ML20101M515

Nc Electric Membership Corp,1991 Annual Rept, Including Saluda River Electric Cooperative,Inc Financial Statements

ML20101M515
Person / Time
Site:	Catawba
Issue date:	12/31/1991
From:	Ellen Brown, Clayborne H, Rachel Johnson NORTH CAROLINA ELECTRIC MEMBERSHIP CORP.
To:
Shared Package
ML20101M503	List: ML20101M500 ML20101M506 ML20101M515 ML20101M526
References
NUDOCS 9207080268
Download: ML20101M515 (34)

Text

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es 9 North Candina's 28 nitalriertnr awperatwo verrjou nded in the 1%(h and '4(h to bring riectnaly to areas of the state considord I:w remote and u nfojitalde to Ir vn ed 19 municipri or inenfor-owned utshtin. Today, thme a,opnatwn are senrd 19 threr i vparate statewide orgar natwns, all rumler-owned and non profit. Thor organi:ations provedr whidnalepourr to 27 f.!rrtnr hiembenhap Corporatwns i13KM and matntah suffdy and trade aswnation vn ites to all 2N131Cs in the state. Thne statewide organaations cre:

• The Nonh Carolina Electric Alemhenhip Gnporation (NCl31C), a generatwn and transminwn power supply anterative, (NCf3(C cho vn n as the umbulla airporate organi:ation in many matters B

for all three statacide organi:atwns varing North Can, lina's naal circtnr awpnatwn.l

• The North Carolina Anoriatwn of Electric Coopnatwn, Inc. INC3EC),

a statnvide trade anoriation that pwridn a vanrty of snrires t-memben, including wjety training, govern ment relatwin, communications, and youth and adult progtumt

• The TarheelElertnr Alemtenhip Auoriation, Inc, ITl3fA1, a rentral purchasingand matnials supply amperative.

Together, the 13fCs, NCf31C, NCAl.C and 713IA vnr 583,Uth) houvhrdds and huunevn, more than 1.46 million people from th# Outer finnin to the I:lue Ibdge Slountains. hen ice extends to 45 vj North Cawlina's IHH con niin ~ -

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,,Exuutivo M:sstCo x..in co r.te n a rte,,,,, at,.n,,,4.p re,pyrotio. For the North Carolma Elcrtiir Alcmlenhip Cot}mratior.,1991 was a gorni tra+.15ci auw of our < onlinued initiatises, we he ought clertric power and awo< iated enic es to our < onsmner-mem-hers at the lowest gumible (ast, met our financial of jeuises and Lept espenses below budgets. From the beginnmg of the state's rural rict nic sniem in the 14% and N10s, our stratep has been to c onstantly wel w.ns to make cleurir powt r more allordahic. That strategs has made <n i rautious in cronomic Inom innes, and stable when the economy is unstahic. We beliese this su alegs has helped us wrather the retenien that burdened the nation in 1991. We provided considerable flexibihn to otu generating and transmis-sion capainhtics Ahmg with our existing patt<mnership in the Catawba Noticar 5tation in York Counts. 5 C.. ws dedit ated two pral-shaging powet plann on the (luter llankt - The plants. one in Ouatoke and the other in lluston, < ost about $15 million to build an expenw that willle trimered through s.ninp on pral-period cleurir power. In 1991 we focused more on (harting our path for the future. One taajor initiathe was the deselopment of an in-houw power supply and tax planning rapability. We behese this in-house planning capability is far superior to depending totally on the uw of outside consuhants as had been done in the past. All initial powei supply studies base been completed and will be incorporated into a < ost-ef feuhr and integrated plan. The demand-side and supph-side sindies will be integraird b mv 3 of1992. We aho res cised apprmat in 1991 from the Rural Elet triikation Admimstration f or a resenue deferral plan that will help us of fset exprued luture inu caws in power < osn and uabili/r ciruric ratet fly having the rnenue deterral plan in place, we will he able to defer rnenne until it is needed to Lerp rmts down for our consumer-membert We're proud of this initiative - it is an indication of the Lind of thinking we're using to appinac h the f uture of rural elrotir noperatises.

Executive Message Morithly atuliting td the opriatuvii anil tiirl expriiscs I tlic (!atawlia NLit Iraf blallini is t (intiiltulig, as is the f estiltillisti e d sailinis disjnlirs htt}t ('.af tall:1.4 Pt#wt I & I,lght aild l)tikr Powfl. In krrphig with ton rmilonmental poht s stalt iUrnt. N( 131C has stijlpoi tril state and flatitinal If scal ( b destgin'd Ut t!c'erlQ illipt er.t'd drfiland aint slipp!'. d ejltit uts that will assn 3 0 pflitr4 - tioll 8 d (lit' t ilsit onillrtil. We Mdstantit d a plinjMbal to (lic Irderal I nrigs Negulattin ( 4 5tnttos sion in 1991 to t lean up a }nlluird lake on ihr het on Rner in llaywood Counts and he allowed to opf r ate a tedrialk th emed hyhorlet tin ta(dits at the lake. Proposed impitarments would he pomble onh il N( l \\!C weir granted a long-terin in eme to opriair ihr Inth ot let tiu projet t. ~Ihr pt ojet I was opriated In (.:P&l. undri a hing-terni hteme hom 19' ti to 157 ( and on oncat ar it mporan in enses ner suu r. Our appht anon was iturwt d in ihr Federal I nergs Regulaton Commisdon last spiing. A ruling is expr(ted this trar. Ihe past scar saw nunt.arnt in out long-standmg autormt suit against CP&l Although alleged ant:4 ompetiin e ai tiom undritalen priot to 1973 tn ( P&l when drahng with NCDIC and Iti DICs wrte dnmiwCd. the was was t leati d a for at tiom atter August 1973 to be be.ud hs a inn. NEDI( /s t.laim states that CP&l. atit il to kr p the DICs out of the husmew of gruerating ilet tin ity through anti 4 ompruine ai thities imulung othri powrr companies ~1 he a awr will go to trial this svar. We aho filed with the Fedet al 1.ncigv Regulaton Connnnsion a toival(ninplaint aganni Vnginia Powri (:ompam askmq that it uppadC its las ihtin sening six Dlf W or rrdm e r ates t harged to N(:13!C. In shoit.1991 was a scar of contnuird tinclopment. N(:DlO inennes beiaine subject to int ome taxn in lW,. nut we paid sut h taxn for the in st tune in 1991. We base matur ed as an organization. An oig.mirational andii in low 9 ict om-mrnded some iror ganization and enti m im mg. We stat teil f 4

- - -.. _. -. -. -..... -. - _ -.. - - - - -. ~ - - -.. ~. - - - -. - h ' yest! c a v o l u n, a i t<<susc st a. s e r > A i r c e r t u r a t u e s r 4 b r l the gutx rw in 199n and dramatically strengihened the orga-j nization in 19'31. We now hase our own peak gete u.iag 1 b ll plants, aint hate added a host of ses -- ' \\l'i and l 6 their c onsumer-rnenderrs. l We're in a brtter position than rser In fore to takr a stronger tolr in the economic deselopment of North Carohna. We will l (untinue to arthch esploir enrigs alternatises and be in-whrd in acthities that he3t sene the intriests and nords of our conunner-members. Together, the Nooh Carohna Elcrtric Ah mhership Cor}mration. i the North Carolina Awociatiot. of Electric Cooperatnes and ti-Tarbert Electric Alembership Awo< iation ate ur

• nic e.

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• /

~ ' } l q \\ .~, p., w e + s y f t f~ W. i H. Eugene Clayborne 4 i President j . Torheel E!ectric Membership Eugene W. Brown Jr. Association, Sc. President ') ,7 (': / I North Carolina Electric Membership Corpora 6on Richord H. Johnson 7b //I(7?( b'! President /~k d

Non, olina Association

/ l i of Elect. Cooperatives. Inc. Wayne D Keller l Executive Vice President a I 1 '7 I 5 --e

P;w;r Service in St,pport of Sustoirdng Production in ihr rat h 19 sow Technology NCFNIC bought a M pn. Power i rnt share in the Catawha We are a senice oimpam in 197h. the lat herl that must rehabh amt utely N "' I""' M"""" ' I " P"' ' ' tin ou % ndwn h thn mimyawan dia"' .bsm ianon *.n estabbshol mort the powet irquitr-senes N(.E\\lC's base-h..ul ments of our member as the u ottai puit basing (ooperatiset Our minion ratuunnentt Ihr Catawha and mainial supph opera-mainiatn that we do so at N "' IC"' S'"li""' "PC'"d hon h.r the BlCt in the lowest long-term cost bs Duke Power, operain g;, ;g, , g "I I"II P"wer.n nun h a' $3n57 nulhon Abbough powibir, c onsistent with soumi businew prat ti< rt P"" dele. It luyan pr oduo not ir uuni to puit base ()H dpril 27. I991, the ~ inaterials llHieugh II.bl N. sun e du n WCs a< t"" Nm th Carohna Elecnic F Nt(N hasr usnt moon North Lu ohna base surd Niemberslup Corporation i use W 11 RW umrh launt brd a new era of milhoin of doltu s in power de b m d and buL ( ostt These usings, in (oopriaine elet trh wnh e hasq ana m w m un n. hase held down the in the state. We trat hed a .I ERN opriatn liom '" "I P"" ' ' I"' N a w.u chouse m Raingh. significant plateau m our long struggle to estabbsh

• """"'"~I'#P""'

thspatt hing n ui kloads of I our own power supply pnth ownul hs NCENIC. mi.d unm on a daih i Duke Power and other mirm with the e ompletion basis. Common (arnen are and dedu ation of two solch P"" C ' '""' "" usnt to transport goods ow ned generanon laultin. I '"" M~ f "" M " P " " ' "' " thus W IEm the I in separate i ric monin Inung dnelogu-d to nu t alnha to ir:rne an of der du?da n.uulforcln n uin on the Outer Banks. we and deiner it the neu da>. in iural Noith Carolina dnbrated a 15-megawatt to a N dw M WC ihrough the end of this generating station in headqu.uien and dntii( t irnton and into die neu. Buuon and a Smegawatt of f h es station m Octat oke, l I"' I" "' "" ""I" N ' "" Il31A aho inordmates analun of ihr asailah!r The plann will redute the g g,g gg, g pg,g oserall rost of power for "P"""' I"' P '"' Id '" M " in gening supphn uno the NCDIC and in member <irpendable now ot power hads ot emmin iu u

• M ' "" ' " 4 "" " I ' "" " " " " h e ooperatnes.150th arr woikmq to rntote pown on, inc luduig c onsu m n""

diesel-fit ed pt aking when weather < oiuhuous "t new gnu 1 anon.uul stations that opriate onh c ause outaen " " " '"" "'"" I '" U " i C ' dm mg ( rnu al demand periods when the c ost of dneloping new pun base and unn uinnn tion wholnale pur< hased pouri agt n nu-nn, and dnn.uuh is at a prennum. Ihe plant, also sene the area f or '"I" "'anagnunit. The linuted periods during analun n guMniIn a dup emergem irs '""""E'*'""P'"'"'*R ihe rinuontnent and a touunonernseappro.uh io liv al sirw ai d sinp i 7 6 i

.. -......... - ~ ? \\r s 4 areIonu !le< Iso < \\1e=aee<Arj >rp,>satuo n r b 1 a g a 4 i I a n. i. I I e I x i l ( 1he Ucrnenke Generut-1 o l k e ing Station is on Ucracoke I island adjacent to th.' s } district office of ledeland j 131C, headquartered in e c l l l'antrgo. The 3 megawatt l }_k diesel powered generating v::. lh plant is used promarily to [': j 'y pret ede praking power 7,; ^' along the coast, The plant unsfirst put l \\ ? l T into service in O< tober ) 4',. l / S,~ 1990 after the priman v.: power cables to the Outer L.s. {

