ML20098C712
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{{#Wiki_filter:- _ l L ' -WNP-3 & WNP-5 l (- e BEFORE THE UNITED STATES ATOMIC ENERGY COMMISSION Application of WASHINGTON PUBLIC POWER SUPPLY SYSTEM, ) et al., for Class 103 Construction )
- Permits and Operating Licenses for Utilization Facilities to be.known as- Docket Nos. 50-508 Washington Public Power Supply System 50-509 Nuclear Project No. 3 and Nuclear Project No. 5. at its Site near )
Satsop, Grays Harbor County, Washington 4
)
JOSEPH B. KNOTTS, JR. ( NICHOLAS S. REYNOLDS Debevoise and Liberman 700 Shoreham Building 806 15th. Street, NW Washington, D.C. 20005 Of Counsel: RICHARD Q. QUIGLEY Washington Public Power Supply System Post Office Box 968 Richland, Washington 99352 4 i 8409270144 840824 Anendment 39
$O iE 4 603 PDR ,
April 1977
I ' ' WNP-3 & WNP-5 BEFORE THE UNITED STATES NUCLEAR REGULATORY COMMISSION l Application of WASHINGTON PUBLIC POWER SUPPLY SYSTEM ) et al. (WPPSS Nuclear Project No. 3) ) Docket Nos. STN-50-508 (WPPSS Nuclear Project No. 5) ) STN-50-509 In accordance with the Atomic Energy Act of 1954, as amended, and the rules and regulations issued thereunder WASHINGTON PUBLIC POWER SUPPLY SYSTEM (hereinafter sometimes referred to as " Supply System" or as "WPPSS"), acting for itself and as agent for certain other entities as set forth herein, seeks from the UNITED STATES NUCLEAR REGULATORY COMMISSION (hereinaf ter referred to as "NRC" or "Comission") (i) 40-year Class 103 licenses to construct and operate nuclear power facilities at its site locateo in south-eastern Grays Harbor County, State of Washington, near Satsop, along the south bank of the Chehalis River ne3r its confluence with the Satsop River (the facilities will consist of two pressurized water reactors, each with a core power level of 3800 MWt, officially known as WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECTS N0. 3,
. and NO. 5 (hereinaf ter called, collectively, the " Project", or, separately.
( WNP-3 and WNP-5 respectively)), and (ii) appropriate source, byproduct . and special nuclear material licenses for the Project. In support of this application the Supply System provides the following information (references in brackets are to sections or appendices of 10 CFR Part 50, unless otherwise noted).
- a. Name of Applicant [Section 50.33 (a)]
The applicant is WASHINGTON PUBLIC POWER SUPPLY SYSTEM, for itself as owner of 70% undivided interest as a tenant in comon in WNP-3, and as agent for Pacific Power & Light Company (PP&L), Portland General Electric Company (PGE), Puget Sound Power & Light Company (PSP &L) and the Washington Water Power Company (WWP), all of which will share the remaining 30% interest in WNP-3 as tenants in comon in the following
/V undivided proportions: PP&L (10%); PGE (10%); PSP &L (5%); and WWP (5%).
With regard to WNP-5, WASHINGTON PUBLIC POWER SUPPLY SYSTEM is the Applicant for itself as owner of 90% undivided interest as a tenant in common in the facility, and as agent for PACIFIC POWER & LIGHT g COMPANY (PP&L) as owner of a 10% undivided interest in WNP-5 as a tenant in comon. 1 Amendment 39 April 1977
l E:P-3 S WNP-5
- b. Address of Applicant [Section 50.33 (b)]
The address of the Supply System is: 3000 George Washington Way P. O. Box 968-Richland, Washington 99352 1. The address of Pacific Power & Light Corapany is: Public Service Building 920 S.W. Sixth Avenue Portland, Oregon 97204 The address of Portland General Electric Company is: 121 S.W. Salmon Street Portland, Oregon 97204 The address of Puget Sound Power & Light Company is: Puget Power Edilding Bellevue, Washington 98009 The address of the Washington Water Power Company is: E.1411 ilission Avenue
, Spokane, Washington 99202
( i < ( 2 Amendment 39 April 1977
UNP-3 $ WNP-5 w , c. Description of Business Applicant [Section 50.33 (c)] (' The Supply System is a joint operating agency and a municipal corporation of the State of Washington organized under Chapter 43.52 of the Revised Code of Washington, as amended. The Supply System is composed of 19 public utility districts of the State of Washington and the cities of Richland, Seattle and Tacoma, Washington. Pursuant to its statutory authority the Supply System is empowered to acquire, construct and oper-ate plants and facilities for the generation and transmission of electric power." The Supply System presently operates (1) the Packwood Lake Hydroelectric Project in Lewis County, Washington, and (2) the Hanford Electric Generating Project, which utilizes by-product steam from the Energy Research and Development Administration's N-Reactor near Richland, Washington. The Supply System has under construction WPPPSS Nuclear ProjectNo.1(WNP-1)andisproceedingwithsitepreparationonWPPSS Project No. 4 (WNP-4). Construction of WNP-1 is pursuant to NRC Construction Permit CPPR-134 and WNP-4 site preparation is pursuant to Limited Work Authorizations dated August 1, 1975 and October 3, 1975. WNP-1 and WNP-4 are the subject of a single application. In addition, the Supply System has under construction its WPPSS Nuclear Project No. 2 (WNP-2), formerly known as Hanford No. 2, pursuant to NRC Construction Permit CPPR-93. Pacific Power & Light Company is an investor-owned electric utility with its principal offices in Portland, Oregon. PP&L owns thirty-three hydroelectric generating plants with a rated capacity of 863,393 kilo-( watts, six steam-electric plants with a rated capacity of 2,478,452 kilowatts and minor internal combustion generating capacity. The company also has cuatracts to purchase power from various public agencies and pe%lic utility districts on long term agreements as well as peaking capacity from the Bonneville Power Administration, and expects to purchase non-fim energy from Bonneville to the extent available. PP&L presently operates, inter alia, the Dave Johnson generating stat-ion, a coal-fueled 750 MW facility, near Glenrock, Wyoming, and also operatAs and owns 47-1/2% of the Centralia Project, two coal-fueled 700 MW facilities at Centralia, Washington, which are jointly-owned by PP&L, four publicly-owned and the three other investor-owned utilities which also are owners of WNP-3. PP&L with 66 2/3% ownership and Idaho Power Company presently are developing the Jim Bridger power and coal mining complex in southwestern Wyoming. The Jim Bridger Project will have four 500 MW units, three of which are operating and the last of which is scheduled for service in 1979. PP&L is also a 2-1/2% owner of the Trojan Project together with Portland General Electric Company and the City of Eugene, Oregon. The Trojan Project is a nuclear-fueled 1,100 W facility near Rainer, Oregon which is in comercial operation. Also, PP&L and Black Hills Power and Light Company are constructing a 330 W coal-fired facility near Gillette, Wyoming, which is scheduled for commercial operation in May of 1978. (
, Amendment 39 s April 1977
WNP-3 & WNP-5
'I Portland General Electric Company is an investor-owned utility with its .( principal offices in Portland, Oregon. PGE owns 661 W of hydroelectric capacity and has long-term purchase contracts for purchase of hydroelectric
. capacity from Washington State Public Utility Districts which purchases currently total 936 M. PGE also is a participant in other regional pur-chase transactions including those involving the Hanford Electric Generat-ing Project and the Columbia Storage Power Exchange (CSPE). CSPE currently provides 274 W of capacity. PGE owns 67.5% of the nominal 1,100 W Trojan nuclear plant, as well as 2.5% of the Centralia coal-fired project. In addition, PGE owns 849 W of combustion turbine capacity to which a 150 MW combined-cycle steam turbine is currently being added. PGE is the constructor and principal owner (80%) of a coal-fired plant scheduled for completion in 1980 at Boardman, Oregon. PGE is also the applicant for a two-1260 MW unit nuclear project planned at Pebble Springs near Arlington, Oregon, and, in addition, is participating in the Skagit nuclear project and Colstrip Nos. 3 and 4 coal-fired units being sponsored by others. Puget Sound Power & Light Company is an investor-owned electric utility with its principal office in Belle /ue, Washington. PSP &L owns and operates ' hydroelectric and oil-fired generating facilities, with a total net plant capability of approximately 495 megawatts. In addition, PSP &L owns a 7
; percent interest in the 1400 megawatt Centralia Project, a coal-fired plant in western Washington operated by Pacific Power & Light Company, and a 50 percent interest in Colstrip Units 1 and 2, two 330 megawatt coal-
- ' fired units at Colstrip, Montana, jointly owned by PSP &L and The Montana Power Company. PSP &L also has long-term contracts with several public
( utility districts to purchase substantial amounts of power from several hydroelectric projects on the Columbia River, as well as a contract with the Bonneville Power Administration under which it is receiving power from Hanford Electric Generating Project and will receive power from WPPSS Nuclear
- j. Project No.1. PSP &L has also purchased power under the Columbia Storage i Power Exchange Agreement. PSP &L will cwn a 40 percent interest in its
; proposed Skagit Nuclear Power Project, Units 1 and 2 two 1288 megawatt units to be constructed near Sedro Woolley, Washington to come on line in i 1984 and 1986. PSP &L will also own a 25 percent interest in the proposed f Colstrip Units 3 and 4 two 700 megawatt coal-fired units, and a 20 percent interest in the proposed Portland General Electric Company Pebble Springs l Nuclear Plant, Units 1 and 2, two 1240 megawatt units, j l The Washington Water Power Company is an investor-owned electric utility
, with its principal offices in Spokane, Washington. The bulk of the Company's j power needs are supplied by Co.npany-owned hydroelectric projects while
- approximately 22% of its needs are supplied from the output of the Columbia t
River hydroelectric developments sponsored by the Public Utility Districts. The Company also owns a 15% share of the Centralia Project a two-unit, ! 700-MW each, coal-fueled facility at Centralia, Washington. The Company has agreed to participate in the proposed Skagit Nuclear Project, sponsored by Puget Sound Power & Light, with a 10% ownership and in the Colstrip
- Units No. 3 & 4, sponsored by Montana Power Company, with a 15% ownership, i
- The Stagit and Colstrip Projects are currently in the licensing process. I t I i
4 4 Amendnent 39 April 1977
WNP-3 & WNP-5
- d. (1) [Section 50.33 (d) (1)] N. A.
(2) [Section 50.33 (d) (2)] N. A. (3) (1) [Section50.33(d)(3)(i)] The Supply System is a municipal corporation and joint i operating agency of the State of Washington. The management and control of the Supply System is vested in a Board of Directors made up of one representative from each of its 22 member utilities. An Executive Committee composed of l seven members elected by the Board of Directors ; administers the business of the Supply System
-between regular quarterly meetings of the Board of Directors. The principal office of the Supply System is located at 3000 George Washington
- Way, Richland, Washington 99352. -
Pacific Power & Light Company is an investor-owned utility incorporated in the State of Maine and maintaining its principal office at > Public Service Building, 920 S.W. Sixth l Avenue Fortland, Oregon 97204. t Portland General Electric Company is an investor-owned utility incorporated in the State of Oregon and maintaining its principal office at 121 S.W. Salmon Street, Portland, Oregon 97204. , Puget Sound Power & Light is an investor-owned i utility incorporated in the State of Washington i and maintaining its principal office at Puget l Power Building, Bellevue, Washington 98009. The Washington Water Power Company is an investor-owned utility incorporated in the State of Wash-ington and maintaining its principal office at E. 1411 Mission Avenue, Spokane, Washington 99202. (ii)[Section50.33(d)(ii): All of the Supply System's directors anc officers are citizens of the United States, as are the directors and officers of the four investor-owned utilities. ( Amendment 39 i 5 April 1977 _I
WNP-3 & WNP-5 The names and addresses of the Supply System's Board of Directors are as
-( follows (members of the Executive Committee are designated by an asterisk):
Name Address John Goldsbury 200 N. Kellog Kennewick, Washington 99336 R. Keiser Box 456 Chelan, Washington 98816 Alvin E. Fletcher P. O.--Box 509 Forks, Washington 98331
*Ed Fisher P. O. Box 1566 -
Vancouver, Washington 98663
*D. E. Hughes 960 Commerce Avenuo Longview, Washington 98632 Howard Prey Drawer A Orando, Washington 98843 Clair R. Hilderbrandt , P. O. Box 634 Republic, Washington 99166
*Glenn C. Walkley Route 5, Box 5010 Pasco, Washington 99301 C. K. Jolly 111 Maringo Rd.
Ephrata, Washington 98823
- John J. Welch 218 W. 4th Street Cosmopolis, Washington 98537 Harold W. Jenkins Route 5, Box 25 Ellensburg, Washington 98926 Gerald C. Fenton Rt. 1, 903 East Allen Street Goldendale, Washington 98620 T. R. Teitzel 368 North Fork Rd.
Chehalis, Washington 93532 Edwin W. Taylor Route 1, Box 575 ; Shelton, Washington 98584 Quentin Mizer P. O. Box 472 Raymond, Washington 98577 ( Amendment 39 6 April 1977
WNP-3 & WNP-5 Name Address {. Lane Bray < P. O. Box 190 Richland, Washington 99352 ^'
*Gordon Vickery 1015 3rd Avenue Seattle, Washington 98104 Rolf E. Jemtegaard Route 1, Box 1850 Washougal, Washington 98671
*W. G. Hulbert,-Jr. P. O. Box 1107 Everett, Washington 98206
*J. D. Cockrell Dept. of Public Utilities P. O. Box 11007 Tacoma, Washington 98411 C. F. Emerick P. O. Box 248 Cathlamet, Washington 98612 Stanton H. Cain P. O. Box C Malott, Washington 98829 The names, titles and addresses of the Supply System's principal officers are as follows:
John Goldsbury 200 North K'ellogg President Kennewick, Washington 99336 John J. Welch 218 W. 4th Street Vice-President Cosmopolis, Washington 98357 Edwin W. Taylcr Route 1. Box 575 Secretary Shelton, Washington 98584 The names of administrative staff members of the Supply System are as follows: Name Title N. O. Strand Managing Director P. C. Otness Executive Assistant R. Q. Quigley Chief Counsel b i Amendment 39 7
.s:
April 1977
WNP-3 & WNP-5 ( Name Title J. D. Perko Assistant Director, Finance & Administration F. D. McElwee Assistant Director, Projects-D. L. Renberger Assistant Director, Gener-ation & Technology All of the directors and officers of Pacific Power & Light Company are citizens of the United States. The names and addresses of the Board of Directors are as follows: Name Address C. M. Bishop, Jr. Pendleton Woolen Mills 218 S. W. Jefferson Portland, Oregon 97201 Don C. Frisbee Pacific Power & Light Company 920 S.W. Sixth Avenue j Portland, Oregon 97204 Stanley K. Hathaway Hathaway, Speight and Kunz 3001 Henderson Drive Cheyenne, Wyoming 82001 Glenn L. Jackson Pacific Power & Light Company 920 S.W. Sixth Avenue l Portland, Oregon 97204 C. Howard Lane Mt. Hood Radio & Television Broadcasting Corporation 140 S. W. Columbia Portland, Oregon 97204 Conrad F. Lundgren West Glacier Mercantile Co. West Glacier, Montana 59936 John McGregor McGregor Feedlot P.O. Box 607 Pasco, Washington 99301 1 l l 8 Amendment 39 April 1977 l
r WNP-3 & WNP-5 Name Address Paul F. Murphy-- 8019 Sacajawea Way Wilsonville, Oregon 97070
. Louis B. Perry . Standard Insurance Company-P. O. Box 711 Portland, Oregon 97204 George D. Rives _ Rives, Bonyhadi, Drunnond & Smith 920 S.W. Sixth Avenue Portland, Oregon 97204 William E. Roberts B-& D Development Company E
806 S. W. Broadway Portland, Oregon 97205 Kenneth W. Self Freightliner Corp. P.O. Box 3849 Portland, Oregon 97208 Donald Sherwood Sherwood & Roberts, Inc. 106 North Second Avenue Walla Walla, Washington 99362 Howard Vollum Tektronix, Inc.
-( P. O. Box 500 Beaverton, Oregon 97007 Roy A. Young -
Chancellor University of Nebraska-Lincoln Lincoln, Nebraska 68588 The names, titles and addresses of the principal officers of Pacific Power
& Light Company are as follows:
Name: Title Address Don C. Frisbee Pacific Power & Light Company Chairman of-the Board 920 S.W. Sixth Avenue j and President Portland, Oregon 97204 G. E. Drennan, Executive Pacific Power & Light Company Vice President 920 S.W. Sixth Avenue Portland, Oregon 97204 Allan C. Bartholorew Pacific Power & Light Company Senior Vice-President 920 S.W. Sixth Avenue Portland, Oregon 97204 ( Amendment 39 g April 1977
WNP-3 & WNP-5 g Name: Title Address ( John H. Geiger Vice-President Finance Pacific Power & Light Company 920 S.W. Sixth Avenue Portland, Oregon - 97204 Leonard Bennett Pacific Power & Light Company Corporate Secretary 920 S.W. Sixth Avenue Portland, Oregon 97204 All of the directors and officers of Portland General Electric Company are citizens of the United States. The names and addresses of the Board of Directors are as follows: Name Address Warren W. Braley 9155 S. W. Canyon Road Portland, Oregon 97225 Ernest H. Miller President, Mortgage Bancorporation P. O. Box 230 Salem, Oregon 97308 Wade Newbegin, Sr. President, R. M. Wade & Company P. O. Box 8769 Portland, Oregon 97208 Robert W. Roth President, JANTZEN INC. P. O. Box 3001 Portland, Oregon 97208 Robert H. Short President Portland General Electric Company 121 S.W. Salmon Street Portland, Oregon 97204 Eberly Thompson 2542 S. W. Hillcrest Drive, Portland, Oregon 97201 James J. Walton 330 Candalaria Blvd. South Salem, Oregon 97302 Earl Wantland President, Tektronix, Inc. P. O. Box 500 Beaverton, Oregon 97005 William E. Love Chairman Equitable Savings & Loan Association 1300 S.W. 6th Avenue Portland, Oregon 97201 John L. Schwabe Attorney Souther, Spaolding, Kinsey, ( Williamson & Schwabe 12th Floor Standard Plaza Building Portland, Oregon 97204 Amendment 39 April 1977
I . WNP-3 & WNP-5 - (L
~Name Address Frank M. Warren Chairman and Chief Executive Officer, Portland General Electric Co.
121 S.W. Salmon Street Portland, Oregon 97204 William W. Wessinger Chairman of the Board Blitz-Weinhard Co. 1133 West Burnside Street Portland, Oregon 97209 Robert J. Wilhelm President, Wilhelm Trucking Co. 3250 N. W. St. Helens Road Portland, Oregon 97210 Ralph E. Williams Room 333, North Pacific Building 917 S. W. Oak Street Portland, Oregon 97205-The names, titles and addresses of the principal officers of Portland General Electric Company are as follows: Name: Title Address Frank M. Warren 121 S.W. Salmon Street Chairman and Chief Portland, Oregon 97204 Executive Officer Robert H. Short 121 S.W. Salmon Street President Portland, Oregon 9720% Joseph L. Williams 121 S.W. Salmon Street Executive Vice President Portland, Oregon 97204 Hilbert S. Johnson 121 S.W. Salmon Street Senior Vice President Portland, Oregon 97204 Glen E. Bredemeier 121 S.W. Salmon Street Vice President Portland, Oregon 97204 William J. Lindblad 171 S.W. Salmon Si.reet Vice President Portland, Oregon 97204 H. H. Phillips 121 S.W. Salmon Street Vice President, Corporate Portland, Oregon 97204 Counsel & Secretary Amendment 39 yy April 1977
WNP-3 & WNP-5 ( .Name: Title Address Estes Snedecor 121 S.W. Salmon Street Vice President Portland, Oregon 97204 F. D. Wieden 121 S.W. Salmon Street Vice President Portland, Oregon 97204 E. F. Wildfong 121 S.W. Salmon Street Vice President Portland, Oregon 97204 J. N. Woodcock 121 S.W. Salmon Street Treasurer _ Portland, Oregon 97204 J. L. Staines 121 S.W. Salmon Street Controller Portland, Oregon 97204 All of the directors and officers of Puget Sound Power & Light Company are citizens of the United States. The names and addresses of the Board of Directors are as follows: Name Address 1 Ralph M. Davis Puget Sound Power & Light Company Chairman Puget Power Building i Bellevue, Washington 98009 Winston D. Brown Howard S. Wright Construction Co.
** Room 3318 Seattle-First National Bank Bldg.
Seattle, Washington 98154
** Send all mailings to 1201 Shenandoah Drive East Seattle, Washington 98112 John W. Ellis Puget Sound Power & Light Con.pany Puget Power Building Bellevue, Washington 98009 F. J. Herb 416 Bellingham National Bank Bldg.
Bellingham, Washington 98225 J. H. King Puget Sound Power & Light Company Puget Power Building Bellevue, Washington 98009 l 1 l Amendment 39 April 1977 12
l WNP-3 & WNP-5 ) (. Name Address Lowell P. Mickelwait Perkins, Cole, Stone, Olsen
& Williams 1900 Washington Building Seattle, Washington 98101 John N. Nordstrom Nordstrom, Inc.
1501 Fifth Avenue Seattle, Washington 98101 Robert D. 0'Brien PACCAR, Inc. Post Office Box 1518 Bellevue, Washington 98009 Irvine B. Rabel Star Machinery Company 241 South Lander Street Seattle, Washington 98134 Ralph W. L. Stormans Ralph's Thriftway Store 1908 East Fourth Avenue Olympia, Washington 98506 R. Kirk Wilson Thrifty Foods, Inc. P.O. Box 265 Burlington,' Washington 98233 The names, titles and addresses of the principal officers of Puget Sound Power & Light Company are as follows: Name: Title Address John W. Ellis Puget Power Building President and Chief Bellevue, Washington 98009 Executive Officer Ralph M. Davis Puget Power Building Chairman of the Board Bellevue, Washington 98009 J. H. King Puget Power Building Vice-President-Finance Bellevue, Washington 98009 and Treasurer J. Harold Abramson Puget Power Building Vice-President-Administration Bellevue, Washington 98009
- Robert W. Evans Puget Power Building
!- Vice-President-Divisions and Bellevue, Washington 98009 l ( Customer Service l l Amendment 39 ' April 1977
1 WNP-3 & WNP-5 j ( Name Address Warren J. Ferguson Puget Power Building Vice President-Engineering Bellevue, Washington 98009 and Construction Lawrence E. Hall Puget Power Building Vice-President-Public Affairs Bellevue, Washington 98009 David H. Knight Puget Power Building Vice-President-Power Supply Bellevue, Washington 98009 Richard F. Whaley Puget Power Building Vice-President and Controller Bellevue, Washington 93009 Robert C. Wing Puget Power Building Vice-President-Corporate Bellevue, Washington 98009 Planning Wilbur E. Watson Puget Power Building Secretary Bellevue, Washington 98009 All of the directors and officers of The Washington Water Power Company are citizens of the United States. The names and addresses of the Board of Directors are as follows: Name Address Rodney G. Aller Attorney at Law Lakeville, Connecticut 06039 A. L. Barnes (retired) General Delivery Hayden Lake, Idaho 83835 Duane B. Hagadont President, Hagadone Newspapers Hagadone Building Coeur d'Alene, Idaho 83814 Roy J. Johnson (retired) Riverfalls Towers, Penthouse West 1224 Riverside Avenue Spokane, Washington 99201 W. A. Lowry E. 1411 Mission Avenue Spokane, Washington 99202 James B. McMonigle Box 877 Lewiston, Idaho 83501 ( Amendment 39 April 1977 14
WNP-3 & WNP-5 C Name Address James A. Poore, Jr. Poore, McKenzie, Roth, Robinson & Robinson 4th Floor, Silver Bow Block Butte, Montana 59701 W. J. Satre The Washington Water Power Company E. 1411 Mission Avenue Spokane, Washington 99222 Eugene Thompson Route #1, Box 56 Moscow, Idaho 83843 The names, titles and addresses of the principal officers of Washington Water Power Company are as follows: Name: Title Address Wendell J. Satre E. 1411 Mission Avenue President Spokane, Washington 99202 William A. Lowry E. 1411 Mission Avenue Executive Vice-President Spokane, Washington 99202 l Donald M. Oliason E. 1411 Mission Avenue Vice-President and Spokane, Washington 99202 General Division Mgr. Donald L. Olson E. 1411 Mission Avenue Vice-President - Spokane, Washington 99202 Engineering & Construction James M. Coombs E. 1411 Mission Avenue Vice President - Spokane, Washington 99202 Finance and Treasurer Harold W. Harding E. 1411 Mission Avenue Vice-President - Spokane, Washington 99202 Power Supply i , Jermiah P. Buckley E. 1411 Mission Avenue l Vice-President & Spokane, Washington 99202 Secretary l ( 15 Amendment 39 April 1977 L
. _ - ,_ _ _ -_ , ~
. ~ . . . - ._ _-._- _ _
~
UNP-3 S WNP-5 Name: Title Address F (-~ Reginald J. Clizbe E. 1411 Mission Avenue
)
Vice President-Personnel and Spokane, Washington 92202 Administrative Services 1 Robert T. McLendon. E. 1411 Mission Avenue Vice President-Gas Supply Spokane, Washington 92202
- d. -(3) (iii) [Section 50.33 (d) (3) (iii)] The Supply System, Pacific Power & Light Company, Portland General Electric Company, Puget Sound Power.& Light Company, and the Wash-ington Water Power Company are not owned, controlled or dominated by an alien, a foreign corporation, or foreign '
government.
- d. (4) ~[Section 50.33 (d) (4)] With regard to WNP-3, the Supply System is acting on its own behalf as owner of 70% undivided interest as a tenant in common in the facility and as agent for Pacific Power & Light Company (PP&L), Portland General Electric Company
, (PGE), Puget Sound Power & Light Company (PSP &L) and the ) Washington Water Power Company (WWP), all of which will share a 30% interest in WNP-3 as tenants in comon in the following undivided proportions: PP&L (10%); PGE (10%); PSP &L (5%); and WWP (5%). With regard to WNP-5, the Supply System is acting on its own be-half as owner of 90% undivided interest as a tenant in comon in the facility, and as agent for Pacific Power & Light Company (PP&L) as owner of a 10% undivided interest in WNP-5 as a tenant in common.
- e. [Section 50.33(e)]
The Supply System for itself and as agent for the other entities as their interests appear herein seeks from the Commission (i) 40-year
. Class 103 licenses to construct and operate two nuclear power plants, each with a core power level of 3,800 Wt, , at its site located in southeastern Grays Harbor County, State of Washington, along the south bank of the Chehalis River near its confluenc~e with Satsop River, (ii)
- appropriate source, byproduct and special nuclear material licenses for the Project. The facility will be used to generate electric energy.
! The Supply System's 70% share of the WNP-3 output will be sold by the Supply System to 103 consumer-owned utilities in the Pacific Northwest through Net Billing Agreements, described in Exhibit A, which these utilities have executed with the Supply System and the Bonneville Power Administration. These 103 utilities are all statutory preference customers of Bonneville, and consist of 27 municipalities, 29 districts, and 47 cooperatives.
-(
i l- 16 Amendment 39 April 1977 l L _ . _ _ _ . ._ _ . - - - - _ _ _ _ _ _ . _ _ - _ . _ _ . _ _ _ _ . . _
WNP-3 & WNP-5 (~ The remaining 30% of the WNP-3 output will be received by Pacific Power
\ & Light Company (10%), Portland General Electric Company (10%), Puget Sound Power & Light Company (5%), and the Washington Water Power Company (5%) in proportion to their respective ownership shares in accordance with the WNP-3 Ownership Agreement as set forth in Exhibit A.
The Supply System's 90% share of the WNP-5 output will be sold by the - Supply System to 88 consumer-owned utilities in the Pacific Northwest through Participants' Agreements which these utilities have executed. *f These 88 utilities are all statutory preference customers of Bonneville, and consist of 21 municipalities, 24 districts, and 43 cooperatives. The remaining 10% of the WNP-5 output will be received by Pacific Power
& Light Company in accordance with the ownership agreement set forth in Exhibit H.
The Site Certification Agreement was ratified by the State of Washington and WPPSS on October 27, 1976.
- f. [Section 50.33(f) and Appendix C]
Financial Qualifications WPPSS Huclear Project No. 3 will be owned by the Supply System and by four investor-owned utilities on a joint ownership basis as tenants in comon, with the Supply System owning 70% undivided interest and the four investor-owned utilities owning 30% in the following undivided proportions; Pacific Power & Light Company (10%), Portland General Electric Company (10%), Puget Sound Power & Light Company (5%) and the Washington Water Power Company (5%). **/ WPPSS Nuclear Project No. 5 will be owned by the Supply System and by Pacific Power & Light Company on a joint ownership basis as tenants in common, with the Supply System owning 90% undivided interest and Pacific Power & Light owning the remaining 10% undivided interest. Each of the utilities to which the Supply System will sell its portion o' the output of WNP-3 and WNP-5 by contract agree to ratably reimburse the Supply System for its cost of financing and managing construction and operation of WNP-3 and WNP-5. Each of the privately-owned utilities agrees to pay its ownership share of the costs of constructing and operating WNP-3 and, in the case of Pacific Power & Light Company, WNP-
- 5. Each owner agrees to bear its respective ownership share of all obligations and liabilities of WNP-3 and (for PP&L) WNP-5 as they arise.
*/ Included in Exhibit H is a listing of Participants and their respective shares of the Supply System's 90% share of WNP-5 output. Also included is a typical Participant's Agreement.
**/ Exhibit I contains the 1976 Annual Reports for the Supply System, PP&L, PGE, PSP &L and WWP.
17 Amendment 39 April 1977
WNP-3 S WNP-5 The Architect-Engineer and the Supply System have estimated that the cost of construction of WNP-3 and WNP-5 will be $1,050,216,000 and [-
' $1,210,000,000 respectively. These costs have been tabulated below in accordance with the FPC Code of Accounts.
WNP-3 Costs WNP-5 Costs FPC Account Account Name ($1,000) ($1,000) 320 Land and Land Rights (1) $ 492 $ - 321 Structures & Improvements 163,900 172,700 , 322 Reactor Plant Equipment 126,300 139,000 323 Turbine-Generator Units 84,200 86,900 324 Accessory Elect. Equipment 36,900 37,500 325 Misc. Power Plant Equipment 2,200 2,400
- TOTAL NUCLEAR PLANT (2) $ 413,992 $ 438,500 353 Station Equip. & Switch Yard 3,500 2,700 Owners Direct Cost 55,000 30,000 Sales Tax (4) 22,705 24,586 Capitalized Interest During Construction 204,925 272,452 Financing Expenses 14,570 22,140 Eng. & Const. Mgmt. (2) 65,100 47,000 Contingencies (2) 66,808 73,200 Escalation 165,500 247,900 Performance 1,000 1,000 Nuclear Fuel 120 Nuclear Fuel (First Core) (3) 37,116 50,522 TOTAL ESTIMATED COST $ 1,050,216 $ 1,210,000 Fuel costs are based on purchase of the first fuel core. Cost estimate for WNP-5 assumes 100% WPPSS ownership. All cost estimates are subject to updating.
The Supply System will finance its share of the costs of acquiring and constructing WNP-3 and WNP-5 by issuing short term notes and long term (1) Future land acquisition or land rights will be funded from - contingencies. l
- 2) Estimated by the Architect-Engineer.
- 3) Estimated by the Supply System.
- 4) Includes sales tax on nuclear fuel.
18 Amendment 39 April 1977
. - .. .- . . - . - = _ . - -_
.t WNP-3 & WNP bonds. It is anticipated that these bonds will' be issued in series from
~ . (_ - time to time ac funds to meet the costs of construction are required. bonds issued by the Supply System and interest thereon will be repaid from Supply System revenues which are to be paid by the 103 utilities 4 participating in WNP-3 and the 88 utilities participating in WNP-5 who are purchasing the Supply System's share of the project, as a portion of the annual costs of the project. i , These participating utilities have contracted to pay an agreed per-centage of Supply System's costs, including the costs of issuing and repaying the bonds, whether WNP-3 and WNP-5 are operated or not, and regardless of whether power is produced by WNP-3 and WNP-5. Each of ~these participating utilities further agrees to assign its
!- percentage share of the output of WNP-3 to the Bonneville Power Adminis-tration under Net Billing agreements in return for a credit or offset by Bonneville on amounts otherwise due Bonneville for power and other '
services furnished to the utilities under other contracts in an amount equal to the. amount the utility has paid.the Supply System. The sale to
- the utilities by Supply System and the assignment to Bonneville by the utilities will be on-actual cost basis. A form of net billing agree-ment is set forth in Exhibit A.
Generally similar arrangements, differing however in contractual mech-anisms (net billing is not used for WNP-5), are utilized for . financing WNP-5. The contractual agreements provide that the 88 utilities parti-L ; cipating in the Supply System's share of WNP-5 are directly billed for their respectiva portions of the WNP-5 net operating cost.
," Each of the four investor-owned utilities will finance their ownership shares of WNP-3, and as applicable WNP-5, in the same manner as the i
balance 'of their respective construction programs, viz., short term , borrowing, sale of equity securities, proceeds from first mortgage bonds, internally generated funds, leases or other executory arrange-ments and other secured and unsecured transactions or construction I financing. < t The financial qualifications of the Supply System, with respect to its share of the project, and the four privately-owned utilities, with , respect to their shares of WNP-3 and as applicable, WNP-5, to carry out , the activities for which the Construction Permits are sought, are set { fourth in Exhibit B (and the schedules thereto) which is made part of this application by this reference. Exhibit B shows that the Supply l: .Syste.n and the other owner or owners possess the funds necessary to ' cover estimated construction costs and related fuel cycle costs or have reasonable assurance of obtaining the necessary funds, or a combination of the two. Set forth in Exhibits A and B is further information on sources of funds (planned financing arrangements) and the financial statements contemplated for construction permit applications by Appendix
.C of 10 CFR Part 50.
," 9 [Section 50.33(d ] was deleted on April 3,1969 (M F. R. 6036).
L Amendment 39 19 April 1977 I
- . . - _ . . _ , _ . . , _ , _ _ _ , . _ _ _ _ _ _ _ _ . . . _ . . _ _ _ _ . _ , . _ _ __.-____.____m.,. . . , . _ _ . . , ~ . .
WNP-3 & WNP-5
- h. [Section 50.33(h)]
The earliest and latest dates for completion of construction are, for WNP-3, November 1, 1982, and flovember 1, 1984, rerpectively, and, for WNP-5, May 1, 1984 and May 1, 1986. The latest outes for completion are specified for purposes of duration of the permits in the event of unforeseen contingencies. It remains essential to the public interest in an adequate reliable supply of power, as shown is sections 1 and 8 of the Environmental Report, that the Project be constructed, licensed and operational at the earliest possible dates. The planned time for fuel loading of WNP-3 and WNP-5 is January 1983 and July 1984, respectively. Comercial Operation is scheduled for July 1983 and January 1985 respectively.
- 1. [Section 50.33(i)]
The Supply System does not engage in the distribution of power to retail customers. It is authorized among other things, to acquire, construct and operate plants, works, and facilities for the generation and trans-mission of power to utilities. The Supply System does not have " rates" but is reimbursed for the costs of each project by the participants therein. .In any event, as a municipal corporation of the State of Washington, the Supply System is not under the jurisdiction of any regulatory agency having control over " rates and services" of the proposed activity. The Federal Power Comission, 825 fiorth Capitol Street, N.E. , Washington, D. C. 20426, has jurisdiction over the rates and services and/or certain other matters with respect to the four investor-owned utilities, as do or may the following state regulatory agencies, as noted respectively hereinafter: Pacific Power a Light (1) California Public Utilities Company Comission State Building, 350 McAllister St. 4 San Francisco, California 94102 (2) Oregon Public Utility Comissioner 300 Labor and Industries Bldg. Salem, Oregon 97310 (3) Washington Utilities and Transportation Comission Highway-Licenses Building Olympia, Washington 98504 (4) Montana Public Service Comission 1227-11th Avenue Helena, Montana 59601 (5) Idaho Public Utilities l ( Comission Statehouse Boise, Idaho 83720 Amendment 39 20 April 1977 l
WNP-3 & WNP-5 (6) Wyoming Public Service Comission (^ Cheyenne, Wyoming 82001 Portland General Electric (1) Oregon Public Utility Commissioner 300 Labor and Industries Bldg. Salem, Oregon 97310 Puget Sound Power & Light (1) Washington Utilities and Company Transportation Commission Highway-Licenses Building Olympia, Washington 98504 (2) Public Service Commission of Montana 1227 - lith Avenue Helena, Montana 59601 (3) Oregon Public Utility Commissioner 300 Labor and Industries Bldg. Salem, Oregon 97310 . Washington Water Power (1) Washington Utilities & Company Transportation Commission Highway-Licenses Building Olympia, Washington 98504 (2) Idaho Public Utilities Commission Statehouse Boise, Idaho 83720 (3) Public Service Commission of Montana 1227 - lith Avenue Helena, tiontana 59601 The municipalities, private utilities, public bodies and cooperatives which are within transmission distance, and authorized to engage in the distribution of electric energy within the area, are described in Exhibit B and in the "Information Requested by The Attorney General For Antitrust Review" which was previously submitted prior to this updated application. As described in Exhibit A,103 public and consumer-owned utilities have agreed to purchase the Supply System's 70% share of the output of WNP-3, while the four investor-owned utilities will receive the remaining 30% in accordance with their respective ownership share. Siniliarly, the 88 public and consumer owned utilities will receive the Supply System's 90% share of the output of WNP-5 in accordance with their respective shares, and Pacific Power & Light (PP&L) will receive the remaining 10% of the output. ; Amendment 39 i April 1977 21 l
NNP-3 & WNP-5 As required by 10 CFR Section 50.33 (i), a list of publications appro-priate to give reasonable notice of the application is set forth below: { Walla Walla Union Bu11etir. Seattle Times First & Poplar Streets- P. 0.' Box 70 Walla Walla, Washington 99362 Seattle, Washington 98111 The Idaho Statesman Tri-City Herald P. O. Box 40 P. O. Box 2608 Boise, Idaho 83707 Tri-Cities, Washington 99302 Yakima Herald Republic The Oregonian 114 No.4th Street 1320 S. W. Broadway Yakima, Washington 98907 Portland, Oregon 97201 Seattle Post-Intelligencer Spokesman Review , 6th & Wall W. 927 Riverside Seattle, Washington 98121 Spokane, Washington 99253 Daily Journal of Commerce Daily Journal of Connerce 2014 N. W. 24th Avenue' 83 Columbia Portland, Oregon 97210 Seattle, Washington 98104 4 Aberdeen Daily World Centralia Daily Chronicle P. O. Box 269 Pearl & Maple Aberdeen, Washington 98520 Centralia, Washington 98531 Montesano Vidette Daily Olympian
- P. O. Box 671 P. O. Box 407 Montesano, Washington 98563 Olympia, Washington 98507 Elma Chronicle Tacoma News Tribune P. O. Box 617 P. O. Box 11000 Elma, Washington 98541 Tacoma, Washington 98411 Siskiyou Daily News Daily Inter Lake P. O. Box 129 300 First Avenue W.
Yreka, California 96067 Kalispell, Montana 59901 Star-Tribune Wyoming State Tribune 111 S. Jefferson Street 110 East 17th Street Casper, Wyoming 92601 Cheyenne, Wyoming 82001 , i 22 Amendment 39 April 1977
WNP-3 & WNP-5 k Bellevue Journal American The Sandpoint News Bulletin P. O. Box 310 415 North Second Avenue Bellevue, Washington 9dOO4 Sandpoint, Idaho 83864 The Vancouver Columbian The Longview Daily News West 8th and Grant Streets P. O. Box 189 Vancouver, Washington 98660 Longview, Washington 98632 J. [Section 50.33(j)] and [Section 50.37] No restricted data or other classified information (defense information) is involved in this application and it is not expected that any will be-come involved. However, in the event that it does, the applicants will appropriately segregate and safeguard.such information and will not per-mit any individual to have access to Restricted Data until the United States Civil Service Commission shall have made an investigation and report to the NRC on the character, associations and loyalty of such individual, and the NRC shall have determined that permitting such person to have access to Restricted Data will not endanger the common defense and security.
- k. [Section 50.33(a) and Appendix L]
The information required by 10 CFR Section 50.33(a) and 10 CFR Part 50, Appendix L has been submitted under separate cover entitled "Information Requested By The Attorney General For Antitrust Review."
- 1. [Section 50.33(f) and Appendix D]
, The Environmental Report pursuant to 10 CFR Part 50, Appendix D, (now 10 CFR Part 51) has been submitted.
- m. [Section 50.34]
The Preliminary Safety Analysis Report pursuant to 10 CFR Part 50, especially Section 50.34, has been submitted. l
- n. The Supply System has retained Ebasco Services, Inc.
(Ebasco) as Architect-Engineer to design and supervise the construction of the Project. The technical qualifications and description of Ebasco are shown in Exhibit C.
- o. The Supply System has also retained R. W. Beck and Associ-ates as Consulting Engineer to review economic feasibility and financial aspects of the Project. The technical qualifications and description of R. W. Beck and Associates are shown in Exhibit D.
t Amendment 39 April 1977 23
WNP-3 & WNP-5
- p. The nuclear steam supply systems for the Project are to be furnished by Combustion Engineering, Inc. (Combustion). The technical
( qualifications and description of Combustion are shown Exhibit E.
- q. The turbine generators for the Project will be furnished by Westinghouse Electric Company. The technical qualifications and description of Westinghouse Electric Company are shown in Exhibit F.
- r. The Supply Systen employs a Project Engineering Staff consisting of individuals having substantial training and experience in the construction and operation of nuclear facilities. See Chapter 13 of the Preliminary Safety Analysis Report,
- s. (10 CFR Part 140). The Supply System will provide and maintain financial protection for public liability and will execute an indemnity agreement with the Commission at the times, on the terms, and in the amounts all as may be required by 10 CFR Part 140.
