0,000L Accounts payable: I Associated companies 2,144,937 1,382,961 i ' O th e r..................,....... '5,042,742 4,216,098 ~ Oth -521,972 34,802 1 Total....... 15,119,651 ~ 10,003,861 DEFERRED CREDITS: I-Accumulated deferred incon e taxes (Note 1)............. 140,864 60,174 L Other...................................... 149,E26' Total,,............................... ~ 290,690 60.174-t TOTAL............................... 16,410,341 ~ $ = 11,964,035 - + i i 4 k See Notes to Financial Statements.
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ENTERGY OPERATIONS, INC. STATEMENTS OF INCOME For he Years Ended December 31. 1991-1990 (1) REVENUES: Services rendered to associateo companies............ $ 535,669,594 $ 414,167.0'l8 Miscellaneous income..................... 53,844 98,156 To tal.......................... 535,723,438 414.265,174 EXPENSES: Sa la rie s a nd wages........................... 173,866,951 105,202,775 Other general and admir.istrative...... 156,997,285 106,763,525-Outside services employed...................... 176,392,048 190,771,421 4 Ren t e x pense............................... 14,539,616 6,227,806 Depreciation and amortization........ 89%,825 453,715 Taxes other than income taxes......... 12,446,790 4,596,620 Interest expense.................. 394,224 249,312 Income tax expense................ 187,699 To ta l....................... 535,723,438 414,265,174 NET INCOME............ NONE NONE l l (1) For the period from June 6,1990 (date of inception) to December 31,1990 ( l l See Notes to Financial Statements. L l l l 4
ENTERGY OPERATIONS, INC. STATEMENTS OF CASH FLOWS For the Ycars Endej December 31, 1991 1990 (1) OPERATING ACTIVITIES: Net inerme........ NONE NONE Non-cash items included in net income: Depreciation and amortization......... 898,825 453,715 Changes in: Accounts receivable........................ (2,518,290) (5,232,516) Accounts payable.............. 1,588,620 - 5,599,059 Other current assets and liabilities............... 489,573 32,399 Oth.... 105,544 (76,757) Net Cash Flow Pro ~ided By Operating Activities... 564,272-775.900 INVESTING ACTIVITWS: Construction and acquisition of plant.. (2,686,034) (7,012.215) Net Cash Flow Used By Investing Activities............. (2,686.034) (7,012,215) FINANCING ACTIVITIES: Proceeds from issuance of common stock... '1,000,000 Notes payable to c.sociated companies.............. 2,140.000 5,270,000 Net Cash Flow Provided By Financing Activities....... 2,140,003 6,270,000 Net Change in Cash............ 18,238-33,685 Cash at Beginmcg of Period....... 33,685 CASH AT END OF PERIOD............. 51,923 $ 33.685 SUPPLEMENTAL DISCLOSURES OF CASH FLOWINFORMA TION: Cash paid during the period for b.--st.............. 397,375 $ 215,453 (1) For the period from June 6,1990 (date of inception) to December 31,1990 See Notes to Financial Statements. l 5 l l
ENTERGY O?ERATIONS, INC. NOTES TO FINANCinL STATEMENTS NOTE 1.