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Banks were severed u hen I i e e ~ -l ( 3 l a stormbiven barge 9. s l collapsed a portion of the lierbert C. Ilonner Bridge. l l The plant provided emer. i t l 3 genc.y power to Da ncnke m g V island and.the southern y i m ? end of flatteras Island. The S F ,I Station has state-of the. l J I' art noise-et:ntrol g 2 s. 1 r' eq uip m en t. f [ [ 5 l j FI e [ ) l t .m. m. n 7 = m. _-_----=,-=--n. w - --w .,---rv r ,---r-wy-- .r w

_._..______,_.___.....m_ ll J Pom r 1 l ~ a p ) . h 9 3 1 / 'q4 m \\ [ \\ i f. V e fg 8 8 e 4 t k' .J I e 5-d h ( r t il i c ' n'. - 1 l ^ Nert to the new head. > Frnm this central the f.Sf Cs, thns modified j quarters of Cape !!atteras purchasine and material form ofju st-in time EAIC in Buxton is the iL supply warehouse in materials management megawatt Bunte n Raleigh, EAICs through-saves considerable storage i i Generating Station that out the state can ptarchast space and carrying costs. j operaics pri:narily during iterns nerded to prun ide 1ESTA is in a position to l I peak demand periods and service to their a nnsumer-negotiate bulic purchase e m ergencies. members. About 1,300 prices and manntain o } items a alued at $ 3.5 u vil halanced inventory of 1 1 4 millwn are held in materials, eynopment and perpetual invent >ry for supplies. The goa! uf a sir-J dapto-dus needs and f or tu-one onventury tur nover A emergency shipmenn ratin was mrt in 1991 1 i durang pou er outages. For despute the rrrruinn. j 1 1 1 n i I i e i 8 .. ~ I 1

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.- ~. - -... - _. - -. -.. _.. ~.... ~ _.. - _. - -... - - _ = _ _ _ _ i i Service i i i I i I J Member Driveen, hud nuna.:rruent piaer am all dem.u'd ihn my pt ak Quality 4ocused Sersice ihat wn inoutnl to di,nr oprianne p. nodt dnn i r l'ower generated during 'l onet ha, NR\\f C. uni a s peak loads bs t onn oHnw wn in g p.ns o < ost, h also v watn brains and an dows link e Pown and i monber DICs sene ihr tienes of peak demand a. s consnonn s ihn um < r un al \\.u guna Pout i to n diu r largest groa aphic aira of j capensire. In 19M, NCE3fC .un unhn compam m de mand pnio<k Ihr thor prakt who h m turn launched a statewide load Nor th ( arohna M:1.\\fC pn. gain h.n sas ed nion-nen,sduutunne ' h ' " D " " U " '" ' " " " " ' '""'"*"'"'"'""I puic hers rict uit al power management program to w holesale f n m ( Luoh na im eptain m Pol hohh down I>ow n ioos bo in 1o91, M Ut(: ekol .dl thrn a mtomers shas,e peak loads. The Pown & 1 ight. lunLe i,oues for a iral-innr~ va n..d f or 1,a h of Nooh ('amhnn and Yugmia Pown for i command renter fur the 527 I resale t.i ib inrmhn L \\lls monnonng L.P&IJs 6Ms L \\K., n to..d h,o n.nu >nn iu s I m orde: to impiou= du. ,nni < onnoHot bs an million program is in the \\lemhn salidauion. Wu n-m s of du-load clo u-d bo.ud of thn i un s NCEAf C headquarters < outinuons nuptmement and a (onnninnent to """ M ""'"" I" " g on n llusdn duhn gnesa y b uildm.g in Raleugh. Isere, a knh an. ara eman uutdd mendnr m k o w. n. o bent di e onunnn s of both nunn to be msanir and serirt of high tech displays (usirifi,3rnt air din mg ndones ( no rnih. N( l \\1t w k (ine m ns nuihods01 ('M o I ' y"' ' ' P'"' show electrical usage ""i"' '"i b ugnals in u n snung du (onsunny Ilu-From thn (ose-t ontamment throughout the state. Il7:en l'"k" I"w er. nut Vu gnus 1.muh of r k i u t< < oopri a- < onnnhnu m ha rm a Pow n. m intnum the uu s 'n Nonh (inohna i conditions near a prak. host of innmatne wn k es ' " " " * " " C " " ' " M " "E adm is nuotar n scan h, and progiams One sm h demand stage, controllers M J h < an ndnu' osn-both ionnal and intonnat pmgram i3 tbr uairwide operate a series <<f urit< hes i to reduu r service to run-sumers ' rlectric water .7 .7 j \\ ' Y. I. heaters und uir conditioners. ~ ' $Y ' 1 anse eme, o The voluntary program y \\ controls unore than 215.000 vl[ } .h ' s c- .{ appliantes and reduces . f. '

• peak demand by more than x

160 rnegawatts. hince its s - ~ -( inception. the peakahar-

• a '

ing prueram ha.s saved the z . A E3f Cs more than 5 70 \\g. million. These wrings R '\\ have helped hold down \\ u 4 power costs for 13f C con n mer-members. ~ i, 10 - ~

%<eth C a r bin e n Ilertsee ti e m h s A s p. certvention \\lembo s who air haild. Ahhtan Siail t'all was the Froin diat.. srait h. t.cural .57' w} . AY--. ya g ,.s y r ] mnosatnr programs base ing tieu homes ran most un irwtul eser. _- [i cmcr ged, im luth ng: apph-for the Madmum i nrolmo Crepatry guo .m, i rNW:'by-Q \\ alur ilomr. Ihe \\las intd

• the hoinos ot 310# f0 T.

R vI .T w o l.W.s offri qwt Ld -AN "9 hoine has logh leu is of f amihes an:1 Irm nrs tuorr lates to c onsumen w ho msulahon. is heated bs Ia-ilrrl iraden than ant 3

• n_

n., i hinne not to use + y a -h. *M ) + the Cornfon t Ma< hine othrt Voith Cernhua $' 9 ' "2 2 ein trir brat for a i.ch Ch heat pt.

p. and uses puhh< at son. ~l hr [mbli< a-

- pyM honrs during the M the load manage:nent hon kreps < o-op n.cmhers p .d t ohl winter not mnv .s4

• win h foi peak rune informed about the statcN h

peak tunes. t onu o). inval cln o u program and (:ustomen of.4.cs t ral For rysting homes. otirn a satirts of helpf ul N.^ can use electiu ^ In 1991* NCDf C 'oined h nucownen ian rr. at tulo. A iradenhip sotTry 1 thermai storage to stoir w e iomhu ted in late lie >t. qunt a nos osi cuerto other organizations and heat at night and use is llouset :all, a compuier-I be maga /ine will be individuals in au nwiron-durma the dav iied aniht that pinn t-gr aphi< alb aiul editorialk \\. arums uthn spn ial enental riean up program tien the oinsonwr N rnhanced in her.' to trun i m ates air t.nloird to the d""'~'""#^ "' "" " h "' i' ~ ' " '" k "l " Y ' called Big Sweep. The needs of unaUrs sasingtrilol'Itt cleanmp effort, co-sponsored '"'U'n't RTouly U"' 9_ 4 ruirr,Jr is the Time ot homes a <bv ount is by the University of North 1.,c Rat e, w h.,u n sanes ottered for homn that Carolina $.ra Grant dming peak and otb meet enrip < onsona-peak houn, in iontr ast Program and other stat' sinn rquiremenn bm h to a constant rate. as high R4alue insula-agencies, was established Anodwr rmde is du-tion and other encip-in i987 to clean the state's 8M c Rate.w h. h allows ~ u rificwnt feat. csi, a omsumn to i ut h.is or waterways and build het electric heating raic Sery ce Beyond Power public awarrness oflitter, in half hs installing rin kwal high-clli< ient) Seniin ottard in NLt MC Afore than 60 employers, or peakesh.ning and its member DICs go spouses andfriends of equipment. heyond cln encal power. DICs oiler a<his e on During operanons Descii NCDf C participated in making csisting homo shield and Dncrt Storm. the event by sicans.ng up a mor e enet gs cil_u v"t. unployen and memhen of stretch of shoreline at falls and swerten the Olh w-ned m dw Ar med Lake. Blur Ridge DfC in I""P"'nion w uh low-t otum in the l'nited Stain inta nt loans to fin.un e and abroad. And. wnh the Lenoir also participated in msulation. stor m help of an.uwle that ap[rar-Big Swerp in the western window s and do< n s ed m ( Andma (ountn the "'"U"* W W" U"' ' U ^\\ part of the state. stnpping. aiul heat pumps Y .i

.x - Servico i i D i 1 Safety as o Priority Omps that en tise oiganisationt Ambassadnis at onhtanon smot he re-sein ird in 1991 %dl sene i Out otganuauon's drdh a-au sedard non thir" 0"""E" ^" non to said) a not lost hp .'Ihr o u'psthat"C'r " 1""' "' K""""i r,' ail, a u.nh c. In Non camhna ordord in Pf31, And R b h N "'" i I n elthe uate's W 131C' dw nunil,n of dmes tlw) 131G I C'i"E'""; '"",a h bec seu hnt a 5alth lme guhdod for an sedits Pa ri I hH b D"""i in 1991. 583,000 ^"'"h" 0"", a"1 IU"r ""N" - NationA Rm al 11ros h households and ,,g, n ne; gla33,nni Mi i-coopnan,c Asu.<ianon. gg3asnmdh _ sen; businesses, more l hat ira d i' id I"MI"' south Rnrr ITIC. ponn, Pole Top ReHue than the natiotui eddRC-than I A6 rnd, h.on u.u n; Roanoke 131C. Ri' b C mP**i'" alw nond Rural f in u n people, receid % I W d. uni 1 31C-O xipo athe A""d70"" W mni hum Al 28 Imd paniego, snu llahlas ITit their power from inidated die 544 b d. an uit o.opo anm I" g,,g;ept gius lannin e Dd EMCs in North nation toogtam in itHA Noish Guohna < onipdr 13H; Red $ oingt Dw+ 1 lode. U.M of dw nan"n's nrn mo u.an m a Carolino. The iMCs' Ruda ibird DIG fur" 000 ein uir < oolutd"'" de.mi.o h show "I *dir'! ""d cin, tnun and Cirv rut 6eryke terrbories hpplysnatiIrdurd. iew ur skillt I be Ptdr4"P ' NMnulle, lont. Many of our incmga f g. g;, n.w ur OHnprthols follo% are in 95 of North I hu > ugh i ounnmn" dam an unintrunpted sum,Arn suln whilr u.nin, abo u pnimoting - Carolina's 100 "4 ""I "M "*" endang a r> h>oi an u n un'sdr uw "i d""4 toonties and ex*' strett hing hat L fo8 luo pok in armonsua um i dw o*+ps A"uill in ("""""' and snuw iunon in h-dndn. from the Outer m m & W m dons in unin to quahly I"' gg.,A m.. pound inpro for an ui< cong' Bonks to the Blue au H tado". "" '" dunon)nhknamed %"ol' one un h ynogtam is dw is uwd to simulaw We sated m 21 atras of Ridge Mounto,ms. Annna Youth l'unD opn.oion 1hcpaar" onogem 3 tru ur of au-- Rnwa twid 4 die Broy NCEMC is one of ansoh n an on-sin' in'i"* inped wm kn. The jcti per,n &ll center sw.u North Carolm, a,5 lop non and the ounlulaH"n hntmen muu make iadio Reidudir. I be f unith of a salet) book w1ii<)1 omt.u i uith br.ulquantof t 20 componies With Annud Youth i noto indndo do"""C"'d'i"" n>lin 1 all nN r"di? Run e g.nc 30mbs an more than $1.6 of dw U*P "" e papment, dimb ihr pole i opp a nnun to gd d d""" and un o wing town dw billion in o55015 0"'I mndgation and telwo hng up buik.o the powrf of dunung to the gtourul pn.< edures employee an u u 1. The domoinu a- $604 mil 5on in 9 beh ar hcK nnind '""" i'd' i u aining aubMm. pow i" tion, traiming f ull-v ale on alw uw of proid the iion in o< edons Whn poln.md uansioim- ) rquipment and sah11 bnonnhutedhsairt 1 hc pole t op Reu ur n 3 impo tion of hnes jud" n,mpdinon was Ont held $ codiso hom p.niduo' and imdeigiound builni" m 194. Io quably lui the 131c in 1.cxington and p,. ops the are auseditol stairwide larnnul n rnt. scl31c in Raleigh. gd diw ounts on insuram e lintmen must pl.u r hnt in At dw rud of the t amp, simdu onorus at 1310' premiums but the money y di Amb.nsulon an' thc3 ser is a ut ondail wirord to wnr a lim'""' t n,mrin to penroting pgwrenihe131C3and inimics and sumg bres. i m 3omb and w bool f 12 ~._.,,..,--_...,.~,--,---.-~__-_...--n