- t. It is requested that all orders, notices, oapers and other comunications issued by the Commission in connection with this application be mailed and delivered to:
N. O. Strand, Managing Director Washington Public Power Supply System 3000 George Washington Way, P. O. Box 968 Richland, Washington 99352 and Joseph B. Knotts, Jr., Esq. Nicholas S. Reynolds, Esq. Debevoise and Liberman 700 Shoreham Building 806 15th Street, NW Washington, D. C. 20005 and Richard 9. Quigley, Esq. Washington Public Power Supply System 3000 George Washington Way, P. O. Box 968 Richland, Washington 99352 Amendment 39
! April 1977 24
-WNP-3 & WNP-5
, . WHEREFORE, the Supply System prays that the Commission issue
( (i) 40-year Class 103 licenses authorizing the Supply System to construct-and operate the proposed nuclear facilities at its site near Satsop,
. Gray's Harbor County, Washington and (ii) such byproduct, source, and
- special' nuclear material licenses as may be appropriate for the Project. i I l I L i i. L l i ; Amendment 39 April 1977 25
WNP-3 & WNP-5
~ .(
STATE OF WASHINGTON ss COUNTY OF BENTON D. L. RENBERGER, being first duly sworn, deposes and says: That he is the ASSISTANT DIRECTOR, GENERATION AND TECHNOLOGY, for the WASHINGTON PUBLIC POWER SUPPLY SYSTEM, the applicant herein, that he is authorized -by PACIFIC POWER AND LIGHT COMPANY, PORTLAND GENERAL ELECTRIC COMPANY, PUGET SOUND POWER AND LIGHT COMPANY and THE WASHINGTON WATER POWER COMPANY to submit the foregoing on their behalf; that he has read the foregoing and knows the contents thereof; and believes the same to be true to the best of his knowledge. DATED NesY N1 , 1977
/
D. L. RENBERGER v On this day personally appeared before me, D. L. RENBERGER, to me known to be the individual who executed the foregoing instrument and acknowledged that he signed the same as his free act and deed for the uses and purposes therein mentioned. GIVEN under my hand and seal this 4 ~/ . ' day of / '$f . I , 1977 v' l
/: '
. <. .,441 ,t~a.~.
Notary Public in and ~for the State of Washington - Residing at # . ,,/<,.,., / l ( 26 l
1 WNP-3 & WNP-5 EXHIBIT H WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 5 AGREEMENTS TABLE OF (ONTENTS SECTION PAGE
- 1. Table of Participants and Participants Shares (Final) H-2
- 2. Form of Participants Agreements H-4
- 3. Agreement, P6cific Power & Light Company and
,'- Washington Public Power Supply System (0wnership Agreement) H-38 NOTE Exhibit.H is added to the License Application by Amendment 39
( (H-1)
WNP-3 & WNP-5 TABLE OF PARTICIPANTS AND PARTICIPANTS' SHARES (Final) ( Participants' Districts Shares Public Utility District No.1 of Benton County, Washington . . . . . . . .05080 Central Lincoln People's Utility District ............... .02668 Public Utility District No.1 of Chelan County, Washington . . . . . . . .00642 Public Utility District No.1 of Clallam County, Washington ...... .01373 Public Utility District No. 1 of Clark County, Washington ....... .09858 Clatskanie People's Utility District . . . . . . . . . . . . . . . . . . .00781 Public Utility District No. 1 of Cowlitz County, Washington ...... .09132 Public Utility District No. 1 of Douglas County, Washington ...... .00011 Public Utility District No.1 of Franklin County, Washington . . . . . . .02925 Public Utility District No. 2 of Grant County, Washington ....... .00581 Public Utility District No. 1 of Grays Harber County, Washington . . . . .04410 Public Utility District No.1 of Klickitat County, Washington ..... .00982 Public Utility District No.1 of Lewis County, Washington ....... .02021 Public Utility District No. 1 of Mason County, Washington ....... .00156 Public Utility District No. 3 of Mason County, Washington ....... .00971 Northern Wasco County People's Utility District ............ .00324 Public Utility District No. 1 of Okanogan County, Washington . . . . . . .00681 Public Utility District No. 2 of Pacific C~unty, o Washington ...... .00848 Public Utility District No. 1 of Pend Oreille County, Washington . . . . .00402 Public Utility District No. 1 of Skamania County, Washington . . . . . . .00257 Public Utility District No.1 of Snohomish County, Washington ..... .13051 Tillamook People's Utility District .................. .00781 Vera Irrigation District No. 15 .................... .00257 Public Utility District No.1 of Wahkiakum County, Washington ..... .00123 Cities City of Bandon, Oregon . . . . . . ................... .00067 City of Blaine, Washington . . . . . . . . . . . . . . . . . . . . . . . .00067 City of Bonners Ferry, Idaho . . . . . . . . . . . . . . . . . . . . . . .00190 City of Burley, Idaho ......................... .00190 City of Canby, Oregon ......................... .00525 City of Cascade Locks, Oregon ..................... .00067 City of Centralia, Washington ..................... .00659 City of Drain, Oregon ......................... .00067 City of Ell ensburg , Washington . . . . . . . . . . . . . . . . . . . . . .00625 City of Heyburn, Idaho . . . . . . . . . . . . . . . . . . . . . . . . . .00257 i City of Idaho Falls, Washington .................... .00915 i Town of McCleary, Washington . . . . . . . . . . . . . . . . . . . . . . .00123 City of McMinnville, Oregon ...................... .00971 l City of Milton-Freewater, Oregon . . .................. .00056 ; City of Port Angeles, Washington . . . . ................ .00469 1 City of Richland , Washington . . . . . . . . . . . . . . . . . . . . . . .01965 ( (H-2) Amendment 39 April 1977
L WNP-3 & WNP-5 Participants
- Cities - Shares City of Rupert, Idaho ._. ._. ... . . . . . . . . . . . . . . . . . . . . .00324 s
. City. of Springfiel d , Oregon . . . . . . . . . . . . . . . . . . . . . . . .01764 City'of Steilacoom . . . . . ._.. .................... .00145 City of Sumas, Washington . . . . . . . . . . . . . . . . . . . . . . . . .00022
-City of Tacoma '
. .10695 Cooperatives Alder Mutual Light Company ........................ .00011 Binton Rural Electric Association . . . . . . . . . . . . . . . . . . . . .00670
' Big Bend Electric Cooperative, Inc. . . . . . . . . . . . . . . . . . . . .00514 Blachly-Lane Electric Cooperative Association . . . . . . . . . . . . . . .00458 Central Electric Cooperative, Inc. ................... .00971 Clearwater Power Company ........................
.00324 Columbia Basin Electric Cooperative, Inc. . . . . . . . . . . . . . . . . .00391 Columbia Rural Electric Association, Inc. . . . . . . . . . . . . . . . . .00647 Consumers Power, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .01351 Coos-Curry Electric Cooperative, Inc. . . . . . . . . . . . . . . . . . . .00581 Douglas Electric Cooperative, Inc. ................... .00514 L Elmhurst Mutual Power & Light Company . . . . . . . . . . . . . . . . . . .00581 Fall River Rural Electric Cooperative, Inc. . . . . . . . . . . . . . . . .00648 Glacier Electric Cooperative ...................... .00?79 Hood River Electric Cooperative, Oregon . . . . . . . . . . . . . . . . . .00301 Idaho County Light & Power Cooperative Association, Inc. ........ .00045 Inland Power & Light Company ...................... .02244 (ootenai Electric Cooperative, Inc. . . . . . . . . . . . . . . . . . . . .00647 Lane Electric Cooperative Inc. . . . . . . . . . . . . . . . . . . . . . .00770 Lincoln Electric Cooperative (Washington) . . . . . . . . . . . . . . . . .00190 Lost River Eleptric Cooperative, Inc. . . . . . . . . . . . . . . . . . . .00134 Lower Valley Power & Light, Inc. .................... .00837 Midstate Electric Cooperative, Inc. . . . . . . . . . . . . . . . . . . . .00703 Missoula Electric Cooperative, Inc. . . . . . . . . . . . . . . . . . . . .00581 Nespelem Valley Electric Cooperative, Inc. ............... .00045 Northern Lights, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .00514 Ohop Mutual Light Company . . . . . . . . . . . . . . . . . . . . . . . . .00089 Okanogan County Electric Cooperative, Inc. ............... .00045 Orcas Power and Light Company . . . . . . . . . . . . . . . . . . . . . . .00647 Parkland Light & Water Company ..................... .00134 Prairie Power Cooperative, Inc. . . . . . . . . . . . . . . . . . . . . . .00089 Raft River Rural Electric Cooperative, Inc. . . . . . . . . . . . . . . . .00391 Ravelli County Electric Cooperative, Inc. . . . . . . . . . . . . . . . . .00234 Rural Electric Company ......................... .00089 Salem Electric ............................. .00458 Salmon River Electric Cooperative, Inc. . . . . . . . . . . . . . . . . . .00084 Tanner Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .00100 Umatilla Electric Cooperative Association . . . . . . . . . . . . . . . . .03573 Unity Light and Power Company . . . . . . . . . . . . . . . . . . . . . . .00134 Vigilante Electric Cooperative, Inc. .................. .00290 Wasco Electric Cooperative, Inc. .................... .00134 Wells Rural Electric Company ...................... .00045 g 'est Oregon Electric Cooperative, Inc. ................. .00134 Amendment 39 (H-3) April 1977
WNP-3 & WNP-5 WASHINGTON PUBLIC POWER SUPPLY SYSTEM
-4/15/76 k7 NUCLEAR PROJECTS NOS. 4 AND 5 PARTICIPANTS' AGREEMENT TABLE OF CONTENTS
'SECTION PAGE
- 1. Definitiops 2
- 2. Exhibits 5
- 3. Term of Agreement 6
- 4. Financing, Design, Construction, Operation and Maintenance of the Projects 6
- 5. Sale and Purchase of Participant's Share 7
- 6. Payment by the Participant; Sources of Such Payments 8
- 7. Provisions Relating to Delivery 9
- 8. Budget and -Accounting Procedures 9
- 9. Fuel 11
- 10. Scheduling 13
- 11. Insurance 14
- 12. Training 14
- 13. End of the Projects; Termination Settlement 14
- 19. Determination of Costs Associated with Nuclear Projects Nos. 1, 3, 4 and 5 16
- 15. Participants' Committee 16 16.' Project Consultant 19 (i)
! (H-4)
Amendment 39 April 1977
i 1 1 WNP-3 & WNP-5 l
- 17. - 0bligations in the Event of Default 20
~
- 18. . Replacements, Repairs, Betterments and l Capital Additions 21
.19. Energy Program 22
- 20. Uranium Bearing Lands Acquisition 24
- 21. Modification and Uniformity of Agreements 25
- 22. Designation of Bonneville 25
- 23. Approval by Rural Electrification Administrator and other Agencies 25
- 24. Notices 25
- 25. Relationship to Other Instruments 26
- 26. Severability 26
- 27. Assignment 27 EXHIBIT A - Table of Participants' Preliminary Shares EXHIBIT B - Description of Plants ,
EXHIBIT C - Table of Participants and Participan'ts' Shares (to be provided) EXHIBIT D - Points of Delivery (to be provided) f 4 ( (ii) Amendment 39 (H-5) April 1977
\
, WNP-3'& WNP-5 WASHINGTON PUBLIC POWER SUPPLY-SYSTEM l( NUCLEAR PROJECTS NOS. 4 AND 5-V PARTICIPANTS' AGREEMENT F THIS AGREEMENT is executed by the Washington Public Power Supply System (Supply System), a municipal corporation of the State of i Washington, and _ ^ corporation of the State of- (Participant). WITNESSETH Supply System is organized under the laws of the State of Washington (rev. Code of Washington, Ch. 43.52) and is authorized by law to con-struct, acquire, own and operate works, plants, systems and facilities for the generation and/or transmission of electric power and energy and j to enter into contracts with public and private organizations for_the dis-position of electric power and energy produced thereby.
~ Attached hereto, as Exhibit B, are descriptions of certain gener- '
ating Plants, sometimes referred to as " Washington Public Power Supply System Nuclear Project No. 4' (" Nuclear Project No. 4") and " Washington Public Power Supply System Nu: lear Project No. 5" (Nuclear Project No. 5"). 'It is the intent of this Agreement that each of the Participants
- I shall purchase a share of the Project Capability and have a right to purchase a share of the capability of any other senerating plants under-taken by Supply System pursuant to this Agreement. Supply System and the Participant have each determined that the construction and operation of the Projects as.herein provided will accomplish economies of size and that the sale by Supply System to the Participant of the Partici-pant's Share and the purchase thereof by.the Participant as herein pro-vided will be beneficial to the Participant by increasing the amount of i
firm power and energy which will be available to serve its customers in 4 the future in an efficient, economical and environmentally sound manner. { The Participant and Supply System have heretofore entered into an agree-
+
ment entitled " Washington Power Supply System Nuclear Projects No. 4
- j. and 5 and Skagit Project Agreement for Option to Enter Participants' i Agreement, Reservation of Project Capability and Performance of Ser-vices" (the " Option and Services Agreement") dated July 22, 1975, under which, amont other things, the Participant obtained an option to enter l into this Agrement.
Bonneville has indicated that, subject to any limitations imposed by law, it expects to be able to furnish, under separate contract, trans-mission, scheduling, load factoring, reserves, exchanges and other ser-
- vices available from the Federal Columbia River Power System to enable the Participant to integrate its Participant's Share of Project Capa-l bility with power and energy available to the Participant from its own
, electric system and from Bonneville and other sources. i. . ( 1. (H-6) Amendment 39 April 1977 l 1 __.1, _...-__.__.,.-.-.,,,..m- .,--,.---_.-..,-,,-me,---e,
,_,_,.._,..m_,,,_,, . . - - ~ _ , , . . _ , , , , , . , - - . _ , . . _ ,
WNP-3 & WNP-5 NOW, THEREFORE, the parties hereto mutually agree as follows:
- 1. Definitions.
-(
The singular of any term defined in this Agreement shall encom-pass the plural, and the plural the singular, unicss the context indi-cates otherwise. (a) " Annual Budget" means the budget adopted by Supply System pursuant to Section 8(b) with respect to the Projects and which itemizes the estimated costs of each Project, commencing with (i) the Date of Continuous Operation of the Plant related to such Project, or (ii) July 1,1988, or (iii) the date one year after the date of termination of a Project as provided in Section 13, whichever is earliest, exclu-sive of costs of construction as defined in the Bond Resolution, and costs of fuel, applicable to the respective Contract Year, or, in the case of an amanded Annual Budget, applicable to the remainder of such Contract Year. The Annual Budget, as amended from time to time, shall make provision for all such Supply System's costs, including accruals and amortizations, resulting from the ownership, operation and mainten-ance of the Projects, repairs, renewals, replacements, and additions thereto and costs of termination thereof as provided in Section 13, together with the amounts over or under billed in accordance witt, sub-section (b) below. The Annual Budget shall include, but not be limited to, (i) the amounts which Supply System is required under the Bond Resolution to pay in each Contract Year into the various funds provided for in the Bond Resolution from the Revenue Fund, as therein defined, for debt service and all other purposes and (ii) in the event other funds, including proceeds of sale of the Bonds, are not available, amounts necessary to pay the principal of, and interest and premium, if any, on any Development Bonds outstanding. The Annual Budget shall identify the source of all funds proposed to be expended. (b) " Billing Statement" means the written statement prepared by Supply System and delivered to Participant that shows the amount to be paid, including the cost of fuel, to Supply System by the Participant for the Participant's Share for a Contract Year, or for the remainder of such Contract Year in the case of an amended Billing Statement adopted to reflect an amended Annual Budget, a change in the cost of fuel or a change in the Participant's Share pursuant to Section 17. Such amount shall be the sum of (i) the amount determined by multiplying the Partici-pant's Share by the amount of the Annual Budget or the amended Annual Budget, as the case may be, less any other funds, which shall be speci-fied in the Annual Budget, or an amended Annual Budget, as being pay-able from sources other than the payments to be made under all Partici-pants' Agreemnts and (ii) the costs of fuel to be paid by the Partici-pant in accordance with Section 9. At the end of each Contract Year any amount over or under billed during such year shall be reflected in the Annual Budget or Billing Statement, or both as appropriate for the following Contract Year; any amounts over or under billed during the portion of the Contract Year preceding the adoption of an amended Annual Budget shall be reflected in such amended Annual Budget to the extent practicable. 2. Amendment 39 (H-7) April 1977 , 1 1 l-
^
WNP-3 & WNP _ . (c) " Bonds"!means any bonds,. notes or other evidences of indebtedness issued pursuant to the Bond Resolution, including bonds for notes.-(i)-issued to pay the principal of and interest and: premium,
~
--{:
. if_ any, on the outstanding Development Bonds, or (ii) issued for the-purpose of. financing or refinancing any debt incurred by Supply System for the purpose of planning, designing, acquiring and constructing ,
either of the Projects. l l
~
(d) " Bond Resolution".means the resolution or resolutions adopted by Supply System, as the'same may be amended or suppl _emented, to authorize the Bonds. A copy.of,the draft dated April 12, 1976, of l
~ .the first Bond Resolution has been filed with the Participant. Tne first Bond Resolution to be adopted by the Board of Directors of Supply.
System shall be..substantially in thetform and content of said draft Resolution. ' All Bond Resolutions shall be approved by the Participants' Committee as provided in Section 15. (e)' "Bonneville" means the United States of America', Depart-ment of-the Interior, acting by and through the Bonneville Power Administration. (f) " Construction Budget" means the Supply System's construc-tion budget referred to in Section 8(a) and any amended construction budget as therein provided. (g) " Contract Year" means the 12-month period commencing. 2400 hours Pacific Standard Time on June 30 of each year during the term of this contract and ending 2400 hours on the June 30 next.fcilowing,* 3rovided, that the first Contract' Year shall commence at 2400 hours
)acific Standard Time on the date immediately preceding (i) the earlier-of the Dates of Continuous Operation of any of the Plants or (ii) on July 1, 1988, or (iii) the date one year after the date of termination of a Project as provided in Section 13, whichever is earliest, and the last Contract Year shall end at 2400. hours,Pa'cific Standard Time on the date of termination of this' Agreement as provided in Section 3.
(h) "Date of Continuous Operation" as to Nuclear Project No. 4 Plant means (i) the date fixed by Supply System as the point in time when-the Plant is ready to be operated and the output scheduled un a commercial basis and (ii) as to Nuclear Project No. 5 Plant means the date fixed by Supply System in conformity with the Ownership Agree-ment when such' Plant is ready to be operated and its output. scheduled on a commercial basis. (i) " Development Bonds" means the $100,000,000 principal amount of bonds heretofore issued and sold by Supply System pursuant to Resolution No. 767 adopted by the Board of Directors of Supply System on July 24, 1975. ( 3. (H-8) Amendment39 April 1977
WNP-3 & WNP-5 (j) " Elective. Capital Additions" means additions and better-h' ments- that are neither necessary to achieve design capability nor re - quired by governmental agencies having jurisdiction. l (k) " Federal System" means the Federal Columbia River Power
. (1) " Minimum. Capability" means (1) as-to Nuclear Project No.
'4 Plant, the minimum electrical l generating capability:thereof as deter-i mined by Supply System and (ii) as to Nuclear Project No. 5 Plant, the-
' minimum electrical generating capability thereof as determined by Supply-System in accordance with the Ownership Agreement,.in each case to be 5-cas near as may be, but not less than, the minimum generating capability for each Plant permitted by the manufacturer's recommendations or by the terms of the' United States Nuclear Regulatory Connission ("NRC")
operating license, whichever is higher. l (m) "0wnership Agreement" means the agreement between. Supply
- System and Pacific relating to the ownership of Nuclear Project No. 5 which is substantially in the form of a draft, dated April 15, 1976, a copy of which is on file with the Participant.
(n) " Pacific" means the Pacific Power & Light Company. (o) " Participants" means those entities which are specified in Exhibit C to be attached hereto, pursuant to Section 5, and which enter into a' Participants' Agreement. (p) "Particpants" Agreements" mean this Agreement and all
.Other agreements substantially identical to this Agreement entered into by Supply Syatem and the Participants.
(q) " Participants' Connittee" means the Committee established pursuant to Section 15. (r) # Participant's Preliminary Share" means the decimal frac-tion share of Project Capability set opposite the name of the Partici-pant in Column 1 on Exhibit _A or the decimal fraction share inserted in Column 2 on Exhibit A, whichever is the lesser.
- (s) " Participant's Share" means the Participant's Prelimi-nary Share adjusted as provided in Sections 5 and 17 of this Agreement.
-(t) " Plant" means Nuclear Project No. 4 Plant and Nuclear Project No. 5 Plant described in Exhibit B.
(u) " Projects" means Supply System's ownership interest in the generating plants and related properties described in Exhibit B, as
.the same may be adjusted pursuant to Sections 16(b), 20 and 22(b) of the Ownership Ag'reement, which description in any event shall conform t to the description of the Projects in the Bond Resolution which author-l- .
.izes the issuance of Bonds in an amount sufficient to pay the cost of l acquiring and constructing the Projects.
L Amendment 39
- 4. = April 1977 (H-9)
WNP-3 & WNP-5 (v) " Project Capability" means the amounts of electric power and energy, if any, which the Projects are capable of generating at any particular time (including times when either or both of the Plants are { not operable or operating or the operation thereof is suspended, inter-rupted, interfered with, reduced or curtailed, in each case in whole or
'n part for any reason whatsoever), less Project station use and losses.
I (w) " Project Consultant" means an individual or firm,-of national reputation having demonstrated expertise in the field of the matter or item referred to it, appointed among other things, for the resolution of a difference regarding a matter or item referred by Supply System. A different Project Consultant may be appointed for each matter or item referred. (x) " Prudent Utility Practice" at a particular time means any of the practices, methods and acts, which, in the exercise of rea-sonable judgment in light of the facts (including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the electrical utility industry prior thereto) known at the time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. Prudent Utility Practice shall apply not only to functional parts of a Plant but also to appropriate structures, land-scaping, painting, signs, lighting, or facilities and public relations programs reasonably designed to promote public enjoyment, understanding and acceptance of a Plant. Prudent Utility Practice is not intended to be limited to the optimum practice, method or act, to the exclusion of all others, but rather to be a spectrum of possible practices, methods or acts. In evaluating whether any matter conforms to Prudent Utility Practice, the parties and any Project Consultant shall take into account (i) the fact that Supply System is a municipal corporation and operating agency under the laws of the State of Washington with the statutory duties and responsibilities thereof and (ii) the objectives to integrate the Project Capability with the generating resources, primarily of the i Participants, and, as to Project No. 5, Pacific, including such resources
! and electric power and energy purchased under ccntract, and secondarily of the Federal System, and to achieve optimum utilization of the resources and achieve efficient and economical operation of each system, primarily as to the Participants and, as to Project No. 5, Pacific, and secondarily as to the Faderal System.
- 2. Exhibits Exhibits A through D, inclusive, are by this reference incor-porated herein and made a part of this Agreement, namely:
Exhibit A - Table of Participants' Preliminary Shares. Exhibit B - Description of Plants. Exhibit C - Table of Participants and Participants' Shares. (to be added) I 5. Amendment 39 (H-10) April 1977
WNP-3 & WNP-5 Exhib'it D - Points of Delivery. (to'be added)
'3. Term of Agreement.
This Agreement shall be effective upon execution and delivery of Participants' Agreements by Supply System and Participants whose
. Participants' Preliminary Shares total 1.0 or more. This Agreement shall terminate on the date when both Projects are terminated pursuant to Section 13, .the costs of decomissioning as defined in Section 13 have been paid or provided for and the principal of, premium, if any, and interest on all Bonds have been paid or funds set aside for the pay-ment or retirement thereof in accordance with the Bond Resolution.
.4. Financing, Design, Construction, Operation and Maintenance of the Projects.
(a) Supply System, in good faith and in accordance with Prudent Utility Practice, shall use its best efforts: (i) To arrange for the financing of the Projects and the design, acquir.ition, construction, operation and maintenance of the i Plants; (ii) To obtain, or arrange for obtaining, permits and other rights and regulatory approvals necessary for the financing of the Projects and the design, acquisition, construction, operation and maintenance of the Plants; . (iii) To issue and sell Bonds to finance the costs of construction of the Projects, as such costs are deffned in the Bond Resolution, to pay or provide'for the payment of the principal, interest, and premium, if any, on the outstanding Development Bonds and, to the extent provided by Section 18, to finance the costs of any capital additions, betterments, renewals, repairs, replacements, or modifica-tions to the Projects, provided, that in each such case Bonds may then be legally issued and sold, and further provided, that no Bonds shall be issued to pay costs of' construction of Nuclear Project No. 5 until after November 2, 1976; (iv) To complete, or arrange for the completion of, all appropriate planning and engineering studies and to construct and acquire, or arrange for the construction and acquisition of, the Plants ' in accordance with Prudent Utility Practice. Supply System shall use 1 its best efforts to schedule the Date of Continuous Operation of each ! Plant as near as may be to the date for each Plant set forth below: Nuclear Project No. 4 March 1982 Nuclear Project No. 5 April 1984 l 6. I (H-11) , Amendment 39 April 1977
.- . .~...__., ,#~ _ _ _ , . . . . _ . . ,_.y,,,_,,..,wm,..,-, ,,%.,,,,-,,-,,,,.4-- ,. _y_.--,w %-,,_g w r-
WNP-3 & WNP-5 y (b) Supply System shall operate and maintain the Plants, or is cause the Plants to be operated and maintained, in accordance with Drudent Utility Practice and so as to meet the requirements of govern-ment agencies having jurisdiction.
- 5. Sale and Purchase of Participant's Share.
Supply System herby sells, and the Participant hereby pur-chases, its Participant's Share of Project Capability. The Participant's Share shall be the Participant's Preliminary Share; provided that, if the sum of the Particpants' Preliminary Shares of the Participants who shall have executed and delivered Participants' Agreements is greater than 1.0, the Participant's Preliminary Share shall be automatically decreased, pro rata with other such Participants' Preliminary Shares so that the total Participants' Shares shall equal 1.0; and further provided that, if the sum of the Participants' Preliminary Shares of the Partici-pants who have executed and delivered Participants' Agreements to Supply System within 90 days after delivery of notice pursuant to Section 3(d) of the Option and Services Agreement is less than 1.0 and the Partici-pant has inserted a decimal fraction share opposite its name in Column 2 on Exhibit A in excess of the amount set forth in Column 1 thereon, the Participant's Preliminary Share shall be automatically increased up to a maximum of such inserted share, the amount of any such increase to be determined by the following formula: Amount of Increase = (1.0 - X) .Y T X = the sum of the Participants' Preliminary Shares of Participants who have executed and delivered a Participants' Agreement. Y = the amount of the excess of Column 2 over Column 1 for the Participant. Z = the sum of the Y's for all Participants. If the sum of the Participants' Preliminary Shares is still less than 1.0, in order to bring the total of such shares to 1.0, Supply System may (i) agree with any Participant to an increase in its Participant's Preliminary Share or (ii) execute Participants' Agreements with any other existing statutory preference customer or direct service customer of Bonneville or any existing electric utility member of the Western Systems Coordinating Council. After execution of the Participants' Agreements on Exhibit C showing the Participants and their Participants' Shares shall be prepared by Supply System and shall be distributed to the Participants forthwith. The purchase price to be paid for each Contract Year by the Participant to Supply System for its Participant's Share shall be the amount specied in the Billing Statement. ( 7. Amendment 39 (H-12) April 1977
o i WNP-3 & WNP-5 l
- 6. Payments by the Participant; Sources of Such Payments.
' { (a) Not less than 90 days prior to each Contract Year, Supply System shall prepare and deliver to the Participant a Billing Statement showing the amount to be paid by the Participant for such j Contract Year. Whenever during a Contract Year the Annual Budget is amended or Participant's Share is changed from that used in the Billing Statement for that Contract Year, or Supply System's determination of the net cost for providing the fuel required to generate the Partici-pant's Annual Energy Availability (as defined in Section 9) for such Contract Year is changed, an amended Billing Statement shall be pre-pared for the remainder of that Contract Year reflecting such amendment or change and shall be delivered to the Participant. (b) On or before the 25th day of each month of each Contract Year the Participant shall pay to Supply System the amount specified in : the Billing Statement, divided by the number of months in the respective Contract Year, or in the case of an amended Billing Statement, the amount specified in such amended Billing Statement divided by the number of months remaining in such Contract Year. Amounts due and not paid by the Participant on or before the close of business on the 25th day of the month shall bear an addi-tional charge of two percent of the unpaid amount. Thereafter, a fur-ther charge of one percent of the sum of the initial amount remaining unpaid and said additional charge shall be added on the twenty-fifth day of each succeeding month until the initial amount due and the addi-tional charges are paid in full. Remittances received by mail will be accepted without assessment of said charges, provided that the postmark indicates that the payment was mailed on or before such day. If the twenty-fifth day of the month is a Sunday or other nonbusiness day of the Participant, the next following business day shall be the last day on which payment may be mailed without addition of said charges. In any event the Participant shall pay by the twenty-fifth day of the last month in each Contract Year the difference, if any, between the total amounts paid by Participant to Supply System during that Contract Year and the total amount billed to it by Supply . System as herein provided. (c) No Participant which is a statutory preference customer of Bonneville shall be required to make an.v payments to Supply System under this Agreement except from the revenues derived by such Partici-pant from the ownership and operation of its electric utility properties. Such Participant covenants and agrees that it will establish, maintain and collect rates or charges for power and energy and other services, facilities and commodities sold, furnished or supplied by it through any of its electric utility properties which shall be adequate to pro-vide revenues sufficient to enable the Participant to make the payments to.be made by it to Supply System under this Agreement and to pay all other charges and obligations payable from or constituting a charge and lien upon such revenues.
- 8. ,
Amendment 39 (H-13) April 1977
~ _. . .. _
. , ,, - - -. .. . . . . - ~ _ - . -- - _ . _ . .-
WNP-3 & WNP-5 l (d) _The Psrticipant shall make the payments to be made to 'l c Supply System under this Agreement whether or not-any of the Projects F I'
~
.are completed, operable or operating and notwithstanding the suspension, interruption, interference, reduction or curtailment of the output of
-either- Project for any. reason whatsoever in whole or in part. .Such payments shall'not be subject to any reduction, whether by offset or otherwise, and shall.not be' conditioned upon the performance or nonper-
' formance by Supply System or any other Participant or entity under this tor any other agreement or instrument, the remedy for any nonperformance being limited to mandamus, specific performance or other legal or equit-able remedy.
' 7. . Provisions Relating to Delivery. '
Deliveries of electric power and energy for the account of the Participant shall be made to the transmission grid of the Federal
- . System at the respective points of delivery and at the approximate L voltage to be agreed upon by Bonneville and Supply System subject to approval of the Participant's Committee. In the absence of such an agreement, deliveries to the Participant shall be at the site of the
.. Plants or at a point of delivery agreed to by Supply System and the Participant. Such electric power and energy shall be in the form of three-phase current, alternating at a frequency of approximately 60 Hertz. Amounts so delivered at such points during each month shall be
- " determined from measurements adjusted for losses, if any, as agreed upon by Supply System and Bonneville, subject to the approval of the
- Participants' Committee or, in the absence of such an Agreement, by Supply System and the Participant, made by meters installed to record such deliveries at the place and in the circuit agreed upon by Supply System and Bonneville subject to the approval of the Participants' Committee, or, in the absence of such agreement, by Supply System and
, the Participant, all as may be appropriate. When the points of delivery
, are so agreed upon pursuant to this Section, Supply System shall pre-i pare and deliver to the Participant an Exhibit D describing such points.
, 8. Budget and Accounting Procedures. (a) The Participant hereby approves Supply System's Construc-
- tion Budgets for Nuclear Projects Nos. 4 and 5, dated October 10, 1975, L and October 31, 1975, respectively, a copy of each of which is on file
- with the Participant. By October 1 of each year until completion of 3 construction of each Project, Supply System shall prepare and deliver to the Participant and the Participants' Committee an amended Construc-
! tion Budget for each Project, describing the items of construction and i the estimated amounts to be expended therefor in each quarter from the succeeding January 1 to estimated date of completion of such Project. Supply System shall deliver amended Construction Budgets to the Partic-
- ipant and the Participants' Committee from time to time to reflect sub-l .stantial changes in construction schedules, plans, specifications, or
- costs. Amended Construction Budgets for a succeeding year and amended Construction Budgets for a current year shall become effective with respect to each Project within 30 days, and 15 days, respectively, lI (
9. (H-14) Amendment 39
- l. April 1977 I
l WNP-3 & WNP-5 : Lafter delivery,' except for any item disapproved by the Participants'- , , Committee before such time, provided that, with respect to Nuclear i
' (- Project No. 5, approval by Pacific.is also obtained to the extent t: % required by the Ownership Agreement.
- . A monthly Construction Budget report'shall' be prepared -
by Supply System and filed with the Participants' Comittee showing by Jmajor plant accounts or contracts, the cumulative amounts committed and the expenditures. L (b) At least' 90 days prior to the start of the first Contract
- Year, Supply System shall deliver to the Participant and the Partici-f ,
pants' Committee a proposed Annual Budget for the Projects for such Contract Year. Thereafter, on or before April 1 of each Contract-Year
- Supply System shall deliver to the Participant and the Participants'-
1 Comittee a similar Annual Budget for the next succeeding Contract ' Year, which budgets:shall take into account the cumulative difference , between income and expenditures for-the prior Contract Year and provide
, for adjustment, as necessary, of the appropriate working cash fund.
All taxes and payments in lieu of taxes with respect-to the Projects imposed and required by law to be paid by Supply System, and which are due and payable in a Contract Year, shall be included in the Annual Budget for that Contract Year as a. Project cost. To the extent Supply System is permitted by law to negotiate for payments in lieu of taxes or other negotiated payments to state or local-taxing j' entities. the Annual Budget shall also include, for each Project, the amounts of such negotiated payments; provided, that Supply System shall not agree to any such negotiated payment if in any Contract-Year the j sum of such negotiated payments and taxes and payments in lieu of taxes
- imposed by law, applicable to any Project,-would exceed the total i
amount of ad valorem taxes applicable to that Project which Supply i System would have paid in that year to such taxing entities if the ! Project or portion thereof, within the boundaries of each such taxing entity,.were subject to ad valorem taxes _and its valuation for tax ! purposes'were added to the valuation of the property-subject to ad j valorem taxes by such taxing entity, but with its millage' rate reduced so that the amount of ad valorem taxes raised would be unchanged. I Notwithstanding any other provision of this Agreement,
- _ costs may be incurred by Supply System in an emergency or to protect i the safety of any of the Projects or the public, and any such costs, i
not otherwise provided for, shall be added to the Annual Budget as incurred. Promptly after any such addition to 'the Annual Budget, and prior to expenditures of any other funds not contemplated in the effec-tive Annual Budget, Supply System shall deliver an amended Annual }' Budget reflecting such-additions to the Participant and the Participants' Comittee. l i-1 10. 1 , [' (H-15)
- Amendment 39 April 1977 I
WNP-3 & WNP-5 The Annual Budget and any amended Annual Budget shall-become effect've with respect to each Project, within 30 days and 15 {;. ~ days,~respectively, after delivery except for any item disapproved by the Participants' Committee prior to such time, provided that with respect to Nuclear Project No. 5, approval by Pacific is also obtained to the extent required by the Ownership Agreement.
- (c) Accounting.
Supply System shall keep up-to-date books and records showing all financial transactions and other arrangements made in
- carrying out the terms of this Agreement. Such books and records shall contain infonnation supporting the allocation of Supply System's in-direct costs associated with each Project. The method of allocating or prorating such costs as between the Projects and other activities in which Supply System may have an interest shall be based upon Prudent Utility Practice. Such books and records shall be retained by Supply.
System for three years and shall be made available for inspection and audit by the Participant and the Participants' Committee at any reason-able time. All accounts shall be kept so as to permit conversion to the system of accounts prescribed for electric utilities by the Federal . Power Commission. ! a Any contract with any consultant or contractor of Supply System providing for reimbursement of costs or expenses of any kind
, shall require the keeping and maintenance of books, records, documents, 4
and other evidence pertaining to the charges claimed under such contract i to the extent and in such detail as will properly reflect all costs-related to this Agreement and shall require such -books, records, docu-ments and evidence to be made available to the Participants' Committee at all reasonable times for review and audit for a period of three years after final settlement of the applicable contracts. i
- 9. Fuel.
(a) For each Project, Supply System shall use its best efforts to arrange for Fuel in amounts such that each Participant, acting singly or as a member of a group of Participants, may utilize its Participant's Share of the Project Capability in a manner which such Participant estimates will be best suited to its individual system needs. 1 (b) As soon as practicable after the Participants' Committee is established, and annually thereafter by each April 1 until the earliest Date of Continuous Operation of either of the Plants, Supply System shall prepare and submit to the Participants' Committee for approval a ten-year Fuel Management Plan (" Fuel Plan") for each Plant. Each year
; thereafter, the Fuel Plan will be submitted with each Annual Budget i
beginning with the first such budget. Each Fuel Plan shall be prepared l after consideration of the fuel supply arrangements, power generating . requirements and other operational aspects of each Plant. c 11. Amendment 39 ApH1 1977
- (H-16) l
WNP-3 & WNP-5 Supply System shall consult with the Participants' , Committee and shall prepare the Fuel Plans consistent with Subsection ( 9(a). Each Fuel Plan shall describe in detail each contemplated action and payment and the dates thereof separately for each Plant, the amount of net energy available from the Projects in each Contract Year (Annual Energy Availability) and, separately for each Plant, core usage, design burnup and estimated fueling dates. It shall include a cash flow analysis of forecasted expenditures and credits for each Plant for each major component of the fuel cycle by years, for the entire ten-year period, and cash flow by months, for the first five years of that period. Each Participant shall furnish to Supply System, as requested, forecasts of its generating requirements from the Projects. Supply System shall use such forecasts in preparing each Fuel Plan. For the ten-year period of each Fuel Plan the net energy available to the Participants shall, to the extent practicable (i) equal the Partic-ipants' forecasted generating requirements for such period, and (ii) be available at times and in amounts sufficient to meet the Participants' forecasted generating requirements from the Projects. Supply System shall amend the Fuel Plan as reasonably required to reflect changes in conditions unforeseen at the time the Fuel Plan was prepared, and shall submit such amended Fuel Plan to the Participants' Committee for approval. Supply System shall arrange to secure fuel and refuel each Plant in a manner which implements the Fuel Plan to the extent reasonably practi-cable. (c) The forecasted generation requirements of each Partici-pant shall be at least sufficient to ensure operation of each Plant at Minimum Capability to the Forecast Refueling Date for such Plant; provided, however, that to the extent any Participant has arranged, pursuant to Section 10(d) for the delivery of alternative capacity and energy to the Participants requesting operation, Supply System may order only the amount of fuel for such Project such that the available capa-city and energy output from all Projects plus the alternate capacity and energy so arranged for is at least equal to the amount of capacity and energy the requesting Participants are entitled to from the Projects until the Forecast Refueling Date of the respective Plant. (d) At the time of fueling or refueling of any Plant, Supply System shall submit to the Participants' Committee for approval its determination for that Plant of (i) the next fueling date (Forecast Refueling Date), (ii) the kilowatt-hours of net energy available to each Participant to the Forecast Refueling Date (Energy Entitlement), (iii) the estimated cost per kilowatt-hour of each Participant's Energy Entitlement and (iv) the outage schedules for maintenance to the next refueling date. Supply System shall periodically review such determi-nations with the Participants' Committee, revise such determinations I as necessary and submit them to the Participants' Committee for approval. 12. (H-17) Amendment 39 April 1977
WNP-3 & WNP-5 (e) Any Participant may require that the Forecast Refueling Date of a Plant be advanced or delayed and/or may use the Energy . { Entitlement of other Participants if such Participant (i) makes arrange- ! ments for delivery of alternative capacity and energy at the Plant point of delivery equivalent to the amount of capacity and energy which would ,
-have been av311able to such other Participants from their Participants' Shares if the Forecast Refueling Date for such Plant had not been advanced or delayed or such Energy Entitlement had not been used by the requiring Participant, or (ii) makes other arrangements acceptable to
-the affected Participants including, but not limited tu, payments for Fuel used and/or making a portion of such requiring Participant's Share of Project Capability available for use by other Participants; provided, that neither the advancing or delaying of such Forecast Refueling Dates nor the use of another Participant's Energy Entitlement shall (i) adversely affect the availability of capacity and energy ' vhich any other Participant otherwise would have been entitled from such Project, or (ii) adversely affect any other Participant's costs for such capa-city and energy.
(f) No Participant shal'1 be entitled to proceed pursuant to Sections 9(d), 9(e) or 10(d) to the extent so proceeding would be con-
, trary to the rights of Pacific under the Ownership Agreement unless such Participant has made arrangements with Pacific similar to those pro-vided in such Sections.
(g) After reprocessing of a fuel batch removed from the core of a Plant, Supply System shall make and deliver to the Participant, a detailed final accounting for. such fuel batch of all coats, payments and energy and for any credits or deficits attributable to any Participant. (h) Supply S each Contract Year (1)aystem shall include provisional chargeon forthe Billing fuel equalStatementto the esti- for mated net cost to Supply System, included in the current Fuel Plan in accordance with Subsection (b) above, for providing the amount of fuel required to generate the Participant's Annual Energy Availability for ' such Contract Year, and (ii) any credits or debits attributable to the Participant necessary to adjust the provisional payment for the previous
- Contract Year to net actual Fuel costs for such year. Such adjustments shall take into account, among other things, the difference between
" estimated and actual Fuel cost recovery from the reprocessing of any Fuel batch during such year and any difference between the Participant's
~ Annual Energy Availability and Participant's actual energy use from the Projects, but shall not take into account any energy adjustments between Participants made under Sections 9(d), 9(e) and 10(d).
- 10. Schedulina.
(a) Within the constraints of Section 9 and of this Section 10, each Participant shall be entitled to receive, as scheduled by it,
- all or any part of its Participant's Share. Supply System promptly
! shall notify each Participant of any significant change in Project ! Capability. ( 13. ! Amendment 39 April 1977 +
. . - , .- - . , ,. ,-.._..,,.,--..----.,nc._,,, ,-- -,m,,-- .,_-.c,,.. , - _..
i WNP-3 & WNP-5 l (b) By 12:00' noon on each regular working day, each Partici-pant acting singly or as a member of a group of Participants shall (' submit its hourly schedule for the following day to Supply System except that such schedule shall be submitted for a holiday, Saturday, Sunday, and for the first following regular working day by 12:00 noon on the regular working day immediately preceding. Such hourly sche-dules may be changed at any time; provided, that if the total requested changes in the level of operation of'the Plants require a rate of change of the output of any Plant in excess of the lower of that pres-cribed either by the manufacturer's warranty or by the NRC operating license, each Participant whose scheduled rate of change is in excess of its Participant's Share of such lower prescribed limit shall be limited proportionately so that the total rate of change of such Plant does not exceed such lower prescribed rate of change for that Plant. (c) In addition to forecasted refueling outages, Supply System shall schedule generating plant outages and submit them to the Participants' Comittee for approval as to the time and duration thereof as far in advance as practicable. Notwithstanding the foregoing, any Plant may be shut down or its operation may be modified by Supply System to meet requirements of the NRC or other governmental agency having jurisdiction or to avoid hazard to the Plant or to any person or property. (d) Except as otherwise provided herein, each Participant shall schedule energy from the Projects in such a manner that its Energy Entitlement is adequate to maintain its Participant's Share of i Minimum Capability until the next Forecast Refueling Date; 3rovided, that a Participant may require that one or more Plants not se operated during any period by arranging for delivery of alternative capacity and energy at such points of delivery to the Participants requesting operation equivalent to the amount of capacity and energy which would have been available to such requesting Participants from their Partici-pants' Shares during such period, and such requesting Participants shall pay the supplying Participant a percentage of the amount of incremental savings which the requesting Participants realize from the displacement of energy from the Projects, which percentage and amount of savings shall be as agreed by the Participants involved; provided further, that requiring non-operation of any Plant will not (1) adversely affect the availability of capacity and energy to which any other Participant otherwise would have been entitled from such Project, or (ii) adversely affect any other Participant's costs for such capacity and energy. If fulfilling the schedules submitted by the Participants would require operation of the Plants at an operating level below the ' Minimum Capability of any Plant, Supply System shall imediately notify all Participants. Unless otherwise agreed by the Participants as pro-vided in the preceding paragraph, the Participants whose schedules are greater than their Participants' Shares of such Minimum Capatility shall take energy as provided by such schedules, and the other Participants , shall adjust their amounts to be taken proportionally to their Partici- ' pants' Shares in an amount equal to the remainder of such Minimum ( Capability. 14. Amendment 39 April 1977 (H-19) l
l WNP-3 & WNP-5 (e) When testing of Plant facilities requires generation, each Participant shall make provision for acceptance of its Partici-pant's Share of such generation. Supply System will notify Participants
-[- of test schedules as far in advance as practicable.
