ML20101M506

Piedmont Municipal Power Agency,Annual 1991 Rept

ML20101M506
Person / Time
Site:	Catawba
Issue date:	12/31/1991
From:	PIEDMONT MUNICIPAL POWER AGENCY
To:
Shared Package
ML20101M503	List: ML20101M500 ML20101M506 ML20101M515 ML20101M526
References
NUDOCS 9207080263
Download: ML20101M506 (27)

Text

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Piedmont M u n i c i p a l P o nv e r A g e n c y l

.3 1: CORPORATE L

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• he l'iedmont Municipal Power l Agency is a joint action agency form- .

ed by ten municipal el,etric utilities .

in the northwest section of South .

Quulina, its mission is to provide its  :

members with adequate, competitively .

priced supplies of electricity. PMPA .

owns 25% of the Catawba Nuclear Plant Unit Number Two A B il E V il.E E atid }nitrhases additiollal CEINToN power froII) Duke Power E A $ 1. E Y Collipany. Tlie ageiicy's GAFFNEY corporate office is located a

GREER ill GI'ect, niid it has a EAUREN$

staff of eleven employees.

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UNInN WE$TMINSTER j

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PMPA jfemben

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l'Ali% Statistical Highlights l'articipants l'eak Incmanil Sales linenues

(\lwl (\lw hl (in thousand-)

3 1991 302.5 1.507.100 $ 70. 883 1990 240.7 1.l10.100 $61.883 1989 277.6 1.416.660 $63.754 1988 2 711.H 1,i1H,i11 $ 39,990 ,

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POWER

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PARTNERSHIP Use rnost positity M# #H"'unt of ( hange in the enrrp industn osrt the

. last tworit) ye ar, han luul a tre ttirruloil* lilipas t site our

. sm irty.

trsu[t t{all this .

,. f Crowing iriteinational corn ern regarding giechlueuse change ja g/m neg. [ paws has e inused us to tliu *tiieri tlu" w1*dorn of In.nldirig inore fouilfur!cd power plant

• to krop pat c with the espnding dr nsand for e ler.

tric enne. Esen a.ide froni ensironnienial concern,. ihere are the enornu,u, < on-partnenhip being

• hiruction costs to lic considelesl. % hen folded into the esisting intra of any utshts, pfpfbetufen these rants wouhl pnne hurdensorne to am 4 orninunity.

Then, there is the enonthl 3 horne encep lull. 'lo the airrage Arnern ari farin1, 3 electric utilities * 'hi' i' 'I ""*t drarnatic m idrnre of a hange. Unre a comparatisely minor item

. in the In>usehold budget, energy ha 1.crome a major and their operating co t. liu*ines, and industry feri ihe i,npu t of il -

$ i

, thange, too, as new and emergmg tc< hnologica make them .

, >N

. enoH* and nUWV enre p depefulent.

Cottimunities rf

. In the enid*t of urh < hange, it is striking to reahic how .

3cp,jpg beggggg [ mut h we still take enrtp for granted. In nenday hfe our

, reliant e upon it is wo pena *ise that we might begin to thit k of it as a liasic ele.

. inent: earth, air, l' ire, water and e lectrion).

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er Ino%k {loh k se rY%d t fif a jig (' j d fl((* g4 lhe [geg p3fjjgpgghh)g lpphyg hgppd company and the ' betwern electric utihties and their ronimunifics of enirr 1,cturen the power O'rnpam and the power ru-!omer. No one doubts . hat

..I--

l par customer. *

.. ,-} 'hi' P"werful Partner

• hip w dl *ucceed in he lping u* io

', Tila na gP, w kI Hfut hai rlfkor, a frvouit'P we Ca t H H at (fu gr , ,.

'l .- ' without.

M anicipally owned rlectric utiht'cs i are ideal candidates

. for this Lind of partnership i.ike em h I'MP\ menil.e r ots th.7 rsist to sene a community, not a remoic hod) of sto< Lholden 1

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POWER w

CROW i

lici au c win le erne growth i ruennal t., a < ornniurun ' piahn Nort, along stilb .

• • ,h

- of hfe. P\ll'\ in l a L een v n r of re pon.otohn to inernber < iti,- l 1

ln IbC bif ;ln l ( t ulij h*'till% P NOFna taf n s trh etnN IlnChipf tF fit. lli ibri f-rl-perwnalimi u j gi,onn,rnt w here the woihl i, nn. luy inaikrtpl u r. the erw anh <,1 5 new industn wdl go to tho e arra- w hii h are ahic t > inar Le i

. +

3(/ (flff , t If nl*4' %4'" IIM I*t ud i d fu 1%

t In tran lating that sen e of tr pon->bihn into arte n. P\1PA Juoudes b<.th lealen!ap and

• lanf ileIe f4 tisltif' . lil NI, for PsalrijdC. tbr aff nt s. folbewir g the trad of lbr Malf' lh'u-bip-I sm ire, one-stop.

Inont Iluartl. C'Lparoled it rialvinal adsort1 ing ( afnp,ngn to inilude rnouafr* In tarpried

, inda try publu airons *ui h u Wirin Pla in and Whi al lin k e A lhagno tic Indo tn.

sboppingpr . . .

, t.oni arrently. the agenr3 1.ryan prodni tion of an n ononiit dnelopruent udco in an e ifori i , to better po di..n P\1PA < itie a thc3 < ornpcie woh n. ora urd unr* tor-ow ned utihties for l

• j u nter, seu emge new unjustrial < ustornen. . "yy l

, Tiu sidro pn.dured in p.utner hip w oh $..uth Carohna Edura- / P e all( pOlt fr, j tionJl Mn i*itall anil tiit' af f fiel futil kf lifly ( dif t U!talits w ill llnb e g l

siac ca< h or P\tPn n cna., n w ch a oi>. penrir u nion oaonniaac perp ,.

• S * .

.. . to hichhyht ihc feature and bm fit unique to r.a h < ornnionit3 C a n!ses util alw be

• h n,,-

, Foi inany coic, a sido, nnploung nib high pn dxnon sahic would D.

be out of rra4 h w about the en nornic of wraic inhereni in the joint m tion < harat ter of P\lPA.

able to qlfer more .

, Herin ru.ng in Pm. P\tPA one, w di ens a new i ornpriaisc <dre in ihe f.orm of an k'k 0 0fIl9llI4(' $ N !* O! $U 1 d $'! $I re. I'. a 3ld I" k $ 'I 5I -Ew I t IIIn {* r l I 9- - I( nIN kN II r$4k t

(borf One srbeifdfe g g%ggggry3, (l,'g-, j tH t'nt h e f alp will (buulat}r rnd" 0 H h l'Mlh t !!) nnerr atirlft ine he new

-d .,.a.n. ,-. a .. .~- , ..+ P ~ ,-r, n . .d, w a -,-u cf mtes. rd exprrirnred *cn o e, oncMop4hopp;ng for wau r, *ewerage and power. P\1PT iine aill

! $ h I 4 t

[ , I!C* Carl b, w klH b klulH?aini tbat it rnahirit y (d ne'w laii itit - b ot .st H uri 1414ifl S rra bt f r ldat I , ni in an eu ting buil I.ng or f.o dat pounpicJ l W\ to .inet.p a -ite anulabihn broi hure.

l This bn* hure. implenmnted in '91. depn t and do< un4ent- esisung iic- and fa. ihnc uital le l

for deu lopment in each P\1PA < a3. The rust. of w bat i- intendnl to be seini annual rnad- l ings, has altrady generated *cu r.o u i) po one Ir.n! . 7i The n ononsh d-u lopmeni odirbh m e a. h < in o.rainne b put P\1PG ec ononur d. clopment ytant, to good u-, 'f h+ ponted nuirnals prognons and a: nunc- that hau i en f ondnl in the-r

, annual grant are pn .t that people at the loi al Imel know the a nec4 better th-m P\11 \ cu r rouhh 1he-c pant oko proside tancible cuib m e that P\lP\ : i onuna d in ea< h iin in.bsi lualh a wc!)

a to the umn of purpo- t hat e. t h- -u rnrt h of the .. rem t w , -, .