s,.,,A 1,,, o iI,.,,,, u, r...A.s <e ep, or, l l ( lour tienes a year, e at h n oluntee r svart hrs s olunterrs from ivur for the anost unusual trash County i AlC gathe r to treasure to present to the pith up trash along a group ut the end of the section of interstate HI tiran up tffert. as part of the state's Other i AlCs that 'A dop t-r riigh way harr adopted portions ~ prograrn managed b1 of the North Carolina the North i orolina roadwap enslude II'ahr lhrpartrnent of f AIC, Ilokr l'orrst; f ra nsporta tion. llando'ph l AlC, Ashe boro; f our County 1 AfC %uth flu er f AIC, flunn; Jnrst particif>nt<d in the a nd Jones-ttnslow I. AIC, pr, grarn in iUSM by Ja c k s onrille. Opportunities for North iNlt:, m Leion *. I out adopting a two rnile Carolina Youth ronon ITIC,Inungaw..unt s tr r te h..f' l WI on th r ( It u rlit I \\l(. %tatesullr. %tuethe 19n0% Nolth l*rnder County /llanorer (.attehna has }Lu tu spate,l tit s. Ilir in n agri s pat ht I-Count) linr, but te e rntly in ihr lini al I li t t r it i.nuth .t out to O.uungton. ll t pate m a Youth 'l oui Quir took orer stran-up ducirs ln.uhlitn H1 to % l 's,I 4 th liowl that lnts soulent h.ulen s h oin viious states near esit 14% the llurgaw (:atohna high u lu.ol d d "'t "" stuilonit groups leoni othe ruhange. It inkrs the answor nig questions on states }utin tpatnl in the right to f(3-mornbrr all-t ur 41 rin o n murs. uni 1941 tom - neat h 1.000 '""'"""'I"'"""' ' " # " " # "# ' ' "# I"' "' stuilents nationa nic, 1 he it i n-aut is air d " l '" "' I AlC nhout tu o houri to sponsoint on the inut in un k long nip is tin n th t i ham e to we ihr nation's f i'" " "P " '"" ~

• i l' ' h satiinis i ln tin Tlmnlin-ship Cot pos ations Luth,

' "P""' "'H H T "' N ' P. d W of the intnstatr. the stuilents aho got hanileon irpirwnint Ninth I?nri quarterly outings atio offrr i Nt(:, launn; Itine lintgr "I"'"'"""'""#"*" I.%)(.., I rnoit ; I lgn oinia - ow n t i.opri aine woh t he a c hane r for some fun as i NIai nn (.ounni\\lt. help of s ai n.us i \\l(' aiul N( 131(: nnplou et .I ailu n o, Put aiul (..irent I \\l(l. I ailll%111r; IIllilwtltHil 1310. l'oi est (.in ; WJ t 'r 13

i l Economic Development a I i ) i i J 1 J l Cultivating Value Added ih4 i no;n s ain r* op n< 1 suppoit to stais up huu j Relationships in the 1 o p b uin nInn al e i.unta - ni u

• in it.i n < n n <.n ras Community n, p.. u n e n iis t h asul hi Pen t N( l \\H.nni i

I he nanoni nn al e h t ti n < ln clopn m n t Ir.n h r o oin ot in-i < oo} u-i r l. piogi.nu has a mini intur e. Ik geninng ni 1990 ine

• and uns sion ow nril t pn talh il the i nopt s a

.nni < onunnuig ni loot. nnhin

• In lped opi n thi v in 1441 l umbre River tnes an able to ln wh-n un udn-t ITit si.n nesth Non th ( anohna Alicinatnr i

i %fC en lird Aprings helped then nile in s uial t < oin onn lL ed f or opp.n in.nt n a. 1 in igs ( ni p< >r ationi provide a $ 79,000 intres st. 'hid 'l"'n ut I" d ' t.d to has e posone e ik i t on inch ninal I tri n oire huologs ] wn c. the n..n ju olis t oi a! ri ononin dosi lop-I aboiaion on ( rno unial I frrr loan in Ihr l u tnbre g.hm h igi i \\H: ni ( eq in.n ik % n th gg ,ny n l Regional lirr e lop men t stair h.nr pr os ule.1 t uv al I<nou nullhun'auLI\\H~ 4 atohna Nia" l~nnet uni f e 4 oen uni ( <lo rlopine nt to, in shallotte we ir < atahsts ( nlh"co ol l a siih v i he l A ssociation,.t he loan e,s innir than *,o star s l i orn I"' h ool lin ("tisti ni tion of \\brinatne i tiet o ( ot po [ i one of a numbrr of efforti gn.dm when<h<nn o bounns dnrh pnient r ain.n, w hn h N( l \\H'in Ips in North Carolina ht lural lwe t l'n st pionib d hght 'on uhato in"It i t* to 'o pi >"i t '* a n "n l'i"I n l l aint brai fe., i nt al its h nis. D' os ule us ei hr.nl aeni i ni poianon intuted 131Cs that have resulted in i l interrstfore loans from the a Rural 1.Irrtrifica tion I Administrntion. RL4 is a ~ y.

• L.

frderal (brpartment of l e ' N* l Agrn.ultuur agenr1 that ) 4 6 provides finan<ing for the i nation 's cir< tric and s i } trirphonetoops. y. k s 'Ihe f umber Regional . r l I)crvlopment A noda tion will \\ ~ use the loan tu uperate n k anodri turkrs growing b ^ , - e w i ~ L i ~ operatton in At. l'auls and l to trath farmers how to wpplement and rapand thrir g s far m oper a tion s. j "'" ~ I I O i 4 m if I i 14

v .<4 4 o,i.. ir,,t .u,.1,,.a.f .t.,4,,,, a f ,g * .'N =iek A i [ 4 4 > %Ar leaders of 2 m..m m %'i. ~~j I_nmorr ow, a pr ogram t 3 A 4 develop leadership Y' }- potential in Ashe County. i m is sponsored by the Ashe 9 j ML .s l'conomic flectinpment .+

• r.;

( Council. Ihr annual right. e y mnnth long program for up ^ i to 50 partitipants includes ~ y readings, dista:ssions end j N rsercises thalfoc us un Icadership skills, nanomir '""Y ^" ' "'"'T"'"' trends, communits needs, otilun

• aint h (ornnuttal to eh dna. mn t ow.n r iln ing.

ot hri statew ule n.nto tram-huilding, probtrm. pn,nunnig alm < Hn n nt use mii.n ed ilning atul anoi ianons.md no n e th.m sulting and conj 7icI of rnngs hs aH segun-nn of aloasonint shone l lu-lah 1In n ononn< dnelop i ti,e statri < < onoun. ll w.n aho ourn nonp.n arne inent < n n.unt i due anonal resolution. In teams, l rstahlnin d in in%n in the dnpl.n s i.f innlosn ial gu enps participants arIn t stair l'ohin s ( omunuson hghting. uni the onh \\( l \\1(: aho pr os ales .n t mg m i noper anon un h unlepnntenth opriated ongomg supp< n t to tu soin s ommunits projrets tu the cln 11n unhin s Ihe inotor s it sting f at ihts m lhe tooln n of the 1 \\1( s l'i om I work on dueing the Lh<n.non N nhuin a m tinn d stan t pt ojn n < ome huuh '" ""' "' H I " ' M he ' " d "' h"d " 3 "I d " " " " ' I"4h " I " '"I " " " " ' " h " progra m in.tihr Cou nt.v. .n ailable n the stair'. of ihr Nnib (Laiohna h.nl paitu ipaint m the and in 1991 it again u ns a ,y 4 4 g,,,, g g , g 9, major finant ial e ontrihu. < nstonn is at oo t ost %ns h ( oopr ianu s i M :All i m l our to hlungton ihn j sonic i s un hule the loni. A irpor t. Inini n pirsenu d ('iru rnt l'\\l(:, for en the program. I imph inent.inon of nt w (..n i n n e t h e ( 'i n n pi o t n e %tatre ille. N int h Rn t r 1 cl.. o otn huoloems - a i Ar: Ihe'.hauengeio i\\lc.Onnn;and mor j irsonu r t hat pia n n nh has % n ih (.n ohna's (:onunn. Knige l' \\lt. I rnon. l nm n n.,,.pu.ha.im e io, mn o.nogr a asn,m. l mans plann. nulls and pih d hs the 1 omnnuum t u toi tes.1.atru air irsting on the i non e of the % nth .un t inan nt.n im mesi a.r (..n ohna ( : unminun drinonso. mons,n r ( oltre sutrm i hr trpor t j s i 15

j Iconomic Development 1 .I d ll 1 l l

l l

J i a i ,,,,,..****,,.e r. i j 1I',,,r, ) ,,,1 k 19Y,, 41'9 og j

1. ,,4 j

.= 0 9 8 ' u k a II ' \\ J 9 4 \\ d l l l I k I l i + l ~ j i I i t .I e } .e l i i g 9 i = i 1 f l 4 4. i e i o ~~ i g. I m. l i l / l o 16 l I

... ~ _ ~ - s,ros e n ,..r.. Ii..ir, u. s,..e p. o .g,,,,,,, \\outh lins e r i \\lC on l'aroluna Clause s is the Iash sear,li^arrrn ~-:- y g-dfpry e.~g, I l flunn prur iden rIra tri al largest ratfish prns e nor r e sto< ls hn ponds. I nb re n< h ':N^ rf *; < np +i f, y._ ' ;m. : e r. r: pou er and se rviers la a in the unnd. \\ tlan tic r e guon. matursts nn ahuut r ech t l s arict; vf hansohnids and North Carolsna ranks annnth s, bs u k ne h te nte bussnessen, tlnr of the sisth en the natonn en thr; u righ hetu ren ene E>- must unusual is Jeff aquarustur r u s th yr vdut tnan and threr founds. Alorr j if a r r en 's s a tfis h f a r un. A totallnng $10 mnllion. than t,00 pounds of spru nal l for me r Aarnpson Counts It'arrrn's is une of onts 22 fre d per aus are vorf urerd I thit ken farme r av linse-c ontras t forrns un the state to brung a trop of fnh to l broru, If arten in 14M prot'iding thss new Ispr maturits. stat a rd thorr of his ung - of fish flybrsd c hannel l ar te far s,r ponds u-ith satfosh are a far <n from hy brid t hannel s a tfish, the old timr " mud tat