(f) Reactive Power Scheduling. The Supply System shall, at the request of a Participant, supply or absorb reactive power, within the capability of a Project, in amounts as may be appropriate to inte-grate the Participants' Share of such Project into the Federal System or into any other system to which such Project is interconnected. (g) Deviations. The parties shall hold deviations from schedule to a minimum and shall correct
- therefor as promptly as possible under conditions approximately equivalent to the conditions under which the deviation occurred. The amounts scheduled for delivery shall be deemed delivered.
(h) The parties shall coordinate their operating plans to the extent practicable so that Plant availability, Plant maintenance schedules and Plant Fuel Plans are consistent with the operating plans i of the Participants, and to the extent required by the Ownership Agree-ment, Pacific.
- 11. Insurance.
Supply System shall maintain a force, for the benefit of the Projects and the Participants as their respective interests shall appear, as a Project expense, such insurance as will satisfy the requirements of the Bond Resolution and any other applicable statutes, and such other insurance as Supply System may provide with the written concurrence of Participants holding two-thirds or more of the total Participants' Shares. Subject to Section 13, any proceeds of such insurance received by Supply System for loss or damage to any Project shall be applied, to the extent necessary, to the costs or repair of such Project.
- 12. Training.
Supply System shall carry out a familiarization and training program to maintain adequate staff for the Projects and the expenses thereof shall be part of the direct or indirect costs of construction or costs of operation as appropriate.
- 13. End of the Projects; Termination Settlement (a) As to Nuclear Project No. 4:
(i) The Project shall be terminated and Supply System shall cause it to be salvaged, discontinued, decommissioned, and dis-posed of or sold in whole or in part to the highest bidder (s) or dis-posed of in such other manner as Supply System and the Participants' Committee may agree when: i 14. l (H-20) Amendment 39 April 1977
WNP-3 & WNP-5 4 (A) Supply System detemines that it is unable to ' construct, operate or proceed as owner of such Project due to financing, (, licensing, construction or operating conditions or other causes which are beyond its control. (B) Supply System with the written concurrence of members of the Participants' Committee representing two-thirds or more of the total Participants' Shares of Project Capability determines that such Project is not capable of producing energy consistent with Prudent Utility Practice. (C) The Participants' Committee directs Supply System to tenninate the Project pursuant to Section 18(a). The date of termination shall be the earliest of the dates of the termination under subsections (A), (B) and (C) above. (ii) After such termination, Supply System shall under-take the decommissioning of such Project. Supply System shall make monthly accounting statements to the Participant of all costs associated
, therewith. Such monthly accounting statements shall continue until such Project has been salvaged, discontinued, deconsnissioned and finally disposed of hereunder, at which time a final accounting statement shall be made by Supply System and such final accounting statement shall be made at the earliest reasonable time. The costs of decommissioning shall include, but shall not be limited to, all of Supply System's costs and liabilities resulting from Sup operation (including cost of fuel) ply System's ownership,
, maintenance construction, of and renewals and replacements to such Project and the costs of salvage, discontinuance and disposition or sale thereof.
4 (iii) The final accounting statement shall credit to the Participants, and deduct from any amount otherwise chargeable to , them, the fair market value of any assets related to any Project then i retained by Supply System. If the final accounting statement (s) show that the costs referred to in Subsection (ii) above exceed such credits after application by Supply System of all other funds available for such purpose, the Participant shall pay Supply System a sum determined by multiplying the amount shown to be due in Supply System's final i accounting statement (s) by the Participant's Share. (b) As to Nuclear Project No. 5, subject to the Ownership Agreement, Supply System shall comply with the provisions of Subsections
, (a) (1), (ii) and (iii) of this Section in substantially the same manner as if the properties and facilities comprising the Plants were wholly owned by Supply System. .
(c) Upon termination of all of the Projects, Supply System
- shall make monthly accounting statements to the Participant until all -
Bonds have been paid or funds set aside for the payment or retirement thereof in accordance with the Bond Resolution. 15. (H-21) Amendment 39 April 1977
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[- WNP-3 & WNP-5 i
- 14. . Determination of Costs Associated With Nuclear ;
i Pro.iects Nos. 1, 3. 4 and 5.
-Costs solely attributable to the Plants shall be allocated to such Plants and costs solely attributable to Nuclear Projects Nos.
-1 and 3 shall not be so allocated.
i
- Costs not solely attributable to the Plants and attributable to both the Plants and Nuclear Projects Nos.1 or 3 shall be allocated i
i 'to the Plants on the basis of the proportion of respective benefit to ;
. the Plants or, if such proportion-is not determinable, on the. basis of 1 an equal allocation between the Plants and Nuclear Projects Nos. I and j
- 3. respectively. !
- 15. Participants' Comittee.
l (a) 'Not more than 30 days after the date of this Agreement, i
- and 'thereafter not-less than 30 nor more than 60 days prior to July 1
- of each succeeding third year, the Participants shall form the Partici-1 pants' Committee, which shall be composed of not less than two nor more than seven members. Supply System shall give each Participant not less
! than 15 days' notice stating the time and place at which a meeting of representatives of the Participants shall be held for such purpose.
, Prior to the time of such meeting the Participant shall deliver a notice 1 to Supply S
! sentative")ystem and anofalternate its designation (to serve of the person in the or entity ars ence (the "Repre-or ' disability of any such Representative) to cast its vote for its Participants' Committee , members. Each Representative shall be entitled to cast a vote equal to j the Participants' Shares of the Participant (s) who designate such Repre-sentative and more than one Representative may vote for the same person j or entity to be a Committee member. The persons or entities, up to , seven, who receive the highest votes shall be members of'the Committee; j provided, where more than three Participants' Comittee members are j chosen, no person or entity shall serve who is chosen by Representatives j entitled to vote an aggregate of less than 3% of the Participants' Shares. Each Participant shall designate a Committee member to repre-sent its Participant's Share. Any vacancy on the Participants' Committee
- shall be filled by majority vote of the Participants' Shares of the L Participants represented by such Comittee member.
F (b) Meetings of the Participants' Committee shall be held at - { least quarterly during the construction of the Projects and at least semi-annually thereafter. Committee meetings may be called by Supply System or the Committee Chainnan or Comittee member (s) representing ,
- 20% or more of the Participants' Shares; and timely notice of the time '
and place of, and agenda for, such meetings shall be given to each Co.snittee member and the Participant. Each member of the Committee, ! or an alternate designated in writing by him, shall be entitled to a i vote equal to the amount of the Participants' Shares represented by I him. A Committee Manber shall be entitled to separately vote any Par- 4 l ticipant's Share he represents and shall be obligated to vote as ' l ) ( 16. l j (H-22) Amendment 39 l April 1977 'a. ~ = - - - . - - . -.- - _ . - - _ - - .-
w WNP-3 & WNP-5
- instructed by'such a Participant to the extent of such Participant's Sharp. Members representing more than 50% of the Participants' Shares
. (. shall constitute a quorum. All meetings of the Committee shall be open to attendance by any person authorized by any of the Participants.
Except as herein provided, the calling and holding of meetings of the
= Committee, and all of its other proceedings, including the giving of
- notices, shall be governed by rules adopted from time to time by members of the Committee entitled to vote two-thirds or more of the Particiapnts' Shares. All actions by the Participants' Comittee shall require a vote
- of members holding more than 50% of the Participant's Shares, except '
as otherwise provided in this Agreement. i (c) Except in the event of an emergency requiring immediate 4 action, Supply System shall deliver to each member of the Participants' Committee a copy of.each of the items listed below (as well as such
- other items as are required under the Agreement to be approved by the
! Participants' Committee) relating to each Project together with a state-ment identifying the general nature of the action proposed to be taken by Supply System thereon (referred to hereinafter as " proposal"). Whenever appropriate. Supply System shall also deliver itemized cost estimates and other details sufficient to support a comprehensive review, including but not limited to, a copy of all supporting reports, analyses, recomendations or other documents pertaining thereto. Copies thereof, or of any other documents relating to agenda items, shall a delivered to the Participant upon its request. Determination of Minimum Capability. l Construction budgets and changes therein (Section 8(a)). i L Award of any contract or approval of any change order, - in either case in excess of $2,000,000, or such other
~
contracts as determined by the Participants' Comittee. Budgets of annual costs and revisions thereof.(Section 8(b)). Fuel Plan, changes therein, and determinations relating l t'ereto (Section 9). j Operating schedules (Section 10). i l Insurance coverage, including limits and choice of
- insurers (Section 11).
J Estimates of costs of repair of damage to a Project if in excess of $5,000,000, recomendation whether to repair in whole or in part or to remove from service and con-L struction budpet for repair of Project. l- Sales of salvage materials in excess of such minimum , l amount as is established by the Participants' Comittee. 1 (
- - 17.
i Amendment 39 (H-23) April 1977
WNP-3 & WNP-5 Change of an architect-engineer, b Proposed Bond Resolutions. Any proposal made by Participants' Comittee members represanting Participants' Shares voting rights of 20% or more. Construction or acquisition of Nuclear Project No. 5 pursuant to Section 22(b) of the Ownership Agreement. Repair of Nuclear Project No. 5 pursuant to Section 16(b) of the Ownership Agreement. Increase in the Supply System's ownership interest in Nuclear Project No. 5 pursuant to Section 20 of the Ownership Agreement. (d) With respect to Supply System proposals, unless within 15 days, except as otherwise provided herein, after delivery of such proposal notice is delivered to Supply System by Comittee members representing 20% or more of the Participants' Shares stating that they dissapprove of a designated proposal, the proposal shall be deemed approved. Any notice of disapproval shall segregate the items in the Supply System proposal so that the exact items of difference are ident-ified; items in the proposal not specifically disapproved shall be deemed approved. Further, such notice of disapproval shall describe in what particular the proposal or item is not consistent with Prudent Utility Practice and recomend what would meet that standard. (e) Upon receipt by Supply System of disapproval of a Supply System proposal or a proposal by Comittee members representing 20% or more of the Participants' Shares or, a proposal by Pacific, pursuant to the Ownership Agreement, Supply System shall call a meeting of the Comittee and if appropriate. Pacific, and shall not less than seven days prior to the date of such meeting, deliver a copy of such disapproval or proposals to each Committee member and, if appropriate, Pacific. If at such meeting any Supply System proposal is approved by Committee members representing 80% or more of the Participants' Shares and, if appropriate, by Pacific, the Supply System proposal shall be deemed approved. If such approval is not so obtained, then Supply System, Comittee members representing 20% or more of the Participants' Shares or, if appropriate, Pacific may submit one or more proposals to the Project Consultant for review pursuant to Section 16. (f) Review by the Participants' Comittee referred to in Subsection (e) above shall be based solely on whether the proposal is ) consistent with Prudent Utility Practice. I (g) Supply System shall consider the recomendations of the engineering, accounting, legal and professional personnel engaged by Participants' Comittee to monitor and audit the Projects, to make i t' 18. (H-24) Amendment 39 April 1977
WNP-3 & WNP-5 periodic reports to the Committee and to perform such other reasonable services as may aid the Committee in the performance of its review f functions and shall change the reasonable costs of any such services
\ to such Project. Supply System shall pay such expenses and costs 1 from the revenues of such Project or from Bond proceeds. '
(h) Supply System shall submit the following additional
. Matters relating to the Projects to the Participants' Committee for reccmendation and may proceed on such Matters only upon approval by Participants holding 80% or more of the Participants' Shares:
Substantial change of the site of a Project in conformity with Section 2.3 of the Bond Resolution. Substantial change of the type or supplier of a nuclear steam supply system or turbine generators. Extension of insurance to any additional unit or generating project. Elective Capital Additions to a Project exceeding
$2,000,000 in any Contract Year.
(i) Supply System shall submit the Matter of a change of the type of steam supply system to the Participants' Comittee for recomendation and may proceed on such Matter only upon unanimous approval by Participants.
- 16. Project Consultant.
(a) T:.e Project Consultant shall be selected by agreement of Supply System, Committee members representing agreement of Supply System, Committee members representing 20% or more of the Participants' Shares and submitting a proposal or a disapproval pursuant to Section 15, and, if appropr.iate, Pacific. If agreement cannot be reached upon selection of the Project Consultant, within ten days after the meeting 4 referred to in Section 15(e) or such additional time as agraed to by the above, then any such party may request the Chief Judge of the United States District Court for the Western District of Washington to appoint the Project Consultant. If any Project Consultant so appointed fails, or is unable, to act or serve until a decision is rendered, his successor shall be appointed by agreement as provided herein, or by said Judge, as the case may be, who made the original appointment. (b) Unless otherwise stipulated in writing by the parties to the proceeding, the Project Consultant shall commence a hearing within ten days after his appointment, shall conduct the proceeding expedi-tiously and shall render its decision within 30 days after the close of such hearing. The Project Consultant may receive any evidence ; hat in its opinion will enable it to arrive at a fair and correct decision. The Project Consultant shall decide whether thc Matter proposed by ( Supply System is in accordance with Prudent Utility Practice. If the 1 19. Amendment 39 (H-25) April 1977 l l
WNP-3 & WNP-5 Project Consultant decides in the affirmative, the Supply System shall proceed as proposed by it. If the Project Consultant determines the Supply System's proposal is not in accordance with Prudent Utility (, Practice, it shall then consider the proposals of Pacific, if appropriate, and Committee members representing 20% or more of the Participants' Shares in the order designated by Supply System and determine if such proposal is in accordance with Prudent Utility Practice. If the Project Consultant determines any such proposal is in accordance with Prudent Utility Practice, Supply System shall proceed with such pro-posal and any remaining proposals shall not be considered. If the Project Consultant determines that none of the proposals conform with Prudent Utility Practice, it shall dismiss all proposals. (c) If any proposal or item referred to the Project Consul-tant has not been resolved and will affect the continuous operation of the respective Project, Supply Systen shall continue to operate the Project.
- 17. Obligations in th Event of Default.
(a) Upon failure of the Participant to make any payment in full when due under this Agreement or to perform any obligation herein, Supply System may make demand upon the Participant, and if said failure is not cured within 10 days from the date of such demand it shall con-stitute a default at the expiration of such period. (b) If the Participant in good faith disputes the legal validity of said demand, it shall make such payment or perform such obligation within said 10 day period under protest directed to Supply System. Such protest shall specify the reasons upon which the protest is based. (c) If the Participant is a municipal coporation, upon default on the part of any other such Participant (s) which is a municipal corporation the Participant's Share shall be automatically increased for the remaining term of this Agreement pro rata with that of other such nondefaulting Participant (s) to the extent that such defaulting Participant (s) fails or refuses for any reason to perform its obliga-tions under its Participants' Agreement, and the Participant's Share of such defaulting Participant (s) shall be reduced correspondingly; provided, that the sum of all such increases for the Participant pursuant to this Subsection shall not exceed, without consent of the Participant, an accumulated maximum of 25% of the Participant's Share. (d) If the Participant is not a municipal corporation, upon default on the part of any other such Participant (s) which is not a municipal corporation, the Participant's Share shall be automatically increased for the remaining term of this Agreement pro rata with that of other such nondefaulting Participant (s) to the extent that such de-faulting Participant (s) fails or refuses for any reason to perform its obligations under its Participants' Agreement, and the Participant's Share of such defaulting Participant (s) shall be reduced correspondingly; provided, that the sum of all such increases for the Participant pur-( suant to this Subsection shall not exceed, without consent of the Par-ticipant, an accumulated maximum of 25% of the Participant's Share.
- 20. Amendment 39 April 1977 4
(H-26) 1
, - - , . ~ - --_ , - . _ _ _ - _ _ - - . - . - . - - - - - . - - .
. . - _ _ . . - . . . _ ~
- m. , ,
~
l WNP-3 & WNP-5 a ] (e) If the Participant shall fail or refuse to pay any amounts due to Supply System hereunder, the fact that other Participants have
~ (, assumed the obligation to make such payments shall not relieve the Par- i ticipant of its liability for such payments, and the Parti:1 pants i assuming such obligation, either individually or as a member of a group, i shall have a right to recovery from the Participant. Supply System or l any Participant as their interests may appear, jointly or severally, may
. commence such suits, actions or proceedings, at law or in equity, .
including suits for specific perfomance, as may be necessary or appro-- , priate to enfore the obligations of this Agreement against Participants, 3 which obligations shall include reasonable attorneys' fees in all trial l and appellate courts. !
- 18. Replacements, Repairs Betterments and Capital Additions. {
(a) Whenevertheaggregatecostsof(i)bettermentsorcap- ' ital additions either necessary to achieve design capability, to improve , operating reliability or to reduce unit power costs or required by ' governmental agencies and (ii) replacements or repairs exceeds $3,000,000 ! ("Betterments and Repairs") for any Plant for any Contract Year as esti- i mated by Supply System, relating to a Plant which has become contin-uously operable, Supply System shall submit to the Participants' Com- ! mittee its plan, including but not limited to a financing plan and i budget of expenditures for each such Betterments and Repairs; provided.
.that if such estimated aggregate cost of any such Betterments and Repairs exceeds 20 percent of the then depreciated value of the Plant, members of the Participants' Comittee representing 80% or more of the ;
Participants' Shares may direct that Supply System proceed to end the ! Project in accordance with Section '13 and as to Nuclear Project No. 5, i the Ownership Agreement. If Supply System and the Participants' Com- i mittee cannot agree upon such estimated costs, such estimated costs [ shall be referred to and determined by the Project Consultant. If the Participants' Comittee does not so direct Supply System to proceed to ! end the Project within 90 days from the date such estimated costs have been so agreed upon or determined, Supply System shall proceed with its plan and budget of expenditures for such Betterments and Repairs. Each , such plan and budget, or updated or amended budget, relating thereto i shall be submitted to the Participants' Committee and shall become :' effective at the time and in the manner provided in Section 8. (b) If in any Contract Year the amounts for costs of con- i struction in the applicable Annual Budget for Betterments and Repairs (less the amount of applicable reserves, if any, as provided in the Bond r Resolution plus the proceeds of insurance, if any, available by reason ; of loss or damage to one or more Projects) exceed by 10% the applicable Annual Budget less such costs, and not including such reserves and , insurance proceeds, Supply System in good faith shall use its best efforts to issue and sell Bonds to pay such excess in accordance with , Section 4. fi 21. . 4 I l (H-27) Amendment 39 ) April 1977 [ l l ' . a;_ _ _ _. _ -. _ _ _ .. _ _ _ _ _ _ _ _ _
WNP-3 & WNP-5
- 19. Energy Program.
( (a) Supply System may expend not to exceed Fifty Million Dollars ($50,000,000) of the proceeds of the Bonds pursuant to Section 6.12 of the Bond Resolution (the " Energy Program Proceeds") for studies o and surveys necessary or appropriate to enable the Participants to determine the best method of serving the prospective needs of their customers for power and energy, including planning, engineering, siting, environmental, financial and economic studies and surveys relating to generation and non-generation alternatives, basic data collection, research, resources evaluation and work necessary to comply with the State Environmental Policy Act (Revised Code of Washington, Chapter 43.21C). (b) Supply System may also expend Energy Program Proceeds for the design and engineering work necessary or appropriate to estab-lish the economic, environmental, regulatory and technical feasibility of a specific energy resource and, incidental thereto, such expenditures may include the necessary costs of options for acquisitions of equipment, fuel and land, or rights thereto, and the costs of preparation, and presentation to proposed participants, cf the environmental documents and agreements necessary or appropriate to finance such resource. (c) Prior to any expenditures of Energy Program Proceeds Supply System shall prepare and deliver to the Participants' Committee a budget describing the items of expenditure and the estimated amounts to be expended therefor in each quarter and shall obtain approval of
; such budget by Committee members representing 80% or more of the Partici-pants' Shares. Supply System shall prepare, and obtain such approval for, any amended budget r.ecessary to reflect any substantial changes in such expenditures, prior to making such expenditures.
A monthly budget report shall be prepared by Supply System and delivered to the Participants' Committee showing by contract or major account the cumulative amounts committed and the cumulative amounts expended. (d) Any agreements (" Purchase Agreements") entered into for the purchase and sale of shares of power and energy of any project developed with any Energy Program Proceeds shall contain the require-ments that: (i) In the event that such a project is terminated before proceeds of bonds or notes sold to finance such project are received by Supply System, the purchasers under the Purchase Agreements shall be obligated to pay any amounts expended or committed from Energy Program Proceeds for the project after the effective date of said Purchase Agreements plus the amount of any interest paid or accrued by Supply System on the portion of Energy Program Proceeds expended for a project, such amounts to be due within five years after the date of termination. 22. ( (H-28) Amendment 39 April 1977
WNP-3 & WNP-5 (ii) In the event that proceeds of bonds or notes secured by Purchase Agreements for such project are received by Supply System,
-Supply System shall apply an amount from such bond or note proceeds
(:- equal to the amount expended from Energy Program Proceeds for the project plus the amount of any interest paid or accrued by Supply System on the portion of Energy Program Proceeds expended for a project, as pro-vided in Subsection (iii) below. (iii) Supply System shall expend any amounts paid it under Subsections (i) and (ii) above to reduce the costs of construction or operation of the Projects, or pursuant to and subject to the limita-1 tions of this Section or for other proposes permitted by the Bond Resolution. ! (e) Supply System convenants and agrees that is will enter into Purchase Agreement for any project developed with Energy Program Proceeds and proceed to issue and sell bonds or notes to finance such projects as soon as reasonably practicable. (f) Supply System shall reserve or cause to be reserved for each Participant a share (the " Reserved Share") of the' power and energy i of any project developed with any Energy Program Proceeds. The Reserved , Share of the Participant shall be equal to a fraction having (i) a denom-inator represented by the estimated amount of growth in power and energy
- requirements for all statutory preference customers of Bonneville for
, the five year period ending on the June 30 preceding the estimated date-
! of continuous operation of such project and (ii) a numerator represented j by the estimated amount of such growth of the Participant. Such esti-j mates shall be provided by each such preference customer, subject to j approval by the Participants' Committee.
(g) The Reserved Share of each Participant shall be made available by Supply System under a form of Purchase Agreement which j will treat all Participants for whom power and energy are reserved j hereunder on equal terms. (h) Except as otherwise provided in this Section, the form of Purchase Agreement and all other matters reasonably' required to imple-ment this Section shall be governed by rules adopted by Supply System j and approved by members of the Participants' Consnittee representing 80". or more of the Participants' Shares, t (i) Supply System shall use its best efforts promptly to , secure a written waiver from each of its members to any preference right > j that the member may have under and pursuant to RCW 43.52.380 to purchase an amount of such reserved capability or output in excess of that' pro-
- vided for in this Agreement. The execution of this' Agreement by a Par-ticipant who is a member of Supply System constitutes such waiver, i
I l ! 23. 6 l (H-29) i Amendment 39 April 1977
WNP-3 & WNP-5 l
, 20. Uranium Bearing Lands Acquisition. -( (a) Supply System may expend not to exceed $45,000,000 of the proceeds of the Bonds pursuant to Section 6.13 of the Bond Resolu-tion (the " Uranium Lands Proceeds") for (1) the identification and acquisition of uranium bearing lands, or any rights in or to such lands, including basic data collections, research, resources evaluation and other preliminary stuGes and work necessary or incidental thereto, and (ii) the design, engineering and other preliminary work or studies necessary or incidental to establish the economic, environmental, regu- l latory and technical feasibility of the extraction and processing of '
the uranium resources of such acquired uranium bearing lands, including but not limited to the preparation of necessary and appropriate planning, geological, engineering, mining, environmental, financial, economic and other preliminary surveys and studies, necessary to comoly with the State Environmental Policy Act (Revised Code of Washington, Chapter 43.21C) and including any environmental documents and agreements nec-essary or appropriate to finance such extraction and processing. (b) Prior to any expenditures of Uranium Lands Proceeds Supply System shall prepare and deliver to the Participants' Committee a budget describing the items of expenditure and the estimated amounts to be expended therefor in each quarter and shall obtain approval of euch budget by Committee members representing 80% or more of the Partici-pants' Shares. Supply System shall prepare, and obtain such approval for, any amended budget necessary to reflect any substantial changes in such expenditures, prior to making such expenditures. A monthly budget report shall be prepared by the Supply System and delivered to the Participants' Committee showing by contract or major account the cumulative amounts committed and the cumulative amounts expended. (c) Supply System shall make available to the Projects at its cost of development any uranium resources developed with any Uranium Lands Proceeds; provided that, subject to the approval of members of the Participants' Comittee representing 80% or more of the Participants' Shares, Supply System, after making such provision as it deems necessary for the Projects, may make available all or any part of such resources, upon such terms and conditions as it may determine, to the Supply System's ownership interest in any of its other existing or future nuclear gen-erating projects, to any system of Supply System relating to nuclear fuel, to Pacific for its ownership share in Nuclear Project No. 5 or to others. In the event of a disposition of uranium resources pursuant to this Section, including to the Projects, Supply System shall charge not less than an appropriate allocation of the amounts expended from the Uranium Lands Acquisition Fund for such resources. Supply Sy tem shall deposit in the Uranium Lands Acquisition Fund created pursuant to the Bond Resolution all monies received for such charges and such amounts shall be used by Supply System pursuant to and subject to the limita-tions of this Section or to reduce the costs of construction or opera-tion of the Projects. 24. Amendment 39 (H-30) April 1977
WNP-3 & WNP-5
- 21. Modification and Uniformity of Agreements.
.( (a) This Agreement shall not be binding upon one of the s parties hereto if it'is not binding upon the other party hereto, but this Agreement shall not be subject to termination by any party under any circumstances, whether based upon the default of the other party
- under this Agreement, or any other instrument, or otherwise, except as specifically provided in this Agreement.
(b) This Agreement shall not be amended, modified, or other-wise changed by agreement of the parties in any manner that will impair or adversely affect the security afforded by the provisions of this Agreement for the payment of the principal, interest, the premium, if any, on the Bonds as they respectively become payable as long as any of the Bonds are outstanding and unpaid or funds are not set aside for-the payment or retirement thereof in accordance with the Bond Resolution. (c) If any Participants' Agreement is amended or replaced so i that it contains terms and conditions different from those contained in this Agreement, Supply System shall notify the Participant and upon timely request by the Participant shall amand this Agreement to include similar terms and conditions.
- 22. Designation of Bonneville j The Participant may designate Bonneville as its agent to per-
) fonn its obligations under Sections 6, 7, 9 and 10 but such designation shall not affect any of Participant's obligations hereunder.
- 23. Approval by Rural Electrification Administrator and Other Agencies.
If the Participant is a party to an agreement or other instru-ment pursuant to which approval of this Agreement by the Administrator
- of the Rural Electrification Administration is required as listed in Exhibit A, this Agreement shall not be binding upon any of the parties
- until it shall have been approved by him or his delegate. If Partici-
! pant is a party to any other agreement or instrument pursuant to which approval of this Agreement by any agency is required and Participant so notifies Supply System prior to Supply System's execution of this Agree-i ment, this Agreement shall not be binding upon any of the parties until it shall have been approved by any such agency. ! 24. Notices.
- . Any notice, demand, approval, proposal, protest, consent, F direction or request provided for in this Agreement to be delivered.
given or made to a Participant shall be deemed delivered, given or made
- on the date delivered in writing, in person or deposited in the United
- States mail by registered or certified mail, postage prepaid, return i receipt requested, addressed to the person and at the address designated
( 25. (H-31) Amendment 39 April 1977
WNP-3 & WNP herein or in writing filId with th2 other Party. Any party may changn such designation, at any time and from time to time, by giving notice . to the other party as above provided. The address of the Supply System j is: Managing Director, Washington Public Power Supply System, P. O. f-Box 968, Richland, Washington 99352,
- 25. Relationship to Other Instruments.
It is recognized by the parties hereto that Supply System in the ownership, construction, acquisition and operation of the Plants must comply with the requirements of the Ownership Agreement relating to WPPSS Nuclear Project No. 5, the Bond Resolution, and all licenses, permits and regulatory approvals necessary for such ownership, construc-tion, acquisition and operation,.and it is therefore agreed that this Agreement is made, and referrals to or any review or other action by the Participants' Committee hereunder shall be subject to the terms and provisions of the Ownership Agreement, the Bond Resolution and all such licenses, permits, and regulatory approvals. Except as to the obligations under Sections 6 and 9 of the Option and Services Agreement, this Agreement supersedes such Agreement.
- 26. Severabili ty.
Notwithstanding the provisions of Sections 19 and 20 or any provision of this Agreement relating to the review, determination, approval, disapproval or other action by the Participants' Committee or Project Consultant, it is, nevertheless, understood and agreed that the essential purpose of the Participant entering into this Agreement is to obtain from the Supply System its Participant's Share in order to serve its customers in the future. Accordingly, if any section, para-graph, clause or provision of this Agreement (including Sections 19 or 20 or any provision of this Agreement relating to any review, determi-nation, approval, disapproval, or any other action, by the Participants' Committee or Project Consultant or its application to any Plant, Project or entity) shall be finally adjudicated by a court of competent juris-diction to be invalid or unenforceable, the remainder of this Agreement or its application to any other Plant, Project or entity shall be unaffected by such adjudication and all of the remaining provisions of this Agreement or its application to any other Plant, Project or entity shall remain in full force and effect as though such section, paragraph, clause or provision or any part thereof so adjudicated to be invalid had not been included herein. The parties agree that any event or ccndition which may occur which delays or prevents the construction or operation of one of the Plants shall not delay the construction of the other Plant. 26. ( (H-32) Amendment 39 April 1977
WNP-3 & WNP-5
- 27. Assignment.
( (a) This Agreement shall inure to the benefit of, and shall be binding upon, the respective successort ano assigns to this Agree- l ment; provided, however, that neither this Agreement, nor any interest herein, shall be transferred or assigned by Supply System to any entity without consent of Participants representing 80% of the Participants' Shares, or transferred or assigned by the Participant if (i) in the opinion of counsel to Supply System such assignment or transfer would adversely affect the exemption from federal income taxation of the interest on the Bonds to the holders thereof or (ii) Supply System determines such assignment or transfer would adversely affect the oper-ation of the Plants. (b) No assignment of this Agreement, or any interest herein, by the Participant shall relieve it from any obligations hereunder. (c) Upon request by the Participant, Supply System will use its best efforts to secure arrangements to dispose of all or any portion of the power and energy, including capability, to which the Participant is entitled under this Agreement, first, to entitities in the Pacific Northwest region, and second, to any other entitities; Supply System shall credit to the Participant's acccount any sums received by it pursuant to such arrangements. IN WITNESS WHERE0F, the parties hereto have executed this Agreement this day of . 1976. WASHINGTON PUBLIC POWER 4 SUPPLY SYSTEM ATTEST: By Title Managing Director (SEAL) Participant's Name ATTEST: By Title Title (SEAL) Amendment 39
- 27. April 1977 (H-33)
e WNP-3 & WNP-5 TABLE OF PARTICIPANTS' PRELIMINARY SHARES (~ Districts Col. 1 Col. 2 Public Utility District No. 1 of Benton County, Washington .05460 Central Lincoln People's Utility District .02868 Public Utility District No.1 of Chelan County, Washington .00828 Public Utility District Nc. 1 of Clallam County, Washington .01476 Public Utility District No.1 of Clark County, Washington .10596 Clatskanie People's Utility District .00840 Public Utility District No.1 of Cowlitz County, Washington .09816 Public Utility District No.1 of Douglas County, Washington .00012 Public Utility District No.1 of Franklin County, Washington .03144 Public Utility District No. 2 of Grant County, Washington .00624 Public Utility District No.1 of Grays Harbor County, Washington .04740
*Public Utility District No.1 of Klickitat County, Washington .01056 Public Utility District No.1 of Lewis County, Washington .02172
*Public Utility District No.1 of Mason County, Washington .00168 Public Utility District No. 3 of Mason County, Washington .01044 Northern Wasco County People's Utility District .00348 4 Public Utility District No.1 of Okanogan County, Washington .00732 Public Utility District No. 2 of Pacific County, Washington .00912
- Public Utility District No.1 of Pend Oreille County, Washington .00432 Public Utility District No. 1 of Skamania County, Washington .00276 Public Utility District No.1 of Snohomish County, Washington .14028
*Tillamook People's Utility District .00840 Vera Irrigation District No. 10 .00276 Public Utility District No.1 of Wahkiakum County, Washington .00132 Cities City of Bandon, Oregon .00072 City of Blaine, Washington .00072 City of Bonners Ferry, Idaho .00204 City of Burley, Idaho .00204 City of Canby, Oregon .00564 City of Cascade Locks, Oregon .00072 City of Centralia, Washington .00708 City of Cheney, Washington .00132 City of Coulee Dam, Washington .00048 City of Drain, Oregon .00072 City of Ellensburg, Washington .00672 City of Heyburn, Idaho .00276 City of Idaho Falls, Idaho .00984 Town of McCleary, Washington .00132 City of McMinnville, Oregon .01044 City of Milton-Freewater, Oregon .00072 Exhibit A (H-34)
Amendment 39 April 1977 j
n WNP-3 & WNP-5 City of Monmouth, Ore .00204 (- City of Port Angeles,gonWashington .00504 City of Richland, Washington .02112 City of Rupert, Idaho .00348 City of Seattle, Washington .11928 City of Springfield, Oregon .01836 City of Steilacoom, Washington .00156 City of Sumas, Washington .00024 City of Tacoma, Washington- .11496 Coopera tives Alder Mutual Light Company .00012
*Benton Rural Electric Association .00720
- Big Bend Electric Cooperative, Inc. .00552
*Blachly-Lane Electric Cooperative Association .00492
- Central Electric Cooperative. Inc. .01044 Clearwater Power Company .00348
- Columbia Basin Electric Cooperative, Inc. .00420
- Columbia Rural Electric Association, Inc. .00696
- Consumers Power, Inc. _._
.01452
- Coos-Curry Electric Cooperative, Inc. .00624
~
- Douglas Electric Cooperative, Inc. .00552 Elmhurst Mutual Power & Light Company .00624 Fall River Rural Electric Cooperative Inc. .00696 Glacier Electric Cooperative .00192 Hood River Electric Cooperative, Oregon .00324
- Idaho County Light & Power Cooperative Association, Inc. .00048
- Inland Power & Light Company .02412
*Vootenai Electric Cooperative, Inc. .00696
- Lane Electric Cooperative, Inc. .00828
- Lincoln Electric Cooperative, Inc. (Montana) .00048
*LincolnElectricCooperative,Inc.(Washington) .00204
- Lost River Electric Cooperative, Inc. .00144
- Lower Valley Power & Light, Inc. .00900
*Midstate Electric Cooperative, Inc. .00756
*Missoula Electric Cooperative. Inc. .00624
*Nespelem Valley Electric Cooperative, Inc. .00048
- Northern Lights, Inc. .00552 Ohop Mutual Light Company .00096
*0kanogan County Electric Cooperative, Inc. .00048
*0rcas Power and Light Company .00696 Parkland Light & Water Company .00144
- Prairie Power Cooperative Inc. .00096
- Raft River Rural Electric Cooperative, Inc. .00420
*Ravalli County Electric Cooperative, Inc. .00252 Rural Electric Company .00096 Salem Electric .00492 Salem River Electric Cooperative Inc. .00096
( A-2 (H-35) Amendment 39 April 1977
I WNP-3 & WNP-5
- Tanner Electric . .00108 4
*Umatilla' Electric Cooperative Association .03840
{ : Unity Light and Power Company .00144
- Vigilante Electric Cooperative, Inc. .00312
- *Wasco Electric Cooperative Inc. .00144
- Wells Rural Electric Company _ .00043
- West Oregon Electric Cooperative, -Inc. .00144 1.20000 a
!
- Approval of Agreement by Rural Electrification Administration required.
P t l 1 f A-3 I (H-36) Amendment 39 April 1977
?
WNP-3 & WNP-5 ( , EXHIBIT B DESCRIPTION OF PLANTS WASHINGTON PUBLIC POWER SUPPLY SYSTEM Nuclear Project No. 4 The Vashington Public Power Supply System's Nuclear Project No. 4 comprises a nuclear generating plant and associated facilities having an installed nameplate rating of approximately 1,250 MW. The Project will be located within the United States Energy Resources and Develop-ment Administration's Hanford Reservation in Benton County, Washington, about 2.5 miles west of the Columbia River at river mile 352 in Section 3, 4, 33 and 34, Townships 11 North and 12 North, Range 28 East, Willa-mette Meridian, Benton County, State of Washington, such site being about 0.7 miles east and 0.3 miles north of the Washington Public Power Supply System Nuclear Project No. 2 presently under construction, about 12 miles north of the City of Richland, Washington. Nuclear Project No. 5 The Washington Public Power Supply System's Nuclear Project No. 5 comprises a nuclear generating plant and associated facilities having an installed nameplate rating of approximately 1,240 MW. The Project will be located in Section 17 of Township 17 North, Range 6 West, Willamette Meridian, Grays Harbor County, State of Washington, about 3 miles south of Satsop, Washington, and about 17 miles east of Aberdeen, Washington. l l Exhibit B l- I (H-37) Amendment 39 April 1977
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WNP-3 & WNP-5 l l ( l WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 5 AGREEMENT PACIFIC POWER & LIGHT COMPANY and WASHINGTON PUBLIC POWER SUPPLY SYSTEM (0wnershipAgreement) / ( Amendment 39 April 1977 (H-38)
WNP-3 & WNP-5 WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 5 ( AGREEMENT PACIFIC POWER & LIGHT COMPANY and WASHINGTON PUBLIC POWER SUPPLY SYSTEM (0wnershipAgreement) TABLE OF CONTENTS Section Page Recitals 1
- 1. Definitions 2
- 2. Ownership and Waiver of Partition 5
- 3. Approvals of Pacific 6
- 4. Project Consultant 8
- 5. Construction Budget 9
- 6. Construction Payments 10
- 7. Construction, Licensing, Operation and Maintenance 10
- 8. Annual Costs -- Budgets 11
- 9. Operating Trust Account 12
- 10. Fuel 12
- 11. Scheduling 14
- 12. Accounting 15
- 13. Insurance 16
- 14. Liabilities; Waiver of Subrogation 16
- 15. Uncontrollable Forces 17
- 16. Damages to the Project 17
[ 17. Default 18 l i , I f (i) Amendment 39 April 1977 (H-39) l
WNP-3 & WNP-5
- 18. Elective Capital Additions 19
( 19. Investment 19
- 20. Assignments 19
- 21. Training 20
- 22. End of Project 20
- 23. Notices 21
- 24. Provisions Relating to Delivery 21
- 25. Personal Covenants; Rule Against Restrictions on Alienation 22
- 26. Determination of Costs Associated with Project and Project No. 3 22
- 27. Construction of Agreement 22
- 28. Additional Documents 22 Exhibit A - Description of Plant Real Property (to be added)
Exhibit B - Project Description 24 , f (ii) (H-40) Amendment 39 April 1977
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' WNP-3 & WNP-5 THIS IS AN AGREEMENT between WASHINGTON PUBLIC POWER SUPPLY SYSTEM,
- a municipal corporation of Washington, herein called Supply System, and
, ( PACIFIC POWER & LIGHT COMPANY, a Maine Corporation, herein called Pacific; each individually called Party, and collectively called the Parties. RECITALS l On September 17, 1973, the Parties, and other investor-owned utility l corporations, entered into an Ownership Agreement pursuant to RCW 54.44, ! as amended, for the undivided ownership of a nuclear plant for the gen- ! eration of electricity of approximately 1,100 megawatts net electric l capacity and related facilities and property, all comprising a project designated as Washington Public Power Supply System Nuclear Project No. 3 (Project No. 3), and for the planning, financing, acquisition, con-struction, operation and maintenance thereof. Thereafter, Supply System acquired a site in the State of Washington for such project and has proceeded with the performance of said Owner-ship Agreement by way of entering into certain contracts relating to Project No. 3, filing applications for required licenses and permits to construct, operate and maintain said project and taking other actions as provided in said Ownership Agreement. Pursuant to Section 25 of said Ownership Agreement, Supply System has decided to construct and operate, jointly with Pacific, on the Plant Real Property (defined herein), an additional nuclear generating unit consisting of a nuclear plant of approximately 1,240 megawatts net electric capacity and related facilities and property, all comprising a project to be known as the Washington Public Power Supply System Nuclear Project No. 5 (hereinafter called and defined as the Project), under terms and conditions substantially similar to those set forth in said Cwnership Agreement. In order to achieve the economies of scale, the Parties now enter into the following Ownership Agreement (hereinafter called the Project No. 5 Ownership Agreement) pursuant to RCW 54.44, as amended, for the undivided ownership of the Project and for the planning, financing, acquisition, construction, operation and maintenance thereof. Supply System is organized under the laws of the State of Washington
.(RCW 43.52) and authorized by law to construct, acquire, operate and maintain works, plants and facilities for the generation and/or transmission of electric power and energy, including capability. Pacific is an investor-owned electric utility corporation subject to regulation by the states of Oregon, Washington, Wyoming, Idaho, Montana and California.
I Amendment 39
- 1. April 1977 (H-41)
M WNP-3 & WNP-5 All as hereinafter provided: Each Party shall own a percentage of ( ' the Project and shall furnish a like percentage of the money or the value of property for the acquisition and construction thereof, and shall own and control a like percentage of the electrical output thereof. Each Party shall defray its own interest and other payments required to be made or deposited in connection with any financing undertaken by it to pay its percentage of the money furnished or value of property supplied by it for the planning, acquisition, construction and operation of the Project, or any additions or betterments thereto, a uniform method being provided herein for determining and allocating operation and maintenance expense of the Project. NOW, THEREFORE, the Parties mutually agree as follows:
- 1. Definitions. The singular of any term in this Agreement shall encompass the plural, and the plural the singular, unless the context indicates otherwise.
(a) " Annual Costs" means all Project costs, except Fuel Costs, included in any budget or revised budget of Annual Costs which has been
, approved or incurred under Section 8(b), and allocable to (1) Operation and Maintenance Expense Accounts as such accounts are described in the Uniform System of Accounts, (2) elective capital additions made pur-suant to Section 18, and (3), beginning on the Date of Continuous Operation, repairs, renewals and replacements necessary to assure design capability, and modifications, betterments and additions required by z
governmental agencies. Annual Costs shall also include an appropriate allocation of Supply System administrative and general costs. Credits relating to such costs shall be applied to Annual Costs when received. (b) "Bonneville" means the Bonneville Power Administration, a bureau of the Department of the Interior of the United States of America. (c) " Contract Year" means the period commencing on the Date of Continuous Operation and ending at 12 midnight on the following June 30, and thereafter raeans the 12-month period commencing each year at 12 midnight on June 30, except that the last Contract Year shall end on
- . the date of termination of this Agreement.