~~SUMMARY~~
OF SIGNIFICANT ACCOUNTING POLICIE Organization Entergy Operatior.s. Inc. (Entergy Operations), a nuclear management service company wholly-cwned by Entergy Corporation, was formed on June 6,1990 to astume operating responsibility for Arkansas Power & Light Company's (AP&L) Arkansas Nucle r One Generating 8tation Units 1'and 2 (ANO), Louisiana Power & Light Company's (LP&L) Waterford Steam Electric Generatiag Station Unit No. 3 (Waterford 3) and System Energy Resources, Ir.c.'s (System Energy) Orand Gulf Nuclear Station Unit 1 (Grand Gulf 1), subject, respectively, to AP&L's, LP&L's and System Energy's oversight. AP&L, LP&L, System Energy and the other Grand Gulf I and Waterford 3 co-owners retained their own;rship interests in their respective nuclear generating units. Further, AP&L, LP&L and System Energy retined their associated capacity and energy entitlements and pay directly or reimburse Entergy - Operations ic.-'he coso associated with the operation and maintenance of these units. Entergy Corporation entered into serarate guarantee agreements with ~AP&L, LP&L and System Energy whereby Entergy Corporatioa gu. ranteed the financial ability of Enterg" Operations ta meet its various financial obligations to AP&L, LP&L and Systern Energy under the operating agreements, as long as AP&L, LP&L and System Energy continue to meet their payment ooligations to Entergy Operations under,he app!icable operating ag'sements. Applications for approval of or non-opposition to, as applicable, nuclear management consolidation I were filed with the Nuclear Regulatory Commission (NRC), the Arkansas Public Service Commission (APSC), the Louisiana Public Service Commission (LPSC), the Council of the City of New Orleans, Louisiana and the Securities and Exchange Commission (SEC), and all such approvals were received by June 5,1990. The APSC's order was appealed by the Arkansas Electric Energy Consumers, an intervenor in the APSC proceeding, and was later denied. The APSC Order approving the nuclear management consolidation included, among other thir.gs, a provision whereby the APSC staff and AP&L would designate an independent consultant to audit Entergy Operations to determine the extent of savings achieved as a result of the consolid: tion. The APSC staff agreed to the consolidation on the basis that the independent evaluation would be perforrted and that the APSC could cause AP&L to terminate the operr.:ing agreement vith Entergy Operations if the AFSC determined that the agreement was not in the pubhc interest (the LPSC also reserved this right). The APSC staff ed AP&L selected an independent consultant to perform the audit, which was to be cond'de) M two phases, an initial phase to evaluate the projected benefits of consolidatiou and a follow-ur. phase to determica the progress of the consolidation savings. The auditors completed the majority of Phase I fieldwork in December 1991 and ex:pect.o issue a final report thereon during the second quarter of 1992. Pnase 2 of the audit is expected to be performed during mid to late 1992. 6
ENTERGY OPERATIONS, INC. NOTES TO FINANCIAL STATEMENTS - (Continued) System of Accoaots The accounts of Entergy Operations are maintained in accordance with the system of accounts prescribed by the SEC. Depreciation and Amortization Depreciation is computed on the straight-line basis at rates based on the estimated service lives of the varicas classes of property. Onortization of leasebold improvemen's is computed on the straight-line basis over the lease terms. Income Taxes Entergy Operations joins its parent and affiliates (System companies) in the filing of a consolidated Federal income tax return. Income taxes are n!!ocated to Entergy Operations in pcoportion to its ccatribution to connlidated taxable income. In accordance with SEC regulations, no System company is required to pay more income taxes than would have been paid had a separate income tax return been filed. In addition, Entergy Operations files a consolidated Mississippi sute income tax return with certain other System companies. Entergy Operations provides for deferred t.xes