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1. plantting ad, ! ,

-% i".a ' L in *m b an emininment i not only < nti ul to the .un ew of. aan

/

). '

endcawr. it i nc< ruan for mnital An imperferi took planning nal

\

)

trmairu the remains the best option we hmc for making sen e of the future.

l Three Ley elemenu runstnute PMPAi abihn to plan. l'iru, thrie i lop manarernenn

• arthe participation amileadenhip in puhhc po*-r deri ion at the nationalic.cl. Then there

, best option

• ji is a continuing regimen of can fut and tirnely market re enn h lui. but tar from lea t. i.

a lloani of Directo

• who e p<.licy-malmg *Ldb her been

• hoped in ne trem he. iJ davio.

urhatefa  ; day decision.inating at the city incl. where accountahihty mu t acuanpany ner3 action.

.  % hen aH of these element comerged at the Annual'91 %nage- wr w -

mc.g e rf.l}Q g,Y Mh>

g g-j p gggp tUent Platmtrig (Amferrnee m k heilOc. a f nani} ate for actior) einerg-s ed. The boani maid. "Ile-can h. de ign and recommend for our con- per M,y .

g h C70 On $ odd IndlMl[f'[nf nk pT(${7d$ j[;bpItipDal8' \o QU[ ((\)ch.,

POWEli pal (I NEllS, the ' unit of iarefid re ran h and pnnient -

. . J'1"a'OWERPAKrNfjW-

., phmnin,. w an,e ininan ca io n,+, men m m.or ihe ru+mer. - --

fulwr.  ; POR Ell PAlffNElts h the mcun wherein ihn 4 an ncit some u.ntrol mer futare energ3

rovt . Ihr PMPA. PO% El. PAhlNEIR is a methodology for shaping future demand .

. A*tm13 of pnipruhe niilitics aU over t'w rountr3 wili show that nio t are of fering umibt

. opportunities to their customer . firmarkably. public rmer h in the unguan! of thi new pen eption of i.upply'ilemand. A terent mnq omducted 19 ihe American Publii Power g '*lk atHin corH @ Pl t dI , d i u a n'l%dn%{T NIIn welf d i t'.14 % f nMd[01 jn Tlmf

, form of load management.

POW Lit PAlfrNElW i* a whuaar3 con-mner pmyrari that rehe- on n na A contnd receiwn

to regulate errtain miuipment for brief pe riovi during the utait3% hour, of peak demand.

The wide pread a< ccptance of,uch pmyram aroun I the < ou

ar3 h i tcar nidence that par.

ticipation reepiires httle if am i hange in paurens of h hmior or customer hfrq3 1e. The agen-y aiulits member iitie are commined to luning 15% oi re identi.d rustomers on the pro-

. gram within three years. Esen

• mall erductmn in total to+ gene rated h3 Po% I 11 P\itT-4 e . s am ok le! Mik i 1.o IMlt Il[ j)rfl[ rani- to 4 8%. wl T letun# n r'lt$1Ia ) I41 I II' 9

1 rustomen, who an htcrull, the m.ner, of the prbhr pmwer -wiern in ra h at3 whew ihn Inc. I'nderuand tbat the long range co a ni im; Armennng Po% Fl! PAltl N Elb w JI he icu than tho c that woubt har been incurred had the ayenn met p, al demand in ahno t ara odn r madahic rnethml.

Po% Eli PAltTNElb is far mow than a new kind or parinenhip between a mumng.dh ow ned ein tric utdin auni in re idential ru tomer ha-c h b u tragen< n!Iunre.

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M i LElTER l fruin

MANAGEMENT

. 1 er ,

Signal et ert!s f ar l'\lPI in 1991 urry the tuo bond trtinaruing

$t 53 importarJ' .

e lluu orrurred con febnsar, 2H and %s ember L'(n. Sorne $ M5 rutilwn 4 uurth t{bu <ruls uvir tr{unded to kdr ads ardage o{ lou er interest ratrL

.e {l~4 h /NOl and Usest rguriding me n[serted to sat c P.llPI and r.-terde.' ut4rs ihise to $19.5 million os er the nnt seten snn Alw sn '91, P111% ucu its members I,, alde to add $10.6 million to the ogenn 's Rate Stabilaatwn Fund to he seed to trwdemie rate snrresnes us er the nnt decadr. l'rudent stru anbhip t{the ap ruy 's resources u a pmitn e sips and v mdtratur wntinually , ,,, 9 ,, , , , , , , , , , , , ,

the much <{the .,ca , the acer n e onrentrated on an ew! ring sub.

remind customers station constrw tion progmm. As an added senke to memben. P111%

uill constmrt arul rnaintain neu sulatation capaat,, av a o nerd #d te u, n.p.,

' JAW (9 A flAUt R

, in the cirses. .%ndaniuatior, u{ design uill enable l'\lPl to <u hirie significant cottum v tuonn.m of the importance *

, sasinp.1hh substatwn corutnutien pn pwn bjwt one nwrr ua.s P\ll% van wntnbute to the competirne strrngth <{rach cuts as it cornistesfor n.v notomm lad.ing to U*"I*

j and talue of their  : t,mv in the rubic ,

'Yn',?

[

• 1hr Canau bu plants hme wivurenti, maintained an outstanding operuting lnel. I2/31191 l

l public p<rter . Pnfunnance stiubti:sf.r 1991 nhou ed that l'nis Unr uas atmiablefor use 71,13% i99i A Serice i

$ 196,600

~

FoltfMio Statistics a.,1Lw an swamJo  !

8) stem.5. Earnings income Mate of f(etern I99 **

1991 $ 10,750 8.40% N U.,550 1990. 35.115 8 63 Market Value )< an 19811A Series as of 12/31 Lher berye h unn $ 114,70 8

. 1991 8145.361 S.21 1990. 458 327 1.51

. 19815. r5ee

. Trsnursion.  % mber A ninant g 43,92; 4 1991 657 $ 1.298.5 th l

1990. 758 1.736.681 ---

( _ 1986A Scrice

• ()ebt Outste i (la. ' an sn slu,amdo urighted Awrage $3bA*135 Interest Coa

, Nember . _ 1991. $ 1,362.581 819% 1986 Series

. Dnrmlerai.1990. 1.307.836 8.10

$ 76.650 i [ lland lleconcillatlon l}

. H.,nd s r Out tandmg 12'31/90. $ 1,307.836 I W S'd**

lourd $ 54,810

, 5eries 1991. .+ 213.550

. vrie.1991 A .+ 196.t ,00 1985115edes l 1.7I7.986 $210,800~

. N urni Iil191 .

480 Hefunded . .

354.425

. 1984 5edes

. Ibnd* Out* tan bng 12!3 t NI _ .$. . t_. % 2181_

__ _8 57,805

+ * . . e W.g

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• SOURCES OF FUNDS . .. and Unit Tun 7560%{the line dunng the year Unit one demorusmted a 67.12% _ - .

****** . capacsty factor and Unit lion 73.32%. The national as emge caparsty factor is in rm.u. ream e J , rei.

• se n , ,o,.,. ,

the mid 60% rungr.

Rith the obserrance of Public lhuer Week in betober. P11P4 achined a high-r A

pnfile uithin each ofits member e t mmunities, lhe agency sporpored ads ertisements

'U

• in city nen'spopen and underumte the cost of entmnce sigm to each cin to inf arm

./3

) .* nwtorists that thev are entering a "Public lbuer Gammunitr"It u important ihr PUP 4 1

p . 4

-3 and its members to continually remind customen e{the imponance and t ab e of their j/ .

. public pou er sptems. Regulaton and legislatit e inues u ill appear in thefuture that

, are certain to luu e an efect on F11P4, and it is necevan la stay in touch nith our custamen to keep them informed - so that the communin uill undentand uhat i<

happening and continue to support their local n.rility.