• lhis popular defin an of rou ers and streame

,y nnw supplies a new and f urlas 's s affish, grosen ,g,,,,g vy s j,,,,, y, grouing retailfood u nde r s tintr olled < undi-rn a t h a t, tuons, are toute d as une today,11ar ren has of the best tastingfish 4 more than 12 arrr. of a ny u h r r r. under u aterjnrmland that 1 d.. ;

s hora ested in %ptember, h4 I

'('l;^ h}; h l Oc tober and Nos vnube r. l j Alvre than 10,000 pounds vf mature natfish are j' w. y netted in eath hars est [ ar d are purs hased by r oj.. Carolina classtes Catfish V l of Ayden for pru< rs sing and trsair in turnumers. sw / 17

Toomwoth Monoging Member ( > ne g o o p..s.. ! l ull p.,, s. ftequirements and w,,ul I h.n e in.nh a h a-e Corporate CopobiliHes nih t ul b < a io h n, d.. Roi.d i h i te n i nepri ain n u n i b ' 17 n al $"" L u n h " p. J h.ni he i o a s nal p u i of 8 h' $u o i n it Ian 41 to b uil 'y the tahin d s ural % o th imo N l'"I" d'tue' t.u ohna h o nu o r ilun h.dl snigirlaouh u t nins ec htt ai<ntuis ikianu Nt I \\lt orio.o 6.n.untineins.n atol the n:he i nulu n s Ithone N( l \\l( .u ol t he uniLt d luid to ou hule < olo i unhis i oni;uno s e Q. 9 t j H li( lil init f r a si' ill Il6g el a tit al 4 4 allse' 't w as n"' inn n :ne b o unhto + Q siate's sah s in.q,in ou d i n ih, (..n i.a \\ u na.h ni and wooh' onteih no irme I l'ml. nu n la is of ihr s ui al t'

• loi'"oaon'unn -

i i b i n n e no;.. iain n w on i Hu nk is h,n r o. p n M *, onllu ri in N( l \\14 .n m i h u ( i s s & S$ a.hino.n.a sah s iau s on w o ninn"

n. nu o do-e.~,p<

i j lisilits lulls \\in li ail lirr81% I l!M 2

• n d 'nI'8 i A

I \\lt s u hit ni tuin iniei un is a# w e,uld hau poi an ail Inninal hunion on I \\1(' ihr sus ds.t ilu i onu nnri i onsuinri nu int i i s. w ho N ot ih ( av ohna's I \\1(, a h r.u h a r e f.o r.1 u it h lo e n oir an inh en ni tuir p.nnrg the nu r e au d sah, ht tiowillal"Id a rb'p lasn on gini e in s. ilottung no nt w ho h hi Ips union.r ihr yeahn of hh toi all it s and othr nri t unn, Ilu er we ir noor than iin/tns 1 It t in n in. lohs 2.Unt i )olls siiti e n h u t il wanI i s i u ls. i d th at le iii. dormgiln 19n t t.o u i al luahh.uutioninnunn \\urinhh \\f.u n i,1 i h',sr P o in ilunon air unj n u t.o n f olk < h a h u n h lu iw i..-ops i"um to ilu inial e Iri n " i and otin i 1.usuu urs Ir uh iship in No:th opr i a i r N( l \\t(. ionk ( alohna i < ei lbri, a4 tion to he lp <h tr.n Nt i \\l(. N( \\1 i .u ni le cidat o.o t hat woubl h.n r 11 \\1 \\ inana.'rt

• an't eniph n t i s sh.o r a i onnnon lunne d the apn o s i h i o n al woil a i o op i an no"i n.notio mneni pe i h o rn f oi it s ineml.. i s sahn s l oi i tamph. inosi 1 \\l(.s mstall u urin belas.unt pi I f or in. o ra i ch i t i n al duurs n isennrtoihrn m r in b( n i.

s,,a <.43,.. 11,,1,.. st,.5,..A,7 <. f.. 4 r,e-3jfffN# = 4 g ,( k,MC;; _;_ ;, f' l?fdI? <Nj:i , j,_ _ yi'l;, _ ; ; 3-g ,J'

M'My

~ mt ' c + lrmwrtM!'^1Ph7MREGMf00fWhG[,.?-_;.p l'f / %+y:: i l%e.1 ^ !! took Carolina readily available and 1992, Ihn 'll be serrrd Triephone and Telegraph dependable electric pou er by li'ake I-AIC, Is ake Company of larburo sour < rs. Ihr t arnpany loorst. Ihr site untn several months tu find an found a site that met its vs entually at t ummndate ide al int a tion for its nrte requarrments near the snest< hing equipment as administrative offiers. border of if ake and nerli as administratin e l I flequerrments included f ranklin s uunties. it hrn offic e s. I I that the losatson be nrar the nett administr ative an corport and ncithin the offis cs ope n in August rompany 's franc hiir arra; another requirement u as I 19

. _..m._ 4 NCCMC I nn u a,,un t fischt,gs,1, I J l Deferred Chorges 2*. i g. ee 4,a%'j. 4s daf b.S;; h, + py* g, (;a; c{ aje *-- ' y ;... p;* ey f,. p, .+ (*7,* ,r... R,. N*g. I N p+;:~;.,.$.4 .1

-*;M,- w

,*i' V e*, e i I F-a }+ (,..,,,,,g y n, w/ s.%. y, .b .*t.yojy-w ,b.. 1.(% ;.....

• ty..f.t.*J,

j 5-jg.%t. 4 f. I .Q,%Q.t. . f ({ J,. p g * >'p s; ;.. (..., se,g*[w*hsy*m n.;,, 3 f *,

• 4* 4

+v. ca%vj;*" 4 I Assss j i l c i l } Iquity 2'e OCurrent Liabilities 3*. e EoUlfft$ AND llAgitefits S I h 20

u r e, e m. a >s e~ ~ r + - y.3, 4>n. y s m> w, ,,g 7, ~ s. 3 s y . m .qq; ,4 s j 4 ,w

n 4kl}#

~ T 5 1 n. m .,1 sA / Ntatis hauem, eDunm Mika mene Omtsmaww Mam Cam <ma 12mriac Mtwo asur nonew 2 .m ,,i EMMCX bir.Fr . ~ n!?,, Storms'or O""nwnws AND Pmmua" C4MAld y' f .O , ~... -..... ' V, a3:_. ?foratQanaddLGain 11,n9)aridi9C E 1er the yearienddIMle 31, iW1 and 19% 3G ',9 - p t in y . fhsaudud) Hy '$Unaudited)( ' ', g ' r e, ~ _. 3' s jI g-' N [ f,.,, i i h -{ ' ' k '4hf y I }s3 - /S

V w

..4 s s-u ~-739,14 -199p y . As.fm ing" '1900 !.4 ,s q A, l, + / - V, 10peratingRemucQ c 3 tility1%nt f c. m, -.m e, Ehfrkrnap menW,, f / $444,313,701i i 566,692,9101 L1%fwtv,plantandqur/ent 11.514,332,779 ;;1,472.225 634 5 I 397,779,L ?407,848) N, AamidArddynNatEra $ 455.m,2N(8$11 i 383$360,662.' . Odet ofcadng myris$. 2 .-.w- ,~. m ry -- ' + W A .m 1 n....,.,, _,t 1,088.864,972 O 1,061,070,922 . i,, .4 .r Total Openting Revenues (s~. ~ 644,711,480 V 567,103,7581 %-din mswwa> am t 7, 3 - s N. p. .,..: 94 _ s + 30,534,626 % r 5),223,946 & OperatingE.sp:ones " N, r;s @: e,,' ;, < , Ninfmgmy '~~.~ - ~~ em n. il'rodudirm i > N . t $1,315Acti:W 57,516,'458 : <,o f.,%a.. , +-.. - J 'J ~- - c? -< > t Totid Udlity* Plant. J 1,091405.544.- 1,146,068,918 : e a L Ef tdehad s m. .. ; /yg iA,m 362A02,4UQ333.751,6We a -~ 3 m :- - iTmtumssion ex/env4 l 1. %+" l.1_,824,8236, 1,1,0M91,302 "w' T Other Ameets ; Q.. ~.. i w M n s n c. .r. .V~;, $ ^ Ifnin5ArrNinauodafd i ~ ~ -; l Mainhimiive rmd: ) g" y y K,*, D11,419,4.,14 y 4. '.- ~ . =. ~ v my ~ .-s+ i M .,id r,efout) a sLMm Walnfr$dahRf CN f 23,835,9293 -23,,453[043? - argonhatimu ^ C 7,402,110 2 ' 7,621,486,, 9J,42,153,i c e -W ,. genev r .~ w. m m[ i M,Ar.r/rsatmesde 126,393,283 s - V m4~2,,$791 95 85 r x m~ p y~ -. ... ~ j1% n,eciatha (3;j *.

• WQ ? $4,568.060 E 1,53

{ _ 133,795393'.- ?" d A,897,584 K

Total Odeer.Ammets ~

103,474,065 W f , ? '25A67,705 ?(16,962,426)t g -y io.,. e -< ."v m- .A ygg - ,y. s r W ,. y s. aun v, e, TTotal Operating Expenses %', :^,M,.. 7 - y. >.Ac v + ,m - 7Cughgg Aggggg,' 'S7 c m.,..- s Sjj 5 a l A.,. . t m.,f WW 155 s33.820 i t471,089,714 r 1.-.- 12,620,871 0, . Cmh, m 2 xw... ,o n >. l5,369A75 0, Dn J4; ^-- g y? ( 4 n'sw, n.- b.gJ. a ;77,660i W3.044 5,, %perialdefeitU 5 c -[ -... '. 4 ~' Openting Margin " 1 4 1 < u ~ g'

@enk >.'..

.m 123,004A06

• t115,757,121 M.S

,s...-~4 'I, N i . - forary rad inws/rnente y n a c Other income? < n r/sNt i 113A00,549 ? a 'k - - N JAca'usu'sMdid 4 +,s- . -, l191,286,098 e

MPii

,. s = -- -- - -o; - - p.; 2. s ./2s L '21bA46A16L + m 315.385,3090 5. m cr Wh"er rumn/ aders : , 237,702' *s. x6-r 278,372,. e< 3 m wo, E 391,0201 #.q.. s-2 521,535 pr ', m - p ~ ~~~: z'.Odet o sf c -,4 ms y v U, , f,; Total Oth,erincome t, C $ ~ Y,&s ,E ' C t - - g i /. - C', sTotal Currmt Aucts' s . My W 13.991A09 i j 15,906,844? e '- M ~ 355p~30s&5 s 1312,650,596 f + .a ' M-m ~m -,n, 'J < h DefNr^ed Charges 1 - -m---" < 22,345,454 2't,'582504

lideant Charges j ' -

g_ r ~g s... < M a-. ? '.4 - ~ ~ ~ <e m ,V-5 S f $1.602,777,160 : 1.583.796J83 J-y%- 7 J Totanternf expene *- ' 4

• 105,626,017 4 y,122,2541ga a,, : F 9:

- ;y

• = -

' 103 '... @ e. e. M fay)n;temt charg- &M O+, -y f, ' ' n;,w^,;p ; amts ANDIlumMIS 2 +(, a:,%-q ylsw %7 sw $ ', w~= ~~ -des x n b h.?> ff; i ) $0 (ONstf$fht l _f s

lff,

' ); k 3 'W { ^ ( q' _ _ 7 p _ JY e ..o w.. 1. w;, w nx ~.m j n n s.. , m - d 31.843.252{ > }1,093.340 ? {.., Wendenhlp Ters - ! 22,113,664 E 1 }} Msoortnationg ebtexpew p ' !$700i 1700 - v.,. .,.-m ..,w o,4 , 9 paf,,,iage G... 22 113,6643 am '2 ,, w,'.," phal ,..,c s,. 0, 1 Totall,atercas Charps 4107,449,,2695. 3 09,215.594 ? m ~ p m ~c 3 ... t f ' & f ' 7 ',294!.W W ;ITotal Equitief a 23114,364 L.- '22.114,3441 a% , Net margN ~ +. ^ 7 2,702 ~p, a Patronage Capital. ' IMeh,nn Debt) 1,334,621'928 -1,348,527,995 ~ ' 10 ginning ef)' ear s .e 22.113,6641 j 19,411,370 L .,e

Cu ent Uabilities '

e .. ~ s

Nolofwvable-

, Patronage Capitab a \\$ Mioffent j22.113,664.~.22,113.6641 AAwas Apah : . i nfrl '.44,602,713 31.281,332-g <4 l A]Piatd %epanies. 220,815l 35,229 ^ /miemt derrud 1,403,294 1,937,694 Oda accrud expensn __240,013 - j37,589 . g Total Current Dahl11 ties _ _45<466,835_ 33 391,844 1 -s- --e 51,602,777.160 - 1.583,796.183 f-21 y fn Y 4 % y -'j-E J -~ g g y g b

F NCAEC t o n a ar a c a t ip o g s t,,,,,, I 0 i I e4-t k -r t R i l i l l l l I l l 4 Asseis t l l I ? i l i long Term Debt 5 %. l foe c vf.Wh h /e! ?..,, VM.J

• 9

...4.. v,.4.%.% l

• ~ '

e j-r'; 4, a e +,m>= we m %;:s, ~ ~.