resulting from recognition of expense timing differences for income tax purposes as compared with fm' ancial statement purposes. The tax net operating loss carryforwr d n December 31,1991 is approxiraately $240 thousa::d snd is available to offset federal taxable income in future years. If not utilized, the carryforwara will expire in the year 2006. In February 1992, the Financial Accounting Standards Board (FASB) issned SFAS No.109, ' Accounting for income Taxes," which is generally effective for fiscal years beginning efter December 15, 1992. The new standard requires that deferred income taxes be recorded for all temporary difference. 4 d carryforwards and that deferred tax balances be based on enseta ~ laws at tax rates that are expected to be in effect tvhen the temporarj differences -everse. The impact of the new st.ind:rd is currently under study by the System. Entergy Operations plans to adopt SFAS No. 109 in 1993. It is not expected that Entergy Operations would be significantly impacted 1y the adoption of SFAS No. 109. Pastretirement BeneSts - Entergy Operations' emplerees participate in the postretirement plans of AP&L, LP&L and System Energy. The Systen/s pclicy is to fund pension costs in accordaace with contribution l l 7 l r--- d T M
ENTEROY OPERATIONS, INC. k NOTES TO FINANCIAL STATEMENTS -(Continued) guidelines established by the Employee Retirement income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended, and to fund and record other postretirement plan costs on a cash basis. See Note 5, "Postretirement Benefits." NOTE 2. LINES OF CREDIT AND RELATED BORROWINGS Entergy Operations, through a line of credit (at an interest rate of prime), is authorized by the SEC, through June 30,1992 to effect short-term borrowings with Entergy Corporation in an aggregate amount outstanding at any one time of up to $15 million, subject to incree e to a maximum of $20 n. '. lion with further SEC approval. Entergy Operations is currently seeking SEC approval to extend such lines of credit. This line of credit was not used during 1991. Entergy Open-tions participtes wit;. certain other System companies in the System Money Pool (Money Pool), an intra-aystem borrowing arrangement designed to reduce the System's dependence on external short-term borrowings. As authorized by the SEC, the borrowings by Entergy Operations from the Money Pool.7ay not exceed the a:nount of the unused portion of the line of credit discussed soove. The borrowings from the Money Pcol and applicable interest rates for 1991 and 1990 were as follows: 1991 __1990 i Average borrowing $6,409,096 55,367,000 Maximum borrowing et any month end......... $7,410,000 $5,740,000 Average interest rate: During the year 6.1 % - P.0% i C At end of ycar............. 5.2 % 8.1 % - NOTE 3. COMMON STOCK s There was no change in the number of shares of Entergy Operations' commca stock durir.g the year 1991. On June 6,1990, Entergy Operations issued 1000 shares of $5 par value common stock to Entergy Corporation for an aggregate consideration of $1 million. 8 fi l
ENTERGY OPERATIONS, INC. NOTES TO FINANCIAL STATEMENTS - (Continued) NOTE 4.' OPERATING LEASES Effective with the formation of TNtergy Operations, certain operatinr,lerses were either - assigned to Entergy Operations by Sgtem Energy or entered into direcdy by Entergy Operaticas. Total rental charges to expense for 1991 and 1990 were approxi;nately $14.5 million and $6 '1-midion, respectively, of which approximately $10.6 million and $5 million, respectively, related to rent expense associated directly with AP&L, LP&L or System Energy leases and approximately $3.9 R million and $1.2 million, respectively, related to ren; expense associated with Entergy Operations leases discussed above. At December 31,1991 Entergy Operations had noncancelable operating leases with future minimum rental commitments on building space, vehicles, computer equipment and other, office equipment as follows: Mi.