USES OF FUNDS

• Throughout the year the agene, uas hant at unch layirg all the ground norlf or

• the '92 launching <{ POWER PARTA ERS P\lP4's s oluntan demand side mannee-

'*v n~aes*'. so m '4.-

, m.,

a *

. ment progmm. Along uith etternis e prepamtan rnearch, conducted by engineenng

- at nop au l . and marLeting specialists, representatieespom the og >ne, and the board trar eled to AI '. -

& . a si.cer agency in . Alabama to study the succes fid demand side management pnwam that hm been in place there f>r sneral yenn.11uch of uhat u<u learned on thi<

j.

', -<y

\ fsct-finding etpedition confrrned the nisdom and practicahn afplaru and concepts '

. ? , already dnised f>r our our demand side management progmm.

NiW

• The reasonable and steady grou th of enerp usage in the P\lP4 cominumn -

some 3% annually ou er the past sit pean - is indicarice of the on erall heahh and

nnou w . stabstin <{ the region.

ewe, r o .

f _ _,,,, . There is tw uny to sepamte thefidure <{ the region and thefuture <{ F\fPA. The

. agener and its communitir <fsenice are engaged in a partnenhip uhere each miut consider the p>od <{the other Infa pnneding. Even step must be caref dly considned and n alaated over the long term. Rb are doing Inniness in a undd that u reshainny i* -if nwmera by nwment. We hate to be ready}or chang , bracedf>r challenze and

}2 ,

preparedfor opportunity Re air conpdent that Y11P4 u on the right tmck.

-- ' MA - y f4$ -

(s_- /

'7' Pie d m o n t .\t u n icip al Po w e r A ge n c y Independent i

AUDITORS' Report

-KPMG Peat M'arwick Certified Public Accountants One Shen er Pee Sze 600 PO. Box 10529 .

Greenvme. SC 29603 -

The Hoani of Directon Piedmont Municipal Power Agency:

We haw audite<(the accompanying balance sheets of Piedmont MunicipalIV.er Agency as of December 31,1991 and 1990, and the related statements of revenue and npenses and changes in retained earnings'and cash fl<m for the years thin ended l These financial statements are the responsibili.y of the Agency's management. Our responsibihty is to n.

press a n opinion on these financial statements leed on our audits.

We conducted our audits in accordance with genmally accepted auditing standards. Those ,

standards require that we plan and perfort- se audit to obtain reasonabh assurance about whether the financial statements are free of < aerial mistatement. An audit includes examin-ing, on a test basis, evidence supporting th'e amounts and disclosures in the financial statements. An audit also includes assessing the acinunting principles uwd and significant

. estimates made by management, as well as esaluating the t.verall financial statement presen-tation. We beli-ve that our audits provide a reasonable basis for our opmion. .

In our opinion, the financial statements referred to abme present fairly, in all material respects lthe financial position of Piedmont Municipal Power Agency as of December 31, 1991 and 1990, and the resuhs of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.

Our audits were.made for the purpose of forming an opinion on the basic financial

. statements taken as a whole. The supplementary information included in Schedules 1 and 2 is presented for purposes of additional analpis and is not a required part of the basic finan.

cial statements. Such information has been subjected to the auditing procedures applied in' the audit of the basic fi_nancial statements and, in our opinion, is fairly stated in all material respects in relation to the basic linancial statements taken as a whole.

hh Y ff b Marth 27,1992

BALANCE v i c a m <, n n u n i c ii . n t v.nc e r n e n c y shecu - i 1

D F. C E M B E R 31, 1991 AND 1990 DOLLARS IN THOUSANDS 1991 1990 ASSETS U TI1 IT Y P l. A N T :

ELECTRIC PLANT IN SERVICE $ 544,895 $ 544.881 NUCLEAR FUEL 38,122 43.090

+

CONSTRUCTION WORK-IN PROGRESS 3.43.3 __ 2.535 586.460 590.506 )

LESS. ACCUMULATED DEPRECIATION AND AMORTI2ATION (119.266) ( C/.515)

NET UTILITY PLANT 467.194 482.991 It E 5 T ft I C T E D F U N c ,

176.383' 185.263 q H E V E N t' E F U N D A 5 5 E T 5:

CASH 7.409 6.904

• MARKETABLE DEDT SECURITIES 270.030 254.746 ACCRUED INTEREST RECElVAHLE 15.709 15,07?

DUni FROM RESTRICTED FUNDS 1.567 1.839 PARTICtPANT ACCOUNTS RECEIVADLE 5,298 4.504 OTHER ACCOUNTS RECEtVADLE 3 672 5.920 MATERIALS AND SUPPLIES 3 278 -3.600 PREPAID EXPENSES - 13 TOTAL REVENUE FUND ASSETS 306.963 292.598 D E l' E 1111 E D C 11 A H G E 5 :

UNAMORTt2ED DEDT ISSUANCE COSTS 21.945 20.930 NET DEFERRED EXPENSES TO DE RECOVERED FROM

, FUTURE REVENUE 162.499 143.704 EXCESS COSTS ON ADVANCE REFUNDINGS OF DEUT 194.743 170.551 OTHER 2.533 2.633 381.720 337.818

$ 1.332.260 $ 1.298.670 LIABILITIES AND RETAINED EARNINGS -

1.O N G .T E R M D E 11 T :

BONDS ,

S 1.362,581 S. 1.307.8!36 UNAMORTIZED DISCOUNTS (93,095) (70.328) 1,269406 _ 1,237.508 l

R E S T R I C T E D F l! N D 1. l A H i l. l T I E 5 ;

ACCRUED INTEREST PAYADLE 39,925 44.871 FiESERVE FOR DECOMMISSIONING 5,603 3.608 DEFERRED COMPENSATION 371 242 45,899 48.721 H ET NU E FU N D LI A BIL t TIE 5 A C C O l' N T S P A Y A B l. E 3.963 2.963 HETAINED E A H NIN GS __

12.912 9.478

$ 1.332.260 S 1.298.670 SEE ACCOMPANYING NOTES TO FINANClAL STATEMENTS

- Pie dmo n t M u n i c ip a l P o tv e r A g e n c y STATEMENTS of Revenue and EXPENSES YEARS E f4 D E D DECEMBER 31 1991 AND 1990 DOLLARS IN THOUSANDS 1991 IM ggd (hgg5c3 [g OPE R ATING REVENUES:

SALES OF ELECTRICITY TO PARTICIPANTS $ 71,594 $ 60946 g Il rpgy.1 3>

u l4411 ss!

SALES OF ELECTRICITY TO OTHER UTILITY 81.731 83.635 149.581 Eamings 153.325 OPE R ATIN G EX P ENS Et, OPERATION AND MAINTENANCE 32.410 30.254 NUCLEAR FUEL AMORT 12ATION 7.876 7.339 PURCHASED POWER 40.929 44 099 TRANSMISSION , 4.943 4.600 -

PAYMENTS IN LIEU OF PROPERTY TAXES 3.130 2.598 ADMINISTRATIVE AND GENERAL 2.170 2.041 DEPRECIATION 18.217 18.211 DECOMMISSIONING 1.995 1.830 111.670 110.972 NET OPERATING INCOME 41,655 38.609 O T H E R I N O M E I E X P E N S E ) :

INTEREST INCOME 41.270 36.112 OTHER INCOME 19 4,456 INTEREST EXPENSE (86.535) (92.718)

AMORTlZATION EXPENSE (11.770) (10,562)

(57,016) (62.712)

REVENU ES OVER (UN DER 4 ' EXPENSES BEFORE D E F E R R E D' IT E M S (i5.361) (24.103)

DEFE RR ED ITEM S TO' B E R ECOV E R ED FROM FUTURE REVENUES. NET. 18,795 21.130 -

R E-V E N U E S O V E R ( U N D E R ) EXPENSE 5 3 434 (2.973)

RET AYN ED E ARNINGS A T B E G I N N I N G O F Y E A Il 9.478 12.451 RETAINED EARNINGS AT END OF YEAR . $ 12,912 S 9.478 SEE ACCOMPANYING NOT ES 10 FINANCIAL STATEMENTS 15

,,.s . s T

STATEMENTS; vi a rn a. n r n u n i c ip a i n uer n ency Of .