• 4 4,.*,*,4AO 6 ' '

E o u s t i s s a w o t. i a. i t i g,,, I l l l 22 l

g@%.m$ ^*f 'l %@q:&,WM%y s T**R -g[W ag.!ne-mm%m wQaa x. +,,, s r,.i, mw' ?. , w s. --c m v n Q =s. 2 u m <.m-Mg, c- % e.w poe n ap72 1 .s o i '-i l ~.Wfjf s i, ; ) 4, f ' 'f & S '

• V

..'&k.b % iW-IO-4%'t j - '\\$** f,. 4 g y [ h* ( h [y.l y 1 m os - o, + hk k ( k O N;:q $ EU $ [ f eaM , ?.@%'&1. J.

ay s

k-$g7, my,Nov14C#AtN+ AmixundsOr mcmcCoonm, s@ww$

• Wem Cuotre Ainenhas Or Eucme Qummu R

4;w M , ~: y s ; w c v. ma:. + r r .y 01Y, phi, 5MD AMG .{ w c<~. w.. _jg._. s c, e- :. wm. ;, n.a ,~., .~.: p a -lM tWgnnded&MkJ}}l $ 991 k, ed )9& ' ' a : ;~ 1 h. ; g......l. l~& theyms kled,k&r 31; }99) f -,w ly9 'C j5 fy~Ql

1. p :6 K, w 4%,aw ~

v@n. % y a vnauana a 6 . x w bm &n&@w velm%le\\ a&w$&gt 4 c 8 c D fk QQ; m s&kh lsw~ { -lnl$l, m0 : ~ &B QQ ~ m-n w.c w, n < i e w w w a m mw m- - m c ws r ~ua

ei m.

y. .l q .y.,a ..cv ~

• w A

_4 s , n, dfW$- .j ,S* (h, M4$,1N. l/. Ih, Mb

• A OutNt(N.

s %n(kh i Q 6, '.-?CaiA R, *o%_ ?> . 5. Mh$$(~.. $7MF .d' n yn~ 1,. + h(i[TMNfdv4N#4 l9tputNo.., M, I.MH7 ,057 4,. 1 $ 281603 E w - " v 30.,026 - '. #m i 1341.517i 4 o omm u... %3 - m [h, bi ';1 LN,.. - ~._ c < ,m U U N-h((Punk, h dGk M [, (%@Ykh rMTotd Operadogincueme o i f~ 4 5 ec'9d' t.hi$[ I'4 3.112.100 M,N.' 1

2.%8,663r @; @dmentoria ?. @aO 3,029 L 1

. 1 We u, c 3. 29) T 13,0 . ~,M. yge ^ W y-, g f y - 4, W.; jM 7 o z + M7GW10, Adad6ArrethO. a d Ccwrsi?w%,[, j$:a AmgJ $,s%;,.~ ~ ~ ~...,n i . - -~~. - ~ a ~~ f

f. /njW/urpraw 3. ; 21.991 1 ?

- 9399? g J n.J v ROperndng Espmem, b. h J~ - i. ~. u

, ~~

M,1,397d54M< w:> %. ~691317 ),, ' wen cdninurent Anwte . l ' 737,822 ' J ! % 0,211 iT n x :x ~~ nn ~' e

w. y m ; pc o - :

m sw): w a -;;$#dNN TflAf hI) e TW.3T2,067.12.1,1.4M,2_16) [?w gFraed Aimets? W

• g

. m: D y e ',' m, _... a f p'NN b ~ c _ g s s.. %c .wm,su-e h(Ff#fflNWF(dRdba$Mr#[ kj7,$$3 l.' Ij76g1$$9 N Mb P Yh h. .- *d N* A k hl "detal Opersidag E6Mh.g/ 2,749,2' '5 A E 2,8$5,633 # + b Ak/ n s - m - 0 .1 o.1 M 2 P U M *% w./f ~ k' 3 9 4%v, p Am y. %m *p* s -Gd(Q MAW 7 3 og? +m. ' 92,679 ? , ; $6,621 c WT RC#m Ce M f/g@qq@E ; Ope %w?~ a %w &sg g o,, '~ v n g ~~~~ ~~ Issooene flatoK v M $'42,955 A % (2%,970W M (m% v < Ly a wm m AumirglatalDr/nrdabs i ~ 4165.073 ? 1262,8071 g 1, 65 W hJN Mq u[c.x w s~Jfk: d[ @ M'w p. m-a m + , p" "la25489 f D 125,680 ; 'm s L .;. + M e%d r-dJ mp v lih d T,[ g L(DTotalFined>Winets > N 4 M sdonthan M - Q," N p ' W *&n WNgOdwrIncosme(Ofam)g 4@fd6,128% / 4691WQ w sNS @ a f. a, vm y A !, y% e A O wodier Amuss f % yk W -v 1 JM M WW "cA yp$w ~ W pW;yIntemtlagnum m WW;w+ (1,900h;e' %'(%w-W~w y)d ilkfern YA ~ + m 1 W3M J s Ha WQS AkMQA a - fi' hW ,.1 : - S nA ~ p x w ~. M..,o a a 'm enpwm m ' ". ' 20 % n w11%tSmwrGut1%sion11av ' 4~ M

5,8% ' ',' A m n n g g ; g* c n % 4r r m m e v3s

.x ~ s. e 4%t N mg we . g ut he a nn$8COE8W e 4 %g7yl(1372)%g)WNTNMNh, n%Myo,up Q % '

• $2.000 $...3 6N, k> ~, 3 [

I bbhphay}y~M - kbkU1w +M b/"kMlb j -en. ~ n %; AAw > CpNS Mq% n n hpe as)-Q Q,~ . ye <d 3 00 ; ' ;200t + v 93 J ?%69n.1yjpm L w - e-e. s. %, e s ~. w n n.-: ~. e, 7p immns{DQ. w umgn won.1odies,ep 2 NEO193.066 L ?166,229' Me Man g h' k .l""#*

jf O,

f$lf Yf f 's f.N/fh h h$5h h ? m "* Y "ss**,*o77t p;%hm&gyuufEpitfWM:W ?wgWw s;[i - [w W4&L W@m '.,4 Y Mtmel bmita w% %w }t we u a yTot.1A em c +jN k y s n:q j, m.. s 51 c a42;tzoU > ge- & Wm VW &n WWc hWw: *a ' v '~J VM measn% 'a, = < e " + YW N55 ?YI# kNO Y ;$ 005,50M0.Y,WEYb?o,r n $ k. a n n. h 0 Y ~b k w' A d wf U W khb

e.. ;W.

~ . + v pg m; g y ? w%, n. u w m'n ,m q c 4 ; y,b p' %:, A,%a ,~ gs;MN.,,i v , y, g a i y t 4 g y3,, f. 3 7 *. 4S ~ k-20 ,s v, er mm.> lmuw mms &%uwww e'd b y ~ A ph D @m e g@ m w m e v r% a.,MhuMs$v4MM, -. g LazsAs7)a,.(39kh20s, I M+ b N @a n u m m $v CMEw w m ..c ~ M

v m m-

+ ,i ( y* M.wle@/ w%$[ W'Wsvewd lasse+d,, e w'M e s' ^!. d m M kw/h $ d a [t h. m m-m w, N_ w' O_s.x m'De. n ~26_,527 ? 6, a

~ =~-

~ ~= w v w.d M i d4A10i .Y wh ,s, a ,s- / II6,M j < M,660., W k b, M ~ . k w s mm$w f m.. ns .<k~, [ % e s$w @n M t, +%,e$n. s .d n%y$ mm4@,QG~nsTmn Debt i -(. 7QN dqQ S 'T~i W '^ w %WkN U,@.N@en.uo)k[6 i

d $3A00;

-L5A400;e4 V, +p{sh[an%y %WW sm&a ww w a w+ hp p N[MkN1 E Qds / " a f s W,b x %r A 4w w g M. nm. .. ~. Y W, 4, u~uarmt1%1 n,, a.'^w.M ,&a MM %a % m:n ~ rFT d+5 i m a..o w we..c wam e u q7. -4 me .my +, $hh n [d(( n$ +e --o, $., m,,...s Sh, mx k w/h>$[ " 7 'lb,talIAmgTe.nn Debel ~ ' =5A4002 15A4002 O a e, y.{ m _. - AMi %yM,e. ~,w~~~.c-we m v /.. m. vcw ,,e - ;o ;w. = -. w .w v.y agwg;.ty,n ,,1 f. u: W x&. 4 + u .so a a "1E $ / 'i f' _Y MI 1 .Y p' w v. m'[ 1 gi '{ ,,, o - p. Ve 4 gO $ w;e - ~. > w* a. i Qd$. #@ pre %gdMyM " 4G GDy w' 392.866 2-:. ?160,173i xm 2,w 9 W, A.eMMWReece1 n 4 T p.- j_f;;MiM? M[p MO@h.{f:ad p h C w m A s@*PSN@ w m$ W m h - AM ' 2 " @m[f c., Met.alUmbilities i s L582,6)$< e. ; 710,2612 A.N WM C GW 4) s P y Mx.f f Q< f %3

• ~ ~ * * * ' ' ' * * * * * ' ' ' **"*,

/'.. &W : ~ My4.m$w}PivMq -Q,.m Q t Q . ' ^ $ ^K 2 M & A M W M..f(: %f 'L:.;. 't,.p ?i,

• s > - m 1 :,: ml 5 WR. *Eqmtf N

, m . m,.en v A h f f @hh h h h h N?hh$g g q p?hWF+kp e?q' ;W. w ~e m (p y A 4-Q Q G- + rf g f h E% W f f, s 22 .a a pn nm m mw ~ mw f n aSMiM~4~MMMMM MnMWW ' m_472 742 532.15$1 E SM W m u n Y. f'8 .- 5, n, s

• i

~ (4:c a y 4MCGSSJ +Mgy e,N, ?mw~#PM:n. 4 TTotal Ushuities a. -nd Equity "St054077i z B42,120 p p m#::t; %-a ; w$ $ w @+ m':p % u. r y. w a, ms 4 e, ~ -w , W~M % r n %w%s v> 3~ n m~ s Dum Ds y~ d m4 ya.o ., ;. v, c 7 9,e c u.: n i o .=-r wc m 4 e' n '., u .~y%<g-4"

g s w

tpr P p,., 4 y .,.. -. gy 7:

• h-

, f6 WW y V.%s a~

yW^ % s ~: Y L f' #! ' ~ - Q&:

g.,. 9;bc ?Q..qw m' a,

v s s- % 23 1'

• • +

aW ,u'p1.. s i% V-S ^^t 4 p n #4: ss, s t v. .s ys..