-imum Leat Payments - - (In Thousands) - 1992 $3,059 1993 - 2,713 1994 2,0o4 1995 2,026 1996 ',026 2 For years thereafter 14,222-TOTAL....................... $26,140 NOTE 5. POSTRETIREMENT BENEFITS { Effective June 6,1990, all of System Energy's employees became employees of Entergy Operations. However, the employees ;till remain under System Evergy'a postretirement benefit plan and no transfers of related pension liabilities and assets have been made. In addition, ANO and Waterford 3 em; loyees.ho transfarred to Entergy Operations on June 6,1990, remain ucier AP&L's-and LP&L's plans, respectiv:ly, and no tran fers of related pension IMilities and assets have been made. Entergy Operations' employees, not formerly in the Entergy System, participate in the e postretirement plans of either AP&L, LP&L or System Eoergy, donding upon their work location Entergy Operations provides certain Fealth care and life insurance benefits for retired employees. Substantially all employees may become eligible fr these benefits if they reach retirement age while still working for the Entergy System. These benefits and similar benefh 9' 3, )
ENTERGY OPERATIONS, INC. NOTES TO FINANCIAL STATEMENTS - (Concluded) for active employees are provided through p;,yment of premiums to insuran:e companies, and Entergy Operations recognizes the cost of providing these benefits by expensing the amounts as incurred. EnterFy Operations is then reiol ursed by AP&L, LP&L and System Energy for their share of these expenses. In 1991 and 1990, these reiubursements totaled approximately $5.9 mi' lion and $1.6 million, $3.9 million and $1.9 million, and $2.5 million and $1.9 million for AP&L, LP&L and System Energy, respectively. In December 1990, the FASB issued SFAS No.106, " Employers' Accounting for Postretirement Benefits Other Than Pensions," wluch is generally effective for fiscal years beginning after - December 15, 1992. The new s:andard requires a change fmm a cash method to an accrual method of accounting for those benefits. Adoption of the new standard is expected to increase annual expense associated with these benefits, and Entergy Operations will be reimbursed by AP&L, LP&L and System Energy to the extent of such increased costs. Entergy Operations plans to adopt this statement in 1993'. NOTE 6. TRANSACTIONS WITH AFFILIATES f Pursuant to operating agreements, Entergy Operations has been authorized to act as ao agent for AP&L, LP&L and System Energy in the operation, but noi ownership, of ANO, Waterferd 3 and Grand ) G. ' 1. In return, AP&L, LP&L and System Energy pay directly or reimburse Enti.rgy Operations for the costs associated with operating those units. Upon its formation on June 6,1990, Entergy Operations purchased approximately $5.9 million of corporate assets at net book value from Vstem Energy. Pursuant to a service agreement, Entergy Operations receives technical and advisor-/ services from Entergy Services, Inc. These charges amounted to approximately $12.4 million in 1991 and $11.6 million in 1990, with AP&L, LP&L and System Energy reimbursing Entergy Operations for(neir respective portions. 10
l l l i l 6 - ANNUAI. REPORT OF ENTEROY OPERATIONS. INC. l For the Year Ended December 31.1991 Schedule XVI-Analysis Of Charge-for Service Acanciser and Nammes rinae Companies Instruction: Total cost of service will equal for asacciate and = minea conspenies the total assount bPled undes their seperaN manlysis of billseg schedulae. Aesortmeicompany Chargse Nc= =aeteen , Charges Teeni C:mrges for Sar-tco Dereas leaime Dessa. j le4truct Dorset Indisest Acceent Deeceiption of lienee Coat cose Tevel com Cent Tesel Cost Coe Tesel 920 Salaries and Wegee ' $153.183,729 $O.6t1.222 5173.866.951 $153,183.729 $20.683,222 5173.866.951 921 Ofnce Sepplies and Expenese 124.963.538 11.769.944 136.733.482 124.963.538 11,769.944 136.733.482 922 Adenenennetv. Empense Transfernd - Creda 0 0 0 0 0 -0 923 Outp6de Serv 6cee 9. '_-g. 163,452.241 12.939.807 176.392.086 163.452.248 12,939.007 176.392.00s i - 924 Property Inseeence 844.570 955.909 1,800.479 844,570 955.909 1.800.479 925 Injertes and Demoges 0 303.452 303.452 0
303.452 303.452 926 F-.*
~~7 Pensione end Benefite 698.588 14.981.349 15.679.937 69s,588 14.9s1,349 15.679.937 928 Reguiswy Commise6am Expense c 749,108 749,108 0 749.108~~