CASHTLOWS ' '

YEARS ENDED DECEMBER 31 1991 AND 1990 DOLLAF4S IN THOUSANDS 1991 1990 C A S il T L O 4 5 FROM OPER ATING ACTI\lTIES:

REVENUE OVER (UNDER) EXPENSES $ 3.434 $ (2.9 73)

ADJUSTMENTS TO RECONCILE REVENUES OVER (UtJDER)

EXPENSES TO NET CASH PROVIDED BY OPERATING ACTIVITIES:

DEPRECIATION AND AuORT12ATION 37B03 36,112 NET DEFERRED EXPENSES TO DE RECOVERED F ROM FUTURE REVENUE (18.795) (21.130)

HESERVE FOR DECOMMISSIONING 1.9b E. 1.830-DECREASE (INCRE# SE) IN:

PARTICI ANT ACCOUNTS RECEIVAULE (794) 473 OTHER ACCOUNTS RECEIVABLE - 2.248 6.953 ACCRUED INT EREST RECEIVABLE (220) 1,838 MATERIALS AND SUPPLIES 322 (57)

OTHE9 DEFERRED CHARGES (301) (543)

PREPAID EXPENSES 13 (13) tNCRE,ASE (DECREASE) IN:

DEFERRED COMPENSATION 129 59 ACCOUNTS PAYABLE ,1.000 (86)

ACX' RUED WTFREST PAYABLE (4.946) (3.B58)

NET CASH PROVIDED BY OPERATING ACTIVITIES 21.948 18.605 CASil F l. O W 5 F it O M . I N V E FI' I N G A CTIV il l E 5:

NET INCREASE (DECREASE) IN INVESTMENTS (6,435) 120.977 EXPENDITURES FOR ELECTRIC PLANT IN SERVICE 1922) (2.051)

EXPENDITURES FOR NUCLEAR FUEL (9.374) _ (9.706)

NET CASH PROVIDED BY (USED IN) INVESTING AC11VITIES (16.731_), 109.220 _

C A S il. F l. O W S VROM FIN A N CIN G A C T I,V I T I E s :

PAYMENT OF BOND PRINCIPAL (480) (455)

PROCEEDS FROM ISSUANCE OF NEW DEBT.

NET OF DISCOUNTS OF $32.243 377.907 -

REFUNDING OF BONr)3 (354.925) -

DEFEASANCE LOSSES. NET OF UNAMORTIZED DEBT ISSOANCE COSTS OF $5.704 AND UNAMOFTTIZED DISCOUNTS OF 56.241 (19,443) -

DEBT ISSUANCE COSTS (7.657) -

PAYMENT OF NOTES -

(100.000)

REDEMPTION OF BONDS - -

(27.085).

NET CASH USED IN FINANCING ACTIVITIES (4.598) (127.540)

.N E T INCREASE IN C A 511 619 285 16 - CAS11 AT BEGiNNING () F Y E 411 _

7.161 6.876 CASH AT END OF YEAR S 7.780 S 7.161

$ U P P l. E hl E N T A L ' D I S C L O S U R E 5 0F C A s ti

- F l.O W I N F O lt M A T I O N :

CASH PAID DURING THE YEAR FOR INTEREST $ 91.484 S 96.576 SEE ACCOMPANYING NOTES TO FINANCIAL S1ATEMENTe.

Piedm on f -Mu nicipal Po wer A ge n cy NOTES lu FINANCIAL DFCEMBEP 31 1991 AND 1990

~ ~ ?9..'. m .2? . ..... . .... ... . . .. . . . . . . .. . statements

1. DESCHIPTION O l' T il E ENTITY Piedmont Municipal Power Agency ( Ageno) was inwrporated in 1979 under the South Canana joint Munwipal Elec.

tric Power and Energy Act. The %ct. adopted April 1978. enall< d the formation, by Nuth Caruhua municipaltw. and municipal commissions of pubbe works of a ). int ageng to plan, f. nance, deselop own ami operate electric geiwroten and transtniwion fachtin. Ten municipal uthty systerns (Parthpanta comprise the Ageng's nmnd ership

. The Apeng and Duke Nwer Company trh kra are parties to agreements phmg the Apetw> a 2">% undaided owner.

ship interest in Catawba Nucl-ar Station I! nit 2 (Prnhd Dule is the operating owner of the Pndert.

The Agency's Pnijed power output entitlernents (appmUnately 286 MW) come from Carnba Nucl-ar Stanon I nita 1 and 2: subject to the terms of certain Eubange Agreemens under whic h the Agency paw 12.5% of ilw ms and meiws 12.5% of the power output awociated with each of these 1.145 MW units.

2.

SUMMARY

O F .SIG N I FIC A N T A CCO U N TIN G P O LICI E S llani, of Accounting - The Ageng's acc ountmg reconk are r,aintained on an an rual bam m confornut3 with generalh accepted accounting principle. and sub lantially in conformity with the Federal Energ3 Regulatory Comm+

sion's Uniform Sptem of Acnvunts.

The Agenn's General Bond Resolution require, that a rate tnn ture dreign pnahme rnenues sufficient to p.n operating. debt ar ir and other spenfied costs The apphraton of a rate attucture to a ghen perhW. cledriciti uln may pnulace inenun not intended to pay that period's amts, and conwnely, that perio(Ps co.a mas u..t lw miended to be reemered in period rnenues. The aiTected revemes and/or ce are, m wh ca,en, def-rred for fuiure recogni-tion. The uhimate recognition of deferred itema is correlated pth gerific future mente primanly payment of debt principal.

Unamortized Debt I=uance Coste -. Unamortized debt inuance t o.a at Decernber 31.1991 and 1990 of $21.%

and $20.930, regiectively, inet <4 accumulated amortization of $9.006 and $8.069. re pr<ttwly) are bemg amortiwd on the bonds outstanding me+hml Exce Co.in on Advance Hefundings of Debt - Euew cows on asance rdundmg, of debt at December 31.

,1991 *and .1990 4 $194,743 and $170,551. renectiv ty. (net of accumulated ar3nrtaation of $34.286 and $27.0B9 re*pectnely) are beitig amortized on the bonds oututending method.

Organization Co.to - Organization costs at Decemler 31.1991 and 1990 of $960 and $989. respertheh, Inet of -

accumulated amortua: ion of $207 and $177. re*pentp are being amortised on the wraight-Une method mer a period af 40 yean.

Diacounta on Bond. Payable - The dAconnu on bond, payalde at December 31.1991 and 1990 of $93.095 und

$70,328, rnpectiwly. (net of accumulated amortizati.m of $1 E03 6 and $10.799. reyetiwly) are bemg amortied on the bonds metanding method.

Income Tases - The Agenefia nempt in.m Federal income taws under Internal Hnemic Code Wmn 115. Nuth Caruhna has adopted Section 115 by reference; therefurc, the Agency is also evmpt from state menme tases Ca.b Flan - For purpues of the statements of cash Con, the Agency considers interr+ hearing depmiu with banks and Duke to be. cash.

Marketable Debt Securities - As authorized by the lumd re*olution, imesmenu in mailmtable debt m untms in-clude ortly direct obligations of the United States gmernment, obhgation* of I nited States gowrnment agencies and general obligat_ ions of the ftate of South Laruhna. The<e imnimena are u umured and unregistered and beld by the Agency's trustees or Iv; the Agency. as truster.

lY

3. PROJECT POWER SALES AGHEEMENTS Catawbe Project Power Salen Agreement - The Agency and ca< h Participant are parties to Caiawba Project Nwer Sales Agreements (Sales Agreemc,al These Sa'n Agreements obbge the Agency to pro ide ea< h Partiapant a share of Project power output and, in turn, each Participant must pay its share of Pndert m,is Partwipans make their pay ments on a "take-or-pay" hasis whether or not the Project is operable or operaung. Such pay rnent, are not subiert to reduction or off*t and are not ennd.tioned upon performance by the Agrno or any ghen Participant. Tbc %

Agret ments are in effect until the earlier of August 1. 2035, or the completion of paymenu on the bonds and sato.fai-tion of obligations under the Project agreemens.