.. > v-o

ym wp

,o qw,3 ~."f,,, A u,. . Y m. <.pu Vy ~"' 5 h,? f' 4 c s ,f Q x)s lUsf ), 'M < + t. y Qp

0//M,g kr n.@y

%n -pr kj + s s@' .Q,:, ',- s.;~..- 's f4R 4

• s a

x .,m ea ( m hw R yg-g y. y 4 mi 3 33 : 2 h?k$n 44 %

• m -

r - y Qi? g ^ m w4p$h!$$o n.y',w;c ll%

h< w w? lw%,f l 5

kW a nc n'Y t y g w w:V.m Dm,*4i' m R _ p c ;.3 .- 2 A .3z,' v%n.m~p %ymWe ghq# p4" s +qp- -w - 4 t w es W.( s vs f i O ' /.v "' O s t W v a d: e f y5 N- \\- 'M M $$ > hhhh fij&ptp W*.. fhf 2h f, tl, $ ? &'(.:g; a 2_

---_.m. l TEMA l o n a r, o r a l H o c h t i g h t. I f I l 1 4j t J i 1 I i l other Assets 4 3 *>. l 'I 4 l t tJ .s i I t Asseis i i \\ a, W T[**<.f,s . sws,u,:q %.* e,4 s. 7.,a, e. 74*. \\ 6 A, .g.. ,,k[g g' \\ ..,.3 s n i y.)?/Y *k, \\

,y y- *

.A qq\\.y 1 \\ \\ i \\ E c u t tlE 5 ANO L i A B O L iil 6 5 i l l l l J f 24 1 ___.._,,,..,,,.n__,,w,,,,. ,,,- _, _,a-_,a.,..,mn,,,,___ w g,_,,,,., n,> - ~ - - - - - -

3 m .mp. . m.g . p;n w. 4 lr f l>N+: s ' % d ? f. &, k ? ^' -% c a: g sg c ( *g j, :, yi/s, @; (TAufttLEtterpchirmu6inidr@th... 4 Trunu Dkmc Mminnr Anwhim W

w,. ; Wm.

i rv 4 cu m y a c. j:4,3 Sr4TupT or Om, attows awn P, AWOMM CAPITAL,

M4AMtNHM

.g a : . ~ ~,. Q~#* g n 5e Speari endalikewld 31,1991 N,ud 19% !

• 14n Aeynns endedIkernier 31, !991 and 19W

,x [IM1 : 64Ad*d,f,) m . d'MditedF g 7 wW;; t r 4 t ) l. , 4 4 4 _?- i 8 A f p 4 3 ef.s >W . (1991] j 1990 4 f Amr0 -1991 1990' f, M ~ a an-r 4 .w-g' e: $ 0,870MI1 w r 3 !N.846,'404D XCwrmt Ameeti bpu ?, JSalesjNetB M g ,m r%vt. i.

w.,

v~~ g ;

iiCoot of 31 E -$U6d419.' 1,695.326 7 w,.aj<,. aJ ;g 3

V og-p~,;

,, W' ' p, Goods Sokt i < ~ J > "=: - e , *Anudres.ltnrismW Tradr ^ '2,712,571 ' - 2.496,22$ b 4 ~.' \\J L i { It, nt,mg immt.orr., W 2,762,15044 : 3,172312i_.

i-u a

e At,sur.t4Iturisolde OAc.r ' 19,003 .17,928 ey sa.g- / .~

=-

'J m9 - a. y 'ywga,yggy 1, 4 23,306.306 1 1 34,717,415; m ' inventories l

• 2,2h0,267,.

a3 - - '2,762,150, yr1,568,$M 4 L 37;889,$07 - L ~

w n.

^ ~~W~

W s

.c Q X~ 4 '.c n 4 >~~- ~ ~,960'J.. ".1%,909 ' y 6; Depad1:4.enusJ

13 c

c+ r as > x .a... n.. / esdodingIn6eryg ; +. ! 2,230,267 $ ;i;762,150 L e u b 6,647,220 J6 l r Total Cumn' Amets ; ' ~~~vmm,987,538 -~- t

y,;. <h,,n n&~nk

=rm&W ~r e v 1. -=.-.. a. .e l %cp JTotalCost of Good.Sokt.t. 4 29,288,269 L c 35,,127,357,. : ? lhed Annets) ~ t me-em m m ~. y,[ I [i y 4 < -; s. [:.8 D.

• 1 l Y! *;;d -/.

iI'- ~ &wsadIkm' HS8. '.0E7 - / 4 3p .t .xa W ' q Creine Margin! ?j 1.582.142: 41 - s;- m $43,000". A,759,047 ' "'e: r=< . c+ , gydffn 41,593 - J 33,s22 "-s! v.'; ius t>. ~ v..r. g &% r 239 _ Operating Espervies- ? 698,761 M y; ' .s. o m &s a739,062 ? = J1,060,286i * .i Buddi@-; f=. ,115977' '110.251 s M< 'arekwh uip.snentu m-"~r7, h. . g 3.. _~c; mv M - ..n ... e Opd M +. Ma @ ; pg - L m-625,202 - 625,204 1 <t s M ~em-e - - m-m c g . s 3 -. s m l,..a 17 $

OtherincomeK e(

s. J 442,257 ' 819,532' agy, ~ i e C.# e e- 'e < _- ^? l f133,21G,',, c frut A' munenlard Deptreinstori. '440)~55:. / 444 &O2 : 1 m ,^ -r a m v 9 L M,f.';z ? l%}n%tlwcmWa - ~ - - ? m % 134,873]. - m L u eu,

• ' " ~

h,.y ! ' &p,.. na, -, A; s oc '. L 32,636 ~ W,030, ' ~ - . 375,430;- 'x &A w, 4 w. al ?. " ' Jhritarmnalname% ;'M 9 tiw - 1 4

41 n"Q 4 i

a y. a ;.4 W, eU,t*~ r-T f

fi.. rid }

,. _ _157.2,50- ..157,250?. ...e. c., c. e M., ! 9 MM "Wny? Total Odich income e 5 ' %--4157,509 (/t C174,N, +- 532 680, MNg 7% m 7 ~7e%w.Se / Total Hsed A eta" ^ s -~ v 539,m149-r ~m m,- a + t a, m 4 - Awawgag44 ;, -~,s - -,--~n~~y g 9 OtheNM y' : '

nv i194,194 -

193,993 - ,; y .c- .e, w + 7kk@@;MA! 6Y, a ipg < S / AY X = J au a. s A OTotalAMel#- a 57.300,563 37,714,211 ' f Nh @% s L,S96.571; W1,234,532 _ w; ga = L NetSqln) n&% ~ F t r _m Qfya&elv q,g dypepital! lJ , t. y v. m. a s c ~ %Q lhinh [Innksstumb F4atus i V w r,+: aw, w r c a- +w <= ~ ! ~, ~ + %MV,. s%ginnir&fYarW ~ < i 5,022,053: J4,767,477l '- ' w1..,., m.m 4- " Lc q*Y e ;,urs* Murmnhf.1%2soney ::. yl, ;

CumutljabDitles !,

me -e n, f' g a% & se,~- .~. ?-- /P Mm,,,wts Paine ; $ 2,127,$40. ' 2,358,918'. = WW ..Ortificatn gp" * - . 695,827f skn % w"'.'l%tn,ugr Cajntal$rktuifint:? '"< 670,290 n%n , e ', Annkvl!Jabilists;;c -+. .v ~ ' 29,148. " 22,874

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Saluda River Electric Cooperative, Inc. Financial Statements Years ended December 31, I991 and 1990 with Report ofIndependent Auditors

d Saluda River filectric Cooperative. Inc. Financial Stalements l Years ended December 31,1991 and 1990 4 Contents Repon of Inde pe nd e n t A u di tors.................................................................................. 1 Audited Financial Statements B al a n c e S h e e t s...................................................................................................... 2 - S tatements of Operations and Patronage Capital........................................................ 4 S tate me n ts o f Ca sh Flo ws........................................................................................ 5 N ot e s to Fin an cial S ta t e m e n t s......................................................................................... 7 Compliance with Laws and Regulations and Internal Control Structure Report ofIndependent Auditors on Compliance with La w s a nd R e g ul a tio n s......................................................................................... I 7 Report of Independent Auditors on Internal Control Structure............................. 18 i e ......v.. .,.~,m.. _._,.y-- _,m.. .w.,,4s m., .-r, ~ w... yr,

2ERNST& YOUNG e cme.,- ~ ~.am n n. %w Iwi# Mwl!Of f t"(1!re P () f'a n 14 m F Dename h W"1 (JMd8 Q 2WEl k Report ofIndependent Auditors The Boaro of Trustees Saluda River Electric Cooperative, Ir.c. We have audited the accompanying balance sheets of Saluda River Electric Cooperative. Inc. as of December 31,1991 and 1990, and the related statements of operations and patronage capital, and cash flows for the years then ended. These financial statements are the responsibility of the Cooperative's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and the Governrrgnt Auditing Startdards issued by the Comptroller General of the United States. Those standards requirc that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and dis-closures in the Gnancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Saluda River Electric Cooperative Inc. at December 31, 1991 and 1990, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting pnnciples. V d March 18,1992 \\

Saluda River Electric Cooperative, Inc. 4 Balance Sheets ~ 4 December 31 1991 1990 Assets Utility plant Electric plant in service $518,759,436 5506,290,378 = Less accumulated depreciation and amortization 149,629,761 125,025,545 369,129,675 381,264,833 Construction work-in-progress 3,834,190 5,278,674 372,963,865 386,543,507 Investments and other assets Investments 55,857,435 29,998,509 Debt service reserve funds 6,663,533 6,644,083 Decommissioning trust funds 1,552,362 736,351 .l. 64,073,330 37,378,943 s Current assets Cash and temporary investments 24,335,673 50,436,380 Accounts receivable 46,361,651 41.199,216 Interest receivable 948,738 599,977 Prepaid expcases 84,793 39,162 71,780,G55 95,274,735 Deferred charges Interest expense 9,673,042 0 Debt expense 494,337 515,790 10,167,379 515,790 $518,985,429 $519,71-2,975 2

Decemtwr 31 1991 1990 51cmbers' equities and liabilities Members' equities Patronage capital $ 9,867,021 $ 9,867,021 Membership fees 40 40 9,867,061 9,867,061 Long term debt Mortgage notes payable 375,407,827 379,708,228 Note payable 18,928,353 18,928,353 Pollution control bond; p?yable 44,200,000 44,200,000 438,536,180 442,836,581 Current liabilities Accounts payable 12,486,700 9,025,533 Interest payable 785,428 10,094,158 locome taxes payable 195,000 240,000 Accrued expenses 35,975 27,354 L 13,503,103 19,387,045 Deferred credits Deferred revenue 17,416,272 12.555,475 Deferred income taxes 39,662,813 35,066,813 57,079,085 47,622,288 Commitments and contingencies $518,985,429 5519,712.975 See accompanying notes. 3