(d) " Costs of Construction" means all costs allocable to the planning, acquisition and construction of the Project and of making l it ready for operation (excluding Fuel Costs and allowance for funds l used during construction (interest during construction)), after giving l appropriate consideration to credits relating to costs of construction, sales of salvage materials and interest received on monies deposited in the Construction Trust Account referred to in Section 6 hereof. Without limiting the generality of the foregoing such costs shall include: i ! I l
- 2. Amendment 39 April 1977 (H-42)
WNP-3 & WNP-5 (1) Preliminary investigation and development costs, engi-neering, contractors' fees, . labor, materials, equipment and supplies,
-{ operator and other personnel training, testing, legal costs and all other costs properly allocable to construction.
(2) All costs of insurance obtained pursuant to Section 13(a) hereof and applicable to the period of construction. (3) All costs relating to injury and damage claims arising out of the construction of the Project less proceeds of insurance main-tained in accordance with Section 13(a) hereof. (4) All Federal, state and local taxes and payments in lieu of taxes legally required to be paid in connection with the construc-tion of the Project, except any tax or payment in lieu of taxes assessed or charged directly against any individual Party unless such tax or pay-ment was assessed or charged to the individual Party on behalf of the Project. (5) The cost of all services, including an allocation of administrative and general expenses, performed by or at the request of Supply System which are directly applicable to Project construction. (6) An appropriate allocation of administrative and general costs of Supply System applicable to Project construction to the extent i such costs are not otherwise chargeable pursuant to this Subsection (d). (f) "Date of Continuous Operation" means the date fixed by Supply System when the Project is ready to be operated and its output scheduled on a commercial basis. (g) " Fuel" means nuclear fuel and rights relating thereto. (h) " Fuel Costs" means all costs attributable to the supply, trans-portation, storage, processing, installation and reprocessing of Fuel, including all direct labor costs related thereto and an appropriate allocation of administrative and general costs, but excluding allowance for funds used during construction. Credits relating to Fuel shall be applied to Fuel Costs when received. (1) " Matter" means any subject, or any aspect thereof, arising out of or relating to the interpretation of performance of this Agree-ment, including any proposal that may be made by a Party. (j) " Minimum Capability" means the minimum electrical generating capability of the Project determined by Supply System but not less than the minimum generation permitted by the manufacturer's recommendations or by the terms of the NRC operating license, whichever is higher. (k) "NRC" means the United States Nuclear Regulatory Comission ; and such successor agencies as shall have responsibility for licensing i or regulating nuclear electric generating plants.
- 3. Amendment 39 l
April 1977
WNP-3 & WNP L
~(1) "0wnership. Share" means the percentage specified in Section 2 p or such percentage' adjusted pursuant to Sections 16(b) and 22(b).
(m) " Participants" means the entities which have entered into the Partici ants' Agreements with the Supply System described in Section 4(a .
-(n) " Plant Real Property" means real property, or any rights in or to real property, heretofore or hereafter acquired a., the site for Project No. 3 and _any additional real property or rights in or to such real property which may be acquired as the site for the Project. A description of the Plant Real Property will be attached as Exhibit A when determined _ pursuant to Section 3(j) (1) of the Project No. 3 Ownership Agreement.
'(o) " Project" means the nuclear generating plant and related pro-perty known as the Washington Public Power Supply. System Nuclear Project No. 5 as described in Exhibit B. Exhibit B may be revised from time to time by mutual agreement of the Parties.
(p) " Project Capability" at any time means the actual net elec-trical generating capability of the Project at such time. (q) " Prudent Utility Practice" at a particular time means any of , the practices, methods and acts, which, in the exercise of reasonable ' judgment in the light of the facts (including but not limited to the
- practices, methods and acts engaged in or approved by a significant
- portion of the electrical utility industry prior thereto) known at the '
time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with realiability, safety and expedition, Prudent Utility Practice shall apply not only to functional parts of the Project, but also to appropriate structures, landscaping, painting, signs, lighting, other facilities and public relations programs reasonably designed to promote public enjoyment,
, understanding, and acceptance of the Project. Prudent Utility Practice i
is not intended to be limited to the optimum practice, method or act, to the exclusion of all others, but rather to be a spectrum of possible 4 practices, methods or acts. In evaluating whether any Matter conforms to Prudent Utility Practice, Supply System and any Project Consultant chosen pursuant to Section 4 hereof shall take into account: i' (1) The fact that Supply System is a municipal corporation ! and operating agency under the laws of the State of Washington, with l prescribed statutory duties and responsibilities; and (ii) The objectives to integrate the Project Capability with the generating resources, primarily of the Participants and Pacific, including such resources and electric power and energy purchased under , contract, and secondarily of the Federal System, and to achieve optimum I utilization of the resources and achieve efficient and economical oper-ation of each system, primarily as to the Participants and Pacific and i secondarily as to the Federal System. l ( L Amendment 39 April 1977 (H-44) a ____ _ ____ z __ __ - _ _ - . - - - - - - _ _ - - - . - .. N-.
WNP-3'& WNP-5 (r) " Uniform System of Accounts" means the Federal Power Commission > Uniform System of Accounts prescribed for public utilities and licenses ( in effect on January 1,1970 as amended to September 17, 1973.
- 2. Ownership and Waiver of Partition. (a) The Project shall be owned by the Parties as tenants in comon, with each Party's respective i undivided interest being in the following percentage (Ownership Share), ;
except as modified pursuant to Sections 16(b) and 22: l Percentage i Party Ownership Share Supply System 90% l Pacific 10% i I (b) Each Party promptly and with all due diligence shall take all j necessary actions and seek all regulatory approvals, licenses and permits I necessary to carry out its obligations under this agreement. (c) So long as the Project, or any part thereof as originally con-structed, reconstructed or added to, is used or useful for the genera-tion of electric power and energy, or to the end of the period permitted by applicable law, whichever first occurs, the Parties waive the right to partition whether by partition in kind or sale and division of the proceeds thereof and agree that during said time they will not resort to any action at law or in equity to partition and further that for said time they waive the benefit of all laws that may now or hereafter i authorize such partition of the properties comprising the Project. (d) The duties, obligations and liabilities of the Parties are intended to be several and not joint or collective, and none of the Parties shall be jointly or severally liable for the acts, omissions, or obligations of any of the other Parties. No provision of this agreement shall be construed to create an association, joint venture, partnership, or impose a partnership duty, obligation or liability, on or with regard to any one or more of the Parties. No Party shall have a right or power to bind any other Party without its or their express written consent, except as expressly provided in this agreement. (e) Each Party and its designees shall have the right to go upon and into the Project at any time subject to the rules and regulations of public authorities having jurisdiction thereof and to the necessity of efficient and safe construction and operation of the Project, but Supply System shall have possession and control of the Project for all the Parties. (f) In order to provide unified management of the Project, Pacific authorizes and designates Supply System, and Supply System agrees to act, as its agent, to construct, operate and maintain the Project under the terms of this Agreement. The Parties agree that such agency rela-tionship shall not be changed without unanimous written consent of the Parties.
)
5. Amendment 39 ( (H-45) April 1977 l-
WNP-3 & WNP-5 (g) In construction and operation of the Project, each Party shall act without compensation other than reimbursement of costs and ( expenses as provided herein.
- 3. Approvals of Pacific. (a) Supply System shall keep Pacific informed of all significant Matters with respect to planning, construc-tion, operation or maintenance of the Project (including without limi-tation, plans, specifications, engineering studies, environmental docu-ments, budgets, Fuel Plans, estimates and schedules) and when practicable, in time for Pacific to comment. thereon before decisions are made, and shall confer with Pacific during the development of any of Supply System's proposals regarding such Matters when practicable to do so. Upon request of Pacific, Supply System shall furnish or make available to it, with reasonable promptness and at reasonable times, any and all other infor-mation relating to the planning, construction, operation or maintenance of the Project.
The Parties shall meet regularly, but not less often than once in each calendar quarter. (b) Supply System shall submit each of the Matters listed below to Pacific for approval; provided that, no approval by Pacific under this Agreement shall be required as to any Matters relating to the Project which are the same as to Project No. 3 and approved by the Committee established by, and pursuant to the provisions or such Matters as are determined by the Special Board under Section 4 of such Agreement. Determination of Minimum Capability (Section 1(j)). Construction budgets and changes therein (Section 5). Any increase in the working fund in the Construction Trust Account (Section 6(b)). Budgets of Annual Costs (Section 8(a)) and revisions thereof (Section 8(b)). Any increase in the working fund in the Operating Trust Account (Section 9(b)). Fuel Plan, changes therein and determinations relating thereto as provided in Section 10. Scheduled outages as provi&c in Section 11(c). Insurance coverage, including limits and choice of insurers (Section 13). Estimate of cost of repair or damage to the Project (Section 16(a)) if in excess of $1,000,000, and estimate of the value of the Project without repair (Section 16(b)). , /' Sales of salvage materials in excess of such minimum amount as j is agreed to by the Parties. ! Amendment 39 6. l April 1977 (H-46) l L_
WNP-3 & WNP-5 Determination of appropriate administrative and general allo-
,.- cstions for Annual Costs, Costs of Construction and Fuel Costs.
( (c) All proposals of Supply System relating to Matters regarding , the planning, construction, operation or maintenance of the Project submitted to Pacific under any provisions of this Agreement shall include itemized cost estimates and other detail sufficient to support a compre-hensive review, including, but not limited to, a copy of all supporting reports, analyses, recommendations or other documents pertaining thereto. (d) If any Matter submitted-to Pacific under subsection (b) above is not approved within 30 days after the original submittal to Pacific, or within such longer time as the Parties may agree to, then Pacific shall specify in a written statement its reasons for declining approval, and shall also state therein what alternative is acceptable to it. Such statement shall be submitted to the Supply System within 10 days after expiration of such 30-day period or such longer period as the Parties may agree to. Immediately after receipt from Pacific of the written state-ment pursuant to the preceding paragraph, Supply System may refer the disputed Matter to the Project Consultant for a decision pursuant to Section 4 of this Agreement. If Supply System elects not to do so and does not submit an alternative proposal, or if pursuant to Section 8(b) Supply System continues to operate the Project without an approved budget of Annual Costs, Pacific may refer such matter to the Project Consultant for decision pursuant to Section 4. (e) Supply System shall submit the following Matters to Pacific and shall not proceed without the approval of Pacific: (i) Change in site of the Project. (ii) Change in type of steam supply system. (iii) Change in method of heat disposition. (iv) Award of contracts for changed type or supplier of steam supply system and turbine generators. (v) Change of architect-engineer. (vi) Elective capital additions to the Project. (vii) Change of construction manager. Pacific hereby approves: (1) the site of the Project des-l cribed in Exhibit B hereto, (ii) the selection of Ebasco Services. Incorporated as architect-engineer and construction manager for the i Project,(iii) the award of the contracts for the nuclear steam supply l l I 7. l (H-47) Amendment 39 l April 1977
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WNP-3 & WNP-5
~
[-... system and the turbine-generators.to Combustion Engineering Co. and-L _ Westinghouse' Electric Co., respectively, and all other contracts listed E as awarded in the initial Construction Budget delivered to Pacific pur- , suant to Section 5; and (iv) the selection of evaporative cooling towers as the method of heat disposition. l
- 4. Project Consultant. -(a) _Except as otherwise provided in I
this Agreement, either Party (the " notifying Party") may refer any. Matter which fails to_ receive the required approval of Pacific to a , . Project Consultant for decision by serving notice on the other Party. Such notice shall specify in reasonable detail the Matter to be _sub-1 mitted to'the Project Consultant and the Party's position on the Matter. Within_ ten (10) days after such notice is given the other Party shall
- deliver a notice to the notifying Party stating its position on the Matter to be submitted and within five days thereafter Supply System and Pacific shall agree to such consultant.
If any proposal submitted by Supply System to Pacific or the Participants' Comittee or submitted by Pacific or by the Participants' Committee to Supply System pertains to a matter which requires both the approval of the Participants' Comittee and Pacific, and if the proposal t is not approved by Supply System, Pacific and the. Participants' Comittee, and the Participants' Agreements and this Agreement provide for the appointment of a project consultant to resolve such matters, then .the procedure for the resolution of the matter shall be that set forth in ! Sections 15 and 16 of the Participants' Agreements and this procedure j shall supersede the procedure set forth in Subsections (b), (c) and (d) of this Section. As used in this subsection, " Participants' Agreements" means the agreements to which Supply System is a party and containing provi-sions substantially in the form of Sections 15 and 16 of the agreements entitled " Washington Public Power Supply System Nuclear Projects Nos. 4 and 5 Participants' Agreement" (a draft of which dated April 15, 1976, is on file with Pacific) and " Participants' Comittee" means the com-mittee established pursuant to Section 15 of said agreements. (b) If Supply System and Pacific fail to agree upon the appoint-
- ment of the Project Consultant within the time specified above, any l Party, after three days' notice to the other Party, may apply to the Chief Judge of the United States District Court for the Western District of Washington, for appointment by him of the Project Consultant. Such i judge shall be requested to appoint an individual of national reputa-i tion having demonstrated expertise in the field of the Matter submitted ;
to the Project Consultant. 1 (c) If any Project Consultant so appointed fails, or is unable, { to act or serve until his decision is_ rendered, his successor shall be 4 appointed by the Parties or by said Judge, as the case may be, who made j the original appointment. L [
- 8. Amendment 39 (H-48)
=_ _ _ - - . _ _ - .- -. -
WNP-3 & WNP-5 (d) Unless otherwise stipulated in writing by the Parties, the Project Consultant shall commence a hearing within ten days after its ( appointment, shall conduct the proceeding expeditously and render its decision within thirty days after the close of such hearing. The Project Consultant may receive any evidence that in its opinion will enable it to arrive at a fair and correct decision. The Project Consultant shall decide whether the Matter proposed by Supply System is in accordance with Prudent Utility Practice. If the Project Consultant decides in the affirmative, Supply System shall proceed as proposed by it; if in the negative, Supply System shall not so proceed. The decision of the Project Consultant shall be final and conclus've. (e) Pacific may submit any proposal to Supply System which con-firms with Prudent Utility Practice and the requirements imposed on Supply System under Subsection 3(c) by serving a copy of it on Supply System. Within 15 days after receipt of such proposal, Supply System may submit one or more written alternative proposals. Such an alterna-tive proposal may be that the Project continue to be constructed, oper-ated and maintained, as the case may be, as previously planned; failure of Supply System to submit a written proposal to Pacific or to the Project Consultant shall be treated for all purposes of this section 4(e) as if Supply System had submitted a written alternative proposal to such effect. If the Parties do not agree on a proposal within sixty days, any Party may submit its proposal to a Project Consultant to be appointed pursuant to Sections 4(a) and (b). Such Consultant shall then consider Supply System's proposal and determine if its proposal is in accordance with Prudent Utility Practice. If the Project Consultant so determines Supply System shall proceed accordingly and Pacific's proposal shall be dismissed. If such Consultant determines Supply System's proposal is not in accordance with Prudent Utility Practice it shall then consider the proposal of Pacific and determine if such proposal is in accordance with Prudent Utility Practice. If the Project Consultant determines such proposal is in accordance with Prudent Utility Practice, Supply System shall proceed with the proposal. If the Project Consultant determines that none of the proposals conform with Prudent Utility Practice, it shall dismiss all proposals. (f) The costs of the proceeding hereunder, including compensation for the Project Consultant and the reasonable costs incurred by each Party in connection with the proceeding, shall be Costs of Construction or Annual Costs, as appropriate.
- 5. Construction Budget. An initial budget effective January 1, 19/6, setting forth the preliminary estimate of amounts expected to be expended for Costs of Construction in each month for calendar year 19Ni and each quarter thereafter to the completion of construction has been submitted by Supply System to Pacific with an estimated cash flow schedule for each of said months and quarters; said initial budget and schedule are hereby approved. By October 1 of each year until comple-tion of construction, Supply System shall submit to Pacific for approval 9.
Amendment 39 (H-49) April 19T/
WNP-3 & WNP-5 an updated budget and cash flow schedule, supported by detail adequate for the purpose of comprehensive review, describing the items of Costs i-{
~o f Construction and of the amounts expected to be expended therefor in each month during the next twenty-four months and each quarter there-after until completion of construction. Construction budget and cash flow schedules shall be changed by Supply System from time to time as necessary to reflect substantial changes in construction schedules,
. Plans, specifications or costs, and when so changed shall be submitted to Pacific for approval.
- 6. _
Construction Payments. (a) Supply System shall establish a separate trust account (Construction Trust Account) in a bank located in the State of Washington and having qualifications meeting all require-ments imposed upon depositories for any of the Parties. Moneys for Costs of Construction of the Project shall be deposited therein and, except as provided in Section 19, Supply System shall withdraw and apply funds therefrom only as necessary to pay Costs of Construction. (b) Upon the date of execution and delivery of this Agreement each Party shall pay into the Construction Trust Account-its Ownership. Share of a working fund of $100,000 and Pacific shall pay to Supply System Pacific's Ownership Share of the Costs of Construction, Fuel Costs and allowance for funds used during construction, and incurred by Supply System to such date. If Supply System proposes any larger amount of such working fund it shall submit its proposal to Pacific for approval. Thereafter each Party shall continue to maintain its Ownership Share of such fund in the amount stated, or in such larger amount as may be approved by the Parties. (c) Except as otherwise agreed to by the Parties, Supply System will, at least seven days prior to the date set for a meeting of Supply System's Board of Directors or Executive Committee, give Pacific a schedule of the Costs of Construction and reimbursement of the working fund expected to be paid on the Monday following such meeting if held on Friday, or on the next business day if such meeting is held on any other
- day, and each Party shall deposit its Ownership Share of the amounts to be paid in the Construction Trust Account on the day of such payment, .
whether or not such amounts are specified in the budget. (d) Upon completion of the Project, acceptance thereof by Supply System and settlement of all the obligations relating to construction, i Supply System shall close the Construction Trust Account and distribute to Pacific its Ownership Share of any balance remaining.
- 7. Construction, Licensing, Operation and Maintenance. (a)
Supply System shall take whatever action is necessary or appropriate to seek and obtain all licenses, permits and other rights and regulatory approvals necessary for the construction, operation and maintenance of the Project, on behalf of itself and Pacific. ( 10. Amendment 39
^
(H-50)
WN9-3 & WNP-5 l (b) Supply System shall' prosecute construction of the Project in accordance with Prudent Utility Practice, NRC licensing requirements, (i- any applicable Federal or. state laws and regulations thereunder, and plans and specifications for the Project prepared or recommended by r the Project architect-engineer and so as to schedule the Date of Con- ' tinuous Operation as near as may be to April 1984. , '(c) Supply System shall operate and maintain the Project in accordance with Prudent Utility Practice, giving due consideration to
- the recomendations of Pacific and the manufacturer's warranty require-ments.
(d) Supply System shall operate and maintain the Project in such a manner as to meet the requirements of the NRC and other government agencies having jurisdiction in any given Matter, to_ safeguard the health and safety of persons and safety of property, and, as necessary in the nonnal course of business, to assure the continued operation and maintenance of_the Project. (e)' Supply System shall award contracts for the construction, operation and maintenance of the Project in a manner designed to result in the least over-all cost consistent with standards of high quality. . Contracts may be lump sum or unit price, and may also _contain incentive and liquidated damages clauses. Supply System shall advertise for bids ' and award contracts or reject all bids after appropriate evaluation and review in accordance with applicable 16ws of the State of Washington; g provided, however, that prior to making comitments thereon Supply System shall submit to Pacific for approval each proposed contract award or change order, in either case, for any amount in excess of
$500,000.
i
- 8. Annual Costs -- Budgets. (a) At least four months prior to the expected Date of Continuous Operation, Supply System shall submit to Pacific for approval a budget of the Annual Costs, except Fuel Costs,
, but including administrative and general expenses relating to operation 1 and Fuel, for each month from the expected Date of Continuous Operation
-to the end of the next succeeding Contract Year. Thereafter, by April 1 of each year, Supply System shall submit to Pacific for approval a similar budget for the next two succeeding Contract Years, which budget shall take into account the cumulative difference between payments into and expenditures from the Operating Trust Account established pursuant to Section 9 hereof up to the preceding April 1 and provide for restora-tion, as necessary, of the working fund. Each budget of Annual Costs 1
. shall be supported by detail adequate for the purpose of comprehensive
, review and shall show, among other things, staffing allocations and i services of the Parties and Capital Additions. l ( 11. Amendment 39 (H-51) April 1977 s , I I. - -. .-_-, ,_. . - . - , - , , -
----.--------.--.,--------,----,--,,,-----N
WNP-3 & WNP-5 (. (b) . The effective budget of Annual . Costs shall be changed as j necessary to reflect changed circumstances, and when such changed cir- l cumstances become known, and prior to expenditure of any funds not con- I templated-in the effective budget.of' Annual Costs (except as otherwise provided hereafter in this subsection), Supply System shall submit
-promptly a revised budget to Pacific for approval. Unbudgeted expendi-ture made by Supply System in an emergency or to protect the safety of
- persons or property shall be Annual Costs as incurred. Other expendi- !
tures necessary .in the normal course of business for the continued j
. safe operation and maintenance of the Project, which are made by Supply System prior to Pacific's approval of a budget of Annual Costs, or a revision thereof, shall be Annual Costs as incurred.
- 9. . Operating Trust Account. (a) Supply System shall establish a separate trust account (Operating Trust Account) in a bank located in the State of Washington and having qualifications meeting all require-ments imposed upon a depositary for any of the Parties. Each Party shall deposit therein its payments on account of Fuel Costs determined pursuant to Section 10(e) in funds available for withdrawal by 10:30 a.m. on the business day payments are to.be made by Supply System for Fuel Costs.
t' (b) Prior to the Date of Continuous Operation each Party shall deposit in such Account its Ownership Share of a working fund in the amount of $50,000. If either Party proposes any different amount it 3 shall submit its proposal to the other Party for approval. All moneys received by Supply System under the terms of this Agreement, except Costs of Construction and receipts related to Construction, shall be deposited in such Account. i (c) At the request of Supply System, each Party shall deposit as required in the Operating Trust Account such Party's Ownership Share i of the portion of Annual Costs to be paid by Supply System. i
- 10. Fuel. (a) Supply System shall arrange for Fuel in amounts so that each Party may utilize its Ownership Share of the Project in a manner which such Party estimates will be best suited to its individual
- system needs. Except, as otherwise provided by Fuel Plans approved by Pacific and subject to approval by Supply System, Pacific may arrange for Fuel in amounts sufficient to enable it to utilize its Ownership Share of the Project.
(b) Pacific hereby approves the ten-year Fuel management plan, dated July 18, 1975, a copy of which is on file with Pacific. By i April 1 of each year until the Date of Continuous Operation, Supply System shall prepare and submit to Pacific for approval a ten-year Fuel management plan (Fuel Plan). Each year thereafter, the Fuel Plan shall be submitted with each budget of Annual Costs beginning with the first such budget. Each Fuel Plan shall be prepared after considera- ! tion of the Fuel supply arrangements, power generating requirements and other operations aspects of the Project. I
- 12. Amendment 39 l
April 1977 i (H.52)
- WNP-3 & WNP-5 Supply System shall consult with Pacific, and shall prepare the l
' Fuel Plan consistent with Subsection 10(a). Each Fuel Plan shall des-i cribe in detail each contemplated action and payment and the dates '
L (-
^
thereof, as well-as core usage and design burnup, and estimated fueling dates. It shall include a cash flow analysis of forecasted expenditures and credits for each Party for each major component of the Fuel cycle by. years, for the entire period, and cash flow by months, for the first five years of the period. Pacific shall furnish to Supply System, as requested, forecasts of 1 . its generation requirements from the Project. Supply System shall use
- - such forecasts in preparing each Fuel Plan. Supply System shall amend the Fuel Plan as reasonably required to reflect changes in conditions
, unforeseen at the time the Fuel Plan was prepared, and shall submit such amended Fuel Plan to Pacific for approval. Supply System shall secure Fuel and refuel the Project in a manner which implements the Fuel Plan l to the extent reasonably practicable. (c) The forecasted generation requirements of each party shall be at least sufficient to insure operation at Minimum Capability to the Forecast Refueling Date unless a Party has arranged, pursuant to Subsection 11(d) for the delivery of alternative capacity and energy to the Party requesting operation. (d) At the time of each fueling, Supply System shall submit to Pacific for approval its determination of (i) the next fueling date (Forecast Refueling Date), (ii) the kilowatt-hours of net energy avail-able to each Party to the Forecast Refueling Date (Energy Entitlement), e' (iii) the cost per kilowatt-hour of its Energy Entitlement, and (iv) the outage schedule for maintenance. Each Party's Energy Entitlement shall equal as nearly as practicable such Party's forecasted generation requirements. Supply System shall periodically review such determina-tions with Pacific, revise such determinations as necessary and submit 4 them to Pacific for approval. 4 (e) Each Party shall pay its share of the amounts of Fuel Costs as appropriate to the Fuel Plan and at the time required by Section 9(a). Each Party shall have the right to make whatever arrangements it
;. may desire, whether by lease, security transaction, or otherwise, for the discharge of its Fuel payment obligation so long as such arrange-ments do not impair the rights of any other Party. Supply System shall disburse each payment relating to Fuel, when due, from the Operating Trust Account.
i (f) Each Party shall receive appropriate net Fuel recovery credits, as-determined by Supply System. (g) Any Party may require that the Forecast Refueling Date be advanced or delayed and/or may use the Energy Entitlement of the other Party if such Party (1) makes arrangement for delivery of alternative
; . . capacity and energy at the Project point of delivery equivalent to the 13.
[ Amendment 39 April 1977 (H-53)
-- -w----,,_mv. ,i.,.,,--,-.m,e-.,2-,---,.m,r,-w. m .w.-, . , . , ,
- e- , ,,,,s.w,,,y n,,- ---3
WNP-3 & WNP-5 amount of capacity'and energy which would have been available to the other Party from its Ownership Share of Project Capability if the Fore-
.{ cast Refueling Date had not been advanced or delayed or such Energy Entitlement had not- been used by the requiring Party, or (2) makes other
' arrangements acceptable to the affected Party, including, but not limited to, payments for Fuel used or making a portion of such Party's Ownership Share of Project Capability available for use by such other Party;
)rovided, however, that neither the advancing or delaying of the Forecast lefueling Date nor the use of the other Party's Energy Entitlement shall !
. (1) adversely affect the availability of capacity and energy to which the other Party otherwise would have been entitled from the Project, or (ii) adversely affect the other Party's costs for such capacity and energy. (h) After reprocessing of a Fuel batch removed from the core, Supply System shall make a detailed final accounting of all costs, pay-ments and energy allocable to Pacific. Such final accounting shall stipulate any credits or deficits due Pacific, including any provisional settlements made. Supply System shall submit such data to Pacific for approval, after which the Parties will settle accounts within 30 days or as otherwise agreed. ;
- 11. Scheduling. (a) Within the constraints of Section 10 and this Section 11 each Party shall be entitled to receive, as scheduled by it, all or any part of its Ownership Share of the Project Capability.
Supply System's dispatcher promptly shall notify Pacific of any signi-ficant change in Project Capability. (b) By 4:00 p.m. on each regular working day, Pacific shall submit its hourly schedule for the following day to Supply System's dispatcher except that Pacific shall submit its hourly schedule for a holiday, Saturday, Sunday, and for the first following regular working day by 4:00 p.m. on the regular working day immediately preceding. Pacific may make changes therein at any time; provided, however, that if the total requested changes in the level of operation of the generating plant requires a rate of change in excess of that prescribed either by the manufacturer's warranty or in the NRC operating license, each Party 4 whose scheduled rate of change is in excess of its Ownership Share of the prescribed limit shall be limited proportionately so that the total
- rate of change does not exceed the prescribed rate of change.
(c) Supply System shall schedule generating plant outages other than fueling outages and submit same to Pacific for approval as to the time and duration thereof as far in advance as practicable. Notwith-standing the foregoing, Supply System may shut the generating plant down to meet the requirements of NRC or other governmental agencies having jurisdiction or to avoid hazard to the Project or to any person or property. ( 14. Amendmerit 39 April 1977 (H-54)
l WNP-3 & WNP-5
. (d) Except as otherwise provided herein, each Party shall schedule '( energy from the Project in such a manner that its Energy Entitlement is adequate to maintain such Party's Ownership Share of Minimum Capability until the next Forecast Refueling Date; provided, however, that a Party may require that the Project not be operated during any period by arranging for delivery of alternative capacity and energy at the Project point of delivery to the Party requesting operation equivalent to the amount of capacity and energy which would have been available to such Party for its Ownership Share of Project Capability during such period, and such-requesting Party shall pay the supplying Party a percentage of -
the amount of incremental savings which the requesting Party realizes from the displacement of energy from the Project, which percentage and
, amount of savings shall be as agreed by the Parties involved; provided further that requiring non-operation of the Project will not (i) adver-sely affect the availability of capacity and energy to which the other Party otherwise would have been entitled from the Project, or (ii) adversely affect the other Party's costs for such capacity and energy.
If fulfilling the schedules submitted by Pacific would require operation of the Project at an operating level below the Minimum Cap-ability, Supply System's dispatcher shall immediately notify Pacific. Unless otherwise agreed by the Parties as provided in the preceding paragraph, the Party whose schedule is greater than its Ownership Share of such Minimum Capability shall take energy as provided by such sche-dules, and the other Party shall schedule and take the remainder of such Minimum Capability. (e) When testing of plant facilities requires generation, each Party shall make provision for acceptance of its Ownership Share of such 4 generation. Supply System will notify Pacific of test schedules as far i in advance as practicable. (f) Supply System shall arrange for Project station use and losses, p_rovided that if Supply System cannot do so Pacific shall arrange for its Ownership Share of such energy to be delivered to the Project. . 12. Accounting. (a) Supply System shall keep up-to-date books and records showing all financial transactions and other arrangements in carrying out the terms of this Agreement. Such books and records shall contain information supporting the allocation of Supply System's indirect costs associated with the Project. Such books and records shall be retained by Supply System for ten years or such longer period as either Party is required to keep such records by any regulatory agency having , jurisdiction and shall be made available for inspection and audit by l Pacific at any reasonable time. Any contract with any consultant or contractor of Supply System providing for reimbursement of costs or expenses of any kind shall
- require the keeping and maintenance of books, records, documents, and other l evidence pertaining to the costs and expenses incurred or claimed under l ( such contract to the extent and in such detail as will properly reflect Amendment 39
- 15. April 1977 (H-55)
i_ . L WNP-3 & WNP-5 p L all costs related to this Agreement and shall require such books, records,
-r documents and evidence to be made available to-Pacific at all reasonable A times for review and audit for a period of three years after final settlement of the applicable contracts. Pacific shall have the right to' examine and copy all plans, specifications, bids and contracts .
relating to the. Project. !
.(b) All accounts shall be kept so'as to permit conversion to'the system of accounts prescribed for electric utilities by the Federal Power Commission. The allocation of costs by Supply System between costs of Construction and Annual Costs pursuant to this Agrement shall be binding en the Parties for purposes of this Agreement, but the manner in which accounts are kept pursuant to this Agreement is not intended .
, to be determinative uf the manner in which they are treated in the books of account of-the Parties. (c) Supply System 'shall by the 15th of each month supply to l Pacific a complete, itemized account of all deposits in and withdrawls from the trust accounts during the previous month, together with an , itemization of the basis for reimbursement made -to Supply System from such accounts during such month. Supply System shall cause all books , and records to be audited promptly by independent Certified Public
- j. Accountants of national reputation acceptable to Pacific at approximately annual intervals and at such time as such accounts are closed. Copies of such audits shall be supplied to Pacific.
i 13. Insurance. (a) Supply System shall procure at the earliest j practicable time and thereafter maintain in force for the benefit of the j Parties as named insured and with losses payable to the Parties as their respective interests shall appear, such insurance coverage for the con- ! struction, operation, maintenance and repair of the Projects as Pacific j may appreve pursuant to Section 3(b), but not less than shall be required under the contract executed with the Project architect-engineer, and i not less than will satisfy the requirements of the Atomic Energy Act j of 1954 (as amended), (including all NRC regulations in effect from time
- to time thereunder), and conform to Prudent Utility Practice. .
l (b) Pacific may request additional insurance to the extent avail-L able, and Supply System shall purchase such requested insurance at the expense of Pacific. The proceeds from such requested insurance shall i be disbursed as directed by Pacific.
- 14. Liabilities; Waiver of Subrogation. (a) Each of the Parties
{ releases the other Party, its agents and employees from any claim for
! loss or damage, including consequential loss or damage, arising out of
- the construction, operation, mainte~ ce, reconstruction, and repair
- of the Project due to negligence, inu uding gross negligence, but not any claim for loss or damage resulting from breach of any contract 2
- relating to the Project, including this Agreement, or for willful or j wanton misconduct.
i i Amendment 39
- 16. April 1977 (H-56)
. _ a_ _ _ _ _ . _ _ _ _ __ _ _ _ _ _ _ _ _ _ __ _
,(b) Any loss, cost. liability, damage and expense to the Parties j or any Party, other than damages to any Party resulting from loss of
.(- use and occupancy of the Project or any part thereof, resulting from
'the construction, operation,' maintenance, reconstruction or repair of.the Project and based upon' injury to or death of persons or damage to or loss of-Project property and property of other parties, to the extent not' covered by collectible insurance, shall be charged to Cost of Construction or Annual Costs, whichever may be appropriate. ,
1
- .(c) Each Party shall cause its insurers to waive any rights of subrogation against the other Party, its. agents and employees, for ,
losses, costs, damages or expenses arising out of the construction, operation, maintenance, reconstruction or repair of the Project.
- 15. Uncontrollable Forces. No Party shall be considered to be in default in the performance _of any of the obligations hereunder, other than obligations of any Party to pay its Ownership Share of costs and i expenses, if failure of performance shall be due to uncontrollable i-forces. The term " uncontrollable forces" shall mean any cause beyond the control of the Party affected and which, by the exercise of reason-able diligence, the Party is unable to overcome, and shall include but not be limited to an act-of God, fire, flood, explosion, strike, sabo-tage, an act of the public enemy, civil or military authority, including i court orders, injunctions, and orders of government agencies with proper jurisdiction prohibiting acts necessary to performance hereunder or permitting any such act only subject to unreasonable conditions, insurrection or riot, an act of the elements, failure of equipment, or inability to obtain or ship materials or equipment because of the effect of similar causes on suppliers or carriers. Nothing contained herein shall be construed so as to require a Party to settle any strike or-labor dispute in which it may be involvea. Any Party rendered unable to fulfill any obligation by reason of uncontrollable forces shall i
i exercise due diligence to remove such inability with all reasonable dispatch. f 16. Damage to the Project. (a) If the Project suffers damage resulting from causes other than ordinary wear, tear or deterioration to the extent that Supply System's estimate of the cost of repair is
- less than 20% of the then depreciated value of the Project, and if the i Parties do not unanimously agree that the Project shall be ended pur-suant to Section 22, Supply System shall promptly submit a revised con-
- struction budget or budget of Annual Costs, as appropriate, and shall proceed to repair the Project, and each Party shall pay as budgeted, into the appropriate trust account, its Ownership Share of the cost
! of such repair. (b) If the Project suffers damage to the extent that Supply System's estimate of the cost of repair exceeds 20% of the then depre- , ciated value of the Project, Supply System shall determine the estimated fair market value of the Project if it is then terminated without repair. Thereafter, each Party which, within 60 days gives notice in writing to l l 17. (H-57) Amendment 39 l April 1977 T _ . . . . _ _ _ _ _ _ .._ _ _ __.__ _ _ _ _ _, _ _ _ _ _ . _ _
WNP-3 & WNP-5 theotherPartyofitsdesirethatkheProjectberepaired,shallpay into the appropriate trust account, as budgeted in a revised budget, that part of the total cost of repair in the proportion that its Owner-(- ship Share bears to the total of the Ownership Shares of all Parties giving such notice. If only one of the Parties has given such notice, the Ownership Share of the other Party shall be reduced at the end of each month thereafter to the extent determined by the following formula: S r
=S o V V+C where V = Estimated fair market value of the Project if it is terminated without repair C = Actual expenditures for Repair Sg = Ownership Share prior to loss Sr= Reduced Ownership Share At the same time, the amount of such reduction shall be added to the Ownership Share of the Party giving such notice.
(c) If the Project suffers damage to the extent that Supply System's estimated cost of repair exceeds 20% of the then depreciated value of the Project and no Party gives the notice provided in Section 16(b), the Project shall be ended pursuant to Section 22. (d) For the purposes of this Section 16, the depreciated value of the Project at any time shall be based on the original cost of the Project, plus additions and less retirements, depreciated on a straight-line basis using a composite life of 35 years. (e) Supply System shall submit each of the estimates referred to in this Section to Pacific for its approval pursuant to Section 3(b).
- 17. Default. (a) Upon failure of a Party to make any payment when due, or to perform any obligation herein, the other Party may make written demand upon said Party, and if said failure is not cured within 10 days from the date of such demand it shall constitute a default at the expiration of such period.
(b) If a Party in good faith disputes the legal validity of said written demand, it shall make such payment or perform such obligation within said 10 day period under written protest directed to the other Party. Such protest shall be in writing and shall specify the reasons upon which the protest is based. Payments not made by the defaulting Party pursuant to said written demand may be advanced by the other Party and, if so advanced, shall bear interest until paid, at the highest lawful rate. Upon resolution of such dispute, then any pay-ments advanced or made between the Parties, as in this Section. provided, l shall be adjusted appropriately. l Amendment 39 l 18. April 1977 ! (H-58)
WNP-3 & WNP-5 , (c) In addition to the rights granted in this Section 17, the
.nondefau_1 ting Party may take any action, in law or equity, including
(:~ an action for specific performance, to enforce this Agreement and to recover for any loss, damage or payment advances, including attorneys'
-fees in-all trial and appellate courts and collection costs incurred by reason of such default.
- 18. . Elective Capital Additions. Renewals and replacements not-necessary to assure design capability, and betterments and additions
, not required by governmental agencies, shall be made after the Date of
- Continuous Operation only upon unanimous approval of the Parties.
- 19. Investment. :;upply System shall use its best efforts to invest funds in the Construction Trust Account or in the Operating Trust Account in legally issued obligations of the United States or the State of Washington, or in other obligations in which Supply System is authorized to invest. The net proceeds for such investments shall 1
be deposited in the accounts from which they came and credited to the j . Parties in their respective Ownership Shares.
- 20. Assignments. This Agreement shall be binding upon and shall inure to the benefit of successors and assigns of the Parties; 3rovided, however, that no transfer or assignment of other than all of a ' arty's interest in the Project and under this Agreement to a single entity shall operate to give the assignee or transferee the status or rights of a Party hereunder. Except as provided in Section 16 of this Agree-ment, the undivided interest (or a portion thereof) of any Party in the
, Project, the property, real or personal, related thereto, and under I
this Agreement may be transferred and assigned as set out below but not otherwise; provided that so long as Supply System retains its Ownership Share in the Project, no interest, except as a security interest, in the Project shall be sold or assigned pursuant to Subsections (b) through (f) in this Section to an entity not authorized by RCW 54.44,
- as amended, to participate and enter into agreements with an operating
- agency for the undivided ownership of common facilities
1 (a) To any mortgagee, trustee, or secured Party, as security r for bonds or other indebtedness of such Party, present or future; such mortgagee, trustee or secured Party may realize upon such security in foreclosure or other suitable proceedings, and succeed i to all right, title and interests of such Party; i (b) To any corporation or other entity acquiring all or j substantially all the property of the Party making the transfer; t ' (c) To any corporation or entity into which or with which the Party making the transfer may be merged or consolidated; i (d) To any corporation or entity, the stock or ownership ! of which is wholly owned by the Party making the transfer; l ( l j 19. Amendment 39 (H-59) April 1977 l
-, , a. ..-,--. .- - - ..
- .. - . _ - - -- - - .~ . _
WNP-3 & WNP-5 ; l
-(e)' To any corporation or entity in a single transaction constituting a sale and lease back to the: transferor or assignor;
. (f) To any other person, provided that the Party shall first
-offer to transfer or assign such interest to the other Party in the amount of and on terms and conditions not less advantageous l than those which it is willing to accept for a transfer or ass _ign- l ment to such other person. Such offer shall remain open for a reasonable period but not less than three months.
. (g) Transfer or assignment shall not relieve a Party of any obligation hereunder except to the extent agreed to in writing by the other Party. Any interest or assignment permitted by subsec-tions'(b) through (f) of this section 20 is expressiy conditioned upon the transferee or assignee assuming the obligations of the
, transferring or assigning Party under this Agreement. , 21. Training. . Supply System shall carry out a familiarization 4 and training program to maintain adequate staffing in connection with the construction, operation and maintenance of the Project and the expenses thereof shall be part of the Costs of Construction or Annual Costs as appropriate. Pacific shall be entitled to have employees pre-sent at the Project for purposes of training, subject to reasonable 4 rules to be established by Supply System. Any increase in the Costs of Construction of Annual Costs resulting from such training shall be borne by Pacific. i
- 22. End of Project. (a) When the Project can no longer be made capable of producing electricity consistent with Prudent Utility Prac-
. tice or the requirements of governmental agencies having jurisdiction i~ or is no longer licensed by the NRC, or when the Project is ended pur-suant to Section 16, Supply System shall sell for removal all salable parts of the Project exclusive of Fuel to the highest bidders. After deducting all costs of ending the Project, including, without limiting the generality of the foregoing, the cost of decommissioning, razing all structures and disposing of.the debris and meeting all applicable requirements of law, Supply System shall close the appropriate trust j accounts and, if there are net proceeds, distribute to each Party its Ownership Share of such proceeds. Supply System shall liquidate the Fuel, and after making all required payments and receiving all due receipts, shall disburse the proceeds to the Parties as their interests appear. In the event such costs of ending the Project exceed avail-able funds, each Party shall pay its Ownership Share of such excess as incurred. (b) (i) If one of the Parties is rendered incap6ble of proceeding with its obligations hereunder by reason of one or more of the condi-tions listed below, which condition is beyond the ability of such party
.to remedy by reasonable means within a reasonable time, the other Party may, within ninety (90) days after notice by a Party of the occurrence of the ' condition, elect to proceed with the Project without the disabled p
f 20. Amendment 39 - l April 1977 h (H-60) L
- - . . , - , , - , - - -- --,,--.,,n --
, , n, ...w-n---,,-~ n-_.-,_,-
v WNP-3 & WNP-5 Party; provided, however, that is such disabled Party is proceeding with all due. diligence to remove such disability, the election shall
- (- not be made until .90 days after final order or othe- final disposition of the matter; provided further .that if delay would cause substantial additional costs to be incurred if the election were so postponed, the L
electing Party may proceed as necessary to avoid or minimize delay, preserving the rights of the disabled Party until final order or other The conditions are: final disposition. 1._ Inability to finance. , 2. Failure to obtain necessary legal authorization, including regulatory approvals. (ii) _ Upon the election for any of the reasons set forth in (i) above, the Party so electing shall promptly reimburse the non-eiecting Party for its Cost of Construction, Fuel Costs and allowance for funds used during . construction, if any incurred hereunder; provided, however, that such reimbursement shall not occur with regard to the disabled Party until final order or other final disposition in the Matter con-firming the disability. Upon such reimbursement, the non-electing Party's interest in the Project and in this Agreement, and any related rights or interest acquired by them hereunder, shall forthwith vest in the electing Party. f 23. Notices. Any notice, demand, approval or request or other j item provided for in this Agreement to be served, given or made in connection therewith shall be deemed properly served, given or made when given in person or deposited in the U.S. mail, registered or cer-tified mail, postage prepaid, addressed to the person and at the address designated in writing by the respective Party, as the case may be. Either Party may at any time, and from time to time, change its designation of the person to whom notice shall be given by giving notice to the other Party as hereinabove provided.