749.10B 930.1 General.U.a

Empunees 0
0 0 0 0 0 0 - 930.2 hanae=al-General Expenses 102,638 -- 778,863 151.506 102.638 778.868 881.506 931 Renee 10.642.870 3,896.746 14.539,616 10,642.870 3.896,746 14.539,616 j-932 hemies====e* of Structores and C-f, 0 0 0 0 0 0 403 Deprecieuen and Annartaretion F=p=ama 0 898.825 898.815 0 998.825 390.325 408 Tasse other 1 hem faceae Tames 12.322.706 124.084 12,446.790 12.322,706 124.0e4 12.446.790 l 409 Income Tamse 0 46.835 46.835 O 46.835 46.835 I' 410 Prownelon for 0%ferred laceae Tamee 0 316.004 316.004 0 316.084 316.084 411 ProwWon for Deferred Iecome Tames - Crede 0 (175.223) -(175.220) 0 '(175.220) (175.230) 4 R l.5 lavestment Ten Creda 0 0 C 0 0 ? j' 424.I W 127.338 0 127.338 127.338 0 127,338 426.5 Other Dodections
~~721,983 0~~
~~721,983 721,983 0 721.983 477 lasere on Img-Term Debt 0 0 9 0 0 0 431 Other laserest Empense 0 394,224 394,224 0 394,224~~
~~94.224 TOTAL EXPEN5ES 467.060.201 68.663.131 535.723.438 467.000.201 68.663.237 535.723.438' CE,~~
~~' for ese of Eqeiry Capital ~ 430 laterest,a Debt to Assoctees C-TOTAI. COST OF SERVICE~~
~~A67.060.201 168.6(.3.237 1535.723.438 A467.060,201 See.463.237 1535.723.438 i~~
I ANNUAL REPORT OF ENTERGY OPERATIONS. INC. For the Year Ended December 31,1991 Schedule XVII - Schedule of Expense Distribution by Department or Service Pisection huvucdae: l Indicate each department or service functio i. (She 'estruction 01-3 General Structure of Accountang Sysassa: Uadforse Syssess of Amounes). DEPARTMENT OR SERVICE FUNCTION Arkansa. Grand Gulf Accommiang Presedsat Legal and Account Demeripoon of home Teest O wrhead Nuclear Nuc1's WaterforJ 3 and and External Huseam Number A mount One Sentian Tr g CEO ANears Reesuress 920 Salaries and Weges 173.866.951 0 $67.097.746 $42.883.382 S43.202.601 15.195.923 1346.340 $975.116 $7.522.899 .92i Omco Suppl 6es and Empense. I36.733.482 0 61.068.646 32.077,235 31.817.657 4.963.392 98.620 479.887 3.926.892 . 922 Administratiw Empeges Transferred - Credit 0 0 0 0 0 0 0 0 0 923 Ouseide Services Employed 176.392.048 0 84.097.578 26.467.675 52.886.988 9.583.077 3.242 1.503.545 1.244.26A 924' Property Insurenes 1.800.479 0 58.842 729.029 56,498 955.909 0 0 0 - *3 925 lajuries and Damages 303.452 0 0 0 0 5.749 0 0 297.703 926 sepseyes Penstems and Beneate 15.679.937 0 9.479 689.109 0 406.340 0 0 14.582.418 928 Regulesory Co-m Expense 749.108 0 0 0 0 106.780 0 642,328 0 I 930.1 General.^h - ; Empense 0 0 0 0 0 0 0 0 0 930.2 M4=raan===a== O earst Espanse 881.506 0 0 103.247 (409) 658.868 0 0 0 931 Reese 14.539.616 0 7.649.505 1.677.707 1.315.628 3.555.851 5.00s 29.500 18.271 . 932 h of Structores and F; 0 0 0 0 0 0 0 0 0 i 40 Depreciation and Amoetization Expense 898.825 898.815 0 0 0 0 0 0 0 408 Temos Other Then Income Tesee 12.446.790 124.004 5.326.778 3.266.013 3.729.915 0 0 0 0 + l 409 Incesse Temes 46.835 46.835 0 0 0 0 0 0 0 410 Provision for Deferred laceme Tene. 316.084 316.084 0 0 0 0 0 0 0 - 411 Provuion for Deferred locome Temes - Credit (175.220) (175.220) 0 0l 0 0 0 0 0 411.5 lavestment Ten Credst 0 0 0 0' 0 0 0 0 0 426.1 Donatione 127.338 0 894 125.732 712 0 0 0 'O 426.5 'Other D:datione 721.983 0 26.105 632.273 63.605 0 0 0 0 427 laterest on tong-Term Debt 0 -0 0 0 0 0 0 0 0 430 Interest ce Dcht to Assoc' ate Companies 0 0 0 0 0 0 0 0 0 431 Other laterest Expense 394,224 -394.224 0 0 0 0 0 0 0 - TOTAL EXPENSES 1535.723.438 $1.604.832 5225.335.573 5106.651.402 $133.073.226 325.438.909 $453.208 $3.640.377 327.594.4'./ t u
AENUAL REPORT OF ENTERGY OPERATIONS, INC. For the Year Ended Do. her 31,1991 Schedade XVH - Schedule of Expense Distribution by Dcy 11.4 or Service Punction DEPARTMENT OR SERVICE FUNCTION -. - - = - Account Operations & Purchasing Number Engineering 920 $6.305.574 $337.370 l 921 2,250,735 43,4IB 922 0 0 923 - 578.198 20.480 924 0 0 U 925 0 0 926 2,0$0 (9,479) 928 0 0 930.1 0 0 930.2 120,000 0 938 267,758 10,360 932 0 .0
~~3..~~
~~0 0 408 O . 0 -409. 0 0 410 0 - 0 4:s 0 0 411.5 0 0 426.1 0 0 426.5 0 0 427 0 0 430 0 0 431 0 0 l. 19.524.315 $407,149 i W}}~~

ML20097B252

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