Saluda River Electric Cooperative, Inc. Statements of Operations and Patronage Capital Year Ended December 31 1991 1990 Operating revenues Electric sales to members $ 87,298,529 $ 7F.,190,734 Electric sales to nonmembers 50,723,569 56,802,904 138,022,098 134,993,638 Operating expenses Purchased power 54,323,449 47,102,925 Produced power 28,852,276 26,532,579 Depreciation and amortization 17,946,911 17,852,521 Property taxes 2,864,518 2,949,531 Operations and maintenance 1,144,643 851,262 Administrative and general 2,053,325 1,779,793 Income taxes 5,054,276 3,926,728 112.239,398 100,995,339 Operating margin 25,782,700 33,998,299 Other income (expense) Interest and other income 9,641,801 7,074,144 Interest expense (30,563,704) (41,381,239) Defered revenue (4,860,797) 308,796 (25,782,700) (33,998,299) Net margin 0 0 Patronage capital At beginning of year 9,867,021 9,867,021 At end of year $ 9,867,021 5 9,867,021 See accompanying notes. 4

Saluda River Electric Cooperative,Inc. Statements of Cash Flows j t Year Ended December 31 1991 1990 Operating activities - Operating margin - $ 25,782,700 $ 33,998,299 s, Adjustments to reconcile operatmg mcgin to to net cash provided by operating activities: M Interest and other income 9,641,801 7,074,144 Intenst expense (30,563,704) ( i,381,239) Depreciation and amortizction 24,528,612 23,844,556 Change in deferred interest (9,673,042) O Change in deferred taxes 4,5 %,000 3,686,728 Change in operating assets and liabilities: - Receivables.' (2,511,196) (2,614,376) Prepaid expenses (45,631) 11,290 Current liabilities (5,883,942) (454,892)_ Net cash provided by operating activities 15,871,598 24,164,510 investing activities Net change in investments - (37,193,019) (12,592,652) Additions to utility plant (10,974,041) (12,787,982) Net cash used in investing activities (48,167,060) (25,380,634) Financing activities Additions to debt service reserve funds. (4,300,401) (2,911,027) Payment oflong term debt (19,450) (19,450)

Additions ;u decommissioning trust funds (769,487)

(736,351) ~ Net cash used in financing activities (5,089,338) (3,666,828) Net (decrease) in cash and cash equivalents - during the year (37,384,800) (4,882,952) Cash and cash equivalents at beginning of year 46,426,337 51,309,289 ~ Cash and cash equivalents at end of year $ 9,041,537 $ 46,426.337 5

s t .-n" l Saluda River Electric Cooperative,Inc. . Statements of Cash Flows (continued) i s i Year Ended December 31 1991 1990 Reconciliation of cash and temporary investments: Cash and cash equivalents at end of year $ 9,041,537 5 46,426,337 Temporary investments (maturing in ninety - days to one year), not considered cash equivalents. 15,344,136 4,010,043 $ 24.385,673 $ 50,436,380 Supplemental disclosures of cash payments during the year: Interrst payments (net of capitalized interest of $10,005,422 and $237,076 in 1991 and 1990 respectively) $ 39,877,434 S 41,574,253 Income tax payments 503,276 5 0 t See accompanying notes, 4 E, t i 6 4 6 > pow--- w=w,re-wr--+e-e,- c --+-wmi+--r-

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Saluda River Electric Cooperative, Inc, Notes to Financial Statements December 31,1991

1. Description of the Entity Saluda River Electric Cooperative, Inc. (the " Cooperative"), formed in 1958, is a genera-tion and transmission electric cooperative providing wholesale electric power to its five rural electric member cooperatives that are engagd in the retail sale of electricity to rumb; r-consumers located in South Carolina. The Cooperative represents its member

% dealings with power suppliers and various government agencies. In on' e a reliable source of power for its members, the Cooperative purchased, 6' - 75 percent undivided ownership interest in Unit I and a 9.375 percent rship interest in certain common suppon facilities of the Catawba Nuclear e County, South Carolina, a two-unit nuclear power generation facility u Duke Power Company (" Duke"). Under the terms of agreements exe- ,e ake, the Cooperative is entitled to 9.375 percent of the power generated by bom m.un 1 and 2; additionally, a ponion of the power produced by the Cooperative's share of each Unit is sold back to Duke. During 1990, Duke purchased 60 percent of the Cooperative's share of power generated by Unit 2 and 50 percent of the Cooperative's share of power generated by Unit 1. During 1991, Duke purchased 50 percent of the Cooperative's share of power generated by Unit 2 and 40 percent of the Cooperative's share of power generated by Unit 1. Duke's purchase of power generated by the Cooperative's share of Units 1 and 2 will continue to decrease by 10 percent annually, subject to certain contractual limitations. Under the terms of the agreements between Duke and the Cooperative, costs payable by the Cooperative are based upon a 9.375 percent interest in Units 1 and 2 as well as the common suppon facilities. As a result of the substance of these agreements, the Cooper-ative, for fincncial reponing purposes, accounts for its investment based upon a 9.375 percent interest in the entire project. The accounting records of the Cooperative conform to the Uniform System of Accounts, prescribed by the U. S. Depanment of Agriculture as modified for electric borrowers of the Rural Electrification Administration ("REA"). The Cooperative's electric utility activities are directed by its Board of Trustees, subject to certain approvals by REA, and its rates are not regulated by the South Carolina Public Service Conunissica or Federal Energy Regulatory Commission. 7 l l

- Saluda River Electric Cooperative, Inc. i Notes to Financial Statements (continued)

2. Electric Plant in Service Major classes of the Cooperative's electric plant in service as of December 31,1991 and 1990, are stated at cost, including capitalized interest and overhead incurred until the time the asset was placed in service, as follows:

1991 1990 ' Generation plant- $434,585,657 $433,273,653 Nuclear fuel 63,852,434 57,784,702 Transmission plant 5,2 %,182 3.580,761 Substations 11,617,125 8,854,547 General plant-1,587,201 1,335,991 Land and land rights 1,820,837 1,460,724, $518,759,436 $506.290.378 Maintenance and repairs of plant and replacements and renewals of items determined to be less than units of property are charged to operations. Replacements and renewals of items considered to be units of property are capitalized in the alant accounts. At the time properties are disposed, the origmal cost plus cost of remova:, less any salvage value, is - charged to accumulated depn:ciation. Depreciation is provided over the estimated useful lives or the respective assets on the straight-line basis at the following rates: Generation plant 4.0'7o Transmission plant and substations 3.2?o General plant- ~ 3.07o to 33.37o The composite depreciation rate for the nuclear generation plant includes a factor to pro-vide for the expected costs of decommissioning. The Cooperative's portion of decom- - missioning the jointly-owned facilities of the Catawba Nuclear Station, based on current price levels and decommissioning promptly after the project is taken out of service, is estimated at approximately $37,000,000. This estimate may be adjusted periodically to . reflect changing price levels and technology. Construction work-in-progress, consisting primarily of substations and related materials - and supplies, is stated on the basis of cost, including capitalized interest and overhead. 4 0 8 ,- - * ~,... .,m., .4 m,c.... om- + -, r ....,---v., ,.w..,---,-.v,-y-e v.-~qv-,r ,---m, ,w--,,--

Saluda River Electric Cooperative,Inc. Notes to Financial Statements (continued)

3. Nuclear Fuel The cost of nuclear fuel is being amortized to produced power expense based on the rate of fuel usage. The total fuel amortization expense in 1991 and 1990 was $6,581,701 and

$5,992,035, respectively. The Cooperative,in accordance with the terms of operating agreements for the Catawba Nuclear Station, pays Duke a monthly fee for the disposal of spent nuclear fuel. This disposal fee is based on kilowatt hours of energy generated and is charged to operations as a cost of produced power.

4. Long-Term and Teniporary Investments Investments consist of general funds invested for longer than one year and investments in associated organizations. Temporary investments consist of investments maturing in ninety days to one year. Under the Cooperative's investment policy, investments are not concentrated in any one geographic region. General funds are invested primarily in instruments issued, guaranteed or insured by the United States Govemment or an agency thereof, and are stated at cost adjusted by camed income.

At December 31,1991 and 1990, investments in associated organizations include $48,296 of Capital Term Certificates with the National Rural Utilities Cooperative Finance Corporation which earn interest at 4 percent until maturity in 2080. Other investments m associated organizations are accounted for using the equity meihod and include capital credits which have been assigned to the Cooperative but are not currently receivable. Excess cash is invested each night through participation in a bank investment plan and bears interest at a variable rate. Under this agreement, the bank sells securities to the Cooperative each night and repurchases the investments the next business day. These securities are issued, guaranteed or insured by the United States Government or an agency thereof. The balanec of these investments was $890,300 at December 31,1991 and is included with cash and temporary investments. 9

W b 4 e Saluda River Electric Cooperative, Inc, t Notes to Financial Statements (continued)

5. Debt Service Reserve Funds Debt service reserve funds are held by the National Rural Utilities Cooperative Finance Corporation and are restricted in connection with the Cooperative's Pollution Control 1

Bond indenture agreement. The fund balances at December 31,1991 and 1990 are as follows: 1991 1990 Pollution Contml Bonds $4,453,533 $4,434.083 Subordinated Term Certificates 2,210,000 2.210,000 - 3 $6,563,533 $6.644.083 The Pollution Control Bonds reserve fund was established to provide for deficiencies, if I any,in the amount available to pay the arincipal and interest on the bonds and to provide for the final payments of principal anc. interest on the bonds. Investments in the fund earn interest at rates ranging trom 7.6 percent to 10.375 percent. The Subordinated Term Certificates represent a 5 percent compensating balance of the Cooperative's outstanding Pollution Control Bonds for the life of the bond issue and earn interest at 11.648 percent.

6. Decommissioning Trust Funds In compliance with regulations issued by the Nuclear Regulatory Commission ("NRC),

the Cooperative established an external trust fund in July 1990 to provide for a portion of the cost to decommission its nuclear facilities. The NRC regulation requires funding levels based on average expected costs to decommission only the components of nuclear - generating stations subject to radioactive contamination. In compliance with the NRC requirement for the Catawba Nuclear Station, the Coopera-tive funded $395,736 for Unit I and $373,751 for Unit 2 in 1991. 4 4 10

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- ~ -..

Saluda River Electric Cooperative, Inc. Notes to Financial Stntements (continued) i

7. Deferred Interest Expense Beginning in 1991, the Cooperative's Board of Trustees granted the Cooperative recovery of the inten:st expense associated with long-term debt used to finance construction of the 1

Catawba Nuclear Station on a levelized basis over the remaining life of the Station..The

cxisting operating license granted by the NRC expires f6r Unit 1 on December 6,2024 and for Unit 2 on February 24,2026.. Accordingly, the portion of the applicable interest expense not recovered through current rates is being deferred for recovery in future periods.

8. Deferred Debt Expense Unamortized debt expenses incurred in connection with issuance of certain debt had

- b&,ces at December 31,1991 and 1990 as follows: 1991 1990 i Pollution Cor. trol Bonds $461,583 $481,829 Federal Financing Bank mortgage notes 32,654 33,961 $494,337 $515.790 The unamortized debt expense related to the Pollution Conaol Bonds consists primarily of underwriter and legal fees associated'with the issuance of the bonds and is being . amortized based on bonds outstanding. The unamortized debt expense related to the Federal Fmancing Bank mortgage notes is being amortized based on the mortgage notes ~ - outstanding. The amounts above are net of accumulated amortization of $155,812 and $134,358 as of December 31,1991 and 1990, respectively. b 11 .-y ..wy. ....,.,,.,yy. ,,,,,,,.,-_.,,,n. ..w,.