- 24. Provisions Relating to Delivery. Deliveries of electric power and energy to the Parties shall be made at the point of delivery and at the approximate voltage described below. Such electric power and energy shall be in the fann of three-phase current, alternating at a frequency of approximately 60 hertz. Amounts delivered at such point 4
during each month shall be determined from measurements made by the meters, adjusted for losses as agreed upon by the Parties, installed to record such deliveries at the place and in the circuits hereinafter specified: i PROJECT POINT OF DELIVERY: Location: the point agreed upon by the Parties where the 230 kv or higher voltage facilities of the Project and those of Bonneville or of a Party are connected; or, in the absence of such agreement, at the Project site; ( Amendment 39
- 21. April 1977 (H-61)
WNP-3 & WNP-5
-Voltage: 230 kv or higher; Metering: in the circuits over which such electric power and -( energy will flow; Adjustment: for losses between the point of metering and the point of delivery.
- 25. Personal Covenants; Rule Against Restrictions on Alienation.
(a) Except for the Parties' mutual waiver of the right to partition set forth in Subsection 2(c), all of the covenants and conditions herein shall be personal to the respective Parties and not covenants running with the land and shall be binding upon any Party which acquires any right, title or interest of any Party in or to the Project or under this Agreement, by assignment or in any other way. (b) If the duration of any term or condition of this Agreement shall be subject to the rule against restrictions on alienation or to a similar or related rule, then the effectiveness of such tenn or condi-tion shall not extend beyond (1) the maximum period of time permitted under such rule or (ii) the specific applicable period of time expressed in this Agreement, whichever is shorter. For purposes of applying the rule against restrictions on alienation, or any similar or related rule, the measuring lives in being shall be those of the officers and members of the Board of Directors of Supply System listed by name on page 2 of the Official Statement dated February 4,1976, and relating to Supply System's Nuclear Project No. 1 Revenue Bonds, Series 1976A, a copy of which is on file with the Parties, together with all such listed persons' children who are living on the date of execution of this Agreement. As used in this paragraph, the word " children" shall have its generally accepted meaning of descendants of the first degree.
- 26. Determination of Costs Associated With Project and Project No. 3. Costs soley attributable to the Project shall be charged to the Project and costs solely attributable to Project No. 3 shall not be so charged.
, Costs attributable to both the Project and Project No. 3 shall be charged to the Project on the basis of the proportion of respective benefits to the Project or, if such proportion is not determinable, on the basis of an equal allocation between the Project and Project No. 3.
- 27. Construction of Agreement. This Agreement shall be construed in accordance with the law of the State of Washington, i
- 28. Additional Documents. Each Party, upon request by the other Party shall make, execute and deliver any and all documents reasonably required to implement the terms of this Agreement.
(
, 22. Amendment 39 April 1977 (H-62)
, . - - . - - -- - - - . e. .- - - , . ,_,, , -- - --
WNP-3 & WNP-5 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed this day of July ,1976. ( 14 (SEAL) WASHINGTON PUBLIC POWER SUPPLY SYSTEM i By /s/ J. J. Stein Managing Director ATTEST: , Seeretary President (SEAL) PACIFIC POWER & LIGHT COMPANY By /s/ Don C. Frisbee (Title) press ATTEST:
/s/ Gerald K. Drummond (Title) Ass't Sec'y I
i 1 ( 23. (H-63) Amendment 39 April 1977 l
WNP-3 & WNP-5 WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 5 The Washington Public Power Supply System's Nuclear Project No. 5 is expected to have a net electrical plant capability of approximately 1,240 MW. It will be located on a site in Township 17 North, Range 6 West, Willamette Meridian, Grays Harbor County, State of Washington, about three miles south of the community of Satsop, Washington, and about 17 miles east of the City of Aberdeen, Washington, such site to be described more particularly in Exhibit A. The plant and associated facilities will include the site referred to, a nuclear steam supply system, fuel and reactor coolant system with all related containment structures, safety features, instrumentation, control and auxiliary systems; turbine-generator, condensers and circu-lating water cooling systems, facilities and piping; electrical and mechanical systems and other related equipment and facilities; electri-cal facilities required to deliver the output of the Project to the point of delivery described in Section 24; and other structures, shops, ware-houses, construction facilities, offices, equipment or facilities required in the construction, maintenance and operation of the Project. (
.(
EXHIBIT B 24. 4 (H-64) Amendment 39 April 1977
u. ( WNP-3 & WNP-5 4 EXHIBIT I 1976 ANNUAL REPORTS FOR WASHINGTON PUBLIC POWER SUPPLY SYSTEM PACIFIC POWER & LIGHT COMPANY PORTLAND GENERAL ELECTRIC PUGET SOUND B0WER & LIGHT COMPANY THE WASHINGTON WATER POWER COMPANY 4 4
'l (
Amendment 39 April 1977
19 WNP-3 AND WNP-5
'(. LICENSE APPLICATION AMENDMENT NO. 39 INSTRUCTION SHEET-The following page removals insertions should be made to incorporate Amendment No. 39 into the License Application.
Removed (Existing Pages) Insert (New Pages) Title Page Title Page 1 through 22 1 through 26
- Exhibit H, 64 Pages
- Exhibit I, Cover Sheet 5 Annual Reports
( l (
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, FEBRUARY,1976
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- t. . r t o r .c._on.c t ru c t..i.n._a 1:et capacite s 1,240 ::'Me) '
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..__ .l g .
) :Dl lFt'. i' C.O.S T.S.
91 Coastruc t i on f acilities , e:;uip ' t , and 17,ec,Jav senice.............. ................ $ 1:n..ince r i r.r, e nd cocc t . n 't. r.crvlc u... 66 s G.' 92 9.'i Othe: costs............................. 83 ht'o later. :: d u r i . i;; c o n s t r n .~ L i .n . . . . . . . . . . . . 2 7'i .tM ? 94 St.'* t c ! a l . ......... . .. . $_... 4 0 :'. , . a g. blart c:, co:'ettu"tico cc: .......... ...-$ ....c .( 13.cM a t in- duri n.: com treetten (. . . -v r . ') - 16". M
..o E xc l UC'%m 1' n 4. t I a 1
" ' 't"1 " riaat c. api at ii, s c:- en: (5 961' O --
O ,: 1. h;;,,] ,,_ .x -
- _, n ;.,
core fuel ,: t ;
; ' i c. ...e s 1 2i.. c., ie. .it 1; . ,. i t -. i t .J , -
n.- . l
. t '. ' ' , ' .- .
Labor escalation 8' ccmpounded i:aterial escalation 6" compounded l 6
u . I. 4 . 9 7 k ATTACHMENT 1-2 u WNP N0. 5 I r PLANT CAPITAL INVESTMENT
SUMMARY
(,( , f
?
3. 9 I h e l-
- i i
l
- ATTACitC:Y F07.1TE:t ':0. 1
(. - . Pi.A::T CAPJ TAL 1:;Vr.5T1:::iT,, Ftr t:1.itY
, .i.i!
51C 11.iT '. I:ane of plant WPPSS fiUCLEAR PROJECT tt0. SCe:#t i nds: - start or_constructson I!et canacity 1.240 !!W(e)-- . Reactor 1.ype PWR
, . Location Satsop. Washington Tene of cenu c:
~
Run of riv.fr . Desir.u an:1 conutruction uct lod I:sturci J.-rit
. coali: ; :: ors , X
!!onth, year USSS ore:cr !!c::i:nnirn: ". raft placed _10/74 coolin' - cers Other (cc;2rihe)
. ,. 1;oni.h , year of cor:nircJ n) ,
o,erntinn a 9/33 1.cni,th of worhuech. - ,,,, _ 4 0 p2nn in ere.:t rate, interest during construction _-7.5 t ..Lc? or conn. oun n simale
.A.,. 4 .
CO5T SI"i.irY
.;ccount ::unbi r Acicont Tit]c' . Total Coat (thausa: ' dolk . )
{ DII'r.CT COSTS 20 La n d a n d J a n d r i gh t r. . . . . . . . . . . . . . . . . . . . . $. . . . .. _0. . . . . . . . Pl!YSTC?.'. Pl/.::T 1 -'3, r 3~! J 21 Structuren nnd site fact.1!t'ics.......... 1/.0,1 b l 2? 1:eacLor pinnt equipnent................. - o lo-e 9 . / r; : 8a l.o r..o in e p ] a n t r'q t.i pr : n t . . . . . . . . . . . . . . . . . i 24 Plecrile plant equip': cat................ - - ..,d.' I
,t !t_
c i , uu 25 !! ice. pinnt e q u ip .:e n t . . . . . . . . . . . . . .. . . . . .
$ P Subtota.1........................ 4(7< . s l {<_,
Spa r e pa r t s e 11m:nn te . . . . . . . . . . . . . . . . . . . Centingency allo'ance................... 63.Ml Subtotal........................ $, _ _641_ 3.f_G;_,, i JI:111 P"Cr COSTS .
'91' Conntruction facilitics, equip't, and q . .c-
m.
. 4 3
SCrVlCCr............................... 92 Enr.ineerina and conet. n.~, ' t . ser. ices... SUIC Othercosts.............................
/9.491
'13 2W,%8 i n t eres t dur i.ic, toustruction............
94 S . h t e t .11. . . . . ................. $ 416.U7
<. .4../;.
..t a rt e- c o n s t r iu. t i c u r e s r . . . . . . . . . . . . . . . - S..
- e l'.ncala t ton duri n", con: traction ( .' vr.) _. - 221 2-R. .i_.
(~ ** Excludes initial " loi d plaat capital i t. .s s t r m ( 8,959f r.t. ) s_ ,1,1,g 71*L,,+ core fuel ;
'ic - ...t, :: i.*r..c. : v ,- ,it. ic-. tit . tt . : t.i t . . : ri fe. n: c'. + - !
Labor escalation: 80 co'rpounded Material escalation: 65 conipounded
-,e- --
O . i x
- :1.
, , . ( ). . . , .
JATTACHMENT 5-1 1--. CALCULATIONS OF NET EARNINGS OF INVESTOR-0WNED UTILITIES O 9 e G 9
~4 h
t. t ,. . e i 4 C - - 1
- v. .
- Q-Puget Sound Power & Liglet Company
- h "
INDE!1 TUP.E 00VERAGE 12 MONTilS ENDED LECEMSER 31, 1975
-(l)- - The net earnings for , the 12 months ended Decerrber 31, 1975, availabic-for interest, are computed as.follows:
$161,735.150 Operating revenues derived fros the trust estate Operating expenses cppliccble-to the trust estate: .
78,734,197-O c M Expense Depreciation I4,816,414 17,284.093 Taxes other ther. FIT Total Expense !!0.835.70,1 Op: rating incor.e 50,900,415 Net carnings . f rom other than Trus t Estate (10E lirait) 5,655,605 Net earnings evcilable for interest Liblishf Annual in'. crest chnrges on bonded indebtedness . _ _ _ _ _ _ . . 12 3]i. f Indenture coverage 2.49-w.. ( The aanual i r.t u rc s : charges cn bondea i ndet. tedne s s are (?) compu ted ct. f ul l c..;s : 530,000.003 principc! arxx n.t of First Mortgcee Ucads, 10-3/o/ Series dac 1983 $ 3,125,7 0
$25 000,000 principci cmcunt cf First Mortgcge Bonds, 3-1/2/ Scries due is34 E75.000
$30,000,000 princinal naour.t of Fi rst Mortgng2 Bonds, 10.45;.' Se r i c s dce 19J5 3,135,C.^*
$30,000,000 princ i p;l arount of First l'.cr:9sge Lands, 4- 1/F' Ser ied duc 1988 1,?37,500
$15,000,000 principel crount of First Mortgage Conds, 4-5/EX 5eries due 1991 693,750
$40,000,000 principal account of First Mortgage Bonds, 4-5/07 ser ies dua 1993 1,050,000
$15,000,000 principal amount of Fi rst l'ortgege Bonds, 4-3/4/. Series due 1994 712,500
$20,000,000 pr incipal c:acent of First Mortgage Bonds, 5-1/4.Ueries due 1996. 1,050,000
-$20,000,000 prin ipcl i .ount of First Mortgage Bonds ,
6-5/04-Series due 1937 1,325,C30
$20,000,000 principal aeaunt of First Mortstge Bonds.
7-1/2 teries due 1993 1,rco,cCa
$29,7C0,000 principal neount of First Mortgage Bends, 9-i/2a Series duc 2000 2,821,500
,( .$30,000,000 principal. amount of First Mortgage Bonds, 7-3/4 series due 2005 2,325,000
$30,000,000 principM c*. cent ai First Mertgage Conds,
? ,67 , ,0:' ?
8-3/4? 5 cries.(.ua 2034 r & ?T.rus* ? :> ..: " ' : a.
.+ r-
.a s-
.(3) Additional Fi ret Mortgage Bor.d Coverage for the
-( 12 months ended Decen.ber 31, 1975
$5(2,5%,02 Si .,
Earnings available for indenture coverage 28,278.029 interest to maintain two tir.1as coverage (line le 2) interestoncurrent)MS y ,375,250 Annual 4,902,779 Available interest Principle available at 102 pM,003.q04a;te ( t
.. j -
1 l 1
PORTLA!!D GEf;ERAL ELECTRIC CO. (. TIMES INTEREST EARNED FOR THE TWELVE MONTHS ENDED NOVEM3ER 30, 1975, BASED ON THE INDENTLRE AGREEMENT, AND A CALCULA110N SHOWING THE ADDITIONAL BONDING CAPACITY AT NOVEMBER 30, 1975 ($000's) Cross Operating Revenues $174,351 Other Operating Incoca-Allowance for Funds Used During Construction 21,699 Total Operating Income and Revenues 196,050 Operating Expenses and Taxes (Exclusive of Income Taxes): Operation 79,275 Maintenance 7,099 Depreciation 13,725 Taxec other than income taxes 16,,65) P Tota) Operating Expenres and Taxes (15 c b'e.i ro r f Tn r. n .~ Y.? ra s ) 13 6,3f2 ( Met Ecrnings Avnilable for Intereci 4
$ 7 9,.2.9.c Annual Interest Chart,as en Bonded Indebtednans at November 30, 1975 j,2 f.L,615 Tir:cn Interent Enrned [.fj Additional Bandin:; Capacity at Nover.ber 30, 1975 assu:ning a 10-1/2% Intcreet Rate (1) }._?1. ,500, (1) For cach 1/87; chunge in interect rate, the additional bonding capacity vill change approxinately $1,100.
(
C4 p zu >.u- aw f $, -un e,-s-* a- a m$mek 3 +- 4 a ( THE WAS!!!!1CTON WALER PO'.!ER COMPAl1Y fiet Earninos Calculatiens NET EARN 1liGS TESTS - 12/31: 1975 1974 1973
- 1. Under Mortgage and Deed of Trust dated 6-1-39 es Supplen: entec' fiet Eernings (as defined) 41,309,741 37,6L6,fG5 3 3 ,7 /. 0 , ' ' ,
Annual !'ortgage Interest 13.238,875 10,805,125 10,Co5,D. Requirement Tin.es Ecrned 3.12 3.46 3. I t.
- 2. Ur. der l':b ntu : I.:, . - :.:.:'.t s f Jcted b/i/5.3, 1/1/ W , 3/1/6b at,d 4/1/71 Adjustcd l int Earr.i sp (r.s defined) 3G ,0.'M40 N ,5f f ,E4 9 31.0 6 ..
Annual Debt Inter st I't q rire .e.it 15,850,322 15,C91,510 14,255,'. Ti:rcs Eern?d 2.32 2.10 P.I'
- 3. l'o:1Js issuchle tt 12/3i 35,501,785 i
. y. -
1 PACIFIC POWER & LIGHT COMPAi4Y l l A net earnings certificate dated January 26, 1976 is attached. l:~ Based upon an assumed 10% interest rate. Pacific could issue another $51.5 million of bonds; O e
". O e *u e r PACIFIC POWER & LIGHT CO M PANY Pum Lic s eRvice mulLDING PO RTLAN D, D R E G O N 97304 NET EARNING CERTIFICATE Re Application No. 249 B-29 (Under "ections 7, 27, 28(6) and 121 of Pacific Power & Light Company's Mortgage and Deed of Trust) The undersigned, John H. Geiger, a Vice President of Pacific Power
& Light Company (hereinafter called the Company), the corporation that exe-cuted its Mortgage and Deed of Trust, dated as of Ju,1y 1,1947, to Guaranty
- Trust Company of New York (now Morgan Guaranty Trust Company of New York) and Oliver R. Brooks (R. E. Sparrow, successor), as Trustees as heretofore amended and suppleme' n ted (hereinaf ter called the Mortgage), , J Karl Hoffmann,
, the Treasurer of the Company and an accountant (the period covered by this Certificate not being a period covered by annual reports required to be filed by the Company within the parview of the fourth paragraph of Secticn 7 of the Mortgage), HEREBY CERTIFY as follows:
, (A) That the Adjusted Net Earnings of the Company for a period of 12 consecutive calendar months within the 15 calendar months immedi-ately preceding the first day of the month in which the Applica-tion for the authentication and delivery under the Mortgage of bonds now applied for is made, viz: for the 12 consecutive calendar months ended October 31, 1975, were as follows:
(1) Its operating revenues, with the principal divisions thereof: . Electric '$2'56,169,215 08 Steam Heating 2,549,239 58 Water 2,346,991.79 Tota 10perating Revenues $261,065,446.45~ (2) Its operating expenses, with the principel divisions thereof, including, but without limitation, all ex-penses and accruals for repairs and maintenance and all appropriations out of income for property retire-ment not only in respect of the Mortgaged and Pledged Property but also in respect of all other property owned by the Company - (in lieu of including herein the amounts actually appropriated out of income for depreciation and retirement of the Mortgaged and
' Pledged Property used primarily and principally in the electric, gas, steam and/or water utility business.
and of the autcmotive equipment of the Company used in the operation of such property, there has been in-cluded herein nn amount fer each full calendar month
" Net Earning C;rtificate
- Re Application No. 249 B-29 ,
I . included in said period of 12 consecutive calendar months equal to (1) one-twelfth of $1,150,000, plus (ii) one-twelfth of 2-1/4% of the gross charges to plant account for additions to the depreciable prop-erty (other than additions consisting of property owned by Northwestern Electric Company on April 30, 1947, and acquired by the Company prior to July 1,1947) included in the Mortgaged and Pledged Property, used primarily and principally in the electric, gas, steam and/or water utility business, made subsequently to April 30, 1947, and prior to the beginnin6 of the calendar year within which such calendar month is included, less (iii) one-twelfth of 2-1/4% of the gross credits to plant account of the Company for retirement of depreciable property, 4 used primarily and principally in the electric, gas, steam and/or water utility business, made subsequently to April 30, 1947, and prior to the beginning of the calendar year within which such calendar month is in-included, and less (iv) one-twelftn of 2-1/4% of the gross credits to the plant account of Northwestern Electric Company for retirement of depreciable property used primarily and principally in the electric, gas, steam and/or water utility business, made subsequently to April 30,1947 (other than gross credits to the plant account of Northwestern Electric Company for retirement of depreciable property acquired by the Company prior to July 1,1947), in each case, excluding from plant account any amounts included in utility plant acquisi-tion adjustment accounts or utility plant adjustment - accounts or in any accounts for similar purposes): Electric: Power Purchased $28,931,999.13 1 Other Production 32,117,922.60 Transmission and Distribution 12,232,9.95.42
\ Customer & Sales Promotion 10,464,851.49 Administrative and General 18,538 554.14 Maintenance 21,966,,215 97 Other Utilities 4,355,612.89 3
An atount for depreciation and re-tirement of the Mortgaged and Pledged Property used primarily in the electric, andprincipally/orwaterutility gass, steam and busi tess and of the Company's automotive equipment used in the l l operatien of such property cal-
' culated as set forth above less expensen ($146,757'.29) included in preceding items for retirement
Net Earning'Certifiente I
; - *' Re Application No. 249 B-29 .
l { #- -3 of automotive equipment (in lieu of the amounts actually appropri-ated out of income for such purposes)$27,084,227.74 Appropriation out of income for re-tirement of other property owned by the Company 'None 22,960,225 33 Taxes other than income Total of such Operating Expenses '\ $178,652,604.71 (3) The amount remaining after deducting item . (2) from item (1) above 82,412,841 74
~
(4) its rental expenses for plants or systems not otherwise deducted herein from revenues or from other income None (5) The balance remaining after deducting item (4) from (3) above 82,412,841.74 (6) its rental revenues from plants or systems not otherwise included herein in revenues, g or in other income (net) None (7) The sum of items (5) and (6) above 82,412,841.74 (8) Its other income (net) 39,205,959.82 (9) The sum of items (7) and (8) above 121,618,801 56 (10) The amount, if any, by which the aggregate of (a) such other income (net), and (b) that portion of the amount stated in item (7) above which, in the opinion of the , g signers, is directly derived from the operations of property (other than paving, grading and other ' improvements to, under or upon public highways, bridges, parks or other public properties of analogous char-actor)not subject to the Lien of the Mortgage, at the date hereof, exceeds 15% of item (9) above - (to the extent that item (7) above includes revenues from the operation of property not subject to the Lien of the Mortgage, there has been included in this calculation such reason-able interdepartmental or interproperty revenues and expenses between the Mortgaged and Pledged Property and the property not subject to the Lien of the Mortgage as has been allocated to such respective properties by the Company). The atuount of this item (10)was None _. - -. _. _ _ . = - - - . . .
]_ ,. .-c -- -l * , Net Earning C:rtific2te '
!, Re Application No. 249 B-29 .
-k-
.i I- (11) The Adjusted Net Earnings of the Company
' for said Period of 12 consecutive calendar months ended October 31, 1975, (being-the amount remaining after deducting Item (10) from Item (9) above) $121,618,801 56 (B) That the Annual Interest Requirements, being the interest -
requirements for 12 months are as follows: (i) Upon all bonds Outstanding under the Mortgage at the date hereof, except any for the refunding of which the bonds applied for are to be issued 48,145,668.75 (ii) Upon all bonds now applied for in pending, applications including the Application in connection with which this Certificate is made, viz:
. Upon $75,000,000 principal amount of the first Mortgage Bonds 7,500,000.00 Series due January 1, 2006 , 10%
(iii) . Upon all Qualified Lien Bon,ds which will be Outstand-ing immediately after the authentication of the Bonds I now applied for in pending applications, including the Application in connection with which this Certificate is made, viz: Rawlins Electric Company Upon $124,000.00 principal . amount of First Mortgage - Bonds, 6% 8eries due 1977 $ 7,440.00 (iv) Upon the principal amount of all other indebtedness (except indebtedness of $None for . N the payment of which the bonds applied for are to be issued and indebtedness for the purchase, payment or redemption of which moneys in the necessary amount have been deposited with or are held by the Corporate Trustee or the trustee or other holder of a Qualified Lien or lien prior to the Lien of the Mortgage, as amend-ed and supplemented, upon property subject to the Lien of the Mortgage, with irrevocable direction so to
, apply the same, any notice required therefore having bee'n given or having been provided for to the satisfaction of the Corporate Trustee),
,g. . .
_o n s v Net Earning C;rtific;ta Re ' Application No. 249 B-29 I outstanding in the hands of the public on the date hereof and secured by a lien Prior to the Lien of the Mortgage, as amended and supplemented, upon property subject to the Lien of the Mortgage, as amended and supplemented, to the extent - said indebtedness has been assumed by - the Company or the Company customarily pays the interest upon the principal "" thereof
$55,653,108.75 Total of such Annual Interest Requirements (C) That $121,618,80156, the Adjusted Net Earnings of the Company for the 12 consecutive months ended October 31, 1975, item (11) above, is at least equivalent to twice
$55,653,1C8.75 such Annual Interest Requirements, item
, (B) above; (D) That the persons making this Certificate have read, as r,cquired by the provisions of Section 121 of the Mortgage, the covenants and conditions contained in the Mortgage, with respect to compliance with which this Certificate is
( made; That the statements made herein are based either on their own personal knowledge or on information, data and reports furnished to them by the Officers, Counsel, department heads cr employees of the Company who have knculedge of . the pertinent facts involved; That, in the opinion of the persons making this Certificate, they have made such examination or investigation as is neces-sary to enable them to express an informed opinion as to whether er not such covenants and ccnditions have been, complied with; and That, in the opinion of the persons making this Certificate, such conditions and covenants have been complied with. WITNESS our hands this 28th day of January,1976. 24 ~,/L Y icePresidentf ke g Treas r i l f
P 9 ATTACHMEllT 7(a)-1 RATE DEVELOPMEtiTS ( . 5 I a / D 'A i 4 f a (..
Puget Sound Power & Light Company
/ ATTACHMENT FOR NUMBER 7a RATE DEVELOPMENTS **
Electric Gas Steam Granted
- Annual amount - test year basis (000's) 22,877
~
Percent increase 19.92% Effective date Nov. I, 19 74
- Rate of return on rate base authorized 8.5%
Rate of return on conmon equity authorized 11.63% Revenue Effect (000's) i ! Amount received in year granted - see note l Amount received in subsequent year 24,733 Pending Requests Amount (000's) 36,485 . Percent increase 23 5% Date filed Jan. 2, 1976' l Date by which decision must be issued Nov. 1, 1976 Rate of return on rate base requested 9 3% - 9.4% ( Rate of return on common equity requested 13 0%
- Provid? copies of latest rate order.
** Provice copies of the submitted testimony of the staff and company In the last rate relief action or pending rate relief request.
e Note: Interim effective February 9, 1974 8,399
- General effcetive November 11, 1974 2,564 l
t
ATTACllt!!2iT FOR NUM11ER 7 a PORTLAND GENERAL- ELECTRIC _ RATE DEV[t0PilillTS** f All Electric Gas Stcan
- Granted *
$39,593 Annnal amount ' test year basis (000's)
~
24.7% Percent ~incrcase ' sept. 26, 1975 Ef fective date . (1) . _
- 9. 08% --
Rate of return on rate base cuthorized (2) 13.3% Rate of return on conmon couity authorized Revenue Effect (OM's)
$16,400 Amount received in vear oranted $41,277 Ar.iount received. in subschuent yeet-Pendino licouests
$42,203 Amount (000's) 20%
Percent in(.rease nov. 26, 1975 Date filed June 73, 1976 g Date bye which hc ir. ion :vsi. he isr.ued 9.567% Rate of return on rate ! ase rcover.ted 13.3% Rate of return on ccamon equity reeuested
$Providecopicsoflatest.rateorder.
** Provide conics of the submitted testimony of the staff and company in thc last rate relief action or pendinn rate relief reonest.
_ (1) The Cocetissionct , by order dated Apcil 2,1975, granted the Company interin relief to the c:: tent of a 10% increase effectiva with billings on and af ter April 4,1975 for service rendered on and after March 12, 1975. On Septerr.ber 26, 1975, the Commissioner granted the Company a rate inercace of 24.7% (including the 10% interim relief granted in April) effective for service rendered on and af ter September 30, 1975. (2) Rate of return on total capital investment. , l 4. Y'
o T WASHH$T03 L7TED. PC'..TP CC"PANY AIT/2Cli:IENT FOI: '.:L"inER 70 g , RATE DEVELO!'5ESTS** - U/. Nil::GTON Electric . Gas Grn_n t eF Annual amount . test ycar bar.;is (000's) 2,217 1,338 Percent increase 6.37% 4.51r Effective date S-5-75 8-1-75 Rate of return'on rate base authorized 8.4? 8. /. I Ente of return on cor=on equity authorized 12.75%- 12.75?: 1hvar.*>e Ef fe et (300's) Ar:c unt i eceived in year 7,ronted (Cst 1/3) 739 M6
/enouc t received in cinseque, ye.: e --- ---
9 Fenh ap. !u ctk e r e - :.c m1 at 1-31-70 A:.mun t (C'X ' t ) - Tarcent incrorr: ( Iki t ? filed l':e
. by d *.+5 dcCl9 f ia .m 'i b, ' asuc d 1:a t e of retern en ri<t. i .w i t-q a itG B11'c ; i rr * 'in, t r . > o e s.its requ~ io
?i'rOVI!e C O p i. : vi 1.1 L e f, t r. '
- OedVC.
0 2'- } ^ ;* C i 'de te. 's , Cf.L}p *; ti ; l l t <. [ ( > c. t h ' O * ; . ( * ;' ' C. I .~. j' i " Tr d C C/? p p r " i t : ,- 3 U'J L T.7 L . Y C . ; i:4. i. C L IC " o r i'i' . . d it ! C PP ' ' T* L . I t- ' ref;LJ* . C.
L'ltSHIUGTC!' WATEP PO!.'EP. C0!9A!iY
- ATTI.CI!!T:t FOR :: UMBER 7a .
.[m kATE DEVEl.0P :E!;TSM- - ID.*d!O acetric Cas s
Cranted. e - Annual r.inuunt -- test year _ bas!.s (G00'a) 607 643 Percent increase 2.93% 4.24% EffeetIve dat'e 8 .13- 75 8-13-75 ilate of return en late hace authorhed B . G. 8.4% Rate ei return on oc=an equity auti:orized 12,75% 12.75X
' Rever.16 :.I fe..c (003's)
A onnt rr.ceived in ~ vc :t r,rcntr.-d Ost 1/3) :'02 2]i t.mnunt receive.f in subsaycet.t ycw --- --- Pentifr<. % .jrt*. Krone at 1-32-76 Acc ud (000'r) yr,v e c., + i . c r,~ , r c, ! k Da '. e f l i er'. Dcto by hi M ri,2ct.J m nurt 1c tr aur . PAtC O[ Y O P.U :*ll Oa TD,. h . '. . . t. t + 4 .1 ! : Ct d fi to o' rct :na c , c e. O .? e g r .I ; 4 et,unir6, l. l- '* V t t v i ' c.qit: c+
' :. c cm ; cs: c v~~ kr .
M-n re!Je c e ; ' ,- , I G . n! m;;; 3 J. ,
.i : ,y of t!. . rr r.,3 en , S. 3 l e - t- r. L . 1' .T inc;, t. . 'i )
A
. x ..n ;.. .v. . . u u t_s. a.v.. -,.. ...<. , ca.o s ,2.a.:
ar r t.4,a April 21, 1976 1 Mr. Anthony Bournia Project Manager Nuclear Regulatory Com:nisalon 7920 Norfolk Avenue Bothenda, Maryland 20852 Re: WNP Nos. 3 and 5 Daar Mr. Bournia: Confirming our conference telephone call among us and Messrs. Potorson, Thoresen and Sorenson, the attached summary should be sufficient to analyze regulatory, response to Pacific's requesta for rato increases. Yours very tr y, ,. Robert F. J.aJ Assistant % the Vice President-Finance RFL ss enclosure I cc: Messrs. Geiger - Stiloa
, Thoreson WPPSS m ,$
f I W.IICOMER 34*4-4714 TV X DX) 4641504 ' 1 I
u , . .. I'; c;4;< M e r J L ,4.3 c. ( '
. i .
/ , .' ATTACl!NGTFORNUMBER'Jf(i.).[
, 2 RATE DEVELnmEllTS**
Since December 31, 1974 Electric Gas Steam
*Cranted* -
' Annual amount - test year basis (000's) (1)
- l Percent incrcase '
(1) '
. Effective date (1)
? Rate of return on rate Lase authorized (2) 8.78ej I Rate of return on conwon couity authorized (2) 13.50%
~
Revenue Effect (0M's) . Amount received in vear granted (1)
' Amount received. in subscouent year (1) l
- ~
Pendino Renuests ,
'/uuotin t. (000.'s ) c :. ~
$6,100 l Percent . increase -
- NA .
Date filed NA'- ', Date by which deci.sion must be issued NA
' Rate of return on rate base rcoucsted (2) 9 02%
Rate of retur.1 on ccianon enuity recuested(2) 14.51% , i , Company will not provide
- Provide copics of latest rate order."~ '
** Provide 'c6 pics of. the submitted testimony of. the staff. anil . company ill the '
- i last rate relief. action or pending rate relief reo,uest. -
I g (1) On September' 3, November 12, November 20, 1974 and March 25, 1975, Pacific
. increased its retail electric rates in the states of Oregon, Idaho, Washington and California, respectively in the aggregate annual amount of approximately
, $34.5 million.
On August 13 and september 30, 1975, Pacific further increased its retail
; rates in Oregon and Washington in the aggregate amount of approximately
$20.25 million , ,
. (2) Most'recent emong six states. .
a g e *%, ( . g . l
f .
~
A 1,
' ' ATTACK 4ENT 7(b)-1 INVESTOR-OLINED ANNUAL REPORT TO STOCKHOLDERS e
e C G e e 4 9 0 3 o 4 9 e
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. Increase
#. *-v f Financial Results* ~ 1974 1973 . Amount Percent 10peradng lievenses (tnousar.d<.h . . . $142.393 5116.902 S25491 21 8
, ' TM tr.tcws for Com tz.,n 510% W Dunndif. S 18.071- 5 12.894 S 5.177 40 2
.- Earningmr Swo cf C,;mt mn SocW $4.03 52.94 S t.03 37.1 if 1 D;/..:Mdt Mr Share of Cbmmen Stock . . . . 51.98 .51.93 N Gross Acc t.ons a Utaty Piant 1:r omnt.)m. S 98.79's S'03.050 S35,735 56.7-Furecs Prev :Nd from OccraSar.s f".emmt.). . $ 26.800 5 29.287 5 7.519 25.7 Common Entchow rs Ecu tptr.ousa-esh . 5106 059 5144.028 ' S22.031 - 15 3 m
i Sne'es of Common Stock Outstar.dmg ,
- (; year Md) . .. .... .. . ........... 4.997.852 4.385E0 612.002 - 14.0.
J Operating Results Kilowatt. Hour Sales (thousands) . . ,. . 11.771.365* 9I .319.957* 2A51A03* 26.3 * -
~ Average /innual KWH Use per Rcsident at -
Customer. .. . . , . . . ...... ........ 13.856 13.E63
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L Number cf Customers (year end) . .... . 403.85G 398.743 10.113 2.5 Peak Load-Ki;owatts . . . . . . . . . . . /. . . . . 2.057.500 2,076.800 Capab!! tf at Time of Peak Load %!owatts. . (19.300) (0 9) 2.379.000 2.283.000 90.000. 4.2
! tt) Sasecen an sverage v9 4.ts12rto* O'yr s cums v*mp a r9N atur d79 862* m t?7.T sssum.ng no ca.1vsrs on sipre evence stoca (2) hcivoes allowance too funds used c/sn2 cornsvu cton.
*Austt.rocedures atded, see Atudtprs' Report. -
. Table of Contents Page Page' Highlights - Financial and _.
Financial Statements: Operating Results . . . . .Inside Cover Balance Sheets . . . . . . . . . 18,19 President's Letter . . . . . . ....... 2 Statements of income. . . . . . . . . 20 - Service Area Economics. . . . ..... 4 Statements of Earnings Earnings increaso . . . . . . . . . . . . . . 4 s. Conservation of Electricity. . . . . . . . .
- Reinvested in the Business. . . 21 6 Statements of Changes in
. Constneti<>n Pronrem ' . ... .. "
Fiwiaiai Fostuori . . . . . . . 22 Pow er Sates . . . . . . . . . . . . . . . . . 6 . Notes to Financial Statements 23-26 i Power Resources . . . . . . . . . . . . . . 8 Auditors' Report . . . . . . . . . ..... 27: Rate increase , . . . .
. ....... 10 Fiscal Agents . . . . . . . . . . . . . ... 27 Customer Relations . . . . . . .... 10 Historical Summary of ,
Employee Relations . . . . . . . . . . . . . 12 Operations and Statistical e Financing Program . ..... Record .... .............. 28.29
.... 12 a
Service Area Map. . . . . . . . k anagement's Discussion and
. 14.15
- Officers and Directors ' Analysis of the Summary of the Company. . . . . . of Operations . . . . . . . . . . . . . . . . . 29
.. 16.17 Form 10.K - A copy is aval!able, upon Annual Meeting-The Annual Meeting of -
request of the Company's Annust Report to the Securities and E chance Commission on Sharehotcers of the Company will be held be-pinnmg at 10 a.m. on May 13,1975 in the Form 10-K. Copies of the Form 10-K may be auditorium of the Puget Power Building tri obtained without charge by writing John H. Bellevue Washington.
. King. Vice President-Fmence and Treasurer. .
. Puget Sound Power & Light Company. Puget Quarterly Report-Quarterly Reports are Fower Dueldmg, Believue, Washington 98009. issaec m February. May. August &nd November e to att sharr.ho!ders. Comments by management Financial Brochure - A !;eoklet ecver:rg t'te on important events arid financial cata on a Company's I,nancial and eparating stadst;;at comparative basis are a part of each report.
data for the 10-year period 1061 74 i
- ava: tab!e rpen requer.t. is atso This annual report has been prepared for the .
i Common Stock - The Conipany's common mfortnation of share. holders and employees of
- stnck Stu par valu<t is teted on the Nc.v Yet the Puget Saund Power & Light Company and I H ~ Stock Exchange - Symbot PS3 - t 997.552 ~ is not mter ced to be used m connect:on with
- Snares were outstancing ns of Decemeer 31. to any sale. 01:er for sale, er schcitation of an offer buy any securit;es.
1974. Commen stock price ranges ano d vi- k
. dends pei sharu on a guarter!y t' asis for tne last }
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r - To Our Sharch:Id:rs and Empl yens I am very pleaseo to report substantial improveme'nts in revenues, energy sales. nelincome and earnings in 1974. Gross revenues were t (a up 21.8W and kilowatt-hour sales up 20.3%
- over 1973. Not inccme was S21.385.631 * , an increase of SS.923.042* or 38.3%
- Earnings were,S4.03' per share in 1974 compared to S2.94
- for 1973. Through-out the year, management expressed confidence that the slight downward dip earnings had taken in 1973 - a year of relatively poor hydro conditions - would be reversed in 1974.
The two principal reasons for this marked improvement werc, first, the impact of a rate increase which the Company was granted in two steps during the year by the Washington Utilities and Trans-portation Commission, which accounted for S11.3 million of the revenue increast Jhe full rate increase was in effect only during the last two months of 1974 so we expect it to have a significant effect on 1975 results. Our basic residential rate averaged 1.44' cents per kilowatt-hour in 1974, about one-half the national average. Second, the Company sold a substantial amount of surplus energy to utilities outside the Pacific Northwest region in 1974 because of the favorable hydro situation in the region throughout much of 1974. The utilities in the Northwest were able to self this surplus energy principally to Southwestern utilities to displace a por-tion of their higher cost oil and natural gas fuels used for electric generation. The reservoirs of the Northwest again are about normal and with avernge accumulations of snow in the mountains the hydro outlook for 1975 is very good. We expect to continue to sell surplus I energy outside liie iegion liiis yem io ihe muiualimnent of both arcas. The improvement in revenues and earnings was achieved before an expected return to more normal customer consumption patterns. The energy curtailment program in our region in the w:nter season of 1973-74 caused by severe water shortages, followed immediately by the oil embargo and the national energy conservation program, resulted in a sharp reduction in our load growth pattern. The Company anticipates a gradual return to more normal load growth trends. Our 1975 construction expenditures are estimated at S90.7 million, compared to $94.4 million* in 1974. Almost two-thirds of this year's anticipated expenditures will be used for generating projects as the region continues the transition from an almost completely hydro-based system to a mixed hydro-thermal system. About $43.5 million will be spent on the coal-fired project at Colstrip, Montana, where Puget Power, in partnership with other Northwest utilities, is building two generating units and planning two others. About $16 million is expected to be spent in 1975 on the Skagit Nuclear Power Project.
*hud.t p'OCCdures app? icd, see Auditors' PepOll.
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.q . The economy of our service area appears to hnvc bocn affected less by the recent downturn than that of the c ;ntry as a whole. Washington's employment growth in 1974 was well above the national average ana 'or the first time in several years unemploy-ment in the region is below the national average. The state's per (. capita personal inccme is also considerably above the average of the nation. Two major projects will have a substantial favorable impact on
'the economy of the arca for several years. First is the trans-Alaska oil pipeline, now under construction, for'which the Puget Sound region serves as the principal staging area. Many of the families of construction workers and numerous construction-related industries are locating in this ,egion.