N l NOTES eiamon nun m ai enn Aeenn to .

FINANDAL 3. l'Il O J E C T P O T E li S A L E S . A G il E E M E N T b . (c o n tin u e d)

Ntatemenf3 The Participants' Shares of Gaawba Project Output are as follows:

CITY OF ABBEVILLE 2 G8% '

CITY OF CLINTON 7 84 CITY OF EASLEY 13.24 CITY OF GAFFNEY 1005 <

CITY OF GREER 934 CITY OF LAURENS 649 CITY OF NEWBERRY 1047 CITY OF ROCK HILL 20 04 C'TY OF UNON 10 01 CITY OF WESTMINSTER 1.84 100.00Mo

~

Supplemental Power Sale Agreements - The Agency and each Participant are also partws to Supplemental Pwer Sales Agreementa ($upplemental Agreement 4 under which each Participant has agreed to pay, in nchange for sur plemental bulk power supply, its sha'e of supph mer,tal bulk power supply emts. A Participant may termir. ate its Sup plemental Agreement with ten years adsance notke. ,

Interconnection Agreement - This opeement, between the Agency and Duke, pnnides for the inwichange of pcwer supply and power supply rervices 11 also defines a fificen year arrangement whe.chy the Agency selb Duke a portion of its Project power output entitlement. Such sales commence upon commenial operation e,f each Catawba Unit and decrease annually over the contract term. Frorn July 19M until January 1987, the Agency sold 96.7% of its Pro-pct puwer output entitlement from Unit 1. Fr.m August 1986 untd Janaury 1988. 96.7 % e.f the Agency's entitlement in Unit 2 power output was schl. Subsecpen to January 1987 for Unit I and January 1988 for Unit 2, each unit's Project power output entitlement originally wtained by the Agency incream 3.3% per year until the carber of:

(at Unit 1: 1995. or the commenial operatva, of the first new 500 5tW thermal generatir;g unit (nrept Catawbs unit;,) added to the Duke uuem; (b) Unit 2: 1996, or the commercial operation of the wrond new 500 %lW thermal generating unit added to . ,

the Duke sywem.

At December 31,1991, no such units were under tonstructi<m and it is highly unlikrly such units couhl be completed by 1995 or 1996. Therefore, during 1995 as to Unit I and 1996 na to Unit 2 the amount of each unit's Project power output entitlement retained by the Agency will increa,e 50% Subsequently, s , Agenty's shan of Project rwer output entitlement will igmin increa e by 3.3% pr year until. during eac h unit's shteenth year of enmmercial opera.

tion, the Agency retains 100% of its Project power output entitlement. The Agency may, with m.twe, increase but -not decrease its retained entdlement. -

4. UTILITY PLANT Original rows of major etw.es of the Agencyi electric pime in *enire at Decenuer 31,1991 and 1990 are as

%lto,s:

1991 1990

............ . . . ... .. . . . . . . . ..... .......r. ..... .... ~ .. ..

LAND . t 336 $ 336 STRUCTURES ANO IMPROVEMENTS 155,370 155.370 REACTOR PLANT EQUIPMENT 248,112 248,112 TURBO GENERATCR UNITS 69,020 69,028 ACCEPSORY ELECTRIC EQUIPMENT 50.831 50.831 MISCELLANEOUS PLANT EQUIPMENT 10.542 10,542 STATION EQUIPMENT 4.719 4,719 OTHER 1.466 1,452 UNCLASSIFIED 4,491 4,491 S 544,895 S 544.881

.18 -

Unclassified awets are in senre but not yet clasified to specific plant arrounts.

Nuclear fuel at December 31.1991 and 1990 of $38.122 and $ 43.090. iespectiwh, eepresents the cost of nuclear fuel in the reactor plus the costs anoriated with acquiring and pri ce*ing reload fuel assemblies. Nuclear fuel is amor-thed based on burn rates using a unit of production basis. The Agency regularly reme n fulh amortized nucten fuel cows from its imLs; when fuel batches are replaced during the core refueling pnwns. Such rosts aggregating $14.312 and $5.737 were remosed during the years ended December 31.1991 and 1990. respectiwly

L segummum m-l 3

l 1

! vicamon s uu niciva t vo w er a sa n c, NOTES l

r to

4. UTILITY P l. A N T icontinuedi l Electric * .t in vnice, including unclavi6ed awet.. .; deprec iated on a wraight ime 1.a a at raten i ah ulated ta am<.r Oldfemeld5 l l tize the to=qoure anets oser their respertise ewimated useful hm. Ikpreconon b.pns wlen swin are placed into 4(nke.

A Aummary of arrumulated depreciation and amartiJation at llettmbf f 33.1991 and 1990 foll.ms:

1991 19N) t ACCUMULATED DEPRECIAllON - ELE CTRIC PLANT

! IN SERVICE S 105.716 5 87 499 ACCUMULATED AfAORTIZATION OF NUCLEAR FUEL 13.550 20.016 5 119.266 S 107.515 1 7

1

5. RESTRICTED FUNDS

, The General IL>nd Re olution, l'rojest arreements. and Arn< y poLeir re tri< t the use of bond pn,< eeds Arno rnenu-s. and Agency funds on hand. Certain nwnctions denne the order in whi<-b asa2Ld>le funds ma le u ed to

, pay costs other restrictmn* require minimum balan< ca or accuma!ation if I alarwe* for yecific purpo es At December 31.1991 and 1990, the Arney wa* in compbance with all such reunithos and held the followmg restrien d as eu.

stated at cost or amortis d co<t. whk h appnmimat a market:

1991 1'#90 CONST RUCTION $ 2.202 $ 2.290 DEBT SERVICE - DOND PRINCIPAL 1.010 480 DEBT SERVtCE - BOND FIXED RATE INTEREST 31.895 37.453 DEDT SERVICE - BOND VARIABLE MATE lNTEREST 2.501 3.623

! DEST SERVICE RESERVE 107.092 11?.347 RESERVE AND CONTINGENCN 10,709 11.135 DECOMM SSIONING 5.633 3 oO8 SPECIAL RESERVE 15.000 16.085

)EFERRED COMPENSATION 371 24 {

S 176.383 5 185.263 FUNDS ARE COMPRISED OF:

CASH EQUIVAt.ENTS $ 371 5 257 MARKETABLE DEST SECURITIES 174.117 182.966 ACCRUED INTEREST RECEtVABLE 3.462 3.879 '

DUE TO REVENUE FUND (1.567) (1,839)

S 176,383 5 185.263

6. II E V E N U E FUND ASSET $ AND 1. I A H i l. I T I E S Hnenue funo auct, and habibtm, are used in the Apncis dapto-de op-ratams. The mets <iated at < o t whii h ap.

pnnimates market, are alkwa:cd for !be following purp., ev 1991 1990 ,

WbRKING CAPITAL $ 43.326 5 38,007 FUEL ACQUISITION 19.640 21.138 RATC GTABILIZATION 243.007 , 233.363 5 306.963 S 292.598 Liabibties of $3.963 aad $2.963 at llecember 31.1991 and 1990. re p.-rthelv, will be paid out of working rapital awets.