Saluda River Electric Cooperative, Inc. Notes to Financial Statements (continued)

9. Members' Equities Patronage capital represents the retained net margins of the Cooperative which have been allocated to members in accordance with guidelines established by the Cooperative's 1

Board of Trustees. In 1991 and 1990, a net margin was not available to be allocated. Patronage capital credits may be paid to the Cooperative's members at the discretion of thc Board of Trustees, except as restricted by the debt agreements described in Note 10; accordingly, no patronage capital has been retired. Patronage capital accounts allocated to the Cooperative's members at December 31,1991 and 1990 are as follows: Blue Ridge Electric Cooperative, Inc. $3,264,461 Laurens Electric Cooperative,Inc. 2,467,M1 York Electric Cooperative, Inc. 1,834,904 I Broad River Electric Cooperative, Inc. 1,510,156 Little River Electric Cooperative, Inc. 790.469 $9,867,021 Membership fees represent amounts paid by individuals to become members of the Cooperative who are not otherwise directly served by the Cooperative or its member dis-tribution cooperatives.

10. Leng-Term Debt Long-term debt at December 31,1991 and 1990 consists of the following:

1991 1990 Federal Financing Bank mortgage notes $375,407,827 $379,708,2:8 Duke Power Company note payable 18,928,353 18,928,353 Pollution Control Bonds -44,200,000 44.200.000 $438,536,180 $442.836,581_ The mortgage notes payable to the Federal Financing Bank ("FFB") have maturity dates . ranging from December 31,2015 to 2019, and interest rates ranging from 7.325 percent to 11.118 percent. Substantially all assets of the Cooperative are pledged as security for this debt, and the terms of the debt agreement ~ restrict the Cooperative as to patronage capital distribution, the type of investments and capital activities. At December 31,1991, the Cooperative had unadvanced loan commitments from FFB of $49,196,000. 12

Saluda River Electric Cooperative,Inc. Notes to Financial Statements (continued)

10. Long-Term Debt (continued)

The note payable to Duke Power Company, executed in 1981,is unsecured and is to be paid in 100 equal quarterly payments consisting of principal and interest over a term of 25 years. The first installment will be payable on June 29,1995,10 years after the date on which the first Unit of the Catawba Nuclear Station was put into service. Interest is payable monthly on the principal balance at the. ate of 11.'18 percent. The Pollution Control Bonds, issued in 1984, bear a variable, semi-annual interest rate (4.70 percent at December 31,1991 and 5.85 percent at December 31,1990). Principal payments escalate and are to be made each year beginning with $650,000 in 1994 until $4,000,000 is due on the maturity date in 2014. Proceeds from the bonds were restricted to pay or refinance the costs associated with certain pollution control facilities at the Catawba Nuclear Station. Scheduled maturities oflong-term debt for the five years after December 31,1991 are as follows: 1992 5 3,830,457 1993 4,258,526 1994 5,322,135 1995 5,931,737 1996 6,587.253 Thereafter 412,606,072 ~ $438,536,180 The Cooperative has unadvanced loan funds of $12,000,000 available relating to com-mitments from the National Rural Utilities Cooperative Finance Corporation. The funds may be t.>rrowed at any time during the twelve months ended December 15,1992. In addition, the Cooperative has an unused line of credit of $500,000 with another financial institution. Li acccrdance with industry practice, portions of long-term debt due within one year are not segregated, and thcrefore are not included with current liabilities. 13

Saluda River Electric Cooperative, Inc. ~ Notes to Financial Statements (continued)

11. Deferred Revenue The Cooperative's Board of Trustees sets rates with the intention of recovering certain costs expected to be incurred in the future. Revenue related to these expected future costs is deferred until such time as these costs are incurred in order to achieve a proper match-ing of revenues with the costs of providing power. The deferral plan adopted by the Board of Trustees is designed to produce a TIER (times interest camed ratio) of 1.0 and a net margin of zero. It is the Cooperative's intent to reexamine rates on a yearly basis; therefore, the deferred amounts are included in the determination of the Cooperative's rates to members in the year 0,11owing the year of deferral.

Deferred revenues at December 31,1991 and 1990 were $17,416,272 and $12,555,475, respectively. Revenues deferred during 1991 and 1990 were 54,860,797 and $(308,796), respectively.

12. Retirement Benefits Substantially all of the Cooperative's employees participate in the National Rural Electric Cooperative Association (NRECA) Retirement and Security Program, a noncontributory defined benefit multi-employer pension plan. The cost of the plan is funded annually by payments to NRECA to ensure that annuities in amounts established by the plan will be available to individual participants upon their retirement. Accumulated benefits and plan assets are not determined or allocated separately by individual employer. Due to an over-funding of the plan in prior years, a moratorium on normal employer contributions was declared in 1987, accordingly, there were no pension costs related to this plan in 1991 and 1990.

Substantially all of the Cooperative's employees also participate in the NRECA 401(k) plan, a contributory defined contribution plan. The plan requires all eligible employees, after one year of service, to contribute a minimum of 1% of base salaxy, as defined. The Cooperative contributes additional amounts for participating employees as determined annually by the Cooperative's Board of Trustees. Cooperative contributions in 1991 and 1990 were $120,326 and $66,719, respectively. In addition to pension benefits, certain health care and life insurance benefits are provided for the Cooperative's retired employees through participation in a multi-employer group benefit plan sponsored by NRECA. All employees become eligible for this coverage upon retirement if they reach normal retirement age while working for the Cooperative. The cost for these benefits is recognized as an expense as premiums are paid; accord-ingly, the costs related to this coverage in 1991 and 1990 were $5,237 and $5,047, respectively. 14 -w-r m

Saluda River Electric Cooperative, Inc. Notes to Financial Statements (continued)

13. Income Taxes South Carolina law exempts all electric cooperatives from state income taxes; conse-quently, the Cooperative is exempt from state income taxes. Whether or not a coopera-tive is exempt from Federal income taxes is a function of certain tests under the internal Revenue Service Code Section 501(c)(12) relating to the sources of income and is deter-mined annually.

Since 1985, the Cooperative has been deemed a taxable entity for Federal income tax purposes and consequently has been subject to paying Federal income taxes. Differences between income tax and financial reporting income result primarily from different methods of computing depreciation. Investment tax credits are accounted for as reduc-tions of income tax expense in the year utilized, under the deferred method. The provision for income taxes for the years ended December 31,1991 and 1990 con-sisted of the following: 1991 1990 Current portion $ 458,276 $ 240,000 Deferred portion 4.596,000 3,686,728 $5,054,276 $3.926.728 At December 31,1991, the Cooperative had u'msed investment tax credits of approxi-mately $22,000,000, which expire if not utilized by 2000, as well as the following approximate amounts of operating losses available to carry forward to future years: Expiring in 2001 $37,000,000 Expiring in 2002 38,000,000 Expiring in 2003 42,000,000 Expiring in 2004 32,000,000 Expiring in 2005 10,000,000 In February 1992, the Financial Accounting Standards Board ("FASB") issued Statement No.109, a new standard on accounting for income taxes. The Cooperative must adopt the provisions of this statement in 1993. The effect of the new standard on the Cooperative's f'mancial position and results of operations has not been determined. 15

Saluda River Electric Cooperative, Inc. Notes to Financial Statements (continued)

14. Commitments and Contingencies In accordance with the terms of agreements with Broad River Electric Cooperative, Inc.,

the Cooperative purchases all of the power produced by the Cherokee Falls Hydroelectric Generating Plant. The cost of this power purchased by the Cooperative in 1991 and 1990 was approximately $1,3M,000 and $1,125,000, respectively. The agreements between the Cooperative and Duke Power Company (" Duke") provide for mechanisms to settle disputes under the agreements. As a result, the Cooperative and Duke are currently in arbitration over various issues, including payments on acount of Federalincome tax expenses that the Cooperative believes are currently owed by Duke in accordance with the terms of the agreements between the two entities. Consequently, the Cooperative has recorded cumulative income tax billings to Duke in the amount of $33,179,260, included in accounts receivable as of December 31,1991, chargeable to Duke based upon the terms of the agreements, which amount Duke has so far refused to pay. Hearings pursuant to this arbitration are currently expected to commence in 1992. The ultimate outcome of these issues cannot presently be determined; however, should the Cooperative not obtain payment of the income tax amounts from Duke, it would be necessary for the Cooperative to obtain recovery of appropriate tax amounts through other revenues. During 1990, the Cooperative received a favorable preliminary decision relative to other issues in arbitration with Duke, the financial effect of which has not yet been determined. Duke, on behalf on all the owners of the Catawba Nuclear Station, filed suit in 1990 against the manufacturer of steam generators at the Station, seeking correction of defects in the steam generators at no cost to the owners, including payment for replacement power, and for related punitive damages. The ultimate outcome of the proceeding cannot be determined at this time; accordingly, no benefit has been recorded in the financial statements.

15. Adjustments to the Financial Statements Certain items in the financial statements for the year ended December 31,1990 have been reclassified to conform with the presentation used in 1991.

16

. EH ERNST& YOUNG . cxs 8.a u,- . m- ~ w w suite UL)1 Two shelter rentre I () 60 l Of s-4 7 u, _ s, om c.a.e mn Report ofIndependent Auditors on Compliance with Laws and Regulations The Board of Tmstees Saluda River Electric Cooperative, Inc. We have audited the financial statements of Saluda River Electric Cooperative, Inc. (the " Cooperative") as of and for the year ended December 31,1991, and have issued our repon thereon dated March 18,1992. We conducted our audit in accordance witt. generally accepted auditing standards and Government Auditine Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Compliance with laws, regulations, and contracts applicable to the Cooperative is the responsibility of the Cooperative's management. As part of obtaining reasonable assur-ance about whether the financial statements are free of material misstatement, we per-formed tests of the Cooperative's compliance with certain provisions oflaws, regulations, and contracts. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests indicate that, with respect to the items tested, the Cooperative complied, in all material respects, with the provisions referred to in the the preceding paragra h. With respect to items not tested, nothing came to our attention that caused us s to believe that the Cooperative had not complied, in all material respects, with those l provisions. This report is intended for the information of the the Cooperative's Board of Trustees, management, and the Rural Electrification Administration. This is not intended to limit l the distribution of this report, which is a matter of public record. f March 18,1992 1 17 l ~

illERNST& YOUNG a a s a.m.- - n-> m sw som ino $hcher (entrts POIWkW oreeih iht' btb carohna 1%O1 Report ofIndependent Auditors on Internal Control Structure The Board of Trustees Saluda River Electric Cooperative, Inc. We have audited the financial statements of Saluda River Electric Cooperative, Inc. (the " Cooperative ') as of end for the year ended December 31,1991, and have issued our report thereon dated March 18,1992. We conducted our audit in accordance with generally accepted auditing standards and Government Auditine Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assur-ance about whether the financial statements are free of material misstatement. In planning and performing our audit of the financial statements of the Cooperative for the year ended December 31,1991, we considered the Cooperative's internal control structure in ordet to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. The management of the Cooperative is responsible for establishing and maintaining an -internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies'and procedures. The objectives of an internal control structure are to provide management _with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit - the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evalua-tion of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following catego-ies: cash disbursements / purchases, cash receipts / sales, and payroll. For all of the internal control structure categories listed above, we obtained an under-standing of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. 18

i I Report of Independent Auditors on Intemal Control Structure (continued) Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under stan-dards established by the American Institute of Certified Public Accountants. A material weakness is a reponable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the Gnan-cial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be noterial weaknesses as defined above. This report is intended for the information of the the Cooperative's Board of Trustees, management, and the Rural Electrification Administration and supplemental lenders. This restriction is not intended to limit the distribution of the report, which is a matter of public record. I March 18,1992 19 . _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ - _}}