Second is the construction of the Trident submarine base in Kitsap County in the western portion of our service area. The $600 million defense project will employ about 7,000 people this year, and it is expected that the development will induce a permanent l-population increase in the area of about 27,000. ' i Port citfes on Puget Sound are experiencing their busiest years. The value of imports through Washington ports was up about.65% for the year, while the value of exports was up cbout 25% over j 1973. Puget Sound ports have become known as the Gateway to Alaska and the Pacific Rim. Notwithstanding the high cost' of new generating sources, the i Company will for mmfy years enjoy the advantage of having sub- l stantia! amounts of hydroelectric power available to insulate its ! overall power supply from some of the cost escalation. The years ! ahead will pose severe challenges for this Company and for the i electric utility industry generally. However, management is confident ;
, that the Comoany will continua to grow enri prosper an.d that cur '
relative economic position in the industry will continue to improve. t March,1975 Sincerely, For the Board of Directors ( f lN m. Ralph M. Davis, President _ i
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. . m Summary d the Ycar . Service Ama Eennomics int thw niajor nnphnnter. About 94% of the remdentici cu'.tomers added last yea' Puget Poner provides e:ectric scrvice to use cie' tom!/ cr f cnoking wh;!c 9t % bcVe {- over cno m!! hon peop;c res dmg punch e'ectric wales heating W th too surf' es of pa!!y in the western pcrtion cf tne 5:ito of fossi: fuo's 6mir..ch:ng af.d the price in- , Washington - an area cf the sti.!c '..uch creasin ;. 68% of the ricw remcent.a! Cus-has exDerienced steady. consstent cc').10- tomers t.d2d m 1974 are heatirig thcir nomis gurt th for more tnan a escace. Tnc dweliings c'ectrically. Company's service area covers about 3,200 square miles, in part c' a'! of cdcht counties m the Puget Cound region of Earmngs Mercase western Washington, and a portion of Ki:D- Eamk,ge showed a sub;tantial increarc tas County in centrat Washington. during 1974 l amings per share for 1974 The service area has a d versified were S4.03
- on 4,483,216* average economic base. but the primary act:v. tics common shares outstand:ng compared to include manufacturing, lumber, shipping S2.94* per sharc for 1973 on 4.379,682*
and those related to nat.onal defense es- average shares. Assuming fu!! conversion tabhsnments. Major industrics include the of the Company s convertib,e proforence manufacture of commetrial aircraft and stcck to sha'es of comn:on stock during acrospace components, ships, freight that per;od. eamings would have becn cars, trucks and logg:ng equipment; o!! S3 88* pcr share for 1974 compared to refining; production of lumber. pulp, pc.'cr $2.83* fer 1973 and other wood products; chemicals; licht Operating re/enues rose to S142.- motCs, steel and iron products: coment: 393,229' up S25,491.230' or 21.8% over and the processing of food goods. Numer- the S116,901.991
- a year carlier. An ous international companies (like The intenrn rate increase ord a general rate Boeing Company,Wcycrhacuser Com- rncrease along with the ca!c of suro'us pany, PACCAR inc). national compsnies energy to other utilities wcre the main (like the Afyoska Pipe!ine Company which contributing f actors to the increasing is construct;ng the Alaska oil p:p:!iv) revenues. Atced by the salc of surplus and regior.al headquarters of' ices (includ- ener0y, the Company sold about 11.8 ing regional branches of the Federal nov- bi' hon kilowett hours o' electric.ty last i ;.n.,ic.d) a,e.,IUci. w o aI*u acivd.e o,ca. year, a /o.Mo ' inCf Case oVLf IV/J. riel Puget Power's service area is subu'- income for the year 1974 was 521,335,-
ban and rural in nature. The Company G31 *, an increase of 55,923.042
- or does net serve the major cities cf Saattie, 38.39o* over the S15.462,589* for 1973.
Tacoma or Everett. The Company serves After provisien for dividends en preferred Bellevue, the state's fourth largest city and ard convertible preference stock, the re-the location of Puget Power's corporate mainder for common stock was S18 071.- headquarters. Other cities the Company 397* 1ast year. That is an increase of serves include Olympia, Bellin0 ham, 55.177,292* or 40 2%
- over the S12.894.-
Bremerton, Renton, Kent. Puyallup and 105* for 1973. Mount Vemon. At the close of 1974 Puget The Company was granted an in'crim Power served over 403.850 customers, an rate increase c!feebve February 9,1974 increase of more than 10.100 or 2.5% for which remMned in effect until November 1, the year. Electric energy consumption per 1974 when the general rate increase was residential customer remaincd about the made offective by the Washington Utihties - same for 1974 at approximately 13.860 and Transportation Commission. The rate kifoetatt hours. increases accounted for about S11.3 About 51.1%
- of the Company's total ' million of the 1974 revenues. However, the cperating revenues for 1974 came from improvement in earnings and revenues residential customers, 25 4%
- from was accomplished primarily before the commercial,10.6%
- from industnat, ano impact cf the full general increase, which the remaining 12.9%
- from other sa'os. was offectwe er.ly the last two moaths of principafly sales to other utihties Residen- 1974. It shou!d have a significant effect on tial customers continue to rely on electncity 1975 results.
- Audir procedures app!ned. See Aud ! Ors' Report.
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C;nscivati n of Electricity ' tcmers to mtutaic prcperfy, to extract and recyc!c heahng enorgy from artif,c.al icht-The v,ae and efhcient use of c!cc*r: cit / ing and solar gain, and to provide ofccient contfuen to ref;ect the Company s posi- load manancment through proper control tion on coriservation. ConservMion systerns SJ rr.a.htenare. mer.;r% by rcsidential, commercia! cnd This v.ii! continue to rcpresent the ( indumm! customerg in the we.*cr of 1073- Company's pohcy as it goes to a hydro-74 arc cre-bled with assisting Pac:,fic tiiermal based sysicm. Most of the thermal Northw+st ut:ht:es, inciuting Puget Poeer, generation the CTrpsny adds in the next . to g 3:Inrouch fast year's peak season v i* i. decace v.d; use either coat or nucicar the lo..cn reservoir levcis in the region s fuels, both of wh:ch are in fa' more suffi-h!: tory. cient supply than either petroleum or The reservoirs beh. in d the region's natural gas. major hydroelectric proftts returned to normai sevels during 1974 rd indicanens Construcfion Program are tnat they wi!! have tufficient storage for , normal generation this year, Therefore, The Company expects to spend S90.7 an on-going conservation program is not million for construction purposes in 1975, as critical at this time. Wasteful consump- excluding allowance for funds used during tion of electric energy is still to be dis- construction, compared with S94 A millicn
- couraged. Our new rates contain energy in 1974. Almost SGO million of this year's and peak conservation incentives for all total wifl be for generating facilitics.
cus!amers. Continued construction on Units 1 The Company remains concerned and 2 at Coistrip, Montana will require the about peak load conservation encouraghg expenditure of S41.1 mdfion in 1975. Con-customers to be particuiarly conscious cf tinued pl:nn.ng and preliminary stud cs their electric energy usage during the 5 into proposed Units 3 and 4 at Co' strip will p.m. to 8 p.m. hours of the winter months. cost an estimated S2.4 million this year. It Reduced usage at peak load times resutts is expected that about S16 mitfion will be in a reduction of the rcquired capacity of spent on the Skagit Nuclear Proiect in generat;on, transmission and distribution 1975. The expenditures will be in engineer-facihties which has a lonn-range benefit to ing and design. licensing fees, nuclear fuei both the Company and its customers. enrichment and initial costs relating to The current shor; ages and price es- preliminary construction. catation in petroleum and netural cas have The Company has also budgeted had an effect cn the choice of energy about S30.2 million in 1975 for additions forms in our area Aamittedty, etect4C IO U IU=0 00 C= 00d 0 C C 070I00 rates a o going up. but not as rapidly as and for other facihties . elated to customer SOfVICU-those for petroleum and pas f ucts. This has resulted in a growing preference for clec-tricity in new construction and heightened Power Sales interect in conversions to c!ectric spr.ce Kilowatt-hour sa!es for 1974 were about heatmg. in addition to a high percentage of 11.8 billion *, a 26.3%
- inercase over electnc energy use in other applications. 1973. The substantial increase is due pnn-New residential space heating was about cipally to the sale of surplus energy to 50% electric in the early 1970's, but rose other utilities outside the region. Because to abcut 68% !ast year. Commercial oudd- of abundant supplies of hydroelectric ings arc a!co turning mora to clectricity for power in the spring and summer of the space conditioning- year. the Company was able to sell con.
The Company is directing much of its siderabic amounts of e!cctric energy to i effort at insuring that new bu;!ncss ref!ccts utilities in other areas (principally the qua'ity space heating installations. Leads Southwest).which rely heavily on f ossil-which minimize waste and inef ficiency fueled generating plants. and give the customer the best value for Without these large sales of surplus his energy dollar arc being achieved. energy the Company's kilowatt-hour sales Company personnel are advising cus- growth would have been on!y about 1%*
- Audit piccedures applied, see Austors' Report.
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n . (- . Redxedind growth frcm 4 ct the Com- age mre;y. Popet Fower hv cordracted par.y !m initecnc!!y cq-;r u,cco in tis on a ccs1 of4erv'ce Lash for the entire lar.t decnde enre be c!tributed to a output of the cd%cna! un.ts unt:1ine yccr conSnued tender,cy to conserve o'cctric 2012, s:ih:ch mF.y be reduced un to 10% energy cnd the particu%f rc,id icesthur per year, beginning in the year 2000, to the region egertenced ir. 1974 Averaga 50%. ( annum twsumpt an of e!ccinc encroy by Puget Po7cer is now receiving about rcsidenhat customers re*r ained v:rtua!!y 100.000 i<iteecatts cf energy at th: resu!! of the saw in 1974 as in 1973 a9er an ail the c:nstruct~cn of storage rwr,u.rs in - time high v.as achieved in 1972. Even W.th Canada wh ch r,ct/ prov'ec an actticra! the Cornpany's f act rate increase, the 15 5 m&on acre-feet of storage en tne average residential rate ic still about upper Columb:a River. In adition. the
, one-half the nat:onal averapc. W;th hydro. Company has contracted for 17.5% of efectric generction serving cs the base for both capacity and a terage energy (240.000 the region. rates should contmue to run kdowatts and 130.000 kdonatts. resocc-considerab'y beton those in most of the tively, in 1975) of Canaca's share of the nahon. power resulting from such storage. The Load growth of about G% a year is Company has assigned a cortion of the expected during this decade. power to other utihties, but in April 1975 will withdraw 84.200 ki!owatts of capacity Power Resources and 45.100 kilowatts of average energy.
The Ccmpany has contracted with other The Company has retied on hydroc!ectric utihties for Co!umbia Storage Poe er Ex-power for the bv!k of its generation needs change power of 300,200 kilowatts of for rnany years Over 97% n' the Com- Capacity and 150 900 kilowetts of average pany's 1974 energy rcquirements were energy effc;tive April 1975 sab;cct to rights supplied by hydroelectric generation. cf withdrawal. Some ut;hties have with-About 90% of that generaFon came from drawn their shares of this power effective five hydro projects on tne mid-Co!umbia April 1976 v,hite other utikties cannot wah-River v.ith which the Company has long- draw their sharcs until after March 1978 term contracts at a cost of about three rn!!!s and March 1979. per ki!cwatt-hour. The baiance ccme from The 330.000 ki!awatt, coal-fired first the Company's own generabon, which is unit at Cc! strip. Montana. is expected to also primari!y hydroc:ectric. be in operation .his year. Puget Power Current!y, the Company is enhttec' to and The Mentana Power Company ars purcasse portions of the poner autout of icintly conctrur tm" $% ri's! "n't M : the mid-Golumbia River projects as second unit of comparable, capacity follows: scheduled to be operational in late 1976 Currer:r Annual Amount Purchasable EBCh utility will own 50% of the output of
- (Approximately) the two un;!s which will use coal mined at enacit the project sito by Westem Energy Com-Proiect % of ou: nut Kaoe.ans a pany, a Montana Power subsidiary.
R;ck Island 87.1 % 217.000 2012 Puget Power, Montana Power, Wash-Rocky Reach 59.7 % 7Ca.000 2011 wens 50 3 % 42t000 ington Water Power, Pacific Power & Light 2018 and Portland General Electric have an Iu s . application before the State of Montana to tSJ:t-r rc estan rmt ts o< ecw or rr e cre . construct two add;ticnal generating units ett cc.urs a et t!.c c?ws. ors c* the long. term at Cotstnp. Pucet Power would have a rce puret.ase contracts 25% share of the output of the two pro-Expansion of the Rock Island Project posed units which would have a combined , through the adoitton of eight generat6ng capacity of 1,400.000 kitowatts. in January units was begun last s mmer by the Chetan 1975 the Montana Department of Natural County Public Utihty Distoct. Tbc add;- Resources and Conservation recom-tional units will be operational in 1977-78 mended denia! of a permit for construction and will produce about 410.000 kdowatts of the two additional units. However, the of capacity and 150,000 Adowatts of aver- Montana Board of Natural Resources and s 1 6 l l l l
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Comrvahon hn scheduled aco i oral Rafe Incrcin pubhc hearings and may mthee grant The Wa%ington Utmites and Transporta-the pernut or accon; the Department's tion Commission *: d the Company a rc'.cmmconation- nenera! rate incet . se of 20% or about Plans are pmcred ng to centtruct a $22.9 nw.on in increard annual revenue; te.o una r.uc! car ce, rcra'.ng prc.cct in- o!!cctwe _ November 1,1974. Of that 'ctal ( ~Sgt Couty m the r4crthcm pomon of about $12 mrition in increased annual 1 t% Corrpuy s service area. Schecu!cd revenues had already been a'iowed the compmt;n of the it.o umts has t:een re- Company through the iniciim incitase v.seu so inat Un,t 1 is p'anneo'to be Opera- whien had been in cifett cince Februmy tioW in m:d 1082 ed Uit 2 totaNc:y in 9.1974. The amotmt ei Die incrcato is rn;d-1985 Each unit will have a capscity of based on the 12 month test pciod ended 1.286.000 kilowa'ts. Ownersmp arrange- June 30,1973. The $22.9 metien that was mer.ts are being comp:eted wi'h other granted represented about 98'b of the agencies with Puget Power current'y own' total the Company had requested. ing 50% of the proiceb Pacif C Power & The effect of the intenm and general Light 20%, Washington Public Power increases contributed to the improved Supply System 15%, Wash:ngton Water earnings and revenues the Company Power 5%, and the balance una'Iocated. cxperienced in 1974. The rate increases Zoning approval was obtained from skagit resulted in about $11.3 mithon in added County in tha spring of 1974 and applica- revenues for the year. However, the impact tion was immed: ate!y made to the State of the full generat increase was felt only in Thermal Power Plant Site Evaluation the last two months of 1974. It shou!d have Council. Hearings by that agency are to be a signhcant e!!ect on 1975 rewits. As scheduled this spring with a decis.on to part o' th s rate increase the Commesion be niade by the Govemor of the State of granted the Company an a::cwabie rate of Washmgton this summer. The Atomic retum of 8.5%. Energy Commission, since changed to the Pucet Power was airected by the Nuc' car Regu!atory Commission (NRC), Commisiion to irrpose a five perc(nt con-docketed the Company s application for servation surcharoe on c!ectric pnwer a cons *ruction perm.t and r. hmited work delivered to non-re'sidential customers be-authorization last fa!L Later they also oinnino November 1 and running throuch docketed the Pre!iminary Safety Analysis Febru'a ry 28, 1975. The Cornmission Report and the Environmentai Repur!. The estabbshed the surcharge as a research Commission issued a Draft Environmental
..too!" to provide informatio,n on the effect a_,au,,,,.,,;,,,,,,,,,
i tmnact Statement in Januarv 1975 m inc ,,
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project. Tha NRC wi!! also be condacting ((bhy$ puIpose of the surcharge is to hearings this spring The Company p!ans emphasize the need to constructivety krnit to begin limited site preparation work late encroy use wherever pocsibic. especia'!y this year with actual construction to begin durin'a the period of hich winter usage, by _ ~ in the sJmmer of 1970. providing an economic incentivo to e!imi-The Company has contracted for a na'e wastefui energy consumption. Tnc 5% undivided share of the output of the Commission stated that all consumers, but Washington Pubhc Powcr Supply System's especially non-residential consumerc, can Nuclear Project No. 3 to be built in Grays reduce their etcetric energy consumpton Harbor County, Wash:ngton. Puget Power's signif;cantly without adversely affecting share of the 1.240,000 kilowatt output comfort. safety or productivity. The Com-amounts to about G2.000 kilowatts. The mission has indicated that it may d. rect the project is schedu'e;l to be in operation in Company to refund all revenues realized late 1982. from the surcharge.The amount of revenue The 67,500 kilowatt Whitehom Com- from the surcharoe .in 1974 was about
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bustion Turbine Station was avadable for S340.000. use in December 1974 for standby and peaking availability. It is located near Customer Relations Ferndate in Whatcom County, not far f rom the Canadian border. The Company for many years has taken an 9 10
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( Cc.q .ny it; cMnevem roc f e-ca:r.t E.pr ry.a :, n !:nmis ar.u sor Ac at an intcecorate of 10% *. /Jso in r.~..fe.r.!r;r. tPc Cm pay sobi @0.003
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cpy mw h Cornpany t 0:r.: to m a p.oygng cgr 9 3 m.+nn- p,0 j- cc,w rect a n;.;:re cc :ry:, , r aect ces.ca werc used to pay off cuMandmg have trouant m, imcrest in picanzens bank loans incurred for construction I- on rffcC6 of th*:t t.ub;cct. I' + e in in M purpo',*% preser.tntions have been mace before A g ,,;t mortgge bord o!!enng, a pre-l groups m inc general area cf thc Skagit ferred stock saie, and a commen stock ( Nuclear Proget. In add' tion. the Comoany caic are p:anned for 1975. has opened an mformation ceter : car the The Company has negotiated a nevi t project sde v.ith displays exhibits and crc @t agreement viith 22 banks which , b!:raturo relatwo to lhe pro;ect an*' to provides for a manmum commitmcat by nuc! ear power This temporary f acihty wi;' the banks of S75 maiion This agreernMt u't.n.ately be replaced with a permanent v/ill be offective Apnl 1,1975. The agree. structure en the site after construction rnent provides for interest on borrowings Eto'tS- at 114*o of tne pnme rate for commercia! bank loant in offect at Seattic First Employee Relations H&'s.M Bank at the time of cach octrow ing nQusted cach ca._codar quarter. The it e Campan/ exper nced .ts f.tst authct. ayeen,ent also provides for a Ice of or.c-ized Linke by tne International fkothc" ha.f cf 1% per annum on the unuted hood of Electrica! Worker Local 77 c'ommitment it is informally underunod the bargammg agent for ;ut 1.550 tnat the Company will maintain compon-cmp!cyees. dunng 1974 TFc Locat has set;ng ba.ances on a yearly averc.gc basis representtd union empicyees of the Cow - equal to 7% of the total kne of credit. peny s'nce 1936 Employces afic;ted ttft their jot.:s IAey 1 and rcturned July 1. Supervitory and managemcn! per'.nnnc!
, maintamed the Compar.y's cperaitons tnrougnc.ut the strike.
As part of the terrns of the re trio-year anrecrnent beineca the Company and loca! 77, a'l union emp'nyees v.ere gwen an 11.16% genera! .vage increase f or the first year. The new contract provided for certain work ru!e chan0es. The two-year contract is efic0tive threugh IAarch 31. 1976. A now general wage encrease wi!i be the only Mcm under ccns!do'ation for the second yant of the contract-The Company offers an extendve list of bonOf.! programs to att emp;oyees. The programs are rev:cv.ed icge:a'ly ad up-deed. These benefit programs include med.;al and dental care insurance. group life insurance, a non-contributory retire. ment p! art an investment plan, vacations. sick leave and hohdays.
' Auca puedarcs Lppl.cd. t co kcuots' Report.
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; RALFH fi DAVIS (17 yunt.)
P r( , . -" :. . : Cro.t tre M o O v er JOri;; W. t L LIS *.* it: ?I)
, Ev c.. .. ? Prvi,m at - (Pr rti an Or;erc' r : OMer - Occratiers. Eninect:no. -( (,c .st . .ne hah a Contrits. !/c% chap ed Divitens)
JOHNif KING (16 )c;. 4 s
%:: N. .t n - F:n.ve .m Tu avru - 6Pr.nc q a: Finand 0::.ccr- Finance.
- Fm- -! Pr.n.r g crd i ua tiny J. HICOLD ADRkt.tSON tM VCWs '
V.x P :,cnt - Armni,tra!.on - (k::Att i Rc t: Sons. Fur thasing. Storcs. Duild.r-gs.
- Ficsi Or erst.c'.h cod C#cmcr Informat:On SA: cms)
WARPEN J. FERGUSON (2 ytc's) . V c! Fi;:4 nt - Me,cr PicMcs -(Pannitg Devotopment and Construct:on of o!! ne.v gencrr tmo facilit;cs) LAWRENCE E. HALL (17 yearsj
%cc Priscen!- Pat,hc Affa:rs - (Coverrmnt Re'ations. Community Nfairs and Area Development)
DAVID H. KNIGHT (27 yews) Mce Presdc41- Power Supply -(Product.0n. Syrtem Operat;ons. Planning and Communicat.ons) RICHARD F. WHALEY (33 years)
%cc P:csicent and ControSer -(Accounnng. Insurance and Ta cs) .
ROBERT C. WING (13 years)
%ce Pruicent -(Corboater Services. Real Ettato and Public Uso facihties)
WILDUR E. WATSON (13 ycars) Secretary -(CorporL!a Secretanal Actmt.et, and Sh'ne Owner Recctds) (t:::.1 Lc t;!n o! service v.ah Com;=y is oca la turne ) tGcclui Lxcci 'se Yx nes.nc'.i thy C.1973.1%Mer in it.c law fem of Pe%ns. Coe. brcnc. 0 se, & \%Iin3 and Cn et !cpa! Cccntet for Puget Pov.er from 19C2 untd !.farch 1970 v.han hc v.us e:ccied %cc P,csac !ct tre Company.
~ DircClOrs WINSTON D. DROWNtt CLwnir. r.f the Boa c (Rr. bred)
Howard S. Wr.cht Constrt.cDon Co., Sect:le. Washington (L::a.ng corn truct:cn )
'{ pasny n nfui?
PrcCdent and Chicf Exacunve Ofacer I Popct Sed Pcwo & Light Compi.ny. Be hwe, %ashington JOHN W. ELLIS Execuke %ce Presice nt Puget Sound Power & Light Company. Col:cvue. Washington FRANCIS J. HEhBit Cha:rman of nc Board The Uc hngham National Bank Be!!ngham. Washington JOHN H. KING
%ce President Peget Sound Pour & Light Cornpan>. Dellevue, Wash.ngton LOWELL P. MICKELWAIT D. rector Ementus The Oct;ng Company. Scattle. Washington i (Mant/acturer c' acrespace and a.versit'ec products )
ROBERT D. O'DRIEN Chaarr.an cf the Board FACC AR Inc. Bel:evue. Washington ('/anufcc:wer of hcavy cau pment ) lRVINE B. RABEL . Chartman of the Board Sta Marn'nery Compc.ng, Scottic. Washington (Indu>te.al rnachencry distribato'.) RALPH W. L. STORMANSt1 Ch iirmn of tue Daard Asoc.ated C ccers. Inc and Presicent of Riph s Trnftway Stores. Ohmpia Washingtori f f Au6: Comw:co t,temtcr t i 1G i 1
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(' Assets December 31 Deccdt:r31 1974 1973 (Thousandsof Dollars) UTILITY PLANT (Notes 1,2,6 and 14): Electric plant, at original cost. . .
. SG72,2G9 S576.912 Less accumulated depreciation. . . . . 92,766 81.074 Not utility plant .. . . . . .. 579,503 495.838 OTHER PROPERTY AND ;NVESTMENTS:
Nonutility property, at cost. . . . . 879 796 investment in and advances to subsidiaries (Note 1) . 2,843 2.700 Other investments, at cost . . 880 1AG5 Total other property and investments . . . 4.602 4.931 CURRENT ASSETS: Cash (Note 9) . . 3,701 1.294 Accouns receivable (Nos 1). . . 17,904 13.172' Materia l0 and supplies. et average cost. . 9A33 5.59G Current portion of deferred incorne taxes (Note 1) . . 900 - Prepayme nts . 1,326 1,195 Total current assets . .. 33,264 21.257_ g DEFERRED CHARGES: Advance under power contract , . . 90G 937 Unamortized debt expense . . 1,009 772 Accumu!ated incorne taxes (Note 1) . 829 703 Thermal plant feasibility costs. . . 707 Prepaid power costs . . . . . - 2.573 . Other. . . . . . . 1,104 1.524 Total deferred charges. . . .. 3,908 7.216 5621.277 S529.272 The accompcnyng notes are a part of the f.nanc.at s:t'ements. 1
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- Liabilitic.s and Capital December 31 Decemtier 31 1974 ,1073 CADITAUZATIOfC (Thousands of Donars)
Shareholders' investment. Common sto:.k (No:es 6 and 13). . . . S 49.979 S 43.850 Add.tional paid-in capital (Notes 7 and 13) . 34.G89 26,976 Earnings reinvested in the business (Note 3). . 81,391 73.202 , T'otal common equity . ...... .. . 166,059 144,028 ,[ Preferred stock (Note 4). . . . . .. . .. . 37,122 39.345 - Convertib'c preference stock (Note 5). . .. .. 14,814 14,814
)
Total shareholders
- investment. . .... . .. 217,995 193.187 ,
Long-term debt (Note 8). .. . ..... . . . . 318,749 256.11G ! Total capita!!: anon . ... . . . . 530.744 454,'303 I NOTES PAYADLE TO BANKS (Note 9). . . . 30,500 41.000 CURRENT LIABILITIES: . Commercia! pacer . .
. . 15,700 6,003 Accounts payable . .. . ... . 4,704 4,679 Accrued expensos:
Taxes.. . .. . ... .. . .. 12,457 9,649 Salariet, and wages . . . . . . . 1,667 1,547 i interest . . .. . .. . . .. 4,22G 2,175 , ( Othor . . .. .. 2,441 bo3 Total current liabilitics . .. . . 41,195 24,703 DEFERRED TAX CREDITS (Note 1): Accumulated investment tax credits . 3,754 2.449 7 Accumulated income tax credits . ... . .. 1,223 833 ; Total deferred tax credits. ... . . . .. 4,977 3,282 l OTHER DEFERRED CREDITS: ' Customer advanccs for construction (Nete 1). . 3,213 2,942 Other . . . ... 2,572 1.230 - Total other deferred credits. . . . 5,785 4,172 , i ACCUMULATED PROVISION FOR SELF-INSURANCE. . 2,076 1,812 COMMITMENTS AND CONTINGENCIES (Notes 2 and 11). ,
$621.277 S529.272 t I
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6 . i 19
I ) Puyt kund Pa er a Ugni Cr/mpany i t . (, Statemerois of Incomo Years Ended Detcer 31 1974 1973 - (Thousands of Do: irs 1
. OPERATING REVENUES (Note 1). .... . S142.393 S110 002 OPERATING EXPENSES:
Operation: Purchased and interchanged power - net .. .. 32,103 25.582 Other. . . ... . . . 26,024 23.148 Maintenance .. . .. . . ... .. . . 6,401 0.140 Depreciation (Notc 1) . . . . . . ... . . 13,850 - 12.331 Taxes other than Federalincome taxes. . .. ... 17,042 .4.861 Federal income taxes (Notes 1 and 10): Payabic cur rent!y. . . . . . . . 7,335 2.958 Oc ferred investment tax cred.ts . 1,305 - 919 Ocierrcd - other . .. . . . (G37)- 203 Total operating expenses . . . 103,483 86.205 OPERATING INCOME. . . . . 38,910 30,697 OTHER INCOME - NET: Allo.*cance for funds used during construction (Note 1). . .. 4,423 1,899 fascellaneous - net. . . .. . 1,793 1.414 Tota! c:her income - nct . ,. . . 6,218 3.310 INCOME BEFORE INTEREST CHARGES. . . . 45,128 34,010 ( INTEREST CHARGES: Interest and amortization on long-term debt . . 18,723 15.670 Other . . . . . . . . 5,020 2,877 Total interest charges . 23,743 18.5I7~ NET INCOME , . . . 21,385 15
. _.__A 53 u,# Y k LESS DIVIDEND ACCRUALS:
Preferred stock . . .. . . 2.240 - 1.495 Consertible prefeter.cc stock . . .. 1,074 - 1,074 l l 1otal dividend accruals. . . 3,314 2.5G9 1 NET INCOME FOR COMMON STOCK. . . .. S 18,071 .- S 12,894 CONW10N SHARES - WEIGHTED AVERAGE: Outstanding . .. ...... . . 4,483.216 4.379.832 Assuming full conversion of preference stock. . . . 4,932,140 4,828.800 EARNINGS PER COMMON SHARE (Note 1): Assuming no conversion of preference stock . . . . S4.03 S2.94 Assuming full conversion .. . . S3.88 S2.89 inc a:co nswnying notes are a cart ct :he inanc,at state nents t'
. 20 e
m t t ( Statements of Earnings Rcinvostedin the Business Years Ended December 31 1974 1973 (Thousands of Dollars) GALANCE AT DEGINNING OF YEAR. .. . . . S 73,202 S 68.778
. NET INCOME . . . . ... . . .. . .. .. 21,335 15,463 Tot al . . . . . . . . . . . . ... .. . . . . . . .. 94,587 84.241 DEDUCTIONS:
Cash dividends paid: Preferred stock . . . . . . . . . . . . . . . .. ... . ... .. 2,307 1.294 Convertible prefeience stock . . . . .. .. . .. .. 1,074 1,074 'i Common stockt . . . . . . . . . ..... .. . . . . 8,693 8,671 Expenses re!ating toissuance of equity securities: 8% Preferred stock. 150.000 shares . . . . ... . . 248 - Common s!cck. C00.000 shr.res . . . . . 874 - Total deductions . . . .. . .. . . ... 13,196 11.039 BALANCE AT END OF YEAR (Note 3). . . S 81,391 _S_73.202 t I974 and 1973. 51.98 per sharc. The accompanyin; notes are a part of the financial statements. ( i i a l ( i 21 L. . I
y_ . .. Puget Sound Power & Light Compnny I Stataments of Changes in rinnncialPocition Years Ended December 31 1974 1973 (Thousands of Dollars) Funds Provided by Operations: Net income . . .. . . . .. ... . . . . .. S 21,385 S 15.463 Add (deduct) items not affecting working capital in the current period: Depreciation, including amounts charged to other expense accounts . . . .. .... . ... . . 14,751 13,131 Equity portion of a!!owance for funds used during construction (1,701) (730) Deferred investment tax cred:ts and income taxes - net. . 1,568 1.185 Other . ..... .. . . . ... ... ... . .... . . 803 238 Total from Operations . ... .. . . ... 36,806 T,287 Other Funds Prcvided (App!ied): Issuance of first mortgage bonds. . .. . .. 60,000 - Issuance of equity securit;es . . .. . 13,183 15,283 increase (decrease) in notes payab!e to banks. . .. . . . (10,500) 25.000 Proceeds of pollution control bonds - net . . . ... 3,852 2,738 Additions to utility p! ant - net ol equity portion of allowance for funds used during construction. . . . (97,094) (62.330) (locreasc) decrease in prepaid power costs. . . 2,573 (2.573) Payment of dividends . ... . . . .. (12,074) (11.039) Reacquired secunties. . .. . . . ....... (2,152) (560) ( Miscallaneous - net. . . .. .. . . 920 1,343 Decrease in v/orking capital . . .. . . . S (4,486) S (2.860) Changes in components of working capital: Increase (decrease) in current assets: Cash. ..... . . . ..... . S 2,407 S (2.880) Accounts receivable . . .. .. .. . ... 4,732 ~724 Materia!s and supplies . . .. . .. .. .. 3,837 1,453 Current portion of deferred income taxes. . . .. .... 900 - Prepayments . . . .. . ... 131 390 (!rcrease) decrease in current liabilities: Commercial paper and accounts payable. . . .. .. (9,725) (3.649) Accrued expenses and other . . . . . . .... ......... (6,768) 1,093
$ (4,486) $ (2.860)
The accompanying notes arc a part of the financial sta:cments.
Puget Sound Power G Light Company
/-
( !!ates to Finc.ncialStatsmants .
- 1)
SUMMARY
OF ACCOUNTING POLICIES -The Company't accounting polcW, t.oY:nn to genarM, accepv 3 tcoura.ng crinapca nnd to cccount:ng requ;roments c' rcgulatory 3#0rd cr- S poltic pSr,ies arc deserted t.elov. a Utihty Plent.- Unhy plant mc!ucen taxes incurred and allowances for funds usc durinj consWction. It c the pencrat petty of !na Company to charge the cost of maintenance art tweiss to operating expenses and otter apprcpriato accconts. The cost (,f renev/3's and betterments is charged to apprcct; ate utd!y p' ant accoums_ except the cost cf rsmor rep!acements wh;ch is charcca to main!cnance expense, The original cost of operainig property rctired or othertcise disposed cf and the cost of removat, less sa'vage, is chargcd to accumu!ated cc preciatica. However. in the case cf the sa!c of a sign f cant operatng unit or system, accumu!ated depreciation is charged onfy with the accumulated depreciation relatcc to the propeily so!d, and the not gain or loss on disposit<cn is credited or charged to income. Investment in Subsidiaries-The investment in subsidiatics is stated on an equity basc. The assets: revenues. earnings, and earnings reinvestod in the business of the subsidiaries are not material in relation to those of the Company. Accounts Receivab!c and Operating Revenues - The Company bids its customers on a mcath!y ana bi-month!y cyc%at besis Accounts receivabic and operating revt.nues incluce on!y cmounts biMeo. They do not inctah an estimated acc ual for service bct r. ten the last cycfical bWino and the end of the year. Customcr Advances for Construction -Customer advances for ccostruction may be refurced in whoie or in part er mpy to transferred to uhhty p! ant Such creoits represent amcunts paid by custerrers a .J others tov. ara utihty p! ant imprcvements, principa!'y underground distribution fac1tOs. Depreciation and Amortization - The Company provides for depreciation on a stra:ght-tr.e basis ter a!! depreciable picperty, excent for 15 G% cf such property (poncipsby hydro.e'ecric production property) which is ocpicciated on a 6 percent compound-intere2t methoi . The annual r epreciation provtsions recorded in the Company's accounts were equimWoi iv liw, ;v::cv.4 p;rcentc;;c c! !53 OHWI ros' of rirsnreciable utiliiv punt: 1973 1974 3.1 ~T3 Straight line method (%) . . . . . . . . .. .
.85 .81 Compour.d intero method (%) . . . .. .
Federal Incomo Taxes -In computing depreciation for Federat income tax purpo:cs. the Ccmpany usts depreciaten mc: hods and estimated asset hves which differ from , th0se used in its financial statements. In addition, the affowance for funds used during
- construction and certain taxes during construction are treated d:fferent!y for income tax and financial statement purposts, Pnncipally as a result of these f actors. the Company's cftcctive tax rate varics from the statutory Fedeia! income tax rate (see Note 1C).
The Company normalizes. with the approval of the Washington Utilities and Trans-portation Commission, the tax e!!ects of (1) hocratized and asset depreciation range oepreciation on production proper;y additions a' tor 1-969 and 1970. respectivety (2) job development investment credits; (3) the provision for scif-insurance in excess of deductibfe losses: and (4) certain accrued property taxes Allowance for Funds Used During Construction - The a!!cwance for funds used during constructica represents the est; mated portion ol intcrest and equity costs of capital funds which are app!! cab!c to utihty plant while under construction. The composite rate used by the Company to capitahze the cost cf funds devoted to construction was, 7.8% for 1974 and 1973. Earnings per Common Share - Eamings per common share are computed as foilows: Eamings per common share assuming no conversion of pretcrence stock: the nct income for common stock is divided by the weighted average number of common shares outstanding. Earnings per common share assuming full conversion: the angregate of the net income for common stock plus the div:cends accrued on converhble preference stock is d,vided by the acnregate of the weigh!cd average number of common shares outstand-ing plus tne number of shares that would oc outstanding if the convertiblc pretcrence stock weie futty converted
- 2) UTlUTY PLANT EXPENDITURES- Expenditures for utity r> tant during 1975 are cxpected to epptcximate 590.7C0 000 The Company's construchon program t d atfor the j'
_S304.300.000 scars 197t1 through 1977, sub;eri to cenbnamp rev;cu and ad;ust ncnt. is estima cenerutt.cn picGram. 23
m. s ..-m
. Pugct Sound Pour & Light Company i 1 .
y a f 0"
- ' 3) EARNINGS REINVESTED IN THE F.US! NESS - Earnings re;nvested in the busvess unics'r c
- ed es to rsyment of cah d v.cenn on ccm:ren tiock amount in apprcximaMiy 55*.100 000 ct Dctemcer 31,1974 un' r proviseons cf the rnost rcLmctwo ccecnants
' adicobM ta inc prcimcd anc prefe:coce stocks and long.tcim debt.
- 4) PREFERRED STOCK,5100 PAR VALUE - 1.000.000 SHARES AUTHORIZED:
Nurnber of Shares 4.81% 4.70 % _ _8_%_ Au horized for each series. . . . . . . . . . . . . 150.000 150.000 150.0^0 Outstanding. January 1,1974 . . . . . . . . ..,.... . 120.012 123.437 150.000 Acquired for sinking fund durinp 1974. . . . . . . .. . 4.407 820 17.000 Outstanding, December 31,1974....... . . . . . . 115.605 122.617 133.000 Availab!e for futurc cinking fund requirements. . . . . 7,395 6.383 - 17.000 The preferred stock may be redecmed by the Company a* the following redemption prices per share plus accrued dividends: 4 84% Series - $103 prior to May 15,1977 and $102 thereafter. 4.70% Series - $102 prior to Ma/ 15.1979 and S101 thercatter. 8% Serics - $108. S105 and S103 prior to Februa.y 15,1978.1983 and 1953. respective!y, cnd S101 thercr.fter. The Company is regwred to cep0 sit funds annua!!y in a sinking fund suff.cient to redeem the fchovnng number cf shares of each scoes at 5100 per sharc p!us accrued dividends: 4 84cb teries and 4.70% ter:es 3.000 snares cach; 8co senes. 4.000 chares
, from 1975 through 1984 aad 5 000, 6.000 and 1.000 shares through 1959, 2003 and 2004, respectively.These rc:.drements rnay be satisfied by delivcry cf reacquired shares.
- 5) CONVERTIBLE PREFERENCE STOCK,550 PAR VALUE - Shares 700,000 SHARES AUTHORIZED: 7.25 %
Authorized for the 7.25'b series. . . .. . . ... . . _300 0,00., Outstanding January 1. and December 31,1974. . . . .. .. . ... . 296 290 rhe ennyn+hin pennre cri, r j hn ,esomes p, por pu necreen s%sens The Company must keep available ter conversicn of its preference stock 448,924 shares of its cuthorizeo and unirsued S10 pEr value common stock, based on conversion va!ues for prefnrence rtock and common stock of S50 and 533. respective!y.
- 6) COMMON STOCK, S10 PAR VALUE: Shares Authorized . . . . . . .. ... .. . . .. .. . . . 6.000.000 Outstanding January 1,1974 . ... ..... .. ..... .. .. 4.355.050
. Issued to trusico of ernployee investment plan . . . .. .. . .. 12.802 So!d to pubhc. . . .. . . .. . .. . .. ... .. .. 600.000 Outstanding December 31,1974 . . .. . . .. . ... . 4.997.852 (Thousands
- 7) ADDITIONAL PAID IN CAPITAL: of Do!!ais)
Balance January 1.1974 . . ....... .. .. ... ... ....... . S26.976 Excess of proceeds over par value of common stock issued to trustee of emp oyce investment plan. ... ...... . .... 156 4 Excess cf proceeds caer par value of common stock issued to the put!ic . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.900 Excess of par value over cost of preferred stock reacquired for annual sinking fund requirements . . . . . . . .. ..... .. ... .. 657 Balance December 31, 1974. .. . ... .... . .. ... . .
... _S34 g Outstaning
- 8) LONG-TERM DEBT. AT DECEMBER 31,1974:
. (Thousands First Mortgage bonds: of Dollars)
- 10%% scrics, due 1983 . . ... . . .......... ... . ..... S 30.000 3 Web series, duc 1964 . . ... .. . . ... . . ..... . . .. 25.000 4rr% sencs due 19S8. . .. . ..... . . . .. .. . 30.000 4%% series, duc 1991 ... . . .. .. .... .. ... ........ 15.000 4%% scrics, due 1993. ... .. .... .. .. . . .... .. . 40.000 4%% series duc 1994. . .. . . ... . ... .. .. .. 15.000 5% #b series. due 1993. .. . .. . . .. .... 20.000 Girch series, cuo .1937 . . . ... .. ... .. 20.030 7B% series. duc 1999. . . ... .. .. ...... .. . . 20.000 9% % senes. cuc 2000 . . . . . ... . . .. . ... 29.700 7%% scr;cs. cuo 2002 . . . . . . ...... .. ..... . ... .. 30,000 24
l. [ Notes to Financial Statements (Continued) 6'd% scGes. cue 2004, .. . . . . .. . . .... S 30.000 Tcta: Fini Mortgue bonds . . . .. . .. .... . .'"fA700'
...... . ..... ....... . 846 DetentureL 5% % due 1953. ... ..
5.90% pcMen control crenue bonds, tenes 1973, c;;c 1990 6.591 (S20.003.000 net of funds on depomt utn truc'ec of $15.403.000) . . . i 525 Notes paya!/e. . . . ...... ....... . ... .. .... . 320.302 L Less unamortized discount- net of premium . . . . . . . . . .. .... .... 1.553_ Tctal . . ..... .... ..... .. .... .... . . . . . . . . . $318.74 9 The effective interest cost approximates the coupon rate during the life of the bonds. The Company is requircd to make annual sinking cnd improvement fund payments to the trustcc equal to one percent of the aggregate pnncipa! amount of each series
- of f rst mortga;to bends outstand;ng, as provided in the recpective indentures. cxcept for the 10%% series. duo 1983, which has no sinking fund prov;sion. The aggregate amount of such requ roments for 1975 is S2.447,000 and for each of the yecrt 1976 !.
through 1979 is S2.747.003. Tnis requirement may be mct by the substitution of certain creda as provided in the reortgage. The Cc.mpany is also required to make an annus! sinking fund cayment sufficient to redeem (at spe ial redemption pnces n0 to excced 100.75 pcment of pnncipal) ' S375.000 principai amount of debentures on Novenicer 1 cf each ycar through 1982. Th'.s requirement may bc Latisf;cd by defivery of reacquired dcoenturcs. At December !
- 31. 1974. 5859.000 of reacquired debentures were avai'able to meet future sinMng l
fund requirements. SubstanSaHy ait propertics of the Company are subject to the lico of the first rnortgage honds. l i
- 9) NOTES PAYABLE TO DANKS-Notes payable to banks represent borrovrings uncler f
a credit agreement v.ith texr ty-one tanks, v.tich provides for a may,imum commitment t (Ty tne Dar4 os SoU.600.000 wiiie inMcM u.i LONG..'.*.- , a* '07., O! the pih.c rat. I l ' The agrec'.ient also provides for a Ice Cf % of 1% per annum on the unused commil- # ment. The Lorrowings carry an average imerest rate cf 120o at December 3i,1974 and mature Aprd 1.1975. It is informany uncerstood tnat the Company w:n maintam com-pensatmg ba:ances on a yearly average basis equal to Scb of the total kne of credit l, based on mentaly, bank statement ba'ances. The normal do!ay in check cicarances { through the depository banks substantiaHy meets this compcnsalmg balcnc.e rcquire. f ment. On Apol 1,1975 loans outstandmg under the agreement v/f! be refinanced with notes duc April 1.1976 under a new credit cgreement complcted in March 1975 (sce f page 12). I The Company has a supplemental credit agreement with fre banks providing for l an addit:onal cred t ime of $5.000,0C0 with interest on borrowings at 107% of the pnme l rate. ThU credit hne om;tes March 31.1975. The Company has inhr'naDy agreed to mainta;n compensating balances equal to 15% of this suppiemontal hne.
- 10) FEDERAL INCOME TAXES- The Company's effective Federal income tax rate In l<
was 27 2% for 1974 and 21.1% for 1973. The difference betwecn those etiective ratos
- and the 48% Federal income tax statutory rate comprises:
l 1974 1973 licms on which the tax effect has not becn deferred in accordance with reputatory requirements: Depreciation expense dedJCted for income tax purposes in excess of depteciat.on expense included in the tmancial statements. net et hboratized depreciation treated as a timing det!crence. . . . ... . . . ......... . . . 11.1 cb 16 4 % AI owance for funds used during cons *ruction included as income in the financial statements and excluded from 4.7
... 7.2 taxabte income . . . . . . .... ... .s.