19

l NOTES v i c a m ,, fu m n i ci i . <, , v ,. u ~ wno 10 FINANGAL 7. '% l: T - !) E F E H H E I) E \ l' E N 51' 5 TO HE HECOVEl(ED Statements As drM rded in hatr 2, ta?rs t halgrd tu Idrtii tpnh an =trm f ult tl fo *Wte nuW dh pnnide for de ht trquire mente arul yerataig roA 0f the k yenn. D ese r* pr 1*v - and rt%Cr-urs ou ImIr I from th = nu r ih fet t rd to o n h po r n ed, ,o the-% i arr intended to be miluded io ram-l

\rt defern d npe rnes tu (w- Itt owit'd f,5stn jut uf *> (q4edae in( 1 J.lr I I te tidl m tig 1991 1 WeO CH APaGL (CUMut ATIVE TOT AL S) tTEMS TO DE RE COVERED IN FUTURE j PAB'llCIPAf 4T DIL .INGS_

INTCREST EXPLNSE $ 315.97* $ 314,292 5 1.683 ,

JEPRECIATION E n PENSE 1M.564 68.474 10,090 l AMORTf 2ATION 01 REDEMPTION AND I DEFEASANCE LOSSES 33.919 2 0.(> 51 7.268 l AMORT.7ATION OF GOND DISCOUN T S AND )

DEDT ISSUANCE COSTS .'4.201 20 029 4.172 l NUCLEAR FUEL EXPENSES 573 873 - )

LETTER OF CREDIT FEES 5,849 5.649 -

OTHER _._. 9_36 , - _1,702 1

-__ 234

- ),

439,117 457.070 31.447 ITEMS REDUCING FUTURE PARTICIP ANTS HILL INGS )

INVESTMENT INCOME (70 J76) (76.238) (138)

RATE ST ABILIZATION (REVENUE RECEIVED TO i REDUCE FUTURE a:LLINGS TO PARTICIPANIS) C 34 888) (276.361) (28 527) l RESERVE AND CONTINGENCY DEPOSI TS (4.197) (3.284) (913)

(385.401) (355.883) (29.578)

DEFERRED REVENUES (EXPENSES) RECCGN1?ED E EFERRED INTEREST. DEPREC'ATbON. j AMORT!ZATION EXDENSE K CL'UDf t) IN 1 PAFITICIPANT BIL' lNGS FOR DE D T 1 FRINCipAL P/ YMEN TS (2.295) (1.2H S ) (1.010)

RATE STABIL12ATl)N DRANS AF' PLIED TO EXPE N SEU3 CO 891 42.998 17.693 RESERVE AND CONTINGENCY REVENUE APPL IEE' TO E WE NSES 247 204 43 58,843 41,917 16,926 j NET DEFERRED EXPENSES TO DE RECOVEAED FROM FUTURE REVENUF 5162.49_9- 5.-143,704-

_$ _18,79 5.-

i b 3 k k I k k N bN M qk I% h. $ .I h h$ l h, h% Ifl N k llk

,- rmnun ulin w nt to retne the debt w hwl hndnl i v.~e i < ma ,

1

• }nier*%! rigvfmr of) the Agens )ht bond ,md s ari4}r ram de rimnd ol hi,atums along with a mwtated lrlter o{-

creda. b.mking ami re-inarb 'mg fera #cu ept m rre,i and fer .s lahsl to Canaal Apprrrianon lionda paid )

l nosona c..a, am, a.s,.n.m . o, em, .c. I n-, .u_ m.. . , n,d o n d, t.. mr. _ ,.

~

wnt of ihme bond procee k

• Interru mpenw on Capa.d \pprmon liomi. m ered but not paid unni naturav. l

• An.artaam.v. of debt iwuan< r n,vn es bond dr< omis M. a,aner b,~ ,. redempnon low , and organua-  !

l l tion co a paid from or im loded m L nd po,< r.. -

( 1

• lleprecicum on uShty p%ut e on.truded w ah and amortuanoti of nue lrar fuel a. < pored wah bond pn.serd . l und 20 - coriam mher vem rosi, paia ircon hona porcea, l 1 1

kbC ktentV b4.5 a}'*a b defctrt'd h'drth 1 pant rt%rtler. % u ht l~., fl q f mt' !be 1[of t uf W 'i te >f. k 't'[ p .* k tgHe INf abb*bF4k di i

in m to user Proret co-8 wt paid from t .m! pro .rds. as well n v heduled depea- to a Itate Nabihnhon ar- l l .oun; T he resor.or aw.e nted w ah thos - w heduird 6p.,w s un<l the mir o -: in ome thereon mil he in ognard when tho-r fos., are diaw n upon to pn Droiret < mt, W. o onn o'.c me nt rm enor- ami eu os, rnenur in e rt .n n I funds hme been transferred to riv !! ate N abihnwm a, t uovi a id h.r. c be en dcirrred bor ro ngna.an untd the nme l the fund- am appbrd to the pry ment of Prye rt < <rm  ;

1 b bIsf U risad f , Ib8'- $grtK) b be-DrT2 lb +fid l$+NOllia nte re ipo!#

• l'artti Iliatil (n o nile's to lo e staldeshesl at leg t- l% o dl~es W ut to prmde y died de>.o+ into a W- cn e and Cont evm v hmd. En . s m that fund are o <d f .r t he i onu rwoon l l

or a< qm,itmn of utd.ty pLmi The rn open of sm b wnor, n d. fe n ed urn! -m h nmc a t he denrn unon n i remrded on ihr a -.u con-trm &d or m pare d w ah tho-e m.anc, l i

, Pied m o n t 31 u n i c ip a l P o tt e r A g e n c y NOTES 10

8. LO N G-T E R M DEHT long-term debt at December 31,1991 and 1990 consists of the falkming: blGlemCUIS 1991 1990

..................m .......... . ............. . ..... .- ... . .. .. .. . ..

1984 SERIES ELECTRIC REVENUE BONDS, PAYABLE DURING 2013 WITH INTEREST AT 7% $ 57,805 $ 57,605 1985 SERIES ELECTRIC REVENUE DONDS, PAYABLE DURING 2016 WITH INTEREST AT 7,5%

~ (ADVANCE REFUNDED DURING ,1991) _

- 25,940 1985B SERIES ELECTRIC REVENUE BONOS, PAYABLE ANNUALLY FROM 1996 TO 2025 WITH AVERAGE INTEREST RATES OF 4 25% AND 5 88% FOR 1991 AND 1990. RESPECTIVELY 240.600 240.800 1985 REFUNDING SERIES ELECTRIC REVENUE BONOS. _

' PAYABLE DURING 2025 WITH INTEREST AT 7% 54.810 54.810 1986 REFUNDING SERIES ELECTRIC REVENUE BONDS.

PAYABLE ANNUALLY FROM 1996 TO 2025 WITH INTEREST RANGING FROM 5% TO 8%

• 76.650 326.345 1986A REFUNDING SERIES ELECTRIC FkEVENUE; BONDS.

PAYABLE ANNUALLY FROM 2013 TO 2024 WITH INTEREST RANGING FROM 5 75% TO 7.25% 363,735 363,735 1988 REFUNDING SERIES ELECTRIC REVENUE BONDS.

PAYABLE ANNUALLY FROM 1991 TO 2018 WITH INTEREST RANGING FROM 5.5% TO 7.75% 43.927 123.697 1988A REFUNDING SERIES ELECTRIC REVENUE BONDS.

PAYABLE ANNUALLY FROM 1998 TO 2019 WITH INTEREST RANGING FROM 6 7% TO 7.65% 114.704 114,704 1991 REFUNDING SERIES ELECTRIC REVENUE BONDS. '

PAYABLE ANNUALLY FROM 2007 TO 2023 WITH INTEREST RANGING FROM 4% TO 6.85% 213.550 -

1991 A REFUNDING SERIES ELECTRIC REVENUE BONDS, PAYABLE ANNU ALLY FROM 1998 TO 2018 WITH INTEREST RANGING FROM 541 TO 6.5% 196.600 -

TOTAL LONG-TERM DEST 1.362.581 1.307.838 LESS UNAMORTIZED DISCOUNT. 93,095 70,328

$ 1,269.486 S1.237.508 The lands are specia obhgariuns of the Agency and are wcured by future. resenue and pledged monics an;l securities as provided by the lxmd revdution. The 1985B Series Electric Hevenue Bonds are further collaterahied by an irresocable letter of credit. % borrowings under the letter of credit hase ocrurred as of December 31.1991.

The bonds generally prmide for early redemption during the Grst ten years after iuuance at prices rangins from 101.h

. to 103% of the bond principal amounts. Tbc Agency has adsance refun. led certain bond i sues as desenbrd in nue 9.