Certa'n taxes included in tr'e cost of Ohhty plant in the fmanciar statemen's and deducted for income tax purposes. . 2.7 3.5 , Other. ....... ....... ..... . ... . . . . ... .... (0.2) 2.3 20 6 % 2G 9%
- 11) CONTINGENCIES- Dy comp'aint ticd in the Umfed States District Court dxcd July 18.1971 trie Muck!cshoct Mdian Tr:be has sued the Company for $45.000.000 for diversion and conycreion of water f orn the White-Stuck R ver, and for an injunction
.?5
- Puget SounlJ Power & Light C$mpany -
A. - . Notes to Financial Statements (Continued) . ada;nst furtner diverstons. Ir the opmien of ger,cral countet, the Company has sub-
, - stantial defenses in this thgation and there is htlic likehhood of sign.l. cant recovery agamst ine Company.
Tne Montana Department of Natural Resources and Concervation has recom-mended the denial of the applicatien for a construction permit fer two additiona! Ocnerating units at Cc:stnp. Mcntana, in which the Compaay is to have a 25co interest. Hearings are to be hold in connection with the application. In tha event the app!ication is u!!irnalcly denied, the Comenny may have to charge operahons witn cancellation .. charges of approximately $1.600.000 and construction expenditures of $2.400.000 in-curred to da!c. Should any such charges to opcrations be necessary the Company will request the approval of the Washington Utikties and Transportation Commiss;on to amortize the charges over a penod of years.
- 12) EMPLOYEE PENSION PLAN -The Company has a noncontributory pension plan covenng substantia!;y all of its employees. The total cost of this plan for 1974 and 1973 was 52,300,000 and $1,800,000,- respective!y, including approumately S725 000 and S587,000, respecthely, charged to construction. Effective January 1,1974 the p!an was amended to increase p!an bendts which had no material effect on not income.
Unfunded prior service costs are being amortized over a period of approximate:y thirty years. The Company's pol icy is to ford pension cost accrued. At December 31,1974, unfunded past service costs were approxima'.c!y $10.392.000 The actuarially computed value of vested benef.ts exceeds by apprcximately 58,600,000 the value (based primarily
- on market) cf the pension fund.
- 13) EMPLOYEE INVESTMENT PLAN-The Company has a quahfied employee invest-ment p!an ender which prescribed payro'l deductions as designated by the employces are deposi'ed rran Ny with a l'ustee and are used to purchase a diversified investo.ent portfoho. The Company makes a monthly contribution to the trust fund equal to 35%
f cl the basic cont ibut.on of ccch participating emolovec. The basic contribeuen is limi!0d to 6% of the employee's reputar carnings. Under the invcstment plan agreement, all Company contributions are used by the trustec to purchase common stock directly from the Company at a vaiue estab!ished by sates at specified dates on the New York Stock Exchange. During 1974 and 1973 the Company contributed approximately S240.000 and i S253.000, respectively, in cash to the plan and the trustee purchased from such con-L tr;bations 12,802 and 9,706 shares, respectively, of common stock. Proceeds from such sales were credded to the common s cck and addittenal paid-in capital accounts on ! the books of the Company.
- 14) RESTATEMENTS -In accordance with regu'atory requirements effcetive January 1,1974. contubuticns in aid of construction have been reclassif cd as a reduction of the cost of utthty plant. Ulihty plant as of December 31,1973 has been restated to ref'cct this change resul ting m a reduchon of S12,954,000. Previously such contobutions were shown separate!y among the habihtics.
\
, 2G
rc =.
- ~ Addit;rs' R: port' To th3 shrrthold:rs of Pug:t Sound Powar &. Light Company -
(Wa have examined the balance sheet of Puget Sound Power & Light Company as
. of December 31J1974_ and the re!ated statements of ;ncome, carnings rein-
, , ' vested in the business and changes in financial position for the year then ended.
' Our examination was -.made in accordance with generally accepted auditing "k= standards and;accordingly,-included such tests of the accounting records and such other auditing procedures as we considered necessary 'in,the. circum-stances. We previously examined and reported on the financial statements of the
~
Company for the year 1973. .. . In our opinionc the aforementioned financial statements present fairly the financial position of Puget Sound Power & Light Company at, December 31,1974 and 1973. and its results of operations _ and changes in financial position for the
; years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.
- In addition, we have read certain historical accounting information included in the nonfinancial statement sections of this annual report; as identified therein; have compared it to data taken from the audited financial statements:-have _
subjected it to audit procedures; have verified its' mathematical accuracy. In our opinion, such data is fairly stated in relation to the audited financial state-
, ments taken as a whole.-
COOPERS & LYBRAND February 12,-1975, except as to Note 9 with respect to which the date of this report is March 25,1975. Seattle, Washington l Fiscal Agents' Common Stock: Transfer Agents; The Chase Manhattan Bank, N.A., New York,
. and Rainier National Bank. Seatt;e; Registrars, Irving Trust Company. New York, and Pacilc National Bunk of Washington. Seattle.
[. Convertible Preference Stock: Transfer Agents. The Chase Manhattan Bank, N.A., New York, and Rainier National Bank, Seattle: Registrars, Irving Trust Com-pany, New York, and Pacific National Bank of Washington, Seattle. Pretorted Stock: 4.84% and 4.70% series: Transfer Agent Rainier National
- Bank, Seattie; Registrar. Pacific National Bank of Washington, Seattle. 8%
l series: Transfer Agents and Registrars, Manufacturers Hanover Trust Company, New York, and Rainier National Bank, Seattle. l First Mortgage Bonds: Trustee and Registrar, The First National Bank of Boston, j- Boston. Debentures: Trustee and Registrar, ContinentalIllmois National Bank and Trust
' Company, Chicago.
e- . L
?
27' l i
,- ,- - -,--~ - ,. , - - , . . -
g y'
' Hist:rirl Summ:ry cf Oper:ti:ns cnti St:tistic:I Rec:rd
~
h ;
^
SUMMARY
OF OPERATIONS' (inousands of Dollars) - 1974 _1973 1972
~
Opirating revenues' - 4 4
. ; Residential , . .............. ................... S 72,722. S 65.249 S 61.4 8 '
Co m me r cia! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,230 32.920 29.6 0 : 1 r industria! . . . . . . . . .. . . . ./.. ...... .............. 15,146 :12.502 11 A50 1' Otherh ................... ........... ....... 18.295. 6.231 5.424 - Total operating revenues . . . . . . . . . . . . . . , . . . . . . . 142,393 116.502 103.5C Operation and maintenance . . . . . . . . . . . . . . . . . . . . . . . . 64,588 54.870 :51.212
- D e pre c i a t ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . '. . . . 13,850 12.331 11.204 Taxes other than income taxes . . . . . . . . . . . . . . . . . . 17,042 14.861 :13,257-Federal income taxes. . . . . . . . . . . . . . . . , . . . . . . . . . . . - . 8.003 f 4.143 3.92G __
< Total operating expenses . . . . . . . . . . . . . . . . . . . . 103,483 86.205 79.599.
Operating income : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,910 30.697 28.547 Other income - net. . . . . . . . ................. ... 6,218 - 3.313 - 2.217 i'
. income before interest charges. . . . . . . . . . . . . . . s . . . . . . 45,128- 34.010- 30.764-
. Interest charges . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . 23,743 18.547 -14.720
~
s + Net in co me . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 21,385 15,463 16.041 Preferred and convertible preference stock dividend 9' a cc r u al . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ 3.314 2.569 2.296 - Net income on common stock . . . . . ...... ... ... . ' S 18,071 S 12.894 . S 13 7G Common shares outstanding - weighted average. . . . . . '4,483,216 4.379.682 4.367.055. Earnings per common share - assuming no conversion. . S4.03 ~ S2.94 S3.15
- assuming full conversion . . S3.88 --S2.89 S3.0S Dividends per share of common stock .. .. ... . . $1.98 St.93 SW Pay-out ratio on common stock. . . . . . . . . . . . . . . . . . . 49.1 % 67.3 % 63.6 L STATISTICAL RECORD
~ KWH generated. purchased and interchanged (Millions):
Tota! Company generated. . . .. ....... 1,794 :1,493 1.435 Purchased power . . ...... .. . . . . 10,350 9.225 0.14D' interchanged power (net) . . . .. .. ... . . 474 (737) (877 E Total output .. . . . .. . . ... 12,618 9.978 9.67f Losses and Company uae . . . .. .... (847) (658)- (79'm Total energy sales . . . . .... ... .. . 11,7f1 9.326 8.586
-~ --
Electric energy sales - KWH (Millions): Residential . . ..... . . . .. . .... 5.040' 4.913' 4.S56 Commercial .. .... ... . .. . . . 2,043' 2.049* 1,86? Industrial; ... . .. . .... . . . 2,050* 2.041* 1.865 Other. . ... .. .. ... .. ........ ... 2,638
- t 317* 293 4 Total coergy sales . . . . . . .. . ... 11.771* 9,320' 8.555 Total average number of customers. . . . .. . 403,409 393.553 379.7.?G
! Per residential customer: L Annual use (KWH) . . . . . . . .. .... . . .. . . 13,856 13.663 14.151 Annual revenue . . . . . . . . . . ... . .... .. . $199.94 S184.09 S178.09 r verage rate per kilowatt-hour. . . . . . .. . .. . 1.44C' 1.330* 1.26; Peak load - Kilowatts (thousands) . ... . . . . . 2,058 2.077 2,115 Capability at time of peak load - Kilowatts (thousands) . 2,379 2,283 2.280' Capitalization ratics:' Long. term (excluding bank loans) . . .. . . 59.4 % 56.4 % 58.7 % Preferred stock. . . ... .. .... ... . . .. 6.9 8.6 5.8 Convertible prefererice stock .. .. . .... . 2.8 3.3 34 Common sharcholders' investment. .. .... ........ 30.9 31.7 32.1 a
- Total . . . . .. . . ...... ... . . 100.0 % 100.0 % 10000
, Total re0ular employces (December 31). . . . . . .. 1,819 1.779 1[GE
'Asd I ruoccdures apphed, see Aud.tcts' Repart tincludcs 2.361 KY.'H (mdlionsI of firm and non. fem enes'scL! r0 c:w i *
. 28
v 19/1 1970' 1969 _ 1964-
/ $ 54,432 - :S.49.897 $ 47,025 S 30,783 M8MAGEMENTS' DISCUSSION AND ANALYSIS OF
,. L B6.222. :24.023 .21.906- c 13.883 THE Su' MARY OF OPERATIONS FOR THE YEARS 8,884 8,520 6.018 . " " ^ND 1873
% 986 - s
'I ( . 461 ~ - 3.878 3,448- 2.247 W '*"m se omrai rate increase accounted for about 511.3 milhon of the mcrease in operat ng-94,101 86.682 80.899 . = 52,931 reve%cs tot 19n. Tr <: gesrat ram increaso v4: m 41,703 ~ sM20 27,219 **C'* ' " 9 ""'*" '" ' * "5 " " * " '5 45.274: 3
'10*467- 8*585' 7'860 4*375- Sa'e5 to other u%Dc5 80 counted for an accitional 10,851: -10,889 : 10,052 6,480'. st1.1 manon cat mereased 19n operatma revenses.
1,692* 450' 7P1 952 A:though inc ccmr any eroscis to sett ocwrer to ciner 68.284 61*627' - 58'453 39'026 ""^'" " pomar4t/ penes "" '"'*'e'"ava*dabihty on th of power in excess 425,817 '25,055 22,446 13,905 cohe comcany's requ,rernents. m incmase in opmtion au ma.nmnance ex-1,914 1,090 723 747- penses for e74 is due to increased purchased power 27.731 26,145 23,169 14,652 ccsts and to inf:at.onary factors result ng m increasec 13,868 13,100 11;441 6.279 - wa3e rate a-d manal am su;pty costs.
'13,863 13,045 11*728 8.373 and M73 is due to increazec depreciabic electric
! '^ , plant and to an increase in cepreciation rates m 1974.
'W L 2,333 2,3661 1,454 1,370 . Taxes other than Feceral mcome taxes increased 73 ""* ' '" * # '" * ' "##
5 11,530 - S.10 679 .S 10'274 S 7 003 - v* aluat "75 "" or :"danerres anc wa;cs upon v.nien tne M,112.676 3,953,799 3.953,501 3,593.501- ciner taxes are ease, tege:ner w;to increased tax rams.
'3 S2.80 S2.70 S2.60 $1.95 ' *'"' "* *"" * * * ' # # ""# "#,"
-S2,76 ' S2 67 -S2 59 -
ton pr marity cae to the merease in taxabie incoris. S1.82 S1,76 St.70 $1,60 3 r, ;neren,s in otte, mec.r, ,07 3 gn 8.e n73. 65.09o 65.2 % - 65.4% 82.1 % ' veere cue to 9 increases m ine a;cwance tv fancs - used curir:g construction which is attributable to h:gher levels of const uct en expcnciturcs and 2) an mmm a nierest mme imm funcs insted by 1,404 1,250 1.238 '1 136 " *,, * * " " " " ' " In ' 606 _7,163 7'153 ['17"0 The h ;'cr Mterr5t entrpes in 1971 and 1973 l1 '(,177) i
, (22G)' (701) (626) are due to higher teve:S ci snc t term ccet as svett as
. 8,833. 8,189 7,690 - 4.682 NGh '"" "'* **"'st rams ana to mc issuance
' * * * "* * " *" # #' # 3 " " * * ""'
(806) (782) - (749) (594) rams in esCE$c Ci priCir average r3205 8.027 7,407. - 6,941 4,088 . Earnings Per Common Share and Operating Revenucs by Quarter for 1974 and 1973 4,557 4,164' 3,928 2,460 g,,,,,,,'," L,, ,,,,, u,,,,d,"h..,, ,, i 1,722 1,545 1 392 737 r com" mon (T' Pac
" re' "
!
- N ~,3nt's co riton {T'=e h .l AN'S l' 1,50G 1,492 1,'449 760 e=t o' como eat of ovv')
I 242 '206 172 131 l;$'on%"30Lg, ; 5['! 5
@ 5's 5 j'.50 8.027.- 7,407 6.941 si==-===
4.088 rw Elf orC.*/u tSe Year.
- E
$4 03' s142,3?3*
E s2 94* NM s11c.90?' '. 367.741 .354,752' 339,560 258.940 fBased upon everage corn en sna es eufstano:ng assuming no conver.scn cl pre!crence s:Och. J 13,711 13.042 ~ 12,910. 10.556 Common Stock Price Ranoes and Dividends S163.77 $15G.28 S154 67 S132.09 Fer Share by Quarter fo'r 1974 and 1973 1.190 1.200 1.200 1.250 ,,,,,,,,,,'"'o,,,,y, 1,850 1,711 1,613 1,139 s,gn to. rer saa e 2,186 -1'896 1'807 1'372 o** er - - 28 - 25 -- 5 A"> sc'o' e nd o"vatier . . 25's - 1934 49'r 1hrd Ooaqer . 218. - 1sS .49'r
-56 3 % 58.7 % 55.9 % 53.0 % ""
6.5 6.9 7.8 11.8 Price R>nge D evider4s .' 3.8 3.9 - 4.3 - H.on to. Per share 33.4 30.5 32.0 .34.3 l$n3"$2"gc UC$4 524 100.0*'o 100.0 % 100.0 % 100.0 % N1*8u"'ii N ~ EU SU u5 - iS9 I,~7N ~E63 29 l l- r
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((Continued from Front Cover)? . e, g r forva Eeneral electric rate increase: rates throughout its service area, de-in both the states of Washington and. ferred the increase .in the state of iid;.ho. The Company takes pride that : Idaho in anticipation of an early, fa. in, thej past:14 years, through elhi vorable~ order frorn the . Washington - ciency gains and otherf factors, we- Commission.
- lw:re able to make five-separate re- __
; ductions in the cost of electricity;to y yp%gm., \g 7 S. U
, ' our customers. However. your Com- ,
- \ \ A
- piny was forced to yield to the dra- . /.,' " N. . 7
; matic inflationary spiral of 1973 and : i: " I;Q,y, ". 4 J 1974. The continuing pressure of in - ! .
- creased operating costs, burgeoning.
interest' rates, and need for capital- - L a: h' / j(' <>! to meet' construction requirements, j left your Company no' alternative but '((' /; of to file in January.1974 ~ a proposed
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+
j j .: rate increase with .the Washington - 1
- i. i Utilities and Transportation Colomis- , s j
- '
- sion and with the Idaho Public Utili- .
. T ties -CommissionoTo meet current- I A and. future ~ er.ergy . demands. - your - L--- - d C .._- d
- Company must Eenerate additional . Kirt Cc!c, Preticent cf EXPO *74, Kmsey !J. Rob.
revenue to maintain its financial in- inson, Chairman of the Beard of the company, and .
.tegrity and to continue to attract in. Rct,ert S. Dea:ty. Resident !!ana;er far Standard
- . Vestor capital at the lowest available - Oil, pay a visit 13 the Eneyy Pavmc1. one of the
.Ost.' I"I#' 8U'd'ibu of DJO '74. Lt. R:.bicsin v.as
'~ $n alive me@ of the fuertne Cer9ttee of
{ ,m L. s. , ["
- r -' the Board of Direttcts for EXPO?74.
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,,,,, t On November 1,1974, the Wash- /
- ington Commission issued an order '/
- allowing the Company an increase of h . about 7 per cent of additional an- <
l "
! nual gross revenue in Washin5 ton. >
i~ ; An increase in excess of $3,000.000 ! ' .< r : had been requested. Approximately i W , 'd. $2,400,000 was approved. The Com- ) u I , y.% j mission also ordered the Company to .:.-.
. Wp combine and modify the residentia! ;'
- l. --gl ' .;.f. f . , ,/ ; rate schedules and to add a 5 per l< .L . M '
4 ..._.. g cent surcharge to billings for com- - I l' Company directors Roy J. 'Jehnson. $ptkane. InerClal and industrial accounts dur- , ' T [7} -- L washington,'and James 8. I,tfaonigie tetisten. ing the months of November, Decem- ;,.. . , , g Idaho, esamine the system tontrel conscle in the ber, January, and, February, y
- Company's Power Sopply cepartment. The Commission, justifying the i_(a N,
8 ft a Hh surcharge, stated, "The purpose of . l The proposal made to the Wash- the surcharge is to emphasize the [J. 6 . L . ington Utilities. and Transportation - need to limit energy use wherever ~
~t iCommission and to the Idaho Public possible, especially during the pe. -
Utilities Commission would have in- riod of winter peak demand." The . ! f creased system-wide gross electric Commission further stated that the operating revenue by $5,000,000, or results of the surcharge would be D'S 53f"d'eent hame tu tw patanW l approximately 10 per cent. evaluated. From such evaluation $5;,$;#((n$d$$n d'N E li
- in August,1974, the Idaho Com- could stem continuation of a like sur.
- mission issued its order granting the charge for future periods, extension ircrease as tired subject to a 30-day of the surcharp to includo residen-T iting peried. The Company.- in line tial customers, or abandonment of
- *.sth its policy of uniform electrical all surcharges. The latter decision
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t .i ( - 3 4 .t. could re; ult in refunds to the cus. ' n rate by approximately 25 per cent. .L tomers invo!ved. ' Preceding contracts with thes The Company made a counter ~ <3 wholesale customers had been in c^- t j proposal to the Commission involvinE - ', . , w. fcct for up to 20 years, with no ir,
, the residential rate schedule and ap- ,
crease in rates during that peri-1 j plication of the surcharge to certain ; -'
.,_. .: The new rates will increase the Cot rate schedu!es. The proposal was ac. *
? F ,i pany's annual revenues abom
{ t cepted. The ne.v electric rates be. , 1 $203,000. came effective in Washington cn No- - 3 Gross operating revenue increw~ vember 19, 1974. 5 S17,099,867 durina 1974 to a rr
! The electric rate increase in Idaho, !
- high of $110,098,432. The impad v
! as originally appEed for, became ef. I l the recently granted rate ir.cretec.
t itclive Nnvember 13,1974. It will in- !
', - - ~ ~ """ j is not fully reflected in these fir
; crease Eross revenue by 51.604.000 Earnings per share based en 1.cr
. . . - . _ . _ . , cm - newe Jans u.c:e 7m a shcres amounted to 32.11. r c:-
.~-
departmrtgl us i from c.rettus Jps x F : c. pa'ed with $2.0 d rirr 1973 r / J
,{.mt M Pm E u. LM,wc. The Board of Direct' cts acr::
l the quarterly dividerd payab'e C . [ c! asses of customers is designed to cember 12,1974 to 38 c<. r.9 - offs 2t the co t? associated 8th the shye ThB increase !' Fe u - higner pri;c cf gcr purcnasec frorn ci/icend cf one cert a sb..:re i ', . j our pipeline supphu, Northwest i Pipehne Corporatnn. In a little more ,increase annual rate of during made 51.52 isthe theetr* secc~ *
- than one year, the price of us dchv-year. Your Board of Directo", ,,'.'*
, 4 crc.d to our pWne suom <. frcra preyjoupy jnmeagge ty gg Canaca hn rr.cre than trdd Si ce onc cent'a share or a carinr N P
- ; October of 1973, the prica has risen effcctive with the dMde m ;' .= ;
i , ; from 32 cents to $1.00 a theusand' March 15 1974. Tnis Mm; cubic fcet. Canada is tne source of marks the 'tv alf tn comecuti'.e p-- J. P EwL>f. Cc- r Sc:rrtm. !ctis cn v. abot. 70 per cent of the gas supply- in which the dividene he r r - jou repan itn J. tittaa ee rs a r c:( cf ing the Pa:ific Narthwest. raised. Dividends ha"*c bce Ehi"i automotF.e fear ta duett:r (germ Thorr.r:sn nsec,, w.1 Rates for steam heat.ing service outstanding sharesof Commen Su $
; were increased in March and Decem. without interruption, since 159.^
j annually. Electric rates will new very ber, 1974, to yield apprcximately On May 10.1974, the sher - between the te.o states. 5290,000 and 5550,000, respec- ers of Coiumbia Gas Company , a ha late November, both tne Wash- tively, on an annua! basis. These in- The Washin;; ton Wcter Pc; c- O
- ington and Idaho Commissions issued creases were pr;marily for increased pany voted on a plan of mcryr.d ~
t orders permittir.g the Company to fuel and labor costs. November 2, 1973. Tha mer c t l pass along certain increases in the The Company filed for a water agreement, which was tc bccci. ' price of natural gas. These " tracking" rate increase in January,1975. The fcctive with an aft:rrnr.ve vote ci i - J increasts allo // pipcline price in- proposad increase wou!d generate less than twc-thirds o' ire r.* creases to flo.y through to our cu: approximately $197,000 of addi. ing shares of botn corpedir t tomers. The increases ret lected the tional revenue in Washington on an ceived a favorable vote cf 75 ~ net cffect of five separate rate a$ annual basis, cent of the outstand rg shtra e
; Washington Water Po, vet and 99 c' -
- justments. In Washington the new The Federal Poiver Commission, j rates also include the cost of the on February 4.1974, accepted for cent of the outstanding sharcs o' t state gas excise tax. Effective dates filing a new wholesale tariff based on Columbia.
! of the increases, purposely delayed four new contracts bete.een your Sharcholders of Columbia GM to give our customers the benefit of Company and certain wholesa!e elec- Company received one sharr M
. a refund received from c~ former tric customers. Contracts with Mod. Water Power's Common Sto k .
supplier, El Paso Natural bas Com- ern Electric Water Company of Spc. each 16.3 shares of Comrnon &cA pani. were December 3 in Washing- kar.e County Washington; the city of
. of Cofumbia.
ton and December 6 in Idaho. Chewelah. Washingten; the city of Through this merrer the Comrar The natural gas rate incru os wil' Piumnier. Idaho: and with Cit %ns acquired cbcut 1.400 r qur UtMie Con , any to resa!e in Por- cuttomer's it, Rit: !: , c' 4 ai! 5 35.03 to M.C0 a gar to t". accra;T res;de; tial heating b'JI. The lions of ShoM.c"e County, litho. ir. den. Connel!. Ge% rr r c e entire amount of the increase to all creased our wholesal" electric poner venson, Washinc, ton. /,M en nlo,,c s cf
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i i Colurribia " Gas? Company 1were c re. Bonds and.400,000 shares of Com .
~ tained by' the Company.:' ' : mon Stock. The proceeds availabte :
, . . A!so cpproved at the' Company's: = to the Company from this sale were
? annual rneeting was an. amendment used to prepay $27,000.000 of unse. .
z to the Employes'- Stock'. Purchase cured promissory notes due Decem-
. Plan authorizing future issuance of - ber .1. .1975. - with the remainder-L150,000 shares of Common . Stock - availab!c' to finants the Company's
. which may be offered to employes. , construction program.. 'l
'"At the present time,' more than:65- The much-needed 2.770.000 kito-
? per cent of the regular full. time em- : watt hydroelectric project 'on the-
- playes own stock in the Company Middle Snake River at the Mountain 1On June 25,1974l the Company . Sheep-Pleasant Valley sites survived '
M cnt: red into a credit agreement with l1974 Congressior,al . attempts. to l
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eight service area banks under which he Retirement comettfee of the Retiremtrit , a maximum aggregate amount of Plan for Wash,nrte, V.sto Paer t Cenany en -
$35,000,000 may be outstanding. [g,5jj@'y y,Cp'plpf,E'fQh This revciving line of credit is avait- Satre: and Man P. 01cuy, attwty, Sp%aie.
, able for borrowing by the Company wasNcaten zfrom October 1,1974 to September 1975. . Notes ' issued under this block it by setting aside national rec-af',reement mature on December 1, reation or park land areas. The proi-
;1975, and bear interest at the prime ect. sponsored jointly by- Pacific commercialloan rate of Seattle-First Northwest Power Company' and
' National Bank during the life of the Washington Public Power Supply
- notes. ' An initial borrowing of System, has wide support in the re- ,
; $18,000,000 was used for the pre- gion, as indicated by public opinion payment of notes outstanding under surveys'and testimony at hearings.
; a prior credit agreement. The. re- The case is still before the Fed-mainder is available for construction 'eral Poiver Commission, which has purposes, On- December 31, 1974, scheduled the filing by its staff of a
$27,000.000 was outstanding under final . environmental impact state-
; tha credit agreement. ment for comment and additional
( ' 4 Fabru.,ry of 1975. the Company . hearing. A- decision is not antici. soid 525,000.000 of First Mertgage pated before 1976.
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( Production at the Centralia mine, costs and low interest rates. operated by your Cempany's wholly- We appreciate that pretsures on owned subsidiary, Washington irriga- the poor, the cfderly, and the thrif ty tion & Development Company, has have bui!! up social tensions. We still improved substantially. Installation consider that our utility services, par-of a Bradford rotary breaker,in June, ticularly electric energy, are the effects preliminary separation of greatest bargains available to cus-waste matcrial from coal ar,d in- tomers on our system. We intcnd to creases coal-handling capability. continue to provide service at the There are many problems in the lowest practicable cost consistent mining operation. We are working in with good business practices and ap-a highly fractured area. Clay seams propriate returns to the investors in "c complicate separation of coat and L residual matuial. As a result, the l' , contract delivery deficiency from , n, , mine to p! ant was apprcomely -
+
322.000 tons at Decembcr 31,1974. t .~ , Contract payments received, ap- t' 's r!icable to th:0 deficiecy, have been deferred until the coal is actuaJy a delivered. , The statement of income, efte-
- I where in this rcpert s% /s a lost in l" equrty in eart.w2 of suosiGuy cora-panim 10- 1574. A 3b pcr cent in-crease in the price of ccal to!d to the steam generating plant. cffectiw _ .. , _ _ _ __
,J February 1,1975, will resu!t in a g,,..,p.; ,g % .e g.m, m ,,
markcd impro,ement in income from gy, m % >tuice.< earu m our Centralia cperation. men rer to tri.v L r,ce cmr e ;m e in 1974 the Company res isted the rasun r arntm swerma. initial requests by union-represented our Company. Rea!istically. we all employes, considering the rec;uests may have to make adjustments in our excessive and contribut,vei to the in- I fe style because the era of cheap flationary spiral As a result. the encrry may be pone forever. Recu'a-Company was struck for ,the first tors'cf our industry mutt recoEnize time in its history. After six wec kt that appropriate pricc incrcases no < the strike ended w,th i a rew three- are acessey enri in tha best long year contrci. Rriking en ploves t,en- t.crm intermt's of cur custorncrs and gally depasted ,hemsehcer,in a dip our Nation mfied manner. Cus'omer inconun' Your Company thnuld enjoy en-ience was minimal because of e<tra- other successfu! year in 1975. As al-ordinary effort of nonmanual em- ways, it v,i!! depend in large measure ployes- on the efforts of the Company's em-
, Much of our report so far has con- playes whose response has been so sidered high prices, high interest commendable over the years.
costs, and the ,immediate need for increasing rates for utility services. We do not believe that any request made to regulatory authorities for such increases has been unrealistic , or excessive. We believe our custom- Chstman of the Board ers have benefited for n*cre than 20 Chief EwcuM O'frer ( yees from the Currpais feresiht in twice daublinn oor hvaro cenerat-in;t capacity ddrin. th'e 1950's. a time of relatively 1o.. ccnstruction President 4
e 1 ( . The Washington Water Power sion and peaking services for gen-Company is dedicated to providing eration to meet their requirements. long term, reliable power to meet The in-service dates of the t//o gronirg custowr demands. Bect.use coal-fired units at the Centraha p ant our present po/cer supply is predom- v.are advanced from *e original inantly hydroelectric, our customers scnedule by two years to provide for enjoy low electric rates. Our com- the area's energy needs under the mitment' is to the community, by Hydro-Thermal Poner Program. Ec-protectirg the environment; to cus- cause the energy was not neede-' by tomers. by pro / icing lou.ccs; service The Washington Water Po/a.r Com with high reliability; and to Stock- pany for severa; years, our share has ho'ders, by maintaining efficient op- been assigned to others until needea. . erations and paying appropriate divi- The Bonneville Power Administration dends. and the Bureau of Rectamation re-The Company has joined other ceived the entire output of tne p! ant
-r q utilities and agenc'cs in the Pacific and paid aH the pl ant costs thro *
, Northwest. in a ion.pterm coordina- Maren.1974. The arrarren ent . -
j tion agreement extencing until 2003. ine United States Eu'eiu cf Rwa.
.i lhis agreement pro' sides for the co- mation (Central Va!Iey Project) con-ordinated operation cf most of th9 t; rues thrcugh 1951. Of its .w :-
power otarts and rrrr/o'.'s in thC 0, M 1 port'rn. tne C0&.nv u' - area. Tne Company a:so partic: pates a sma:t amount for itc ce/n laa > r..
, in an intercompany poo! agreement ou:rements. It has made short-term
/ v/ith six other imesto'-owned utilitius arrangem?nts for disoositicn cf 11
[- ~ ~ ~S."..;' / of flye Northvest. This ggreement remaincer thrcuch 1977. ( , ,
;f pro..qc3 ior opwauco ai.o pianrmg Tm ','/dWcn irrir.y'ior. & D -
y coordinz.'.&, om<ng the p rept,1N cpment ComMny, a y, hc!iv.c czq - - s and transmitting utiiities. Particica. Subsidiary of the Compan[ man-e
. , . ,f 7 tion b,y other utilitics is invitcd. The ages the su.rfre siq eg'er e
Q,, j< rcsulting cocrdinated omration ha firmed ye thcJsands o kilo //{.its o).of tne coal field for tne Centra %> g . steam plant Cord pr oi.ci d W
./ otherwise sccondarv pot.e r in the
- A ' * '
1974, reached 4.000.000 tor:s. dq-Northncst. The Naon Rards hdce'e tot r'ojnt. largest The Company also participates in spite a strike by the Operating Ew-(f the Comp. mis cre.cr pc::ca. sNs vater an area Hydre. Thermal Pouer Pro, neers for mcre than one month. rast its (wr IU 5'h b genmtas. tte dn is en cram This joint effort of Pa .ific Additional electrostatic precip;ta-t*.e cia 9. rm riier in r.':re.120 wes frcm tw Northe,cM electric utilities forecasts tors werc added to the po//cr p:ent lac state hne. the frilities neaaed to rr.cet the re. durin;,1974 at a cort of apprm; gion's changing e!cctric require. matc!y MO 000.000. This cost, as
, ments. with other capi'ai p;ar.: cops. v. 3 The Centralie Steem ENctric Gen. shaicd by the eight uthities putti cratin Plant. a I A00.000 kil0e/att P3t'nc in the pont, on the 1.iasis cf coal-f 0;ed projcct, was the firrt ther. the shnre of pov.cr whicn each !s t1 mal plant constructed under this titled to receive. Although these ad program. Our Company was one of ditiens ccrrected tne emission prc'a the two sponsoring util; ties. Iem. the p! ant cannot yet operate up last winter Phase il of the Hydro. to full design capacity of 1 A00.000 Thermal Power Program was adocted kHowatts. However, it has been cer-to meet area needs through 1990. tif ied to operate at 1.267.000 id!c-Phase 11 provides for (1) the area viatts Modifications are non heing utilities to construct generatinr facili. Studied to enab e the plant to operate ties to niest the area's end,gy re. at its full rated capacity.
quirements, and (2) the Bonneville Reclamation of the area after ced Power Administration to provide removal is proceeJing as piarn c transmissico facititie and additiona! Severty thousand DcJm f;r * <- { peaking at e n tin l' fedrra' hv&c ha.e t cen planted ca &J a". 5 c' ' plants. BPA . ill e, change transmis. claimed land. In addit!cn. 300 ..com 5 _ , . . . . . _ . . _ _ . . . . . - ~ . . .
5. i z have baen prepared for seeding in is a 1,240,000 kilowatt plant sp n-the continuing soit reclamation. and sored by the Washington Put;He water-Quahty prograrns developed Poner Supp / System. The sect,n-J for this area. project is being deve!cped by Puget l I The Washington - W a t e r Power Sound Power -& Light Company i,n
' . Company continues its quest of Skagit have County, Washington, two units, and w.N eaeh raied et
-I power supplies to meet future cus.
tomer demands. We are planning the 1.288.000 kilowatts. Prod u ct s o n 1 installation of an auditional 125.000 dates are 1982 and 15c,g. Whil
- kilowatt hyore unit at the Company's Wash. e planning ington Water Pov.crfor the .uture.
Company Noxon Rapids hydroelectric p!cnt on the Clark Fork River. Primary pur, has been able to mamtain an am;te pose of this unit is to provide a peak,customers supply of during elecincal energy 19m. fer a Sixty-four ing resource. This unit is schedu!ed to tm in servict ey Novembct,1977. D*f. cent cf demand vcas rne; bg ye:
' tracity generated at cur ccen tan 7- . , i j - , .
-- . - ' ' ~
.-- - Twenty per cent was obtain;d thrcu- '
t
** fong term partnershir-typ: c;r*<,.s i l '-
, tual agreements for thc pure'm c; firm pov.er from purc uti
- e tricts' Co:urr.bia River pre.-; . -
i- . d .
- teen per cent was provided t,y fir l purchases or cychange arrant em.a.
( t." Y " i
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l with other utilities. The Wash:gr [ . L
. ; %1er Poner Corrgany er., ,. 6 .
verehte position in mM?in '- t .. .
, s (' /' '
,- ', requirements because of its dic fied sources of porcer p neret a.
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7/ J both currently and in the futwe.
.' Because cf the critical m' ' +- c.
' - - , ditio^s durirr. tha somnr r.-
- 8. . s,. s
~~
i 1973 in the Pacific Northreest U . l C, j all customers were asked to C . - t' y N , C ' ' i [ , v ,, ,,- M,., 'b . .
.' tarity conserve electrica! (n( rry. 'i' drcught ended in Novemb0r. ,1973 he co tret roc.m of tte tematia Ster Dectne ,
Cc'cratW Flart at Ctr.tMa. Vias 6.m;t:A !s the with hca,/y precm.tation ayd m i - im cettr fu crmtim De r's,t ha e case SP.r irg and summer of 19,,,3D rd-vcirs were refilled by one o' inc IJ territ:r c rm et 1.c.ca umits c' eu trinty. he po;er is tr arte.1 fo n coat. safne est snowpackt on record. Cunm . min (d m rurty fiWS. ContinucJ to conser.e. er-during the first part of F7J M . sult of this condition en:i in i~ The Company is a part. .icipant in natioral empnnis on const car c the construction et two 700.000 kilo- all types of energy, tne C:'gan? watt coal fired units at Co! strip, Mon'.loads for 1974 were bclon thou tana, with four ,other private utilities which were previously estimatei Water ,Pov.er will have a 15 per cent During the past year the Comparv share in the output of the two , units- had a 2.5 per cent grov.in in electri. currently scheduled for operation in use. This was consideraNv r':n ' 1979 and 1950. The Company is than some of the utilities Ow n seeking alternate poecer , sources in perienced in the United $r. s 6 e the event that these units are de- to the favorable econom:c canat er lay ed. in our service area. The Company .is also partic.ipat.mg in three nuclear plant:,. v.ith a fi'.e I per etnt share in their output. The first,"WNP +3." schtduled for 1951, 1
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tre Sp:k*me dantoe.n a'ca thrrt:i'i th'. *' l Spokare Ruf lice.s 7.d tu- Ves t- tr< 's<- j ground is a f errn.mert attra;t!Sn. the r 4;i'r !.. '
- nest inean Centcr. Tre Cent" is a rc .b-f , :-/
f inst;t6 ton near tre Cyza a Or: . cts t,[ u 6 11 (cr.tifs a 6scl:g of art Jnd 2:t !*^ , f # l ern ht'atare ire tra:er is e e ef a gro ,r m,+ ber of Et:ractiers r.ania[ S;:L;.ra s tri . t t.
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k yy mg. - Accuiring and selling energy prod-ucts is the primary purpose cf The The most obvious indication of 13 effectiveness of thcse consen. W gJ, ,h b s g W .n Washington Water Poner Compan/. efforts is shc/,n by the 6 o r;er c0
'. ! . [ .' . Inceme from e!ectric saies rep *c- drop in natural Eas u% in 1974 O
.. 4 Q;f'.
sents 67.7 per cent of total revenues. Natura: cas produces 30.5 per cent. the average resiaenda: cus* cme Nctural cas is sold to 69.541 custc7 E 'a- f District steam service to downtonn ers. including 3.447 adced in 197-Ph6(.g$)Nr:ff,h.i
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- W h j..p - 1 p. . .f ,.* b , .,@4,.! c/[' b d Spokane yields 1.2 per cent. This central steam service contdbates to an increase of 5.,2 per cent.
The Company s worh r re_,e ' -
/
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" clean air," since ind;vidual business bui: dings can dispense with their ship with customers reauire: cc'""
tration cn chang:ng nee".c 2.rc er - I own boiler plants. Water service pro- uses. This expertise requires b m. ,
+ ![t 3 duces 0.6 per cent of the Companfs edge in home econcmcs fr-(" . .JI .
/ /
revenues energy apphcat:cns. rmue-
. M r /,; in 1974 elactric service cias pro. comn:ercial and induyrd 'ec<
t
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vided to 180 73 cmicrneti. in^'u'.f. ing 4.607 adac1 durirt the year an mcnts, and other ccm- e " ch ~ such as hight;ay 17 'T
' ' ~
increase of 2.5 per ceni The Washington Se Un.acr3 Elect >c. rateal in cd stan w nrms A;ibouth the cverage residential aEricu;tura! researcn curm n' ' v.ere pronM te t arc cn t's K3 m 6 wJs costumer conserved an estimated 3 ber commis;:cre'i to s _ m . rer ice ty tw tmr4 ti semn e ew tr r:t d f em r '3, t.. ' < ' "
*:m- g,. r c m' !9 rm accram un r act,,.
g,: e m irim s.*-treL<tc
,g pm ally in:r'e asul a,,. . k /;ri o,(r 197.: ,to - ~ 7 .~
12.857 k<.h. Totat residential knh / - consumrt'on increased 4.1 per ccnt This c,rra4 cain. even in the fsce of cons coca%n m ay 'n a c o/cir-number d cuwmts anu thc h - creasing selection of e!ectricit/ fcr space hc enc. In 1974 23 cer cent ' more resicential electric hea'. inst 3l ' - lations were adced than in 1973 Aftr r 12 full n onths of conscrea. tion practices, the combined (lectric , consumpticq of commecial and in-dustrial customers in reased 1.5 per cent considerab!y less than in prc. 6
,;J ,
v:cus pars. '~ 0"' "2 The Compmy's customar se'vio T.& N t.cns c f 1re i " r';'S r. 1...a 'h ..e L, , representathes advise energy users on the value and cc:t of America's the warm water c' sche ' - fi energy resturces. Wisc and efficient thermcl electric p? ccr pt: ' ' energy uc.e is advocated thrcegh paid Company atso is tcstw. t.' o t' - advertising, news and pub!ic media. panel trucks, using tic' . :n '.. speeches, and customer contacts. formerly done bv rasW - ne Accurate and explicit information vehicles. The Cornp.iny th e C helps thn consumer establish his ocen electric transport wi.I u. crease energy managemcnt program. Par- The Company also pa:ta'hmte titular emphasis is placed on bome research activities of the I;'umb, insulation techniques. Engineering Research Institu: 1-A specialized representative will Institute is concerned '. .th dce - inspect any customer's home to rec- ing madmum energy ethcien- . i:' ommend the appropriate insulation myriad of lighting appcations. recluired to save energy. The Ccm pany also publist,tes insulation infor. matien n < ceti: an;4 mcc censur', tien ual ' a'id f uMCilic"b Cn eIf s-Ciert ui" l 4
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During 1974 the Company ccntin. A reticri ct hrecht'e rat ro us 1,r.es prc-U2d to trut tM nLra! pas n&:'I cf M M' N
- V"'# M * " ' WrM its firm customert, whde satisfying a 5"'"5 W "smat a d a O m L'a Me o
** 'd a relativcly high level of interruptible ers in the s.'.pf .irgc[uaw smia ta Ccmrany costen
- ve:e..
customer requirements. Honever, the she,rtte c' ns fnm Britist Co. la e. C:,n;d;'. tc 2,,v:d duri ,C 'S' ' cr! car bc nempi,shcd and 19m, and added materiauy to thi tne deficicncy eliminacd. ( g ob!cm of maintaining adequate The Company, and the other teco servic . The dcficicncy for the P3 Joint onners cf the .ractecn Prcirie cific No:thwest averap:d about 100 Underground Gas Stcrage Project, raillion cub c fu-t par day during D0- acrecd to increase the underrrcund cember. This shortare of Canadian storage dt.liverability of the Project gae, resu!!ed in reduced deliveries to 300 million cubic fect scr day in / from the Northwest Pipeline Corpora- 1975. Additional ra! was injected in tion, the Cnmpany's solc pipeline rat the summer of 1974 to bring gas in-supphcr. Much of th2 Compny's storage to 213 billian cub'c fect. The
- t. hare of tae pipeline ra', d:fic!cnc'; peak dai deHyr"cbil;ty for the 1974 was of fset. however, by utilizing the 75 winter was 240 milHen cubic feet Company's full entit:ement to deliver. per day. On *he prak day in January, ,
ics frnm the jointly owned Jackson 1974, the Ucmoany met Lpproxi Prairie Underground Gas Stord,e mately one-third cf its 19ta! system Proicct. load with na!, withdrawn from the The Canadian pas supply dafi. Jackson Prairie Underground Gas ciency continues to be of sericas Storage Proiect. During the 1974-75 concern to the Company. The prob. winter the Company has satisfied up 4 lem stems from water encroachment to 40 per cent of its peak day load into high productivity wells in the with underground storage gas, fur-major gas producing areas of north- ther indicating the importance of the ern British Co!umbia. To eliminatt facility to the Company and its the problem, gas producers will be re- customers. quired to make substantial ir, vest- Three additional wells were drilled ments in addi4anat ras we!!s and ex. In 1974 into a deeper storage forma-pioratory drilling. Tne Company be- tion that is being inuiticatad. This beves that an adequate wellhead picliminary reo'erical evaluation in-prira for 19e f as Frown ;n Britsh dirSes that this dceper Zane h as the N bk it. vital in croer that reme- potential 10 store as much gas as the , 0
. s- os s
+
{ 2 C y(. . . . ._ . . , , I upper zones now being developed. . tion program for natural gas in the Company construction a:tivities On January 31,1974, the El Paso # Rocky f/cuntain region. Four wells continued at a high rate dt. ring the Natural Gas Company sold its Ncrth- had been dri!!ed oj year's end. Wnile year. west Division to Nortbnest Pipeline all four eof these wells had shows of improvements and addition: wer
}
, Corporation, folloning sixteen years natural gas, ncr,e of the first three completed on generation. trans n?-
sion and distribution facilh.ies ine; l Of litigation initiated by tne Depart- were considered to have commercial natural gas system, the steam 7. eat ment of Justice of the United States. quantities of gas. All three were ofant service for Spokan#s ceNea: Your Company is working with our ' plugged. The fourth well has er'ccur- business district. and on :.eva.; new supp't!er on a number of suoply aging indicatiens of gas in commer-smaN Comcany-core vxe s; __ projects in addition to the jointly- cia! quantities, anc casing pipo was tems. A budget of 527.115.000 cza: owned Jackson Prairie Underground set in late December. During Febru-
! Gas Storage Project. ary,1975, the well was completed expended on these opera'.icr1 A new underground 110,000 vr p~ - - trar.smission line war ir e.&.! S trir? a rupo!y to tie Pm 59
- _- t,ubstation in downteren Ecci- cm. 7
'- __ instat! alien is our fire a;>otatie .
+
oil fibed, high-vo.tagc cab:: Ine r tupp!y providts grcaMr etc.r. .' s'
" rdabilit to *he g c e w '- M cowntor.n arca.
< r
. Nearly 100 per cerit reli2biihv v -
achieied in total sarvice; to D':1 i '74 The single e:cctrical og n i
- caused by th comefe- <
g c' e!Las. A!! uver :- ~ ' 8!e matcria!s will ncc, be re n t j
. The permanent bact.t:.n- s e+
i will rernain tu serve tN w & (~~ " ~ ~ ~ icu'remeras et thc riv:cf rc: car Northwest Pipcline Ccrparatien A'K"N d b N CWrri5 l Substantia: re!c:decs c' O 9 0 distribution end transmiss:an i:r' has been certified to build, and is now constructing, a 150 milfion %jl,q]m e$ 7 e ,Nr.'q [ ,K'j'l@ [ni curatan de"* i.ubstation cquipment. and nat v cub,ic fcet pct day liquefied natural mrati. P.as faci lities v.ere compkted in - gas p!:nt. Your Ccmpany will take ap- Lewiston-Clarkston area b3f ere to e-proximate!y li per cern et the ca- and tested and found to be a com- vo:r impoundment rezan b-nir.d ,- cacity from this r.en facility when it mercially ptodt,cibie gas weli, trur G'onite praN cf ths 0 . becomes avaira cle in 1976. /.rmy Corps cf Enginects. Tt.e n. The Company is abo v;o: Ling with _ ruiremr'nts for ceniinum P. : Northmst Pirchne Corporation and b am old f a61ibes, vihile con:D u~ rma f acilities, were m?! ":th r a regional gas dhtributnts cn a cu' toil- inconvenience to cur custanr'., ment plan in the evcn! that pipeline Company practice of encom shortages threaten high. priority firm Undergroand electric d,n ibu - loads. A proposed interim Curtail. ment Plan is pending aporoval of the lines in new residential areas shot s positive results. Obviousiv. dev&
, Federal Power Commission. ers feel that underground;r r. d ('s An application was filed with the Federal Power Commission, by the trical facilities is an asM in tr competitive realty market.
Company's pipeline supplier, to con- Approximately 350.000 fcct c' . . solidate the former Columbia Gas rnains and servicen v.cre insto : ' Company's service a;;reement with Polyethylene rine v.as und in n . the Company's combinM syf tem gas supply contract. Approval is expccted of these insta:lations. in earI,1975. I On April 1,197 t. the Cempany and tv,o ctla;r ras ditritsutian cc?Nn-ics initiated a Jo;nt Venture esp!cra-10
y_ f' ( u . a.
.. . . ,o._...- ,-a
> /4, F IW 3 $
-,_y.-.~..y.- Noxon and Cabinet Dam reservoirs.
p pf it(",] e and a picnic area on Long Lake ec
, filled to near capacity tnrcup.v h summer seasons. The Company co-operated with state and Fr.dr.ral
, agencies in the development of tn-:(
j campgrounds. 1 The Company has scent rncre inn
; 4 58,000.000 as its 15 mr cer.t P .'.
I cf a sorne 550.000.000 emen: . l at tne Centralia Steam Electric Gar.:
, a on air and water oo!!ution pre,emim
,- - a facilities. At Centraha, tne Campenfs j
-- land rchab:Utat:cn prcr'am e.rd fcl!or.s the minirE cf ine cr i ciudes preding. tcrracmg. p.c' .
L-.a.... . - . trccs, shrubs and g ass cn i . c.c trcihng 't.ater quality. Coits cr. ho, ., , A r apr treta-ve rrhen r? a u.uns w. r per acre. The Comr.any :s cc.' - frr tenu::L:r e.maa C-f d r2 A -- that *nis rf.stcrat'on c3 n' J - H/4 L as to.ir:..e . a tm c ' ,r , u c a' "* ven! re est;b!sn f 07 at.J :. e ' Cerrpny's ben RaHs p :,ut, ~i.6 sacMe:, tat, marketab!e timber, and D~cr;c..!. of ters entenkd seto e.urt, t.ur . g, The importance cf th? acy r.t L . f3ydrercetd: p'ent :' Th:. V!W "PWh". at th" N vv W m t" " ' inctcn s',' ate r Foe.c r Ccmpv. cp r- CP! P P"! G TCC"'i7 ate in a backercand cl 200,003 acrcs PCl;CY Of CCCI'0b!TI MM> ^ N of beautiful rnountair lakes and res. ment and beaut:f'ptcq if.n: - ' ervoirs. Tne Company cooperate:, crd architcctural ir proscntr9 : with the stat' fish ard Fcme d-ip77;. b*n rnade in storare arer DN ' .. mcnts of Wash.ngten Idaho, v'i staticas. Wcor r n pcp:eare b. sie -l !!n - Montana. in develcptng hich quality placcd with lcw pofi - fishing in inese waters. Resharch and turcs. Deccrative lif him is ty. .. stalled at substrtions. T he cc:q, ra development fishing continue prog'on ansyear.to-year to improve fccis that these devc!Opm^nk cc' h3;3, tribute significantiy menta quahty to in" . n u - cf the redon Especially nctaworthy '.n 1974 vias
.he fish?ry work in Idaho in connec- -
tion with our Cabinet Ge'Ec proj^ct on the Ciaik fork River which ficees into Pend Oreille Lake. Nation-liy fa-mous anglin ' in north Idaho's Pend Oreille Lake depenas upon produc-tive spawning areas. The lake's huge kamloops rainbow trout, up to 40 pounds, affords fishing unique in the United States. Catches of kokanee or landlocked sockeye salmon often reach 400,000 annually. The Company is working with Idaha State in hcip crrretuate this high qua' tv fishine.. Snae.ning, chan-nets preaucing hundreds cf thou-f:nic of trou .1 i.rkar 9 hme bct, constrecici ( 't hree largt can';'rrcur.d5 en llT
,,w.-a -- ... .. .. .-. - ,. _ _ a. .w _ _ _ _ _ _ ,
Nonhere a'e the effects of infla- Shortages and the long de!ays in .c.. p,., g.t y ,. : i.7 & ." : tion more apr,arent than in the dra- receiving sh pments renoirs.c ear 9r n' '
;i,V
matic rise in the value of Ccmpany ordering in larger volumes tc a/cd ' { 4';,' . .'. ( ., , _ inventory, which increased costly constructen delays s - ;,j a.1 ~ /, 'r 1 . in reccEnition of this groning
~
$1.590.639 from $2.681.803 at the ; l close of business in 1973 to
$4.272.442 at the end of 1974.
prcb!crn, revised crdering. and v are-
. housing and schcdu ing procedures t
N %, b - Pricc im reas<:3 material short- were w ir.to ef'nt. A s:ro% attEr pt ! , j . aps, shippin.2 de%yt and the 10nf was mad 0 bt:f 0re b0th W.te tcD.la- : lead t;me for crderint, are primary tcry commis3 cns to include tr.e c0!- : ,, ' %. ' t
;., e '
reasons for the higher dollar value of inventory. lar value of material and supplies in the Company's rate base. Unfortu-N * ' ./ . The cost of such everyday rcouire- nate!y, the corr'mispcns tr fuor d to ' ments as c,ct<.n pcies and mos' rcccEnde incnice/ as en & ~'ent cf cmssarms ircr.t ased nac.riy E.'.; (cr rate r,asc. n. 3 m e u.s .m _.m s,
. 1 ccat. Certrn km'n cf cor.dr.er in- The er. erg y is tuation rrd te m m gy, ta te mc f; e . ,
crcasrd 1% pcr cent. Gayo!:ne in. e,elier's r ark 0t tcn-! ; ion af te .-i the :t trat ..n (M;.St c at tv Ert ri L created 42 rnr cent. Fuel c;I for thc Purchasing and Stc ec operation in dart tN V :.rtrn Few r.t<vm heat p!?nt ano thr t J: h're c'.hr-r e a - 1 hc Fedr-rt4 man; Y ,ry .
~ * < ~ , lW e
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- r. . r aire. - , - - . r .-: .. g w~ ,> ,, i- ( ,' v
.t. . + ..
y 0.. c- ; 3 y',' . hice in'.rca n on eth r ittms rangcc from , m./ percentef t- peints to cnani.e m ;on.w:, an i9ed prccure-seco. nd year"of a fwm.eer /b ,n.' ~ . . . ment proce "uree' a. doubir and tripe their 1973 !%cis .P y 7-Scarcity"o.f m'aicriMs necessitated s....,,..a...~- sm .. ..m., o. . , r .a. , a. - ment 9g an_,, main ur .ard mo to y;;, 3 c. r
. , . ., ; , , 4 ,
,.,,,( ,
O pa tri ce ic . i:Onit t, i...c ' Q ,g# , ,.,;9,.].' fu r, ,, preater nuTi;r of venjc's, Ord rrc'e p!cyment. O'pportun A w. i l/eCiic schedu...m? o,, con 5truct;en projects. Thcse Et!: rte, ccmbnd #'#,'e tra,s em a7 w,
.W-
.Ca ' ' . -
with the 'cfli9ncy ci a rw;;t et p.agress tcf.a ci 1 ic p2} *. *,"' pa n: k _d a- H.. . r c.e .~ *q . . w". !sW. < y- u 1. 03M'",, # ' 1 ", . " , " o" gC',"' s' o ; , ," ' ' 4 t. .
,, g.-
ity, w:ll e.:aHe us to n Pet t% de- '
"rl "~l' l mands of materiat manarem nt for [emains, in ,.'act. an cpa! upp:: L future prae.th in a chaniint, rna*kot. @ W Durmg the ycar, the Ccmpe tinued to build er rcmedei its c f' and operatiny f a:. mig-s. A ' '
; square fcat o'fi:n :>na v . sic < cc r.'
i !- was bu4t in Othc!i: W:? '. . 1 moder n and etic'en' 26. ~.9 n
- I .' '
foat t,crei& center W.B rm A j ; tha Lcwic-Clark Dhipc1 in WasWgion For the first th f.; c-
~"~~"
it was built in 195M the frui Central Operating t'acihty is L:-
,a.
the tudemark of semce e.i a tut < is tne spanded TM bu.lding moJ4 ;1do frier.4 Smde v.h.ch r.reets cust:mers and an additional 18.000 scume L of space will lead to more concen: and cfficient 0,wation Pcto . m necessitated by Company prec.m An improved Company af ay t : grarn has byn recop.nized " Sir.n 4 I l l 4
p-b , p WG g - e- 7:- *1 Despite economic donnturns na- prices were paid for wheat and peas.
.p..- * .' 2 tionnide, Spokane and the inland Pa- There is constantly Etoning produc.
,I *
~il cific Northwest service area continue tion in the food processirn incur; j i .to shon economic vitality. Contrary The Company-onned Spckane in-j - to a proning trend in other parts of dustrial Park continues to oporz*.e at i - - the Nation to discourage industrial 100 per cent capacity. A'most 4 03
-[ 4 and .cconomic deve!opment, your persons a e employed in the 78 di-
- 1 Company continues to enccurage versified industries, with busire I- economic deveicoment consistent ranging frcm 5ttel 10Jrdr!'. - :-
r v/ith energy resources and with the pYsticated electron:cs. Ccru m
, needs of the area and desires of cur demands for space require parti, r > ," ! citizens. for the 200 undeve:opeo a rcs of inc l Sparked by EXPO '74, a Vicrid's Park.
, Fair dedicated to the environmer,t, Filling of the reservoir !n 197F
, . the Greater Spckant Rarica has cp- with the come!ction tf Lqta' powd tre trena cf reassicq ared Dam. 24 m!w bNo, it . .s 0,"._ W tak:n steps forverd iri its eccmcrf. /. P l creats tile inia' d v.F . '
l A ne/; skiline has rnulted in dD/."- Le ttist en. Idano, and C it t ;.!'; tocen Spokane Lecause of EXPO end Washingten. The resuit v.i i to a 4,' , insut.:. ; cf rn:rv ru sour rr.cs no;iro ciner comr"ercL 1 b B d:nr pro rn;te. s!3ch- taler trvscorth , a cwler e nedM Mr cf mcP c ;':,e .h "s . r-,r v, ,
. . C. .' .".
T.' M. . . ^,q ^-
' j e +._c,%_
c t s u. -) : - '" s'. ,- ~_ tnrougn a sakty z//;rd p cscnnd by the eco%. The EFO sta rem 3MS co.icmic tenef.t tc in" ara the Ameri' an Gas A:.sociation Vic rt:. as a 100-acre donntoe.n riverfront rnain in ccmp'iance witn the Na:en .; in b-a ' t'u:n lemy o' the fa:n Occoor.Fcut Uniy -r d It .Wr A;t. I trec:ct ..s: y n:' :-f 4 ..c ~ -
- p. .ations tcc the cc ngt , nr :c.
tive!/ sought An vamp.: b th2 riewly deve'oped donastM ps rnete-performance cen:roi prcgram, c.hich will contribute mo c than El tr.il! ion in savings in tne next 10 years. Cus to.ner billirrn computer prol:rarns have been extensite!y mofified 50 that authorized changs in tariff ratas . , , , , _ , , . , , . . - - - - can ba put into effe:t V ithout ce!3y. > Adecuate aut:ect've fuels were ' availab!e fcr Corapany operations . during the year. Il?c/ever, huh for . improved efficiency and preat~r fu- - -- * *-- - " ' tore reliability, undeq.round fuel Omer Ngos of prcirns are to I, va onr tu Gm@ t/m N r. tanks were insta'le f at se<.eral dis- VC'Uk'd in &e sta/ carts of the region's eget wu feiotet y P' n trict and division lecctions. economy: lumbcring, mining. and res metqt:n l'rU n me tf v' r" agriculture. Comny ;"esWent. tu rket na MW' Area v. cod proJJcts operations M Vs au gam;M b puw d o have continued to expand. New prod- A *'" - ucts and new facilities have stimu-lated the erpend;ture of mere than
$20,000,000 The north Idaho mining industry has workUf to capacity this past year.
generatinr ene of the best prcht years in the h' story of the industry. The arricultural picture has never becn t'r!Fier in ti.a r. An. Rcccrd n i4
.. . - = = , . . . . . . . . . . . . . . _ . . ,, .. , , , , , _ , , , , _ , , , _ _ , _ _ _
?~ . [ f J %v Does the Company have the resources to meet the currcnt riecd% of its
! customers. for electric power?
; q _ _ . pary-w v -~
'; Yes. t% Company is rnecting there needs, and anticir.ates being ab'<: to cb n thrcJ;;n the 1977 78 cpera?!rg yu'. Vie are do;ng tNs intcm;n Qct~. "ce * ;;WP I
l at cut oen faciteties. povn:r ava iab!e thrcugn long-term partr-<shc tge w.traA j
' ., agr?ements wdh other utif t.cs, and the purchase of letter anv1Ns cf f;rrr r;
fi~7 ciner utd4 ties. Howevu. future dernands can be forecast and we nh! :M# j the tr.eans to rnect these needs with nev. electric poher sources. Dy what means does the Company anticipate meeting these, fatute demands? 4 l t in the imrned: ate fu'ure, v.e will utW2e all our hydroelectric facMet to theh E' e j j h capab3ty, plus everosirg car co-tractua! ent I'c r ents to cu' 15 t er c en'. c <. r . r '
;
- o' tr e Cmtra'i3 Stern Eletric Gener3hng Pw. hnd tntt t ce e sc r, t% Crr-wi;t f c cm avf r.'m .4 c : * <-'pbim m gcrn' rg c P.'s cr'.W '
! V. i!! ! c'."4 ut M Sp2 M p ?:.s 4C- ? Jen n%c '23* d cS D! <
E
, Supr :i ;c:Ucn cf ta's r( cc t.
i Do tha e,ame princip!es hold true for the supply of ruturat g:r.u to VMr custo nerr? i , The sit utic, is quite different es it re'att.s tc r.aturtt g,as tucp'y. Wh a c . r' ,
' supp!i ti t t*-:c cutten.c s om?nct en c J' own cw wrthrp e ortL : / r r -'
f .
- r. in Et ac'it'an f7Itts. om r?!ura! cEs surr.!y is ccriv nt u nn d. ._' re ,
f* r r- < . .m .iv.r Qn %.yt wt , Ve-.~ ( c p~r s cm im ' r
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ib :. O "c" r. f y d p r, f ( " rM e- tm ! ;.:m. *
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L2 1 Cl$id b Lt.c h (e. Ca p L.51Se..Cumdon u rnnvr tr.' shM s de r." . rch ? . _ art 'n En ErtFtri y inanr.er co .cening to*b tr. amour.t cf n W't.' io t. . t c
- _ . , ohc?.ad in IRw to the Unued Stata airl .he p cc to l'e c% re0 fe ' s te . t inis has rctu':ed in f ee. thrcq?" increa .cs in Ine cc? (f r Y +-J i;- " G a ers, A rre e c>. peat accou%ng of th $ s n,f er,9 rnay t e it..w! ' i t'v G 5 of tNs rep'yt. In gerie- , hcAc.mr. v.c wou'd 5 ?y it is car ceres
- t m ct .
gas v.;ll rer. urn in adenutt.: surp'y te scr'.e hem cosicrrerr, ar-f et a r"c < r , v !th ct'.cf fcssil f ueN. Doon the Compi.ny cooretincte itt er.r. rations witn other uta ?Ws ic. th : regio:i?
% ry cNiety. Tne creation v l'e 1%.tccmriirri P 0 is c f twt:. t : : i: .
Tia ICP. t it it e mi rnainta'ns its occv. tint. ' u dat u s in T v "; " ' Pe'.n r Cea. pen,'s ott c es in spo:ene. In MJ t.cn te '.W. P. c"wr r ' v/ u ics a c Pc'tand Cenerat Doctr:c Co.mpan:. Pagt S.mu Pne.(r & Lip C' +
; i cific Penc< E Ught Company. Ithe Pev.u Company. The Monten: Pc..- Oc
, and the Utnh Pener & Light Company. The Intercompany Foel bn ter r. in t ; i .
} since 1947. Through its repreaentatnes. it coord:nxer the operntsen c' ind v'1.; P r- .
l' crt. tion and transmissicn f acit tes of each comp.iny. The Irtercomp:my Poc' n. ' crr.ani2cc' in 1974, and is entering into an capanded ph;ase of creratica, wmhn
, q bet.ilona and she t tante p!annHg. As a resu t of the Inte ccmpany Pec' c g. > .d -
- , more cPicient and economic operation is avahat3'e to cach ecmpn), te tw tev ' ."
' a'l customers.
l l ,,, l g An0*her c!?ociatico of balua to !!v consumers is the Neethn?st Penc Pcc lhe b tary a%;cdon cons;sts et imesto..et.ned v'mties cf tno rcr.& ru!" A ' '2 (, ., , Chbtr4 t'. vnd Nn ! spa l s'.ste r5 w9 th h3.-c ff hcrahn.0 t?r% EU*m O' b
.g, ., , y 3,,.u t, . i e'f- , !( , . . . 8; Al to e . i
! E-g g gg ir" .1 P ; . . ' A/. n 0' . ' t . . Mef a - tre Nc ' ' IO /.t" tC te m ..~
W h.d in*Wiin;.Jrtr J > ;'s .Ib Lin . ; Nt e Ak IPt .i y e ' e .s i e 14 l 9 l I h _
7 3 For alrnost 20 years, V'WP ced severat other util: ties have bonn seeking a liConse to develop the Maddie Snake River for hydroelectr.c power produc. t;0n. Do you stsil believe this is a feasibio program, and do you see any Chance that this proposal will ever becorne a reality? WhHe it has been a icog, uchdl. ar'd tepensive struggic, the app': cants are still f.rmly
.. convinced they will be rehtensed to build a hydrcelectric project at this higt.ly de-sirabie location, it continues to be feas'ble, and it would have less impact on ecotoi;y than any afternative.
U:e of reney,abte water resource is still the most economical method of producing energf. In tne past few ytars. prescrystionit ts have made their cpposihon fett. ard the/ have ga:ned certai n commitmer,ts of support frorn congressional Icgislators. However, pub-lic opinion has been increasirg in favor of develcoment. Concerned citizens are aware of energy shortages and the disaitrous expense to the reg:en end the Nation in utmting dMndlnp suntics of irreducab!c and h:2 her-crat cil and c'xsl cs alte ra. tives. Tre rea; hcp of r*cmr,t u '.stru;t'cn of the f.*ihe S*Pe Ri t* c'03 ct 4 te remo,e if frcm tt:e pohtical aren
, la the Comr>any takin;t part in any progroms to deverlop riew and .2iternstc eotarce a of t'ricrgy?
Yes, it is it v.ca:0 !+ tec cct/ fcr the Ccmpa f and mcst eine* utdit:es, to aucri such effo ts indi.'cua'ly. This woul3 lead te w 4teful cuphcr.t;on cf effort Ccqse-Quent!/ . the Ccmp21y hse, jo;ned w.tn $03 chnt et cu0Gc end priva't. to fund tre Ele:tric rezer Remrch IrtOste. DJring M74 Tne Wash'ngin Wrcr Fcwcr Cc n-cora irrar,5.ka DS3.M o 4 #ne tc.sard ins ccedeWt r<ccra+ to cAvem e rer. tnba:y iA 'i s " ta mre: fue elctMc encrA crc % ir. (nber mertig an: ectremic.4f sr.hsictcry wm Tnt hmt:tute r:cw i: tr.cred m 2E5 research projets. ccsimg 5153 mAcn cf [FRI f t.nds. r On c loca! baCs, t"e Com:m/ participatas v.ith r.ec bi co"q25 and universit'es to fund eqJ cirect se.uat in&."J n! propts Fer intt nte, v c hnt jcincd v.ith et%r .
'utust.o to func a r ev p cfetscPJp c' WaWn; ten Mate Unc. err *y in order to try, you ig men and ncTen in (P.ctric perar eng:reering_ We t ehcVe tnat we can tert uremiilh rena ch project' by v.crL'ng in concert witn the o'gan:tations. Such as educabenal i%Dtutions, wh:ch are qJ4p(d and staffed to do inese jobs. '
[ lisw dncs the C.cmpany work toward enviror'mentot plannen;; in its pou ct
- production proLrann?
Envi o tiran'.it.pLnr.ing it cn intetu;.: rert o' al' per.cr Podiruon ptect . ju t a b
- engineering or fitcacina WA on environment?! 6 Atacs et a pregc1 be fns in the p*e! minary $?xes v."M the f or,u'atcry amncies rnrenWe f or there c:cas, &nd com tinues thrNgh to pr;ect cont ction. i Ih;s precctt h0wr.c', is beccTiin2 inCrea5irF / '#
difficult. As growth in energy contumption cont:nues, pub lic concern for environmen. , g tal preservahort also prw.3, and this is accompan;cd by evcr incrresing reCJ ahons l f nd
- EML rnere restr.ac standa'ds And in some cases these repJtations are established with littlc of no retard fcr cost and with dJubtful soebl benefits. For examp!e, milhons are being spent on sulfu' tcmoval equipment at pov.cr plants on unptc\en systems.
At the Central a plant. for instance, the inabil.ty of emission centrof systems to perform in accordance with et.5 bog tlate standards resuited in the generating units operating at much less than carecity for three sea s As-a resutt. the a!rca@ ht.h econornic bur, den of the ecst of ir cua',ty cau;rment was con'pounid t'y the ina'Shty of the project to [OncratC el(Ctri0ity St toe OIJni's cJpdCIIy. re.vyien' n~ ti t" "* P % t M i e. tn cn'oct? m 9 nuity (cqiri! :n asJ ce v.N:h (L - @ W! aid l l D ' t ( P !'. - l( r.f t f . l'0 *.st, J /e e1e.$ c i ( L ' ,t' c! ($2' rdi' rn!, ,%
$1 e v Q hilepe.1, nl (("dtu.Je to re%.It I:n im kJS 'Q G f.ts cA eld g'y 10 euT cuaIc.ilCrs.
L
vT ""*- I 6 ( Rodr+v G Asee Jamet A Poore. Jr. p ~ .- ,e.w; wro etu pa , ,(; *s; C y] r i 's"6. I.Dthe l'% A *.P. b #E k# "O fa k q L'r:< cre Arthtt* L Barres oseew, un er.v.ve co.. tcMs~r. Maho %U*L'* " snane. war.mron Kinsey FA. Robinson Duane B. Haey:hne C S i,'g,Z- %* * .T
- r ce. - m? -
$4 Age F1 9 L'?
tw a v.'4' co. .5 um wendelt 1. Sa:rc RCy J JC,' ins 01 Pittict"? Pt el t stax ar d inveMeetm!$ E0" M'W
$0 wape. /icSNe pm Eugene Thompscc.
jar **.e5 (L f,td tcrdg'e Socs%re am Reai Fst**e 3 e. e-v t n se.m-ts wm nem Pr e= Me +.t t' & et Fevs. e c. p ,. car 6can:
- rFata f Y . Ic t !c-r n e n.. - a ~, r . 3 R e e *. T. htcLear.:
Ass r9ri sn e . < c : - C. a ' .: . r.s W.*te- _ .e D W jamesM Cec:@ VieriC! J, !!* c T cue Cenoral Of fices of the Company F' d "
- Rctert L Stmp
. E. Init 1 M.suon Avenue Doned U O sin A vum 9.~ a s N.cU 0o M.,
Spokane. Washington 9t>2C2 ' 0 " * ' I' *'# V
*r l ( # ' 7. * :~ ' I -
- *".. He r.'j E. Ca r liartl.)V,'. h p 6 4 Ats.c y,t 1 m t m .
The purpcw of th.s report is to -[he mO'o*^tJ mSM/ 1
- Herhart R Remhyc't JCIC At testet Trowe' g cmp,n br~en P.lb..
, p;:, . 3u .n , ,3 f,hp c *".+je r s. er'd cTp!T.4 a inf ernut K u
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$MW d h cf thq Cc:'~o.
T he 19h". hn3rdM and Oper 6ng S*J.> h( 9 Tid TD.P/ l C C h51.hr[ 'JpOn P':QJC 51. The ?nntaf mee'eg CJ t"c shr.*th W ktr. 04: fu' cn:' Dr"L t f Vi?91ir..' 'en yjg; g.g q , g 4.g,,. ., O*f PO e'$ N /at t h - Oc'npt~ ! r of Tre Vieren Vi;,ter Pcc er Ccmpv y Crohr t. Vinn. go, c9D 5pekane,Vl. m rpen G N S V.dl 'A f.edt! t/0, 9.1976, iri IM AJd.trM.m
. Nef.C'h' PT IrWWer Com;nn' , hast Nat&.a Cm ik : A 34 bcN rgt. Pact 111 Wan Street cf !!v. C(m Ib,s (F.0';.,. Cf,..Cr trJddrr, r; JUN C ti. UNg Jersdy 073T. fe: Yc L. f o. Yori< 100: 5
$pCk3fic. WMh nyb . 4'i O.li eD;kf' .10 CCrdi.4lly itidt+"f 10 tattrnet. f.bd(;r # for th;t 19M Annu?! Ik, t t a pr(petini f., th-r d Tart nents inso',a (f. ' the d:rMt or. (! */ J raertir : ' mr 40w:/ r* Re:frv5 on fel-ry 16. 'CM. Mr F m t,et cffde Of the .w.r e c,a'),, A h CCf q"i i1h,. Evf ih l'r..' On r c :1 ?
- l at thC f. ors d cf Orcctcr~ r:cc-c.c t'. s y c m n, Cl ICD?UJ ' N.197 C"? rPJ. 3 ;* lHC fi 'd JI;J CnffEft;U C'.t*
lrtN1. ctscr1 was gaOv'ded by cmpic,es (! Ottd M O mCnt?' c' fire B .a. d Cl (Jirc:te;rs , the Company ord t y itaat prird 'rs and WC U:)'d "L':'.antry irc; o.c3 t rcf;<ere : and w,ssed a resu.y CKytc t%ng tricn OpyCCw':n (C? htf Rcs*\n5[n'$ OCj (Jf f t j!!'d h (Unp r
- D61CtY N %. rncots. a'd the peat contribut.:st he his twe to it:c Co'rpe'1f, the ccn.
Inunity, it'Td thC Uksly Industif, f.ft W. J. $atre Viciid?rt o' the CompatW since 1971, was c'ceted to the othce et PrevJcet pr d Ch.vernart cf tW B:.vd Mr. Wi!!ivn A. iov.ry. a vice presiccrt Cn:c 1073 u n e'ected [ww. e ULC VICsaftst'.! jy'a yyy apc;r"lp3 gy tng. fQ,,td ( * [ hec;fyg gp f,f; fnc g\y , . _ , creattu t's !.*: Rcb.ntco s tv:.:crr.crt ?,*'. Lo. sty 1.as tun .r; emp':ye et it c Compam v..te 1939 I <'s
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STU.?/, IC A1CG . . 1.2" ELECTRIC. 67.7c ~ y-6AftK.. 0.6( GAS. 30.Sc ; .'. .- WHERE IT CAME FROM ..
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- DECEVfiER 31,1974 AND 1973 1_9. 7._.f .197. ? ~
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s . ; . C:m . . . . 379.574 .3. c Total cun ent wxtt. . .
~ ~1 6,9d3.r,$8 ^ 13F '
DEFF RRLD DEBITS-
- Unamcrtized cect emense .
1,659.135 1.70 4.* E ' I'relim;ntry suncy er.r.1 inver.9 ;c. tion charf.a . . 9!O.606 SL.C P O'. M. ' . . . . 8 7. 's 7. .r.o. 1. . . . , r . Tct a Ur::1(cit et L;tr.. 3.4 ?b.6CD ?~"1
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'S 1974 1973
-LONG TE81f.i DERT. (Noie 2); . .
. 1262.498.573 S243 270,M'
. . - . - . . - - ~ -
COfr/GN STOCU- fu rtr:acelztd,10E0J N ems,01tir' dire
- 1974,0.015.07 7 tl.ves,1973,6./6'),035 :r.uc3 J.cN 3)... . 111.701.939 110.794.FIL n- - , . .w r. i. ., ; > n ' . , . -
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/.CCUf/i!L ATED ACOUNi INVESlCD IN YHE BUS:NESi w - l;> ~. .r. ". , ,3 h*a. f u- u p,,o> .m, >w t..
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. . . J.C TAXiB IN
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e- u _ . . - LATOPY R.".CU*i;: ' Dr. 5) , 4,330.')7 4 r /'. CUP. RENT L!/Sl!:;!'.h EGS 003 DEG C;. Currently rrriv:rq tone term cebt. . Accounts r3yWe . . 5.091,162 2,610.12'e Payabic N wb.ddi:.ry < cmn : n.. . 1.236 537 Traes accrue.i . . . 6,556,943 5,W ' , .. Iri'c ren c :r' utd .. . 2.570,D2 7 ? W.G 1 Oth::e . . . . 1.321,S22 132 0.0F let:! c..are ! tiabi;ities 17,M 1,991 13,d .: i '2 del'ERitED CRED115: Irwezmo't te treits . .. . . . . . . 1,162,778 1,191.553 Ott'ct . . . . . . - . . ),703.824 460.6 F Total detc,: vi creWtr . 2,871 CO2 1.002.1 t C CONTRIPUllDNE. IN /,'O OF CCNr.TRUCllCN. . .. 3 21 F c '
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u c . .t< 'a:'.,'c. 7 *. ,,.,". "., f '. 1974 1973 OPER AT G'S I':EVEN'f.'r Electri .574.532.733 555.166.750 Gn. 33.t,96,3E 6 26.42/. C19 . Ot te. 1,9'.9.307 1.437.7~0
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tau r remti.; <rc cc. . . r ;;c.J c : . a., E;.2.0 ' c fu, NET INCCf.if AW,:Lt.Fli FO'i Di'/:UENDS AND OTHER CORi% 'sTE FURPC: :. S 14.350.812 13.645 73/
$211 a sbme in 1974: 3.' 04 it 1973- .t ced on averare sharcs.
DEDUCT-Cash cic: N (10,135.761) (9.0 K '
& 1.J9 a h in i v 7..; e ]s . ' . i : 107 1
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. Net ir:ccent . . _ . . $ 14.350.812 513,645.737 Depreciation ard emar1%ijor.. . . 8,796.995 L.046.b13 invw r.ent tr.x credit aJlm.tr sr4 ---rw . G3.3W- ?2'.2'd
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' Cm h riivi.n n# 10.135,701 9.6'9.Or4 itwt :,tm'nts in st.Hdiary compi.ines 1.300.00') 4.611.'i5'd Acquir: lion of Co ter.hb Gas Cernpany L (prl'n;.rily net utihu n'antt 855.403 l, Redemptio" cf &bentures CEO 000 007.0:'1 t . .
l" TOfAl FUNDS APRlt D- !57.4.".0, % 2 1 M 333. h. l l j r
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(. ?ECE.'M;EP. 31.1Y/4 AND l' 73
- 1. SUMMArtY OF.SIGNIFICANT ACCOUNTING INCOME TAXES-POLICIEc, PNision:, fer it come taxes are based cw Si STtL, OF. Ago0. d. , T S - , .
, (ra.Uy CS in:( "A Er a cpCOnse 25.rOMr191 f;r tirencial statement purposes adjusted p'inci-Tha accodntin2 record! o pally for the alb/,c,r.:e for funds used duW maintmned m accordancethwIthe theunCcm;=ny are fctrn sj> construction, ceria;n openses capitalized, ind
_ tem of = account,s prescribed by the fe'Arel the ace.ts of tax deprecit. tion (corr.ruted p.- Power Ccmmwen (rPC) and adocud b. the nerFvo c.n. m*.d -,.m m ) .c t.d - cpptcasete Sir,3 r@!s:ct; torru.m. ca pcg;3.i h x ct w vc;th i3 ucetn M s UD!ITY FLANT rm =tc'/ C c W trJ % lerl'R.Len ( a liie cost of adoit:ons to utili!/ plant, int!vo. rties, th'c Ccenxqy's lay prevision:, ref t.t tne k trg cn r,l!0 war:0 fcr funds used durin; cor,. Current tar. recuction". tirP,ing from Su:h 1im:ng s'ru tion, and replaMmerits of units rf p cp. d M er m .t;s. crty r.,n1 b+ tivovnt:,. N cspit ,we. !/4 - lush r.em N credos s't N". d " ' rar.ca L M re, n J picg rw , s r, - M ' 9' ' rr ::- ~ ., e . ~ rnents -e::rrn:- d M M k6 tm .* c
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SUBSIO:?J;;t.g tac m s to 1:c M'(.,jt' S 'r u n : > i~ . Il c. Cor. pp. c.r.e. :' br iB ir,r erte, 2 d- ;' Min i " ' ' '
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a.n.D . < ,m.u.A, ! refkettd in on.y mr n lad 2. : a t: cr e O arg n ,, 'e t r ta . 1 <"u y rs dotted f ro n the ecs! e: inwstmcnts in in9 Pct. ti,ie 101.o.unf a ypc reliu3. cnnrc v.h .m i t ance gppet fl0d arid Cor,*.nU;ng thicu: tcut th'.: Cf') c' V j prererty, Federa invne ta":s arc cw?ctw ta RETIREMENT PLAN- be creater than they v.out:! have bc;n if accel. The Compaav has a Trustced Retirerrent cratcd amortizat;co had not t cen claimei Plan cocing its reiuW fuittime emplovers. 1974 RECLASS!FiCATIONS Pension cests pre ecmp:;ted en thz tmis cf ac- In 1974. O ur s or o t to FPC iv.tru:W . Cented 00tal.rit.; nmihn 4 .'ni incice; current an;ounts accci.cct frc'r. custemers wr ( , nrvice com ped . .wtgatm et prWo, 5cre r cen t octn. Mne. cw;p,.d a cn - (.yw s ea (.... t. .n .-
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- 2. LONG TERM DEBT 3. COMMON STOCK
; m "*""* '2 m. in 1973 the Com;:an-
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o . ,.c~a. ., ~19.,6.snares vcere issu2d to acquire-c.s :.e.c c., e ncte.c co 2cc:co Co:umbia Gas Company which was m :tged into 4m. wo u im :3.cu: acous the Compny. 43.re.oc.,sqr 3.5.r73
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,it:n. l?.g,m,any's .. s%ros were Fmployees'imu?d Stock at<r-- Pur-4 [ . Y.$, A ,. $ 55 d: '. $ .: 5-- b 5 1974 UDd 14.725 in 1973 El 519 96 L SN "
-,. . . . : .: .v;:, n- :- /.: iMe.W r ' a1. *.974. 3.] 57 sh :rt:: rt p 9% se+ c ::n . :crec o:e tc.cco cca to be issued at 519.95 a shore. On May .0.
7 te's h .o r'.,e 2' ? . _ M 0r's tm0 000-00% 1974 the CCrt.pany's 3harch0ldf fs Lppr3','Cd an Tau n ,.. :o :o n .m.:w L n:ndnmnt to the P:sn creviding, thr: a rm v.i.
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- anco viith reaerally acccp'cd au:htirq sta".dyds, and :ccordingly in:!uded Eecn tests of the accounting rewrds and such otner cui.tinr, p ocedures as we considered r.eces c.ry in the Cif Cunl5100:05.
Ifi O':r 06n'00. te, , ^co m pa nfin g f:rprcia: Si..'t ments present 13ir'v the f:nar.ci;! pec . tien of ') Cer fyrc . ["::c: 2. 3; . IM4 :.nd 19 73 anc. tr e to su!!! of its epc r;:ti ~.5 i et.pnym n. r- r N f c in ' '. c m D e a m J. in cr.fc mis, eci n re -':n, at. C epIPd D'.'C Gi t'..: l] [ ' N'.c [t '. . pp';C d CM O CC'IfiS *ODI D if 55 sa 5,.- F h 4
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ie e 197* 1573 ISU E7 + "' i r S. .- - ' * *~ . _' . '-*- 1 Datnc ! 74,0 3 3 65.1C7 5 55C15 5 57.57c ' b-Cas . . 33 595 26.4?4' 25.E03 23.033 20M. Other 1.%9 145 1.423 1.3R l' 6 4 e4:.; rt..w.c l10.6.1 3 :,n' 7 2.i.54 '~ 76.io . 1 i OPERAll';C RL'/E'iUE DEDUCT 10:& Operatin; o.r.enw. - 53,426 45.5% 40,075 31.8'd .2: ' Frdera! and sta*t it. e ? ina 5.8% 4.731 5 C4 r' 5.115 ) Otur tus 9.r";1 43 9 E.3B 7Ja ' Depnism 2 ' E^i L773 GG I. . I:/1 GwiYg renace dates. ~hl.tM ~ 6735 ~ E010 54.~ i . 'a C?iPATll;G INCOME . 28.442 25 240 22.E34 22 21; T.: ru c, ".cr <'o, r, m.. '.* *.w.t .- 6 - a b,.> . ;r '.r. b ' fp d ', d "; * * * "
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IMT 1963 1?iS7 1966 1955 43 E43 $ 47,037 $ 46,4E8 $ 42,234 5 39.733
- 18,939 .17,215 14.027 11,836 11,193 1.204 1.109 1,057 - 1.035-
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, 6,252 4,461 3.670 2.872 7,091 6,754 6,539 6.175 5.8'S 5.159 5.075 4,E53 4.547 42'.3
;S.153 47.027 ' 43.770 35.253 55.E52 ' He , wro'.mwnt m re.er.a 5 the periods endin;; subsequert to
.19,684 18.334, 17,755 16.919 1E,115 Decernber 31.1972 is attri%te to increased e%ctri: se!r s fu rcr' -
403 453 /,0 96 99 . I' cii-M t:d . s ' .' bl [ *
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THE WASHINGTON WATER POWER ._h__. ' ?. , - COMPANY SERV!CE AREA .~.... . ...- _ ,.
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TN t-vice area cf The W::sh-"'o.i Watar Pa.er Cc:rcany - cup +ises 2+CCO sqtere o.i'ci n Wash:rT:an State and it e northcrn port.cn of the Su:e of Idaha. Pcpu'aticq cf this area ( ,-;._&__3 . . y.'x ( ~/ is ot d ated a: 550.000. . . m m. r ( ', . E!octricity and natral en rervice: s. \
' \'.Y.'P Di. bien and D.st',.:t of+ ices. U('
., Natural ps service enty.
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