The following is a summary of the aggregate annel pnneipal maturines and sinking fund requirements for the lmnd, outstandmg at December 31. 1991:

1992 . $ 1.010 2004 . $25,130 2015 . $ 54,525 1993 1,565 2005 27,580 2016 58.830 1994 1.655 2006 29.428 2017 63,550 1995 2.230 2007 36.137 2018~ 67.630 1996 8,925 2008 29,508 2019 70,345 1997 14,475 2009 31.041 2020 78.820 -)

1998 15,675 2010- , 32,567 2021 84.200 1999 18.970 2011 34.319 2022 89,780 2000 15,800 2012 36.184 2023 92,475 2001 10.625 2013 36.060 2024 100.380 2002 23.165 2014 50,042 2025 95,330 2}

2003 24.625-

9. IN-S U B S T' A N C E DEHT DEFEASANCE During the period December 1985 through Nmember 198H, the Agency purchased $1,318,777 of l'.R Gme.rnment Securities and deposited them in irrevocable trusts for the advance refunding of certain outnandmg bonds The prm.

cipal and interest from thew wcurities will be uwd solely to redeem the follwing Electric Hevenue Honda. Series 1984: $470,000 Series 1985: $312,160, and 1985 Refunding Series: $387,620. The bonds will be redeemed on January 1.1995 and 1996 (the first ophonal redemption darest at the redemption price of 103% of their aggrepte principal amount. These transactions resulted in I.mes totaling $197.640 which have been deferred as exec % cmts on advance refundings of debt.

NOTES vic a m o n f m nici w e n er w nc, l 10 FINANGAL 9. IN SU B ST A N C E DEHT DEFEA5ANCE (continued)

. OfGitmful5 in January 1991. the Ageng pun based $190,102 of l', S. Gmenment wcunbe and dernited them m an irrevoc able trust. The principal and interest from thee wcurities ull be u ed solely to adsance refund the out tandmg

$178,090 of Electnc Hnenue Honds 1986 Refund ng Series, matunng January 1, 2023 and bearing mtered at 8%

The Bonds wdl be redeemed on January 1,1996 tthe first optonal redemption datet at the redemption price of 101 If2% of their aggregate prmeipal amount. Thn defeasance rnuhrd in a low of 812,776 which ha been deferred as nceu costs on adsance refundmgs of debt.

In November 1991, the Agency purcha cd $191,984 of U. 5 Gmernment secunties and dermied them in an u.

recable trust. The principal and interest from the.,e wcuntin will be used udely to redeem on January 1.1995 at a redemption pr;ce of 100% of pnrripal amount, the $25,940 outstanihng principal amount of its Electric Hewnue Bonds, Series 1985, maturing on January 1, 2016 and bearing interrat at 7.5%. on January 1,1996, at a redempnon price of 101 -1/2% of principal amount. the $71.605 aggrega e outstandmg priancipal amount of its Electri Hnenue Bands 1986 Hefundmg Series matunng on january I sn each of the 3ean 1998,1999, 2000 and 2006 and bearing _

intemt at the rate of 74%, 7.7%, 7.75% and 7M5%, reymetnely, and on January 1,1998, at redemption pru e of 102% of principal amount, the $79,290 aggregate outstandmg principal amount of its Electnc Hnenue Bonds 1988 Refundmg Senes, n,a:uring on January 1, 2007, and January 1, 2018, and beanng interes at 7 5% and 7 0%,

rnpectiwly. This defcasance resuhrd in a lois uf $18.613 whk h has beer deferred a cu ra co ts on adsance of refundmgs of debt.

Each of the abme transactens quahfm. as an in. substance debt defeasance; ther, fore, the gmermnent wcuntin and apphcable defcased bond issues are not recorded on the balance sheet, The Agency defea ed the de primanly to reduce debt wnice, thereby entponmg or reducing future electric rate adjustments.

10. RESERVE FOR DECOMMISSIONING The Agency and other Catawba owners are in comphance with Nuclear Regulatory Commmion requirements for fund.

mg future decommissioning co ts. 5ince 1985, the Agency has been making regular depmits to wgtrgated decommie sioning accounts. Depmits pertairung to contaminated petions of the Proyct are held bv a Tru tee, The Agencv has custody of funds act aside to decommiwion non-contaminated portons of the Pnyect. The Agencis share of decom-

'minioning costs, based on current pnce levels is estimated to be $55,214. This uttmate is ad uwed i periodically to reflect changing price levels and technology.

11. CONTINGENCIES The Agency ir routinely engaged in docunions and'or negotiations with Duke related to the appmpnatecess of chargn "

made under the Pnstt agreements. Such actions continued at December 31,1991 wuh certain mues being the sub-jact of continuing arbitration proceedmgs. The Agency cannot determine, at this time, whether ihme actiuties will pro-duce any Proj-ct cost refunds. At December 31, 1991 the Agency has not reconled any benefit relating to unrnidved issues Management believes the value of any refunds or habilitin rnultmg from the c actmiin, would not materially effect the Agency's financial positwn.

Tubes in all eight steam generators at the Catawha station hne nperienced wrew corrosinn crack ng PCCh Ahhough Duke has taken steps to mitigate the effects of SCC, the potential for future SCC esis and Duke cannot predict the extent to which remedial measures will be required to minimize the effed of any future RC, Future corrnsion and cra< king could rnuh in reduction in plant output and replacement of the steam generaton before the end of the plant dnign hfe. Neither Duke, nor the Agenew can predict at this time the cost of additional remeWat measures to mitigate the effects of any future SCC, including the cost of replacing any of the steam generators before the end of the plant design Lfe, Duke, on its own behalf and, in connection with the Ca'awba station, on behalf of the other owners in-cluding the Agency, commenced an action nn %rch 22,1990, in the United States Dstrict Court for the Diarict of .

South Carolina weking damages from Westinghouse Electric Corporation for supplying to the Catawba station

• team-generators that are alleged to be defective in duign, workmanship and materials and that will require replacement well short of their stated design hfe. Ahhough Duke and other ownen are ugorously pursuing tha case, its uhimate out-come is undeterminable at this time.

~ .

The owners of the Catawba Nuticar Station are required by Federal law to protect them ehn from pubbe habihty claims arising out of a nuclear incident through a two-layer combination of insurance and self-insurance, The Federal Price .bbn Act prnently bmits hability to a manmum of $7.8 bilhon per nuclear incident at each renerating unitl Pro-sior gainst this masimum exposure is afforded first by a layer of nuclear habihty insurance, the current mar a

imum asailable smount of which is $200 mdbon. The second layer of protection consics of a mandatory industry. wide program of self-insurance, under which nuclear unit owners would be auewed up to $63 mdlion for each reactor own-ed, not to neced $10 milhon per year for each reactor for each nuclear incident

m l

Pie d m o n t Mu nicip al'Po w e r A gen cy ADDlTIONAL Infinmation

$CHEDt'lJ OF RDF.StT. OD Mi'DSF.s Pi R THE IloND HLMitUllO% A%D trTIIER AGRIDIDb YEAR ENDED DECEMBER 31, 1991 1991 5CllE!)Ull 1 ACTUAL BUDGETED ACTUAL REVENUES REVE NUES OVER DOLLARS IN THOUSANDS AND AND (UNDEN EXPENSES EXPENSES BUDGET REVENUE SALES OF ELECTRICITY TO PARTICIPANTS S 71.594 $ 72.770 $ (1,176)

SALES OF ELECTRICITY TO DUKE 81.731 83253 (1.522)

INTEREST INCOME 41.270 36994 4.276 OTHER INCOME 19 -

19

. TOTAL REVENUE S' 194,614 S 193.017 5 1.597

- E X P E N S ES:

'CMAWBA OPERATING EXPENSES:

OPERATION AND MAINTENANCE . S 32,069 5- 31.827 $ 242 McGUIRE RELIABILITY EXCHANGE 341 222 119

. NUCLEAR FUEL 7.876 8,242 (366)

PAYMENTS IN LIEU OF TAXES 3,130 3,100 30 INTERCONNECTION SERVICES:

PURCHASED POWER.

DUKE 34,643 34.966 (323)

CITY OF UNION 6,286 5.929 357 TRANSMISSION:

TRANSMISSION SERVICES 3,709 3629 80 TRANSMISSION FACILITIES 1,234 1,223 11 ADMINISTRATIVE AND GENERAL; AGENCY '

1.942 2.130 (188)

DUKE 228 186 42 SPECIAL FUNDS DEPOSITS (WITHDRAWALS):

DOND FUND DEPOSITS FROM REVENUE,S 84.676 88.898 (4.222)

LOC FEES 1,135 1.135 -

REFU.NDINGS- (9,617) -

(9.617)

RESERVE AND CONTINGENCY FUND:

DEPOSITS FROM REVENU81 8.468 8.892 (424)

CAPITAL t DDITIONS (913) (1,148) 235 l TRANSFER EXCESS FUNDS (7.555) (7.744) 189 REFUNDINGS (426) -

(426)

DECOMMISSIONING FUND:

DEPOSITS FROM REVENUE 1,619 1.619 -

INTEREST INCOME (1) 376 479 (103)

CONSTRUCTION FUND:

DEPOSITS FROM REVENUE 138 159 (21) l CAPITAL ADDITIONS S (376) 384

• REIMBURSEMENT FROM OTHER FUNDS (234) -

(234) l REVENUE FUND;

. WORKING CAPITAL 4 229 850 3.379 FUEL (9.374) (11,500) 2,131 RATE STABIL12ATION:

INTEREST INCOME (1) 22.644 18,919 3.725 NET ~ DRAWS , (12.010) (12.010)- -

SUPPLEMENTAL POWER RESERVE:

INTEREST INCOME (1) 1,161 1,279 (118)

TRANSFER EXCESS FUNDS (1,246) (.1.279) 33 OTHER CAPITAL TRANSACTIONS:

PLANT ADDITIONS:

RESERVE AND CONTINGENCY FUND 913 1,148 (235)

CONSTRUCTION FUND GENERAL PLANT (8) 17 376 (384) M 65 (48) i FUEL ACQUISITJONS 9.374 11.505 (2,131)

DEDT ISSUANCE COSTS 301' 301 --

BONDINGS: l BOND PROCEEDS (412,493) -

(412.493) l INTEREST INCOME (13) -

(13) l DEBT-ISSUANCE COSTS 39,900 -

39.900 l BOND PAYMENTS 382,086 - 382.086

' TOTAL EXPENSES S 194.614 $ 193,017 ,S 1,597 l (1) INCLUDED IN "OTHER INCOME: INVESTMENT LNCOME."

SEE QCCOMPANYING INDEPENDENT AVOITORS' REPORT

, Pie d m o n t Mu nicipal Po wer Agenc, -

Inkrmation 1 .

'SCHEDCIE 2 .

• 4'.HEDt li(W HD E,%R OD E\PEMES PEH THE ISONI) HEM)LITION AND UTitER AGREE % TENT 5 d ...... . . ......... . ., ... ... . ..... .... .. .... . . .............................................. . ........ .. . .... . . . .. . .. . . . .. . .. . . . -

YEAR ENDED DECEMBER 31, 1991 4 FUNDS-HESERVE AND SUPPLEME NT AL REVENUE OPER A? tNC BONO CONT 4NGENCY DECOMMISSION QNST RUCTION POWER DOLLARS AN THOUSANDS .

PRINCEPAL s WORMING RATE FUEL INTEREST CAPITAL ST AnsLt2ATsON -ACCOUNT RETIRE RESERVE f'

B4L3%CES 4T B E Gl% %i% G or it4R-ASSETS S 38.097 S 233.363 S 21.138 3 41,556 5 111,347 5'11,135 S 3.608 5 2.290 5 15.085 LIABittTIES (2 963) s NET .

35.134 PROJE CT NE% E N C E5 4% 9T k ):

PART4C1 PANTS - ELECTR4C (1) 70.483 F ACAL1 TIES RENT (1) 1,101 CONTROL SERV 5CES (1) 10 .

Mr$CELLANEOUS . (1) 19 DUKE POWER - ELECTRIC (1) 81,731 INTEREST INCOME (1) 16.951 22,644 37s 13a 1,:61

- PROJ ECT COST 5:

.i OPERA f 60NS AND MAINTENANCE (2) (32.069)

REL8ABaL8TY EXCHANGE (2) (341)

• FUEL . (3) (7.n76) 7.876 DECOMusSSsONING (3) (1.619) 1.619 GENERAL ANO ADMINsSTRATlON (2) (1.216)

PAYMENTS IN LtEU OF TAXES (2) - (3.130)

DEST SERVICE (3) (84.676). 84.676

' RESERVE AND CONTINGENCY (3) 18.464) s.468 S U P P L E nt E % T A L P O W E H EONT5;

( PURCHASED POWER - DUKE (2) (34 043)

UNION (2) (6.286)

TRANSMaSS4CN SERVtCES (2) (3.709)

.- TRANSM4SStGN FACILITIES (2) (1.234)

OENERAL AND ADMIN 4STRATiON (2) - . (966) *

' OTHER FL %D EH A NGEbr 4 TRANSFERS IN (OUT):

RATE STA8ftaZATION (3) 12.010 (12.010p .

. EXCESS FUNDS (3) 8.801 (7.5S5) ' (1,246)

RE3M8URSEMRNT ' Q) 1.139 (913) (226)

• PAYMENTSf ,

DEST BETIRE/ REDEEM /1NTEREST (2) (1.430) (BS.464)

CAPITAL ADO (T60NS -(2) (922) (9.374)

DEBT R EFL N DI%G: _

NEW tSSUE PROQEEDS (if 412A93 , . .

EXCESS FUNOS (3) 12.386 (7.705) (4.256) (426) 3 BNTEREST INCOME (1) 13

. OLD ISSUE RETtREMENT (2) (382.066)

COST TO ISSUE . (2) (39,900)

NEW ISSUE 6NTEREST a (3) (2,343) 2.343 SALANCES AT DECEMBER 31,1991 . S 39,363 , S 243.997 a 519.640 S 35,406 $ 107.092 S 10,709 9 5,603 $ 2,202 ' S 15,000 ASSETS .S 43,326

' LIABILITIES . S (3.963) 7 (1) DEPOSITED IN APPROPRIATE FUND ' NOTE: IN ACCORDANCE WITN THE BOf 40 RESOLUTION. THIRO PARTY PAYMENT REQUIREMENTS (EXCEPT '

DEBT SERVICE PAYMENTS) ARE TRANSFERRED FTiOM REVENUE FUND (WORKING CAPITAL) TO THE -

- (2) PA:D TO THtRO PARTIES -: J OPERATING FUND AND ACTUAL DISt!URSEMENTS ARE MADE FROM THE OPERATING FUND

04) TRANSFERS.BETWEEN FUNDS

, SEE' ACCOMPANYING INDEPENDENT AUDSTORS* REPORT.

v - ,

w s + ,m___ ___-________m._.mi_.___. .....-.m. _ _ _ . _

J 4-l7 a

' PIEl%10NT MUNICil'AL POWEft AGENCY BOARD of DIRECTORS Abbeville David H. Krum.icde Gt) Muger Clintos Newn L liarrell Gty Munger

~

Eseley .

Richard 5. Hale General Manger Combined Publ.c Utihtes Caffacy larry A. 59.amon Secretary-Treasurer, lhhiew Hou.e, Inc.

Greer David V. Duncan ,

Commmamner Commmen d PuW Erks laurene Coleman E Samak, Jr.

General Mange Comminaion af Puble hka Newberry Joel 11 lidhetect Utahties Ihmtor Raek Hill Joe R lantimi Oty Manger UrJen -

T.D. Sherbert, Jr Utihty Dimtor Weetniinster Gary L Cobb Superintendern Comminskin of PuW %rks 0FFICERS Chairman ,

Coleman F. Smaak, Jr.

General Manger Commianion of 1%ble %rka laurens Vice Chairman Richard 5. IIale General Manarr Combined Pubhc Utibtes Secretary James A. Bauer General Manager PMPA Treneurer Neil J. Keane Finance Duertor PMP4

e PIEDMONT MUNICIPAL POWEll AGENCY I21 V I 1.1. A G E DHIVE GHEER, .5 01' T il C A lt o l. I N -\ 2 9 f: 51 803 / 877-9632

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